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Investor Day

December 14, 2011

Comment Regarding Forward Looking Statements

Certain of the statements contained in this presentation are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on management's current expectations and are subject to uncertainty and change in circumstances. Among the factors that could cause actual results to differ materially from those projected, anticipated or implied are the following: changes in pharmaceutical market growth rates; the loss of one or more key customer or supplier relationships; changes in customer mix; customer delinquencies, defaults or insolvencies; supplier defaults or insolvencies; changes in pharmaceutical manufacturers' pricing and distribution policies or practices; adverse resolution of any contract or other dispute with customers or suppliers; federal and state government enforcement initiatives to detect and prevent suspicious orders of controlled substances and the diversion of controlled substances; qui tam litigation for alleged violations of fraud and abuse laws and regulations and/or any other laws and regulations governing the marketing, sale and purchase of pharmaceutical products or any related litigation, including shareholder derivative lawsuits; changes in federal and state legislation or regulatory action affecting pharmaceutical product pricing or reimbursement policies, including under Medicaid and Medicare; changes in regulatory or clinical medical guidelines and/or labeling for the pharmaceutical products we distribute, including certain anemia products; price inflation in branded pharmaceuticals and price deflation in generics; greater or less than anticipated benefit from launches of the generic versions of previously patented pharmaceutical products; significant breakdown or interruption of our information technology systems; our inability to continue to implement an enterprise resource planning (ERP) system to handle business and financial processes and transactions (including processes and transactions relating to our customers and suppliers) of AmerisourceBergen Drug Corporation operations and our corporate functions as intended without functional problems, unanticipated delays and/or cost overruns; success of integration, restructuring or systems initiatives; interest rate and foreign currency exchange rate fluctuations; economic, business, competitive and/or regulatory developments in Canada, the United Kingdom and elsewhere outside of the United States, including changes and/or potential changes in Canadian provincial legislation affecting pharmaceutical product pricing or service fees or regulatory action by provincial authorities in Canada to lower pharmaceutical product pricing and service fees; the impact of divestitures or the acquisition of businesses that do not perform as we expect or that are difficult for us to integrate or control; our inability to successfully complete any other transaction that we may wish to pursue from time to time; changes in tax laws or legislative initiatives that could adversely affect our tax positions and/or our tax liabilities or adverse resolution of challenges to our tax positions; increased costs of maintaining, or reductions in our ability to maintain, adequate liquidity and financing sources; volatility and deterioration of the capital and credit markets; and other economic, business, competitive, legal, tax, regulatory and/or operational factors affecting our business generally. Certain additional factors that management believes could cause actual outcomes and results to differ materially from those described in forward-looking statements are set forth (i) in Item 1A (Risk Factors) in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2011 and elsewhere in that report and (ii) in other reports filed by the Company pursuant to the Securities Exchange Act of 1934.

Steve Collis
President and Chief Executive Officer

17 Years 29 Years 4 Years 20 Years Steve Collis
President and Chief Executive Officer

Dave Neu
President AmerisourceBergen Drug Corporation

James Frary
President AmerisourceBergen Specialty Distribution and Services

Peyton Howell
President AmerisourceBergen Consulting Services

5 Years
21 Years

Tony Pera
Senior Vice President, Supply Chain Services

Mike DiCandilo
Executive Vice President and Chief Financial Officer

A Decade of Delivering

A Decade of Delivering
Earnings Per Share from Continuing Operations (GAAP)

$2.22 $1.69 $1.44 $1.26

$0.92 $0.95
$0.71 $0.52 $0.59


















A Decade of Delivering

Diversity Within Our Over $80B Revenues


Retail Retail

Customer buys generics from ABC

Health Health Systems Systems


Alt Site Alt Site

A Decade of Delivering

The First Decade

Integrated two large companies

Built highly efficient distribution network

Implemented new ERP system Built market-leading specialty business Expanded PRxO Generics Improved our balance sheet and credit ratings Delivered tremendous value to shareholders

A Decade of Delivering
The Next Decade
To be the preferred partner to healthcare providers and pharmaceutical manufacturers

