Segment Results (Tables)

6 Months Ended

Jun. 30, 2017

Schedule of reportable segments information

The following represents selected information for the Company’s reportable segments for the three and six months ended June 30, 2017 and 2016 (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Net revenues to external customers:
U.S. Generic Pharmaceuticals	$	563,312	$	565,358	$	1,285,295	$	1,148,748
U.S. Branded Pharmaceuticals	245,188		288,342		495,347		597,155
International Pharmaceuticals (1)	67,231		67,187		132,689		138,523
Total net revenues to external customers	$	875,731	$	920,887	$	1,913,331	$	1,884,426

Adjusted income from continuing operations before income tax:
U.S. Generic Pharmaceuticals	$	253,866	$	214,968	$	595,465	$	426,736
U.S. Branded Pharmaceuticals	127,595		122,420		257,087		291,201
International Pharmaceuticals	14,812		20,615		29,694		42,369
Total segment adjusted income from continuing operations before income tax	$	396,273	$	358,003	$	882,246	$	760,306

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(1)	Revenues generated by our International Pharmaceuticals segment are primarily attributable to external customers located in Canada, Latin America and South Africa.

Schedule of reconciliations of consolidated loss from continuing operations before income tax

The table below provides reconciliations of our consolidated loss from continuing operations before income tax, which is determined in accordance with U.S. GAAP, to our total segment adjusted income from continuing operations before income tax for the three and six months ended June 30, 2017 and 2016 (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Total consolidated loss from continuing operations before income tax	$	(753,500	)	$	(165,465	)	$	(930,851	)	$	(372,943	)
Interest expense, net	121,747			111,919			233,746			228,712
Corporate unallocated costs (1)	34,152			49,818			81,620			86,098
Amortization of intangible assets	190,943			212,844			454,077			424,513
Inventory step-up and certain manufacturing costs that will be eliminated pursuant to integration plans	100			29,103			215			97,579
Upfront and milestone payments to partners	3,082			2,688			6,177			4,105
Separation benefits and other cost reduction initiatives (2)	24,614			22,174			47,284			60,630
Impact of VOLTAREN^® Gel generic competition	—			—			—			(7,750		)
Certain litigation-related and other contingencies, net (3)	(2,600		)	5,259			(1,664		)	10,459
Asset impairment charges (4)	725,044			39,951			929,006			169,576
Acquisition-related and integration items (5)	4,190			48,171			15,070			60,725
Loss on extinguishment of debt	51,734			—			51,734			—
Foreign currency impact related to the remeasurement of intercompany debt instruments	(3,233		)	417			(5,927		)	1,672
Other, net	—			1,124			1,759			(3,070		)
Total segment adjusted income from continuing operations before income tax	$	396,273		$	358,003		$	882,246		$	760,306

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(1)	Amounts include certain corporate overhead costs, such as headcount and facility expenses and certain other income and expenses.

(2)

Amounts primarily relate to employee separation costs of $0.7 million and $21.5 million during the three and six months ended June 30, 2017, respectively, charges to increase excess inventory reserves of $7.9 million during both periods and other charges of $16.0 million and $17.5 million, related primarily to the 2017 U.S. Generics Pharmaceuticals restructuring initiative, during the three and six months ended June 30, 2017, respectively. Amounts during the three and six months ended June 30, 2016 include charges to increase excess inventory reserves of $6.4 million and $33.3 million related to the 2016 U.S. Generic Pharmaceuticals restructuring initiative, employee separation costs of $8.4 million and $15.2 million and other restructuring costs of $7.1 million and $11.8 million, respectively. These amounts were primarily recorded as Cost of revenues and Selling, general and administrative expense in our Condensed Consolidated Statements of Operations. See Note 4. Restructuring for discussion of our material restructuring initiatives.


(3)	Amounts include adjustments for Litigation-related and other contingencies, net as further described in Note 11. Commitments and Contingencies.


(4)	Amounts primarily relate to charges to write down goodwill and intangible assets as further described in Note 8. Goodwill and Other Intangibles as well as charges to write down certain property, plant and equipment as further described in Note 6. Fair Value Measurements.

(5)

Amounts during the three and six months ended June 30, 2017 include costs directly associated with previous acquisitions of $2.2 million and $6.9 million, respectively, and charges due to changes in fair value of contingent consideration of $2.0 million and $8.1 million, respectively. Amounts during the three and six months ended June 30, 2016 include costs directly associated with previous acquisitions of $24.3 million and $47.5 million, respectively, and charges due to changes in fair value of contingent consideration of $23.9 million and $13.2 million, respectively.