Cencora (COR) 10-K risk factor changes: FY2020 vs FY2019

In fiscal [removed: 2019,] [added: 2020,] we continued to experience unfavorable brand and generic pharmaceutical pricing trends, which negatively impacted our Pharmaceutical Distribution Services reportable segment profit and our consolidated operating earnings.

We expect these trends to continue in fiscal [removed: 2020,] [added: 2021,] which could have an adverse effect on our results of operations.

Additionally, there are a number of [added: government] policy initiatives being considered which, if enacted, could directly or indirectly regulate or impact WAC [removed: list] prices.

If such initiatives are passed [added: or finalized] and we are unable to negotiate equitable changes with our suppliers and/or customers, our results of operations could be adversely impacted.

Increasing governmental efforts to regulate the pharmaceutical supply channel [removed: and pharmaceutical compounding] may increase our costs and reduce our profitability.

There have been increasing efforts by Congress and state and federal agencies, including state boards of pharmacy, departments of health, and the FDA, to regulate the pharmaceutical distribution [removed: system and pharmacy compounding activities.][added: system.]

In recent years, some states have passed or proposed laws and regulations that are intended to protect the safety and security of the supply channel but that also may substantially increase the costs and burden of pharmaceutical [removed: distribution and pharmaceutical compounding.][added: distribution.]

[removed: The DQSA also established requirements for drug wholesale distributors and] third-party logistics providers, including licensing requirements applicable in states that had not previously licensed third-party logistics providers.

There can be no assurance that we are fully compliant with the DQSA requirements, [added: including the DSCSA requirements,] or with additional related state regulatory and licensing requirements, and any failure to comply may result in suspension or delay of certain operations and additional costs to bring our facilities into compliance.

Complying with the DQSA [removed: requirements] [added: requirements, including the DSCSA requirements,] and other chain of custody and pharmaceutical distribution [removed: and compounding] requirements, including follow-on actions related to current public concern over the abuse of opioid medications, could result in suspension or delays in our production and distribution activities which may increase our costs and could otherwise adversely affect our results of operations.

The Centers [removed: of] [added: for] Medicare & Medicaid Services ("CMS") published a final rule [removed: on] [added: in] November [removed: 13,] 2017 that reduces Medicare outpatient hospital reimbursement for separately payable drugs (other than vaccines) purchased through the 340B drug discount program from average sales price ("ASP") plus 6% to ASP minus 22.5% (with certain exceptions), effective January [removed: 1,] 2018.

While the appeals process is still underway, CMS solicited comments in the proposed calendar year 2020 Medicare outpatient prospective payment system rule on appropriate payment for such 340B-acquired drugs, [removed: potentially including] [added: and finalized] a [removed: reduced] [added: rule in November 2019 that would impose the same ASP minus 22.5%] rate [added: that was the subject] of [removed: ASP plus 3%][added: the litigation described above.]

Separately, [removed: on] November [removed: 21,] 2018, CMS published a final rule that reduces from 6% to 3% the “add-on” payment for new, separately-payable Part B drugs and [removed: biologicals that are paid based on WAC when ASP data during first quarter or sales is unavailable.]

Notably, the Trump Administration and members of Congress proposed numerous amendments to Part B drug distribution and payment models during [removed: 2018 and have continued to do so throughout 2019.][added: 2018.]

Some of these proposals could have significant effects on our business, including [removed: a potential proposal to create] an [removed: “International Pricing Index” payment] [added: Executive Order issued on September 13, 2020 to test a "Most Favored Nations"] model [removed: that would modify distribution methods] for Part B [removed: drugs] and [added: Part D drugs that] tie reimbursement rates to international drug pricing metrics.

[removed: While we believe that we are in compliance with applicable laws and regulations, many of the regulations applicable to us, including those] relating to [removed: marketing] [added: certain] incentives offered in connection with [added: sales of] pharmaceutical [removed: sales,] [added: products and related services,] are vague or indefinite, and have not been interpreted by the courts.

In addition, a significant number of lawsuits have been filed against us, other pharmaceutical wholesale distributors, and others in the supply [removed: chain.][added: chain by state and local governmental entities and other plaintiffs for claims related to the Company’s distribution of opioid medications.]

Additional governmental and regulatory entities have indicated an intent to sue and may conduct investigations of us in the [removed: future.][added: future and lawsuits could be brought against the Company by other plaintiffs under other theories related to opioid abuse.]

We are deeply committed to diversion control efforts, have sophisticated systems in place to identify orders placed warranting further review to determine if they are suspicious (including through the use of data analytics), and engage in significant due diligence [added: and ongoing monitoring of customers.]

We are currently engaged in [removed: discussions] [added: advanced discussions, which are ongoing,] with the objective of reaching potential terms [added: (which would include monetary payments and certain changes to our anti-diversion programs)] for a global resolution of the multi-district opioid litigation [added: involving certain state] and [added: local governmental entities and] other related state court litigation described in Note [removed: 13] [added: 14] of the Notes to Consolidated Financial Statements.

[removed: Given the large number of parties involved, the complexity and difficulty of the underlying issues, and the resulting uncertainty of achieving] [added: Until such time as] a [removed: potential] [added: plaintiff participates in a] global [removed: resolution,] [added: settlement or otherwise resolves its lawsuit,] we [added: will] continue to litigate and prepare for trial in the cases pending in the multi-district opioid [added: litigation, those remanded from the multi-district opioid] litigation [added: to federal district courts,] as well as in state courts where lawsuits have been filed, and [added: we] intend to continue to vigorously defend ourselves in all such cases.

Since these matters are still developing, we are unable to predict the outcome, but the result of these lawsuits could include excessive monetary verdicts and/or injunctive [removed: relief] [added: relief, including changes to our anti-diversion programs,] that may affect how we operate our [removed: business, or we may enter into settlements of claims that may also include monetary payments and/or injunctive relief.][added: business.]

The [added: inability to reach a global settlement of the multi-district opioid litigation and] adverse resolution of any of these lawsuits or investigations could have a material adverse effect on our business, results of operations, and cash flows and could result in a lower than historical level of capital available for deployment, including a lower level of capital returned to stockholders.

For example, New York has instituted an opioid excise tax, which went into effect on July 1, [removed: 2019,] [added: 2019] and [added: replaces a prior assessment under New York's Opioid Stewardship Act, and] taxes entities that make the initial sale or distribution of opioid medications into the state.

[removed: Each of our businesses may cause us to become involved in legal disputes or proceedings involving] healthcare fraud and abuse, the False Claims Act, antitrust, class action, commercial, employment, environmental, intellectual property, licensing, [added: public disclosures] and various other claims, including claims related to opioid medications as discussed in the above risk factor.

In fiscal 2018, we resolved potential civil claims and administrative action by entering into, among other things, a Corporate Integrity Agreement [removed: (see Note 13] [added: with the Office] of [added: Inspector General of] the [removed: Notes to Consolidated Financial Statements).][added: U.S. Department of Health and Human Services).]

WBA accounted for approximately [removed: 34%] [added: 33%] of our revenue in the fiscal year ended September 30, [removed: 2019.][added: 2020.]

Express Scripts accounted for approximately [removed: 13%] [added: 12%] of our revenue in the fiscal year ended September 30, [removed: 2019.][added: 2020.]

Our top ten customers, including governmental agencies and GPOs, represented approximately 64% of revenue in the fiscal year ended September 30, [removed: 2019.][added: 2020.]

Additionally, from time to time, significant contracts may be renewed [added: or modified] prior to their expiration [removed: date.][added: date in furtherance of our strategic objectives.]

If those contracts are renewed [added: or modified] at less favorable terms, they may also negatively impact our revenue, results of operations, and cash flows.

In May 2016, we extended to 2026 our strategic arrangement with WBA - specifically, our distribution agreement under which we distribute drugs to Walgreens pharmacies and our generics purchasing services arrangement under which [removed: Walgreens Boots Alliance Development GmbH ("WBAD") provides a variety of services, including negotiating acquisition pricing with generic manufacturers on our behalf.]

Achieving the anticipated benefits from the arrangement on an ongoing basis is subject to a number of significant challenges and uncertainties, including: the potential inability to realize and/or delays in realizing potential benefits resulting from participation in our generics purchasing services arrangement with WBAD, including improved generic drug pricing and terms, improved service fees from generic manufacturers, cost savings, innovations, or other benefits due to its inability to negotiate successfully with generic manufacturers or otherwise to perform as expected; the potential disruption of our plans and operations as a result of the terms under which we extended the duration of the distribution agreement and generics purchasing services agreement, including any disruption of our cash flow and ability to return value to our stockholders in accordance with our past practices and any reduction in our operational, strategic or financial flexibility; potential changes in supplier relationships and terms; unexpected or unforeseen costs, fees, expenses and charges incurred by us related to the transaction or the overall strategic relationship; [removed: unforeseen] changes in the economic terms under which we distribute pharmaceuticals to [added: WBA, including changes necessitated by changing market conditions or other unforeseen developments that may arise during the term of the distribution agreement, to the extent that any such changes are not offset by other financial benefits that we are able to obtain through collaboration in other aspects of our strategic relationship with] WBA; and any potential issues that could impede our ability to continue to work collaboratively with WBA in an efficient and effective manner in furtherance of the anticipated strategic and financial benefits of the relationship.

If we are unable to achieve [added: any of] our [removed: objectives within the anticipated time frame, or at all,] [added: objectives,] the expected future benefits may not be realized fully or [removed: at all, or] may take longer to realize than expected, which could have a material adverse impact on our business, financial condition, and results of operations.

If the operations of WBA are seriously disrupted for any reason, whether by [added: the global coronavirus ("COVID-19") pandemic,] natural disaster, labor disruption, regulatory or governmental action, or otherwise, it could adversely affect our business and our sales and profitability.

If our operations are seriously disrupted for any [removed: reason,] [added: reason deemed within our control,] we may have an obligation to pay or credit WBA for failure to supply products.

From time to time, various legislative initiatives, such as [added: changes to] the [added: federal corporate tax rate, the] repeal of last-in, first-out ("LIFO") treatment or the promulgation of state opioid taxes and fees, may be proposed that could adversely affect our tax positions and/or our tax liabilities.

[added: If we complete one or more acquisitions, our results] of [added: operations and financial condition may be adversely affected by a number of factors, including: regulatory or compliance issues that could arise; changes in regulations and laws;] the [added: failure of the] acquired businesses to achieve the results we have projected in either the near or long term; the assumption of unknown liabilities, including litigation risks; the fair value of assets acquired and liabilities assumed not being properly estimated; the difficulties of imposing adequate financial and operating controls on the acquired companies and their management and the potential liabilities that might arise pending the imposition of adequate controls; the difficulties in the integration of the operations, technologies, services and products of the acquired companies; and the failure to achieve the strategic objectives of these acquisitions.

[removed: From time to time, we may face audits or investigations by one or] more domestic or foreign government agencies relating to our international business activities, compliance with which could be costly and time-consuming, and could divert our management and key personnel from our business operations.

[added: Actual or] anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade or have been assigned a negative outlook, could limit our access to public debt markets, limit the institutions willing to provide credit to us, result in more restrictive financial and other covenants in our public and private debt, and would likely increase our overall borrowing costs and adversely affect our earnings.

Industry and Economic Risks

The COVID-19 pandemic has increased volatility of the capital and credit markets and has led to a general worsening of economic conditions, which has put financial pressure on many of our customers and may threaten certain customers’ ability to maintain liquidity sufficient to repay their obligations to us as they become due.

Business and Operational Risks

Walgreens Boots Alliance Development GmbH ("WBAD") provides a variety of services, including negotiating acquisition pricing with generic manufacturers on our behalf.

Moreover, if the economic benefits we are able to obtain through the generics purchasing services arrangement with WBA decline due to changes in market conditions or other changes impacting the fees and rebates that generic manufacturers make available through the arrangement, our margins and results of operations could also be adversely affected.

We are subject to operational and logistical risks that might not be covered by insurance.

We have distribution centers and facilities located in the United States and throughout the world.

Our business exposes us to risks that are inherent in the distribution of pharmaceuticals and the provision of related services, including with respect to cold chain storage and shipping.

We anticipate that the volume of cold chain storage and shipping may increase due to the COVID-19 pandemic, as we assist with the strategic national stockpile as well as possible distribution of COVID-19 vaccines.

Although we seek to maintain adequate insurance coverage, coverage on acceptable terms might be unavailable, or coverage might not cover our losses or may require large deductibles.

Uninsured losses or operational losses that result in large deductible payments in order to receive insurance coverage might have an adverse impact on our business operations and our financial position or results of operations.

Litigation and Regulatory Risks

The DQSA, and in particular Title II of the DQSA, the Drug Supply Chain Security Act ("DSCSA") also established requirements for drug wholesale distributors and

Our international operations may also be subject to local regulations containing record-keeping and other obligations related to our distribution operations in those locations.

Pedigree tracking laws increase our compliance burden and our pharmaceutical distribution costs and could have an adverse impact on our financial position or results of operations.

In July 2020, the United States Court of Appeals for the District of Columbia reversed the district court’s decision, which would allow the payment reductions to take effect.

biologicals that are paid based on WAC when ASP data during first quarter or sales is unavailable.

There can be no assurance that recent or future rules established by CMS will not have an adverse impact on our business.

Further, even where the government does not affirmatively change drug price regulation standards, other parties in the drug manufacturing and distribution system may change their interpretation or approach to implementing or complying with those standards, in a manner that may adversely affect our business.

For example, the 340B drug discount program requires manufacturers to provide discounts on outpatient drugs to “covered entity” safety net providers, and previous Health Resources and Services Administration (“HRSA”) guidance has allowed covered entities to dispense 340B discounted drugs through arrangements with multiple “contract pharmacies.” Recently, several manufacturers have announced initiatives that may inhibit or limit covered entities’ ability to use any, or multiple, contract pharmacies, and may direct us not to honor 340B discounted pricing requests on orders to be shipped to contract pharmacies (or may not honor chargebacks where such discounts are extended to contract pharmacies).

HRSA has initially indicated that it lacks regulatory authority to enforce its prior guidance allowing multiple contract pharmacies, but recently advised that it is considering whether it may have other enforcement remedies in the event that manufacturers do not extend 340B discounts through contract pharmacy arrangements.