To improve patients lives by delivering innovative products and services that drive quality and efficiency

Accountability Collaboration Customer Focus Innovation Integrity Passion

A Decade of Delivering
The Next Decade
Continue to take advantage of the growth areas of the market Generics Specialty/Biosimilars
Continue to deliver innovative services and thought leadership

Invest in our platform to drive efficiency

Utilize robust cash flow and financial flexibility to grow our business

A Decade of Delivering
The Next Decade
Demographics continue to drive organic growth Healthcare coverage expands significantly
Cost containment efforts drive demand for our services Distributors more entrenched than ever with manufacturers

Industry Landscape
Pharmaceutical Sales
400 350 300 7.0% 250 200 150 100 2.0% 50 0 1.0% 0.0% 6.0% 5.0% 4.0% 3.0% sales growth rate 10.0% 9.0%

+ demographics +expansion of coverage +new drug launches +new uses for existing drugs -generic conversions -increased focus on value -safety concerns -reimbursement pressures


Source: IMS Health 2011 Prognosis Report

Were built to succeed in this environment

Industry Landscape
The Role of Distributors
Replacing distributors with direct service model adds over $41 billion in costs Industry costs to serve declined by 80 bps since 2007 due to efficiency and productivity gains
Source: The Role of Distributors in the U.S. Healthcare Industry by The Center for Healthcare Supply Chain Research and Booz & Company, 2011.

Fiscal 2011 Highlights

A Decade of Delivering
FY 2011 Financial Highlights
GAAP Diluted EPS of $2.54, up 14%

Total Revenue of $80.2 billion, up 3%

Operating Margin expansion of 8 bps

Cash Flow From Operations of $1.2 billion

Share Repurchases of $841 million

Met or exceeded all of our goals

FY2011 Highlights

Good Neighbor Pharmacy received the highest numerical score among chain drug store pharmacies in the proprietary J.D. Power and Associates 2010-2011 National Pharmacy StudiesSM, tied in 2011. 2011 study based on 12,360 total responses, and measures 7 chain drug pharmacies. Proprietary study results are based on experiences and perceptions of consumers surveyed June-July 2011. Your experiences may vary. Visit jdpower.com

FY2011 Highlights 2011 VIP Award


Value, Innovation, & Performance


Our Largest Customer Second Year in a Row

FY2011 Highlights
Operational Excellence
Capitalized on specialty generic opportunities

Implemented SAP in ABDC and corporate

Reorganized ABDC sales force

Added new business in targeted markets


FY2011 Highlights
Strengthened Leadership Areas With Acquisitions
Acquisition Strategy FY2011

Increase value for customers and suppliers Strengthen core competencies Domestic and international niche opportunities Increase shareholder value
* Closed 11/1/11

Premier Source IntrinsiQ


FY2011 Highlights
Realigned Business Units
Drug Company Specialty Distribution and Services
James Frary

Consulting Services

Dave Neu
North Region South Region East Region West Region Canada Technology Solutions American Health Packaging

Peyton Howell

Oncology Supply IONIntrinsiQ Besse ASD ICS US Bio

Lash Xcenda Premier Source TheraCom AndersonBrecon

Looking Ahead


Looking Ahead

Our Core Tenets

A Decade of Delivering Collaboration Drives Innovation

ION Solutions/ASD Healthcare/Besse Medical Practice Efficiency Technologies

US Bioservices/ION Solutions Joint Program for Oral Oncolytics

GNP/ION Solutions ASD Healthcare/ABDC Retail Telesales Professional Management Solutions for Physicians and Pharmacists

ABC Value Proposition

Conclusion Key Challenges in FY12

Execution on generics

Conversion of DCs to SAP

Reimbursement pressure on customers

Difficult comparisons to FY11

We have the team to succeed

David Neu
President AmerisourceBergen Drug Corporation

AmerisourceBergen Drug Corporation

Approx. $65 billion in annual revenue 5,000 associates 35 distribution centers in North America ABDC works with every major U.S. manufacturer (1,500+)

