COVER
COVER - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 27, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-36326 | ||
Entity Registrant Name | Endo International plc | ||
Entity Incorporation, State or Country Code | L2 | ||
Entity Tax Identification Number | 68-0683755 | ||
Entity Address, Address Line One | First Floor, Minerva House, Simmonscourt Road | ||
Entity Address, City or Town | Ballsbridge, Dublin 4, | ||
Entity Address, Country | IE | ||
Entity Address, Postal Zip Code | Not Applicable | ||
City Area Code | 353 | ||
Local Phone Number | 1-268-2000 | ||
No Trading Symbol Flag | true | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 109,653,452 | ||
Entity Ordinary Shares Outstanding (in shares) | 235,219,612 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001593034 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Philadelphia, Pennsylvania |
Auditor Firm ID | 238 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,018,883 | $ 1,507,196 |
Restricted cash and cash equivalents | 145,358 | 124,114 |
Accounts receivable, net | 493,988 | 592,019 |
Inventories, net | 274,499 | 283,552 |
Prepaid expenses and other current assets | 136,923 | 200,484 |
Income taxes receivable | 7,117 | 7,221 |
Total current assets | 2,076,768 | 2,714,586 |
PROPERTY, PLANT AND EQUIPMENT, NET | 438,314 | 396,712 |
OPERATING LEASE ASSETS | 28,070 | 34,832 |
GOODWILL | 1,352,011 | 3,197,011 |
OTHER INTANGIBLES, NET | 1,732,935 | 2,362,823 |
DEFERRED INCOME TAXES | 0 | 1,138 |
OTHER ASSETS | 129,839 | 60,313 |
TOTAL ASSETS | 5,757,937 | 8,767,415 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 687,183 | 836,898 |
Current portion of legal settlement accrual | 0 | 580,994 |
Current portion of operating lease liabilities | 903 | 10,992 |
Current portion of long-term debt | 0 | 200,342 |
Income taxes payable | 1,541 | 736 |
Total current liabilities | 689,627 | 1,629,962 |
DEFERRED INCOME TAXES | 13,825 | 21,628 |
LONG-TERM DEBT, LESS CURRENT PORTION, NET | 0 | 8,048,980 |
OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | 5,129 | 33,727 |
OTHER LIABILITIES | 42,746 | 277,104 |
LIABILITIES SUBJECT TO COMPROMISE | 9,168,782 | 0 |
COMMITMENTS AND CONTINGENCIES (NOTE 16) | ||
SHAREHOLDERS’ DEFICIT: | ||
Euro deferred shares, $0.01 par value; 4,000,000 shares authorized and issued at both December 31, 2022 and December 31, 2021 | 43 | 45 |
Ordinary shares, $0.0001 par value; 1,000,000,000 shares authorized; 235,208,039 and 233,690,816 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 24 | 23 |
Additional paid-in capital | 8,969,322 | 8,953,906 |
Accumulated deficit | (12,904,620) | (9,981,515) |
Accumulated other comprehensive loss | (226,941) | (216,445) |
Total shareholders’ deficit | (4,162,172) | (1,243,986) |
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ 5,757,937 | $ 8,767,415 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Euro deferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Euro deferred shares, shares authorized (in shares) | 4,000,000 | 4,000,000 |
Euro deferred shares, shares issued (in shares) | 4,000,000 | 4,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 235,208,039 | 233,690,816 |
Common stock, shares outstanding (in shares) | 235,208,039 | 233,690,816 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
TOTAL REVENUES, NET | $ 2,318,875 | $ 2,993,206 | $ 2,903,074 |
COSTS AND EXPENSES: | |||
Cost of revenues | 1,092,499 | 1,221,064 | 1,442,511 |
Selling, general and administrative | 777,169 | 861,760 | 698,506 |
Research and development | 128,033 | 123,440 | 125,573 |
Acquired in-process research and development | 68,700 | 25,120 | 33,329 |
Litigation-related and other contingencies, net | 478,722 | 345,495 | (19,049) |
Asset impairment charges | 2,142,746 | 414,977 | 120,344 |
Acquisition-related and integration items, net | 408 | (8,379) | 16,549 |
Interest expense, net | 349,776 | 562,353 | 532,939 |
Loss on extinguishment of debt | 0 | 13,753 | 0 |
Reorganization items, net | 202,978 | 0 | 0 |
Other income, net | (34,054) | (19,774) | (21,110) |
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | (2,888,102) | (546,603) | (26,518) |
INCOME TAX EXPENSE (BENEFIT) | 21,516 | 22,478 | (273,982) |
(LOSS) INCOME FROM CONTINUING OPERATIONS | (2,909,618) | (569,081) | 247,464 |
DISCONTINUED OPERATIONS, NET OF TAX (NOTE 4) | (13,487) | (44,164) | (63,520) |
Net (loss) income | $ (2,923,105) | $ (613,245) | $ 183,944 |
NET (LOSS) INCOME PER SHARE—BASIC: | |||
Continuing operations (in dollars per share) | $ (12.39) | $ (2.44) | $ 1.08 |
Discontinued operations (in dollars per share) | (0.06) | (0.19) | (0.28) |
Basic (in dollars per share) | (12.45) | (2.63) | 0.80 |
NET (LOSS) INCOME PER SHARE—DILUTED: | |||
Continuing operations (in dollars per share) | (12.39) | (2.44) | 1.06 |
Discontinued operations (in dollars per share) | (0.06) | (0.19) | (0.27) |
Diluted (in dollars per share) | $ (12.45) | $ (2.63) | $ 0.79 |
WEIGHTED AVERAGE SHARES: | |||
Basic (in shares) | 234,840 | 232,785 | 229,314 |
Diluted (in shares) | 234,840 | 232,785 | 233,653 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
NET (LOSS) INCOME | $ (2,923,105) | $ (613,245) | $ 183,944 |
OTHER COMPREHENSIVE (LOSS) INCOME: | |||
Net unrealized (loss) gain on foreign currency | (10,496) | 1,308 | 1,337 |
Total other comprehensive (loss) income | (10,496) | 1,308 | 1,337 |
COMPREHENSIVE (LOSS) INCOME | $ (2,933,601) | $ (611,937) | $ 185,281 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT - USD ($) $ in Thousands | Total | Ordinary Shares | Euro Deferred Shares | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2019 | 226,802,609 | |||||
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2019 | 4,000,000 | |||||
Shareholders' equity, beginning balance at Dec. 31, 2019 | $ (866,544) | $ 23 | $ 45 | $ 8,904,692 | $ (9,552,214) | $ (219,090) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income | 183,944 | 183,944 | ||||
Other comprehensive income (loss) | 1,337 | 1,337 | ||||
Compensation related to share-based awards | 41,357 | 41,357 | ||||
Ordinary shares issued (in shares) | 3,513,159 | |||||
Tax withholding for restricted shares | (8,036) | (8,036) | ||||
Other | 3 | $ 4 | (1) | |||
Shareholders' equity, ending balance (in shares) at Dec. 31, 2020 | 4,000,000 | |||||
Shareholders' equity, ending balance (in shares) at Dec. 31, 2020 | 230,315,768 | |||||
Shareholders' equity, ending balance at Dec. 31, 2020 | (647,939) | $ 23 | $ 49 | 8,938,012 | (9,368,270) | (217,753) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income | (613,245) | (613,245) | ||||
Other comprehensive income (loss) | 1,308 | 1,308 | ||||
Compensation related to share-based awards | $ 30,046 | 30,046 | ||||
Exercise of options (in shares) | 82,331 | 82,331 | ||||
Exercise of options | $ 622 | 622 | ||||
Ordinary shares issued (in shares) | 3,292,717 | |||||
Tax withholding for restricted shares | (14,774) | (14,774) | ||||
Other | $ (4) | $ (4) | ||||
Shareholders' equity, ending balance (in shares) at Dec. 31, 2021 | 4,000,000 | |||||
Shareholders' equity, ending balance (in shares) at Dec. 31, 2021 | 233,690,816 | 233,690,816 | ||||
Shareholders' equity, ending balance at Dec. 31, 2021 | $ (1,243,986) | $ 23 | $ 45 | 8,953,906 | (9,981,515) | (216,445) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income | (2,923,105) | (2,923,105) | ||||
Other comprehensive income (loss) | (10,496) | (10,496) | ||||
Compensation related to share-based awards | 17,314 | 17,314 | ||||
Ordinary shares issued | 0 | $ 1 | (1) | |||
Ordinary shares issued (in shares) | 1,517,223 | |||||
Tax withholding for restricted shares | (1,898) | (1,898) | ||||
Other | $ (1) | $ (2) | 1 | |||
Shareholders' equity, ending balance (in shares) at Dec. 31, 2022 | 4,000,000 | |||||
Shareholders' equity, ending balance (in shares) at Dec. 31, 2022 | 235,208,039 | 235,208,039 | ||||
Shareholders' equity, ending balance at Dec. 31, 2022 | $ (4,162,172) | $ 24 | $ 43 | $ 8,969,322 | $ (12,904,620) | $ (226,941) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING ACTIVITIES: | |||
Net (loss) income | $ (2,923,105) | $ (613,245) | $ 183,944 |
Adjustments to reconcile Net (loss) income to Net cash provided by operating activities: | |||
Depreciation and amortization | 391,629 | 457,098 | 518,807 |
Share-based compensation | 17,314 | 30,046 | 41,357 |
Amortization of debt issuance costs and discount | 9,406 | 14,437 | 15,606 |
Deferred income taxes | (7,303) | (3,157) | (163,558) |
Change in fair value of contingent consideration | 408 | (8,793) | 16,353 |
Loss (gain) on extinguishment of debt | 0 | 13,753 | 0 |
Acquired in-process research and development charges | 68,700 | 25,120 | 33,329 |
Asset impairments | 2,142,746 | 414,977 | 120,344 |
Non-cash reorganization items, net | 89,197 | 0 | 0 |
Gain on sale of business and other assets | (26,183) | (4,516) | (16,353) |
Other | 2,776 | 0 | 0 |
Changes in assets and liabilities which provided (used) cash: | |||
Accounts receivable | 105,912 | (82,052) | (45,792) |
Inventories | (4,359) | 48,978 | (8,031) |
Prepaid and other assets | 80,350 | (34,002) | (27,421) |
Accounts payable, accrued expenses and other liabilities | 321,055 | 84,391 | (171,366) |
Income taxes payable/receivable, net | 650 | 68,015 | (95,100) |
Net cash provided by operating activities | 269,193 | 411,050 | 402,119 |
INVESTING ACTIVITIES: | |||
Capital expenditures, excluding capitalized interest | (99,722) | (77,929) | (69,971) |
Capitalized interest payments | (3,140) | (2,721) | (2,892) |
Proceeds from the U.S. Government Agreement | 18,635 | 0 | 0 |
Acquisitions, including in-process research and development, net of cash and restricted cash acquired | (90,320) | (5,000) | (654,231) |
Proceeds from sales and maturities of investments | 0 | 0 | 92,763 |
Product acquisition costs and license fees | 0 | (4,177) | (2,000) |
Proceeds from sale of business and other assets, net | 41,400 | 30,283 | 6,737 |
Net cash used in investing activities | (133,147) | (59,544) | (629,594) |
FINANCING ACTIVITIES: | |||
Proceeds from issuance of notes, net | 0 | 1,279,978 | 0 |
Proceeds from issuance of term loans, net | 0 | 1,980,000 | 0 |
Repayments of notes | (180,342) | 0 | (57,649) |
Repayments of term loans | (10,000) | (3,310,475) | (34,150) |
Repayments of revolving debt | 0 | (22,800) | 0 |
Adequate protection payments | (313,109) | 0 | 0 |
Repayments of other indebtedness | (6,062) | (5,448) | (4,884) |
Payments for debt issuance and extinguishment costs | 0 | (8,574) | 0 |
Payments for contingent consideration | (2,462) | (4,010) | (3,848) |
Payments of tax withholding for restricted shares | (1,898) | (14,774) | (8,036) |
Proceeds from exercise of options | 0 | 622 | 0 |
Net cash used in financing activities | (513,873) | (105,481) | (108,567) |
Effect of foreign exchange rate | (4,242) | 285 | 654 |
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | (382,069) | 246,310 | (335,388) |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,631,310 | 1,385,000 | 1,720,388 |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD | 1,249,241 | 1,631,310 | 1,385,000 |
SUPPLEMENTAL INFORMATION: | |||
Cash paid for interest, excluding capitalized interest and adequate protection payments | 289,664 | 538,424 | 534,529 |
Cash paid for income taxes, gross | 14,101 | 10,019 | 11,669 |
Cash refunds from income taxes, gross | 3,092 | 57,801 | 31,897 |
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Acquisitions, including in-process research and development, accrued in the period but not yet paid | $ 0 | $ 20,120 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1. DESCRIPTION OF BUSINESS Background and Basis of Presentation Endo International plc is an Ireland-domiciled specialty pharmaceutical company that conducts business through its operating subsidiaries. Unless otherwise indicated or required by the context, references throughout to “Endo,” the “Company,” “we,” “our” or “us” refer to Endo International plc and its subsidiaries. The accompanying Consolidated Financial Statements of Endo International plc and its subsidiaries have been prepared in accordance with U.S. GAAP. Going Concern As further discussed herein, thousands of governmental and private plaintiffs have filed suit against us and/or certain of our subsidiaries alleging opioid-related claims, most of which we have not been able to settle. As a result of the possibility or occurrence of an unfavorable outcome with respect to these proceedings, other legal proceedings and certain other risks and uncertainties, we have been exploring a wide array of potential actions as part of our contingency planning and, as further described in the Second-Quarter 2022 Form 10-Q, we previously concluded that the related conditions and events gave rise to substantial doubt about our ability to continue as a going concern. Subsequent to the filing of the Second-Quarter 2022 Form 10-Q, on the August 16, 2022 Petition Date, the Debtors filed voluntary petitions for relief under the Bankruptcy Code, which constituted an event of default that accelerated our obligations under substantially all of our then-outstanding debt instruments. However, section 362 of the Bankruptcy Code stays creditors from taking any action to enforce the related financial obligations and creditors’ rights of enforcement in respect of the debt instruments are subject to the applicable provisions of the Bankruptcy Code. Refer to Note 2. Bankruptcy Proceedings and Note 15. Debt for additional information. As a result of these conditions and events, management continues to believe there is substantial doubt about our ability to continue as a going concern within one year after the date of issuance of these Consolidated Financial Statements. The accompanying Consolidated Financial Statements have been prepared under the going concern basis of accounting as required by U.S. GAAP and do not include any adjustments that might be necessary should we be unable to continue as a going concern. |
BANKRUPTCY PROCEEDINGS
BANKRUPTCY PROCEEDINGS | 12 Months Ended |
Dec. 31, 2022 | |
Reorganizations [Abstract] | |
BANKRUPTCY PROCEEDINGS | NOTE 2. BANKRUPTCY PROCEEDINGS Chapter 11 Filing As noted above, on the Petition Date, the Debtors filed voluntary petitions for relief under the Bankruptcy Code. The Debtors have received approval from the U.S. Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) to jointly administer their chapter 11 cases (the Chapter 11 Cases) for administrative purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure under the caption In re Endo International plc, et al . Certain entities consolidated by Endo International plc and included in these Consolidated Financial Statements are not party to the Chapter 11 Cases. These entities are collectively referred to herein as the Non-Debtor Affiliates. The Debtors will continue to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. As debtors-in-possession, the Debtors are generally permitted to continue to operate as ongoing businesses and pay debts and honor obligations arising in the ordinary course of their businesses after the Petition Date. However, the Debtors generally may not pay third-party claims or creditors on account of obligations arising before the Petition Date or engage in transactions outside the ordinary course of business without approval of the Bankruptcy Court. Under the Bankruptcy Code, third-party actions to collect pre-petition indebtedness owed by the Debtors, as well as most litigation pending against the Debtors as of the Petition Date, are generally subject to an automatic stay. However, under the Bankruptcy Code, certain legal proceedings, such as those involving the assertion of a governmental entity’s police or regulatory powers, may not be subject to the automatic stay and may continue unless otherwise ordered by the Bankruptcy Court. Among other requirements, chapter 11 proceedings must comply with the priority scheme established by the Bankruptcy Code, under which certain post-petition and secured or “priority” pre-petition liabilities generally need to be satisfied before general unsecured creditors and shareholders are entitled to receive any distribution. Under the Bankruptcy Code, the Debtors may assume, modify, assign or reject certain executory contracts and unexpired leases, including, without limitation, leases of real property and equipment, subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease in this report, including, where applicable, the express termination rights thereunder or a quantification of obligations, must be read in conjunction with, and is qualified by, any overriding rejection rights the Debtors have under the Bankruptcy Code. To ensure their ability to continue operating in the ordinary course of business, the Debtors have filed with the Bankruptcy Court a variety of motions seeking “first day” relief, including the authority to access cash collateral, continue using their cash management system, pay employee wages and benefits and pay vendors in the ordinary course of business. At a hearing held on August 18, 2022, the Bankruptcy Court generally approved the relief sought in these motions on an interim basis. Following subsequent hearings held on September 28, 2022, October 13, 2022 and October 19, 2022, the Bankruptcy Court entered orders approving substantially all of the relief sought on a final basis. Events of Default The August 16, 2022 bankruptcy filings by the Debtors constituted an event of default that accelerated our obligations under substantially all of our then-outstanding debt instruments. However, section 362 of the Bankruptcy Code stays creditors from taking any action to enforce the related financial obligations and creditors’ rights of enforcement in respect of the debt instruments are subject to the applicable provisions of the Bankruptcy Code. Refer to Note 15. Debt for additional information. Restructuring Support Agreement On August 16, 2022, we entered into a Restructuring Support Agreement (the RSA) with an ad hoc group (the Ad Hoc First Lien Group) of certain creditors holding in excess of 50% of the aggregate outstanding principal amount of Secured Debt (as defined in that certain collateral trust agreement, dated as of April 27, 2017, among Endo International plc, certain subsidiaries of Endo International plc, the other grantors from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent under the Credit Agreement, and Wells Fargo Bank, National Association, as indenture trustee, and Wilmington Trust, National Association, as collateral trustee (the Collateral Trust Agreement)), pursuant to which, among other things, one or more entities formed in a manner acceptable to the Ad Hoc First Lien Group (the Stalking Horse Bidder or the Purchaser) will serve as stalking horse bidder as we seek to sell all or substantially all of our assets in a sale pursuant to section 363 of the Bankruptcy Code (the Sale). As described in the RSA, the Stalking Horse Bidder’s bid (the Stalking Horse Bid), which is subject to higher or otherwise better bids from other parties, includes an offer to purchase substantially all of our assets for an aggregate purchase price including: (i) a credit bid in full satisfaction of the Prepetition First Lien Indebtedness (as defined in the RSA); (ii) $5 million in cash on account of certain unencumbered assets; (iii) $122 million to wind-down our operations following the Sale closing date (the Wind-Down Amount); (iv) pre-closing professional fees; and (v) the assumption of certain liabilities. As part of the Stalking Horse Bid, the Stalking Horse Bidder will also make offers of employment to all of our active employees. Pursuant to the RSA, the definitive purchase and sale agreement with respect to the Stalking Horse Bid will include customary representations and warranties and customary covenants by the parties thereto. On November 23, 2022, we filed: (i) a motion seeking Bankruptcy Court approval of bidding procedures in connection with the Sale and (ii) a motion seeking to set deadlines for all claimants to file claims against the Debtors. Although both motions were initially set to be heard by the Bankruptcy Court at a hearing on December 15, 2022, following several conferences with both the Bankruptcy Court and all major parties in interest in the Chapter 11 Cases, the hearing on both motions was adjourned to allow the Debtors and certain key parties in the Chapter 11 Cases to participate in a mediation process to attempt to resolve certain objections and contested issues relating to the Sale and other critical matters in the Chapter 11 Cases. On March 3, 2023, the Debtors announced that, as a result of the mediation process, the Ad Hoc First Lien Group (and Stalking Horse Bidder) had reached certain resolutions in principle with both the unsecured creditors’ committee and opioid claimants’ committee appointed in the Chapter 11 Cases and certain ad hoc groups of debtholders. These resolutions, which remain subject to definitive documentation, are supported by the Debtors. In connection with such resolutions, the Company agreed in principle with the Ad Hoc First Lien Group to reduce the Wind-Down Amount associated with the Stalking Horse Bid from $122 million to approximately $115 million, subject to definitive documentation. As negotiations among the mediation parties continue, the mediation has been extended and remains ongoing and the Bankruptcy Court hearing on both motions has been adjourned to an undetermined date. As a result of such adjournment, the proposed timelines and deadlines set forth in both motions are expected to be extended. The RSA contemplates a marketing process and auction that will be conducted under the supervision of the Bankruptcy Court, during which interested parties will have an opportunity to conduct due diligence and determine whether to submit a bid to acquire the Debtors’ assets. If the Stalking Horse Bid is selected as the highest or otherwise best offer following said marketing process and auction, the Ad Hoc First Lien Group will direct the Collateral Trustee (as defined in the Collateral Trust Agreement) to assign its rights to credit bid, on behalf of the Secured Parties (as defined in the Collateral Trust Agreement), to the Stalking Horse Bidder, so as to enable the Stalking Horse Bidder to credit bid for all or substantially all of our assets in exchange for the extinguishment of the obligations to the Secured Parties. The RSA further contemplates that the Purchaser will fund one or more trusts for parties with opioid-related claims against us, as further discussed in Note 16. Commitments and Contingencies. Pursuant to the RSA, each of the parties agreed to, among other things, take all actions as are necessary and appropriate to facilitate the implementation and consummation of the Restructuring (as defined in the RSA), negotiate in good faith certain definitive documents relating to the Restructuring and obtain required approvals. In addition, we agreed to conduct our business in the ordinary course, provide notice and certain materials relating to the Restructuring to the consenting creditors’ advisors and pay certain fees and expenses of the consenting creditors. The RSA provides certain milestones for the Restructuring. If we fail to satisfy these milestones and such failure is not the result of a breach of the RSA by the Required Consenting First Lien Creditors (as defined in the RSA), the Required Consenting First Lien Creditors will have the right to terminate the RSA. These milestones, as modified since we entered into the RSA (and which may be further modified from time to time), include: (i) not later than 11:59 p.m. prevailing Eastern Time on October 25, 2022, the Bankruptcy Court shall have entered the Cash Collateral Order on a final basis; (ii) not later than 11:59 p.m. prevailing Eastern Time on March 16, 2023, the Bankruptcy Court shall have entered an order approving the bidding procedures; (iii) not later than 11:59 p.m. prevailing Eastern Time on September 13, 2023, the Bankruptcy Court shall have entered an order approving the Sale; and (iv) not later than 11:59 p.m. prevailing Eastern Time on September 13, 2023 (the Outside Date), the closing of the Sale shall have occurred, subject to certain extensions of the Outside Date as set forth in the RSA, including: (a) for extensions of prior milestones; (b) to close the Sale transaction with a backup bidder; and (c) for delays in obtaining regulatory or third-party approvals or consents. Each of the parties to the RSA may terminate the agreement (and thereby their support for the Sale) under certain limited circumstances, including for material breaches and materially untrue representations and warranties by their counterparties, if a governmental agency enjoins the Sale or if the purchase and sale agreement with respect to the Sale is terminated under certain circumstances. The transactions contemplated by the RSA are subject to approval by the Bankruptcy Court, among other conditions. Accordingly, no assurance can be given that the transactions described therein will be consummated. The Chapter 11 Proceedings Cash Collateral In October 2022, the Bankruptcy Court entered the Cash Collateral Order approving the Debtors’ consensual use of their secured creditors’ cash collateral. The Debtors intend to use the cash collateral to, among other things, permit the orderly continuation of their businesses, pay the costs of administration of their estates and satisfy other working capital and general corporate purposes. As described in additional detail elsewhere in this report, including in Note 15. Debt, the Cash Collateral Order obligates the Debtors to make certain adequate protection payments during the bankruptcy proceedings, establishes a budget for the Debtors’ use of cash collateral, establishes certain informational rights for the Debtors’ secured creditors and provides for the waiver of certain Bankruptcy Code provisions. The Cash Collateral Order also requires the Debtors to maintain at least $600.0 million of “liquidity,” calculated at the end of each week as unrestricted cash and cash equivalents plus certain specified amounts of restricted cash associated with the TLC Agreement, which is further discussed below in Note 12. License, Collaboration and Asset Acquisition Agreements. Potential Claims In November 2022, the Debtors filed with the Bankruptcy Court schedules and statements, subject to further amendment or modification, which set forth, among other things, the assets and liabilities of each of the Debtors, subject to the assumptions filed in connection therewith. As part of the Chapter 11 Cases, persons and entities believing that they have claims or causes of action against the Debtors may file proofs of claim evidencing such claims. As noted above, the Debtors have filed a motion seeking to set a bar date (deadline) for holders of claims to file proofs of claim (including general claims and claims of governmental units), which motion has been adjourned to an undetermined date. The Debtors have received numerous claims as of the date of this report including, in certain cases, duplicate claims across multiple Debtors. For example, the IRS has filed multiple proofs of claim against several of the Debtors, as further discussed in Note 21. Income Taxes. We expect that the Debtors may continue to receive a significant number of claims in the future. As claims are filed, they are being evaluated for validity and compared to amounts recorded in our accounting records. As of the date of this report, the amounts of certain of the claims received exceed the amounts of the corresponding liabilities, if any, that we have recorded based on our assessments of the purported liabilities underlying such claims, and it is likely this will continue to be the case in future periods. We are not aware of any claims that we currently expect will require a material adjustment to the accounts and balances as reported as of December 31, 2022. Differences in amounts recorded and claims filed by creditors will continue to be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate. The Debtors may ask the Bankruptcy Court to disallow claims that the Debtors believe are duplicative, have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons. In addition, as a result of this process, the Debtors may identify additional liabilities that will need to be recorded or reclassified to Liabilities subject to compromise in the Consolidated Balance Sheets. In light of the substantial number of claims that may be filed, the claims resolution process may take considerable time to complete and may continue for the duration of the Debtors’ bankruptcy proceedings. Subsequent Developments The Bankruptcy Court adjourned the hearings for certain critical motions filed in November and December 2022, including: (i) our motion to establish bidding procedures in connection with the Sale; (ii) our motion to establish deadlines for creditors to file proofs of claim; and (iii) our motion to extend our exclusive periods to file and solicit a plan of reorganization, in order to allow the Debtors and certain key parties in the Chapter 11 Cases to participate in a mediation process to attempt to resolve certain objections and contested issues relating to the Sale and other critical matters. On March 3, 2023, the Debtors announced that, as a result of the mediation process, the Ad Hoc First Lien Group (and Stalking Horse Bidder) had reached certain resolutions in principle with both the unsecured creditors’ committee and opioid claimants’ committee appointed in the Chapter 11 Cases and certain ad hoc groups of debtholders. These resolutions, which remain subject to definitive documentation, are supported by the Debtors. In connection with such resolutions, the mediation has been extended and remains ongoing and the Bankruptcy Court hearing on the three motions has been adjourned to an undetermined date. Bankruptcy Accounting As a result of the Chapter 11 Cases, we have applied the provisions of ASC 852 in preparing the accompanying Consolidated Financial Statements. ASC 852 requires that, for periods including and after the filing of a chapter 11 petition, the Consolidated Financial Statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, for periods beginning with the third quarter of 2022, pre-petition unsecured and undersecured claims related to the Debtors that may be impacted by the bankruptcy reorganization process have been classified as Liabilities subject to compromise in the Consolidated Balance Sheets. Liabilities subject to compromise include pre-petition liabilities for which there is uncertainty about whether such pre-petition liabilities could be impaired as a result of the Chapter 11 Cases. Liabilities subject to compromise are recorded at the expected amount of the total allowed claim, even if they may ultimately be settled for different amounts. The following table sets forth, as of December 31, 2022, information about the amounts presented as Liabilities subject to compromise in our Consolidated Balance Sheets (in thousands): December 31, 2022 Accounts payable $ 30,317 Accrued interest 160,617 Debt 7,834,717 Litigation accruals 820,805 Uncertain tax positions 235,176 Other (1) 87,150 Total $ 9,168,782 __________ (1) Amounts include operating and finance lease liabilities as further described in Note 9. Leases, acquisition-related contingent consideration liabilities as further described in Note 7. Fair Value Measurements and a variety of other miscellaneous liabilities. The determination of how liabilities will ultimately be settled or treated cannot be made until approved by the Bankruptcy Court. Therefore, the amounts in the table above are preliminary and may be subject to future adjustments as a result of, among other things, the possibility or occurrence of certain Bankruptcy Court actions, further developments with respect to disputed claims, any rejection by us of executory contracts and/or any payments by us of amounts classified as Liabilities subject to compromise, which may be allowed in certain limited circumstances. Amounts are also subject to adjustments if we make changes to our assumptions or estimates related to claims as additional information becomes available to us including, without limitation, those related to the expected amounts of allowed claims, the value of any collateral securing claims and the secured status of claims. Such adjustments may be material. Additionally, as a result of our ongoing bankruptcy proceedings, we may sell or otherwise dispose of or liquidate assets or settle liabilities for amounts other than those reflected in the accompanying Consolidated Financial Statements. The possibility or occurrence of any such actions could materially impact the amounts and classifications of such assets and liabilities reported in our Consolidated Balance Sheets and could have a material adverse effect on our business, financial condition, results of operations and cash flows. Certain expenses, gains and losses resulting from and recognized during our bankruptcy proceedings are now being recorded in Reorganization items, net in our Consolidated Statements of Operations. The following table sets forth, for the year ended December 31, 2022, information about the amounts presented as Reorganization items, net in our Consolidated Statements of Operations (in thousands): 2022 Professional fees $ 113,781 Debt valuation adjustments 89,197 Total $ 202,978 Since the Petition Date, our operating