Our customers include covered entities and organizations with significant participation as contract pharmacies, and the unavailability of 340B discounts through contract pharmacy arrangements may adversely affect such customers and, therefore, could adversely affect our business.

The Trump Administration has also sought to implement demonstration projects that may affect drug payments.

On July 24, 2020, the Trump Administration issued an “Executive Order on Increasing Drug Importation to Lower Prices for American Patients” calling for the federal government to exercise its authority under the Federal Food, Drug, and Cosmetic Act to permit drug imports from Canada, re-importation of certain insulin products, and case-by-case waivers to certain importers provided such importation poses no risk to public safety and results in lower costs.

Many states have enacted similar statutes which are not necessarily limited to items and services for which payment is made by federal healthcare programs.

While we believe that we are in compliance with applicable laws and regulations, many of the regulations applicable to us, including those

While a global settlement with respect to certain governmental entities within the Multidistrict Litigation ("MDL") and other related state court litigation remains subject to contingencies that could impact whether the parties ultimately decide to move forward, we believe a global settlement is probable and its liability related thereto can be reasonably estimated as of September 30, 2020.

We have recorded a charge of $6.6 billion in the fourth quarter of the fiscal year ended September 30, 2020 related to the global settlement and other related opioid litigation.

Further, any final settlement amongst parties may differ materially from our advanced discussions related to global resolution of the multi-district opioid litigation.

Each of our businesses may cause us to become involved in legal disputes or proceedings.

These disputes or proceedings have involved or may involve

Further, we cannot predict the impact of any efforts to change or repeal the 2017 Tax Act or enact alternative legislation by the incoming presidential administration or the next Congress.

From time to time, we may face audits or investigations by one or

Other Risks

We face risks related to health epidemics and pandemics, and the continued spread of COVID-19 is adversely affecting our business.

We face risks related to health epidemics and pandemics, including risks related to any responses thereto by the federal or state governments as well as customers and suppliers.

The COVID-19 pandemic is adversely affecting, and is expected to continue to adversely affect, our operations, supply chains and distribution network, and we have experienced and expect to continue to experience unpredictable reductions in supply and demand for certain of our products and services.

Further, it is possible that the manufacturers that produce the products that we distribute may experience delays or shutdowns due to COVID-19, such as from disruptions in their supply chains or in a suspension of production at their own facilities.

Accordingly, we expect the continued spread of COVID-19 to adversely affect the supply of products and/or potentially disrupt our ability to deliver products to customers.

Any extended disruption in our ability to service our customers could have a material adverse effect on our revenue, results of operations, and cash flows.

In addition, the DQSA established 503B outsourcing facilities as a category for providers of CSPs, allowing such facilities to voluntarily register with the FDA.

Our CSP business locations have registered with the FDA as 503B

outsourcing facilities and have implemented policies and procedures to achieve compliance with current federal and state requirements for such facilities.

Moreover, we expect that the FDA will continue to issue draft and final guidance and to promulgate regulations in its efforts to implement the requirements in the DQSA, including those relating to current good manufacturing practices ("cGMPs") and other matters related to 503B outsourcing facilities, which may require changes to our business, some of which may be significant.

Additional details on risks related to our 503B outsourcing facilities and implementation of cGMPs are described below.

On December 27, 2018, the United States District Court for the District of Columbia concluded that this policy exceeded CMS statutory authority (with regard to 2018 payments).

for calendar years 2018 through 2020.

and ongoing monitoring of customers.

If the generics purchasing services arrangement does not continue to be successful, our margins and results of operations could also be adversely affected.

The suspension or revocation by federal or state authorities of any of the registrations that must be in effect for our distribution and 503B outsourcing facilities to purchase, compound, store, and/or distribute pharmaceuticals and controlled substances, the refusal by such authorities to issue a registration to any such facility, or any enforcement action or other litigation that arises out of our failure to comply with applicable laws and regulations governing distribution and 503B outsourcing facilities may adversely affect our reputation, our business, and our results of operations.

The DEA, FDA, DOJ, and various other federal and state authorities regulate the distribution of pharmaceuticals and controlled substances and the compounding of pharmaceuticals that contain controlled substances.

We are required to hold valid DEA and state-level licenses, meet various security and operating standards, and comply with the Controlled Substances Act and its implementing regulations governing the sale, marketing, packaging, compounding, holding and distribution of controlled substances.

Government authorities may from time to time investigate whether we are in compliance with various security and operating standards applicable to the distribution of controlled substances including whether we are adequately detecting and preventing the illegal diversion of controlled substances.

Although we have procedures in place that are intended to ensure compliance with such laws and regulations, there can be no assurance that a regulatory agency or tribunal would conclude that our operations are compliant with applicable laws and regulations.

If we were found to be non-compliant with such laws and regulations, federal and state authorities have broad enforcement powers, including (i) the ability to suspend our distribution centers' and 503B outsourcing facilities' licenses to distribute and compound pharmaceutical products (including controlled substances), (ii) seize or recall products, and (iii) impose significant criminal, civil and administrative sanctions for violations of these laws and regulations, each of which could have a material adverse effect on our reputation, business, and results of operations.

We have received, and may in the future receive, requests for information, letters, and subpoenas from the DEA, FDA, various U.S. Attorneys' Offices of the DOJ, and/or state attorneys general and state regulatory authorities and agencies related to our distribution of controlled substances and our order monitoring program, which is designed to prevent and detect the illegal diversion of controlled substances, or other matters.

We generally respond to subpoenas, requests, letters, and other authority and/or agency correspondence in a thorough and timely manner.

These responses require time and effort and can result in considerable costs being incurred by us, such as costs related to addressing the observations listed on FDA Form 483 reports.

Such subpoenas, requests and letters can also lead to the assertion of claims or the commencement of civil, criminal, or regulatory legal proceedings against us, as well as to settlements and the suspension or revocation of registrations required by our distribution and 503B outsourcing facilities, each of which could have a material adverse effect on our reputation, business and results of operations.

In December 2017, following FDA inspections of our 503B outsourcing facilities, we voluntarily suspended production activities at our largest 503B outsourcing facility located in Memphis, Tennessee.

In May 2019, PharMEDium reached an agreement on the terms of a consent decree (the “Consent Decree”) with the FDA and the Consumer Protection Branch of the Civil Division of the DOJ.

The Consent Decree permits commercial operations to continue at PharMEDium’s Dayton, New Jersey, and Sugar Land, Texas compounding facilities and administrative operations to continue at its Lake Forest, Illinois headquarters subject to

compliance with the requirements set forth therein.

As required by the Consent Decree, we have completed audit inspections by an independent cGMP expert at the Dayton and Sugar Land facilities to determine that the facilities are being operated in conformity with cGMP.

Additional audit inspections by the independent cGMP expert of the Sugar Land and Dayton facilities are also required at least annually for a period of four years.

The Consent Decree also establishes requirements that must be satisfied prior to the resumption of commercial operations at the Memphis, Tennessee facility.

Through fiscal 2019, our results of operations were adversely impacted by the Memphis suspension.

Our results of operations will continue to be adversely impacted until the Memphis facility resumes commercial distribution and we cannot predict if or when the FDA will permit PharMEDium to resume commercial distribution at the Memphis facility.

Separately, we have agreed in several state regulatory matters to consent orders or temporary licensing suspensions regarding certain of our 503B outsourcing facilities.

Certain other states have requested information concerning the status of operations at some or all of our 503B outsourcing facilities.

These state regulatory matters preclude us from commercially distributing into certain states, which could have an adverse impact on our results of operations.

Additionally, the FDA may from time to time issue Form 483 reports and warning letters in connection with their oversight of 503B outsourcing facilities.

Prior to our acquisition of the business, PharMEDium received a warning letter from the FDA in 2014 and a series of Form 483 reports were issued in 2015 and 2016 following up on the 2014 letter.

We cannot be assured that the FDA and DOJ will be satisfied with the sufficiency or timing of PharMEDium’s corrective actions in response to this warning letter or the Form 483 reports.

A failure to comply with the Consent Decree or to address observations identified by the FDA in Form 483 reports or any warning letters issued by the FDA or observations identified by any other federal and state regulatory authority, including a failure to resolve the observations identified by the 2014 warning letter and subsequent Form 483 reports, could lead to the suspension of facilities currently in operation, an enforcement action, monetary penalties, and/or license revocation, each of which could have an adverse effect on our reputation, business and results of operations.

The products compounded by our CSP business are administered by our customers to patients intravenously, and failures or errors in production, labeling, or packaging could contribute to patient harm or death, which may subject us to significant liabilities and reputational harm.

The production, labeling, and packaging of CSPs is inherently risky.

Our CSP business sells CSPs to acute care hospitals, freestanding hospital outpatient departments, and ambulatory surgery centers, who then administer the CSPs to patients intravenously or through other injectable routes of administration.

There are a number of factors that could result in the injury or death of a patient who receives one of our CSPs, including quality issues, manufacturing or labeling flaws, improper packaging, or unanticipated or improper uses of the products, any of which could result from human or other error.

Any of these situations could lead to a recall of, or safety alert relating to, one or more of our products.

The Pharmaceutical Distribution Services reportable segment distributes a comprehensive offering of brand-name, specialty brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, [removed: outsourced compounded sterile preparations,] and related services to a wide variety of healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, and other customers.

Through a number of operating businesses, the Pharmaceutical Distribution Services reportable segment provides pharmaceutical distribution (including plasma and other blood products, [removed: injectible] [added: injectable] pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services to physicians who specialize in a variety of disease states, especially oncology, and to other healthcare providers, including hospitals and dialysis clinics.

Other consists of operating segments that focus on global commercialization services and animal health (MWI Animal [removed: Health).][added: Health or "MWI").]

The operating segments that focus on global commercialization services include [removed: ABCS] [added: AmerisourceBergen Consulting Services ("ABCS")] and World Courier.

[removed: | • |] [added: -] Revenue increased [removed: 6.9%] [added: 5.7%] from the prior fiscal year primarily due to the revenue growth of our Pharmaceutical Distribution Services segment; [removed: |]

[removed: | • |] Pharmaceutical Distribution [removed: Services'] [added: Services] gross profit increased [removed: 6.2%] [added: 6.2%, or $216.0 million,] from the prior fiscal year primarily due to the increase in revenue largely due to strong specialty product sales, the January 2018 consolidation of Profarma, and the January 2018 acquisition of H.D. Smith and was negatively impacted by our pharmaceutical compounding operations as production at our Memphis facility [removed: has] [added: had] been suspended since December 2017. [removed: Gross profit in Other increased 4.3% from the prior fiscal year primarily due to growth at World Courier and MWI, the January 2018 consolidation of the specialty joint venture in Brazil, and ABCS's growth in its Canadian operations. Total gross profit in the current fiscal year was favorably impacted primarily by increases in gains from antitrust litigation settlements, a last-in, first-out ("LIFO") credit in the current year in comparison to a LIFO expense in the prior year, and the reversal of a previously-estimated assessment related to the New York State Opioid Stewardship Act; |]

[removed: | • |] [added: -] Distribution, selling, and administrative expenses increased [removed: 8.3% from the prior fiscal year as the Pharmaceutical Distribution Services' segment expenses increased by 10.2%] [added: 3.9%] from the prior fiscal year primarily due to an increase in [added: operating] costs to support [removed: the increase in revenue, the January 2018 consolidation of Profarma, and the January 2018 acquisition of H.D. Smith; |][added: our revenue growth;]

[removed: | • |] Net income and earnings per share were significantly lower in the [removed: current] fiscal year [added: ended September 30, 2019] primarily due to the $570.0 million impairment of [removed: long-lived] [added: PharMEDium] assets and the significant income tax benefit recognized in the prior fiscal year as a result of the 2017 Tax Act. [removed: |]

Year [removed: ended September] [added: ended September] 30, [removed: 2019 compared] [added: 2019 compared] to the Year [removed: ended September] [added: ended September] 30, 2018

| | | [added: | | | |] Fiscal Year [removed: Ended September] [added: Ended September] 30, | | | | | | | | | [added: | | | | | |]

| (dollars in thousands) | | [added: | | | |] 2019 | | | | [added: | |] 2018 | | | | [added: | |] Change | [added: | |]

| Pharmaceutical Distribution Services | | [added: | | | |] $ | 172,813,537 | | | [added: | |] $ | 161,699,343 | | | [added: | |] 6.9% | [added: | |]

| Other: | | | | | | | | | | | [added: | | | | | | | | | |]

| MWI Animal Health | | [added: | | | |] 3,975,232 | | | | [added: | |] 3,789,759 | | | | [added: | |] 4.9% | [added: | |]

| Global Commercialization Services | | [added: | | | |] 2,893,109 | | | | [added: | |] 2,542,971 | | | | [added: | |] 13.8% | [added: | |]

| Total Other | | [added: | | | |] 6,868,341 | | | | [added: | |] 6,332,730 | | | | [added: | |] 8.5% | [added: | |]

| Intersegment eliminations | | [removed: (92,757] | | [removed: )] | | [removed: (92,438] [added: (92,757)] | | [removed: )] | | | [added: | (92,438) | | | | | | | | |]

| Revenue | | [added: | | | |] $ | 179,589,121 | | | [added: | |] $ | 167,939,635 | | | [added: | |] 6.9% | [added: | |]

We currently expect our revenue growth percentage to be in the [removed: mid to high-single] [added: mid-single] digits in fiscal [removed: 2020.][added: 2021.]

Our future revenue growth will continue to be affected by various factors, such as industry growth trends, including drug utilization, the introduction of new, innovative brand [removed: therapies (including biosimilars),] [added: therapies,] the likely increase in the number of generic drugs [added: and biosimilars] that will be available over the next few years as a result of the expiration of certain drug patents held by brand-name pharmaceutical manufacturers and the rate of conversion from brand products to those generic [removed: drugs,] [added: drugs and biosimilars,] price inflation and price deflation, general economic conditions in the United States, competition within the industry, customer consolidation, changes in pharmaceutical manufacturer pricing and distribution policies and practices, increased downward pressure on government and other third-party reimbursement rates to our customers, [removed: and] changes in federal government rules and [removed: regulations.][added: regulations, and the impact of the COVID-19 pandemic (See Risk Factor - *We face risks related to health epidemics and pandemics, and the continued spread of COVID-19 is adversely affecting our business).*]

The Pharmaceutical Distribution Services segment grew its revenue by [removed: 6.9%] [added: 5.6%, or $9.7 billion,] from the prior fiscal year, primarily due to the [added: organic] growth of some of its largest customers, continued strong [added: increased] specialty [added: pharmaceutical] product [removed: sales,] [added: sales (which generally have higher selling prices),] and overall market [removed: growth.][added: growth principally driven by unit volume growth and, to a lesser extent, inflationary increases in brand drugs.]