Branded Rx Generic Rx Biotech and specialty medicines Over-the-counter (OTC) remedies, HH Care, Health Beauty Aids

ABDC provides services across several business channels

Operating Efficiency
Driving Value to Customers and Shareholders

Number of Divisions TOTAL:
Distribution Sq. Ft. Inventory $'s Lines Per Day 4.7M $3.9B 800,000


Average SKU's Per Division

99.4% 99.95%

Customer Service Level

Order Accuracy

FY11 Financial Highlights

ABDC revenues up 5%
Gross margin up Expenses flat Operating margin up Excellent management of working capital

Strong Performance

Continued Operating Efficiency Improvement

ABDC Supply Chain Network with Canada Expansion

Invested $1 billion over past 10 years in distribution network and IT systems Strategically located distribution centers in US and Canada Distribution technology and engineering used as part of Canada expansion plan

A Decade of Delivering Innovation and Operating Efficiency Continue to Drive Value for Our Customers and Shareholders
Improved System Efficiency with SAP
Improved returns processing Optimized customer service Consolidated inside sales Instituted virtual service model

Operational Improvements
Improved Track and Trace design Increased regional product lines Accelerated PRxO Generics product introductions

Productivity Increases Continue for Distribution Productivity

Continued Productivity Improvements

Lines per hour

Expense per line







Expense per Line

Lines per Hour

BT Implementations Improving Back Office and Distribution Systems DC by DC

Completed: July 2010

Completed: October 2010

Currently Underway: Phased Deployments

Master Data Management

Back-Office Migration

Distribution Center Deployments

Foundational data used to build business transactions

Accounts receivable, accounts payable, inventory management; Financial management and reporting

Order management, customer service, and credit management; New customer order entry platform

Collaboration Drives Innovation and Value

Good Neighbor Pharmacy Provider Network

Walgreens CVS GNPPN Rite Aid Walmart 0 2000 4000 6000 8000

GNP Expands into Social Media with Focus on a Changing Demographic

ABC PassPort
An integrated procurement platform for all customer interactions with AmerisourceBergen A customer portal integrated with other AmerisourceBergen back office processes Developed based on customer input Built with usability in mind

Generic Scale Expanding Channel Leverage

Focus on compliance management

Customized portfolios Targeted incentives Multi-channel approach First to Shelf placement

Vigorous contract process

Inside Sales focus across segments

Targeting Growth Markets

Improving the Customer Experience: Two New Consolidated Business Segments

Community and Specialty Pharmacy

Health Systems GPOs Government

Providers Face a New, Unprecedented Productivity Imperative

Market and Regulatory Pressure Providers Face Tactical Needs

Legislative changes will erode the commercial market and grow Medicaid and Exchange participation Medicare reimbursement declines expected to increase pressure on productivity As a result providers will experience:

Increase capacity utilization Reduce variable costs Lower administrative costs Reinvent revenue streams and alter their business models

More patients, more total

dollars Fewer dollars per patient

Improving the Customer Experience

Improved customer coverage

Enhanced national/regional acct mgmt

Enhanced solutions portfolio Increased resources for high-touch segments Telesales supplement to direct sales Consolidation of Alt Care and Retail

Community & Specialty Pharmacy

Retail Independent Retail Chain Long Term Care Behavioral Health Pharmacy Health Maintenance Organization (HMO) Pharmacy Mail Order Pharmacy Specialty Pharmacy Home Infusion Home Healthcare Clinic Services Dialysis Surgery Center Rehabilitation

Strategic Approach
Help community pharmacists attract new patients, improve retention and medication adherence, and drive down operating costs Continuously improve generics offering and drive enhanced compliance and penetration Help customers prepare for upcoming generic launches and AMP implementation

Health Systems
Channel Strategy Focuses on Quality Care, Market Growth and Cost Control

Quality Care Solutions

Medication Process Medication Policy Medication Tracking Coordinated Patient Care

Market Growth Solutions

Employee Pharmacy Services Employer Pharmacy Services Community Pharmacy Services

Cost Control Solutions

Performance Assessment
Inventory Management

Pharmacy Transition Execution

Integrated Services Center

ABDC Will Continue to Invest in Our Core While Leveraging the Improved Solution Portfolio
Our Promise
Our ultimate goal is to focus our business to best serve our customers. We have, and are continuing to provide, services and solutions that align directly with our customers needs.