cash flows included net cash outflows of $53.7 million related to amounts classified or expected to be classified as Reorganization items, net, which primarily consisted of payments for professional fees. Refer also to Note 15. Debt for information about how our bankruptcy proceedings and certain related developments have affected our debt service payments and how such payments are being reflected in our Consolidated Financial Statements. Nasdaq Delisting On August 17, 2022, we received a letter (the Notice) from Nasdaq stating that, in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq had determined that Endo’s ordinary shares would be delisted. In accordance with the Notice, trading of Endo’s ordinary shares was suspended at the opening of business on August 26, 2022. As a result, Endo’s ordinary shares began trading exclusively on the over-the-counter market on August 26, 2022. On the over-the-counter market, Endo’s ordinary shares, which previously traded on the Nasdaq Global Select Market under the symbol ENDP, began to trade under the symbol ENDPQ. On September 14, 2022, Nasdaq filed a Form 25-NSE with the SEC and Endo’s ordinary shares were subsequently delisted from the Nasdaq Global Select Market. On December 13, 2022, Endo’s ordinary shares were deregistered under Section 12(b) of the Exchange Act. NOTE 23. CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION The financial statements included in this Note represent the Condensed Combined Financial Statements of the Debtors only, which include Endo International plc and most of its wholly-owned subsidiaries, except for its Indian subsidiaries and certain subsidiaries associated with the Company’s former Astora business. These statements reflect the results of operations, financial position and cash flows of the combined Debtors, including certain amounts and activities between Debtors and Non-Debtor Affiliates of the Company that are eliminated in the Consolidated Financial Statements. CONDENSED COMBINED BALANCE SHEETS (Dollars in thousands) December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 991,901 Restricted cash and cash equivalents 59,358 Accounts receivable, net 478,889 Inventories, net 241,349 Prepaid expenses and other current assets 111,807 Income taxes receivable 7,038 Receivables from Non-Debtor Affiliates 94,608 Total current assets $ 1,984,950 PROPERTY, PLANT AND EQUIPMENT, NET 233,114 OPERATING LEASE ASSETS 23,200 GOODWILL 1,352,011 OTHER INTANGIBLES, NET 1,732,935 INVESTMENTS IN NON-DEBTOR AFFILIATES 50,001 RECEIVABLES FROM NON-DEBTOR AFFILIATES 240,002 OTHER ASSETS 126,494 TOTAL ASSETS $ 5,742,707 LIABILITIES AND DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ 654,414 Current portion of operating lease liabilities 230 Income taxes payable 10 Payables to Non-Debtor Affiliates 20,162 Total current liabilities $ 674,816 DEFERRED INCOME TAXES 13,479 OPERATING LEASE LIABILITIES, LESS CURRENT PORTION 994 OTHER LIABILITIES 37,367 LIABILITIES SUBJECT TO COMPROMISE 9,168,782 TOTAL DEFICIT (4,152,731) TOTAL LIABILITIES AND DEFICIT $ 5,742,707 CONDENSED COMBINED STATEMENTS OF OPERATIONS (Dollars in thousands) 2022 TOTAL REVENUES, NET $ 2,321,426 COSTS AND EXPENSES: Cost of revenues 1,106,855 Selling, general and administrative 764,768 Research and development 137,851 Acquired in-process research and development 68,700 Litigation-related and other contingencies, net 478,722 Asset impairment charges 2,137,107 Acquisition-related and integration items, net 408 Interest expense, net 345,593 Reorganization items, net 202,978 Other income, net (13,409) LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX $ (2,908,147) INCOME TAX EXPENSE 17,721 LOSS FROM CONTINUING OPERATIONS $ (2,925,868) DISCONTINUED OPERATIONS, NET OF TAX (13,468) NET LOSS ATTRIBUTABLE TO DEBTOR ENTITIES $ (2,939,336) EQUITY IN INCOME OF NON-DEBTOR AFFILIATES, NET OF TAX 22,671 NET LOSS $ (2,916,665) CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE LOSS (Dollars in thousands) 2022 NET LOSS $ (2,916,665) OTHER COMPREHENSIVE LOSS: Net unrealized loss on foreign currency $ (10,496) Total other comprehensive loss $ (10,496) COMPREHENSIVE LOSS $ (2,927,161) CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Dollars in thousands) 2022 OPERATING ACTIVITIES: Net cash provided by operating activities (1) $ 209,523 INVESTING ACTIVITIES: Capital expenditures, excluding capitalized interest (43,743) Capitalized interest payments (3,140) Proceeds from the U.S. Government Agreement 18,635 Acquisitions, including in-process research and development, net of cash and restricted cash acquired (90,320) Proceeds from sale of business and other assets, net 41,400 Proceeds from loans made to Non-Debtor Affiliates 2,355 Disbursements for loans made to Non-Debtor Affiliates (51,486) Net cash used in investing activities $ (126,299) FINANCING ACTIVITIES: Repayments of notes (180,342) Repayments of term loans (10,000) Adequate protection payments (313,109) Repayments of other indebtedness (6,062) Payments for contingent consideration (2,462) Payments of tax withholding for restricted shares (1,898) Net cash used in financing activities $ (513,873) Effect of foreign exchange rate (1,790) NET DECREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS $ (432,439) CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD 1,568,698 CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD $ 1,136,259 __________ (1) The difference between the amount of Net cash provided by operating activities included in the table above and the amount of Net cash provided by operating activities included in the Consolidated Statements of Cash Flows for the same period primarily relates to the fact that the table above: (i) excludes the operating cash flows of our Non-Debtor Affiliates, which are included in the Consolidated Statements of Cash Flows, and (ii) includes the effects of the operating cash flows of the Debtors with the Non-Debtor Affiliates, which are eliminated in the Consolidated Statements of Cash Flows. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies Consolidation and Basis of Presentation . The Consolidated Financial Statements include the accounts of wholly-owned subsidiaries after the elimination of intercompany accounts and transactions. Reclassifications . Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassification adjustments primarily relate to changes to the presentation of certain costs and expenses in our Consolidated Statements of Operations. Specifically, effective with the first quarter of 2022, the Company has added a new financial statement line item labeled Acquired in-process research and development. Any prior period amounts of acquired in-process research and development charges presented in this report have been reclassified to this line item from the existing financial statement line item labeled Research and development. Bankruptcy Accounting. Refer to Note 2. Bankruptcy Proceedings under the heading “Bankruptcy Accounting” for a discussion of accounting considerations related to our ongoing bankruptcy proceedings. Use of Estimates . The preparation of our Consolidated Financial Statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts and disclosures in our Consolidated Financial Statements, including the Notes thereto, and elsewhere in this report. For example, we are required to make significant estimates and assumptions related to revenue recognition, including sales deductions, long-lived assets, goodwill, other intangible assets, income taxes, contingencies, financial instruments, share-based compensation, liabilities subject to compromise and reorganization items, net, among others. Some of these estimates can be subjective and complex. Uncertainties related to the continued magnitude and duration of the COVID-19 pandemic, the extent to which it will impact our estimated future financial results, worldwide macroeconomic conditions including interest rates, employment rates, consumer spending, health insurance coverage, the speed of the anticipated recovery and governmental and business reactions to the pandemic, including any possible re-initiation of shutdowns or renewed restrictions, have increased the complexity of developing these estimates, including the allowance for expected credit losses and the carrying amounts of long-lived assets, goodwill and other intangible assets. Additionally, as a result of our ongoing bankruptcy proceedings, we may sell or otherwise dispose of or liquidate assets or settle liabilities for amounts other than those reflected in the accompanying Consolidated Financial Statements. The possibility or occurrence of any such actions could materially impact the amounts and classifications of such assets and liabilities reported in our Consolidated Balance Sheets. Furthermore, our ongoing bankruptcy proceedings and planned sale process have resulted in and are likely to continue to result in significant changes to our business, which could ultimately result in, among other things, asset impairment charges that may be material. Although we believe that our estimates and assumptions are reasonable, there may be other reasonable estimates or assumptions that differ significantly from ours. Further, our estimates and assumptions are based upon information available at the time they were made. Actual results may differ significantly from our estimates, including as a result of the uncertainties described in this report, those described in our other reports filed with the SEC or other uncertainties. We regularly evaluate our estimates and assumptions using historical experience and other factors, including the economic environment. As future events and their effects cannot be determined with precision, our estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. Market conditions, such as illiquid credit markets, volatile equity markets, dramatic fluctuations in foreign currency rates and economic downturns, can increase the uncertainty already inherent in our estimates and assumptions. We also are subject to other risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in the healthcare environment, competition, litigation, legislation and regulations. We adjust our estimates and assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in our Consolidated Financial Statements on a prospective basis. Customer, Product and Supplier Concentration . We primarily sell our products to wholesalers, retail drug store chains, supermarket chains, mass merchandisers, distributors, mail order accounts, hospitals and/or government agencies. Our wholesalers and/or distributors purchase products from us and, in turn, supply products to retail drug store chains, independent pharmacies, hospitals, long-term care facilities, clinics, home infusion pharmacies, government facilities and MCOs. Net revenues from direct customers that accounted for 10% or more of our total consolidated net revenues during the years ended December 31, 2022, 2021 and 2020 are as follows: 2022 2021 2020 AmerisourceBergen Corporation 35 % 36 % 33 % McKesson Corporation 26 % 32 % 27 % Cardinal Health, Inc. 20 % 22 % 24 % Revenues from these customers are included within each of our segments. XIAFLEX ® accounted for 19%, 14% and 11% of our 2022, 2021 and 2020 net revenues, respectively. Varenicline tablets (our generic version of Pfizer Inc.’s Chantix ® ) accounted for 13% of our 2022 net revenues. VASOSTRICT ® accounted for 11%, 30% and 27% of our 2022, 2021 and 2020 net revenues, respectively. No other products accounted for 10% or more of our net revenues during any of the years ended December 31, 2022, 2021 and 2020. We have agreements with certain third parties for the manufacture, supply and processing of certain of our existing pharmaceutical products. See Note 16. Commitments and Contingencies for information on any material manufacturing, supply and other service agreements. We are subject to risks and uncertainties associated with these concentrations that could have a material adverse effect on our business, financial condition, results of operations and cash flows in future periods, including in the near term. Revenue Recognition and Sales Deductions . With respect to contracts with commercial substance that establish payment terms and each party’s rights regarding goods or services to be transferred, we recognize revenue when (or as) we satisfy our performance obligations for such contracts by transferring control of the underlying promised goods or services to our customers, to the extent collection of substantially all of the related consideration is probable. The amount of revenue we recognize reflects our estimate of the consideration we expect to be entitled to receive, subject to certain constraints, in exchange for such goods or services. This amount is referred to as the transaction price. Our revenue consists almost entirely of sales of our products to customers, whereby we ship products to a customer pursuant to a purchase order. For contracts such as these, revenue is recognized when our contractual performance obligations have been fulfilled and control has been transferred to the customer pursuant to the contract’s terms, which is generally upon delivery to the customer. The amount of revenue we recognize is equal to the fixed amount of the transaction price, adjusted for our estimates of a number of significant variable components including, but not limited to, estimates for chargebacks, rebates, sales incentives and allowances, DSA and other fees for services, returns and allowances, which we collectively refer to as sales deductions. The Company utilizes the expected value method when estimating the amount of variable consideration to include in the transaction price with respect to each of the foregoing variable components and the most likely amount method when estimating the amount of variable consideration to include in the transaction price with respect to future potential milestone payments that do not qualify for the sales- and usage-based royalty exception. Variable consideration is included in the transaction price only to the extent it is probable that a significant revenue reversal will not occur when the uncertainty associated with the variable consideration is resolved. Payment terms for these types of contracts generally fall within 30 to 120 days of invoicing. At December 31, 2022 and 2021, our reserves for sales deductions totaled $600.2 million and $588.7 million, respectively. These amounts relate primarily to our estimates of unsettled obligations for returns and allowances, rebates and chargebacks. The most significant sales deduction reserves relate to returns, wholesaler chargebacks and rebates for the Sterile Injectables and Generic Pharmaceuticals segments. Our estimates are based on factors such as our direct and indirect customers’ buying patterns and the estimated resulting contractual deduction rates, historical experience, specific known market events and estimated future trends, current contractual and statutory requirements, industry data, estimated customer inventory levels, current contract sales terms with our direct and indirect customers and other competitive factors. Significant judgment and estimation is required in developing the foregoing and other relevant assumptions. The most significant sales deductions are further described below. Returns and Allowances— Consistent with industry practice, we maintain a return policy that allows our customers to return products within a specified period of time both subsequent to and, in certain cases, prior to the products’ expiration dates. Our return policy generally allows customers to receive credit for expired products within six months prior to expiration and within between six months and one year after expiration. Our provision for returns and allowances consists of our estimates for future product returns, pricing adjustments and delivery errors. Rebates— Our provision for rebates, sales incentives and other allowances can generally be categorized into the following four types: • direct rebates; • indirect rebates; • governmental rebates, including those for Medicaid, Medicare and TRICARE, among others; and • managed-care rebates. We establish contracts with wholesalers, chain stores and indirect customers that provide for rebates, sales incentives, DSA fees and other allowances. Some customers receive rebates upon attaining established sales volumes. Direct rebates are generally rebates paid to direct purchasing customers based on a percentage applied to a direct customer’s purchases from us, including fees paid to wholesalers under our DSAs, as described above. Indirect rebates are rebates paid to indirect customers that have purchased our products from a wholesaler or distributor under a contract with us. We are subject to rebates on sales made under governmental and managed-care pricing programs based on relevant statutes with respect to governmental pricing programs and contractual sales terms with respect to managed-care providers and GPOs. For example, we are required to provide a discount on certain of our products to patients who fall within the Medicare Part D coverage gap, also referred to as the donut hole. We participate in various federal and state government-managed programs whereby discounts and rebates are provided to participating government entities. For example, Medicaid rebates are amounts owed based upon contractual agreements or legal requirements with public sector (Medicaid) benefit providers after the final dispensing of the product by a pharmacy to a benefit plan participant. Chargebacks— We market and sell products to both: (i) direct customers including wholesalers, distributors, warehousing pharmacy chains and other direct purchasing entities and (ii) indirect customers including independent pharmacies, non-warehousing chains, MCOs, GPOs, hospitals and other healthcare institutions and government entities. We enter into agreements with certain of our indirect customers to establish contract pricing for certain products. These indirect customers then independently select a wholesaler from which to purchase the products at these contracted prices. Alternatively, we may pre-authorize wholesalers to offer specified contract pricing to other indirect customers. Under either arrangement, we provide credit to the wholesaler for any difference between the contracted price with the indirect customer and the wholesaler’s invoice price. Such credit is called a chargeback. Contract Assets and Contract Liabilities . Contract assets represent our right to consideration in exchange for goods or services that we have transferred when that right is conditioned on something other than the passage of time. We record income and a corresponding contract asset when we fulfill a contractual performance obligation, but must also fulfill one or more additional performance obligations before being entitled to payment. Once our right to consideration becomes unconditional, the contract asset amount is reclassified as Accounts receivable. Contract liabilities represent our obligation to transfer goods or services to a customer. We record a contract liability generally upon receipt of consideration in advance of fulfilling one or more of our contractual performance obligations. Upon completing each performance obligation, the corresponding contract liability amount is reversed and income is recognized. Contract assets and liabilities related to rights and obligations arising from a single contract, or a series of contracts combined and accounted for as a single contract, are generally presented on a net basis. Contract assets and liabilities are further described in Note 13. Contract Assets and Liabilities. Acquisitions . We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, further determination is required as to whether or not we have acquired inputs and processes that have the ability to create outputs, which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. Acquisitions meeting the definition of business combinations are accounted for using the acquisition method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. In a business combination, any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Direct transaction costs are recognized as part of the cost of an asset acquisition. We also evaluate which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. The cost of an asset acquisition, including transaction costs, is allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. The accounting for costs associated with acquiring in-process research and development assets, including contractual upfront and milestone payments to third parties, is further discussed below. R&D . Expenditures for R&D are expensed as incurred and included as Research and development in the Consolidated Statements of Operations. Such expenses include, among other things, the costs of discovery research, preclinical development, early- and late-clinical development and drug formulation, clinical trials, materials and medical support of marketed products. R&D spending also includes enterprise-wide costs which support our overall R&D infrastructure. Property, plant and equipment that are acquired or constructed for R&D activities and that have alternate future uses are capitalized and depreciated over their estimated useful lives on a straight-line basis. The accounting for costs associated with acquiring in-process research and development assets, including contractual upfront and milestone payments to third parties, is further discussed below. Cash and Cash Equivalents . The Company considers all highly liquid money market instruments with an original maturities of three months or less when purchased to be cash equivalents. At December 31, 2022 and 2021, cash equivalents were deposited in financial institutions and consisted almost entirely of immediately available fund balances. The Company maintains its cash deposits and cash equivalents with financial institutions it believes to be well-known and stable. Restricted Cash and Cash Equivalents . Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are excluded from Cash and cash equivalents in the Consolidated Balance Sheets. For additional information see Note 7. Fair Value Measurements. Accounts Receivable . Our accounts receivable balance is stated at amortized cost less an allowance determined using the expected credit loss model. In addition, our accounts receivable balance is reduced by certain sales deduction reserves where we have the right of offset with the customer. We generally do not require collateral. Concentrations of Credit Risk and Credit Losses . Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash equivalents, restricted cash equivalents and accounts receivable. From time to time, we invest our excess cash in high-quality, liquid money market instruments maintained by major banks and financial institutions. We have not experienced any losses on our cash equivalents. With respect to our accounts receivable, we have no history of significant losses. Approximately 83% and 91% of our gross trade accounts receivable balances represent amounts due from three customers (Cardinal Health, Inc., McKesson Corporation and AmerisourceBergen Corporation) at December 31, 2022 and December 31, 2021, respectively. We perform ongoing credit evaluations of these and our other customers based on information available to us. We consider these and other factors, including changes in the composition and aging of our accounts receivable, in developing our allowance for expected credit losses. The estimated allowance was not material to the Company’s Consolidated Financial Statements at December 31, 2022 or December 31, 2021, nor were the changes to the allowance during any of the periods presented. We do not currently expect our current or future exposures to credit losses to have a significant impact on us. However, our customers’ ability to pay us on a timely basis, or at all, could be affected by factors specific to their respective businesses and/or by economic conditions, including those related to the COVID-19 pandemic, the extent of which cannot be fully predicted. Inventories . Inventories consist of raw materials, work-in-process and finished goods. Inventory that is in excess of the amount expected to be sold within one year is classified as long-term inventory and is recorded in Other assets in the Consolidated Balance Sheets. The Company capitalizes inventory costs associated with certain products prior to regulatory approval and product launch when it is reasonably certain, based on management’s judgment of future commercial use and net realizable value, that the pre-launch inventories will be saleable. The determination to capitalize is made on a product-by-product basis. The Company could be required to write down previously capitalized costs related to pre-launch inventories upon a change in such judgment, a denial or delay of approval by regulatory bodies, a delay in commercialization or other potential factors. Our inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. It includes materials, direct labor and an allocation of overhead, but excludes certain period charges and unallocated overheads that are charged to expense in the period in which they are incurred. Unallocated overheads can occur as a consequence of abnormally low production or idle facilities. Net realizable value is determined by the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. When necessary, we write-down inventories to net realizable value based on forecasted demand and market and regulatory conditions, which may differ from actual results. Property, Plant and Equipment . Property, plant and equipment is generally stated at cost less accumulated depreciation. Major improvements are capitalized, while routine maintenance and repairs are expensed as incurred. Costs incurred during the construction or development of property, plant and equipment are capitalized as assets under construction. Once an asset has been placed into service, depreciation expense is taken on a straight-line basis over the estimated useful life of the related assets or, in the case of leasehold improvements and finance lease assets, over the shorter of the estimated useful life and the lease term. As of December 31, 2022, the useful lives of our property, plant and equipment range from 1 year to up to 30 years for buildings, 15 years for machinery and equipment, 10 years for computer equipment and software and 10 years for furniture and fixtures. Depreciation expense is not recorded on assets held for sale. Gains and losses on disposals are included in Other income, net in the Consolidated Statements of Operations. As further described below under the heading “Long-Lived Asset Impairment Testing,” our property plant and equipment assets are also subject to impairment reviews. Computer Software . The Company capitalizes certain costs incurred in connection with obtaining or developing internal-use software, including external direct costs of material and services, and payroll costs for employees directly involved with the software development. Capitalized software costs are included in Property, plant and equipment, net in the Consolidated Balance Sheets and depreciated beginning when the software project is substantially complete and the asset is ready for its intended use. Costs incurred during the preliminary project stage and post-implementation stage, as well as maintenance and training costs, are expensed as incurred. Lease Accounting. Whenever the Company enters into a new arrangement, it must determine, at the inception date, whether the arrangement is or contains a lease. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. If a lease exists, the Company must then determine the separate lease and nonlease components of the arrangement. Each right to use an underlying asset conveyed by a lease arrangement should generally be considered a separate lease component if it both: (i) can benefit the Company without depending on other resources not readily available to the Company and (ii) does not significantly affect and is not significantly affected by other rights of use conveyed by the lease. Aspects of a lease arrangement that transfer other goods or services to the Company but do not meet the definition of lease components are considered nonlease components. The consideration owed by the Company pursuant to a lease arrangement is generally allocated to each lease and nonlease component for accounting purposes. However, the Company has elected, for all of its leases, to not separate lease and nonlease components. Each lease component is accounted for separately from other lease components, but together with the associated nonlease components. For each lease, the Company must then determine the lease term, the present value of lease payments and the classification of the lease as either an operating or finance lease. The lease term is the period of the lease not cancellable by the Company, together with periods covered by: (i) renewal options the Company is reasonably certain to exercise; (ii) termination options the Company is reasonably certain not to exercise; and (iii) renewal or termination options that are controlled by the lessor. The present value of lease payments is calculated based on: • Lease payments—Lease payments include fixed and certain variable payments, less lease incentives, together with amounts probable of being owed by the Company under residual value guarantees and, if reasonably certain of being paid, the cost of certain renewal options and early termination penalties set forth in the lease arrangement. Lease payments exclude consideration that is not related to the transfer of goods and services to the Company. • Discount rate—The discount rate must be determined based on information available to the Company upon the commencement of a lease. Lessees are required to use the rate implicit in the lease whenever such rate is readily available; however, as the implicit rate in the Company’s leases is generally not readily determinable, the Company generally uses the hypothetical incremental borrowing rate it would have to pay to borrow an amount equal to the lease payments, on a collateralized basis, over a timeframe similar to the lease term. In making the determination of whether a lease is an operating lease or a finance lease, the Company considers the lease term in relation to the economic life of the leased asset, the present value of lease payments in relation to the fair value of the leased asset and certain other factors, including the lessee’s and lessor’s rights, obligations and economic incentives over the term of the lease. Generally, upon the commencement of a lease, the Company will record a lease liability and a right-of-use asset. However, the Company has elected, for all underlying assets with initial lease terms of twelve months or less (known as short-term leases), to not recognize a lease liability or right-of-use asset. Lease liabilities are initially recorded at lease commencement as the present value of future lease payments. Right-of-use assets are initially recorded at lease commencement as the initial amount of the lease liability, together with the following, if applicable: (i) initial direct costs incurred by the lessee and (ii) lease payments made by the lessor, net of lease incentives received, prior to lease commencement. Over the lease term, the Company generally increases its lease liabilities using the effective interest method and decreases its lease liabilities for lease payments made. For finance leases, amortization expense and interest expense are recognized separately in the Consolidated Statements of Operations, with amortization expense generally recorded on a straight-line basis over the lease term and interest expense recorded using the effective interest method. For operating leases, a single lease cost is generally recognized in the Consolidated Statements of Operations on a straight-line basis over the lease term unless an impairment has been recorded with respect to a leased asset. Lease costs for short-term leases not recognized in the Consolidated Balance Sheets are recognized in the Consolidated Statements of Operations on a straight-line basis over the lease term. Variable lease costs not initially included in the lease liability and right-of-use asset impairment charges are expensed as incurred. Right-of-use assets are assessed for impairment, similar to other long-lived assets. Cloud Computing Arrangements. The Company may from time to time incur costs in connection with hosting arrangements that are service contracts. The Company capitalizes any such implementation costs, expenses them over the terms of the respective hosting arrangements and subjects them to impairment testing consistent with other long-lived assets. Finite-Lived Intangible Assets . Our finite-lived intangible assets consist of license rights and developed technology. Upon acquisition, intangible assets are generally initially recorded at fair value if acquired in a business combination, or at cost if otherwise. There are several methods that can be used to determine fair value. For intangible assets, we typically use an income approach. This approach starts with our forecast of all of the expected future net cash flows. Revenues are estimated based on relevant market size and growth factors, expected industry trends, individual project life cycles and, if applicable, the life of any estimated period of marketing exclusivity, such as that granted by a patent. The pricing, margins and expense levels of similar products are considered if available. For certain licensed assets, our estimates of future cash flows consider periods covered by renewal options to the extent we have the intent and ability, at the date of the estimate, to renew the underlying license agreements. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. To the extent an intangible asset is deemed to have a finite life and to be held and used, it is amortized over its estimated useful life using either the straight-line method or, in the case of certain developed technology assets, an accelerated amortization model. The values of these various assets are subject to continuing scientific, medical and marketplace uncertainty. Factors giving rise to our initial estimate of useful lives are subject to change. Significant changes to any of these factors may result in adjustments to the useful life of the asset and an acceleration of related amortization expense, which could cause our net income and net income per share to decrease. Amortization expense is not recorded on assets held for sale. As further described under the heading “Long-Lived Asset Impairment Testing,” our finite-lived intangible assets are also subject to impairment reviews. Developed Technology . Our developed technology assets subject to amortization have useful lives ranging from 6 years to 16 years, with a weighted average useful life of approximately 12 years. We determine amortization periods and methods of amortization for developed technology assets based on our assessment of various factors impacting estimated useful lives and the timing and extent of estimated cash flows of the acquired assets, including the strength of the intellectual property protection of the product (if applicable), contractual terms and various other competitive and regulatory issues. License Rights . Our license rights subject to amortization have useful lives ranging from 7 years to 15 years, with a weighted average useful life of approximately 14 years. We determine amortization periods for licenses based on our assessment of various factors including the expected launch date of the product, the strength of the intellectual property protection of the product (if applicable), contractual terms and various other competitive, developmental and regulatory issues. Long-Lived Asset Impairment Testing . Long-lived assets, including property, plant and equipment and finite-lived intangible assets, are assessed for impairment whenever events or changes in circumstances indicate the assets may not be recoverable. Recoverability of an asset that will continue to be used in our operations is measured by comparin |