During the fiscal year ended September 30, [removed: 2019,] [added: 2020,] no significant contracts expired.

| | | [added: | | | |] Fiscal Year [removed: Ended September] [added: Ended September] 30, | | | | | | | | | [added: | | | | | |]

| (dollars in thousands) | | [added: | | | |] 2019 | | | | [added: | |] 2018 | | | | [added: | |] Change | [added: | |]

| Pharmaceutical Distribution Services | | [added: | | | |] $ | 3,682,986 | | | [added: | |] $ | 3,466,956 | | | [added: | |] 6.2% | [added: | |]

| Other | | [added: | | | |] 1,314,172 | | | | [added: | |] 1,260,485 | | | | [added: | |] 4.3% | [added: | |]

| Intersegment eliminations | | [removed: (659] | | [removed: )] | | [removed: (609] [added: (659)] | | [removed: )] | | | [added: | (609) | | | | | | | | |]

| Gain from antitrust litigation settlements | | [added: | | | |] 145,872 | | | | [added: | |] 35,938 | | | | | [added: | | | |]

| LIFO credit (expense) | | [added: | | | |] 22,544 | | | | [removed: (67,324] | | [removed: )] [added: (67,324)] | | | [added: | | | | | |]

| PharMEDium remediation costs | | [removed: (48,603] | | [removed: )] | | [removed: (61,129] [added: (48,603)] | | [removed: )] | | | [added: | (61,129) | | | | | | | | |]

| New York State Opioid Stewardship Act | | [added: | | | |] 22,000 | | | | [removed: (22,000] | | [removed: )] [added: (22,000)] | | | [added: | | | | | |]

| Gross profit | | [added: | | | |] $ | 5,138,312 | | | [added: | |] $ | 4,612,317 | | | [added: | |] 11.4% | [added: | |]

[removed: Gross] [added: Pharmaceutical Distribution Services' gross] profit [removed: in] [added: increased 3.8% from] the [removed: current] [added: prior] fiscal year [removed: was favorably impacted] primarily [removed: by the increase in gross profit in Pharmaceutical Distribution Services,] [added: due to] the [added: strong] increase in [removed: gross profit][added: specialty product sales.]

[added: Gross profit] in [added: the fiscal year ended September 30, 2019 was favorably impacted primarily by the increase in gross profit in Pharmaceutical Distribution Services, the increase in gross profit in] Other, an increase in gains from antitrust litigation settlements, the LIFO credit in the current year in comparison to a LIFO expense in the prior year, and the reversal of a previously-estimated assessment related to the New York State Opioid Stewardship Act.

The LIFO [removed: credit] [added: expense] in the current fiscal year was primarily driven by lower [removed: brand inflation,] [added: generic deflation,] offset in part by [removed: lower] [added: a higher] generic [removed: deflation] [added: inventory mix] in comparison to the prior fiscal year.

After [removed: FDA] [added: U.S. Food and Drug Administration ("FDA")] inspections of [removed: our] [added: PharMEDium's] compounding facilities, we voluntarily suspended production activities in December 2017 at [removed: our] [added: its] largest compounding facility located in [removed: Memphis] [added: Memphis, Tennessee] pending execution of certain remedial [removed: measures (see Notes 1 and 13 of the Notes to Consolidated Financial Statements).][added: measures.]

New York State ("NYS") enacted the [removed: Opioid Stewardship Act ("OSA"),] [added: OSA,] which went into effect on July 1, 2018.

As a percentage of revenue, Pharmaceutical Distribution Services gross profit margin of 2.13% in the [removed: current] fiscal year [added: ended September 30, 2019] remained relatively flat compared to the prior fiscal year.

As a percentage of revenue, gross profit margin in Other of [removed: 19.13%] [added: 18.60%] in the current fiscal year decreased from [removed: 19.90%] [added: 19.13%] in the prior fiscal year.

The gains were recorded as reductions to cost of goods sold (see Note [removed: 14] [added: 15] of the Notes to Consolidated Financial Statements).

- In March 2020, the World Health Organization ("WHO") declared a global pandemic attributable to the outbreak and continued spread of COVID-19.

In connection with the mitigation and containment procedures recommended by the WHO and imposed by federal, state, and local governmental authorities, we implemented measures designed to keep our employees safe and address business continuity issues at our distribution centers and other locations.

We continue to evaluate and plan for the potential effects of a prolonged disruption and the related impacts on our revenue, results of operations, and cash flows (refer to our COVID-19 risk factor in Item 1A.

Risk Factors on page 8);

- Total gross profit increased 1.0% and was favorably impacted by increases in gross profit in Pharmaceutical Distribution Services and Other and was offset in part by lower gains from antitrust litigation settlements, last-in, first-out ("LIFO") expense in comparison to a LIFO credit in the prior fiscal year, and an estimated assessment related to the New York State Opioid Stewardship Act ("OSA") compared to a reversal of a previously-estimated assessment related to the OSA.

- Employee severance, litigation, and other increased $6.5 billion due to a legal accrual for litigation relating the distribution of prescription opioid pain medications.

We are currently in advanced discussions, which are ongoing, with the states and various plaintiffs’ representatives that would be necessary to reach a global settlement of the Multidistrict Litigation ("MDL") and other related state-court litigation brought by certain state and local governmental entities to be paid over 18 years in which our payment would be $6.5 billion assuming all parties participate.

A portion of this amount relating to plaintiff attorney fees would be payable over a shorter time period.

While a global settlement remains subject to contingencies that could impact whether the parties ultimately decide to move forward, we believe a global settlement is probable and our loss related thereto can be reasonably estimated as of September 30, 2020;

- Operating income decreased in the current fiscal year primarily due to the $6.6 billion legal accrual in connection with opioid lawsuits, offset in part by an increase in segment operating income, a lower impairment charge relating to PharMEDium's assets, and a decline in depreciation and amortization;

Our effective tax rate in the fiscal year ended September 30, 2020 was higher than the U.S. statutory rate due to our operating loss, the tax benefits associated with our decision to permanently exit the PharMEDium compounding business, Swiss Tax Reform, the CARES Act, and other discrete items (see Note 5 of the Notes to Consolidated Financial Statements) and offset in part by the tax impact of the portion of the opioid legal accrual that is not expected to be tax deductible.

The effective tax rate in the fiscal year ended September 30, 2019 was also impacted by a $37.0 million decrease to the Company's transition tax related to the U.S. Tax Cuts and Jobs Act (the "2017 Tax Act").

| Pharmaceutical Distribution Services | | | | | | $ | 182,467,189 | | | | | $ | 172,813,537 | | | | | 5.6% | | |

| MWI Animal Health | | | | | | 4,216,462 | | | | | | 3,975,232 | | | | | | 6.1% | | |

| Global Commercialization Services | | | | | | 3,308,640 | | | | | | 2,893,109 | | | | | | 14.4% | | |

| Total Other | | | | | | 7,525,102 | | | | | | 6,868,341 | | | | | | 9.6% | | |

| Intersegment eliminations | | | | | | (98,365) | | | | | | (92,757) | | | | | | | | |

| Revenue | | | | | | $ | 189,893,926 | | | | | $ | 179,589,121 | | | | | 5.7% | | |

More specifically, the increase in the Pharmaceutical Distribution Services segment revenue was largely attributable to the following (in billions):

| Increased sales to Walgreens, our largest customer | | | | | | $2.8 | | |

| Increased sales to specialty physician practices | | | | | | $2.8 | | |

| Increased sales to other customers | | | | | | $4.1 | | |

Revenue in Other increased 9.6% from the prior fiscal year due to growth at all three operating segments: ABCS, MWI, and World Courier.

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| Pharmaceutical Distribution Services | | | | | | $ | 3,824,129 | | | | | $ | 3,682,986 | | | | | 3.8% | | |

| Other | | | | | | 1,399,553 | | | | | | 1,314,172 | | | | | | 6.5% | | |

| Intersegment eliminations | | | | | | (6,096) | | | | | | (659) | | | | | | | | |

| LIFO (expense) credit | | | | | | (7,422) | | | | | | 22,544 | | | | | | | | |

| PharMEDium shutdown costs | | | | | | (5,421) | | | | | | — | | | | | | | | |

| Gross profit | | | | | | $ | 5,191,884 | | | | | $ | 5,138,312 | | | | | 1.0% | | |

Pharmaceutical Distribution Services gross profit increased 3.8%, or $141.1 million, from the prior fiscal year due to the strong increase in specialty product sales.

Gross profit in Other increased 6.5%, or $85.4 million, from the prior fiscal year due to growth at World Courier, MWI, and ABCS.

We incurred remediation costs in connection with the suspended production activities at PharMEDium.

We also incurred shutdown costs in connection with permanently exiting the PharMEDium compounding business.

In September 2020, the United States Court of Appeals for the Second Circuit reversed the District Court’s decision, and, as a result, we accrued $14.8 million in the fourth quarter of the fiscal year ended September 30, 2020 as we revised our estimated liability for the 2017 and 2018 calendar years.

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| Distribution, selling, and administrative | | | | | | $ | 2,767,217 | | | | | $ | 2,663,508 | | | | | 3.9% | | |

| Depreciation and amortization | | | | | | 391,062 | | | | | | 462,407 | | | | | | (15.4)% | | |

| Employee severance, litigation, and other | | | | | | 6,807,307 | | | | | | 330,474 | | | | | | | | |

| Total operating expenses | | | | | | $ | 10,327,238 | | | | | $ | 4,026,389 | | | | | 156.5% | | |

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| • | Operating income decreased 23.0% in the current fiscal year primarily due to a $570.0 million impairment of PharMEDium's long-lived assets (see Note 1 of the Notes to Consolidated Financial Statements), and an increase in employee severance, litigation, and other costs, offset in part by increases in gains from antitrust litigation settlements, a LIFO credit in the current fiscal year, and an increase in total operating segment income; |

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| • | Our effective tax rates were 11.7% and (37.2)% in the fiscal years ended September 30, 2019 and 2018, respectively. Our effective tax rate in the fiscal year ended September 30, 2019 was primarily impacted by the $570.0 million impairment of long-lived assets (see Note 1 of the Notes to Consolidated Financial Statements) and legal settlements, which changed the mix of domestic and international income. The effective tax rate in the fiscal year ended September 30, 2019 was also impacted by a $37.0 million decrease to the Company's transition tax related to the Tax Cuts and Jobs Act (the "2017 Tax Act"). Our effective tax rate in the fiscal year ended September 30, 2018 was primarily impacted by the effect of 2017 Tax Act. Our total income tax benefit in the fiscal year ended September 30, 2018 of $438.5 million reflects $612.6 million of tax benefits recognized and a reduction in the U.S. federal income tax rate from 35% to 21%, both resulting from the 2017 Tax Act. Additionally, during the fourth quarter of fiscal 2018, a portion of a 2017 legal settlement charge was determined to be deductible, which favorably impacted our effective tax rate for the fiscal year ended September 30, 2018. Our effective tax rates for the fiscal years ended September 30, 2019 and 2018 were favorably impacted by the Company's international businesses in Switzerland and Ireland, which have lower income tax rates, and the benefit from stock option exercises and restricted stock vesting; and |

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In addition, revenue increased in the current fiscal year due to the January 2018 consolidation of Profarma and the January 2018 acquisition of H.D. Smith.

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We continue to incur remediation costs in connection with our compounding operations.

Additionally, in April 2019, we ceased production at our compounding facility in Cleveland, Mississippi.

NYS filed an appeal of the court decision on January 17, 2019; however, we do not believe a loss contingency is probable.

Pharmaceutical Distribution Services gross profit increased 6.2%, or $216.0 million, from the prior fiscal year primarily due to the increase in revenue largely due to strong specialty product sales, the January 2018 consolidation of Profarma, and the January 2018 acquisition of H.D. Smith and was negatively impacted by our pharmaceutical compounding operations as production at our Memphis facility has been suspended since December 2017.

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We recorded a $30.0 million impairment on a non-customer note receivable related to a start-up venture in Other (Income ) Loss in the fiscal year ended September 30, 2018.

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The loss on the early retirement of the debt included a $22.3 million prepayment premium and $1.5 million of an unamortized debt discount and unamortized debt issuance costs.

Our total income tax benefit in the fiscal year ended September 30, 2018 of $438.5 million reflects $612.6 million of tax benefits recognized and a reduction in the U.S. federal income tax rate from 35% to 21%, both resulting from the 2017 Tax Act.

Additionally, during the fourth quarter of fiscal 2018, a portion of a 2017 legal settlement charge was determined to be deductible, which favorably impacted our effective tax rate for the fiscal year ended September 30, 2018.

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See discussion on page [removed: 41] [added: 43] under the heading "Market Risk," which is incorporated by reference herein.

More specifically, we distribute a comprehensive offering of brand-name, specialty brand-name, and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, [removed: outsourced compounded sterile preparations,] and related services to a wide variety of healthcare providers located in the United States and select global markets, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, physician practices, medical and dialysis clinics, veterinarians, and other customers.

Pharmaceutical sales in the United States, as recently estimated by IQVIA, an independent third-party provider of information to the pharmaceutical and healthcare industry, are expected to grow at a compound annual growth rate of approximately [removed: 4.2%] [added: 3.4%] from [removed: 2018] [added: 2019] through [removed: 2023,] [added: 2024,] and the growth rate is dependent, in part, on pharmaceutical manufacturer price increases.

*Aging Population.* The number of individuals age 65 and over in the United States is expected to exceed [removed: 61] [added: 63] million by [removed: 2023] [added: 2024] and is the most rapidly growing segment of the population.

These policies and other legislative developments (including potential revisions to or repeal of any portions of the health reform legislation) may affect our businesses directly and/or indirectly (see Government Regulation on page 6 [added: and the risk factor titled *Legal, regulatory, and legislative changes with respect to reimbursement, pricing, and contracting may adversely affect our business and results of operations, including through declining reimbursement rates* on page 12] for further details).