Enabling Technologies

Enabling Technologies

Customer Experience

Business Processes


Focus for FY12

Generics, Generics, Generics

Cross Company Leverage of Specialty Assets

Generics, Generics, Generics SAP Implementation

Growth in Target Markets

Provide a Best in Class Customer Experience

In Conclusion
ABDC has had a decade of strong performance.

Our investments in operations, technology, and the commercial organization will ensure the sustainability of earnings growth going forward.
Generics, Generics, Generics

AmerisourceBergen Drug Corporation is well-positioned for continued success for FY12 and beyond.

Generics, Generics, Generics

James Frary
President, AmerisourceBergen Specialty Distribution and Services

ABSG at A Glance

Services that Span the Specialty Industrys Needs

ABSG Revenue Strength

$15.5 Billion Business

ASD Healthcare

ICS Besse Medical

Other Services

Oncology Supply

Leader in Specialty Distribution & Services

Largest oncology products distributor Largest blood plasma products distributor Leading distributor in dialysis Strong positions in other physician specialties Largest specialty 3PL provider dedicated to Rx

Value of Specialty Distributors

Value of specialty distribution calculated in recent study
April 2011 by Arthur D. Little & Center for Healthcare Supply Chain Research

Replacing specialty distributors would add $3.5 billion in costs to manufacturers and providers (~13% of product value studied)
Traditional distributors create similar savings
Source: Specialty Pharmaceuticals and the Role of the Specialty Distributor; Arthur D. Little, 2011

Specialty Generics
Historic performance in FY2011
On top of historic FY2010 Successful oxaliplatin buy-in, gemcitabine and docetaxel launches

Modest opportunity for FY2012

Reduced profit contribution from gemcitabine and docetaxel Oxaliplatin returning August 2012

Opportunity for future launches

ABSG extremely well positioned for biosimilars, in collaboration with ABCS Commercialization of biosimilars will follow mold of branded products and require more services than traditional generics
e.g. Market analysis and access strategies, special distribution and administration, compliance and persistency programs, REMS

Process and timing of product approvals TBD

Oncology Demand Will Grow

Sources: National Health Expenditure data, , National Cancer institute, 2010; Unhealthy America: economic burden of chronic disease (Milken institute), Oliver Wyman analysis;

Role of Community Practices

Community practices key to patient access and high quality, efficient care
Reimbursement pressures continue to challenge practices

Community Oncology Alliance found (as of March 2011):

315 practices acquired by a hospital since late 2007 111 practices merged into another entity

Positive trends are emerging

Payers recognizing quality and efficiency of community practices Hospitals and physicians focusing more on collaboration

ABSGs Broad Practice Solutions

The preferred partner to physicians and manufacturers
Core Services (Distribution, GPO) Practice Management Patient Value

Market leadership Distribution best service, value

IV, orals, supplies

Nucleus Solutions
Flexibility Interoperability

Physician-driven quality initiatives Total cost & quality

Beyond Rx Beyond the practice

GPO best contract value

Flexibility Engagement Information

Rich informatics Pharmacy and patient management solutions

Personalized meds Tools & network

Adoption of Practice Tools Underscore Value

Nucleus Solutions
Installed base grew 118%+ yoy Dispensing grew 295% yoy Installing cabinets in larger practices with higher treatment volumes AND practices are improving their utilization

IntrinsiQ Acquisition

Industry leading provider of oncology software and informatics

IntelliDose: Meaningful-use certified software tracks and manages complex chemotherapy dosing Practices using Nucleus Solutions will soon have access to a much more robust data set to support treatment decisions

Expands ABSG offerings to help providers and pharma to improve the quality of cancer care