DISCONTINUED OPERATIONS AND ASS
DISCONTINUED OPERATIONS AND ASSETS SALES | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS AND ASSETS SALES | NOTE 4. DISCONTINUED OPERATIONS AND ASSET SALES Astora The operating results of the Company’s Astora business, which the Board resolved to wind down in 2016, are reported as Discontinued operations, net of tax in the Consolidated Statements of Operations for all periods presented. The following table provides the operating results of Astora Discontinued operations, net of tax, for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Litigation-related and other contingencies, net $ — $ 25,000 $ 41,097 Loss from discontinued operations before income taxes $ (15,543) $ (49,594) $ (67,847) Income tax benefit $ (2,056) $ (5,430) $ (4,327) Discontinued operations, net of tax $ (13,487) $ (44,164) $ (63,520) Loss from discontinued operations before income taxes includes Litigation-related and other contingencies, net, mesh-related legal defense costs and certain other items. The cash flows from discontinued operating activities related to Astora included the impact of net losses of $13.5 million, $44.2 million and $63.5 million for the years ended December 31, 2022, 2021 and 2020, respectively, and the impact of cash activity related to vaginal mesh cases. During the periods presented above, there were no material net cash flows related to Astora discontinued investing activities and there was no depreciation or amortization expense related to Astora. Certain Assets and Liabilities of Endo’s Retail Generics Business In November 2020, we announced the initiation of several strategic actions to further optimize the Company’s operations and increase overall efficiency (the 2020 Restructuring Initiative), which are further discussed in Note 5. Restructuring. These actions include an initiative to exit certain of our manufacturing and other sites to optimize our retail generics business cost structure. Certain of these sites and certain corresponding assets and liabilities were sold in 2021 to subsidiaries of Strides Pharma Science Limited and certain other entities. The assets sold included certain of our manufacturing facilities and related fixed assets in Chestnut Ridge, New York and Irvine, California, as well as certain U.S. retail generics products and certain related product inventory. As a result of these sales, we became entitled to aggregate cash consideration of approximately $25.6 million, substantially all of which was received by December 31, 2021, as well as certain non-cash consideration of approximately $5.8 million. In connection with these sales, we recognized the following amounts in 2021: (i) a pre-tax disposal loss of $42.2 million to write down the carrying amount of the disposal group to fair value, less cost to sell, which we recorded in Asset impairment charges in the Consolidated Statements of Operations, and (ii) a pre-tax net reversal of $25.4 million of expense, primarily related to avoided severance costs for employees that transitioned to the purchasers in connection with these 2021 sales. In 2022, we entered into a definitive agreement to sell certain additional assets located in Chestnut Ridge, New York to Ram Ridge Partners BH LLC. The assets primarily consisted of property, plant and equipment. In October 2022, the Bankruptcy Court approved the sale of the assets. The sale closed during the fourth quarter of 2022. As a result of this sale, we became entitled to aggregate cash consideration of approximately $18.5 million, substantially all of which was received by December 31, 2022. In connection with this sale, we recognized a pre-tax disposal gain of approximately $8.4 million in 2022, which we recorded in Other income, net in the Consolidated Statements of Operations. The assets described in this section, which primarily related to the Company’s Generic Pharmaceuticals segment, did not meet the requirements for treatment as a discontinued operation. The amounts described in this section that were recognized in our Consolidated Statements of Operations are included in the quantitative disclosures of the 2020 Restructuring Initiative included in Note 5. Restructuring. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | NOTE 5. RESTRUCTURING 2020 Restructuring Initiative As noted above, in November 2020, the Company announced the initiation of several strategic actions to further optimize the Company’s operations and increase overall efficiency. These actions were initiated with the expectation of, among other things, generating significant cost savings to be reinvested, among other things, to support the Company’s key strategic priority to expand and enhance its product portfolio. These actions included the following: • Optimizing the Company’s retail generics business cost structure by exiting manufacturing and other sites in Irvine, California, Chestnut Ridge, New York and India. • Improving operating flexibility and reducing general and administrative costs by transferring certain transaction processing activities to third-party global business process service providers. • Increasing organizational effectiveness by further integrating the Company’s commercial, operations and research and development functions, respectively, to support the Company’s key strategic priorities. As a result of the 2020 Restructuring Initiative, the Company’s global workforce was reduced by approximately 300 net full-time positions. The Company expects to realize annualized pre-tax cash savings (without giving effect to the costs described below) of approximately $85 million to $95 million by the first half of 2023, primarily related to reductions in Cost of revenues of approximately $65 million to $70 million and other expenses, including Selling, general and administrative and Research and development expenses, of approximately $20 million to $25 million. Future costs associated with the 2020 Restructuring Initiative are not expected to be material. The following pre-tax net amounts related to the 2020 Restructuring Initiative are included in the Company’s Consolidated Statements of Operations during the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Net restructuring charges (charge reversals) related to: Accelerated depreciation $ 3,773 $ 24,718 $ 22,459 Asset impairments — 42,155 7,391 Inventory adjustments 1,494 6,968 3,097 Employee separation, continuity and other benefit-related costs 1,216 (7,384) 60,025 Certain other restructuring costs 795 2,012 664 Total $ 7,278 $ 68,469 $ 93,636 These pre-tax net amounts were primarily attributable to our Generic Pharmaceuticals segment, which incurred $5.4 million, $49.9 million and $79.0 million of pre-tax net charges during the years ended December 31, 2022, 2021 and 2020, respectively. The remaining amounts related to our other segments and certain corporate unallocated costs. As of December 31, 2022, cumulative amounts incurred to date include charges related to accelerated depreciation of approximately $51.0 million, asset impairments related to certain identifiable intangible assets, operating lease assets and disposal groups totaling approximately $49.5 million, inventory adjustments of approximately $11.6 million, employee separation, continuity and other benefit-related costs, net of approximately $53.9 million and certain other restructuring costs of approximately $3.5 million. Of these amounts, approximately $134.3 million was attributable to the Generic Pharmaceuticals segment, with the remaining amounts relating to our other segments and certain corporate unallocated costs. The following pre-tax net amounts related to the 2020 Restructuring Initiative are included in the Company’s Consolidated Statements of Operations during the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Net restructuring charges (charge reversals) included in: Cost of revenues $ 3,966 $ 6,244 $ 53,297 Selling, general and administrative 208 20,788 27,857 Research and development 3,104 1,367 5,091 Asset impairment charges — 42,155 7,391 Other income, net — (2,085) — Total $ 7,278 $ 68,469 $ 93,636 In addition to the pre-tax net amounts summarized above, as part of the 2020 Restructuring Initiative, we recognized a pre-tax disposal gain of approximately $8.4 million during the fourth quarter of 2022 as a result of the Chestnut Ridge, New York sale transaction, which is further described in Note 4. Discontinued Operations and Asset Sales. The assets sold primarily related to our Generic Pharmaceuticals segment. Changes to the liability for the 2020 Restructuring Initiative during the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands): Employee Separation, Continuity and Other Benefit-Related Costs Certain Other Restructuring Costs Total Liability balance as of December 31, 2019 $ — $ — $ — Net charges 60,025 664 60,689 Cash payments (1,687) — (1,687) Liability balance as of December 31, 2020 $ 58,338 $ 664 $ 59,002 Net (charge reversals) charges (7,384) 3,711 (3,673) Cash payments (39,975) (4,170) (44,145) Liability balance as of December 31, 2021 $ 10,979 $ 205 $ 11,184 Net charges 1,216 796 2,012 Cash payments (11,926) (1,001) (12,927) Liability balance as of December 31, 2022 $ 269 $ — $ 269 2022 Restructuring Initiative In April 2022, the Company communicated the initiation of actions to streamline and simplify certain functions, including its commercial organization, to increase its overall organizational effectiveness and better align with current and future needs. In December 2022, the Company announced it would be taking certain additional actions to cease the production and sale of QWO ® in light of market concerns about the extent and variability of bruising following initial treatment as well as the potential for prolonged skin discoloration. These actions, which are collectively referred to herein as the 2022 Restructuring Initiative, were initiated with the expectation of, among other things, generating cost savings, with a portion to be reinvested to support the Company’s key strategic priority to expand and enhance its product portfolio. In December 2022, the Bankruptcy Court approved an order authorizing the Company to cease the production and commercialization of QWO ® and granting related relief. As a result of the 2022 Restructuring Initiative, the Company’s global workforce is ultimately expected to be reduced by up to approximately 190 net full-time positions. The Company expects to realize annualized pre-tax cash savings (without giving effect to the costs described below) of approximately $105 million to $125 million by the end of 2023, primarily related to reductions in Selling, general and administrative expenses and Cost of revenues. Future costs associated with the 2022 Restructuring Initiative are not expected to be material. The following pre-tax net amounts related to the 2022 Restructuring Initiative are included in the Company’s Consolidated Statements of Operations during the year ended December 31, 2022 (in thousands): 2022 Net restructuring charges related to: Asset impairments $ 180,248 Inventory adjustments 34,870 Employee separation, continuity and other benefit-related costs 28,345 Certain other restructuring costs 8,656 Total $ 252,119 These pre-tax net amounts were primarily attributable to our Branded Pharmaceuticals segment, which incurred $238.6 million of pre-tax net charges during the year ended December 31, 2022. The remaining amounts related to our Generic Pharmaceuticals segment and certain corporate unallocated costs. The following pre-tax net amounts related to the 2022 Restructuring Initiative are included in the Company’s Consolidated Statements of Operations during the year ended December 31, 2022 (in thousands): 2022 Net restructuring charges included in: Cost of revenues $ 49,078 Selling, general and administrative 18,692 Research and development 4,101 Asset impairment charges 180,248 Total $ 252,119 Changes to the liability for the 2022 Restructuring Initiative during the year ended December 31, 2022 were as follows (in thousands): Employee Separation, Continuity and Other Benefit-Related Costs Certain Other Restructuring Costs Total Liability balance as of December 31, 2021 $ — $ — $ — Net charges 28,345 1,102 29,447 Cash payments (13,348) (1,102) (14,450) Liability balance as of December 31, 2022 $ 14,997 $ — $ 14,997 The liability at December 31, 2022 is classified as current and is included in Accounts payable and accrued expenses in the Consolidated Balance Sheets. |
SEGMENT RESULTS
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): 2022 2021 2020 Net revenues from external customers: Branded Pharmaceuticals $ 851,142 $ 893,617 $ 781,780 Sterile Injectables 589,633 1,266,097 1,238,847 Generic Pharmaceuticals 795,457 740,586 783,110 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 Injectables 349,424 998,453 950,145 Generic Pharmaceuticals 336,133 160,046 87,178 International Pharmaceuticals 19,920 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): 2022 2021 2020 Total consolidated loss from continuing operations before income tax $ (2,888,102) $ (546,603) $ (26,518) Interest expense, net 349,776 562,353 532,939 Corporate unallocated costs (1) 182,335 180,866 157,723 Amortization of intangible assets 337,311 372,907 427,543 Acquired in-process research and development charges 68,700 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. 2022 2021 2020 Branded Pharmaceuticals: Specialty Products: XIAFLEX® $ 438,680 $ 432,344 $ 316,234 SUPPRELIN® LA 113,011 114,374 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): 2022 2021 2020 Branded Pharmaceuticals $ 9,862 $ 10,632 $ 11,758 Sterile Injectables 20,224 17,796 17,400 Generic Pharmaceuticals 16,952 47,343 52,614 International Pharmaceuticals 3,638 4,242 4,530 Corporate unallocated 3,642 4,178 4,962 Total depreciation expense $ 54,318 $ 84,191 $ 91,264 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 7. FAIR VALUE MEASUREMENTS Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial Instruments The financial instruments recorded in our Consolidated Balance Sheets include cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, acquisition-related contingent consideration and debt obligations. Included in cash and cash equivalents and restricted cash and cash equivalents are money market funds representing a type of mutual fund required by law to invest in low-risk securities (for example, U.S. government bonds, U.S. Treasury Bills and commercial paper). Money market funds pay dividends that generally reflect short-term interest rates. Due to their initial maturities, the carrying amounts of non-restricted and restricted cash and cash equivalents (including money market funds), accounts receivable, accounts payable and accrued expenses approximate their fair values. Restricted Cash and Cash Equivalents The following table presents current and noncurrent restricted cash and cash equivalent balances at December 31, 2022 and December 31, 2021 (in thousands): Balance Sheet Line Items December 31, 2022 December 31, 2021 Restricted cash and cash equivalents—current (1) Restricted cash and cash equivalents $ 145,358 $ 124,114 Restricted cash and cash equivalents—noncurrent (2) Other assets 85,000 — Total restricted cash and cash equivalents $ 230,358 $ 124,114 __________ (1) Amounts at December 31, 2022 and December 31, 2021 include: (i) restricted cash and cash equivalents associated with litigation-related matters, including $50.7 million and $78.4 million, respectively, held in Qualified Settlement Funds (QSFs) for mesh- and/or opioid-related matters, and (ii) approximately $86.0 million and $45.0 million, respectively, of restricted cash and cash equivalents related to certain insurance-related matters. See Note 16. Commitments and Contingencies for further information about litigation-related matters. (2) The amount at December 31, 2022 relates to the TLC Agreement. See Note 12. License, Collaboration and Asset Acquisition Agreements for further information about this amount. Acquisition-Related Contingent Consideration The fair value of contingent consideration liabilities is determined using unobservable inputs; hence, these instruments represent Level 3 measurements within the above-defined fair value hierarchy. These inputs include the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability is remeasured at current fair value with changes recorded in earnings. The estimates of fair value are uncertain and changes in any of the estimated inputs used as of the date of this report could have resulted in significant adjustments to fair value. See the “Recurring Fair Value Measurements” section below for additional information on acquisition-related contingent consideration. Recurring Fair Value Measurements The Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2022 and December 31, 2021 were as follows (in thousands): Fair Value Measurements at December 31, 2022 using: Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Money market funds (1) $ 12,226 $ — $ — $ 12,226 Liabilities: Acquisition-related contingent consideration (2) $ — $ — $ 16,571 $ 16,571 Fair Value Measurements at December 31, 2021 using: Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Money market funds (1) $ 134,847 $ — $ — $ 134,847 Liabilities: Acquisition-related contingent consideration (2) $ — $ — $ 20,076 $ 20,076 __________ (1) At December 31, 2022 and December 31, 2021, money market funds include $12.2 million and $16.2 million, respectively, in QSFs. Amounts in QSFs are considered restricted cash equivalents. See Note 16. Commitments and Contingencies for further discussion of our litigation. At December 31, 2022 and December 31, 2021, the differences between the amortized cost and the fair value of our money market funds were not material, individually or in the aggregate. (2) At December 31, 2022, the balance of the Company’s liability for acquisition-related contingent consideration, which is governed by executory contracts and recorded at the expected amount of the total allowed claim, is classified within Liabilities subject to compromise in the Consolidated Balance Sheets. At December 31, 2021, this amount is classified in the Consolidated Balance Sheets as follows: $5.7 million is classified as a current liability and included within Accounts payable and accrued expenses and $14.3 million is classified as a noncurrent liability and included within Other liabilities. Fair Value Measurements Using Significant Unobservable Inputs The following table presents changes to the Company’s liability for acquisition-related contingent consideration, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the years ended December 31, 2022 and 2021 (in thousands): 2022 2021 Beginning of period $ 20,076 $ 36,249 Amounts settled (3,127) (7,449) Changes in fair value recorded in earnings 408 (8,793) Effect of currency translation (786) 69 End of period (1) $ 16,571 $ 20,076 __________ (1) At December 31, 2022, the balance of the Company’s liability for acquisition-related contingent consideration, which is governed by executory contracts and recorded at the expected amount of the total allowed claim, is classified within Liabilities subject to compromise in the Consolidated Balance Sheets. At December 31, 2022, the fair value measurements of the contingent consideration obligations were determined using risk-adjusted discount rates ranging from 10.0% to 15.0% (weighted average rate of approximately 10.7%, weighted based on relative fair value). Changes in fair value recorded in earnings The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the year ended December 31, 2022 by acquisition (in thousands): Balance as of December 31, 2021 Changes in Fair Value Recorded in Earnings Amounts Settled and Other Balance as of December 31, 2022 (1) Auxilium acquisition $ 9,038 $ 2,116 $ (536) $ 10,618 Lehigh Valley Technologies, Inc. acquisitions 3,600 (635) (665) 2,300 Other 7,438 (1,073) (2,712) 3,653 Total $ 20,076 $ 408 $ (3,913) $ 16,571 __________ (1) At December 31, 2022, the balance of the Company’s liability for acquisition-related contingent consideration, which is governed by executory contracts and recorded at the expected amount of the total allowed claim, is classified within Liabilities subject to compromise in the Consolidated Balance Sheets. The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the year ended December 31, 2021 by acquisition (in thousands): Balance as of December 31, 2020 Changes in Fair Value Recorded in Earnings Amounts Settled and Other Balance as of December 31, 2021 Auxilium acquisition $ 14,484 $ (3,471) $ (1,975) $ 9,038 Lehigh Valley Technologies, Inc. acquisitions 13,100 (6,061) (3,439) 3,600 Other 8,665 739 (1,966) 7,438 Total $ 36,249 $ (8,793) $ (7,380) $ 20,076 Nonrecurring Fair Value Measurements The Company’s financial assets and liabilities measured at fair value on a nonrecurring basis during the years ended December 31, 2022 and 2021 were as follows (in thousands): Fair Value Measurements during the Year Ended December 31, 2022 (1) using: Total Expense for the Year Ended December 31, 2022 Level 1 Inputs Level 2 Inputs Level 3 Inputs Intangible assets, excluding goodwill (2)(3) $ — $ — $ 67,082 $ (288,701) Certain property, plant and equipment — — — (9,045) Total $ — $ — $ 67,082 $ (297,746) Fair Value Measurements during the Year Ended December 31, 2021 (1) using: Total Expense for the Year Ended December 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Intangible assets, excluding goodwill (2)(3) $ — $ — $ 5,011 $ (7,811) Certain property, plant and equipment — — — (2,011) Total $ — $ — $ 5,011 $ (9,822) __________ (1) The fair value amounts are presented as of the date of the fair value measurement as these assets are not measured at fair value on a recurring basis. Such measurements generally occur in connection with our quarter-end financial reporting close procedures. (2) For 2022, these fair value measurements were determined using risk-adjusted discount rates ranging from 9.5% to 12.0% (weighted average rate of approximately 11.8%, weighted based on relative fair value). For 2021, these fair value measurements were determined using risk-adjusted discount rates ranging from 10.0% to 12.0% (weighted average rate of approximately 11.1%, weighted based on relative fair value). (3) The Company also performed fair value measurements in connection with its goodwill impairment tests. Refer to Note 11. Goodwill and Other Intangibles for additional information on goodwill and other intangible asset impairment tests, including information about the valuation methodologies used. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 8. INVENTORIES Inventories consisted of the following at December 31, 2022 and December 31, 2021 (in thousands): December 31, 2022 December 31, 2021 Raw materials (1) $ 105,975 $ 90,453 Work-in-process (1) 43,057 82,728 Finished goods (1) 125,467 110,371 Total $ 274,499 $ 283,552 __________ (1) The components of inventory shown in the table above are net of allowances. Inventory in excess of the amount expected to be sold within one year is classified as noncurrent inventory and is not included in the table above. At December 31, 2022 and December 31, 2021, $23.0 million and $10.7 million, respectively, of noncurrent inventory was included in Other assets in the Consolidated Balance Sheets. As of December 31, 2022 and December 31, 2021, the Company’s Consolidated Balance Sheets included approximately $5.8 million and $12.2 million, respectively, of capitalized pre-launch inventories related to products that were not yet available to be sold. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 9. LEASES We have entered into contracts with third parties to lease a variety of assets, including certain real estate, machinery, equipment, automobiles and other assets. Our leases frequently allow for lease payments that could vary based on factors such as inflation or the degree of utilization of the underlying asset and the incurrence of contractual charges such as those for common area maintenance or utilities. Renewal and/or early termination options are common in our lease arrangements, particularly with respect to our real estate leases. Our right-of-use assets and lease liabilities generally exclude periods covered by renewal options and include periods covered by early termination options (based on our conclusion that it is not reasonably certain that we will exercise such options). Our most significant lease is for our Malvern, Pennsylvania location. The initial term of the lease is through 2024 and includes three renewal options, each for an additional 60-month period. These renewal options are not considered reasonably certain of exercise and are therefore excluded from the right-of-use asset and lease liability. We are party to certain sublease arrangements, primarily related to our real estate leases, where we act as the lessee and intermediate lessor. For example, we sublease portions of our Malvern, Pennsylvania facility to multiple tenants through sublease arrangements ending in 2024, with certain limited renewal and early termination options. The following table presents information about the Company’s right-of-use assets and lease liabilities at December 31, 2022 and December 31, 2021 (in thousands): Balance Sheet Line Items December 31, 2022 December 31, 2021 Right-of-use assets: Operating lease right-of-use assets Operating lease assets $ 28,070 $ 34,832 Finance lease right-of-use assets Property, plant and equipment, net 26,761 38,365 Total right-of-use assets $ 54,831 $ 73,197 Operating lease liabilities (1): Current operating lease liabilities Current portion of operating lease liabilities $ 903 $ 10,992 Noncurrent operating lease liabilities Operating lease liabilities, less current portion 5,129 33,727 Total operating lease liabilities $ 6,032 $ 44,719 Finance lease liabilities (1): Current finance lease liabilities Accounts payable and accrued expenses $ — $ 6,841 Noncurrent finance lease liabilities Other liabilities 1,392 18,374 Total finance lease liabilities $ 1,392 $ 25,215 __________ (1) Amounts at December 31, 2022 exclude operating lease liabilities of $28.4 million and finance lease liabilities of $17.1 million that are classified as Liabilities subject to compromise in the Consolidated Balance Sheets. The following table presents information about lease costs and expenses and sublease income for the years ended December 31, 2022, 2021 and 2020 (in thousands): Statement of Operations Line Items 2022 2021 2020 Operating lease cost Various (1) $ 10,959 $ 13,892 $ 14,175 Finance lease cost: Amortization of right-of-use assets Various (1) $ 8,479 $ 9,244 $ 9,244 Interest on lease liabilities Interest expense, net $ 1,127 $ 1,480 $ 1,716 Other lease costs and income: Variable lease costs (2) Various (1) $ 11,707 $ 13,202 $ 10,305 Finance lease right-of-use asset impairment charges Asset impairment charges $ 3,063 $ — $ — Operating lease right-of-use asset impairment charges Asset impairment charges $ — $ — $ 6,392 Sublease income Various (1) $ (6,436) $ (3,793) $ (3,803) __________ (1) Amounts are included in the Consolidated Statements of Operations based on the function that the underlying leased asset supports. The following table presents the components of such aggregate amounts for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Cost of revenues $ 6,189 $ 11,316 $ 11,610 Selling, general and administrative $ 18,305 $ 21,013 $ 18,108 Research and development $ 215 $ 216 $ 203 (2) Amounts represent variable lease costs incurred that were not included in the initial measurement of the lease liability such as common area maintenance and utilities costs associated with leased real estate and certain costs associated with our automobile leases. The following table provides the undiscounted amount of future cash flows included in our lease liabilities at December 31, 2022 for each of the five years subsequent to December 31, 2022 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at December 31, 2022 (in thousands): Operating Leases Finance Leases 2023 $ 11,518 $ 7,881 2024 6,599 8,038 2025 5,381 896 2026 5,337 896 2027 5,345 896 Thereafter 4,630 9,303 Total future lease payments $ 38,810 $ 27,910 Less: amounts representing interest 4,391 9,440 Present value of future lease payments (lease liabilities, including amounts classified as Liabilities subject to compromise) $ 34,419 $ 18,470 Less: amounts classified as Liabilities subject to compromise 28,387 17,078 Lease liabilities, excluding amounts classified as Liabilities subject to compromise $ 6,032 $ 1,392 The following table provides the weighted average remaining lease term and weighted average discount rates for our leases as of December 31, 2022 and December 31, 2021: December 31, 2022 December 31, 2021 Weighted average remaining lease term (years), weighted based on lease liability balances: Operating leases 4.9 years 5.1 years Finance leases 9.9 years 9.5 years Weighted average discount rate (percentages), weighted based on the remaining balance of lease payments: Operating leases 6.1 % 5.9 % Finance leases 7.5 % 7.6 % The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash payments for operating leases $ 13,152 $ 14,478 $ 14,598 Operating cash payments for finance leases $ 1,673 $ 2,256 $ 2,666 Financing cash payments for finance leases $ 6,062 $ 5,448 $ 4,884 Lease liabilities arising from obtaining right-of-use assets: Operating leases (1) $ 1,296 $ 5,807 $ — __________ (1) The amount in 2022 primarily relates to a new lease agreement. The amount in 2021 primarily relates to an increase in lease liabilities and right-of-use assets related to a lease modification. |