[removed: | • | *Optimize and Grow Our Pharmaceutical Distribution and Strategic Global Sourcing Businesses.* We believe we are well positioned in size and market breadth to continue to grow our distribution businesses as we invest to improve our operating and capital efficiencies.] Distribution, including specialty pharmaceuticals, anchors our growth and position in the pharmaceutical supply channel as we provide superior distribution services and deliver value-added solutions, which improve the efficiency and competitiveness of both healthcare providers and pharmaceutical manufacturers, thus allowing the pharmaceutical supply channel to better deliver healthcare to patients. [removed: |]

[removed: With the continued growth of generic pharmaceuticals in the U.S. market, we] [added: We] have introduced strategies to enhance our position in the generic marketplace, including our generic product private label program based in Ireland.

Our robust distribution facility network includes a national distribution center in Columbus, OH, which offers pharmaceutical [added: manufacturers a single shipping destination.]

[removed: | *•* | *Acquisitions.*] [added: *•Acquisitions.*] In order to grow our core strategic offerings and to enter related markets, we have acquired and invested in businesses and will continue to consider additional acquisitions and investments. [removed: |]

[removed: | • |] [added: -] *Divestitures.* In order to allow us to concentrate on our strategic focus areas, we have divested certain non-core businesses and may, from time to time, consider additional divestitures. [removed: |]

Our operations as of September 30, [removed: 2019] [added: 2020] are comprised of the Pharmaceutical Distribution Services reportable segment and other operating segments that are not significant enough to require separate reportable segment disclosure, and, therefore, have been included in Other for the purpose of reportable segment presentation.

[removed: The Pharmaceutical Distribution Services reportable segment distributes a comprehensive offering of brand-name, specialty brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and] equipment, [removed: outsourced compounded sterile preparations,] and related services to a wide variety of healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, and other customers.

[removed: 50 countries,] [added: World Courier] is a leading global specialty transportation and logistics provider for the biopharmaceutical industry.

In addition, we have an enterprise-wide marketing [removed: group] [added: team] that coordinates branding and all other marketing activities across the Company.

Our two largest customers, Walgreens Boots Alliance, Inc. ("WBA") and Express Scripts, Inc. ("Express Scripts"), accounted for approximately [removed: 34%] [added: 33%] and approximately [removed: 13%,] [added: 12%,] respectively, of revenue in the fiscal year ended September 30, [removed: 2019.][added: 2020.]

Our top 10 customers, including governmental agencies and group purchasing organizations ("GPO"), represented approximately 64% of revenue in the fiscal year ended September 30, [removed: 2019.][added: 2020.]

*Suppliers.* We obtain pharmaceutical and other products from manufacturers, none of which accounted for 10% or more of our purchases in the fiscal year ended September 30, [removed: 2019.][added: 2020.]

The 10 largest suppliers in fiscal year ended September 30, [removed: 2019] [added: 2020] accounted for approximately [removed: 45%] [added: 46%] of our purchases.

*Information Systems.* The Pharmaceutical Distribution Services operating segment [removed: operates] [added: recently transitioned] its [removed: full-service wholesale pharmaceutical] [added: key specialty] distribution [removed: facilities in the United States on two] [added: businesses onto its] primary enterprise resource planning ("ERP") [removed: systems.][added: system.]

[removed: Pharmaceutical Distribution Services’] ERP [removed: systems provide] [added: system provides] for, among other things, electronic order entry by customers, invoice preparation and purchasing, and inventory tracking.

We [removed: are currently making significant] [added: continue to make] investments to enhance and upgrade the operating systems utilized by our other operating segments.

Pharmaceutical Distribution Services’ systems are intended to strengthen customer relationships by helping customers to reduce operating [removed: costs] [added: costs,] and by providing [added: them] a platform for a number of the basic and value-added [removed: services offered to our customers,] [added: services,] including product demand data, inventory replenishment, single-source billing, third-party claims processing, real-time price and incentive updates, and price labels.

As of September 30, [removed: 2019,] [added: 2020,] we had approximately 22,000 employees, of which approximately 21,000 were full-time employees.

The U.S. Drug Enforcement Administration ("DEA"), the U.S. Food and Drug Administration ("FDA"), the U.S. Department of Justice ("DOJ"), and various other federal and state authorities regulate the [removed: compounding,] purchase, storage, and/or distribution of pharmaceutical products, including controlled substances.

Wholesale distributors of controlled substances [removed: and entities that compound pharmaceuticals that contain controlled substances] must hold valid DEA licenses, meet various security and operating standards, and comply with regulations governing the sale, marketing, [removed: compounding,] packaging, holding, and distribution of controlled substances.

The DQSA establishes federal traceability standards requiring drugs to be labeled and tracked at the lot level, preempts state drug pedigree requirements, and will [removed: eventually] require all supply-chain stakeholders to participate in an electronic, interoperable prescription drug traceability system.

The DQSA also establishes [removed: new] requirements for drug wholesale distributors and third-party logistics providers, including licensing requirements applicable in states that had not previously licensed third-party logistics providers.

There can be no assurance that we are fully compliant with the [removed: new] DQSA requirements, or with additional related state regulatory and licensing requirements, and any failure to comply may result in suspension or delay of certain operations and additional costs to bring our operations into compliance.

In addition, changes in the interpretations of existing regulations may result in significant additional compliance costs or the discontinuation of our ability to continue to operate [added: certain of] our distribution [removed: centers or Section 503B outsourcing facilities,] [added: centers,] which may have a material adverse effect on our financial condition and results of operations.

The Health Information Technology for Economic and Clinical Health Act ("HITECH [removed: Act"), enacted as part of the 2009 American Recovery and Reinvestment Act ("ARRA"),] [added: Act")] strengthened federal privacy and security provisions governing protected health information.

[removed: On] [added: In] January [removed: 25,] 2013, the Office for Civil Rights of HHS published the HIPAA omnibus final rule ("HIPAA Final Rule"), which amended certain aspects of the HIPAA privacy, security, and enforcement rules pursuant to the HITECH Act, extending certain HIPAA obligations to business associates and their subcontractors.

Most notably certain aspects of our business are subject to the European Union's General Data Protection Regulation ("GDPR") which became effective on May 25, 2018, [removed: and] the [removed: recently enacted] California Consumer Protection Act [removed: ("CCPA")] [added: ("CCPA"),] which [removed: becomes] [added: became] effective on January 1, [removed: 2020 (with the promulgation of regulations due to be released on July 1, 2020).][added: 2020, and Brazil's new General Data Protection Law (Lei Geral de Proteção de Dados Pessoais) – Law No. 13,709/208 ("LGPD") which became effective in August 2020.]

We have implemented a privacy and information security compliance program to facilitate our ongoing efforts to comply with [removed: GDPR, CCPA and other] [added: the] applicable privacy [added: laws and] regulations.

Subsequent legislation and rules promulgated by government agencies have made additional changes to federal drug payment policies.

*COVID-19 Pandemic.* In March 2020, the World Health Organization ("WHO") declared a global pandemic attributable to the outbreak and continued spread of COVID-19.

In connection with the mitigation and containment procedures recommended by the WHO and imposed by federal, state, and local governmental authorities, we implemented measures designed to keep our employees safe and address business continuity issues at our distribution centers and other locations.

We continue to evaluate and plan for the potential effects of a prolonged disruption and the related impacts on our revenue, results of operations, and cash flows.

These items include, but are not limited to, the financial condition of our customers and the realization of accounts receivable, decreased availability and demand for our products and services, and delays related to current and future projects.

While our operational and financial performance may be significantly impacted by COVID-19, it is not possible for us to predict the duration or magnitude of the outbreak and whether it could have a material adverse impact on the Company's financial position, results of operations, or cash flows (see Risk Factor - *We face risks related to health epidemics and pandemics, and the continued spread of COVID-19 is adversely affecting our business).*

- *Optimize and Grow Our Pharmaceutical Distribution and Strategic Global Sourcing Businesses.* We believe we are well positioned in size and market breadth to continue to grow our distribution businesses as we invest to improve our operating and capital efficiencies.

- *Optimize and Grow Our Global Commercialization Services and Animal Health Businesses.* Our consulting service businesses help global pharmaceutical and biotechnology manufacturers commercialize their products.

We believe we are the largest provider of reimbursement services that assist pharmaceutical companies in supporting access to branded drugs.

We also provide outcomes research, contract field staffing, patient assistance and copay assistance programs, adherence programs, risk mitigation services, and other market access programs to pharmaceutical companies.

World Courier further strengthens our service offerings to global pharmaceutical manufacturers and provides an established platform for the introduction of our specialty services outside North America.

MWI Animal Health (“MWI”) sells pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both the companion animal and production animal markets.

MWI also offers its customers a variety of value-added services, including its e-commerce platform, technology management systems, pharmacy fulfillment, inventory management system, equipment procurement consultation, special order fulfillment, and educational seminars, which we believe closely integrate MWI with its customers' day-to-day operations and provide them with meaningful incentives to continue doing business with MWI.

We continue to seek opportunities to expand our offerings in our Global Commercialization Services and Animal Health businesses.

In January 2020, we decided to permanently exit the PharMEDium Healthcare Holdings LLC’s ("PharMEDium") compounding business, and, as a result, the Company ceased all commercial and administrative operations related to this business in fiscal 2020.

The decision to permanently exit the PharMEDium business was due to a number of factors including, but not limited to, ongoing operational, regulatory, and commercial challenges.

The Pharmaceutical Distribution Services reportable segment distributes a comprehensive offering of brand-name, specialty brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and

World Courier, which operates in more than 50 countries, is a leading global specialty transportation and logistics provider for the biopharmaceutical industry.

As a result, the pharmaceutical distribution facilities in the United States all now operate under a single ERP system.

Pharmaceutical Distribution Services’

Human Capital

We aspire to create healthier futures and accelerate business results by inspiring the best and brightest global talent across all dimensions of diversity to perform at their full potential.

More than 56% of our workforce is comprised of women, 49% is comprised of individuals with ethnically diverse backgrounds, and 30% of our Board of Directors are women.

Additionally, our Executive Management Committee is made up of 43% women.

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manufacturers a single shipping destination.

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| • | *Optimize and Grow Our Global Commercialization Services and Animal Health Businesses.* Our consulting service businesses help global pharmaceutical and biotechnology manufacturers commercialize their products. We believe we are the largest provider of reimbursement services that assist pharmaceutical companies in supporting access to branded drugs. We also provide outcomes research, contract field staffing, patient assistance and copay assistance programs, adherence programs, risk mitigation services, and other market access programs to pharmaceutical companies. World Courier is a leading global specialty transportation and logistics provider for the biopharmaceutical industry. World Courier further strengthens our service offerings to global pharmaceutical manufacturers and provides an established platform for the introduction of our specialty services outside North America. MWI Animal Health (“MWI”) sells pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both the companion animal and production animal markets. MWI also offers its customers a variety of value-added services, including its e-commerce platform, technology management systems, pharmacy fulfillment, inventory management system, equipment procurement consultation, special order fulfillment, and educational seminars, which we believe closely integrate MWI with its customers' day-to-day operations and provide them with meaningful incentives to continue doing business with MWI. We continue to seek opportunities to expand our offerings in our Global Commercialization Services and Animal Health businesses. |

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World Courier, which operates in more than

We are currently working to transition all of these facilities to a single primary ERP system.

Employees

Our Section 503B outsourcing facilities must comply with current Good Manufacturing Practices ("cGMPs") and are inspected by the FDA periodically to determine that we are complying with such cGMPs.

DEA, FDA, DOJ, and state authorities have broad enforcement powers, including the ability to suspend our distribution centers or Section 503B outsourcing facilities from distributing pharmaceutical products (including controlled substances), seize or recall products, and impose significant criminal, civil, and administrative sanctions.

On May 17, 2019, PharMEDium Healthcare Holdings, Inc. ("PharMEDium") reached an agreement on the terms of a consent decree (the "Consent Decree") with the FDA and the Consumer Protection Branch of the Civil Division of the DOJ that was entered by the United States District Court for the Northern District of Illinois on May 22, 2019.

The Consent Decree permits commercial operations to continue at PharMEDium’s Dayton, New Jersey and Sugar Land, Texas compounding facilities and administrative operations to continue at its Lake Forest, Illinois headquarters subject to compliance with the requirements of the Consent Decree.

As required by the Consent Decree, we have completed audit inspections by an independent cGMP expert at the Dayton and Sugar Land facilities to confirm that the facilities are being operated in conformity with cGMP.

Additional audit inspections by the independent cGMP expert of the Sugar Land and Dayton facilities are also required at least annually for four years.

The Consent Decree also establishes requirements that must be satisfied prior to the resumption of commercial operations at the Memphis, Tennessee facility, where we voluntarily suspended production activities in December 2017.

We continue the ongoing compliance efforts of our subsidiary PharMEDium, including efforts to resume commercial distribution at the Memphis, Tennessee facility.

In addition, the DQSA created 503B outsourcing facilities as a new category for providers of compounded sterile preparations ("CSPs"), allowing such facilities to voluntarily register with the FDA.

Our CSP business locations have registered with the FDA as Section 503B outsourcing facilities and have implemented policies and procedures to achieve compliance with current federal and state requirements for such facilities.

Legal proceedings in which we are involved are discussed in Note [removed: 13] [added: 14] (Legal Matters and Contingencies) of the Notes to Consolidated Financial Statements appearing in this Annual Report on Form 10-K.

[removed: Form 10-K][added: Form 10-K]

FOR THE FISCAL YEAR [removed: ENDED September] [added: ENDED September] 30, [removed: 2019][added: 2020]

Commission file [removed: number 1-16671][added: number 1-16671]

| Delaware | | | | [added: | | | | | | | |] 23-3079390 | [added: | |]

| (State or other jurisdiction of | | | | [added: | | | | | | | |] (I.R.S. Employer | [added: | |]

| incorporation or organization) | | | | [added: | | | | | | | |] Identification No.) | [added: | |]

| 1300 Morris Drive | [added: | |] Chesterbrook, | [added: | |] PA | | [added: | | | |] 19087-5594 | [added: | |]

| (Address of principal executive offices) | | | | [added: | | | | | | | |] (Zip Code) | [added: | |]

[removed: (610) 727-7000][added: (610) 727-7000]

| Title of each class | [added: | |] Trading Symbol(s) | [added: | |] Name of exchange on which registered | | [added: | | | |]

| Common stock | [added: | |] ABC | [added: | |] New York Stock Exchange | [added: | |] (NYSE) | [added: | |]

The aggregate market value of voting stock held by non-affiliates of the registrant on March 31, [removed: 2019] [added: 2020] based upon the closing price of such stock on the New York Stock Exchange on March 31, [removed: 2019] [added: 2020] was [removed: $9,817,515,026.][added: $10,238,925,461.]