Physician-driven Quality Initiatives in Action

Michigan Oncology Medical Home Initiative
In conjunction with Priority Health and Physician Resource Management Beyond pathways e.g., side effect management, reduced hospitalizations Flat monthly fee for patient support services, such as patient and financial counseling, medication therapy management

ION Solutions providing technology and informatics Practices receive new compensation structure to improve efficiency and patient outcomes

Specialty market continues to be a growth driver
Growth fundamentals are strong Generics and biosimilars create new opportunities

ABSG will continue specialty leadership

Breadth, depth and collaboration across ABC Quality service and customer satisfaction

We continue to innovate to enhance the success of our partners

Strong demand for ABSG solutions to help pharma and providers improve quality and efficiency in specialty care

Peyton Howell
President, AmerisourceBergen Consulting Services

Consulting Services

A Decade of Delivering

Consulting Services
Review our expanded service portfolio to support the manufacturer including recent acquisitions

Provide highlights of capabilities and review how businesses have reached significant scale and are positioned to leverage growth
Describe how the market environment supports strong growth for outsourced manufacturer services across the product life cycle

Summarize how our services support core distribution and product access

AmerisourceBergen Consulting Services

Focused on the manufacturer
Pharmaceutical, Biotech, Device, Diagnostic, and other medical technology or treatments


Focused on innovation to provide value and expertise to manufacturers and support product access
A trusted, essential partner to manufacturers

Value Efficiency

Acquisitions position us for expanded growth and changing product landscape


Aligned Business Strategy

Patient Services Business units Customers
Core business drivers Innovative capabilities People Operational Processes & Systems

Strategic Consulting Xcenda Manufacturers

Innovative capabilities People Technical capabilities, Processes & Systems

Contract & Clinical Packaging AndersonBrecon

Lash, TheraCom, Premier Source

Innovative capabilities People Technology investment & engineering Quality Management 1,500 Associates US and UK


3,400 Associates 6 major call center locations

225 Associates Field-based and remote associates across the US Europe & Canada


Combined Business Unit

Over 5,000 Associates FY11 Revenue Growth of 20%

Above Market Growth Opportunities

Collaboration to support growth includes: Business Development Solution Selling (eg Compliance solutions) Operations & Quality Management Tools Expansion of Global business development


AmerisourceBergen Consulting Services

US Locations
Charlotte, NC Dallas, TX Lincoln, RI Pittsburgh PA Rockford, IL Rockville, MD Portland, OR San Francisco, CA Tampa, FL Washington, DC

United Kingdom
Hay-on-Wye, Wales

Call Center Locations

Patient Services
Lash Group Premier Source TheraCom


Patient Services
A Full Strategic PartnerDedicated to Supporting Patient Access

Benchmarking Exposure Analysis

Support Services Strategy & Development

Reimbursement Support Co-pay Assistance Patient Assistance

Analytics & Reporting Performance Management / QA Web-based Services

Clinical Services & Adherence Programs REMS Management

Billing, Collections & Revenue Cycle Management

Product Life Cycle


Closed on Acquisition of TheraCom on November 1 Provides outsourced reimbursement support and product hubs for pharmaceutical and biotech manufacturers
Founded in 1996, acquired by a Caremark legacy company in 2002. Exceptional growth over the past three years Over 950 associates

Unique from Lash in that services are focused on pharmacy benefit products that include test claims capabilities
Includes two business units: Services and Distribution
Services Business is the core asset but the distribution services are integrated within the reimbursement programs to meet unique product needs such as training kits and patient assistance

Strategic Rationale: Lash & TheraCom

Expanded, differentiated capabilities Pharmacy services model is a market differentiator Essential to efficient growth of oral and self-administered injectable products Focus on market growth and patient access Reimbursement services are projected to continue to grow in importance with health reform and constrained economy Fundamental service across wide range of products and throughout product life cycle Expanded platform for partnership

Opportunity to differentiate service levels and operational offering Opportunity to expand services including strategic consulting and clinical programs Geographic expansion also supports growth
- 74 -

