Segment Data

6 Months Ended

Jun. 25, 2021

Segment Reporting [Abstract]

Segment Data

14. Segment Data

The Company operates in two reportable segments, which are further described below:

•Specialty Brands includes innovative specialty pharmaceutical brands; and

•Specialty Generics includes niche specialty generic drugs and APIs.

Management measures and evaluates the Company's operating segments based on segment net sales and operating income. Management excludes corporate expenses from segment operating income. In addition, certain amounts that management considers to be non-recurring or non-operational are excluded from segment net sales and operating income because management and the chief operating decision maker evaluate the operating results of the segments excluding such items. These items may include, but are not limited to, depreciation and amortization, share-based compensation, net restructuring charges, non-restructuring impairment charges, separation costs, research and development ("R&D") upfront payments, changes related to the Opioid-Related Litigation Settlement and the Acthar Gel Medicaid Retrospective Rebate incurred as a result of the Medicaid lawsuit. During the three months ended September 25, 2020, the Company began excluding depreciation and share-based compensation from its evaluation of the operating results of its segments. As a result, prior period segment operating income has been recast to reflect this change on a comparable basis. Although these amounts are excluded from segment net sales and operating income, as applicable, they are included in reported consolidated net sales and operating income (loss) and are reflected in the reconciliations presented below.

Selected information by reportable segment was as follows:

	Three Months Ended				Six Months Ended
	June 25, 2021		June 26, 2020		June 25, 2021		June 26, 2020
Net sales:
Specialty Brands	$	381.5	$	522.8	$	789.9	$	1,013.4
Specialty Generics	164.9		178.1		314.5		353.3
Segment net sales	546.4		700.9		1,104.4		1,366.7
Medicaid lawsuit (Note 12)	—		(534.4)		—		(534.4)
Net sales	$	546.4	$	166.5	$	1,104.4	$	832.3
Operating income (loss):
Specialty Brands	$	186.6	$	252.7	$	398.7	$	473.2
Specialty Generics	26.9		49.2		58.6		112.4
Segment operating income	213.5		301.9		457.3		585.6
Unallocated amounts:
Corporate and unallocated expenses (1)	(25.7)		(52.7)		(48.3)		(110.2)
Depreciation and amortization	(168.1)		(216.3)		(337.7)		(439.4)
Share-based compensation	(2.4)		(6.6)		(6.0)		(13.3)
Restructuring charges, net	(6.1)		(14.4)		(6.5)		(12.6)
Non-restructuring impairment charges	—		(63.5)		(64.5)		(63.5)
Separation costs (2)	(0.3)		(20.7)		(0.9)		(42.0)
R&D upfront payment (3)	—		(5.0)		—		(5.0)
Opioid-related litigation settlement (loss) gain (4)	—		(8.5)		—		8.3
Medicaid lawsuit (Note 12)	—		(639.7)		—		(639.7)
Operating income (loss)	$	10.9	$	(725.5)	$	(6.6)	$	(731.8)

(1)Includes administration expenses and certain compensation, legal, environmental and other costs not charged to the Company's reportable segments.

(2)Represents costs included in SG&A expenses, primarily related to professional fees and costs incurred in preparation for the Chapter 11 proceedings. As of the Petition Date, professional fees directly related to the Chapter 11 proceedings that were previously reflected as separation costs are being classified on a go-forward basis as reorganization items, net.

(3)Represents R&D expense incurred related to an upfront payment made to acquire product rights in Japan for terlipressin.

(4)Represents the change in the Settlement Warrants' fair value. Refer to Note 12 for further information.

Net sales by product family within the Company's reportable segments were as follows:

	Three Months Ended				Six Months Ended
	June 25, 2021		June 26, 2020		June 25, 2021		June 26, 2020
Acthar Gel	$	151.5	$	213.7	$	280.5	$	381.3
INOmax	105.9		154.9		239.9		296.6
Ofirmev	6.5		52.4		19.3		127.3
Therakos	68.5		47.8		135.3		111.5
Amitiza (1)	44.8		49.4		106.2		90.5
Other	4.3		4.6		8.7		6.2
Specialty Brands	381.5		522.8		789.9		1,013.4
Hydrocodone (API) and hydrocodone-containing tablets	20.5		25.4		43.8		51.9
Oxycodone (API) and oxycodone-containing tablets	17.1		15.0		34.3		31.9
Acetaminophen (API)	51.7		55.5		97.2		99.6
Other controlled substances	69.0		77.8		127.1		161.4
Other	6.6		4.4		12.1		8.5
Specialty Generics	164.9		178.1		314.5		353.3
Segment net sales	546.4		700.9		1,104.4		1,366.7
Medicaid lawsuit (Note 12)	—		(534.4)		—		(534.4)
Net sales	$	546.4	$	166.5	$	1,104.4	$	832.3

(1)Amitiza consists of both product net sales and royalties. Refer to Note 2 for further details on Amitiza's revenues.