The number of shares of common stock of AmerisourceBergen Corporation outstanding as of October 31, [removed: 2019] [added: 2020] was [removed: 205,922,186.][added: 204,249,747.]

Part III — Registrant's Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders.

| Item | | [added: | | | |] Page | [added: | |]

| [1A. Risk [removed: Factors](#s36F730AEE0485688AED1A3C4728980AD)] [added: Factors](#iae24bb64548d47cfaf1f12c57753c40c_16)] | | [removed: [8](#s36F730AEE0485688AED1A3C4728980AD)] | [added: | | | [8](#iae24bb64548d47cfaf1f12c57753c40c_16) | | |]

| [1B. Unresolved Staff [removed: Comments](#s490AA0C8970B5F509F25A3A71B7FDA7D)] [added: Comments](#iae24bb64548d47cfaf1f12c57753c40c_19)] | | [removed: [18](#s490AA0C8970B5F509F25A3A71B7FDA7D)] | [added: | | | [18](#iae24bb64548d47cfaf1f12c57753c40c_19) | | |]

| [3. Legal [removed: Proceedings](#s930FF7243DB05E2CAFD326AE1AD402DE)] [added: Proceedings](#iae24bb64548d47cfaf1f12c57753c40c_25)] | | [removed: [18](#s930FF7243DB05E2CAFD326AE1AD402DE)] | [added: | | | [18](#iae24bb64548d47cfaf1f12c57753c40c_25) | | |]

| [4. Mine Safety [removed: Disclosures](#s24E14BCC314256F29A5E45CC41B4B64F)] [added: Disclosures](#iae24bb64548d47cfaf1f12c57753c40c_28)] | | [removed: [18](#s24E14BCC314256F29A5E45CC41B4B64F)] | [added: | | | [18](#iae24bb64548d47cfaf1f12c57753c40c_28) | | |]

| [Information about our Executive [removed: Officers](#s8F12475D3C105B04954CC351D94FAF9C)] [added: Officers](#iae24bb64548d47cfaf1f12c57753c40c_31)] | | [removed: [19](#s8F12475D3C105B04954CC351D94FAF9C)] | [added: | | | [19](#iae24bb64548d47cfaf1f12c57753c40c_31) | | |]

| [5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity [removed: Securities](#s54E9BC8036C75751AD61BFAA3FC04D56)] [added: Securities](#iae24bb64548d47cfaf1f12c57753c40c_37)] | | [removed: [21](#s54E9BC8036C75751AD61BFAA3FC04D56)] | [added: | | | [21](#iae24bb64548d47cfaf1f12c57753c40c_37) | | |]

| [6. Selected Financial [removed: Data](#s96D3C475AE765FE582C3A807ADBBDD63)] [added: Data](#iae24bb64548d47cfaf1f12c57753c40c_40)] | | [removed: [24](#s96D3C475AE765FE582C3A807ADBBDD63)] | [added: | | | [24](#iae24bb64548d47cfaf1f12c57753c40c_40) | | |]

| [7. Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s0344D91605D15E20BE38FB4471AB6DAB)] [added: Operations](#iae24bb64548d47cfaf1f12c57753c40c_43)] | | [removed: [25](#s0344D91605D15E20BE38FB4471AB6DAB)] | [added: | | | [26](#iae24bb64548d47cfaf1f12c57753c40c_43) | | |]

| [7A. Quantitative and Qualitative Disclosures About Market [removed: Risk](#s9DB7497E0F3A56D19C73982B1A4AA1CE)] [added: Risk](#iae24bb64548d47cfaf1f12c57753c40c_52)] | | [removed: [43](#s9DB7497E0F3A56D19C73982B1A4AA1CE)] | [added: | | | [45](#iae24bb64548d47cfaf1f12c57753c40c_52) | | |]

| [8. Financial Statements and Supplementary [removed: Data](#s8FAA530EC85F5B0B81659ACB20F3B006)] [added: Data](#iae24bb64548d47cfaf1f12c57753c40c_55)] | | [removed: [44](#s8FAA530EC85F5B0B81659ACB20F3B006)] | [added: | | | [46](#iae24bb64548d47cfaf1f12c57753c40c_55) | | |]

| [9. Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s11C1CE1A94305C168B62AA895E07EB69)] [added: Disclosure](#iae24bb64548d47cfaf1f12c57753c40c_154)] | | [removed: [82](#s11C1CE1A94305C168B62AA895E07EB69)] | [added: | | | [86](#iae24bb64548d47cfaf1f12c57753c40c_154) | | |]

| [9A. Controls and [removed: Procedures](#sFC366665D0015C529AEC7EA0DE9AD817)] [added: Procedures](#iae24bb64548d47cfaf1f12c57753c40c_157)] | | [removed: [82](#sFC366665D0015C529AEC7EA0DE9AD817)] | [added: | | | [86](#iae24bb64548d47cfaf1f12c57753c40c_157) | | |]

| [9B. Other [removed: Information](#s4F93A6A3EF01595AAB40811285A01DB3)] [added: Information](#iae24bb64548d47cfaf1f12c57753c40c_160)] | | [removed: [84](#s4F93A6A3EF01595AAB40811285A01DB3)] | [added: | | | [88](#iae24bb64548d47cfaf1f12c57753c40c_160) | | |]

| [removed: [PART III](#sCAD97B6D8731544D84B49026B3C80167)] [added: [PART III](#iae24bb64548d47cfaf1f12c57753c40c_163)] | | | [added: | | | | | |]

| [10. Directors, Executive Officers, and Corporate [removed: Governance](#s1232CA2234C5560AA51CBE91DCEAFD88)] [added: Governance](#iae24bb64548d47cfaf1f12c57753c40c_166)] | | [removed: [84](#s1232CA2234C5560AA51CBE91DCEAFD88)] | [added: | | | [88](#iae24bb64548d47cfaf1f12c57753c40c_166) | | |]

| [11. Executive [removed: Compensation](#sF2B106C289F358D9BB42D649F8CF61B7)] [added: Compensation](#iae24bb64548d47cfaf1f12c57753c40c_169)] | | [removed: [84](#sF2B106C289F358D9BB42D649F8CF61B7)] | [added: | | | [88](#iae24bb64548d47cfaf1f12c57753c40c_169) | | |]

| [12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sB5321D5F2CB351D98B0BDE0FA848B5AA)] [added: Matters](#iae24bb64548d47cfaf1f12c57753c40c_172)] | | [removed: [84](#sB5321D5F2CB351D98B0BDE0FA848B5AA)] | [added: | | | [88](#iae24bb64548d47cfaf1f12c57753c40c_172) | | |]

| [13. Certain Relationships and Related Transactions, and Director [removed: Independence](#s28B51FABE77E5FC3BF574DEAC541026B)] [added: Independence](#iae24bb64548d47cfaf1f12c57753c40c_175)] | | [removed: [84](#s28B51FABE77E5FC3BF574DEAC541026B)] | [added: | | | [88](#iae24bb64548d47cfaf1f12c57753c40c_175) | | |]

| [14. Principal Accounting Fees and [removed: Services](#s50E8D9CB2C6B522BA942730836043E9E)] [added: Services](#iae24bb64548d47cfaf1f12c57753c40c_178)] | | [removed: [84](#s50E8D9CB2C6B522BA942730836043E9E)] | [added: | | | [88](#iae24bb64548d47cfaf1f12c57753c40c_178) | | |]

| [15. Exhibits, Financial Statement [removed: Schedules](#sA9A26F6CD948590D839E0613470B228F)] [added: Schedules](#iae24bb64548d47cfaf1f12c57753c40c_184)] | | [removed: [85](#sA9A26F6CD948590D839E0613470B228F)] | [added: | | | [89](#iae24bb64548d47cfaf1f12c57753c40c_184) | | |]

| [16. Form 10-K [removed: Summary](#sac35d01dd06540719af02442830a29de)] [added: Summary](#iae24bb64548d47cfaf1f12c57753c40c_187)] | | [removed: [90](#sac35d01dd06540719af02442830a29de)] | [added: | | | [94](#iae24bb64548d47cfaf1f12c57753c40c_187) | | |]

AMERISOURCEBERGEN CORPORATION

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.☑

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| [PART I](#iae24bb64548d47cfaf1f12c57753c40c_10) | | | | | | | | |

| [1. Business](#iae24bb64548d47cfaf1f12c57753c40c_13) | | | | | | [1](#iae24bb64548d47cfaf1f12c57753c40c_13) | | |

| [2. Properties](#iae24bb64548d47cfaf1f12c57753c40c_22) | | | | | | [18](#iae24bb64548d47cfaf1f12c57753c40c_22) | | |

| [PART II](#iae24bb64548d47cfaf1f12c57753c40c_34) | | | | | | | | |

| [PART IV](#iae24bb64548d47cfaf1f12c57753c40c_181) | | | | | | | | |

| [Signatures](#iae24bb64548d47cfaf1f12c57753c40c_190) | | | | | | [95](#iae24bb64548d47cfaf1f12c57753c40c_190) | | |

AMERISOURCEBERGEN CORPORATION

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| [PART I](#sD310EEF637AB512DA8BD86332BF5BEC0) | | |

| [1. Business](#s8B0AC30FD9E25056807A9B7993B0D9A4) | | [1](#s8B0AC30FD9E25056807A9B7993B0D9A4) |

| [2. Properties](#sEFE39F5C78F7557BA0E41C8AAA8852E4) | | [18](#sEFE39F5C78F7557BA0E41C8AAA8852E4) |

| [PART II](#sE02F8DB6476C5F338C98F1B791FD05C9) | | |

| [PART IV](#s4D86B850A563500B8D4EB94B8D10F26D) | | |

| [Signatures](#sE96AA36A396E5977974347AF14C76E9E) | | [91](#sE96AA36A396E5977974347AF14C76E9E) |

As of September 30, [removed: 2019,] [added: 2020,] we conducted our business from office and operating facilities at owned and leased locations throughout the United States (including Puerto Rico) and select global markets.

As of September 30, [removed: 2019,] [added: 2020,] the Consulting Group's operations were conducted in leased locations.

As of September 30, [removed: 2019,] [added: 2020,] World Courier's office and operating facilities are located in over 50 countries.

As of September 30, [removed: 2019,] [added: 2020,] MWI's operations were conducted in the United States and in the United Kingdom.

The following is a list of our executive officers and their ages and positions as of November 15, [removed: 2019.][added: 2020.]

| Name | | [added: | | | |] Age | | [added: | | | |] Current Position with the Company | [added: | |]

| Steven H. Collis | | [removed: 58] | | [added: | | 59 | | | | | |] Chairman, President, and Chief Executive Officer | [added: | |]

| Silvana Battaglia | | [removed: 52] | | [added: | | 53 | | | | | |] Executive Vice President and Chief Human Resources Officer | [added: | |]

| John G. Chou | | [removed: 63] | | [added: | | 64 | | | | | |] Executive Vice [removed: President,] [added: President and] Chief Legal Officer [removed: and Secretary] | [added: | |]

| Gina K. Clark | | [removed: 62] | | [added: | | 63 | | | | | |] Executive Vice President and Chief Communications & Administration Officer | [added: | |]

| James F. Cleary | | [removed: 56] | | [added: | | 57 | | | | | |] Executive Vice President and Chief Financial Officer | [added: | |]

| Leslie E. Donato | | [removed: 50] | | [added: | | 51 | | | | | |] Executive Vice President and Chief Strategy Officer | [added: | |]

| Robert P. Mauch | | [removed: 52] | | [added: | | 53 | | | | | |] Executive Vice President and Group President | [added: | |]

Mr. Collis has been employed by the Company or one of its predecessors for [added: over] 25 years.

Mr. Chou has been Executive Vice President since August 2011 and became the Chief Legal Officer [removed: and Secretary] in September 2019.

He served as Secretary of the Company from February 2006 to May [removed: 2012.][added: 2012 and from September 2019 to May 2020.]

Mr. Chou has been employed by the Company for [removed: 17] [added: 18] years.

[removed: He was Senior] Vice President, Alternate Care Sales and Marketing, AmerisourceBergen Drug Corporation from May 2010 to April 2011.

Mr. Mauch has been employed by the Company or one of its predecessors for [added: over] 25 years.

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He was Senior

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| Kathy H. Gaddes | | 56 | | Executive Vice President and Chief Compliance Officer |

Ms. Gaddes became Executive Vice President and Chief Compliance Officer in October 2018.

She served as Executive Vice President and Chief Human Resources Officer from April 2016 to January 2019.

She served as Vice President, Group General Counsel and Secretary from May 2012 to April 2016.

She served as Assistant General Counsel, Corporate and Securities from October 2011 to May 2012.

Prior to joining the Company, Ms. Gaddes was Associate Corporate Secretary at ARCO Chemical Company.

The Company's common stock is traded on the New York Stock Exchange under the trading symbol "ABC." As of October 31, [removed: 2019,] [added: 2020,] there were [removed: 2,459] [added: 2,385] record holders of the Company's common stock.

In November [removed: 2017, our] [added: 2018, the Company's] board of directors increased the quarterly dividend by [removed: 4%] [added: 5%] from [removed: $0.365] [added: $0.38] per share to [removed: $0.380] [added: $0.40] per share.

In November [removed: 2018, our] [added: 2020, the Company's] board of directors increased the quarterly dividend by 5% from [removed: $0.380] [added: $0.42] per share to [removed: $0.400] [added: $0.44] per share.