Leading Market Position

Unmatched scale and breadth of patient access related services trusted partner with proven outcomes for over 20 years

Over 131 programs for 69 different manufacturers including programs for 14 of top 15 pharma manufacturers
Acquisition of TheraCom and Premier Source further differentiates patient service model to include emerging biotech and molecular diagnostic manufacturers


Health reform will expand need for these services

Newly insured and coverage sources
Opportunities to assist with transition to coverage and ongoing access to new insurance sources Shift from support from uninsured to underinsured

More underinsured patients

Increased need for reimbursement support services to navigate access barriers Need for new copayment assistance resources

New focus on health outcomes and cost efficiency


Increased need for adherence and patient-centric support services Increased need for streamlined solutions that reduce MD administrative work

Strategic Consulting


Xcenda Highlights
Strong double-digit top line growth continues

Over 1,130 projects across 120 active clients Significant growth in managed markets agency clients, field reimbursement and international projects


A Decade of Delivering

No one competitor is an analog to the breadth of services we offer Value: Managed Markets Agency Services, Reimbursement Analysis & Market Research Evidence: Health Outcomes, Analytics, Risk Management & Epidemiology Access: Payer & Provider Access Strategy and Field Reimbursement Services for the full lifecycle of healthcare products Scientific excellence partnered with commercial applications

Science that enlightens. Creativity that excites

Platform for partnership across consulting services

The Value Cycle


Foreseeable unmet need in the market

Reason for Being

Current unmet need in the market and your product as solution Reason to Listen

Data showing your product addressing that need clinically Reason to Believe

Data showing your product addressing that need economically

Reason to Endorse


Manufacturers Face Opportunities and Challenges in the Post-reform Era

Xcenda is perfectly positioned to be the PARTNER of CHOICE for healthcare manufacturers

Development of health insurance exchanges

Opportunities & Challenges

Need for new solutions to ensure patient access

Medicaid expansion
Integrated healthcare systems Impact of ACOs and paymentbundling pilots

Patient education and navigation support Comparative effectiveness research


Contract & Clinical Packaging


Largest contract packager in US
Long history of quality and scale across wide range of packaging needs Branded, Generic, OTC, Specialty and Biologics 1,522 associates across over 1 Mil square feet of facilities Global business model with UK facility Anderson & Brecon now united under one leader to support global approach Dramatic growth and expansion of business New expanded capabilities including clinical trials packaging and specialty pharma center

Unique Strengths
Speed & Scale
Unequaled packaging capability for 14 of top 15 manufacturers


Innovative engineering, design and project management

Lean Six Sigma Company


Clinical Trial Packaging

Dramatic growth in clinical trial packaging and established global offering Seamless global supply supporting early phase clinical development through long -term commercial partnerships
Ability to leverage resources of AmerisourceBergen to combine comparator drugs and combination therapies

Product supply for 100+ countries

Opportunity to build early manufacturer relationships and pipeline tracking as part of AmerisourceBergen Consulting Services

Specialty Pharma Center (SPC)

Unique capabilities to support packaging needs of potent compounds Facility opened February, 2011 and completed 9 product launches in first 7 months

Capability now expanding to UK to support global opportunities

Concluding thoughts

Manufacturer Services Environment is Driving Growth

Specialized services that require re-investment and innovation are ideal for manufacturer outsourcing
Manufacturer cost pressures are facilitating growth of our services
Significant value to leverage expertise and innovation and outsource patient services and packaging services

Regulatory environment
Ability to develop very unique, measurable capabilities to support quality Compliance concerns, risk management and HIPAA

Services that require scale and ability to respond to volume changes Importance of speed shifts manufacturer to buy vs build options

Strong Strategic Fit to Support ABC

Supports Product Access & Use Deepens Manufacturer Relationships Patient Focused
Supports product access which is fundamental to product sales and success

Opportunity to better understand product opportunities, lifecycle, and market changes impacting ABC customers

Services directly support patients and providers including ABC customers (doctors, pharmacies, hospitals, patients)