LEASES | NOTE 9. LEASES We have entered into contracts with third parties to lease a variety of assets, including certain real estate, machinery, equipment, automobiles and other assets. Our leases frequently allow for lease payments that could vary based on factors such as inflation or the degree of utilization of the underlying asset and the incurrence of contractual charges such as those for common area maintenance or utilities. Renewal and/or early termination options are common in our lease arrangements, particularly with respect to our real estate leases. Our right-of-use assets and lease liabilities generally exclude periods covered by renewal options and include periods covered by early termination options (based on our conclusion that it is not reasonably certain that we will exercise such options). Our most significant lease is for our Malvern, Pennsylvania location. The initial term of the lease is through 2024 and includes three renewal options, each for an additional 60-month period. These renewal options are not considered reasonably certain of exercise and are therefore excluded from the right-of-use asset and lease liability. We are party to certain sublease arrangements, primarily related to our real estate leases, where we act as the lessee and intermediate lessor. For example, we sublease portions of our Malvern, Pennsylvania facility to multiple tenants through sublease arrangements ending in 2024, with certain limited renewal and early termination options. The following table presents information about the Company’s right-of-use assets and lease liabilities at December 31, 2022 and December 31, 2021 (in thousands): Balance Sheet Line Items December 31, 2022 December 31, 2021 Right-of-use assets: Operating lease right-of-use assets Operating lease assets $ 28,070 $ 34,832 Finance lease right-of-use assets Property, plant and equipment, net 26,761 38,365 Total right-of-use assets $ 54,831 $ 73,197 Operating lease liabilities (1): Current operating lease liabilities Current portion of operating lease liabilities $ 903 $ 10,992 Noncurrent operating lease liabilities Operating lease liabilities, less current portion 5,129 33,727 Total operating lease liabilities $ 6,032 $ 44,719 Finance lease liabilities (1): Current finance lease liabilities Accounts payable and accrued expenses $ — $ 6,841 Noncurrent finance lease liabilities Other liabilities 1,392 18,374 Total finance lease liabilities $ 1,392 $ 25,215 __________ (1) Amounts at December 31, 2022 exclude operating lease liabilities of $28.4 million and finance lease liabilities of $17.1 million that are classified as Liabilities subject to compromise in the Consolidated Balance Sheets. The following table presents information about lease costs and expenses and sublease income for the years ended December 31, 2022, 2021 and 2020 (in thousands): Statement of Operations Line Items 2022 2021 2020 Operating lease cost Various (1) $ 10,959 $ 13,892 $ 14,175 Finance lease cost: Amortization of right-of-use assets Various (1) $ 8,479 $ 9,244 $ 9,244 Interest on lease liabilities Interest expense, net $ 1,127 $ 1,480 $ 1,716 Other lease costs and income: Variable lease costs (2) Various (1) $ 11,707 $ 13,202 $ 10,305 Finance lease right-of-use asset impairment charges Asset impairment charges $ 3,063 $ — $ — Operating lease right-of-use asset impairment charges Asset impairment charges $ — $ — $ 6,392 Sublease income Various (1) $ (6,436) $ (3,793) $ (3,803) __________ (1) Amounts are included in the Consolidated Statements of Operations based on the function that the underlying leased asset supports. The following table presents the components of such aggregate amounts for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Cost of revenues $ 6,189 $ 11,316 $ 11,610 Selling, general and administrative $ 18,305 $ 21,013 $ 18,108 Research and development $ 215 $ 216 $ 203 (2) Amounts represent variable lease costs incurred that were not included in the initial measurement of the lease liability such as common area maintenance and utilities costs associated with leased real estate and certain costs associated with our automobile leases. The following table provides the undiscounted amount of future cash flows included in our lease liabilities at December 31, 2022 for each of the five years subsequent to December 31, 2022 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at December 31, 2022 (in thousands): Operating Leases Finance Leases 2023 $ 11,518 $ 7,881 2024 6,599 8,038 2025 5,381 896 2026 5,337 896 2027 5,345 896 Thereafter 4,630 9,303 Total future lease payments $ 38,810 $ 27,910 Less: amounts representing interest 4,391 9,440 Present value of future lease payments (lease liabilities, including amounts classified as Liabilities subject to compromise) $ 34,419 $ 18,470 Less: amounts classified as Liabilities subject to compromise 28,387 17,078 Lease liabilities, excluding amounts classified as Liabilities subject to compromise $ 6,032 $ 1,392 The following table provides the weighted average remaining lease term and weighted average discount rates for our leases as of December 31, 2022 and December 31, 2021: December 31, 2022 December 31, 2021 Weighted average remaining lease term (years), weighted based on lease liability balances: Operating leases 4.9 years 5.1 years Finance leases 9.9 years 9.5 years Weighted average discount rate (percentages), weighted based on the remaining balance of lease payments: Operating leases 6.1 % 5.9 % Finance leases 7.5 % 7.6 % The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash payments for operating leases $ 13,152 $ 14,478 $ 14,598 Operating cash payments for finance leases $ 1,673 $ 2,256 $ 2,666 Financing cash payments for finance leases $ 6,062 $ 5,448 $ 4,884 Lease liabilities arising from obtaining right-of-use assets: Operating leases (1) $ 1,296 $ 5,807 $ — __________ (1) The amount in 2022 primarily relates to a new lease agreement. The amount in 2021 primarily relates to an increase in lease liabilities and right-of-use assets related to a lease modification. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 10. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net consists of the following at December 31, 2022 and December 31, 2021 (in thousands): December 31, 2022 December 31, 2021 Land and buildings $ 239,207 $ 234,219 Machinery and equipment 241,930 206,971 Leasehold improvements 54,388 55,020 Computer equipment and software 92,566 118,959 Furniture and fixtures 9,129 11,939 Assets under construction 142,560 120,483 Total property, plant and equipment, gross $ 779,780 $ 747,591 Less: accumulated depreciation (341,466) (350,879) Total property, plant and equipment, net $ 438,314 $ 396,712 Depreciation expense was $54.3 million, $84.2 million and $91.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the years ended December 31, 2022, 2021 and 2020, the Company recorded property, plant and equipment impairment charges totaling $9.0 million, $2.0 million and $1.2 million, respectively. These charges are included in the Asset impairment charges At December 31, 2022 and December 31, 2021, $205.2 million and $162.1 million of the Company’s Property, plant and equipment, net, representing net book amounts, were located in India. At December 31, 2022 and December 31, 2021, there were no other material tangible long-lived assets located outside of the U.S., individually or in the aggregate. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | NOTE 11. GOODWILL AND OTHER INTANGIBLES Goodwill Changes in the carrying amounts of our goodwill for the years ended December 31, 2022 and December 31, 2021 were as follows (in thousands): Branded Pharmaceuticals Sterile Injectables Generic Pharmaceuticals International Pharmaceuticals Total Goodwill as of December 31, 2020 $ 828,818 $ 2,731,193 $ — $ — $ 3,560,011 Goodwill impairment charges — (363,000) — — (363,000) Goodwill as of December 31, 2021 $ 828,818 $ 2,368,193 $ — $ — $ 3,197,011 Goodwill impairment charges — (1,845,000) — — (1,845,000) Goodwill as of December 31, 2022 $ 828,818 $ 523,193 $ — $ — $ 1,352,011 The carrying amounts of goodwill at December 31, 2022 and December 31, 2021 are net of the following accumulated impairments (in thousands): Branded Pharmaceuticals Sterile Injectables Generic Pharmaceuticals International Pharmaceuticals Total Accumulated impairment losses as of December 31, 2021 $ 855,810 $ 363,000 $ 3,142,657 $ 550,355 $ 4,911,822 Accumulated impairment losses as of December 31, 2022 $ 855,810 $ 2,208,000 $ 3,142,657 $ 513,211 $ 6,719,678 Other Intangible Assets Changes in the amounts of other intangible assets for the year ended December 31, 2022 are set forth in the table below (in thousands). Cost basis: Balance as of December 31, 2021 Acquisitions Impairments Effect of Currency Translation Balance as of December 31, 2022 Licenses (weighted average life of 14 years) $ 442,107 $ — $ — $ — $ 442,107 Tradenames 6,409 — — — 6,409 Developed technology (weighted average life of 12 years) 6,226,139 — (288,701) (17,417) 5,920,021 Total other intangibles (weighted average life of 12 years) $ 6,674,655 $ — $ (288,701) $ (17,417) $ 6,368,537 Accumulated amortization: Balance as of December 31, 2021 Amortization Impairments Effect of Currency Translation Balance as of December 31, 2022 Licenses $ (419,932) $ (4,576) $ — $ — $ (424,508) Tradenames (6,409) — — — (6,409) Developed technology (3,885,491) (332,735) — 13,541 (4,204,685) Total other intangibles $ (4,311,832) $ (337,311) $ — $ 13,541 $ (4,635,602) Net other intangibles $ 2,362,823 $ 1,732,935 Amortization expense for the years ended December 31, 2022, 2021 and 2020 totaled $337.3 million, $372.9 million and $427.5 million, respectively. Amortization expense is included in Cost of revenues in the Consolidated Statements of Operations. For intangible assets subject to amortization, estimated amortization expense for the five fiscal years subsequent to December 31, 2022 is as follows (in thousands): 2023 $ 255,869 2024 $ 245,751 2025 $ 232,668 2026 $ 209,532 2027 $ 134,364 Impairments Goodwill and, if applicable, indefinite-lived intangible assets are tested for impairment annually, as of October 1, and when events or changes in circumstances indicate that the asset might be impaired. As part of our goodwill and intangible asset impairment assessments, we estimate the fair values of our reporting units and our intangible assets using an income approach that utilizes a discounted cash flow model or, where appropriate, a market approach. The discounted cash flow models reflect our estimates of future cash flows and other factors including estimates of: (i) future operating performance, including future sales, long-term growth rates, gross margins, operating expenses, discount rates and the probability of achieving the estimated cash flows, and (ii) future economic conditions. These assumptions are based on significant inputs and judgments not observable in the market, and thus represent Level 3 measurements within the fair value hierarchy. The discount rates used in the determination of fair value reflect our judgments regarding the risks and uncertainties inherent in the estimated future cash flows and may differ over time depending on the risk profile of the particular assets and other market factors. We believe the discount rates and other inputs and assumptions are consistent with those a market participant would use. Any impairment charges resulting from annual or interim goodwill and intangible asset impairment assessments are recorded to Asset impairment charges in our Consolidated Statements of Operations. Annual Goodwill Impairment Tests The Company performed its annual goodwill impairment tests as of October 1, 2022, 2021 and 2020. For the purposes of these annual tests, the Company had two reporting units with goodwill: Branded Pharmaceuticals and Sterile Injectables. The discount rates used for the Branded Pharmaceuticals reporting units in these annual tests were 15.0%, 14.5% and 15.0%, respectively, and the discount rates used for the Sterile Injectables reporting units in these annual tests were 19.5%, 11.0% and 10.0%, respectively. As a result of our annual tests performed as of October 1, 2021, the Company determined that the carrying amount of the Sterile Injectables reporting unit exceeded its estimated fair value; therefore, the Company recorded a pre-tax non-cash goodwill impairment charge of $363.0 million during the fourth quarter of 2021. The Sterile Injectables impairment was primarily a result of changes in assumptions related to competition, including assumptions related to competing generic alternatives to VASOSTRICT ® , which were subsequently introduced beginning with Eagle’s at-risk launch in January 2022. We did not record any other goodwill impairment charges as a result of our October 1, 2022, 2021 and 2020 annual impairment tests. First-Quarter 2020 Interim Goodwill Impairment Test As a result of certain business decisions that occurred during the first quarter of 2020, we tested the goodwill of our Paladin reporting unit for impairment as of March 31, 2020. The fair value of the reporting unit was estimated using an income approach that utilized a discounted cash flow model. The discount rate utilized in this test was 9.5%. This goodwill impairment test resulted in a pre-tax non-cash goodwill impairment charge of $32.8 million during the three months ended March 31, 2020, representing the remaining carrying amount. This impairment was primarily attributable to portfolio decisions and updated market expectations during the quarter. Second-Quarter 2022 Interim Goodwill Impairment Tests Beginning in May 2022, our share price and the aggregate estimated fair value of our debt experienced significant declines. We believe these declines, which persisted through the end of the second quarter of 2022, were predominantly attributable to continuing and increasing investor and analyst uncertainty with respect to: (i) ongoing opioid and other litigation matters for which we had been unable to reach a broad-based resolution of outstanding claims and (ii) speculation surrounding the possibility of a bankruptcy filing. Further, rising inflation and interest rates unfavorably affected the cost of borrowing, which is one of several inputs used in the determination of the discount rates used in our discounted cash flow models. For example, the U.S. Federal Reserve raised its benchmark interest rate by 50 basis points in May 2022 and by an additional 75 basis points in June 2022. Taken together, we determined that these factors represented triggering events that required the performance of interim goodwill impairments tests for both our Sterile Injectables and Branded Pharmaceuticals reporting units as of June 30, 2022. When performing these goodwill impairment tests, we estimated the fair values of our reporting units taking into consideration management’s continued commitment to Endo’s strategic plans and the corresponding projected cash flows, as well as the fact that management’s views on litigation risk had not materially changed since our annual goodwill impairment tests performed on October 1, 2021. However, when analyzing our aggregated estimated internal valuation of our reporting units as of June 30, 2022 compared to our market capitalization and the aggregate estimated fair value of our debt, we also considered the increased level of investor and analyst uncertainty described above, coupled with our belief that investors and analysts were unlikely to modify their projections or valuation models unless or until we could demonstrate significant progression on the resolution of outstanding litigation matters and/or demonstrate that the risks of potential future strategic alternatives, including the possibility of a future bankruptcy filing, were no longer applicable. After performing this analysis, we made certain adjustments to incorporate these factors into the valuations of our reporting units, primarily through adjustments to the discount rate resulting from an increase in the company-specific risk premium (CSRP), and determined that: (i) the estimated fair value of our Sterile Injectables reporting unit was less than its carrying amount, resulting in a pre-tax non-cash goodwill impairment charge of $1,748.0 million, and (ii) while the estimated fair value declined, there was no goodwill impairment for our Branded Pharmaceuticals reporting unit, for which the estimated fair value exceeded the carrying amount by more than 10%. The discount rates used in the June 30, 2022 goodwill tests were 13.5% and 18.5% for the Branded Pharmaceuticals and Sterile Injectables reporting units, respectively. Third-Quarter 2022 Interim Goodwill Impairment Tests As further described in Note 2. Bankruptcy Proceedings, during the third quarter of 2022, in connection with the Sale, we received the Stalking Horse Bid, subject to higher or otherwise better bids from other parties. The value of the bid, as well as our market capitalization and the aggregate estimated fair value of our debt, was considered when determining whether it was more likely than not that the carrying amounts of one or more of our reporting units exceeded their respective fair values. Further, rising inflation and interest rates unfavorably affected the cost of borrowing, which is one of several inputs used in the determination of the discount rates used in our discounted cash flow models. For example, the U.S. Federal Reserve raised its benchmark interest rate by 75 basis points in July 2022 and by an additional 75 basis points in September 2022. Taken together, we determined that these factors represented triggering events that required the performance of interim goodwill impairments tests for both our Sterile Injectables and Branded Pharmaceuticals reporting units as of September 30, 2022. When performing these goodwill impairment tests, we estimated the fair values of our reporting units taking into consideration management’s continued commitment to Endo’s strategic plans and the corresponding projected cash flows. However, when analyzing our aggregated estimated internal valuation of our reporting units as of September 30, 2022 compared to our market capitalization and the aggregate estimated fair value of our debt, as well as the par value and fair value of the Stalking Horse Bid, we made adjustments to reflect certain risks and uncertainties, including those related to the Chapter 11 Cases and the Sale, into the valuations of our reporting units, primarily through adjustments to the discount rate resulting from an increase in the CSRP, and determined that: (i) the estimated fair value of our Sterile Injectables reporting unit was less than its carrying amount, resulting in a pre-tax non-cash goodwill impairment charge of $97.0 million, and (ii) the estimated fair value of our Branded Pharmaceuticals reporting unit exceeded the carrying amount by more than 10%. The discount rates used in the September 30, 2022 goodwill tests were 15.0% and 19.5% for the Branded Pharmaceuticals and Sterile Injectables reporting units, respectively. Fourth-Quarter 2022 Interim Goodwill Impairment Test Beginning in late fourth-quarter 2022 and concluding in February 2023, the Company completed its annual enterprise-wide long-term strategic planning process, which resulted in updates to its projected future cash flows. Among other items, these updates primarily reflected the anticipated impacts on the Company’s projected future cash flows resulting from: (i) the discontinuation of QWO ® ; (ii) the disruption to XIAFLEX ® revenues that occurred in the second half of 2022; (iii) routine updates to our assumptions regarding anticipated competitive events for currently marketed products, as well as probabilities of success, launch timing and the anticipated competitive landscape surrounding new product launches, including with respect to TLC599 and certain product candidates in our Sterile Injectables reporting unit pipeline; (iv) expected changes in the Company’s future manufacturing expense profile, including delays related to construction, FDA inspections and product transfers to our Sterile Injectables facility in Indore, India; and (v) changes in the Company’s future operating expense profile. Due to the extent of the changes to the projected future cash flows, coupled with the fact that we had recorded impairments for our Sterile Injectables reporting unit during the second and third quarters of 2022, we concluded that it was more likely than not that the carrying amount of our Sterile Injectables reporting unit may exceed its fair value. As a result, an interim impairment test was performed as of December 31, 2022. The updates to the projected future cash flows did not result in an interim goodwill impairment test for our Branded Pharmaceuticals reporting unit due to the significant headroom in this reporting unit. When performing the goodwill impairment test, we estimated the fair value of our Sterile Injectables reporting unit taking into consideration management’s updated forecasts of projected cash flows, as further discussed above. The updated forecast of projected future cash flows was reduced in comparison to the prior 2022 tests. However, in reducing the cash flows, we believe the level of risk and uncertainty of the cash flows also decreased resulting in a corresponding decrease in the CSRP and, in turn, the discount rate used in the determination of fair value of our Sterile Injectables reporting unit. The discount rate used in the December 31, 2022 goodwill impairment test was 14.5%. We believe this discount rate and the other inputs and assumptions used to estimate fair value were consistent with those that a market participant would have used in light of the degree of risk associated with the updated estimated future cash flows. Consistent with the goodwill impairment tests performed earlier in 2022, we compared our aggregated estimated internal valuation of our reporting units as of December 31, 2022 to our market capitalization and the aggregate estimated fair value of our debt, as well as the par value and fair value of the Stalking Horse Bid. As a result of the December 31, 2022 test, we determined that there was no impairment of goodwill. Other Intangible Asset Impairments With respect to other intangible assets, we recorded asset impairment charges of $288.7 million, $7.8 million and $79.9 million during the years ended December 31, 2022, 2021 and 2020, respectively. These pre-tax non-cash asset impairment charges related primarily to certain developed technology intangible assets that were tested for impairment following changes in market conditions and certain other factors impacting recoverability. The amount recorded in 2022 included charges related to the 2022 Restructuring Initiative, as further discussed in Note 5. Restructuring. |
LICENSE, COLLABORATION AND ASSE
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS | NOTE 12. LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS We have entered into certain license, collaboration and asset acquisition agreements with third parties. Generally, these agreements require us to share in the costs of developing, manufacturing, commercializing and/or selling product candidates and/or products with third parties, who in turn grant us marketing rights for such product candidates and/or products. Under these agreements we are generally required to: (i) make upfront payments and/or other payments upon successful completion of regulatory, sales and/or other milestones and/or (ii) pay royalties on sales and/or other costs arising from these agreements. We have also, from time to time, entered into agreements to directly acquire certain assets from third parties. BioSpecifics On October 19, 2020, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Beta Acquisition Corp., a Delaware corporation and wholly-owned indirect subsidiary of the Company (Merger Sub) and BioSpecifics. Pursuant to the Merger Agreement, and on the terms and subject to the conditions thereof, Merger Sub commenced a tender offer (the Offer) on November 2, 2020 to acquire all of BioSpecifics’ issued and outstanding shares of common stock (BioSpecifics Shares) at a purchase price of $88.50 per BioSpecifics Share, net to the holder thereof in cash, subject to reduction for any applicable withholding taxes and without interest. Through the expiration of the Offer on December 1, 2020, approximately 6,159,975 BioSpecifics Shares were validly tendered and not validly withdrawn in accordance with the terms of the Offer. With all conditions to the Offer satisfied, on December 2, 2020, Merger Sub accepted for purchase all of the BioSpecifics Shares that were validly tendered and not validly withdrawn in accordance with the terms of the Offer. Following consummation of the Offer, on December 2, 2020, Merger Sub merged with and into BioSpecifics (the Merger) in accordance with Section 251(h) of the Delaware General Corporation Law without a vote on the adoption of the Merger Agreement by BioSpecifics’ stockholders, with BioSpecifics continuing as the surviving corporation in the Merger and thereby becoming a wholly-owned, indirect subsidiary of the Company. As a result of the Merger, the BioSpecifics Shares ceased to be traded on the Nasdaq, effective as of market open on December 2, 2020. The operating results of BioSpecifics are included in the accompanying Consolidated Statements of Operations from December 2, 2020 and the assets and liabilities of BioSpecifics are included in the Consolidated Balance Sheets as of December 31, 2022 and 2021. Prior to the Merger, BioSpecifics was a biopharmaceutical company involved in the development of injectable CCH that generated revenue primarily from a license agreement with us. We had a strategic relationship with BioSpecifics since 2004 pursuant to which BioSpecifics was, among other things, entitled to a royalty stream from us related to our collagenase-based therapies, including XIAFLEX ® . Specifically, we were required to, among other things, pay BioSpecifics, on a country-by-country and product-by-product basis, a specified percentage, within a range of 5% to 15% of net sales, of certain specified products. This royalty applied to net sales by us and/or any of our sublicensees. In addition, we were required to pay BioSpecifics an amount equal to a specified mark-up on certain cost of goods related to supply of XIAFLEX ® (which mark-up was capped at a specified percentage within the range of 5% to 15% of the cost of goods of XIAFLEX ® ). Our December 2020 acquisition of BioSpecifics eliminated this third-party relationship, which had the effect of reducing royalty payments recognized in Cost of revenues. The BioSpecifics acquisition also eliminated certain milestones and royalties we may otherwise have been required to pay for potential future indications of products or product candidates containing CCH, including those associated with our plantar fibromatosis development program. The acquired set of BioSpecifics assets and activities did not meet the definition of a business based on our assessment that the acquired set of activities lacks substantive processes that significantly contribute to the conversion of inputs into outputs. As a result, we accounted for the transaction as an asset acquisition. The consideration transferred in the asset acquisition was measured at cost, including transaction costs, assets transferred by the Company and royalty obligations discharged by the seller. The following table represents the costs accumulated to acquire BioSpecifics (in thousands): December 2, 2020 Base purchase price (1) $ 650,029 Vested employee options and benefits (2) 10,280 Transaction costs 10,268 Less: royalty obligations discharged (3) (14,909) Total acquisition consideration $ 655,668 __________ (1) Represents cash consideration paid for 6,159,975 shares tendered and 1,184,980 remaining shares not tendered, but automatically cancelled and funded in an escrow account. (2) In accordance with BioSpecifics’ stock plan and employment arrangements, certain unvested options and employee bonus compensation immediately vested and accelerated, with no future service requirement, upon change in control. We have accounted for the accelerated vestings as a component of consideration transferred. (3) Represents the total reduction to the base purchase price for the pre-acquisition accrued and unpaid royalty liability discharged on the date of closing. The following table summarizes the allocation of consideration transferred on a relative fair value basis to identifiable tangible and intangible assets and other information about the assets and liabilities acquired at the BioSpecifics acquisition date (in thousands): December 2, 2020 Cash and cash equivalents $ 21,073 Investments (1) 89,050 Intangible assets—developed technology 673,796 Intangible assets—in-process research and development 28,602 Other acquired assets 3,089 Deferred tax liability (156,441) Other assumed liabilities (3,501) Net identifiable assets acquired $ 655,668 __________ (1) Investments acquired primarily consisted of debt securities acquired from BioSpecifics on December 2, 2020. Investments acquired were fully liquidated prior to December 31, 2020. No material gains or losses were recognized upon liquidation. The in-process research and development assets noted in the table above were expensed on the acquisition date and are included in Acquired in-process research and development in the Consolidated Statements of Operations. The Company concluded that the consideration allocable to developed technology acquired represented incremental costs associated with the Company’s existing XIAFLEX ® and QWO ® intangible assets (the Existing Intangible Assets). The Existing Intangible Assets were acquired by the Company as part of its acquisition of Auxilium Pharmaceuticals, Inc. (Auxilium), accounted for as a business combination at fair value during 2015. Auxilium had a pre-existing development and license agreement with BioSpecifics. The following table summarizes changes to the gross carrying amount, accumulated amortization and net book amount of the Existing Intangible Assets and the new intangible assets resulting from the BioSpecifics acquisition (in thousands): Gross Carrying Amount Accumulated Amortization Net Book Amount Asset balances immediately prior to BioSpecifics acquisition $ 1,580,600 $ (725,123) $ 855,477 Additional costs incurred in connection with BioSpecifics acquisition 673,796 — 673,796 Asset balances immediately following BioSpecifics acquisition $ 2,254,396 $ (725,123) $ 1,529,273 Prior to the BioSpecifics acquisition, the Company had been amortizing the Existing Intangible Assets over their respective useful lives, which were the periods over which the assets were expected to contribute directly or indirectly to the future cash flows of the Company. The BioSpecifics acquisition significantly impacted the timing and amount of estimated future cash flows from sales of XIAFLEX ® and QWO ® and, therefore, the Company considered the acquisition to be a triggering event to remeasure the expected useful lives of the XIAFLEX ® and QWO ® intangible assets. Immediately following the BioSpecifics acquisition, the Company determined that the weighted average useful life for the XIAFLEX ® and QWO ® intangible assets was approximately 13.6 years from the closing date of the BioSpecifics acquisition and, accordingly, the Company began to amortize the corresponding intangible assets prospectively on a straight-line basis over their then-anticipated useful lives, which approximated the periods of economic benefits expected to be realized from future cash flows from sales of XIAFLEX ® and QWO ® . The Company’s accounting for these intangible assets has since been affected by certain subsequent developments, including the Company’s plans announced in December 2022 that it would be ceasing the production and sale of QWO ® in light of market concerns about the extent and variability of bruising following initial treatment as well as the potential for prolonged skin discoloration. Refer to Note 5. Restructuring for additional information. Nevakar Agreements In May 2022, we announced that our EVL subsidiary had entered into an agreement to acquire six development-stage RTU injectable product candidates from Nevakar Injectables, Inc., a subsidiary of Nevakar, Inc., for an upfront cash payment of $35.0 million (the 2022 Nevakar Agreement). The acquisition closed during the second quarter of 2022. The acquired set of assets and activities did not meet the definition of a business. As a result, we accounted for the transaction as an asset acquisition. Upon closing, the upfront payment was recorded as Acquired in-process research and development in the Consolidated Statements of Operations. The product candidates, which relate to our Sterile Injectables segment, are in various stages of development. The first commercial launch is expected in 2025; however, there can be no assurance this will occur within this timeframe or at all. With this acquisition, the Company will control all remaining development, regulatory, manufacturing and commercialization activities for the acquired product candidates. In August 2022, within the ongoing bankruptcy proceedings, EVL filed an adversary proceeding (the Nevakar Litigation) against Nevakar, Inc. and Nevakar Injectables Inc. (collectively, Nevakar) to enforce: (i) a 2018 development, license and commercialization agreement (the 2018 Nevakar Agreement) and (ii) the 2022 Nevakar Agreement. In September 2022, Nevakar filed counterclaims against EVL. In December 2022, EVL and Nevakar reached a settlement with respect to the Nevakar Litigation (the Nevakar Settlement) subject to Bankruptcy Court approval. The Nevakar Settlement provided for the amendment of the 2018 Nevakar Agreement to revoke EVL’s license of two products covered by the 2018 Nevakar Agreement, modify EVL’s license to the remaining three products covered by the 2018 Nevakar Agreement to reduce the royalty owed to Nevakar, terminate any obligations of EVL to make payments to Nevakar upon achievement of contingent milestones and eliminate Nevakar’s ability to terminate the remaining licenses for EVL’s breach or material breach. The Nevakar Settlement also provided that EVL and Nevakar would agree to a mutual release of certain claims under both the 2018 Nevakar Agreement and the 2022 Nevakar Agreement. The Nevakar Settlement was approved by the Bankruptcy Court in January 2023. The Nevakar Settlement had no effect on our Consolidated Financial Statements in 2022; we are currently evaluating how the Nevakar Settlement will be accounted for in 2023. TLC Agreement In June 2022, we announced that our EVL subsidiary had entered into an agreement with TLC to commercialize TLC599 (the TLC Agreement). We are accounting for the agreement as an asset acquisition. TLC599 is an injectable compound in Phase 3 development for the treatment of osteoarthritis knee pain. Under the terms of the TLC Agreement, TLC is primarily responsible for the development of the product and we are primarily responsible for obtaining regulatory approval and for commercialization of the product in the U.S. Upon receipt of regulatory approval, if obtained, we will have exclusive rights to manufacture, market, sell and distribute the product in the U.S. During the second quarter of 2022, we made an upfront payment of $30.0 million to TLC and recorded a corresponding charge to Acquired in-process research and development in the Consolidated Statements of Operations. TLC is also eligible to receive: (i) payments of up to an additional $110.0 million based on the achievement of certain development, regulatory and manufacturing milestones related to the initial indication for the treatment of osteoarthritis knee pain; (ii) payments of up to an additional $30.0 million based on the achievement of certain development and regulatory milestones related to certain potential future indications; (iii) payments of up to an additional $500.0 million based on the achievement of certain commercial milestones; and (iv) tiered royalties based on net sales of TLC599 in the U.S. Unless terminated earlier or extended, the term of the TLC Agreement generally extends until the 20-year anniversary of the first commercial sale of TLC599. Pursuant to the terms of the TLC Agreement, we have deposited approximately $85.0 million of cash into a bank account which may be used to fund certain future obligations under the TLC Agreement or returned to us upon satisfaction of certain conditions. As further described in Note 7. Fair Value Measurements, this amount is considered restricted cash as of December 31, 2022 and is included in our Consolidated Balance Sheets at December 31, 2022 as Other assets. |
