Washington, D. C. 20549

Commission file number 1-5110

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Bergen Brunswig Corporation, a New Jersey corporation formed in 1956, and its subsidiaries (collectively, the "Company") is one of the nation's leading supply channel management companies, providing pharmaceuticals, medical-surgical and specialty products as well as information management solutions and outsourcing services designed to improve cost-effectiveness and increase value for customers, patients and manufacturers across the entire healthcare spectrum. Additionally, the Company serves approximately 500,000 patients in long-term care and alternate site settings. The Company also develops disease-specific treatment protocols and pharmacoeconomic initiatives to assist in the reduction of overall healthcare costs while improving disease management and outcomes.

The consolidated financial statements include the accounts of the Company, after elimination of the effect of intercompany transactions and balances.

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for reporting on Form 10-Q and do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited Consolidated Financial Statements and Notes to Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1998. Certain reclassifications have been made in the consolidated financial statements and notes to conform to fiscal 1999 presentations.

The preparation of the Company's consolidated financial statements in conformity with generally accepted accounting principles necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from these estimates and assumptions.

Effective October 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income", which establishes standards for the reporting and display of comprehensive income and its components in financial statements. This statement defines comprehensive income as "all changes in equity during the period with the exception of stock issuances and dividends." The Company's comprehensive income consists of the following:

Effective October 1, 1998, the Company adopted the American Institute of Certified Public Accountants' Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use". This statement provides guidance for the capitalization and amortization of costs incurred in connection with software to be used internally by the Company. Adoption of the statement has not had a significant impact on the Company's financial position, results of operations or cash flows.

Consistent with its past practices, the Company is assessing the recoverability of goodwill and the impairment of long-lived assets in accordance with the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets to be Disposed Of" which requires impairment losses to be recognized for long-lived assets used in operations when indicators of impairment are present and the undiscounted future cash flows are not sufficient to recover the assets' carrying amounts. An impairment loss is measured by comparing the fair value of an asset to its carrying amount.

The Company records revenues when product is shipped or services are provided to its customers. Along with other companies in its industry, the Company now reports as revenues the gross dollar amount of bulk shipments to customers' warehouses and the related costs in cost of sales. Bulk shipment transactions are arranged by the Company with its suppliers at the express direction of the customer, and involve either shipments from the supplier directly to customers' warehouse sites or shipments from the supplier to Company warehouses for immediate shipment to customers' warehouse sites. All periods presented have been reclassified to reflect the new presentation. Previously, only the gross profit related to these bulk shipments was reported in revenues. This gross profit was not material in any period presented.

Holders of the Preferred Securities are entitled to cumulative cash distributions at an annual rate of 7.80% of the liquidation amount of $25 per security beginning June 30, 1999. The Preferred Securities will be redeemable upon any repayment of the Subordinated Notes at 100% of the liquidation amount beginning in May 2004.

The Company, under certain conditions, may cause the Trust to defer the payment of distributions for successive periods of up to 20 consecutive quarters. During such periods, accrued distributions on the Preferred Securities will compound quarterly at an annual rate of 7.80%. Also, during such periods, the Company may not declare or pay distributions on its capital stock; may not redeem, purchase or make a liquidation payment on any of its capital stock; and may not make interest, principal or premium payments on, or repurchase or redeem, any of its debt securities that rank equal with or junior to the Subordinated Notes.

The Subordinated Notes and the related Trust investment in the Subordinated Notes have been eliminated in consolidation and the Preferred Securities reflected as outstanding in the accompanying consolidated financial statements.

On April 23, 1999, the Company entered into a credit agreement (the "Senior Credit Facility") with a group of banks. The Senior Credit Facility allows borrowings of up to $600 million under a 364-day unsecured revolving line of credit to be used for general corporate purposes, including retirement of outstanding debt of the Company or any of its subsidiaries and entities which the Company may acquire in the future. The Senior Credit Facility has loan covenants which are identical to those of the Company's credit agreement (the "Credit Agreement"). There were no borrowings outstanding at June 30, 1999 under the Senior Credit Facility.

The Company's Credit Agreement, which is effective through March 2001, allows borrowings of up to $400 million and also allows borrowings under discretionary credit lines ("discretionary lines") outside of the Credit Agreement. On April 23, 1999, the Credit Agreement was amended to, among other things, allow borrowing under the Senior Credit Facility. Outstanding borrowings under the Credit Agreement and discretionary lines were $211 million and $170 million at June 30, 1999 and September 30, 1998, respectively. The Credit Agreement has loan covenants which require the Company to maintain certain financial statement ratios. The Company is in compliance with all required ratios at June 30, 1999. The weighted average interest rate was 5.70% for borrowings outstanding at June 30, 1999. The amount of credit available to the Company under the Credit Agreement and the Senior Credit Facility is reduced dollar for dollar by the amount of outstanding Notes under the Commercial Paper Agreements (see below).

