Stockholders’ Equity and Redeemable Non-Controlling Interests

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Stockholders’ Equity and Redeemable Non-Controlling Interests

Stockholders’ Equity and Redeemable Non-Controlling Interests

Effective with the Reorganization on November 7, 2023, the Company holds 100% of the Amneal Common Units.

In connection with the Reorganization, the Company amended and restated its certificate of incorporation. The voting rights, dividend rights and participation rights of holders of Class A common stock of the Company did not materially change as a result of the amendment. There were no shares of Class B common stock of the Company outstanding as of December 31, 2023.

Non-Controlling Interests

The consolidated financial statements of the Company include the accounts of all entities controlled by the Company, including Amneal and its subsidiaries, through the Company’s direct or indirect ownership of a majority voting interest. The Company records non-controlling interests for the portion of its subsidiaries’ economic interests that it does not hold. Prior to the Reorganization, non-controlling interests were adjusted for capital transactions that impact the non-publicly held economic interests in Amneal.

Prior to the Reorganization, Amneal was obligated to make tax distributions to the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members”). During the three months ended March 31, 2023, the Company recorded net tax distributions to the Members of $26.8 million as a reduction of non-controlling interests. Subsequent to the Reorganization, the Company is no longer obligated to make tax distributions to the Members.

The Company acquired a 98% interest in KSP on April 2, 2021. The sellers of KSP, a related party, hold the remaining interests. The Company attributes 2% of the net income or loss of KSP to non-controlling interests.

Redeemable Non-Controlling Interests

The Company acquired a 65.1% controlling interest in both AvKARE Inc., a Tennessee corporation, now a limited liability company (“AvKARE, LLC”), and Dixon-Shane, LLC d/b/a R&S Northeast LLC, a Kentucky limited liability company (“R&S”), in 2020.  The sellers of AvKARE, LLC and R&S hold the remaining 34.9% interest (“Rondo Class B Units”) in the holding company that directly owns the acquired companies (“Rondo”). Beginning on January 1, 2026, the holders of the Rondo Class B Units have the right (“Put Right”) to require the Company to acquire the Rondo Class B Units for a purchase price that is based on a multiple of Rondo’s earnings before income taxes, depreciation, and amortization (EBITDA) if certain financial targets and other conditions are met. Additionally, beginning on January 31, 2020, the Company has the right to acquire the Rondo Class B Units based on the same value and conditions as the Put Right. The Rondo Class B Units are also redeemable by the holders upon a change in control. Because the redemption of the Rondo Class B Units is outside of the Company’s control, the units have been presented outside of stockholders’ equity as redeemable non-controlling interests.

The Company attributes 34.9% of the net income or loss associated with Rondo to redeemable non-controlling interests. The Company will also accrete the redeemable non-controlling interests to redemption value upon an event that makes redemption probable. For the three months ended March 31, 2024 and 2023, the Company recorded tax distributions of $4.4 million and $3.0 million, respectively, as a reduction of redeemable non-controlling interests, respectively.

Changes in Accumulated Other Comprehensive (Loss) Income by Component (in thousands):

	Foreign currency translation adjustments		Unrealized gain (loss) on cash flow hedge, net of tax		Accumulated other comprehensive (loss) income
Balance December 31, 2023	$	(66,072)	$	33,723	$	(32,349)
Other comprehensive loss before reclassification	(390)		15,543		15,153
Reclassification of cash flow hedge to earnings, net of tax of $0	—		(6,515)		(6,515)
Balance March 31, 2024	$	(66,462)	$	42,751	$	(23,711)
Balance December 31, 2022	$	(32,382)	$	42,321	$	9,939
Other comprehensive loss before reclassification	898		(7,135)		(6,237)
Reallocation of ownership interests	(195)		257		62
Balance March 31, 2023	$	(31,679)	$	35,443	$	3,764