CONTRACT ASSETS AND LIABILITIES
CONTRACT ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | |
CONTRACT ASSETS AND LIABILITIES | NOTE 13. CONTRACT ASSETS AND LIABILITIES Our revenue consists almost entirely of sales of our products to customers, whereby we ship products to a customer pursuant to a purchase order. Revenue contracts such as these do not generally give rise to contract assets or contract liabilities because: (i) the underlying contracts generally have only a single performance obligation and (ii) we do not generally receive consideration until the performance obligation is fully satisfied. At December 31, 2022, the unfulfilled performance obligations for these types of contracts relate to ordered but undelivered products. We generally expect to fulfill the performance obligations and recognize revenue within one week of entering into the underlying contract. Based on the short-term initial contract duration, additional disclosure about the remaining performance obligations is not required. Certain of our other income-generating contracts, including license and collaboration agreements, may result in contract assets and/or contract liabilities. For example, we may recognize contract liabilities upon receipt of certain upfront and milestone payments from customers when there are remaining performance obligations. The following table shows the opening and closing balances of contract assets and contract liabilities from contracts with customers (dollars in thousands): December 31, 2022 December 31, 2021 $ Change % Change Contract assets (1) $ 8,193 $ 13,005 $ (4,812) (37) % Contract liabilities (2) $ 4,099 $ 4,663 $ (564) (12) % __________ (1) At December 31, 2022 and December 31, 2021, approximately $1.5 million and $2.8 million, respectively, of these contract asset amounts are classified as current and are included in Prepaid expenses and other current assets in the Company’s Consolidated Balance Sheets. The remaining amounts are classified as noncurrent and are included in Other assets. The net decrease in contract assets during the year ended December 31, 2022 primarily relates to: (i) reclassifications of certain amounts to receivables as a result of rights to consideration becoming unconditional and (ii) net changes in estimates with respect to amounts of consideration expected to be received from sales of certain intellectual property rights. (2) At December 31, 2022 and December 31, 2021, approximately $0.6 million and $0.6 million, respectively, of these contract liability amounts are classified as current and are included in Accounts payable and accrued expenses in the Company’s Consolidated Balance Sheets. The remaining amounts are classified as noncurrent and are included in Other liabilities. During the year ended December 31, 2022, approximately $0.6 million of revenue was recognized that was included in the contract liability balance at December 31, 2021. During the year ended December 31, 2022, we recognized revenue of $11.9 million relating to performance obligations satisfied, or partially satisfied, in prior periods. Such revenue generally relates to changes in estimates with respect to our variable consideration. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 14. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses included the following at December 31, 2022 and December 31, 2021 (in thousands): December 31, 2022 December 31, 2021 Trade accounts payable $ 109,033 $ 123,129 Returns and allowances 160,619 183,116 Rebates 167,516 150,039 Chargebacks 920 2,617 Other sales deductions 6,197 2,500 Accrued interest 68 106,735 Accrued payroll and related benefits 95,666 90,029 Accrued royalties and other distribution partner payables 24,072 58,422 Acquisition-related contingent consideration—current — 5,748 Other (1) 123,092 114,563 Total $ 687,183 $ 836,898 __________ (1) Amounts include a wide variety of accrued expenses, the most significant of which relate to accrued legal and other professional fees. The amounts in the table above do not include amounts classified as Liabilities subject to compromise in our Consolidated Balance Sheets. Refer to Note 2. Bankruptcy Proceedings for additional information about Liabilities subject to compromise. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 15. DEBT The following table presents information about the Company’s total indebtedness at December 31, 2022 and December 31, 2021 (dollars in thousands): December 31, 2022 December 31, 2021 Effective Interest Rate (1) Principal Amount (2) Carrying Amount (2) Effective Interest Rate Principal Amount Carrying Amount 7.25% Senior Notes due 2022 $ — $ — 7.25 % $ 8,294 $ 8,294 5.75% Senior Notes due 2022 — — 5.75 % 172,048 172,048 5.375% Senior Notes due 2023 5.38 % 6,127 6,127 5.62 % 6,127 6,111 6.00% Senior Notes due 2023 6.00 % 56,436 56,436 6.28 % 56,436 56,203 5.875% Senior Secured Notes due 2024 6.88 % 300,000 286,375 6.14 % 300,000 297,928 6.00% Senior Notes due 2025 6.00 % 21,578 21,578 6.27 % 21,578 21,413 7.50% Senior Secured Notes due 2027 8.50 % 2,015,479 1,894,774 7.70 % 2,015,479 1,997,777 9.50% Senior Secured Second Lien Notes due 2027 9.50 % 940,590 940,590 9.68 % 940,590 933,330 6.00% Senior Notes due 2028 6.00 % 1,260,416 1,260,416 6.11 % 1,260,416 1,252,667 6.125% Senior Secured Notes due 2029 7.13 % 1,295,000 1,230,799 6.34 % 1,295,000 1,278,718 Term Loan Facility 13.50 % 1,975,000 1,871,894 6.12 % 1,985,000 1,947,633 Revolving Credit Facility 11.00 % 277,200 265,728 2.63 % 277,200 277,200 Total (3) $ 8,147,826 $ 7,834,717 $ 8,338,168 $ 8,249,322 __________ (1) As noted below, beginning on the Petition Date, we ceased recognition of interest expense related to all of our debt instruments and began to incur “adequate protection payments” (further discussed below) related to our First Lien Debt Instruments (representing all of our debt instruments except for our senior unsecured notes and the 9.50% Senior Secured Second Lien Notes due 2027). The December 31, 2022 “effective interest rates” included in the table above represent the rates in effect on such date used to calculate: (i) future adequate protection payments related to our First Lien Debt Instruments and (ii) future contractual interest related to our other debt instruments, notwithstanding the fact that such interest is not currently being recognized. These rates are expressed as a percentage of the contractual principal amounts outstanding as of such date and, with respect to our First Lien Debt Instruments, without consideration of any reductions related to adequate protection payments made through such date. (2) The December 31, 2022 principal amounts represent the amount of unpaid contractual principal owed on the respective instruments. During the third quarter of 2022, in accordance with ASC 852, we adjusted the carrying amounts of all unsecured and potentially undersecured debt instruments to equal the expected amount of the allowed claim by expensing (within Reorganization items, net in the Consolidated Statements of Operations) $89.2 million of previously-deferred and unamortized costs associated with these instruments. The December 31, 2022 carrying amounts of our First Lien Debt Instruments also reflect reductions for certain adequate protection payments made since the Petition Date, as further discussed herein. (3) As of December 31, 2022, the entire carrying amount our debt, as well as any related remaining accrued and unpaid interest that existed as of the Petition Date, is included in the Liabilities subject to compromise line in the Consolidated Balance Sheets. As of December 31, 2021, $200.3 million of the carrying amount of our debt is classified as a current liability and is included in the Current portion of long-term debt line in the Consolidated Balance Sheets. The remaining carrying amount of our debt as of December 31, 2021 is included in the Long-term debt, less current portion, net line in the Consolidated Balance Sheets. General Information The Company and its subsidiaries, with certain customary exceptions, guarantee or serve as issuers or borrowers of the debt instruments representing substantially all of the Company’s indebtedness at December 31, 2022. The obligations under: (i) the 5.875% Senior Secured Notes due 2024; (ii) the 7.50% Senior Secured Notes due 2027; (iii) the 6.125% Senior Secured Notes due 2029; and (iv) the Credit Agreement and related loan documents are secured on a pari passu basis by a first priority lien (subject to certain permitted liens) on the collateral securing such instruments, which collateral represents substantially all of the assets of the issuers or borrowers and guarantors party thereto (subject to customary exceptions). The obligations under the 9.50% Senior Secured Second Lien Notes due 2027 are secured by a second priority lien (subject to certain permitted liens) on, and on a junior basis with respect to, the collateral securing the obligations under the Credit Agreement, the 5.875% Senior Secured Notes due 2024, the 7.50% Senior Secured Notes due 2027 and the 6.125% Senior Secured Notes due 2029 and the related guarantees. Our senior unsecured notes are unsecured and effectively subordinated in right of priority to the obligations under the Credit Agreement, the 5.875% Senior Secured Notes due 2024, the 7.50% Senior Secured Notes due 2027, the 9.50% Senior Secured Second Lien Notes due 2027 and the 6.125% Senior Secured Notes due 2029, in each case to the extent of the value of the collateral securing such instruments. The aggregate estimated fair value of the Company’s long-term debt, which was estimated using inputs based on quoted market prices for the same or similar debt issuances, was $4.9 billion and $8.0 billion at December 31, 2022 and December 31, 2021, respectively. Based on this valuation methodology, we determined these debt instruments represent Level 2 measurements within the fair value hierarchy. Credit Facilities The Company and certain of its subsidiaries are party to the Credit Agreement, which immediately following the March 2021 Refinancing Transactions provided for: (i) a $1,000.0 million senior secured revolving credit facility (the Revolving Credit Facility) and (ii) a $2,000.0 million senior secured term loan facility (the Term Loan Facility and, together with the Revolving Credit Facility, the Credit Facilities). Current amounts outstanding as of December 31, 2022 under the Credit Facilities are set forth in the table above. Principal payments on the Term Loan Facility equal to 0.25% of the initial $2,000.0 million principal amount are generally payable quarterly, beginning on June 30, 2021 and extending until the Term Loan Facility’s maturity date in March 2028, at which time the remaining principal amount outstanding is payable. Based on the Company’s borrowings under the Revolving Credit Facility outstanding at December 31, 2022, $74.6 million generally matures in 2024, with the remainder generally maturing in 2026. Borrowings under the Revolving Credit Facility bear interest, at the borrower’s election, at a rate per annum equal to: (i) an applicable margin between 1.50% and 3.00% depending on the Company’s Total Net Leverage Ratio plus the Adjusted LIBO Rate (as defined in the Credit Agreement) or (ii) an applicable margin between 0.50% and 2.00% depending on the Company’s Total Net Leverage Ratio plus the Alternate Base Rate (as defined in the Credit Agreement). In addition, borrowings under our Term Loan Facility bear interest, at the borrower’s election, at a rate per annum equal to: (i) 5.00% plus the Adjusted LIBO Rate, subject to a London Interbank Offered Rate (LIBOR) floor of 0.75%, or (ii) 4.00% plus the Alternate Base Rate, subject to an Alternate Base Rate floor of 1.75%. Interest on these instruments is generally payable at the end of each interest period but at least every three months. The foregoing summary, which does not purport to be complete, is based on the terms of the Credit Agreement. Refer to the “Covenants, Events of Default and Bankruptcy-Related Matters” section below for a discussion of the effects of the ongoing bankruptcy proceedings and the related event of default on the Credit Facilities. Senior Notes and Senior Secured Notes The various senior notes and senior secured notes outstanding as of December 31, 2022 generally mature between 2023 and 2029. Interest on these notes is generally payable semiannually in arrears. The indentures governing these notes generally allow for redemption prior to maturity, in whole or in part, subject to certain restrictions and limitations described therein. The foregoing summary, which does not purport to be complete, is based on the terms of the indentures governing our various senior notes and senior secured notes. Refer to the “Covenants, Events of Default and Bankruptcy-Related Matters” section below for a discussion of the effects of the ongoing bankruptcy proceedings and the related event of default on our various senior notes and senior secured notes. Covenants, Events of Default and Bankruptcy-Related Matters The agreements relating to our outstanding indebtedness contain certain covenants and events of default. Beginning during the second quarter of 2022, we elected to not make the following interest payments on or prior to their scheduled due dates: (i) approximately $38 million that was due on June 30, 2022 with respect to our outstanding 6.00% Senior Notes due 2028; (ii) approximately $2 million that was due on July 15, 2022 with respect to our outstanding 5.375% Senior Notes due 2023 and 6.00% Senior Notes due 2023; (iii) approximately $45 million that was due on July 31, 2022 with respect to our outstanding 9.50% Senior Secured Second Lien Notes due 2027; and (iv) approximately $1 million that was due on August 1, 2022 with respect to our outstanding 6.00% Senior Notes due 2025. Under each of the indentures governing these notes, we had a 30-day grace period from the respective due dates to make these interest payments before such non-payments constituted events of default with respect to such notes. We chose to enter these grace periods while continuing discussions with certain creditors in connection with our evaluation of strategic alternatives. Our decision to enter these grace periods was not driven by liquidity constraints. We made the interest payment of approximately $38 million that became due on June 30, 2022 with respect to our outstanding 6.00% Senior Notes due 2028 on July 28, 2022, which was prior to the end of the applicable grace period. We also made the interest payments totaling approximately $2 million that became due on July 15, 2022 with respect to our outstanding 5.375% Senior Notes due 2023 and 6.00% Senior Notes due 2023 on August 11, 2022, which was prior to the end of the applicable grace periods. On the Petition Date, the Debtors filed voluntary petitions for relief under the Bankruptcy Code, which constituted an event of default that accelerated our obligations under substantially all of our then-outstanding debt instruments. However, section 362 of the Bankruptcy Code stays creditors from taking any action to enforce the related financial obligations and creditors’ rights of enforcement in respect of the debt instruments are subject to the applicable provisions of the Bankruptcy Code. As a result of the Chapter 11 Cases, since the Petition Date, we have not made, and we are not currently making, any scheduled principal or interest payments on the Credit Facilities or our various senior notes and senior secured notes. We are however making certain adequate protection payments as further discussed below. Additionally, as a result of the Chapter 11 Cases, all remaining commitments under the Revolving Credit Facility have been terminated. The transactions contemplated by the RSA are subject to approval by the Bankruptcy Court, among other conditions. Accordingly, no assurance can be given that the transactions described therein will be consummated. Because the Company has not yet obtained approval by the Bankruptcy Court regarding such transactions, there remains uncertainty with respect to the ability of our creditors, including our secured and unsecured debt holders, to recover the full amount of their claims against us. As a result, all secured and unsecured debt instruments have been classified as Liabilities subject to compromise in our Consolidated Balance Sheets as of December 31, 2022 and we ceased the recognition of interest expense related to these instruments as of the Petition Date. During 2022, we did not recognize approximately $231 million of contractual interest expense that would have been recognized if not for the Chapter 11 Cases. As part of the RSA that is further discussed in Note 2. Bankruptcy Proceedings, the Company and the Ad Hoc First Lien Group agreed on the terms of a proposed order authorizing the Company’s use of cash collateral (as modified and entered by the Bankruptcy Court on a final (amended) basis in October 2022, the Cash Collateral Order) in connection with the Chapter 11 Cases on certain terms and conditions set forth therein. Pursuant to the Cash Collateral Order, we are obligated to make certain adequate protection payments during our bankruptcy proceedings on each of our First Lien Debt Instruments. These adequate protection payments include the payment of amounts equal to any accrued and unpaid interest that existed as of the Petition Date by no later than eight • with respect to the Revolving Credit Facility and the Term Loan Facility, 200 basis points plus: (i) if denominated in dollars, ABR plus the Applicable Rate (each as defined in the Credit Agreement), or (ii) if denominated in Canadian dollars, the Canadian Prime Rate plus the Applicable Rate (each as defined in the Credit Agreement); and • with respect to the applicable senior secured notes, 100 basis points plus the applicable rate of interest set forth on the face of the applicable note. The rates in the foregoing bullet points, which are used to calculate any applicable adequate protection payments, are expressed as a percentage of the contractual principal amounts outstanding without consideration of any reductions related to adequate protection payments. On a cumulative basis through December 31, 2022, we made the following adequate protection payments pursuant to the Cash Collateral Order: • $11.5 million with respect to the Revolving Credit Facility; • $103.1 million with respect to the Term Loan Facility; and • $198.5 million with respect to the applicable senior secured notes. As required by ASC 852, these adequate protection payments are recorded as a reduction of the carrying amount of the respective First Lien Debt Instruments, which are classified as Liabilities subject to compromise. This accounting treatment is due to the aforementioned uncertainties with respect to the ultimate outcome of the bankruptcy proceedings, including the proposed Sale transaction, which in turn creates uncertainties surrounding the first lien debt holders’ ability to recover in full the amount of outstanding principal associated with those instruments. Some or all of the adequate protection payments may later be recharacterized as interest expense depending upon certain developments in the Chapter 11 Cases. In addition to the terms described above, the Cash Collateral Order, among other things, establishes a budget for the Debtors’ use of cash collateral, establishes certain informational rights for the Debtors’ secured creditors and provides for the waiver of certain Bankruptcy Code provisions. The foregoing description of the Cash Collateral Order does not purport to be complete and is qualified in its entirety by reference to the Cash Collateral Order entered by the Bankruptcy Court in the Chapter 11 Cases. Debt Financing Transactions Set forth below are certain disclosures relating to debt financing transactions that occurred during the years ended December 31, 2022, 2021 and 2020. June 2020 Refinancing In June 2020, the Company executed certain transactions (the June 2020 Refinancing Transactions) that included, among other things, the exchanges by certain of the Company’s wholly-owned subsidiaries of certain series of senior notes for certain newly issued senior secured notes and senior notes and $47.2 million in cash paid by the Company. The June 2020 Refinancing Transactions were accounted for as debt modifications. Following the June 2020 Refinancing Transactions, previously deferred and unamortized amounts associated with the old notes exchanged began to be amortized over the respective terms of the new notes; this continued until the initiation of our bankruptcy proceedings during the third quarter of 2022, at which time the remaining unamortized costs were expensed as Reorganization items, net in the Consolidated Statements of Operations. In connection with the June 2020 Refinancing Transactions, we incurred fees to third parties of approximately $31.1 million, substantially all of which were charged to expense during the second quarter of 2020 and were included in Selling, general and administrative expenses in the Consolidated Statements of Operations. August 2020 Tender Offer In August 2020, the Company repurchased and retired approximately $10 million in aggregate principal of 5.75% Senior Notes due 2022 pursuant to a tender offer. March 2021 Refinancing In March 2021, the Company executed certain transactions (the March 2021 Refinancing Transactions) that included: • refinancing in full its previously-existing term loans, which had approximately $3,295.5 million of principal outstanding immediately before refinancing (the Existing Term Loans), with the proceeds from: (i) a new $2,000.0 million term loan (the Term Loan Facility) and (ii) $1,295.0 million of newly issued 6.125% Senior Secured Notes due 2029 (collectively, the Term Loan Refinancing); • extending the maturity of approximately $675.3 million of existing revolving commitments under the Revolving Credit Facility to March 2026; and • making certain other modifications to the credit agreement that was in effect immediately prior to the March 2021 Refinancing Transactions (the Prior Credit Agreement). The changes to the Credit Facilities and the Prior Credit Agreement were effected pursuant to an amendment and restatement agreement entered into by the Company in March 2021 (the Restatement Agreement), which amended and restated the Prior Credit Agreement (as amended and restated by the Restatement Agreement, the Credit Agreement), among Endo International plc, certain of its subsidiaries, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, issuing bank and swingline lender. The $2,000.0 million portion of the Term Loan Refinancing associated with the new term loan was accounted for as a debt modification, while the $1,295.0 million portion associated with the new notes issued was accounted for as an extinguishment. During the first quarter of 2021, in connection with the Term Loan Refinancing, $7.8 million of deferred and unamortized costs associated with the Existing Term Loans, representing the portion associated with the extinguishment, was charged to expense and is included in the Loss on extinguishment of debt line item in the Consolidated Statements of Operations. The Company also incurred an additional $56.7 million of new costs and fees, of which: (i) $29.2 million and $17.6 million were initially deferred to be amortized as interest expense over the terms of the Term Loan Facility and the newly issued 6.125% Senior Secured Notes due 2029, respectively; (ii) $6.0 million was considered debt extinguishment costs and was charged to expense in the first quarter of 2021 and is included in the Loss on extinguishment of debt line item in the Consolidated Statements of Operations; and (iii) $3.9 million was considered debt modification costs and was charged to expense in the first quarter of 2021 and is included in the Selling, general and administrative expense line item in the Consolidated Statements of Operations. The deferred amounts were being amortized as interest expense until the initiation of our bankruptcy proceedings during the third quarter of 2022, at which time the remaining unamortized costs were expensed as Reorganization items, net in the Consolidated Statements of Operations. During the first quarter of 2021, the Company also incurred $2.1 million of new costs and fees associated with the extension of the Revolving Credit Facility, which have been deferred and are being amortized as interest expense over the new term of the Revolving Credit Facility. October 2021 Revolving Credit Facility Repayment and January 2022 Senior Notes Repayments In October 2021, commitments under the Revolving Credit Facility of approximately $76.0 million matured, thereby reducing the remaining commitments outstanding under the Revolving Credit Facility. This maturity, which reduced the remaining credit available under the Revolving Credit Facility, occurred because the 7.25% Senior Notes due 2022 and the 5.75% Senior Notes due 2022 were not refinanced or repaid in full prior to the date that was 91 days prior to their January 15, 2022 maturity dates. As a result of this maturity, the Company repaid approximately $22.8 million of borrowings in October 2021, representing the amount that had been borrowed pursuant to these matured commitments. The 7.25% Senior Notes due 2022 and the 5.75% Senior Notes due 2022 were repaid in January 2022. Maturities As noted above, the initiation of our bankruptcy proceedings constituted an event of default that accelerated our obligations under substantially all of our then-outstanding debt instruments. The following table presents, as of December 31, 2022, for each of the five fiscal years subsequent to December 31, 2022, the stated maturities on our long-term debt that would have been applicable if not for such acceleration (in thousands): Maturities (1) 2023 $ 82,563 2024 (2) $ 394,600 2025 $ 41,578 2026 (2) $ 222,600 2027 $ 2,976,069 __________ (1) The terms of the Credit Agreement provide that certain amounts borrowed pursuant to the Credit Facilities could mature prior to their scheduled maturity date if certain of our senior notes are not refinanced or repaid prior to the date that is 91 days prior to the respective stated maturity dates thereof. The amounts in this maturities table do not reflect any potential early repayments or refinancings. (2) Based on the Company’s borrowings under the Revolving Credit Facility that were outstanding at December 31, 2022, $74.6 million would have matured in 2024, with the remainder maturing in 2026. As discussed above, as a result of the Chapter 11 Cases, since the Petition Date, we have not made, and we are not currently making, any scheduled principal or interest payments on the Credit Facilities or our various senior notes and senior secured notes. Therefore, the timing and amount of any future principal and interest payments is uncertain. The table above excludes $10.0 million of principal outstanding on our Term Loan Facility that, pursuant to the terms of the Credit Agreement, matured on or before December 31, 2022 but has not yet been paid as a result of the Chapter 11 Cases. