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SEGMENT RESULTS
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
SEGMENT RESULTS
NOTE 6. SEGMENT RESULTS
The Company’s four reportable business segments are Branded Pharmaceuticals, Sterile Injectables, Generic Pharmaceuticals and International Pharmaceuticals. These segments reflect the level at which the chief operating decision maker regularly reviews financial information to assess performance and to make decisions about resources to be allocated. Each segment derives revenue from the sales or licensing of its respective products and is discussed in more detail below.
We evaluate segment performance based on Segment adjusted income from continuing operations before income tax, which we define as Loss from continuing operations before income tax and before acquired in-process research and development charges; acquisition-related and integration items, including transaction costs and changes in the fair value of contingent consideration; cost reduction and integration-related initiatives such as separation benefits, continuity payments, other exit costs and certain costs associated with integrating an acquired company’s operations; certain amounts related to strategic review initiatives; asset impairment charges; amortization of intangible assets; inventory step-up recorded as part of our acquisitions; litigation-related and other contingent matters; certain legal costs; gains or losses from early termination of debt; debt modification costs; gains or losses from the sales of businesses and other assets; foreign currency gains or losses on intercompany financing arrangements; reorganization items, net; and certain other items.
Certain corporate expenses incurred by the Company are not directly attributable to any specific segment. Accordingly, these costs are not allocated to any of the Company’s segments and are included in the results below as “Corporate unallocated costs.” Interest income and expense are also considered corporate items and not allocated to any of the Company’s segments. The Company’s Total segment adjusted income from continuing operations before income tax is equal to the combined results of each of its segments.
Branded Pharmaceuticals
Our Branded Pharmaceuticals segment includes a variety of branded products in the areas of urology, orthopedics, endocrinology and bariatrics, among others. Products in this segment include XIAFLEX®, SUPPRELIN® LA, AVEED®, NASCOBAL® Nasal Spray, PERCOCET®, TESTOPEL® and EDEX®, among others.
Sterile Injectables
Our Sterile Injectables segment consists primarily of branded sterile injectable products such as VASOSTRICT®, ADRENALIN® and APLISOL®, among others, and certain generic sterile injectable products, including ertapenem for injection (the authorized generic of Merck’s Invanz®) and ephedrine sulfate injection, among others.
Generic Pharmaceuticals
Our Generic Pharmaceuticals segment consists of a product portfolio including solid oral extended-release products, solid oral immediate-release products, liquids, semi-solids, patches, powders, ophthalmics and sprays and includes products that treat and manage a wide variety of medical conditions.
International Pharmaceuticals
Our International Pharmaceuticals segment includes a variety of specialty pharmaceutical products, including OTC products, sold outside the U.S., primarily in Canada through our operating company Paladin.
The following represents selected information for the Company’s reportable segments for the years ended December 31, 2022, 2021 and 2020 (in thousands):
202220212020
Net revenues from external customers:
Branded Pharmaceuticals$851,142 $893,617 $781,780 
Sterile Injectables589,633 1,266,097 1,238,847 
Generic Pharmaceuticals795,457 740,586 783,110 
International Pharmaceuticals (1)82,643 92,906 99,337 
Total net revenues from external customers$2,318,875 $2,993,206 $2,903,074 
Segment adjusted income from continuing operations before income tax:
Branded Pharmaceuticals$366,554 $384,186 $377,526 
Sterile Injectables349,424 998,453 950,145 
Generic Pharmaceuticals336,133 160,046 87,178 
International Pharmaceuticals19,920 30,325 41,022 
Total segment adjusted income from continuing operations before income tax$1,072,031 $1,573,010 $1,455,871 
__________
(1)Revenues generated by our International Pharmaceuticals segment are primarily attributable to external customers located in Canada.
There were no material revenues from external customers attributed to an individual country outside of the U.S. during any of the periods presented.
The table below provides reconciliations of our Total consolidated loss from continuing operations before income tax, which is determined in accordance with U.S. GAAP, to our Total segment adjusted income from continuing operations before income tax for the years ended December 31, 2022, 2021 and 2020 (in thousands):
202220212020
Total consolidated loss from continuing operations before income tax$(2,888,102)$(546,603)$(26,518)
Interest expense, net349,776 562,353 532,939 
Corporate unallocated costs (1)182,335 180,866 157,723 
Amortization of intangible assets337,311 372,907 427,543 
Acquired in-process research and development charges68,700 25,120 33,329 
Amounts related to continuity and separation benefits, cost reductions and strategic review initiatives (2)198,381 90,912 126,282 
Certain litigation-related and other contingencies, net (3)478,722 345,495 (19,049)
Certain legal costs (4)31,756 136,148 67,819 
Asset impairment charges (5)2,142,746 414,977 120,344 
Acquisition-related and integration items, net (6)408 (8,379)16,549 
Loss on extinguishment of debt— 13,753 — 
Foreign currency impact related to the remeasurement of intercompany debt instruments(5,328)797 1,919 
Reorganization items, net (7)202,978 — — 
Other, net (8)(27,652)(15,336)16,991 
Total segment adjusted income from continuing operations before income tax$1,072,031 $1,573,010 $1,455,871 
__________
(1)Amounts include certain corporate overhead costs, such as headcount, facility and corporate litigation expenses and certain other income and expenses.