On April 14, 1999, the Company entered into a series of commercial paper dealer agreements (the "Commercial Paper Agreements") with a group of commercial paper dealers which provides for the private placement of short-term commercial paper notes of the Company (the "Notes") up to a maximum of $1 billion outstanding. Outstanding Notes under the Commercial Paper Agreements were approximately $536 million at June 30, 1999. The Commercial Paper Agreements allow maturities of up to 364 days from the date of issue and are backed by the Credit Agreement and Senior Credit Facility. The Notes may not be redeemed prior to maturity nor are they subject to voluntary prepayment. The weighted average interest rate was 5.42% for Notes outstanding at June 30, 1999.

An aggregate of $400 million of outstanding borrowings at June 30, 1999 (including $211 million outstanding under the Credit Agreement and discretionary lines and $189 million outstanding Notes under the Commercial Paper Agreements) have been classified as long-term debt based on the Company's ability to finance them on a long-term basis under the Credit Agreement.

On June 25, 1999, PharMerica Inc. ("PharMerica"), a wholly-owned subsidiary of the Company, completed an offer to purchase its 8 3/8% Senior Subordinated Notes due 2008 (the "8 3/8% Senior Notes"). Holders tendered an aggregate principal amount of $16.9 million in response to PharMerica's offer to purchase the 8 3/8% Senior Notes at a cash price equal to $1,010 per $1,000 principal amount, plus interest. The offer was required as a result of the acquisition of PharMerica by the Company on April 26, 1999 according to the terms of the indenture under which the 8 3/8% Senior Notes were issued.

The Company also filed a shelf registration statement with the SEC which became effective on March 27, 1996 (the "1996 Registration Statement"). The 1996 Registration Statement allows the Company to sell senior and subordinated debt or equity securities to the public from time to time up to an aggregate maximum principal amount of $400 million. The Company intends to use the net proceeds from any sale of such securities for general corporate purposes, which may include, without limitation, the repayment of indebtedness of the Company or of any of its subsidiaries, and entities which the Company may acquire in the future. Any offering of such securities shall be made only by means of a prospectus.

Basic earnings per share ("Basic") is computed by dividing net earnings (the numerator) by the weighted average number of shares of Class A Common Stock outstanding during each period (the denominator). Diluted earnings per share is similar to the computation for Basic, except that the denominator is increased by the dilutive effect of employees' stock options outstanding, computed using the treasury stock method.

On September 24, 1998, the Company declared a 2-for-1 stock split on the Company's Class A Common Stock ("Common Stock") which was paid on December 1, 1998 to shareowners of record on November 2, 1998. Share and per share amounts included in the accompanying consolidated financial statements and notes are based on the increased number of shares giving retroactive effect to the stock split.

On September 24, 1998, the Company declared a $0.075 per share quarterly cash dividend on the Company's Common Stock that was paid on December 1, 1998 to shareowners of record as of November 2, 1998. This $0.075 payment constituted the Company's dividend for the first quarter ended December 31, 1998. Ordinarily the dividend for that quarter is not declared until November. However, in order to make its dividend announcement at the same time that the Company announced the 2-for-1 stock split, the Company declared this cash dividend early. For accounting purposes, this cash dividend was recorded in the fourth fiscal quarter ended September 30, 1998, resulting in a larger than usual dividend in that quarter and no dividend during the quarter ended December 31, 1998. Regular quarterly cash dividends of $0.075 per share of Common Stock were paid on March 1 and June 1, 1999 and recorded in the second and third quarters, respectively, of fiscal 1999. In addition, on July 23, 1999, the Company declared a regular quarterly cash dividend of $0.075 per share on the Company's Common Stock, payable September 1, 1999 to shareowners of record on August 2, 1999.

On April 26, 1999, the Company completed its acquisition of PharMerica, one of the nation's largest providers of pharmaceutical products and pharmacy management services to long-term care and alternate site settings, headquartered in Tampa, Florida. The Company issued approximately 24.7 million shares of Common Stock valued at approximately $670 million, acquired net assets (excluding debt) at fair value of approximately $335 million, assumed debt of approximately $600 million and incurred costs of approximately $25 million. The Company recorded goodwill of approximately $960 million in the transaction.