Quality & Efficiency

Strong value proposition for manufacturers

Market leadership

Leading market position and differentiator for ABC that is positioned for above market growth

Service offering includes services essential to product access


Tony Pera
Senior Vice President Supply Chain

Branded Pharmaceuticals

A Decade of Delivering

The Status of Fee For Service Effectively all manufacturers covered FFS renewals continue to pay us for the value we provide
Performance very near 100% Less than 10% is now subject to price fluctuation

Retained our value with key pharmaceutical companies

A Decade of Delivering

Pharmaceutical Services Value

Distribution Services
Financial Management

Information & Data Management

Inventory & Sales Data Patient and Prescriber Data Other Ad Hoc Reports

Sales & Marketing Services

Product Launches & Sample Programs
Compliance, Persistency, and Awareness Programs Sourcing Programs & Other Marketing Services

Customer Validation and Monitoring

Order Mgmt.

Pick, Pack, & Ship*

Pricing & Transaction Mgmt.

Receivable Risk Mgmt.


Generic Pharmaceuticals

A Decade of Delivering

Generics Growth Continues

Patent expirations Use of generics reduce healthcare costs Increased awareness and acceptance Generic dispensing rates continue to rise

Generics Growth Continues

Sales and TRx Share of Brands and Generics
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
15.6% 16.2% 16.8% 17.7% 20.0% 21.0%

# of Scripts
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%




















2006 2007 2008 2009 2010 YTD Sep 2011 Source: IMS Health


2006 2007 2008 2009 2010 YTD Sep 2011 Generics

Generics Growth Continues

Patent Expirations
ABC Fiscal Year
$39.2 $40.0 $30.0 $20.0 $10.0 $2011
Aricept Taxotere Gemzar Levaquin

$17.8 $9.2 $10.4

Zyprexa Lipitor Plavix Seroquel Singulair Actos

Diovan & Diovan HCT Oxycontin Aciphex Niaspan

Cymbalta Nexium Celebrex

U.S. Branded

Generics Growth Continues

The Right Customer Mix at ABC

Retail Healthcare Providers
Regional drugstore chains Food/Drug combination Independent pharmacies

Institutional Healthcare Providers

Hospitals Long Term Care/Alternate Site

Specialty Physician

Generics Growth Continues

Economics of Generic vs. Branded
Gross Profit Dollars

Make as much or more gross profit dollars per unit on generics Reduced receivable risk Reduced working capital
Can negotiate better terms, i.e. 60 days DPOs




Produces higher ROCC

Generic Brand


Holds true even after exclusivity periods

Generics Growth Continues

Generics Philosophy
Monitor and react to industry trends Manage PRxO Generics Program Procure products from reliable sources Provide manufacturers market access Deliver optimal value to customers Market shortages Support the Prime Vendor Model

Generics Growth Continues

PRxO Generic Program

Formulary that consist of over 7,500 SKUs Value Pricing Portfolio management Tailored programs address specific customer needs Focused on customer profitability Dynamic market response 100+ manufacturers in PRxO generics Key component of Prime Vendor Model

Generics Growth Continues

Factors Considered in Forecast Benefit to ABC

Date of expiry/launch Status of exclusivity Authorized Generic (AG) Number of players expected Who the players are Channel Consideration Mail Order/Retail/Hospital/Oncology Expected conversion
Database of more than 100 recent launches

Sooner Exclusivity Yes Fewer is better

Retail/Oncology Higher is better

Price as a % of brand

Higher is better

Generics Growth Continues

FY 2012 Generic Launches

Total 34 product launches
7 represent 80% of new product dollars None is bigger than 25% of all new products
Two big ones

17 are expected to have an exclusivity period All are predominately retail/mail order
17 are large mail order products (> 25% of scripts)

No product > 2% of generics

Generics Growth Continues

Early read on two largest launches
Zyprexa: Normal generic launch patterns Conversion rates as expected

Lipitor: Generic launch generally as expected Conversion rates appear to be lower than expected