(2)Amounts in 2022 include net employee separation, continuity and other benefit-related charges of $85.6 million, accelerated depreciation charges of $3.8 million, inventory charges related to restructurings of $36.4 million and other net charges, including those related to strategic review initiatives, of $72.7 million. Amounts in 2021 include net employee separation, continuity and other benefit-related charges of $8.8 million, accelerated depreciation charges of $24.7 million and other net charges, including those related to strategic review initiatives, of $57.4 million. Amounts in 2020 include net employee separation, continuity and other benefit-related charges of $86.9 million, accelerated depreciation charges of $22.5 million and other net charges, including those related to strategic review initiatives, of $16.9 million. These amounts relate primarily to our restructuring activities as further described in Note 5. Restructuring, certain continuity and transitional compensation arrangements, certain other cost reduction initiatives and certain strategic review initiatives, including costs incurred in connection with our bankruptcy proceedings, which are included in this row until the Petition Date and in the Reorganization items, net row thereafter.
(3)Amounts include adjustments to our accruals for litigation-related settlement charges. Our material legal proceedings and other contingent matters are described in more detail in Note 16. Commitments and Contingencies.
(4)Amounts relate to opioid-related legal expenses. The amount in 2022 reflects the recovery of certain previously-incurred opioid-related legal expenses.
(5)Amounts primarily relate to charges to impair goodwill and intangible assets, property, plant and equipment, operating lease right-of-use assets and certain disposal group assets. For additional information, refer to Note 4. Discontinued Operations and Asset Sales, Note 5. Restructuring, Note 7. Fair Value Measurements, Note 9. Leases, Note 10. Property, Plant and Equipment and Note 11. Goodwill and Other Intangibles.
(6)Amounts primarily relate to changes in the fair value of contingent consideration.
(7)Amounts relate to the net expense or income recognized during our bankruptcy proceedings required to be presented as Reorganization items, net under ASC 852. Refer to Note 2. Bankruptcy Proceedings for further details.
(8)Amounts in 2021 include gains of $15.5 million associated with the termination of certain contracts, partially offset by $3.9 million of third-party fees incurred in connection with the March 2021 Refinancing Transactions, which were accounted for as debt modification costs as further discussed in Note 15. Debt. Amounts in 2020 include $31.1 million of third-party fees incurred in connection with the June 2020 Refinancing Transactions (as defined below), which were accounted for as debt modification costs as further discussed in Note 15. Debt. Other amounts in this row relate to gains and losses on sales of businesses and other assets and certain other items.
Asset information is not reviewed or included within our internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment.
During the years ended December 31, 2022, 2021 and 2020, the Company disaggregated its revenue from contracts with customers into the categories included in the table below (in thousands). The Company believes these categories depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors.
202220212020
Branded Pharmaceuticals:
Specialty Products:
XIAFLEX®$438,680 $432,344 $316,234 
SUPPRELIN® LA113,011 114,374 88,182 
Other Specialty (1)70,009 86,432 92,662 
Total Specialty Products$621,700 $633,150 $497,078 
Established Products:
PERCOCET®$103,943 $103,788 $110,112 
TESTOPEL®38,727 43,636 35,234 
Other Established (2)86,772 113,043 139,356 
Total Established Products$229,442 $260,467 $284,702 
Total Branded Pharmaceuticals (3)$851,142 $893,617 $781,780 
Sterile Injectables:
VASOSTRICT®$253,696 $901,735 $785,646 
ADRENALIN®114,304 124,630 152,074 
Other Sterile Injectables (4)221,633 239,732 301,127 
Total Sterile Injectables (3)$589,633 $1,266,097 $1,238,847 
Total Generic Pharmaceuticals (5)$795,457 $740,586 $783,110 
Total International Pharmaceuticals (6)$82,643 $92,906 $99,337 
Total revenues, net$2,318,875 $2,993,206 $2,903,074 
__________
(1)Products included within Other Specialty include AVEED®, NASCOBAL® Nasal Spray and QWO®.
(2)Products included within Other Established include, but are not limited to, EDEX®.
(3)Individual products presented above represent the top two performing products in each product category for the year ended December 31, 2022 and/or any product having revenues in excess of $25 million during any completed quarterly period in 2022 or 2021.
(4)Products included within Other Sterile Injectables include APLISOL®, ertapenem for 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 limited or no intellectual property protection and are sold within the U.S. During 2022, varenicline tablets (Endo’s generic version of Pfizer Inc.’s Chantix®), which launched in September 2021, made up 13% of consolidated total revenues. 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 less than 5% of consolidated total revenues for each of the periods presented, includes a variety of specialty pharmaceutical products sold outside the U.S., primarily in Canada through Endo’s operating company Paladin.
The following represents depreciation expense for our reportable segments for the years ended December 31, 2022, 2021 and 2020 (in thousands):
202220212020
Branded Pharmaceuticals$9,862 $10,632 $11,758 
Sterile Injectables20,224 17,796 17,400 
Generic Pharmaceuticals16,952 47,343 52,614 
International Pharmaceuticals3,638 4,242 4,530 
Corporate unallocated3,642 4,178 4,962 
Total depreciation expense$54,318 $84,191 $91,264