On January 21, 1999, the Company completed the acquisition of Stadtlander Drug Co. ("Stadtlander"), a national leader in disease-specific pharmaceutical care delivery for transplant, HIV, infertility and serious mental illness patient populations and a leading provider of pharmaceutical care to the privatized corrections market, headquartered in Pittsburgh, Pennsylvania. The Company paid approximately $195 million in cash and issued approximately 5.7 million shares of Common Stock, previously held as Treasury shares, valued at approximately $140 million. The Company acquired net assets (excluding debt) at fair value of approximately $55 million, assumed debt of approximately $100 million and incurred costs of approximately $10 million. The Company recorded goodwill of approximately $390 million in the transaction.

If the acquisitions of PharMerica and Stadtlander had occurred as of the beginning of the nine months ended June 30, 1999 and 1998, unaudited pro forma net sales and other revenues, net earnings , and diluted earnings per share would have been as follows:

The pro forma operating results above include the results of operations for PharMerica and Stadtlander for the nine months ended June 30, 1999 and 1998 with increased goodwill amortization along with other relevant adjustments to reflect fair value of the acquired assets. Additionally, the pro forma operating results include pro forma interest expense on the assumed acquisition borrowings to finance the cash portion of the Stadtlander transaction; pro forma adjustments to provision for taxes on income to reflect, primarily, the aforementioned non-deductible goodwill amortization; and pro forma issuance of the Company's Common Stock reflected in the weighted average number of shares outstanding for the computations of pro forma diluted earnings per share.

The results of operations reflected in the pro forma information above are not necessarily indicative of the results which would have been reported if the PharMerica and Stadtlander acquisitions had been effected at the beginning of the respective nine-month periods.

On February 10, 1999, the Company completed the acquisition of 100% of the capital stock of J.M. Blanco, Inc. ("J.M. Blanco"), Puerto Rico's largest pharmaceutical distributor, headquartered in Guaynabo, Puerto Rico, for a cash purchase price of approximately $30 million. The Company acquired net assets (excluding debt) at fair value of approximately $23 million, assumed debt of approximately $22 million and incurred costs of approximately $1 million. The Company recorded goodwill of approximately $30 million in the transaction.

On December 31, 1998, the Company completed the acquisition of substantially all of the business, assets and property, subject to certain liabilities, of Medical Initiatives, Inc. ("MII"), a pre-filler of pharmaceuticals for oncology centers, located in Tampa, Florida. The Company issued approximately 210,000 shares of Common Stock, previously held as Treasury shares, valued at approximately $6.3 million, acquired net assets at fair value of approximately $0.5 million and incurred costs of $0.2 million. The Company recorded goodwill of approximately $6.0 million in the transaction.

The inclusion of the J.M. Blanco and MII acquisitions would not materially affect the foregoing pro forma accounts.

The amounts recorded for the aforementioned acquisitions, each of which has been accounted for as a purchase for financial reporting purposes, are subject to change after the completion of purchase accounting adjustments. The Company is in disagreement with the seller and its independent auditors regarding the valuation of the net assets of Stadtlander. If the Company is unable to settle this matter with the seller, it will be arbitrated by an independent party.

The J.M. Blanco acquisition and the cash portion of the Stadtlander acquisition were financed from borrowings under the Credit Agreement and other bank borrowings.

During the second quarter of fiscal 1998, the Company recorded a pre-tax charge of $9.8 million ($9.8 million, net of tax, or $.09 per diluted share; no income tax benefit was recorded in the second quarter) for expenses related to the proposed merger with Cardinal Health, Inc., which was terminated on August 7, 1998. In the fourth quarter of fiscal 1998, the Company recorded an income tax benefit of $4.0 million related to the aforementioned merger expenses since the expenses became deductible as a result of the termination of the proposed merger.

In the opinion of management of the Company, the foregoing consolidated financial statements reflect all adjustments necessary for a fair statement of the results of the Company and its subsidiaries for the periods shown and such adjustments are of a normal recurring nature. Results of operations for the first nine months of fiscal 1999 are not necessarily indicative of results to be expected for the full fiscal year or any other fiscal period.

Portions of management's discussion and analysis presented below, consisting of those statements which are not historical in nature (including, without limitation, the Company's expectations regarding its margins and the Company's Year 2000 disclosures), constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to materially differ from those projected or implied. The most significant of such risks, uncertainties and other factors are described in Exhibit 99 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999. The Company disclaims any obligation to update any forward-looking statement.

