Segment Results (Tables)

3 Months Ended

Mar. 31, 2020

Schedule of reportable segments information

The table below provides reconciliations of our Total consolidated income (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 months ended March 31, 2020 and 2019 (in thousands):



	Three Months Ended March 31,
	2020			2019
Total consolidated income (loss) from continuing operations before income tax	$	21,249		$	(1,709	)
Interest expense, net	132,877			132,675
Corporate unallocated costs (1)	43,322			48,095
Amortization of intangible assets	117,237			145,599
Upfront and milestone payments to partners	1,750			939
Continuity and separation benefits and other cost reduction initiatives (2)	23,220			2,025
Certain litigation-related and other contingencies, net (3)	(17,176		)	6
Certain legal costs (4)	15,536			16,689
Asset impairment charges (5)	97,785			165,448
Acquisition-related and integration items, net (6)	12,462			(37,501		)
Gain on extinguishment of debt	—			(119,828		)
Foreign currency impact related to the remeasurement of intercompany debt instruments	(7,094		)	1,534
Other, net (7)	(7,326		)	—
Total segment adjusted income from continuing operations before income tax	$	433,842		$	353,972

__________


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

(2)

Amounts for the three months ended March 31, 2020 include $13.7 million of costs associated with certain continuity and transitional compensation arrangements for certain senior management of the Company. Other amounts in 2020 related primarily to certain cost reduction initiatives. Such amounts included accelerated depreciation of $6.6 million, employee separation costs of $0.1 million and other charges of $2.8 million. Amounts for the three months ended March 31, 2019 primarily relate to employee separation costs of $1.8 million and other charges of $0.2 million.


(3)	Amounts include adjustments to our accruals for litigation-related settlement charges and certain settlement proceeds related to suits filed by our subsidiaries. Our material legal proceedings and other contingent matters are described in more detail in Note 12. Commitments and Contingencies.


(4)	Amounts relate to opioid-related legal expenses.


(5)	Amounts primarily relate to charges to impair goodwill and intangible assets as further described in Note 8. Goodwill and Other Intangibles.


(6)	Amounts primarily relate to changes in the fair value of contingent consideration.

(7)

Amounts primarily relate to gains on sales of businesses and other assets, as further described in Note 15. Other (Income) Expense, Net

The following represents selected information for the Company’s reportable segments for the three months ended March 31, 2020 and 2019 (in thousands):



	Three Months Ended March 31,
	2020		2019
Net revenues from external customers:
Branded Pharmaceuticals	$	204,073	$	203,525
Sterile Injectables	336,390		270,048
Generic Pharmaceuticals	251,283		218,526
International Pharmaceuticals (1)	28,659		28,312
Total net revenues from external customers	$	820,405	$	720,411
Segment adjusted income from continuing operations before income tax:
Branded Pharmaceuticals	$	98,422	$	95,283
Sterile Injectables	263,896		196,183
Generic Pharmaceuticals	57,327		50,411
International Pharmaceuticals	14,197		12,095
Total segment adjusted income from continuing operations before income tax	$	433,842	$	353,972

__________

(1)

Revenues generated by our International Pharmaceuticals segment are primarily attributable to external customers located in Canada.

Disaggregation of revenue

The Company believes these categories depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors.



	Three Months Ended March 31,
	2020		2019
Branded Pharmaceuticals:
Specialty Products:
XIAFLEX®	$	89,072	$	68,507
SUPPRELIN® LA	19,720		22,056
Other Specialty (1)	25,505		24,403
Total Specialty Products	$	134,297	$	114,966
Established Products:
PERCOCET®	$	27,703	$	30,760
EDEX®	8,568		5,971
Other Established (2)	33,505		51,828
Total Established Products	$	69,776	$	88,559
Total Branded Pharmaceuticals (3)	$	204,073	$	203,525
Sterile Injectables:
VASOSTRICT®	$	202,904	$	139,137
ADRENALIN®	56,512		47,322
Ertapenem for injection	17,874		32,219
APLISOL®	9,867		12,381
Other Sterile Injectables (4)	49,233		38,989
Total Sterile Injectables (3)	$	336,390	$	270,048
Total Generic Pharmaceuticals (5)	$	251,283	$	218,526
Total International Pharmaceuticals (6)	$	28,659	$	28,312
Total revenues, net	$	820,405	$	720,411

__________


(1)	Products included within Other Specialty are NASCOBAL^®Nasal Spray and AVEED^®.


(2)	Products included within Other Established include, but are not limited to, LIDODERM^®and TESTOPEL^®.


(3)	Individual products presented above represent the top two performing products in each product category for the three months ended March 31, 2020 and/or any product having revenues in excess of $25 million during any quarterly period in 2020 or 2019.


(4)	Products included within Other Sterile Injectables include ephedrine sulfate injection and others.

(5)

The Generic Pharmaceuticals segment is comprised of a portfolio of products that are generic versions of branded products, are distributed primarily through the same wholesalers, generally have no intellectual property protection and are sold within the U.S. During the three months ended March 31, 2019, colchicine tablets, the authorized generic of Takeda Pharmaceuticals U.S.A., Inc.’s (Takeda) Colcrys^®, which launched in July 2018, made up 6% of consolidated total revenue. No other individual product within this segment has exceeded 5% of consolidated total revenues for the periods presented.

(6)

The International Pharmaceuticals segment, which accounted for 3% and 4% of consolidated total revenues during the three months ended March 31, 2020 and 2019, respectively, includes a variety of specialty pharmaceutical products sold outside the U.S., primarily in Canada through our operating company Paladin.