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16. COMMITMENTS AND CONTINGENCIES Manufacturing, Supply and Other Service Agreements Our subsidiaries contract with various third-party manufacturers, suppliers and service providers to provide raw materials used in our subsidiaries’ products and semi-finished and finished goods, as well as certain packaging, labeling services, customer service support, warehouse and distribution services. If, for any reason, we are unable to obtain sufficient quantities of any of the finished goods or raw materials or components required for our products or services needed to conduct our business, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition to the manufacturing and supply agreements described above, we have agreements with various companies for clinical development and certain other services. Although we have no reason to believe that the parties to these agreements will not meet their obligations, failure by any of these third parties to honor their contractual obligations may have a material adverse effect on our business, financial condition, results of operations and cash flows. U.S. Government Agreement In November 2021, our PSP LLC subsidiary entered into a cooperative agreement with the U.S. government to expand our Sterile Injectables segment’s fill-finish manufacturing production capacity and capabilities at our Rochester, Michigan plant to support the U.S. government’s national defense efforts regarding production of critical medicines advancing pandemic preparation (the U.S. Government Agreement). The U.S. Government Agreement is part of the U.S. government’s efforts, authorized under the Defense Production Act, to address potential vulnerabilities in critical product supply chains and strengthen the advancement of domestic manufacturing capabilities critical to the national defense, including essential medicines production. Under the terms of the U.S. Government Agreement, our Rochester facility will establish new sterile fill-finish manufacturing assets capable of processing liquid or lyophilized products requiring Biosafety Level (BSL) 2 containment in order to establish and sustain BSL 2 sterile fill-finish production capacity to create and maintain industrial base capabilities for the national defense. Certain qualifying costs are eligible for reimbursement by the U.S. government under a cost share arrangement, generally within 30 days of us submitting requests for reimbursement. The Company must generally incur the costs before subsequently seeking reimbursement of qualifying costs from the U.S. government. Amounts reimbursed are subject to audit and may be recaptured by the U.S. government in certain circumstances. Construction is currently in progress. During the year ended December 31, 2022, we incurred approximately $39.0 million of costs associated with the U.S. Government Agreement. Additional information about such costs is included below: • Approximately $34.9 million has been capitalized and recorded as Property, plant and equipment, net in our Consolidated Balance Sheets as of December 31, 2022. We have also recorded deferred income of approximately $26.5 million, representing the reimbursable portion of the costs incurred, which is included in Other liabilities in our Consolidated Balance Sheets as of December 31, 2022. • Approximately $1.0 million has been charged to expense during the year ended December 31, 2022, with the majority of such expense included within Selling, general and administrative expenses and Cost of revenues in our Consolidated Statements of Operations. This amount is net of approximately $3.1 million, representing the reimbursable portion of costs incurred. Amounts included in our Consolidated Financial Statements as of and for the year ended December 31, 2021 were not material. We currently estimate that between approximately one-quarter and one-third of our expected capital expenditures related to this agreement, as well as the corresponding reimbursements from the U.S. government, have occurred through December 31, 2022. We currently anticipate that facility readiness will occur in 2025, but there can be no assurance this will occur. The new sterile fill-finish manufacturing assets will be available to support our future commercial operations, subject to the U.S. government’s conditional priority access and certain preferred pricing obligations under the U.S. Government Agreement. The U.S. government will have conditional priority access to the facility for an initial period of ten years from the completion of the expansion project, which could be extended in the future after good faith negotiation and on commercially reasonable terms and conditions. Specifically, the U.S. government (or a third-party U.S. government supporting entity) will have priority access to utilize the new sterile fill-finish manufacturing assets for the production of a medical countermeasure if a determination is made in writing by the Secretary of HHS that the priority access is needed to respond to a disease, health condition or other threat to the public health that causes a public health emergency or a credible risk of such an emergency. The U.S. Government Agreement also contemplates the establishment of separate supply agreements to be negotiated in good faith on mutually-acceptable commercially reasonable terms. Refer to Note 3. Summary of Significant Accounting Policies for additional information about our accounting for the U.S. Government Agreement. Legal Proceedings and Investigations We and certain of our subsidiaries are involved in various claims, legal proceedings and internal and governmental investigations (collectively, proceedings) arising from time to time, including, among others, those relating to product liability, intellectual property, regulatory compliance, consumer protection, tax and commercial matters. An adverse outcome in certain proceedings described herein could have a material adverse effect on our business, financial condition, results of operations and cash flows. We are also subject to a number of matters that are not being disclosed herein because, in the opinion of our management, these matters are immaterial both individually and in the aggregate with respect to our financial position, results of operations and cash flows. As further discussed in Note 2. Bankruptcy Proceedings, on the Petition Date, the Debtors filed voluntary petitions for relief under the Bankruptcy Code. Under the Bankruptcy Code, third-party actions to collect pre-petition indebtedness owed by the Debtors, as well as most litigation pending against the Debtors as of the Petition Date, are generally subject to an automatic stay. However, under the Bankruptcy Code, certain legal proceedings, such as those involving the assertion of a governmental entity’s police or regulatory powers, may not be subject to the automatic stay and may continue unless otherwise ordered by the Bankruptcy Court. As a result, some proceedings may continue (or certain parties may attempt to argue that such proceedings should continue) notwithstanding the automatic stay. Where no stay is in place or expected, and in the event the stays in place were to be lifted, we intend to vigorously prosecute or defend our position as appropriate. We cannot predict the outcome of any proceeding, and there can be no assurance that we will be successful or obtain any requested relief. We believe that certain settlements and judgments, as well as legal defense costs, relating to certain product liability or other matters are or may be covered in whole or in part under our insurance policies with a number of insurance carriers. In certain circumstances, insurance carriers reserve their rights to contest or deny coverage. We intend to contest vigorously any disputes with our insurance carriers and to enforce our rights under the terms of our insurance policies. Notwithstanding the foregoing, amounts recovered under our insurance policies could be materially less than stated coverage limits and may not be adequate to cover damages, other relief and/or costs relating to claims. In addition, there is no guarantee that insurers will pay claims in the amounts we expect or that coverage will otherwise be available. Even where claims are submitted to insurance carriers for defense and indemnity, there can be no assurance that the claims will be covered by insurance or that the indemnitors or insurers will remain financially viable or will not challenge our right to reimbursement in whole or in part. Accordingly, we will record receivables with respect to amounts due under these policies only when the realization of the potential claim for recovery is considered probable. We may not have and may be unable to obtain or maintain insurance on acceptable terms or with adequate coverage against potential liabilities or other losses, including costs, judgments, settlements and other liabilities incurred in connection with current or future legal proceedings, regardless of the success or failure of the claim. For example, we do not have insurance sufficient to satisfy all of the opioid claims that have been made against us. We also generally no longer have product liability insurance to cover claims in connection with the mesh-related litigation described herein. Additionally, we may be limited by the surviving insurance policies of acquired entities, which may not be adequate to cover potential liabilities or other losses. The failure to generate sufficient cash flow or to obtain other financing could affect our ability to pay amounts due under those liabilities not covered by insurance. Additionally, the nature of our business, the legal proceedings to which we are exposed and any losses we suffer may increase the cost of insurance, which could impact our decisions regarding our insurance programs. As of December 31, 2022, our accrual for loss contingencies totaled $820.8 million, the most significant components of which relate to: (i) various opioid-related matters as further described herein and (ii) product liability and related matters associated with transvaginal surgical mesh products, which we have not sold since March 2016. Although we believe there is a possibility that a loss in excess of the amount recognized exists, we are unable to estimate the possible loss or range of loss in excess of the amount recognized at this time. As of December 31, 2022, our entire accrual for loss contingencies is classified as Liabilities subject to compromise in the Consolidated Balance Sheets. As a result of the automatic stay under the Bankruptcy Code and the uncertain treatment of these liabilities pursuant to a chapter 11 plan or otherwise, the timing and amount of payment, if any, related to the amounts accrued for loss contingencies is uncertain. As part of the Chapter 11 Cases, persons and entities believing that they have claims or causes of action against the Debtors, including litigants, may file proofs of claim evidencing such claims. While no bar date (deadline) for holders of claims to file proofs of claim has yet been set, the Debtors have filed a motion seeking Bankruptcy Court approval to establish such deadline. The motion has been adjourned to an undetermined date, and as a result, the proposed deadlines set forth in the motion are expected to be extended. At the Debtors’ request, the Bankruptcy Court has appointed a future claims representative (FCR) in the Chapter 11 Cases. As further described in the applicable bankruptcy court filings, the FCR represents the rights of individuals who may in the future assert one or more claims against the Debtors or a successor of the Debtors’ businesses for personal injury based on the Debtors’ opioid, transvaginal mesh or ranitidine products, but who could not assert such claims in the Chapter 11 Cases because, among other reasons, the claimant was unaware of the alleged injury, had a latent manifestation of the alleged injury or was otherwise unable to assert or incapable of asserting the claims based on the alleged injury. Vaginal Mesh Matters Since 2008, we and certain of our subsidiaries, including American Medical Systems Holdings, Inc. (AMS) (which subsequently converted to Astora Women’s Health Holdings, LLC and merged into Astora Women’s Health LLC (Astora)), have been named as defendants in multiple lawsuits in various state and federal courts in the U.S., and in the United Kingdom, Australia and other countries, alleging personal injury resulting from the use of transvaginal surgical mesh products designed to treat POP and SUI. We have not sold such products since March 2016. Plaintiffs claim a variety of personal injuries, including chronic pain, incontinence, inability to control bowel function and permanent deformities, and seek compensatory and punitive damages, where available. At various times from June 2013 through the Petition Date, the Company and/or certain of its subsidiaries entered into various Master Settlement Agreements (MSAs) and other agreements intended to resolve approximately 71,000 filed and unfiled U.S. mesh claims. These MSAs and other agreements were solely by way of compromise and settlement and were not an admission of liability or fault by us or any of our subsidiaries. All MSAs have been subject to a process that includes guidelines and procedures for administering the settlements and the release of funds. In certain cases, the MSAs have provided for the creation of QSFs into which settlement funds are deposited, established participation requirements and allowed for a reduction of the total settlement payment in the event participation thresholds are not met. In certain circumstances, participation requirements or other conditions for payment were not satisfied prior to the Petition Date. Funds deposited in QSFs are considered restricted cash and/or restricted cash equivalents. Distribution of funds to any individual claimant is conditioned upon the receipt of documentation substantiating product use, the dismissal of any lawsuit and the release of the claim as to us and all affiliates. Prior to receiving funds, an individual claimant must represent and warrant that liens, assignment rights or other claims identified in the claims administration process have been or will be satisfied by the individual claimant. Confidentiality provisions apply to the settlement funds, amounts allocated to individual claimants and other terms of the agreements. The following table presents the changes in the mesh-related QSFs and liability accrual balances during the year ended December 31, 2022 (in thousands): Mesh Qualified Settlement Funds Mesh Liability Accrual Balance as of December 31, 2021 $ 78,402 $ 258,137 Cash received for reversionary interests, net of cash contributions to Qualified Settlement Funds (367) — Cash distributions to settle disputes from Qualified Settlement Funds (28,159) (28,159) Other cash distributions to settle disputes — (6,499) Other (1) 463 (507) Balance as of December 31, 2022 (2) $ 50,339 $ 222,972 __________ (1) Amounts deposited in the QSFs earn interest from time to time that is reflected in the table above as an increase to the QSF and Mesh Liability Accrual balances. Subject to any restrictions on making payments as a result of the Chapter 11 Cases, such interest is generally used to pay administrative costs of the funds and any interest remaining after all claims have been paid will generally be distributed to the claimants who participated in that settlement. Also included within this line are foreign currency adjustments for settlements not denominated in U.S. dollars. (2) As of December 31, 2022, this balance is classified as Liabilities subject to compromise in the Consolidated Balance Sheets. Charges related to vaginal mesh liability and associated legal fees and other expenses for all periods presented are reported in Discontinued operations, net of tax in our Consolidated Statements of Operations. As of December 31, 2022, the Company has made total cumulative mesh liability payments of approximately $3.6 billion, $50.3 million of which remains in the QSFs as of December 31, 2022. In light of the filing of petitions for relief under the Bankruptcy Code, we do not expect to make new payments under previously executed mesh settlement agreements within the next 12 months. As funds are disbursed out of the QSFs from time to time, the liability accrual will be reduced accordingly with a corresponding reduction to restricted cash and cash equivalents. As of the Petition Date, mesh personal injury claims against AMS and Astora became subject to the automatic stay applicable under the Bankruptcy Code, and stays on mesh litigation have been obtained in the United Kingdom and Australia. In certain other countries where no stay is in place, and in the event the stays in place were to be lifted, we will continue to vigorously defend any unresolved claims and to explore other options as appropriate in our best interests. We were contacted in October 2012 regarding a civil investigation initiated by various U.S. state attorneys general into mesh products, including transvaginal surgical mesh products designed to treat POP and SUI. In November 2013, we received a subpoena relating to this investigation from the state of California, and we subsequently received additional subpoenas from California and other states. We are cooperating with the investigations. Similar matters may be brought by others or the foregoing matters may be expanded. We are unable to predict the outcome of these matters or to estimate the possible range of any additional losses that could be incurred. Although the Company believes it has appropriately estimated the probable total amount of loss associated with all mesh-related matters as of the date of this report, it is reasonably possible that adjustments to our overall liability accrual may be required. This could have a material adverse effect on our business, financial condition, results of operations and cash flows. Opioid-Related Matters Since 2014, multiple U.S. states as well as other governmental persons or entities and private plaintiffs in the U.S. and Canada have filed suit against us and/or certain of our subsidiaries, including EHSI, EPI, PPI, PPCI, Endo Generics Holdings, Inc. (EGHI), Vintage Pharmaceuticals, LLC, Generics Bidco I, LLC, DAVA Pharmaceuticals, LLC, PSP LLC and in Canada, Paladin and EVL, as well as various other manufacturers, distributors, pharmacies and/or others, asserting claims relating to the defendants’ alleged sales, marketing and/or distribution practices with respect to prescription opioid medications, including certain of our products. As of February 27, 2023, pending cases in the U.S. of which we were aware include, but are not limited to, approximately 15 cases filed by or on behalf of states; approximately 2,570 cases filed by counties, cities, Native American tribes and/or other government-related persons or entities; approximately 310 cases filed by hospitals, health systems, unions, health and welfare funds or other third-party payers and approximately 220 cases filed by individuals, including but not limited to legal guardians of children born with neonatal abstinence syndrome. Certain of the U.S. cases are putative class actions. The Canadian cases include an action filed by British Columbia on behalf of a proposed class of all federal, provincial and territorial governments and agencies in Canada that paid healthcare, pharmaceutical and treatment costs related to opioids; an action filed in Alberta on behalf of a proposed class of all local or municipal governments in Canada; an action filed in Saskatchewan on behalf of a proposed class of all First Nations communities and local or municipal governments in Canada; and three additional putative class actions, filed in British Columbia, Ontario and Quebec, seeking relief on behalf of Canadian residents who were prescribed and/or consumed opioid medications. The complaints in the cases assert a variety of claims, including but not limited to statutory claims asserting violations of public nuisance, consumer protection, unfair trade practices, racketeering, Medicaid fraud and/or drug dealer liability laws and/or common law claims for public nuisance, fraud/misrepresentation, strict liability, negligence and/or unjust enrichment. The claims are generally based on alleged misrepresentations and/or omissions in connection with the sale and marketing of prescription opioid medications and/or alleged failures to take adequate steps to identify and report suspicious orders and to prevent abuse and diversion. Plaintiffs seek various remedies including, without limitation, declaratory and/or injunctive relief; compensatory, punitive and/or treble damages; restitution, disgorgement, civil penalties, abatement, attorneys’ fees, costs and/or other relief. The damages sought exceed our applicable insurance. Many of the U.S. cases have been coordinated in a federal multidistrict litigation (MDL) pending in the U.S. District Court for the Northern District of Ohio; however, in April 2022, the Judicial Panel on Multidistrict Litigation issued an order suggesting that, based on the progress of the MDL, it would no longer transfer new cases filed in or removed to federal court to the MDL. Other cases are pending in various federal or state courts. Following the Petition Date, litigation activity against the Company and its subsidiaries ceased in nearly all pending cases as a result of the automatic stay and a November 2022 preliminary injunction order issued by the Bankruptcy Court. A similar cessation of litigation activity is in place in Canada. In June 2020, the New York State Department of Financial Services (DFS) commenced an administrative action against the Company, EPI, EHSI, PPI and PPCI alleging violations of the New York Insurance Law and New York Financial Services Law. In July 2021, DFS filed an amended statement of charges. The amended statement of charges alleges that fraudulent or otherwise wrongful conduct in the marketing, sale and/or distribution of opioid medications caused false claims to be submitted to insurers. DFS seeks civil penalties for each allegedly fraudulent prescription as well as injunctive relief. In July 2021, EPI, EHSI, PPI and PPCI, among others, filed a petition in New York state court seeking to prohibit DFS from proceeding with its administrative enforcement action. In December 2021, DFS filed a motion to dismiss that petition, which the court granted in June 2022. The Company’s subsidiaries, among others, appealed that ruling in July 2022. Both the appeal and the DFS administrative matter were stayed following commencement of the Chapter 11 Cases. Between 2019 and the Petition Date, the Company and/or certain of its subsidiaries executed a number of settlement agreements to resolve governmental opioid claims brought by certain states, counties, cities and/or other governmental entities. Certain related developments include but are not limited to the following: • In September 2019, EPI, EHSI, PPI and PPCI executed a settlement agreement with two Ohio counties providing for payments totaling $10 million and up to $1 million of VASOSTRICT ® and/or ADRENALIN ® . The settlement amount was paid during the third quarter of 2019. • In January 2020, EPI and PPI executed a settlement agreement with the state of Oklahoma providing for a payment of $8.75 million. The settlement amount was paid during the first quarter of 2020. • In August 2021, EPI, EHSI, nine counties in eastern Tennessee, eighteen municipalities within those counties and a minor individual executed a settlement agreement providing for a payment of $35 million. The settlement amount was paid during the third quarter of 2021. • In September 2021, Endo International plc, EPI, EHSI, PPI and PPCI executed a settlement agreement with the state of New York and two of its counties providing for a payment of $50 million. The settlement amount was paid during the third quarter of 2021. • In October 2021, EPI and EHSI executed a settlement agreement with the Alabama Attorney General’s office intended to resolve opioid-related cases and claims of the state and other Alabama governmental persons and entities in exchange for a total payment of $25 million, subject to certain participation thresholds. The settlement amount was not paid as of the Petition Date and, as a result of the Chapter 11 Cases, it is not known when or if such amount will be paid. • In December 2021, Endo International plc, EPI, EHSI, PPI and PPCI executed a settlement agreement with the Texas Attorney General’s office and four Texas counties intended to resolve opioid-related cases and claims of the state and other Texas governmental persons and entities in exchange for a total payment of $63 million, subject to certain participation thresholds. The settlement amount was deposited into a QSF during the first quarter of 2022. • In January 2022, EPI and EHSI executed a settlement agreement with the Florida Attorney General’s office intended to resolve opioid-related cases and claims of the state and other Florida governmental persons and entities in exchange for a total payment of up to $65 million, subject to certain participation thresholds. The settlement amount was deposited into a QSF during the second quarter of 2022. • In February 2022, EPI and EHSI executed a settlement agreement with the Louisiana Attorney General’s office intended to resolve opioid-related cases and claims of the state and other Louisiana governmental persons and entities in exchange for a total payment of $7.5 million, subject to certain participation thresholds. The settlement amount was not paid as of the Petition Date and, as a result of the Chapter 11 Cases, it is not known when or if such amount will be paid. • In March 2022, EPI, EHSI and PPI executed a settlement agreement with the West Virginia Attorney General’s office intended to resolve opioid-related cases and claims of the state and other West Virginia governmental persons and entities in exchange for a total payment of $26 million, subject to certain participation thresholds. The settlement amount was not paid as of the Petition Date and, as a result of the Chapter 11 Cases, it is not known when or if such amount will be paid. • In June 2022, EPI and EHSI executed a settlement agreement with the Arkansas Attorney General’s office and certain Arkansas local governments intended to resolve opioid-related cases and claims of the state and other Arkansas governmental persons and entities in exchange for a total payment of $9.75 million, subject to certain participation thresholds. With the exception of certain amounts held back pursuant to an MDL common benefit fund order, the settlement amount was paid during the third quarter of 2022. • In July 2022, EPI and EHSI executed a settlement agreement with the Mississippi Attorney General’s office intended to resolve opioid-related cases and claims of the state and other Mississippi governmental persons and entities in exchange for a total payment of $9 million, subject to certain participation thresholds. The settlement amount was not paid as of the Petition Date and, as a result of the Chapter 11 Cases, it is not known when or if such amount will be paid. • In July 2022, EPI, EHSI, PPI and PPCI executed a settlement agreement with the City and County of San Francisco providing for an initial payment of $5 million and subsequent payments of $500,000 a year over ten years. The settlement amount was not paid as of the Petition Date and, as a result of the Chapter 11 Cases, it is not known when or if such amount will be paid. While the specific terms of the agreements vary, each agreement was solely by way of compromise and settlement and was not in any way an admission of wrongdoing, fault or liability of any kind by us or any of our subsidiaries. Certain settlement agreements provided for the creation of QSFs, the repayment of some or all of the settlement amount under certain conditions and/or additional payments in the event certain conditions were met. Depending on the terms of the respective agreements, funds deposited in QSFs have been and may continue to be considered restricted cash and/or restricted cash equivalents for a period of time subsequent to the initial funding. Distribution of funds from the QSFs is conditioned upon certain criteria that vary by agreement. Certain of the settlement agreements described above provide for injunctive relief. The RSA also provides for certain voluntary injunctive terms that bind the Debtors during the course of the bankruptcy proceedings and would apply to any purchaser of our opioid business in conjunction with the bankruptcy proceedings. The Bankruptcy Court also approved certain injunctive terms in connection with its November 2022 preliminary injunction against the continued litigation of opioid actions brought by public plaintiffs. The Stalking Horse Bid provides for the establishment by the Purchaser of voluntary opioid trusts for the benefit of certain public, tribal and private opioid claimants in exchange for certain releases to be provided to (among others) the Purchaser and Endo International plc, its subsidiaries and affiliated entities and persons. In particular, under the RSA, the trusts would distribute up to a total of $550 million over ten years to eligible claimants that opt into the trust agreements by specified participation deadlines. Under the proposed public claimant opioid trust, states which previously reached settlement agreements and received payments from us may elect to participate in the trust. In doing so, those states would agree to return the amounts previously received, net of the amounts allocated to them in the trust agreement and would receive in return a release from any claim for the return of settlement funds under the applicable section of the Bankruptcy Code. The Company would have no obligation or liability with respect to the voluntary trusts, which would be funded exclusively by the Purchaser. As previously noted, the Stalking Horse Bid is subject to higher or otherwise better bids from other parties and therefore there is no certainty regarding whether the proposed sale transaction to the Purchaser, and the funding of the voluntary opioid trusts by the Purchaser, will actually occur. Although the proposed voluntary opioid trusts would be funded by the Purchaser, and not by the Company or any of its subsidiaries, we previously concluded that the proposed funding amount in the Stalking Horse Bid represented the best estimate of liability relating to the contingencies associated with various opioid claims against the Company and its subsidiaries. As such, during the third quarter of 2022, we recorded charges of approximately $419 million to adjust our aggregate opioid liability accrual to approximately $550 million based on the terms summarized above. As noted above, the Company and various key stakeholders have been engaged in mediation to attempt to resolve certain critical issues in the Chapter 11 Cases, including objections relating to the Sale. On March 3, 2023, the Debtors announced that, as a result of the mediation process, the Ad Hoc First Lien Group (and Stalking Horse Bidder) had reached certain resolutions in principle with both the unsecured creditors’ committee and opioid claimants’ committee appointed in the Chapter 11 Cases and certain ad hoc groups of debtholders. These resolutions, which remain subject to definitive documentation, are supported by the Debtors. The resolutions include, among other things, a $34 million increase to the funding amounts for the proposed voluntary private opioid trust. Accordingly, during the fourth quarter of 2022, we recorded additional charges of approximately $34 million to increase our aggregate opioid liability accrual to approximately $584 million. The Company believes this modified proposed funding amount represents the best estimate of liability relating to the contingencies associated with various opioid claims against the Company and its subsidiaries. The mediation remains ongoing and could result in additional terms or transactions in the future that may result in further adjustments to our estimated aggregate opioid liability accrual. To the extent unresolved, and in the event stays in place were to be lifted, we will continue to vigorously defend the foregoing matters and to explore other options as appropriate in our best interests, which may include entering into settlement negotiations an |
OTHER COMPREHENSIVE (LOSS) INCO
OTHER COMPREHENSIVE (LOSS) INCOME | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE (LOSS) INCOME | NOTE 17. OTHER COMPREHENSIVE (LOSS) INCOME During the years ended December 31, 2022, 2021 and 2020, there were no tax effects allocated to any component of Other comprehensive (loss) income and there were no reclassifications out of Accumulated other comprehensive loss. Substantially all of the Company’s Accumulated other comprehensive loss balances at December 31, 2022 and December 31, 2021 consist of Foreign currency translation loss. |
SHAREHOLDERS' DEFICIT
SHAREHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