The Company reported significant increases in both revenues and earnings during the third fiscal quarter and nine months ended June 30, 1999 compared to the same periods in the prior fiscal year. Net sales and other revenues, including bulk shipments to warehouses, increased 23% and 24% for the third quarter and nine-month period, respectively, of fiscal 1999 over the same periods of the prior year. Net earnings increased 21% for the third quarter of fiscal 1999, and increased 47% for the fiscal 1999 nine-month period.

Diluted earnings per share for the third quarter of fiscal 1999 was flat compared to the third quarter of fiscal 1998 and increased 32% for the nine-month period. Due primarily to the issuance of shares of Common Stock in connection with the Stadtlander and PharMerica acquisitions, there were 24% and 11% increases in the weighted average number of shares outstanding for the diluted earnings per share computation in the third quarter and first nine months of fiscal 1999, respectively.

The earnings of PharMerica and Stadtlander were below management's expectations during the third quarter of fiscal 1999. As a result, these acquired entities had a dilutive effect on the Company's earnings per share.

PharMerica's revenues and operating margins were significantly impacted by negative industry trends resulting from dramatically lower reimbursement to nursing homes for Medicare patients under the recently-implemented Prospective Pricing System (PPS), which, among other things: (1) lowered occupancy by Medicare-funded patients at facilities served by PharMerica, (2) significantly diminished acuity levels among residents of these facilities, and (3) increased customer pricing pressure. Management expects that the negative impact of PPS may be at least partially addressed by proposed Federal legislation, but there is no assurance that such legislation will be enacted or that its effect will bring significant relief. Management is in the process of implementing several initiatives designed to improve PharMerica's earnings, including the use of purchasing leverage through the Company's pharmaceutical bussiness' programs, the centralization of packaging operations, the consolidation of billing centers, the installation of a perpetual inventory and pricing system, and the conversion to a common AS400 computer platform. No assurances can be given that such initiatives will result in improved earnings for PharMerica.

Stadtlander's operating results were adversely impacted by an increase in the allowance for doubtful receivables during the quarter. Management is taking several steps to reduce bad debt losses, including the conversion to a new billing and accounts receivable system and the implementation of new credit controls. Revenues for Stadtlander increased significantly over the comparable prior-year quarter (when Stadtlander was under different ownership), due to growth in all major product lines, including HIV, transplant, corrections and infertility.

The following table summarizes the components of the Company's operating earnings for the third quarter and first nine months of the current and prior fiscal year and should be read in connection with the discussion below:

Along with other companies in its industry, the Company now reports bulk shipments of pharmaceuticals in revenues and cost of sales. Previously, only the gross profit on such bulk shipments was reported in revenues. Fiscal year 1998 amounts presented herein have been reclassified to conform with the new reporting method. Bulk shipment transactions are arranged by the Company with its suppliers at the express direction of the customer, and involve either (a) shipments from the supplier directly to the customer's warehouse or (b) shipments from the supplier to Company warehouses for immediate shipment to the customer's warehouse. Bulk sales of pharmaceuticals do not impact the Company's inventory since the Company simply processes the orders that it receives from its suppliers directly to the customers' warehouses. The Company serves as an intermediary by paying the supplier and billing the customer for the goods. Due to the insignificant margins generated through bulk shipments, fluctuations in such revenues have an immaterial impact on the Company's operating earnings.

Revenues excluding bulk shipments increased 27% and 26% in the current quarter and nine months, respectively, over the corresponding prior-year periods. The increases principally reflect internal growth within the Company's existing distribution businesses. A portion of the revenue increases for the third quarter and nine-month period was attributable to business acquisitions, principally Stadtlander and PharMerica acquired in January and April 1999, respectively. Excluding the effect of these acquired entities, consolidated revenues grew 22% and 24% for the third quarter and nine-month period ended June 30, 1999, respectively.

Revenues from the pharmaceutical business grew 20% and 22% for the third quarter and nine-month period of fiscal 1999, respectively, over the prior-year comparable periods with double-digit percentage increases across all major customer categories and geographic regions. Such increases were primarily volume-related, reflecting growth from increased shipments to existing customers as well as from shipments to new customers. A small portion of this growth was attributable to the acquisition of J.M. Blanco in February 1999, which resulted in sales into Puerto Rico and the Virgin Islands. Revenues from the medical-surgical supply business increased 13% for both the third quarter and nine-month period of fiscal 1999 over the same periods in the prior year, primarily attributable to (a) the acquisition of Pacific Criticare, Inc. in May 1998 and Ransdell Surgical, Inc. in September 1998, which enabled this business to serve additional geographic areas and (b) shipments to new primary acute care customers. Revenues from the specialty products business increased 162% and 152% for the third quarter and nine-month period of fiscal 1999, respectively, over the prior year comparable periods, primarily reflecting growth from existing and new customers and the acquisition of Stadtlander in January 1999. The Stadtlander acquisition resulted in sales into the disease-specific pharmaceutical care delivery and privatized corrections markets. Excluding the effect of the Stadtlander acquisition, revenues from the specialty products business grew 73% and 92% in the third quarter and nine-month period ended June 30, 1999, respectively. The acquisition of PharMerica in April 1999 resulted in sales into long-term care and alternate site settings.