The following sets forth the total number of shares purchased, the average price paid per share, the total number of shares purchased as part of publicly announced programs, and the approximate dollar value of shares that may yet be purchased under the programs during each month in the fiscal year ended September 30, [removed: 2019.][added: 2020.]

| Period | | [added: | | | |] Total [removed: Number of Shares Purchased] [added: Number of Shares Purchased] | | | [removed: Average Price Paid Per Share] | | | [added: Average Price Paid Per Share] | [added: | | | | |] Total Number [removed: of Shares Purchased as] [added: of Shares Purchased as] Part of [removed: Publicly Announced Programs] [added: Publicly Announced Programs] | | | [removed: Approximate Dollar] [added: | | | Approximate Dollar] Value [removed: of Shares] [added: of Shares] that [removed: May Yet] [added: May Yet] Be [removed: Purchased Under the Programs] [added: Purchased Under the Programs] | | |

[removed: | (a) | In November 2016,] [added: (a)In October 2018,] the Company's board of directors authorized a share repurchase program allowing the Company to purchase up to $1.0 billion of its outstanding shares of common stock, subject to market conditions. [removed: During the fiscal year ended September 30, 2019, the Company purchased 1.4 million shares of its common stock for a total of $125.8 million, which excluded $24.0 million of September 2018 purchases that cash settled in October 2018, to complete its authorization under this program. |]

[removed: | (b) | In October 2018, the Company's board of directors authorized a new share repurchase program allowing the Company to purchase up to $1.0 billion of its outstanding shares of common stock, subject to market conditions.] During the fiscal year ended September 30, [removed: 2019,] [added: 2020,] the Company purchased [removed: 6.7] [added: 4.9] million shares of its common stock for a total of [removed: $538.9 million under this program,] [added: $405.6 million,] which [removed: included] [added: excluded] $14.8 million of September 2019 purchases that cash settled in October 2019. [removed: As of September 30, 2019, the Company had $461.1 million of availability under this program. |]

[removed: | (c) | Employees] [added: (c)Employees] surrendered [removed: 67,171] [added: 114,032] shares during the fiscal year ended September 30, [removed: 2019] [added: 2020] to meet minimum tax-withholding obligations upon vesting of restricted stock. [removed: |]

This graph depicts the Company's five year cumulative total stockholder returns relative to the performance of the Standard and Poor's 500 Composite Stock Index, the S&P Health Care Index, and an index of peer companies selected by the Company from the market close on September 30, [removed: 2014] [added: 2015] to September 30, [removed: 2019.][added: 2020.]

The graph assumes $100 invested at the closing price of the common stock of the Company and of each of the other indices on the New York Stock Exchange on September 30, [removed: 2014.][added: 2015.]

[removed: ][added: ]

* $100 invested on September 30, [removed: 2014] [added: 2015] in stock or index, including reinvestment of dividends.

In January 2020, the Company's board of directors increased the quarterly dividend by 5% from $0.40 per share to $0.42 per share.

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| October 1 to October 31 | | | | | | 928,528 | | | | | | $ | 81.89 | | | | | 928,528 | | | | | | $ | 385,099,144 | |

| November 1 to November 30 | | | | | | 383,920 | | | | | | $ | 84.57 | | | | | 272,014 | | | | | | $ | 362,228,055 | |

| December 1 to December 31 | | | | | | 367,012 | | | | | | $ | 84.04 | | | | | 367,012 | | | | | | $ | 331,384,669 | |

| January 1 to January 31 | | | | | | 193,502 | | | | | | $ | 84.48 | | | | | 193,502 | | | | | | $ | 315,037,604 | |

| February 1 to February 29 | | | | | | 352,025 | | | | | | $ | 82.84 | | | | | 352,025 | | | | | | $ | 285,874,551 | |

| March 1 to March 31 | | | | | | 2,643,138 | | | | | | $ | 82.12 | | | | | 2,643,138 | | | | | | $ | 68,813,634 | |

| April 1 to April 30 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 68,813,634 | |

| May 1 to May 31 | | | | | | 159,247 | | | | | | $ | 83.49 | | | | | 159,247 | | | | | | $ | 555,518,116 | |

| June 1 to June 30 | | | | | | 784 | | | | | | $ | 95.15 | | | | | — | | | | | | $ | 555,518,116 | |

| July 1 to July 31 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 555,518,116 | |

| August 1 to August 31 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 555,518,116 | |

| September 1 to September 30 | | | | | | 1,342 | | | | | | $ | 94.30 | | | | | — | | | | | | $ | 555,518,116 | |

| Total | | | | | | 5,029,498 | | | | | | $ | 82.60 | | | | | 4,915,466 | | | | | | | | |

As of September 30, 2020, the Company had $55.5 million of availability under this program.

(b)In May 2020, the Company's board of directors authorized a new share repurchase program allowing the Company to purchase up to $500 million of its outstanding shares of common stock, subject to market conditions.

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| October 1 to October 31 | | 1,386,835 | | | $ | 90.72 | | | 1,386,835 | | | $ | 1,000,000,000 | |

| November 1 to November 30 | | 62,923 | | | $ | 89.85 | | | — | | | $ | 1,000,000,000 | |

| December 1 to December 31 | | 1,319,378 | | | $ | 75.79 | | | 1,319,378 | | | $ | 900,000,064 | |

| January 1 to January 31 | | — | | | $ | — | | | — | | | $ | 900,000,064 | |

| February 1 to February 28 | | 157 | | | $ | 82.79 | | | — | | | $ | 900,000,064 | |

| March 1 to March 31 | | 1,252,495 | | | $ | 78.33 | | | 1,252,495 | | | $ | 801,896,921 | |

| April 1 to April 30 | | 116 | | | $ | 75.35 | | | — | | | $ | 801,896,921 | |

| May 1 to May 31 | | 1,038,138 | | | $ | 79.56 | | | 1,034,499 | | | $ | 719,581,614 | |

| June 1 to June 30 | | 1,111,252 | | | $ | 83.29 | | | 1,111,252 | | | $ | 627,021,288 | |

| July 1 to July 31 | | 139,217 | | | $ | 84.95 | | | 139,217 | | | $ | 615,195,472 | |

| August 1 to August 31 | | 752,384 | | | $ | 82.85 | | | 752,048 | | | $ | 552,888,358 | |

| September 1 to September 30 | | 1,101,040 | | | $ | 83.33 | | | 1,101,040 | | | $ | 461,135,868 | |

| Total | | 8,163,935 | | | $ | 82.15 | | | 8,096,764 | | | | | |

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The following should be read in conjunction with the consolidated financial statements, including the notes thereto, and Management's Discussion and Analysis of Financial Condition and Results of Operations beginning on page [removed: 25.][added: 26.]

| | | [added: | | | |] As of or for the Fiscal Year Ended September 30, | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| (Amounts in thousands, except per share amounts) | | [removed: 2019(a)] | | | | [removed: 2018(b)] [added: 2020(a)] | | | | [removed: 2017(c)] | | [added: 2019(b)] | | [removed: 2016(d)] | | | | [removed: 2015(e)] [added: 2018(c)] | | | [added: | | | 2017(d) | | | | | | 2016(e) | | |]

| Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Revenue | | [added: | | | |] $ | [removed: 179,589,121] [added: 189,893,926] | | | [added: | |] $ | [removed: 167,939,635] [added: 179,589,121] | | | [added: | |] $ | [removed: 153,143,826] [added: 167,939,635] | | | [added: | |] $ | [removed: 146,849,686] [added: 153,143,826] | | | [added: | |] $ | [removed: 135,961,803] [added: 146,849,686] | |

| Gross profit | | [added: | | | | 5,191,884 | | | | | |] 5,138,312 | | | | [added: | |] 4,612,317 | | | | [removed: 4,546,002] | | [added: 4,546,002] | | [removed: 4,272,606] | | | | [removed: 3,529,313] [added: 4,272,606] | | |

| Operating expenses | | [added: | | | | 10,327,238 | | | | | |] 4,026,389 | | | | [added: | |] 3,168,632 | | | | [removed: 3,485,660] | | [added: 3,485,660] | | [removed: 2,746,832] | | | | [removed: 3,107,093] [added: 2,746,832] | | |

| Operating [added: (loss)] income | | [added: | | | | (5,135,354) | | | | | |] 1,111,923 | | | | [added: | |] 1,443,685 | | | | [removed: 1,060,342] | | [added: 1,060,342] | | [removed: 1,525,774] | | | | [removed: 422,220] [added: 1,525,774] | | |

| Interest expense, net | | [added: | | | | 137,883 | | | | | |] 157,769 | | | | [added: | |] 174,699 | | | | [removed: 145,185] | | [added: 145,185] | | [removed: 139,912] | | | | [removed: 109,036] [added: 139,912] | | |

| Net [removed: income] (loss) [added: income] | | [added: | | | | (3,399,558) | | | | | |] 854,135 | | | | [added: | |] 1,615,892 | | | | [removed: 364,484] | | [added: 364,484] | | [removed: 1,427,929] | | | | [removed: (138,165] [added: 1,427,929] | | [removed: )] |

| Net [removed: income] (loss) [added: income] attributable to AmerisourceBergen Corporation | | [added: | | | |] $ | [removed: 855,365] [added: (3,408,716)] | | | [added: | |] $ | [removed: 1,658,405] [added: 855,365] | | | [added: | |] $ | [removed: 364,484] [added: 1,658,405] | | | [added: | |] $ | [removed: 1,427,929] [added: 364,484] | | | [added: | |] $ | [removed: (138,165] [added: 1,427,929] | [removed: )] |

| Earnings per share — diluted | | [added: | | | |] $ | [removed: 4.04] [added: (16.65)] | | | [added: | |] $ | [removed: 7.53] [added: 4.04] | | | [added: | |] $ | [removed: 1.64] [added: 7.53] | | | [added: | |] $ | [removed: 6.32] [added: 1.64] | | | [added: | |] $ | [removed: (0.63] [added: 6.32] | [removed: )] |

| Cash dividends declared per common share | | [added: | | | |] $ | [removed: 1.60] [added: 1.66] | | | [added: | |] $ | [removed: 1.52] [added: 1.60] | | | [added: | |] $ | [removed: 1.46] [added: 1.52] | | | [added: | |] $ | [removed: 1.36] [added: 1.46] | | | [added: | |] $ | [removed: 1.16] [added: 1.36] | |

| Weighted average common shares outstanding — diluted | | [added: | | | | 204,783 | | | | | |] 211,840 | | | | [added: | |] 220,336 | | | | [removed: 221,602] | | [added: 221,602] | | [removed: 225,959] | | | | [removed: 217,786] [added: 225,959] | | |

| Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Cash and cash equivalents | | [added: | | | |] $ | [removed: 3,374,194] [added: 4,597,746] | | | [added: | |] $ | [removed: 2,492,516] [added: 3,374,194] | | | [added: | |] $ | [removed: 2,435,115] [added: 2,492,516] | | | [added: | |] $ | [removed: 2,741,832] [added: 2,435,115] | | | [added: | |] $ | [removed: 2,167,442] [added: 2,741,832] | |

| Accounts receivable, net | | [added: | | | | 13,846,301 | | | | | |] 12,386,879 | | | | [added: | |] 11,314,226 | | | | [removed: 10,303,324] | | [added: 10,303,324] | | [removed: 9,175,876] | | | | [removed: 8,222,951] [added: 9,175,876] | | |

| Inventories | | [added: | | | | 12,589,278 | | | | | |] 11,060,254 | | | | [added: | |] 11,918,508 | | | | [removed: 11,461,428] | | [added: 11,461,428] | | [removed: 10,723,920] | | | | [removed: 9,755,094] [added: 10,723,920] | | |

| Property and equipment, net | | [added: | | | | 1,484,808 | | | | | |] 1,770,516 | | | | [added: | |] 1,892,424 | | | | [removed: 1,797,945] | | [added: 1,797,945] | | [removed: 1,530,682] | | | | [removed: 1,192,510] [added: 1,530,682] | | |

| Total assets | | [added: | | | | 44,274,830 | | | | | |] 39,171,980 | | | | [added: | |] 37,669,838 | | | | [removed: 35,316,470] | | [added: 35,316,470] | | [removed: 33,637,501] | | | | [removed: 27,962,982] [added: 33,637,501] | | |

| Accounts payable | | [added: | | | | 31,705,055 | | | | | |] 28,385,074 | | | | [added: | |] 26,836,873 | | | | [removed: 25,404,042] | | [added: 25,404,042] | | [removed: 23,926,320] | | | | [removed: 20,886,439] [added: 23,926,320] | | |

| Total debt | | [added: | | | | 4,119,520 | | | | | |] 4,172,892 | | | | [added: | |] 4,310,189 | | | | [removed: 3,442,055] | | [added: 3,442,055] | | [removed: 4,186,703] | | | | [removed: 3,493,048] [added: 4,186,703] | | |

| Total [added: (deficit)] equity | | [added: | | | | (839,636) | | | | | |] 2,993,206 | | | | [added: | |] 3,049,961 | | | | [removed: 2,064,461] | | [added: 2,064,461] | | [removed: 2,129,404] | | | | [removed: 616,386] [added: 2,129,404] | | |

| Total liabilities and stockholders' [added: (deficit)] equity | | [added: | | | |] $ | [removed: 39,171,980] [added: 44,274,830] | | | [added: | |] $ | [removed: 37,669,838] [added: 39,171,980] | | | [added: | |] $ | [removed: 35,316,470] [added: 37,669,838] | | | [added: | |] $ | [removed: 33,637,501] [added: 35,316,470] | | | [added: | |] $ | [removed: 27,962,982] [added: 33,637,501] | |

[removed: | (a) | Includes] [added: (b)Includes] a $421.3 million impairment of PharMEDium's long-lived assets, net of income tax benefit of $148.7 million; $245.8 million of employee severance, litigation, and other costs, net of income tax benefit of $84.6 million; a $107.8 million gain from antitrust litigation settlements, net of income tax expense of $38.1 million; $51.3 million of PharMEDium remediation costs, net of income tax benefit of $18.1 million; [added: a] $16.7 million [removed: of] LIFO credit, net of income tax expense of $5.9 million; a $16.3 million reversal of an estimated assessment related to the New York State Opioid Stewardship Act, net of income tax expense of $5.7 million; and a $10.1 million gain on the sale of an equity investment, net of income tax expense of $3.6 million. [removed: |]