SHAREHOLDERS' DEFICIT | NOTE 18. SHAREHOLDERS’ DEFICIT The Company has issued 4,000,000 euro deferred shares of $0.01 each at par. The euro deferred shares are held by nominees in order to satisfy an Irish legislative requirement to maintain a minimum level of issued share capital denominated in euro and to have at least seven registered shareholders. The euro deferred shares carry no voting rights and are not entitled to receive any dividend or distribution. Share Repurchase Program Pursuant to Article 11 of the Company’s Articles of Association, the Company has broad shareholder authority to conduct ordinary share repurchases by way of redemptions. The Company’s authority to repurchase ordinary shares is subject to legal limitations, including restrictions imposed by the Bankruptcy Code and related rules and guidelines during the pendency of the Chapter 11 Cases, and the existence of sufficient distributable reserves. For example, the Companies Act requires Irish companies to have distributable reserves equal to or greater than the amount of any proposed ordinary share repurchase amount. In addition, our existing debt instruments restrict or prevent us from conducting ordinary share repurchases. Agreements governing any future indebtedness, in addition to those governing our current indebtedness, may not permit us to conduct ordinary share repurchases. Unless we are able to generate sufficient distributable reserves or create distributable reserves by reducing our share premium account, we will not be able to repurchase our ordinary shares. As permitted by Irish Law and the Company’s Articles of Association, any ordinary shares redeemed shall be cancelled upon redemption. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 19. SHARE-BASED COMPENSATION Stock Incentive Plans In June 2015, the Company’s shareholders approved the 2015 Stock Incentive Plan (the 2015 Plan), which has subsequently been amended, as approved by the Company’s shareholders, on multiple occasions. Under the 2015 Plan, stock options (including incentive stock options), stock appreciation rights, restricted stock awards, performance awards and other share- or cash-based awards may be issued at the discretion of the Compensation & Human Capital Committee of the Board from time to time. No ordinary shares are to be granted under previously approved plans, including the Company’s 2000, 2004, 2007, 2010 and Assumed Stock Incentive Plans. Any awards previously granted and outstanding under these prior plans remain subject to the terms of those prior plans. At December 31, 2022, approximately 11.4 million ordinary shares were reserved for future grants under the 2015 Plan. As of December 31, 2022, stock options, restricted stock awards, PSUs, RSUs, long-term cash incentive awards and certain other cash-based awards have been granted under the stock incentive plans. In February 2023, the Company filed post-effective amendments to its Form S-8 registration statements with respect to the 2015 Plan in order to deregister all remaining unissued securities. Generally, the grant-date fair value of each award is recognized as expense over the requisite service period. However, expense recognition differs in the case of certain PSUs where the ultimate payout is performance-based. For these awards, at each reporting period, the Company generally estimates the ultimate payout and adjusts the cumulative expense based on its estimate and the percent of the requisite service period that has elapsed. Presented below are the components of total share-based compensation as recorded in our Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 (in thousands). 2022 2021 2020 Selling, general and administrative expenses $ 16,019 $ 23,400 $ 32,368 Research and development expenses 1,059 1,378 2,504 Cost of revenues 1,136 5,268 6,485 Total share-based compensation expense $ 18,214 $ 30,046 $ 41,357 As of December 31, 2022, the total remaining unrecognized compensation cost related to non-vested share-based compensation awards for which a grant date has been established as of December 31, 2022 amounted to $10.1 million. Stock Options From time to time, the Company grants stock options to its employees as part of their annual share compensation awards and, in certain circumstances, on an ad hoc basis or upon their commencement of service with the Company. Although we have not granted employee stock options since 2018, previous grants have generally vested ratably, in equal amounts, over a three We estimate the fair value of stock option grants at the date of grant using the Black-Scholes option-pricing model. This model utilizes assumptions related to volatility, the risk-free interest rate, the dividend yield (which is assumed to be zero as the Company has not paid cash dividends to date and does not currently expect to pay cash dividends) and the expected term of the option. Expected volatilities utilized in the model are based mainly on the historical volatility of the Company’s share price over a period commensurate with the expected life of the share option as well as other factors. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant. We estimate the expected term of options granted based on our historical experience with our employees’ exercise of stock options and other factors. A summary of the activity for each of the years ended December 31, 2022, 2021 and 2020 is presented below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (1) Outstanding as of December 31, 2019 7,280,539 $ 18.93 Forfeited (16,953) $ 11.81 Expired (347,000) $ 35.56 Outstanding as of December 31, 2020 6,916,586 $ 18.11 Exercised (82,331) $ 7.55 Forfeited (11,887) $ 13.19 Expired (438,454) $ 40.76 Outstanding as of December 31, 2021 6,383,914 $ 16.70 Expired (1,304,602) $ 20.04 Outstanding as of December 31, 2022 (2) 5,079,312 $ 15.84 2.01 $ — Vested and expected to vest as of December 31, 2022 (2) 5,079,312 $ 15.84 2.01 $ — Exercisable as of December 31, 2022 (2) 5,079,312 $ 15.84 2.01 $ — __________ (1) The intrinsic value of a stock option is the excess, if any, of the closing price of the Company’s ordinary shares on the last trading day of the fiscal year over the exercise price. The aggregate intrinsic values presented in the table above represent sum of the intrinsic values of all corresponding stock options that are “in-the-money,” if any. (2) On March 3, 2023, the Bankruptcy Court entered orders authorizing the Company to reject outstanding stock option agreements, restricted stock award agreements and performance award agreements. The range of exercise prices for the above stock options outstanding at December 31, 2022 is from $7.55 to $86.54. The total intrinsic value of options exercised during the year ended December 31, 2021 was $0.1 million. There were no material tax benefits from stock option exercises realized during any of the periods presented above. Restricted Stock Units and Performance Share Units From time to time, the Company grants RSUs and PSUs to its employees as part of their annual share compensation awards and, in certain circumstances, on an ad hoc basis or upon their commencement of service with the Company. As of December 31, 2022: (i) unvested RSUs were subject to three-year vesting periods, with ratable vesting on the first, second and third anniversaries of the respective grant dates, and (ii) unvested PSUs were subject to three-year service periods, after which the awards would vest in full (conditioned upon the achievement of performance and/or market conditions established by the Compensation & Human Capital Committee of the Board and certain continued employment conditions), with the actual number of shares awarded adjusted to between zero and 200% of the target award amount based upon the level of achievement of the performance criteria described below. No PSUs were awarded in 2022. PSUs awarded in 2021 and 2020 were based upon two discrete measures: relative total shareholder return (TSR) and an adjusted free cash flow performance metric (FCF), each accounting for 50% of the PSUs upon issuance, with TSR performance being measured against the three-year TSR of a custom index of companies and FCF performance being measured against a target covering a three-year performance period. TSR is considered a market condition under applicable authoritative guidance, while FCF is considered performance condition. RSUs are valued based on the closing price of Endo’s ordinary shares on the date of grant. PSUs with TSR conditions are valued using a Monte-Carlo variant valuation model, while those with FCF conditions are valued taking into consideration the probability of achieving the specified performance goal. The Monte-Carlo variant valuation model used considers a variety of potential future share prices for Endo as well as our peer companies in a selected market index. A summary of our non-vested RSUs and PSUs for the years ended December 31, 2022, 2021 and 2020 is presented below: Number of Shares Aggregate Intrinsic Value (1) Non-vested as of December 31, 2019 12,916,289 Granted 3,761,648 Forfeited (824,299) Vested (5,513,359) Non-vested as of December 31, 2020 10,340,279 Granted 4,483,385 Forfeited (1,302,292) Vested (5,380,262) Non-vested as of December 31, 2021 8,141,110 Granted 280,373 Forfeited (1,116,960) Vested (2,324,696) Non-vested as of December 31, 2022 (2) 4,979,827 $ 348,588 Vested and expected to vest as of December 31, 2022 (2) 4,751,674 $ 332,617 __________ (1) The aggregate intrinsic values presented in the table above were calculated by multiplying the closing price of the Company’s ordinary shares on the last trading day of the fiscal year by the corresponding quantities above. (2) On March 3, 2023, the Bankruptcy Court entered orders authorizing the Company to reject outstanding stock option agreements, restricted stock award agreements and performance award agreements. In connection with the rejection of these agreements, the Company currently expects to recognize any remaining unrecognized compensation cost associated with these agreements during the first quarter of 2023. As of December 31, 2022, the weighted average remaining requisite service period of the units presented in the table above was 0.8 years and the corresponding total remaining unrecognized compensation cost amounted to $3.5 million in the case of RSUs and $6.6 million in the case of PSUs. The weighted average grant-date fair value of the units granted during the years ended December 31, 2022, 2021 and 2020 was $3.21, $7.39 and $5.54 per unit, respectively. |
OTHER INCOME, NET
OTHER INCOME, NET | 12 Months Ended |
Dec. 31, 2022 | |
Component of Operating Income [Abstract] | |
OTHER INCOME, NET | NOTE 20. OTHER INCOME, NET The components of Other income, net for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands): 2022 2021 2020 Net gain on sale of business and other assets (1) $ (26,183) $ (4,516) $ (16,353) Foreign currency (gain) loss, net (2) (2,087) 1,253 2,466 Net loss (gain) from our investments in the equity of other companies (3) 378 453 (2,160) Other miscellaneous, net (4) (6,162) (16,964) (5,063) Other income, net $ (34,054) $ (19,774) $ (21,110) __________ (1) Amounts primarily relate to the sales of certain intellectual property rights and certain other assets including, in 2022 and 2021, assets associated with the sale transactions that are further discussed in Note 4. Discontinued Operations and Asset Sales. (2) Amounts relate to the remeasurement of the Company’s foreign currency denominated assets and liabilities. (3) Amounts relate to the income statement impacts of our investments in the equity of other companies, including investments accounted for under the equity method. (4) Amounts in 2021 include gains of $15.5 million associated with the termination of certain contracts. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 21. INCOME TAXES Loss from Continuing Operations before Income Tax Our operations are conducted through our various subsidiaries in numerous jurisdictions throughout the world. We have provided for income taxes based upon the tax laws and rates in the jurisdictions in which our operations are conducted. The components of our Loss from continuing operations before income tax by geography for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands): 2022 2021 2020 U.S. $ (2,429,315) $ 4,792,852 $ (375,262) International (458,787) (5,339,455) 348,744 Total loss from continuing operations before income tax $ (2,888,102) $ (546,603) $ (26,518) Income tax from continuing operations consists of the following for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Current: U.S. Federal $ 21,057 $ 13,649 $ (108,866) U.S. State 1,731 1,491 (434) International 6,031 10,495 (1,124) Total current income tax $ 28,819 $ 25,635 $ (110,424) Deferred: U.S. Federal $ (622) $ 118 $ (143,411) U.S. State 1,065 (564) (11,773) International (7,746) (2,711) (8,374) Total deferred income tax $ (7,303) $ (3,157) $ (163,558) Total income tax $ 21,516 $ 22,478 $ (273,982) Tax Rate A reconciliation of income tax from continuing operations at the U.S. federal statutory income tax rate to the total income tax provision from continuing operations for the years ended December 31, 2022, 2021 and 2020 is as follows (in thousands): 2022 2021 2020 Notional U.S. federal income tax provision at the statutory rate $ (606,502) $ (114,787) $ (5,569) State income tax, net of federal benefit (9,517) 6,750 (17,311) U.S. tax reform impact — — (129,599) Uncertain tax positions 21,930 42,415 35,941 Residual tax on non-U.S. net earnings (32,257) (181,739) (83,550) Non-deductible goodwill impairment 385,459 76,230 7,490 Change in valuation allowance 306,497 495,565 (97,752) Base erosion minimum tax — — 77,438 Non-deductible expenses 47,221 39,791 8,875 Executive compensation limitation 5,580 6,215 5,857 Equity based compensation 3,247 2,695 6,495 Financing activities (1) 73,629 (287,012) (33,217) Investment activities (2) (178,018) (68,943) (44,964) Other 4,247 5,298 (4,116) Income tax $ 21,516 $ 22,478 $ (273,982) __________ (1) The amount in 2022 primarily relates to non-deductible foreign currency adjustments on intercompany debt. The amount in 2021 primarily relates to a net tax benefit of approximately $1.2 billion related to non-taxable intercompany cancellation of indebtedness income, which was partially offset by a net tax expense of approximately $465 million related to non-deductible bad debt expense and a net tax expense of approximately $427 million related to non-deductible intercompany interest expense. The net tax benefit is fully offset by an increase to the valuation allowance. (2) The amounts in 2022 and 2021 primarily relate to tax deductible losses associated with the investment in consolidated subsidiaries. The tax benefit is fully offset by an increase to the valuation allowance. The change in income tax expense in 2022 compared to the 2021 income tax expense primarily relates to an increase in accrued interest on uncertain tax positions and changes in the geographic mix of pre-tax earnings. The change in income tax expense in 2021 compared to the 2020 income tax benefit primarily relates to the 2020 tax benefit for the CARES Act as discussed in more detail below and changes in deferred tax liabilities following the BioSpecifics acquisition during 2020. On March 27, 2020, the CARES Act was enacted by the U.S. government in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019 and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. During the year ended December 31, 2020, the Company recorded a discrete tax benefit in continuing operations of $129.6 million as a result of the change in the NOL carryback period. Deferred Tax Assets and Liabilities Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The significant components of the net deferred income tax liability shown on the balance sheets as of December 31, 2022 and 2021 are as follows (in thousands): December 31, 2022 December 31, 2021 Deferred tax assets: Accrued expenses and reserves $ 220,415 $ 144,573 Deferred interest deduction 421,552 347,501 Fixed assets, intangible assets and deferred amortization 560,257 512,584 Loss on capital assets 23,511 64,503 Net operating loss carryforward 9,214,688 9,258,122 Other 49,943 50,694 Research and development and other tax credit carryforwards 7,777 8,254 Total gross deferred income tax assets $ 10,498,143 $ 10,386,231 Deferred tax liabilities: Other $ (3,156) $ (8,586) Investments (107) (124,311) Intercompany notes (72,286) (104,530) Total gross deferred income tax liabilities $ (75,549) $ (237,427) Valuation allowance (10,436,419) (10,169,294) Net deferred income tax liability $ (13,825) $ (20,490) As of December 31, 2022, the Company had significant deferred tax assets for tax credits, net operating and capital loss carryforwards, net of unrecognized tax positions, as presented below (in thousands): Jurisdiction Amount Begin to Expire Ireland $ 79,617 Indefinite Luxembourg $ 8,934,046 2034 U.S.: Federal-ordinary losses $ 19,105 2037 Federal-capital losses $ 13,699 2023 Federal-tax credits $ 14,081 2025 State-ordinary losses $ 227,587 2023 State-capital losses $ 11,871 2023 State-tax credits $ 3,256 2037 A valuation allowance is required when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The Company assesses the available positive and negative evidence to estimate whether the existing deferred tax assets will be realized. The Company has recorded a valuation allowance against certain jurisdictional NOL carryforwards and other tax attributes. As of December 31, 2022 and 2021, the total valuation allowance was $10,436.4 million and $10,169.3 million, respectively. During the years ended December 31, 2022 and 2021, the Company increased its valuation allowance by $267.1 million and $500.7 million, respectively, which was primarily driven by taxable losses in Luxembourg related to investments in consolidated subsidiaries. As previously disclosed, the Company concluded that there was substantial doubt about its ability to continue as a going concern within one year after the date of issuance of the Condensed Consolidated Financial Statements included in the Second-Quarter 2022 Form 10-Q. The Company considered this in determining that certain net deferred tax assets were no longer more likely than not realizable. As a result, an immaterial increase in valuation allowance on the Company’s net deferred tax assets was recorded in various jurisdictions during the second quarter of 2022. As of December 31, 2022, the Company had the following significant valuation allowances (in thousands): Jurisdiction December 31, 2022 Ireland $ 289,500 Luxembourg $ 8,862,060 U.S. $ 1,278,026 The Company maintains a full valuation allowance against the net deferred tax assets in the U.S., Luxembourg, Ireland and certain other foreign tax jurisdictions as of December 31, 2022. It is possible that within the next 12 months there may be sufficient positive evidence to release a portion or all of the valuation allowance. Release of these valuation allowances would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings. The timing and amount of the potential valuation allowance release are subject to significant management judgment and prospective earnings. We have provided for any applicable income taxes associated with current year distributions, as well as any earnings that are expected to be distributed in the future, in the calculation of the income tax provision. As a result of the bankruptcy filing, we have reassessed our historical indefinite reinvestment assertion with respect to undistributed earnings. Based on that reassessment, we have determined that the undistributed earnings of certain subsidiaries will continue to be indefinitely reinvested. Those entities for which we will continue to assert indefinite reinvestment have an accumulated earnings deficit as of December 31, 2022. No additional provision has been made for Irish and non-Irish income taxes on those undistributed earnings that we are not asserting indefinite reinvestment as no tax is expected to be incurred with respect to those earnings. A liability could arise if our intention to indefinitely reinvest such earnings were to change and amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. The potential tax implications of unremitted earnings are driven by the facts at the time of the distribution. It is not practicable to estimate the additional income taxes related to indefinitely reinvested earnings or the basis differences related to investments in subsidiaries. Uncertain Tax Positions The Company and its subsidiaries are subject to income taxes in the U.S., various states and numerous foreign jurisdictions with varying statutes as to which tax years are subject to examination by the tax authorities. The Company has taken positions on its tax returns that may be challenged by various tax authorities. The Company believes it has appropriately established reserves for tax-related uncertainties. The Company endeavors to resolve matters with a tax authority at the examination level and could reach agreement with a tax authority at any time. The accruals for tax-related uncertainties are based on the Company’s best estimate of the potential tax exposures. When particular matters arise, a number of years may elapse before such matters are audited and finally resolved. The final outcome with a tax authority may result in a tax liability that is more or less than that reflected in our financial statements. Favorable resolution of such matters could be recognized as a reduction of the Company’s effective tax rate in the year of resolution, while a resolution that is not favorable could increase the effective tax rate and may require the use of cash. Uncertain tax positions are reviewed quarterly and adjusted as necessary when events occur that affect potential tax liabilities, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, identification of new issues and issuance of new legislation, regulations or case law. As of December 31, 2022, the Company had total UTPs, including accrued interest and penalties, of $646.4 million. If recognized in future years, $251.4 million of such amounts would impact the income tax provision and effective tax rate. As of December 31, 2021, the Company had total UTPs, including accrued interest and penalties, of $620.0 million. If recognized in future years, $241.0 million of such amounts would have impacted the income tax provision and effective tax rate. The following table summarizes the activity related to UTPs during the years ended December 31, 2022, 2021 and 2020 (in thousands): Unrecognized Tax Positions Federal, State and Foreign Tax UTP Balance at December 31, 2019 $ 486,481 Gross additions for current year positions 33,402 Gross reductions for prior period positions (577) Gross additions for prior period positions 16,914 Decrease due to lapse of statute of limitations (7,033) Currency translation adjustment 588 UTP Balance at December 31, 2020 $ 529,775 Gross additions for current year positions 36,662 Gross reductions for prior period positions (702) Gross additions for prior period positions 1,203 Decrease due to lapse of statute of limitations (475) Currency translation adjustment (24) UTP Balance at December 31, 2021 $ 566,439 Gross additions for current year positions 20,061 Decrease due to lapse of statute of limitations (4,451) Currency translation adjustment (2,419) UTP Balance at December 31, 2022 $ 579,630 Accrued interest and penalties 66,736 Total UTP balance including accrued interest and penalties $ 646,366 The Company records accrued interest and penalties, where applicable, related to uncertain tax positions as part of the provision for income taxes. The cumulative accrued interest and penalties related to uncertain tax positions were $66.7 million and $53.6 million as of December 31, 2022 and 2021, respectively. During the year ended December 31, 2022, the Company recognized net expense of $16.2 million associated with UTPs, primarily related to interest and penalties. During the year ended December 31, 2021, the Company recognized net expense of $10.6 million associated with UTPs, primarily related to interest and penalties. During the year ended December 31, 2020, the Company recognized a net benefit of $78.2 million as a reduction to our net UTP liability, primarily related to the CARES Act. At December 31, 2022, the Company’s UTP liability is included in the Consolidated Balance Sheets within Liabilities subject to compromise, Other liabilities and, where appropriate, as a reduction to Deferred tax assets. At December 31, 2021, the Company’s UTP liability is included in the Consolidated Balance Sheets within Other liabilities and, where appropriate, as a reduction to Deferred tax assets. Our subsidiaries file income tax returns in the countries in which they have operations. Generally, these countries have statutes of limitations ranging from 3 to 5 years. Certain subsidiary tax returns are currently under examination by taxing authorities, including U.S. tax returns for the 2006 through 2018 tax years by the IRS. It is expected that the amount of UTPs will change during the next 12 months; however, we do not currently anticipate any adjustments that would lead to a material impact on our results of operations or our financial position. On June 3, 2020, in connection with the IRS’s examination of our U.S. income tax return for the fiscal year ended December 31, 2015 (2015 Return), we received an acknowledgement of facts (AoF) from the IRS related to transfer pricing positions taken by Endo U.S., Inc. and its subsidiaries (Endo U.S.). The AoF asserted that Endo U.S. overpaid for certain pharmaceutical products that it purchased from certain non-U.S. related parties and proposed a specific adjustment to our 2015 U.S. income tax return position. On September 4, 2020, we received a Form 5701 Notice of Proposed Adjustment (NOPA) that is consistent with the previously disclosed AoF. We believe that the terms of the subject transactions are consistent with comparable transactions for similarly situated unrelated parties, and we intend to contest the proposed adjustment. While the NOPA is not material to our business, financial condition, results of operations or cash flows, the IRS could seek to apply its position to subsequent tax periods and propose similar adjustments. The aggregate impact of these adjustments, if sustained, could have a material adverse effect on our business, financial condition, results of operations and cash flows. Although the timing of the outcome of this matter is uncertain, it is possible any final resolution of the matter could take a number of years. In connection with the IRS’s examination of our 2015 Return, on December 31, 2020, the IRS issued a Technical Advice Memorandum (TAM) regarding the portion of our 2015 NOL that we believe qualifies as a specified product liability loss (SLL). The TAM concurred in part with our positions on the 2015 Return but disagreed with our position that the AMS worthless stock loss qualifies as an SLL. In April 2021, we received draft NOPAs from the IRS consistent with the TAM. We continue to disagree with the IRS’s position and the draft NOPAs received and, if necessary, intend to contest any additional tax determined to be owed with respect to the NOPAs. However, if we were unsuccessful in contesting the IRS’s position, we have preliminarily estimated that we would have additional cash taxes payable to the IRS of between $70 million and $250 million excluding interest. We continue to discuss this position with the IRS and the actual amount that may be owed to the IRS if we are unsuccessful may be different than our preliminary estimate. Although the timing of the outcome of this matter is uncertain, it is possible any final resolution of the matter could take a number of years. As of December 31, 2022, we may be subject to examination in the following major tax jurisdictions: Jurisdiction Open Years Canada 2016 through 2022 India 2012 through 2022 Ireland 2016 through 2022 Luxembourg 2015 through 2022 U.S. - federal, state and local 2006 through 2022 Bankruptcy-Related Developments In connection with our ongoing bankruptcy proceedings, the IRS has filed multiple proofs of claim against several of the Debtors. The total amount of the claims filed by the IRS, which relate to tax years ended 2006 through 2014, 2016 through 2018 and 2020 through 2021, is approximately $18.7 billion. A number of the claims are in respect of the same proposed tax liability but are filed against multiple subsidiary members of our U.S. consolidated tax groups. After excluding the repetitive claims filed to different members of our U.S. consolidated tax groups, the net claims are approximately $2.6 billion. We did not receive from the IRS calculations or support for the amount of the claims filed; however, through our discussions with the IRS following the submission of the claims, we understand that the claims primarily relate to the IRS’s challenges of our historic tax positions discussed above for certain intercompany arrangements, including the level of profit earned by our U.S. subsidiaries pursuant to such arrangements, and a product liability loss carryback claim. We disagree with the IRS’s claims and, if necessary, intend to contest any additional tax determined to be owed with respect to the claims. |
NET (LOSS) INCOME PER SHARE
NET (LOSS) INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET (LOSS) INCOME PER SHARE | NOTE 22. NET (LOSS) INCOME PER SHARE The following is a reconciliation of the numerator and denominator of basic and diluted net (loss) income per share for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Numerator: (Loss) income from continuing operations $ (2,909,618) $ (569,081) $ 247,464 Income (loss) from discontinued operations, net of tax (13,487) (44,164) (63,520) Net (loss) income $ (2,923,105) $ (613,245) $ 183,944 Denominator: For basic per share data—weighted average shares 234,840 232,785 229,314 Dilutive effect of ordinary share equivalents — — 4,339 For diluted per share data—weighted average shares 234,840 232,785 233,653 Basic per share amounts are computed based on the weighted average number of ordinary shares outstanding during the period. Diluted per share amounts are computed based on the weighted average number of ordinary shares outstanding and, if there is net income from continuing operations during the period, the dilutive effect of ordinary share equivalents outstanding during the period. The dilutive effect of ordinary share equivalents is measured using the treasury stock method. Any stock options and/or awards that have been issued but for which a grant date has not yet been established are not considered in the calculation of basic or diluted weighted average shares. The following table presents, for the years ended December 31, 2022, 2021 and 2020, outstanding stock options and stock awards that could potentially dilute per share amounts in the future that were not included in the computation of diluted per share amounts for the periods presented because to do so would have been antidilutive (in thousands): 2022 2021 2020 Stock options 5,453 6,584 7,073 Stock awards 5,789 9,256 5,197 |
CONDENSED COMBINED DEBTOR-IN-PO
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Reorganizations [Abstract] | |
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION | NOTE 2. BANKRUPTCY PROCEEDINGS Chapter 11 Filing As noted above, on the Petition Date, the Debtors filed voluntary petitions for relief under the Bankruptcy Code. The Debtors have received approval from the U.S. Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) to jointly administer their chapter 11 cases (the Chapter 11 Cases) for administrative purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure under the caption In re Endo International plc, et al . Certain entities consolidated by Endo International plc and included in these Consolidated Financial Statements are not party to the Chapter 11 Cases. These entities are collectively referred to herein as the Non-Debtor Affiliates. The Debtors will continue to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. As debtors-in-possession, the Debtors are generally permitted to continue to operate as ongoing businesses and pay debts and honor obligations arising in the ordinary course of their businesses after the Petition Date. However, the Debtors generally may not pay third-party claims or creditors on account of obligations arising before the Petition Date or engage in transactions outside the ordinary course of business without approval of the Bankruptcy Court. Under the Bankruptcy Code, third-party actions to collect pre-petition indebtedness owed by the Debtors, as well as most litigation pending against the Debtors as of the Petition Date, are generally subject to an automatic stay. However, under the Bankruptcy Code, certain legal proceedings, such as those involving the assertion of a governmental entity’s police or regulatory powers, may not be subject to the automatic stay and may continue unless otherwise ordered by the Bankruptcy Court. Among other requirements, chapter 11 proceedings must comply with the priority scheme established by the Bankruptcy Code, under which certain post-petition and secured or “priority” pre-petition liabilities generally need to be satisfied before general unsecured creditors and shareholders are entitled to receive any distribution. Under the Bankruptcy Code, the Debtors may assume, modify, assign or reject certain executory contracts and unexpired leases, including, without limitation, leases of real property and equipment, subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease in this report, including, where applicable, the express termination rights thereunder or a quantification of obligations, must be read in conjunction with, and is qualified by, any overriding rejection rights the Debtors have under the Bankruptcy Code. To ensure their ability to continue operating in the ordinary course of business, the Debtors have filed with the Bankruptcy Court a variety of motions seeking “first day” relief, including the authority to access cash collateral, continue using their cash management system, pay employee wages and benefits and pay vendors in the ordinary course of business. At a hearing held on August 18, 2022, the Bankruptcy Court generally approved the relief sought in these motions on an interim basis. Following subsequent hearings held on September 28, 2022, October 13, 2022 and October 19, 2022, the Bankruptcy Court entered orders approving substantially all of the relief sought on a final basis. Events of Default The August 16, 2022 bankruptcy filings by the Debtors constituted an event of default that accelerated our obligations under substantially all of our then-outstanding debt instruments. However, section 362 of the Bankruptcy Code stays creditors from taking any action to enforce the related financial obligations and creditors’ rights of enforcement in respect of the debt instruments are subject to the applicable provisions of the Bankruptcy Code. Refer to Note 15. Debt for additional information. Restructuring Support Agreement On August 16, 2022, we entered into a Restructuring Support Agreement (the RSA) with an ad hoc group (the Ad Hoc First Lien Group) of certain creditors holding in excess of 50% of the aggregate outstanding principal amount of Secured Debt (as defined in that certain collateral trust agreement, dated as of April 27, 2017, among Endo International plc, certain subsidiaries of Endo International plc, the other grantors from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent under the Credit Agreement, and Wells Fargo Bank, National Association, as indenture trustee, and Wilmington Trust, National Association, as collateral trustee (the Collateral Trust Agreement)), pursuant to which, among other things, one or more entities formed in a manner acceptable to the Ad Hoc First Lien Group (the Stalking Horse Bidder or the Purchaser) will serve as stalking horse bidder as we seek to sell all or substantially all of our assets in a sale pursuant to section 363 of the Bankruptcy Code (the Sale). As described in the RSA, the Stalking Horse Bidder’s bid (the Stalking Horse Bid), which is subject to higher or otherwise better bids from other parties, includes an offer to purchase substantially all of our assets for an aggregate purchase price including: (i) a credit bid in full satisfaction of the Prepetition First Lien Indebtedness (as defined in the RSA); (ii) $5 million in cash on account of certain unencumbered assets; (iii) $122 million to wind-down our operations following the Sale closing date (the Wind-Down Amount); (iv) pre-closing professional fees; and (v) the assumption of certain liabilities. As part of the Stalking Horse Bid, the Stalking Horse Bidder will also make offers of employment to all of our active employees. Pursuant to the RSA, the definitive purchase and sale agreement with respect to the Stalking Horse Bid will include customary representations and warranties and customary covenants by the parties thereto. On November 23, 2022, we filed: (i) a motion seeking Bankruptcy Court approval of bidding procedures in connection with the Sale and (ii) a motion seeking to set deadlines for all claimants to file claims against the Debtors. Although both motions were initially set to be heard by the Bankruptcy Court at a hearing on December 15, 2022, following several conferences with both the Bankruptcy Court and all major parties in interest in the Chapter 11 Cases, the hearing on both motions was adjourned to allow the Debtors and certain key parties in the Chapter 11 Cases to participate in a mediation process to attempt to resolve certain objections and contested issues relating to the Sale and other critical matters in the Chapter 11 Cases. On March 3, 2023, the Debtors announced that, as a result of the