Gross profit as a percentage of revenues excluding bulk shipments ("gross margin") was 7.33% and 5.38% for the third fiscal quarter of 1999 and 1998, respectively, and 6.12% and 5.48% for the respective nine-month periods. The overall gross margin increase for both the quarter and the nine months ended June 30, 1999 was primarily due to the higher margins in the Stadtlander and PharMerica businesses, partially offset by lower gross margins in the distribution businesses. Excluding Stadtlander and PharMerica, the consolidated gross profit margin as a percentage of revenues excluding bulk shipments would have been 5.35% and 5.29% in the current third quarter and nine-month period, respectively. For both the third quarter and nine-month period of fiscal 1999, distribution gross margins decreased principally due to a change in the sales mix, with a greater portion of revenues coming from high-volume, low-margin customers, partially offset by the effects of higher inventory investment buying.

In all of the Company's distribution businesses, it is customary to pass on manufacturers' price increases to customers. Investment buying enables distributors such as the Company to benefit by purchasing goods in advance of anticipated manufacturers' price increases. Consequently, the rate or frequency of future price increases by manufacturers, or the lack thereof, influences the profitability of the Company.

Management anticipates further downward pressure on gross margins in the distribution businesses in fiscal 1999 because of continued price competition influenced by high-volume customers. Management expects that these pressures may be offset to some extent by an increased sales mix of more profitable products and services, the Company's acquisitions of Stadtlander and PharMerica, and reduction of distribution, selling, general and administrative expenses as a percentage of revenues, as described below.

DSG&A as a percentage of revenues excluding bulk shipments was 5.48% and 3.79% in the third quarter of fiscal 1999 and 1998, respectively, and 4.40% and 3.87% for the nine months ended June 30, 1999 and 1998, respectively. The increases for the third quarter and the nine-month period of the current fiscal year were primarily attributable to the Stadtlander and PharMerica businesses which experience significantly higher DSG&A expense ratios compared to the Company's distribution businesses. The effect of Stadtlander's and PharMerica's operating expenses was offset, in part, in both periods by continued operating efficiencies and the spreading of fixed costs over a larger revenue base by the Company's distribution businesses. Without the Stadtlander and PharMerica acquisitions, consolidated DSG&A as a percentage of revenues excluding bulk shipments would have been 3.52% and 3.58% in the current year quarter and nine-month period, respectively. The Company's distribution infrastructure has been able to process increasing volume without a proportionate increase in DSG&A. Also, the aforementioned shift in the distribution businesses' mix towards high-volume customers reduced the DSG&A percentage because these customers are less costly to service.

Net interest expense, including $2.2 million of distributions on the Preferred Securities, increased by $14.6 million, or 151%, compared to the prior year quarter and increased $19.8 million, or 65%, compared to the prior year nine-month period. These increases resulted principally from borrowings under the Commercial Paper Agreements, PharMerica's 8 3/8% Senior Notes, issuance of the Preferred Securities and higher average borrowings under the Credit Agreement and discretionary lines.

Taxes on income, including a $.9 million tax benefit related to distributions on the Preferred Securities, were 43.5% and 41.0% of pre-tax earnings in the third quarter of fiscal 1999 and 1998, respectively, and 41.5% and 44.3% for the comparable nine-month periods. The increase in the effective rate in the third quarter of fiscal 1999 is primarily due to the impact of nondeductible goodwill amortization from the PharMerica acquisition. The decrease in the effective rate in the nine-month period of fiscal 1999 is primarily due to the impact of the non-deductible merger expenses recorded in the second quarter of fiscal 1998, partially offset by the aforementioned effect of the PharMerica goodwill amortization.

During the second quarter of fiscal 1998, the Company recorded a pre-tax charge of $9.8 million ($9.8 million, net of tax; no income tax benefit was recorded in the second quarter) for expenses related to the proposed merger with Cardinal Health, Inc., which was terminated on August 7, 1998. In the fourth quarter of fiscal 1998, the Company recorded an income tax benefit of $4.0 million related to the aforementioned merger expenses since such expenses became deductible as a result of the termination of the merger.