[removed: | (b) | Includes] [added: (c)Includes] $61.3 million of employee severance, litigation, and other costs, net of income tax benefit of $122.2 million; a $59.7 million goodwill impairment with no income tax benefit; $48.6 million of LIFO expense, net of income tax benefit of $18.7 million; $47.8 million of PharMEDium remediation costs, net of income tax benefit of $18.4 million; a $42.3 million loss on consolidation of equity investments with no income tax benefit; a $30.0 million impairment on a non-customer note receivable with no income tax benefit; a $25.9 million gain from antitrust litigation settlements, net of income tax expense of $10.0 million; a $17.2 million loss on early retirement of debt, net of income tax benefit of $6.6 million; and $15.9 million of expense for an estimated assessment related to the New York State Opioid Stewardship Act, net of income tax benefit of $6.1 million. [removed: |]

[removed: | (c) | Includes] [added: (d)Includes a] $101.1 million [removed: of] LIFO credit, net of income tax expense of $56.7 million; a $0.9 million gain from antitrust litigation settlements, net of income tax expense of $0.5 million; and $937.4 million of employee severance, litigation, and other costs, net of income tax benefit of $21.9 million. [removed: |]

[removed: | (d) | Includes] [added: (e)Includes] $367.2 million of Warrants income, net of income tax benefit of $507.5 million; $120.9 million of LIFO expense, net of income tax benefit of $79.3 million; an $80.8 million gain from antitrust litigation settlements, net of income tax expense of $53.0 million; $62.1 million of employee severance, litigation, and other costs, net of income tax benefit of $40.8 million; and a $28.7 million pension settlement charge, net of income tax benefit of $18.9 million. [removed: |]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Total accrued litigation liability | | | | | | 6,606,925 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

(a)Includes a $5,528.4 million legal accrual for litigation relating the distribution of prescription opioid pain medications, net of income tax benefit of $1,078.6 million; $282.5 million impairment of PharMEDium's long-lived assets, net of income tax benefit of $79.2 million; $156.5 million of employee severance, litigation, and other costs, net of income tax benefit of $43.9 million; $46.4 million of PharMEDium exit and remediation costs, net of income tax benefit of $13.0 million; a $17.3 million loss on early retirement of debt; net of income tax benefit of $4.9 million; an $11.6 million estimated assessment related to the New York State Opioid Stewardship Act, net of income tax benefit of $3.2 million; a $9.5 million gain from an adjustment to Profarma's estimate of contingent consideration related to the purchase price of one of its prior business acquisitions, net of income tax expense of $2.7 million; a $7.1 million gain from antitrust litigation settlements, net of income tax expense of $2.0 million; and $5.8 million of LIFO expense, net of income tax benefit of $1.6 million.

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| (e) | Includes $887.5 million of Warrants expense, net of income tax benefit of $25.3 million; $336.2 million of LIFO expense, net of income tax benefit of $206.6 million; a $40.6 million gain from antitrust litigation settlements, net of income tax expense of$24.9 million; a $30.6 million impairment charge on an equity investment, with no income tax benefit; and $23.5 million of employee severance, litigation, and other costs, net of income tax benefit of $14.4 million. |

| | | [added: | | | |] Page | [added: | |]

| [Report of Independent Registered Public Accounting [removed: Firm](#s06AE8849479A59928A821039816E2F16)] [added: Firm](#iae24bb64548d47cfaf1f12c57753c40c_58)] | | [removed: [45](#s06AE8849479A59928A821039816E2F16)] | [added: | | | [47](#iae24bb64548d47cfaf1f12c57753c40c_58) | | |]

| [Consolidated Financial [removed: Statements:](#s1BEAE592A3E253AE8D38FE85B1B4B6ED)] [added: Statements:](#iae24bb64548d47cfaf1f12c57753c40c_61)] | | | [added: | | | | | |]

| [Consolidated Balance Sheets as of [added: September](#iae24bb64548d47cfaf1f12c57753c40c_64) [Consolidated Balance Sheets as of] September 30, [added: 2020 and 2019](#iae24bb64548d47cfaf1f12c57753c40c_64)[,] 2019 and [removed: 2018](#sCAE2CB3EF74C5B4B898AFD8E902B313D)] [added: 2018](#iae24bb64548d47cfaf1f12c57753c40c_64)] | | [removed: [49](#sCAE2CB3EF74C5B4B898AFD8E902B313D)] | [added: | | | [50](#iae24bb64548d47cfaf1f12c57753c40c_64) | | |]

| [Consolidated Statements of Operations for the fiscal years ended September 30, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#sA8DB892F5A6855DD92D4675FA64590F7)] [added: 2018](#iae24bb64548d47cfaf1f12c57753c40c_70)] | | [removed: [50](#sA8DB892F5A6855DD92D4675FA64590F7)] | [added: | | | [51](#iae24bb64548d47cfaf1f12c57753c40c_70) | | |]

| [Consolidated Statements of Comprehensive Income for the fiscal years ended September 30, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#s7C8AE9914AB25319A79E3B4AFD159490)] [added: 2018](#iae24bb64548d47cfaf1f12c57753c40c_73)] | | [removed: [51](#s7C8AE9914AB25319A79E3B4AFD159490)] | [added: | | | [52](#iae24bb64548d47cfaf1f12c57753c40c_73) | | |]

| [Consolidated Statements of Changes in Stockholders' Equity for the fiscal years ended September 30, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#sFCC0B031D2C75B489A5271AC183172C6)] [added: 2018](#iae24bb64548d47cfaf1f12c57753c40c_76)] | | [removed: [52](#sFCC0B031D2C75B489A5271AC183172C6)] | [added: | | | [53](#iae24bb64548d47cfaf1f12c57753c40c_76) | | |]

| [Consolidated Statements of Cash Flows for the fiscal years ended September 30, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#s78A0410F2AB05BFC97083F9A8CB2D842)] [added: 2018](#iae24bb64548d47cfaf1f12c57753c40c_82)] | | [removed: [53](#s78A0410F2AB05BFC97083F9A8CB2D842)] | [added: | | | [54](#iae24bb64548d47cfaf1f12c57753c40c_82) | | |]

| [Notes to Consolidated Financial [removed: Statements](#s93CFDDB5864D5444882EB049EA9BAEDD)] [added: Statements](#iae24bb64548d47cfaf1f12c57753c40c_88)] | | [removed: [54](#s93CFDDB5864D5444882EB049EA9BAEDD)] | [added: | | | [55](#iae24bb64548d47cfaf1f12c57753c40c_88) | | |]

[removed: The] [added: To the] Stockholders and [added: the] Board of Directors of AmerisourceBergen Corporation

We have audited the accompanying consolidated balance sheets of AmerisourceBergen Corporation and subsidiaries (the Company) as of September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of operations, comprehensive income, [removed: stockholders'] [added: stockholders’] equity, and cash flows for each of the three years in the period ended September 30, [removed: 2019,] [added: 2020,] and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the [removed: "consolidated] [added: “consolidated] financial [removed: statements").][added: statements”).]

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated November 19, [removed: 2019] [added: 2020] expressed an unqualified opinion thereon.

| | [removed: Legal] [added: | | Other Legal Matters and] Contingencies | [added: | |]

| *Description of the Matter* | [added: | |] As discussed in Note [removed: 13] [added: 14] of the consolidated financial statements, [added: in addition to] the [added: opioid litigation addressed above, the] Company is involved in [removed: lawsuits, administrative proceedings,] government subpoenas, [removed: government investigations] [added: civil investigative demands, derivative actions,] and other disputes. The Company recognizes a liability for those legal contingencies for which it is probable that a liability has been incurred at the date of the consolidated financial statements and the amount is reasonably estimable. The Company also performs an assessment of the materiality of legal contingencies where a loss is either reasonably possible or it is reasonably possible that an exposure to loss exists in excess of the amount accrued. If it is reasonably possible that such a loss or an additional loss may have been incurred and the effect on the consolidated financial statements is material, the Company discloses the nature of the loss contingency and an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made within the notes to the consolidated financial statements. | [added: | |]

[removed: | | For example, as of September 30, 2019, a] [added: A] significant number of counties, municipalities, and other governmental entities in a majority of U.S. states and Puerto Rico, as well as [removed: several] [added: numerous] states and tribes, have filed lawsuits in various federal, state and other courts against pharmaceutical wholesale distributors (including the Company and [removed: its subsidiary] [added: certain subsidiaries, such as] AmerisourceBergen Drug Corporation [removed: ("ABDC")),] [added: ("ABDC") and H.D. Smith),] pharmaceutical manufacturers, retail chains, medical practices, and physicians relating to the distribution of prescription opioid pain [removed: medications ("opioid matters"). Other lawsuits regarding the distribution of prescription opioid pain medications have been filed by other parties. While the Company is currently engaged in negotiations with plaintiffs’ representatives regarding a potential settlement framework, it continues to litigate the opioid matters. The Company has not recognized a liability related to the potential framework as of September 30, 2019. |][added: medications.]

| | [added: | |] Auditing [removed: management's] [added: management’s] determination of whether a loss for a legal contingency is probable and reasonably estimable, reasonably possible or remote, and the related [added: measurement and] disclosures, is highly subjective and requires significant judgment. For instance, auditing [removed: management's] [added: management’s] judgments [removed: related to the opioid matters] was challenging due to the significant judgment applied in determining the likelihood of resolution of the [removed: opioid] matters through settlement or [removed: litigation given the current status of negotiations with plaintiffs' representatives and the complexity and uncertainty associated with any potential settlement.] [added: litigation.] | [added: | |]

| *How We Addressed the Matter in Our Audit* | [added: | |] We tested the [removed: Company's] [added: Company’s] internal controls that address the risks of material misstatement related to the completeness, valuation, presentation and disclosure of legal contingencies. This included testing controls related to the [removed: Company's] [added: Company’s] process for identification, recognition, measurement and disclosure of legal [removed: contingencies, including the opioid matters.] [added: contingencies.] For example, we tested controls over management’s review of correspondence from external legal counsel, historical legal settlements executed by the Company and those executed by other defendants, actions and statements made by the Company, and communications with the plaintiffs to determine the completeness and accuracy of legal contingencies and the related financial statement footnote disclosures. We also tested controls over [removed: management's] [added: management’s] assessment of the likelihood of the resolution of the [removed: opioid] matters through settlement or litigation. | [added: | |]

| | [added: | |] To test the [removed: Company's] [added: Company’s] legal contingencies, our substantive audit procedures included, among others, testing the completeness of the legal contingencies subject to evaluation by the Company and evaluating the [removed: Company's] [added: Company’s] analysis of its assessment of the probability of outcome for each material legal contingency through inspection of responses to inquiry letters sent to both internal and external legal counsel, discussions with internal and external legal counsel to confirm our understanding of the allegations, and obtaining written representations from executives of the Company. We also compared the [removed: Company's] [added: Company’s] assessment with its relevant history of similar legal contingencies that have been settled or otherwise resolved to evaluate the consistency of the [removed: Company's] [added: Company’s] assessment for outstanding legal contingencies at the balance sheet date. [removed: For example, for the opioid matters, we considered the litigation, claims or assessments, progress of the respective legal cases, communications with plaintiffs and the experience of other similar entities when evaluating the Company's conclusions.] | [added: | |]

| | [added: | |] For those legal contingencies for which the Company has determined that a loss is probable and reasonably estimable and is therefore required to be recognized, and for those legal contingencies for which the Company has determined that a loss is either probable or reasonably possible, but the Company is unable to estimate the range of loss, and is therefore required to be disclosed, we evaluated the method of measuring the amounts of the recorded and disclosed contingencies. We assessed the Company’s estimate of the amount of the loss, for both contingencies that are probable and reasonably possible, through inspection of responses to inquiry letters sent to both internal and external legal counsel, direct discussions with internal and external legal counsel, inspection of court rulings, and inspection of settlement agreements. We also obtained written representations from executives of the Company. | [added: | |]

[removed: | | Auditing the Company's impairment loss on PharMEDium's long-lived assets was complex due to the significant estimation uncertainty in determining the fair value of the PharMEDium asset group.] Significant assumptions used in [added: estimating] the [removed: Company's] fair value [removed: estimate] of [removed: the PharMEDium] [added: PharMEDium's] asset group included (i) [removed: the] [added: a 17%] discount [removed: rate;] [added: rate, which contemplated a higher risk at PharMEDium;] (ii) the period in which PharMEDium will resume production at or near capacity; [added: and] (iii) [removed: estimated revenue growth rates; (iv)] the estimated EBITDA (earnings before interest, taxes, depreciation, and amortization) margins when considering the likelihood of higher operating and compliance [removed: costs; and (v) future economic conditions and demand. Each of these assumptions was forward-looking and could have been affected by the outcome of the negotiations with the FDA and DOJ, the provisions of the final consent decree, the results of the third-party audits, and future economic conditions and demand. |][added: costs.]

