SEGMENT RESULTS (Tables)

3 Months Ended

Mar. 31, 2023

Schedule of Reportable Segments Information

The following represents selected information for the Company’s reportable segments for the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
		2023		2022
Net revenues from external customers:
Branded Pharmaceuticals		$	197,573	$	204,861
Sterile Injectables		101,255		240,028
Generic Pharmaceuticals		198,180		185,944
International Pharmaceuticals (1)		18,259		21,426
Total net revenues from external customers		$	515,267	$	652,259
Segment adjusted income from continuing operations before income tax:
Branded Pharmaceuticals		$	96,265	$	77,666
Sterile Injectables		41,090		191,254
Generic Pharmaceuticals		91,687		66,382
International Pharmaceuticals		5,347		4,381
Total segment adjusted income from continuing operations before income tax		$	234,389	$	339,683

__________

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

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, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
		2023		2022
Total consolidated income (loss) from continuing operations before income tax		$	2,950	$	(67,115)
Interest expense, net		109		134,949
Corporate unallocated costs (1)		39,657		43,281
Amortization of intangible assets		65,256		90,234

Acquired in-process research and development charges		—		2,900
Amounts related to continuity and separation benefits, cost reductions and strategic review initiatives (2)		11,673		57,649
Certain litigation-related and other contingencies, net (3)		15,200		25,154
Certain legal costs (4)		1,560		32,732
Asset impairment charges (5)		146		19,953
Acquisition-related and integration items, net (6)		397		(1,377)


Foreign currency impact related to the remeasurement of intercompany debt instruments		284		1,198
Reorganization items, net (7)		85,352		—
Other, net (8)		11,805		125
Total segment adjusted income from continuing operations before income tax		$	234,389	$	339,683

__________

(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, 2023 include net employee separation, continuity and other benefit-related charges of $10.8 million, inventory charges related to restructurings of $0.3 million and other net charges of $0.6 million. Amounts for the three months ended March 31, 2022 include net employee separation, continuity and other benefit-related charges of $32.3 million, accelerated depreciation charges of $3.7 million and other net charges, including those related to strategic review initiatives, of $21.6 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 15. Commitments and Contingencies.

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

(5)The amount for the three months ended March 31, 2022 primarily relates to charges to impair intangible assets. For additional information, refer to Note 10. 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)The amount for the three months ended March 31, 2023 primarily relates to a charge of approximately $9.2 million associated with the rejection of certain equity award agreements, which was approved by the Bankruptcy Court in March 2023.

Schedule of 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,
		2023		2022
Branded Pharmaceuticals:
Specialty Products:
XIAFLEX®		$	96,910	$	99,484
SUPPRELIN® LA		23,577		28,830
Other Specialty (1)		21,694		20,744
Total Specialty Products		$	142,181	$	149,058
Established Products:
PERCOCET®		$	26,056	$	26,175
TESTOPEL®		10,989		8,880

Other Established (2)		18,347		20,748
Total Established Products		$	55,392	$	55,803
Total Branded Pharmaceuticals (3)		$	197,573	$	204,861
Sterile Injectables:
VASOSTRICT®		$	25,951	$	155,890
ADRENALIN®		25,575		33,823


Other Sterile Injectables (4)		49,729		50,315
Total Sterile Injectables (3)		$	101,255	$	240,028
Total Generic Pharmaceuticals (5)		$	198,180	$	185,944
Total International Pharmaceuticals (6)		$	18,259	$	21,426
Total revenues, net		$	515,267	$	652,259

__________

(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 three months ended March 31, 2023 and/or any product having revenues in excess of $25 million during any completed quarterly period in 2023 or 2022.

(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 the three months ended March 31, 2023 and 2022, varenicline tablets (Endo’s generic version of Pfizer Inc.’s Chantix®), which launched in September 2021, made up 15% and 10%, respectively, of consolidated total revenues. During the three months ended March 31, 2023, dexlansoprazole delayed release capsules (Endo’s generic version of Takeda Pharmaceuticals USA, Inc.’s Dexilant®), which launched in November 2022, made up 6% 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.