A Decade of Delivering

Branded Rx market is challenging
ABC expects to retain value

Generics growth is robust

ABC is in great position
The right customer mix PRxO Generics program

Mike DiCandilo
Executive Vice President and Chief Financial Officer

A Decade of Delivering

Long Term Financial Goals

EPS growth of approximately 15% Revenue growth with the market Operating margin expansion ROIC > WACC Free cash flow approximates net income Minimum 30% of free cash flow returned to shareholders

A Decade of Delivering
Earnings Per Share from Continuing Operations (GAAP)

$2.22 $1.69 $1.44 $1.26





$0.71 $0.52













$0.92 $0.95


A Decade of Delivering

$65.7 $60.8 $71.8 $80.2








A Decade of Delivering

Operating Margin Expansion



+8 +6


+8 +5

2006 2007 2008 2009 2010 2011

Operating Expense Gross Profit

A Decade of Delivering

Asset Management
35 30



25 20 20
15 10 2006 2007 2008












A/R Days

Inventory Days

A Decade of Delivering

Return on Invested Capital



Value Creation










A Decade of Delivering

Cash Generation & Returns to Shareholders

$1.6 $1.4 $1.2 $1.0 140% 120%


% of FCF returned to shareholders Income from Continuing Operations Free Cash Flow 30% Minimum FCF returned to shareholders



60% $0.6 $0.4 $0.2 $0.0 40%









A Decade of Delivering

Fiscal Year 2012 Targets

GAAP Diluted EPS in the range of to $2.74 to $2.84, up 8% to 12%

Operating Margin Free Cash Flow

Flat to modest growth

Expansion in the high single digit to low double digit bps range In the range of $700 to $800 million including CapEx of $150

Share Repurchases

$400 million

FY12 EPS Growth Drivers FY 12 Revenue Growth 0-1% Drivers

+Market growth 0-1% +ABSG growth -Large customer growth -Longs/CVS

Margin Expansion
Op Inc Growth Cash Deployment EPS Growth

5-8% 3-4% 8-12%

+ABDC generics - ABSG generics -Canada, ABCS expenses (acquisitions)

+Share repurchase $400 million -Net interest expense up Fourth quarter highest growth rate

A Decade of Delivering EPS Impact of Key Specialty Generics

Year FY2011 Product(s) Contribution $0.48

Oxaliplatin Gemcitabine Docetaxel

Gemcitabine Docetaxel Oxaliplatin

Substantially offset by ABDC generic launches



A Decade of Delivering

Fiscal Year 2012 Targets

Revenue Growth and Operating Margin by Business Unit
Business Unit % of Revenue Revenue Growth Operating Margin Range


79% - 81%

-1% - 0% 5% - 6% >100% 0% - 1%

1.43% - 1.47%
1.95% - 2.05%

18% - 20%

5% - 6%
1.57% 1.62%


A Decade of Delivering Fiscal 2012 Capital Deployment

Whats Available
$1.8 billion of cash @ 9/30/11 ($1.3 billion available) Free Cash Flow of $700-$800 million expected for FY12 $500 million from recent debt offering Total available for investment about $2.5 billion to $2.6 billion

Where to deploy?

$400 million of shares expected to be repurchased in FY12 $400 million debt repayment in September 2012 $130 million for dividend $250 million for TheraCom acquisition $1.3-$1.4 billion available for further investment

Significant Financial Flexibility

A Decade of Delivering Financial Flexibility

Strong Balance Sheet
9/30/11 Total debt $1.4B 9/30/11 Cash $1.8B

Investment Grade Debt Rating

30%-35% Debt/Capital Ratio

Ample Liquidity
$700m avail on Revolver $700m avail on A/R Securitization Facility New Commercial Paper Facility

Strong Operating Cash Flow

Ability to fund strategic growth and return cash to shareholders

A Decade of Delivering Conclusion

Strong, consistent performance

Better than expected 2011

Solid forecast for 2012 despite tough comparison Great financial flexibility


the next decade of delivering

Steve Collis
President and Chief Executive Officer