| /s/ Ernst & Young LLP | | | | | [added: | | | | | | | | | |]

| | | [added: | | | |] September 30, | | | | | | | [added: | |]

| (in thousands, except share and per share data) | | [removed: 2019] | | | | [removed: 2018] [added: 2020] | | | [added: | | | 2019 | | |]

| ASSETS | | | | | | | | | [added: | | | | | |]

| Current assets: | | | | | | | | | [added: | | | | | |]

| Cash and cash equivalents [added: at beginning of year] | | [removed: $] | [added: | | |] 3,374,194 | | | [removed: $] | [added: | |] 2,492,516 | | [added: | | | | 2,435,115 | | |]

| Accounts receivable, less allowances for returns and doubtful accounts: [removed: 2019] [added: 2020] — [removed: $1,222,906; 2018] [added: $1,417,308; 2019] — [removed: $1,036,333] [added: $1,222,906] | | [removed: 12,386,879] | | | | [removed: 11,314,226] [added: 13,846,301] | | | [added: | | | 12,386,879 | | |]

| Right to recover asset [removed: (Note 1)] | | [removed: 1,147,483] | | | | [removed: —] [added: 1,344,649] | | | [added: | | | 1,147,483 | | |]

| Prepaid expenses and other | | [removed: 163,244] | | | | [removed: 169,122] [added: 52,885] | | | [added: | | | 64,119 | | |]

| Total current assets | | [removed: 28,132,054] | | | | [removed: 25,894,372] [added: 33,055,702] | | | [added: | | | 28,132,054 | | |]

| Property and equipment, at cost: | | | | | | | | | [added: | | | | | |]

| Land | | [removed: 44,142] | | | | [removed: 39,875] [added: $] | [added: 39,572] | | [added: | | | $ | 44,142 | |]

| Buildings and improvements | | [removed: 942,129] | | | | [removed: 1,086,909] [added: 586,551] | | | [added: | | | 942,129 | | |]

| Machinery, equipment, and other | | [removed: 2,362,869] | | | | [removed: 2,281,124] [added: 2,618,354] | | | [added: | | | 2,362,869 | | |]

| Total property and equipment | | [removed: 3,349,140] | | | | [removed: 3,407,908] [added: 3,244,477] | | | [added: | | | 3,349,140 | | |]

| Less accumulated depreciation | | [removed: (1,578,624] | | [removed: )] | | [removed: (1,515,484] [added: (1,759,669)] | | [removed: )] | [added: | | | (1,578,624) | | |]

| Property and equipment, net | | [removed: 1,770,516] | | | | [removed: 1,892,424] [added: 1,484,808] | | | [added: | | | 1,770,516 | | |]

| Goodwill | | [removed: 6,705,507] | | | | [removed: 6,664,272] [added: 6,706,719] | | | [added: | | | 6,705,507 | | |]

| Other intangible assets | | [removed: 2,294,836] | | | | [removed: 2,947,828] [added: 1,886,107] | | | [added: | | | 2,294,836 | | |]

| | | | Legal Matters and Contingencies - Opioid Lawsuits | | |

| *Description of the Matter* | | | As discussed in Note 14 of the consolidated financial statements, the Company is involved in a significant number of lawsuits with counties, municipalities, and other governmental entities in a majority of U.S. states and Puerto Rico, as well as several tribes relating to the distribution of prescription opioid pain medications (“opioid litigation”). The Company recognizes a liability for those legal contingencies for which it is probable that a liability has been incurred at the date of the consolidated financial statements and the amount is reasonably estimable. The Company has recognized a $6.6 billion ($5.5 billion after tax) charge related to the opioid litigation for the year ended September 30, 2020 and has disclosed that it is unable to estimate the range of possible loss in excess of the amount accrued. In connection with this charge, the Company recognized a related income tax benefit, which reflects an unrecognized tax benefit resulting from uncertainty in the amount that is more likely than not to be deductible for U.S. federal and state income tax purposes based in part upon the final terms and conditions of a settlement agreement. The Company used significant judgment in measuring the amount of income tax benefit that qualified for recognition and may ultimately be deductible for U.S. federal and state purposes. | | |

| | | | Auditing management’s determination of whether the opioid litigation liability is probable and reasonably estimable, and the related measurement and disclosures, is highly subjective and requires significant judgment. For instance, auditing management’s judgments related to the opioid litigation was challenging due to the significant judgment applied in determining the timing and magnitude of the liability and whether a range of possible loss in excess of the amount accrued is reasonably estimable, based upon the progress of settlement discussions and a potential settlement framework. In addition, auditing management's estimate of the amount of income tax benefit related to the Company's uncertain tax position that qualified for recognition was challenging because the assumptions and estimates require significant judgment as they are based upon settlement terms and documentation, including provisions related to deductibility, that have not been finalized. | | |

| *How We Addressed the Matter in Our Audit* | | | We tested the Company’s internal controls that address the risks of material misstatement related to the completeness, valuation, presentation and disclosure of the opioid litigation liability and related uncertain tax position. This included testing controls related to the Company’s process for identification, recognition, measurement and disclosure of the opioid litigation and testing controls related to the Company’s process to assess the technical merits of its tax position, including the Company’s assessment as to the amount of benefit that is more likely than not to be realized upon ultimate settlement with taxing authorities. For example, we inspected management’s review of correspondence from external legal counsel, historical legal settlements executed by the Company and those executed by other defendants, actions and statements made by the Company, and communications with the plaintiffs to determine the completeness and accuracy of the opioid litigation liability and the related financial statement footnote disclosures. | | |

| | | | To test the Company’s opioid litigation liability, our substantive audit procedures included, among others, testing the completeness of the opioid litigation contingencies subject to evaluation by the Company and evaluating the Company’s analysis of its assessment of the probability of outcome by considering the progress of settlement discussions involving the opioid litigation and communications with plaintiffs, as well as the experience of other similar entities when evaluating the Company’s conclusions. We inspected responses to inquiry letters sent to both internal and external legal counsel, held discussions with internal and external legal counsel to confirm our understanding of the settlement discussions, and obtained written representations from executives of the Company. We also compared the Company’s assessment with its relevant history of similar legal contingencies that have been settled or otherwise resolved to evaluate the consistency of the Company’s assessment for outstanding legal contingencies at the balance sheet date. In addition, we also evaluated the adequacy of the Company’s financial statement disclosures. | | |

| | | | We involved our tax subject matter professionals in assessing the technical merits and measurement of the Company’s tax position related to the opioid litigation liability. We examined the Company’s analysis and evaluated the underlying facts upon which the tax position was based. We used our knowledge of historical settlement activity to evaluate the Company’s measurement of the uncertain tax position associated with the opioid litigation. This included evaluating third-party advice obtained by the Company and performing inquiries of the Company’s external income tax advisers. We also evaluated the adequacy of the Company’s financial statement disclosures and obtained written representations from executives of the Company related to this income tax matter. | | |

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November 19, 2020

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| Cash and cash equivalents | | | | | | $ | 4,597,746 | | | | | $ | 3,374,194 | |

| Inventories | | | | | | 12,589,278 | | | | | | 11,060,254 | | |

| Income tax receivable (Note 5) | | | | | | 488,428 | | | | | | 5,859 | | |

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| Deferred income taxes | | | | | | 361,640 | | | | | | — | | |

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| Accrued litigation liability | | | | | | 6,198,943 | | | | | | — | | |

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| Adoption of ASC 842, net of tax (Note 1) | | | | | | — | | | | | | — | | | | | | 35,138 | | | | | | — | | | | | | — | | | | | | — | | | | | | 35,138 | | |

| Net (loss) income | | | | | | — | | | | | | — | | | | | | (3,408,716) | | | | | | — | | | | | | — | | | | | | 9,158 | | | | | | (3,399,558) | | |

| Other comprehensive income (loss) | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,135 | | | | | | — | | | | | | (12,081) | | | | | | (8,946) | | |

| Exercises of stock options | | | | | | 21 | | | | | | 159,512 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 159,533 | | |

| Profarma retail equity offering | | | | | | — | | | | | | (1,567) | | | | | | — | | | | | | — | | | | | | — | | | | | | 67,922 | | | | | | 66,355 | | |

| Other | | | | | | 4 | | | | | | (722) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (718) | | |

| September 30, 2020 | | | | | | $ | 2,878 | | | | | $ | 5,081,776 | | | | | $ | 518,335 | | | | | $ | (108,830) | | | | | $ | (6,513,083) | | | | | $ | 179,288 | | | | | $ | (839,636) | |

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| | Goodwill - Identification of Reporting Units |

| *Description of the Matter* | The Company tests goodwill for impairment at the level of reporting referred to as a reporting unit. As discussed in Note 1 of the consolidated financial statements, the Company identified its reporting units based upon its management reporting structure. Goodwill arising from acquisitions has been assigned to the reporting unit or units as of the acquisition date that are expected to benefit from the synergies of the combination. When identifying its reporting units, the Company has aggregated two or more components within an operating segment that have similar economic characteristics. |

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| | The determination of whether two or more components within an operating segment have similar economic characteristics requires the Company to evaluate the characteristics of the respective components, which include the similarity of long-term gross margins, the nature of the products and services, the nature of the production processes, the type or class of customer, the methods used to distribute products or provide their services, and the nature of the regulatory environment. However, not each of these factors must be met for two components to be considered economically similar, and the considerations are not limited to these factors. |

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| | Auditing management's determination of reporting units is highly subjective and significant judgment is involved when evaluating whether two or more components have similar economic characteristics for purposes of aggregation into a single reporting unit. A change in the judgment used in the determination of a reporting unit could result in goodwill impairment. |

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| *How We Addressed the Matter in Our Audit* | We tested the Company's internal controls related to management's identification of its reporting units. For example, we tested controls over management's review of documentation of the criteria assessed when determining whether one or more components within an operating segment have similar economic characteristics. |

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| | To test the Company's aggregation of two or more components within an operating segment into a single reporting unit, our substantive audit procedures included, among others, evaluating whether the aggregated components have similar economic characteristics. As part of our evaluation, we considered (i) the similarity of long-term gross margins of the aggregated components; (ii) the similarity of the nature of the regulatory environments of the aggregated components; (iii) the similarity of the products and services of the aggregated components; (iv) the similarity of the types or classes of customer of the aggregated components, and (v) the methods used to distribute products or provide services of the aggregated components. We corroborated the Company’s assessment of aggregation of components by reviewing reports used by segment management, including the financial performance of the respective components, to assess the aggregation criteria. |

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| | PharMEDium long-lived asset impairment |

| *Description of the Matter* | As discussed in Note 1 of the consolidated financial statements, the Company recognized an impairment loss on PharMEDium's long-lived assets. The continued suspension of production activities at PharMEDium’s compounding facility in Memphis, Tennessee, and further negotiations with the FDA and DOJ regarding a potential consent decree resulted in the Company revising its long-range plan and identifying an impairment indicator of the asset group. At March 31, 2019, the Company evaluated the PharMEDium long-lived assets for recoverability utilizing undiscounted cash flows that were based on the weighted average of multiple strategic alternatives and determined that the assets were not recoverable and were therefore impaired. As a result, the Company recognized a $570 million impairment loss, which represented the amount by which the carrying value exceeded the estimated fair value of these assets. |

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| *How We Addressed the Matter in Our Audit* | We tested the Company's internal controls over the process for the recognition and measurement of the long-lived asset impairment. For example, we tested controls over management’s review of the forecasted cash flows and their review of the significant assumptions and other inputs used in the fair value measurement, such as the discount rate. |

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| | To test the PharMEDium long-lived asset impairment loss, our substantive audit procedures included, among others, the performance of a sensitivity analysis of the assumptions to evaluate the change in the fair value of the PharMEDium asset group resulting from changes in the assumptions and therefore identify the assumptions that have the most significant impact on the fair value calculation. We involved valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions used in the fair value measurement of the PharMEDium asset group, including the evaluation of the reasonableness of the discount rate selected by the Company. We compared the forecasted cash flows to business plans, current industry, market and economic trends, and information from discussions with management and external legal counsel about the status of negotiations with the FDA and DOJ, reviewed the provisions of the final consent decree and compared previous forecasts to actual results to assess the forecasted cash flows utilized in the fair value measurement. |

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There were no changes during the fiscal quarter ended September 30, [removed: 2019] [added: 2020] in the Company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, those controls.

AmerisourceBergen's management assessed the effectiveness of AmerisourceBergen's internal control over financial reporting as of September 30, [removed: 2019.][added: 2020.]

Based on management's assessment and those criteria, management has concluded that AmerisourceBergen's internal control over financial reporting was effective as of September 30, [removed: 2019.][added: 2020.]

We have audited AmerisourceBergen Corporation and subsidiaries' internal control over financial reporting as of September 30, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, AmerisourceBergen Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2019,] [added: 2020,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: 2019] [added: 2020] consolidated financial statements of the Company and our report dated November 19, [removed: 2019] [added: 2020] expressed an unqualified opinion thereon.

| /s/ Ernst & Young LLP | [added: | |]

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November 19, 2020

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November 19, 2019

Information appearing in our Notice of Annual Meeting of Stockholders and Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders (the [removed: "2020] [added: "2021] Proxy Statement"), including information appearing under "Proxy Statement Highlights - Director Nominees and Board Summary," "Corporate Governance and Related Matters," "Audit Committee Matters," and "Delinquent Section 16(a) Reports," is incorporated herein by reference.

We will file the [removed: 2020] [added: 2021] Proxy Statement with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year.

Information contained in the [removed: 2020] [added: 2021] Proxy Statement, including information appearing under "Corporate Governance and Related Matters" and "Executive Compensation and Related Matters" in the [removed: 2020] [added: 2021] Proxy Statement, is incorporated herein by reference.

Information contained in the [removed: 2020] [added: 2021] Proxy Statement, including information appearing under "Beneficial Ownership of Common Stock" and "Equity Compensation Plan Information" in the [removed: 2020] [added: 2021] Proxy Statement, is incorporated herein by reference.

Information contained in the [removed: 2020] [added: 2021] Proxy Statement, including information appearing under "Corporate Governance and Related Matters" and "Related Person Transactions" in the [removed: 2020] [added: 2021] Proxy Statement, is incorporated herein by reference.

Information contained in the [removed: 2020] [added: 2021] Proxy Statement, including information appearing under "Audit Committee Matters" in the [removed: 2020] [added: 2021] Proxy Statement, is incorporated herein by reference.

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| [Report of Ernst & Young LLP, Independent Registered Public Accounting [removed: Firm](#s06AE8849479A59928A821039816E2F16)] [added: Firm](#iae24bb64548d47cfaf1f12c57753c40c_58)] | [removed: [45](#s06AE8849479A59928A821039816E2F16)] | [added: | [47](#iae24bb64548d47cfaf1f12c57753c40c_58) | | |]

| [Consolidated Balance Sheets as of September 30, [removed: 2019] [added: 2020] and [removed: 2018](#sCAE2CB3EF74C5B4B898AFD8E902B313D)] [added: 2019](#iae24bb64548d47cfaf1f12c57753c40c_64)] | [removed: [49](#sCAE2CB3EF74C5B4B898AFD8E902B313D)] | [added: | [50](#iae24bb64548d47cfaf1f12c57753c40c_64) | | |]

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| [Consolidated Statements of Changes in Stockholders' Equity for the fiscal years ended September 30, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#sFCC0B031D2C75B489A5271AC183172C6)] [added: 2018](#iae24bb64548d47cfaf1f12c57753c40c_76)] | [removed: [52](#sFCC0B031D2C75B489A5271AC183172C6)] | [added: | [53](#iae24bb64548d47cfaf1f12c57753c40c_76) | | |]

| [Consolidated Statements of Cash Flows for the fiscal years ended September 30, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017](#s78A0410F2AB05BFC97083F9A8CB2D842)] [added: 2018](#iae24bb64548d47cfaf1f12c57753c40c_82)] | [removed: [53](#s78A0410F2AB05BFC97083F9A8CB2D842)] | [added: | [54](#iae24bb64548d47cfaf1f12c57753c40c_82) | | |]

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