mediation process, the Ad Hoc First Lien Group (and Stalking Horse Bidder) had reached certain resolutions in principle with both the unsecured creditors’ committee and opioid claimants’ committee appointed in the Chapter 11 Cases and certain ad hoc groups of debtholders. These resolutions, which remain subject to definitive documentation, are supported by the Debtors. In connection with such resolutions, the Company agreed in principle with the Ad Hoc First Lien Group to reduce the Wind-Down Amount associated with the Stalking Horse Bid from $122 million to approximately $115 million, subject to definitive documentation. As negotiations among the mediation parties continue, the mediation has been extended and remains ongoing and the Bankruptcy Court hearing on both motions has been adjourned to an undetermined date. As a result of such adjournment, the proposed timelines and deadlines set forth in both motions are expected to be extended. The RSA contemplates a marketing process and auction that will be conducted under the supervision of the Bankruptcy Court, during which interested parties will have an opportunity to conduct due diligence and determine whether to submit a bid to acquire the Debtors’ assets. If the Stalking Horse Bid is selected as the highest or otherwise best offer following said marketing process and auction, the Ad Hoc First Lien Group will direct the Collateral Trustee (as defined in the Collateral Trust Agreement) to assign its rights to credit bid, on behalf of the Secured Parties (as defined in the Collateral Trust Agreement), to the Stalking Horse Bidder, so as to enable the Stalking Horse Bidder to credit bid for all or substantially all of our assets in exchange for the extinguishment of the obligations to the Secured Parties. The RSA further contemplates that the Purchaser will fund one or more trusts for parties with opioid-related claims against us, as further discussed in Note 16. Commitments and Contingencies. Pursuant to the RSA, each of the parties agreed to, among other things, take all actions as are necessary and appropriate to facilitate the implementation and consummation of the Restructuring (as defined in the RSA), negotiate in good faith certain definitive documents relating to the Restructuring and obtain required approvals. In addition, we agreed to conduct our business in the ordinary course, provide notice and certain materials relating to the Restructuring to the consenting creditors’ advisors and pay certain fees and expenses of the consenting creditors. The RSA provides certain milestones for the Restructuring. If we fail to satisfy these milestones and such failure is not the result of a breach of the RSA by the Required Consenting First Lien Creditors (as defined in the RSA), the Required Consenting First Lien Creditors will have the right to terminate the RSA. These milestones, as modified since we entered into the RSA (and which may be further modified from time to time), include: (i) not later than 11:59 p.m. prevailing Eastern Time on October 25, 2022, the Bankruptcy Court shall have entered the Cash Collateral Order on a final basis; (ii) not later than 11:59 p.m. prevailing Eastern Time on March 16, 2023, the Bankruptcy Court shall have entered an order approving the bidding procedures; (iii) not later than 11:59 p.m. prevailing Eastern Time on September 13, 2023, the Bankruptcy Court shall have entered an order approving the Sale; and (iv) not later than 11:59 p.m. prevailing Eastern Time on September 13, 2023 (the Outside Date), the closing of the Sale shall have occurred, subject to certain extensions of the Outside Date as set forth in the RSA, including: (a) for extensions of prior milestones; (b) to close the Sale transaction with a backup bidder; and (c) for delays in obtaining regulatory or third-party approvals or consents. Each of the parties to the RSA may terminate the agreement (and thereby their support for the Sale) under certain limited circumstances, including for material breaches and materially untrue representations and warranties by their counterparties, if a governmental agency enjoins the Sale or if the purchase and sale agreement with respect to the Sale is terminated under certain circumstances. The transactions contemplated by the RSA are subject to approval by the Bankruptcy Court, among other conditions. Accordingly, no assurance can be given that the transactions described therein will be consummated. The Chapter 11 Proceedings Cash Collateral In October 2022, the Bankruptcy Court entered the Cash Collateral Order approving the Debtors’ consensual use of their secured creditors’ cash collateral. The Debtors intend to use the cash collateral to, among other things, permit the orderly continuation of their businesses, pay the costs of administration of their estates and satisfy other working capital and general corporate purposes. As described in additional detail elsewhere in this report, including in Note 15. Debt, the Cash Collateral Order obligates the Debtors to make certain adequate protection payments during the bankruptcy proceedings, establishes a budget for the Debtors’ use of cash collateral, establishes certain informational rights for the Debtors’ secured creditors and provides for the waiver of certain Bankruptcy Code provisions. The Cash Collateral Order also requires the Debtors to maintain at least $600.0 million of “liquidity,” calculated at the end of each week as unrestricted cash and cash equivalents plus certain specified amounts of restricted cash associated with the TLC Agreement, which is further discussed below in Note 12. License, Collaboration and Asset Acquisition Agreements. Potential Claims In November 2022, the Debtors filed with the Bankruptcy Court schedules and statements, subject to further amendment or modification, which set forth, among other things, the assets and liabilities of each of the Debtors, subject to the assumptions filed in connection therewith. As part of the Chapter 11 Cases, persons and entities believing that they have claims or causes of action against the Debtors may file proofs of claim evidencing such claims. As noted above, the Debtors have filed a motion seeking to set a bar date (deadline) for holders of claims to file proofs of claim (including general claims and claims of governmental units), which motion has been adjourned to an undetermined date. The Debtors have received numerous claims as of the date of this report including, in certain cases, duplicate claims across multiple Debtors. For example, the IRS has filed multiple proofs of claim against several of the Debtors, as further discussed in Note 21. Income Taxes. We expect that the Debtors may continue to receive a significant number of claims in the future. As claims are filed, they are being evaluated for validity and compared to amounts recorded in our accounting records. As of the date of this report, the amounts of certain of the claims received exceed the amounts of the corresponding liabilities, if any, that we have recorded based on our assessments of the purported liabilities underlying such claims, and it is likely this will continue to be the case in future periods. We are not aware of any claims that we currently expect will require a material adjustment to the accounts and balances as reported as of December 31, 2022. Differences in amounts recorded and claims filed by creditors will continue to be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate. The Debtors may ask the Bankruptcy Court to disallow claims that the Debtors believe are duplicative, have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons. In addition, as a result of this process, the Debtors may identify additional liabilities that will need to be recorded or reclassified to Liabilities subject to compromise in the Consolidated Balance Sheets. In light of the substantial number of claims that may be filed, the claims resolution process may take considerable time to complete and may continue for the duration of the Debtors’ bankruptcy proceedings. Subsequent Developments The Bankruptcy Court adjourned the hearings for certain critical motions filed in November and December 2022, including: (i) our motion to establish bidding procedures in connection with the Sale; (ii) our motion to establish deadlines for creditors to file proofs of claim; and (iii) our motion to extend our exclusive periods to file and solicit a plan of reorganization, in order to allow the Debtors and certain key parties in the Chapter 11 Cases to participate in a mediation process to attempt to resolve certain objections and contested issues relating to the Sale and other critical matters. On March 3, 2023, the Debtors announced that, as a result of the mediation process, the Ad Hoc First Lien Group (and Stalking Horse Bidder) had reached certain resolutions in principle with both the unsecured creditors’ committee and opioid claimants’ committee appointed in the Chapter 11 Cases and certain ad hoc groups of debtholders. These resolutions, which remain subject to definitive documentation, are supported by the Debtors. In connection with such resolutions, the mediation has been extended and remains ongoing and the Bankruptcy Court hearing on the three motions has been adjourned to an undetermined date. Bankruptcy Accounting As a result of the Chapter 11 Cases, we have applied the provisions of ASC 852 in preparing the accompanying Consolidated Financial Statements. ASC 852 requires that, for periods including and after the filing of a chapter 11 petition, the Consolidated Financial Statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, for periods beginning with the third quarter of 2022, pre-petition unsecured and undersecured claims related to the Debtors that may be impacted by the bankruptcy reorganization process have been classified as Liabilities subject to compromise in the Consolidated Balance Sheets. Liabilities subject to compromise include pre-petition liabilities for which there is uncertainty about whether such pre-petition liabilities could be impaired as a result of the Chapter 11 Cases. Liabilities subject to compromise are recorded at the expected amount of the total allowed claim, even if they may ultimately be settled for different amounts. The following table sets forth, as of December 31, 2022, information about the amounts presented as Liabilities subject to compromise in our Consolidated Balance Sheets (in thousands): December 31, 2022 Accounts payable $ 30,317 Accrued interest 160,617 Debt 7,834,717 Litigation accruals 820,805 Uncertain tax positions 235,176 Other (1) 87,150 Total $ 9,168,782 __________ (1) Amounts include operating and finance lease liabilities as further described in Note 9. Leases, acquisition-related contingent consideration liabilities as further described in Note 7. Fair Value Measurements and a variety of other miscellaneous liabilities. The determination of how liabilities will ultimately be settled or treated cannot be made until approved by the Bankruptcy Court. Therefore, the amounts in the table above are preliminary and may be subject to future adjustments as a result of, among other things, the possibility or occurrence of certain Bankruptcy Court actions, further developments with respect to disputed claims, any rejection by us of executory contracts and/or any payments by us of amounts classified as Liabilities subject to compromise, which may be allowed in certain limited circumstances. Amounts are also subject to adjustments if we make changes to our assumptions or estimates related to claims as additional information becomes available to us including, without limitation, those related to the expected amounts of allowed claims, the value of any collateral securing claims and the secured status of claims. Such adjustments may be material. Additionally, as a result of our ongoing bankruptcy proceedings, we may sell or otherwise dispose of or liquidate assets or settle liabilities for amounts other than those reflected in the accompanying Consolidated Financial Statements. The possibility or occurrence of any such actions could materially impact the amounts and classifications of such assets and liabilities reported in our Consolidated Balance Sheets and could have a material adverse effect on our business, financial condition, results of operations and cash flows. Certain expenses, gains and losses resulting from and recognized during our bankruptcy proceedings are now being recorded in Reorganization items, net in our Consolidated Statements of Operations. The following table sets forth, for the year ended December 31, 2022, information about the amounts presented as Reorganization items, net in our Consolidated Statements of Operations (in thousands): 2022 Professional fees $ 113,781 Debt valuation adjustments 89,197 Total $ 202,978 Since the Petition Date, our operating cash flows included net cash outflows of $53.7 million related to amounts classified or expected to be classified as Reorganization items, net, which primarily consisted of payments for professional fees. Refer also to Note 15. Debt for information about how our bankruptcy proceedings and certain related developments have affected our debt service payments and how such payments are being reflected in our Consolidated Financial Statements. Nasdaq Delisting On August 17, 2022, we received a letter (the Notice) from Nasdaq stating that, in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq had determined that Endo’s ordinary shares would be delisted. In accordance with the Notice, trading of Endo’s ordinary shares was suspended at the opening of business on August 26, 2022. As a result, Endo’s ordinary shares began trading exclusively on the over-the-counter market on August 26, 2022. On the over-the-counter market, Endo’s ordinary shares, which previously traded on the Nasdaq Global Select Market under the symbol ENDP, began to trade under the symbol ENDPQ. On September 14, 2022, Nasdaq filed a Form 25-NSE with the SEC and Endo’s ordinary shares were subsequently delisted from the Nasdaq Global Select Market. On December 13, 2022, Endo’s ordinary shares were deregistered under Section 12(b) of the Exchange Act. NOTE 23. CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION The financial statements included in this Note represent the Condensed Combined Financial Statements of the Debtors only, which include Endo International plc and most of its wholly-owned subsidiaries, except for its Indian subsidiaries and certain subsidiaries associated with the Company’s former Astora business. These statements reflect the results of operations, financial position and cash flows of the combined Debtors, including certain amounts and activities between Debtors and Non-Debtor Affiliates of the Company that are eliminated in the Consolidated Financial Statements. CONDENSED COMBINED BALANCE SHEETS (Dollars in thousands) December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 991,901 Restricted cash and cash equivalents 59,358 Accounts receivable, net 478,889 Inventories, net 241,349 Prepaid expenses and other current assets 111,807 Income taxes receivable 7,038 Receivables from Non-Debtor Affiliates 94,608 Total current assets $ 1,984,950 PROPERTY, PLANT AND EQUIPMENT, NET 233,114 OPERATING LEASE ASSETS 23,200 GOODWILL 1,352,011 OTHER INTANGIBLES, NET 1,732,935 INVESTMENTS IN NON-DEBTOR AFFILIATES 50,001 RECEIVABLES FROM NON-DEBTOR AFFILIATES 240,002 OTHER ASSETS 126,494 TOTAL ASSETS $ 5,742,707 LIABILITIES AND DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ 654,414 Current portion of operating lease liabilities 230 Income taxes payable 10 Payables to Non-Debtor Affiliates 20,162 Total current liabilities $ 674,816 DEFERRED INCOME TAXES 13,479 OPERATING LEASE LIABILITIES, LESS CURRENT PORTION 994 OTHER LIABILITIES 37,367 LIABILITIES SUBJECT TO COMPROMISE 9,168,782 TOTAL DEFICIT (4,152,731) TOTAL LIABILITIES AND DEFICIT $ 5,742,707 CONDENSED COMBINED STATEMENTS OF OPERATIONS (Dollars in thousands) 2022 TOTAL REVENUES, NET $ 2,321,426 COSTS AND EXPENSES: Cost of revenues 1,106,855 Selling, general and administrative 764,768 Research and development 137,851 Acquired in-process research and development 68,700 Litigation-related and other contingencies, net 478,722 Asset impairment charges 2,137,107 Acquisition-related and integration items, net 408 Interest expense, net 345,593 Reorganization items, net 202,978 Other income, net (13,409) LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX $ (2,908,147) INCOME TAX EXPENSE 17,721 LOSS FROM CONTINUING OPERATIONS $ (2,925,868) DISCONTINUED OPERATIONS, NET OF TAX (13,468) NET LOSS ATTRIBUTABLE TO DEBTOR ENTITIES $ (2,939,336) EQUITY IN INCOME OF NON-DEBTOR AFFILIATES, NET OF TAX 22,671 NET LOSS $ (2,916,665) CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE LOSS (Dollars in thousands) 2022 NET LOSS $ (2,916,665) OTHER COMPREHENSIVE LOSS: Net unrealized loss on foreign currency $ (10,496) Total other comprehensive loss $ (10,496) COMPREHENSIVE LOSS $ (2,927,161) CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Dollars in thousands) 2022 OPERATING ACTIVITIES: Net cash provided by operating activities (1) $ 209,523 INVESTING ACTIVITIES: Capital expenditures, excluding capitalized interest (43,743) Capitalized interest payments (3,140) Proceeds from the U.S. Government Agreement 18,635 Acquisitions, including in-process research and development, net of cash and restricted cash acquired (90,320) Proceeds from sale of business and other assets, net 41,400 Proceeds from loans made to Non-Debtor Affiliates 2,355 Disbursements for loans made to Non-Debtor Affiliates (51,486) Net cash used in investing activities $ (126,299) FINANCING ACTIVITIES: Repayments of notes (180,342) Repayments of term loans (10,000) Adequate protection payments (313,109) Repayments of other indebtedness (6,062) Payments for contingent consideration (2,462) Payments of tax withholding for restricted shares (1,898) Net cash used in financing activities $ (513,873) Effect of foreign exchange rate (1,790) NET DECREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS $ (432,439) CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD 1,568,698 CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD $ 1,136,259 __________ (1) The difference between the amount of Net cash provided by operating activities included in the table above and the amount of Net cash provided by operating activities included in the Consolidated Statements of Cash Flows for the same period primarily relates to the fact that the table above: (i) excludes the operating cash flows of our Non-Debtor Affiliates, which are included in the Consolidated Statements of Cash Flows, and (ii) includes the effects of the operating cash flows of the Debtors with the Non-Debtor Affiliates, which are eliminated in the Consolidated Statements of Cash Flows. |
SAVINGS AND INVESTMENT PLAN AND
SAVINGS AND INVESTMENT PLAN AND DEFERRED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
SAVINGS AND INVESTMENT PLAN AND DEFERRED COMPENSATION PLANS | NOTE 24. SAVINGS AND INVESTMENT PLAN AND DEFERRED COMPENSATION PLANS Savings and Investment Plan The Company maintains a defined contribution Savings and Investment Plan (the Endo 401(k) Plan) covering all U.S.-based eligible employees. The Company matches 100% of the first 3% of eligible cash compensation that a participant contributes to the Endo 401(k) Plan plus 50% of the next 2% for a total of up to 4%, subject to statutory limitations. The Company’s matching contributions generally vest ratably over a two-year period. Costs incurred for contributions made by the Company to the Endo 401(k) Plan amounted to $6.5 million, $7.6 million and $7.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
SCHEDULE II_VALUATION AND QUALI
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Beginning of Period Additions, Costs and Expenses Deductions, Write-offs Other (1) Balance at End of Period Valuation Allowance For Deferred Tax Assets: Year Ended December 31, 2020 $ 9,828,959 $ 150,500 $ (316,474) $ 5,571 $ 9,668,556 Year Ended December 31, 2021 $ 9,668,556 $ 504,499 $ (9) $ (3,752) $ 10,169,294 Year Ended December 31, 2022 $ 10,169,294 $ 273,538 $ (46) $ (6,367) $ 10,436,419 __________ (1) Represents the remeasurement of net deferred tax assets due to changes in statutory tax rates. All other financial statement schedules have been omitted because they are not applicable or the required information is included in the Consolidated Financial Statements or the Notes thereto. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Going Concern | Going Concern As further discussed herein, thousands of governmental and private plaintiffs have filed suit against us and/or certain of our subsidiaries alleging opioid-related claims, most of which we have not been able to settle. As a result of the possibility or occurrence of an unfavorable outcome with respect to these proceedings, other legal proceedings and certain other risks and uncertainties, we have been exploring a wide array of potential actions as part of our contingency planning and, as further described in the Second-Quarter 2022 Form 10-Q, we previously concluded that the related conditions and events gave rise to substantial doubt about our ability to continue as a going concern. Subsequent to the filing of the Second-Quarter 2022 Form 10-Q, on the August 16, 2022 Petition Date, the Debtors filed voluntary petitions for relief under the Bankruptcy Code, which constituted an event of default that accelerated our obligations under substantially all of our then-outstanding debt instruments. However, section 362 of the Bankruptcy Code stays creditors from taking any action to enforce the related financial obligations and creditors’ rights of enforcement in respect of the debt instruments are subject to the applicable provisions of the Bankruptcy Code. Refer to Note 2. Bankruptcy Proceedings and Note 15. Debt for additional information. As a result of these conditions and events, management continues to believe there is substantial doubt about our ability to continue as a going concern within one year after the date of issuance of these Consolidated Financial Statements. The accompanying Consolidated Financial Statements have been prepared under the going concern basis of accounting as required by U.S. GAAP and do not include any adjustments that might be necessary should we be unable to continue as a going concern. |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation . The Consolidated Financial Statements include the accounts of wholly-owned subsidiaries after the elimination of intercompany accounts and transactions. |
Reclassifications | Reclassifications . Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassification adjustments primarily relate to changes to the presentation of certain costs and expenses in our Consolidated Statements of Operations. Specifically, effective with the first quarter of 2022, the Company has added a new financial statement line item labeled Acquired in-process research and development. Any prior period amounts of acquired in-process research and development charges presented in this report have been reclassified to this line item from the existing financial statement line item labeled Research and development. |
Use of Estimates | Use of Estimates . The preparation of our Consolidated Financial Statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts and disclosures in our Consolidated Financial Statements, including the Notes thereto, and elsewhere in this report. For example, we are required to make significant estimates and assumptions related to revenue recognition, including sales deductions, long-lived assets, goodwill, other intangible assets, income taxes, contingencies, financial instruments, share-based compensation, liabilities subject to compromise and reorganization items, net, among others. Some of these estimates can be subjective and complex. Uncertainties related to the continued magnitude and duration of the COVID-19 pandemic, the extent to which it will impact our estimated future financial results, worldwide macroeconomic conditions including interest rates, employment rates, consumer spending, health insurance coverage, the speed of the anticipated recovery and governmental and business reactions to the pandemic, including any possible re-initiation of shutdowns or renewed restrictions, have increased the complexity of developing these estimates, including the allowance for expected credit losses and the carrying amounts of long-lived assets, goodwill and other intangible assets. Additionally, as a result of our ongoing bankruptcy proceedings, we may sell or otherwise dispose of or liquidate assets or settle liabilities for amounts other than those reflected in the accompanying Consolidated Financial Statements. The possibility or occurrence of any such actions could materially impact the amounts and classifications of such assets and liabilities reported in our Consolidated Balance Sheets. Furthermore, our ongoing bankruptcy proceedings and planned sale process have resulted in and are likely to continue to result in significant changes to our business, which could ultimately result in, among other things, asset impairment charges that may be material. Although we believe that our estimates and assumptions are reasonable, there may be other reasonable estimates or assumptions that differ significantly from ours. Further, our estimates and assumptions are based upon information available at the time they were made. Actual results may differ significantly from our estimates, including as a result of the uncertainties described in this report, those described in our other reports filed with the SEC or other uncertainties. We regularly evaluate our estimates and assumptions using historical experience and other factors, including the economic environment. As future events and their effects cannot be determined with precision, our estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. Market conditions, such as illiquid credit markets, volatile equity markets, dramatic fluctuations in foreign currency rates and economic downturns, can increase the uncertainty already inherent in our estimates and assumptions. We also are subject to other risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in the healthcare environment, competition, litigation, legislation and regulations. We adjust our estimates and assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in our Consolidated Financial Statements on a prospective basis. |
Customer Product and Supplier Concentration | Customer, Product and Supplier Concentration . |
Revenue Recognition and Sales Deductions / Contract Assets and Contract Liabilities / Cost of Revenues | Revenue Recognition and Sales Deductions . With respect to contracts with commercial substance that establish payment terms and each party’s rights regarding goods or services to be transferred, we recognize revenue when (or as) we satisfy our performance obligations for such contracts by transferring control of the underlying promised goods or services to our customers, to the extent collection of substantially all of the related consideration is probable. The amount of revenue we recognize reflects our estimate of the consideration we expect to be entitled to receive, subject to certain constraints, in exchange for such goods or services. This amount is referred to as the transaction price. Our revenue consists almost entirely of sales of our products to customers, whereby we ship products to a customer pursuant to a purchase order. For contracts such as these, revenue is recognized when our contractual performance obligations have been fulfilled and control has been transferred to the customer pursuant to the contract’s terms, which is generally upon delivery to the customer. The amount of revenue we recognize is equal to the fixed amount of the transaction price, adjusted for our estimates of a number of significant variable components including, but not limited to, estimates for chargebacks, rebates, sales incentives and allowances, DSA and other fees for services, returns and allowances, which we collectively refer to as sales deductions. The Company utilizes the expected value method when estimating the amount of variable consideration to include in the transaction price with respect to each of the foregoing variable components and the most likely amount method when estimating the amount of variable consideration to include in the transaction price with respect to future potential milestone payments that do not qualify for the sales- and usage-based royalty exception. Variable consideration is included in the transaction price only to the extent it is probable that a significant revenue reversal will not occur when the uncertainty associated with the variable consideration is resolved. Payment terms for these types of contracts generally fall within 30 to 120 days of invoicing. At December 31, 2022 and 2021, our reserves for sales deductions totaled $600.2 million and $588.7 million, respectively. These amounts relate primarily to our estimates of unsettled obligations for returns and allowances, rebates and chargebacks. The most significant sales deduction reserves relate to returns, wholesaler chargebacks and rebates for the Sterile Injectables and Generic Pharmaceuticals segments. Our estimates are based on factors such as our direct and indirect customers’ buying patterns and the estimated resulting contractual deduction rates, historical experience, specific known market events and estimated future trends, current contractual and statutory requirements, industry data, estimated customer inventory levels, current contract sales terms with our direct and indirect customers and other competitive factors. Significant judgment and estimation is required in developing the foregoing and other relevant assumptions. The most significant sales deductions are further described below. Returns and Allowances— Consistent with industry practice, we maintain a return policy that allows our customers to return products within a specified period of time both subsequent to and, in certain cases, prior to the products’ expiration dates. Our return policy generally allows customers to receive credit for expired products within six months prior to expiration and within between six months and one year after expiration. Our provision for returns and allowances consists of our estimates for future product returns, pricing adjustments and delivery errors. Rebates— Our provision for rebates, sales incentives and other allowances can generally be categorized into the following four types: • direct rebates; • indirect rebates; • governmental rebates, including those for Medicaid, Medicare and TRICARE, among others; and • managed-care rebates. We establish contracts with wholesalers, chain stores and indirect customers that provide for rebates, sales incentives, DSA fees and other allowances. Some customers receive rebates upon attaining established sales volumes. Direct rebates are generally rebates paid to direct purchasing customers based on a percentage applied to a direct customer’s purchases from us, including fees paid to wholesalers under our DSAs, as described above. Indirect rebates are rebates paid to indirect customers that have purchased our products from a wholesaler or distributor under a contract with us. We are subject to rebates on sales made under governmental and managed-care pricing programs based on relevant statutes with respect to governmental pricing programs and contractual sales terms with respect to managed-care providers and GPOs. For example, we are required to provide a discount on certain of our products to patients who fall within the Medicare Part D coverage gap, also referred to as the donut hole. We participate in various federal and state government-managed programs whereby discounts and rebates are provided to participating government entities. For example, Medicaid rebates are amounts owed based upon contractual agreements or legal requirements with public sector (Medicaid) benefit providers after the final dispensing of the product by a pharmacy to a benefit plan participant. Chargebacks— We market and sell products to both: (i) direct customers including wholesalers, distributors, warehousing pharmacy chains and other direct purchasing entities and (ii) indirect customers including independent pharmacies, non-warehousing chains, MCOs, GPOs, hospitals and other healthcare institutions and government entities. We enter into agreements with certain of our indirect customers to establish contract pricing for certain products. These indirect customers then independently select a wholesaler from which to purchase the products at these contracted prices. Alternatively, we may pre-authorize wholesalers to offer specified contract pricing to other indirect customers. Under either arrangement, we provide credit to the wholesaler for any difference between the contracted price with the indirect customer and the wholesaler’s invoice price. Such credit is called a chargeback. Contract Assets and Contract Liabilities . Contract assets represent our right to consideration in exchange for goods or services that we have transferred when that right is conditioned on something other than the passage of time. We record income and a corresponding contract asset when we fulfill a contractual performance obligation, but must also fulfill one or more additional performance obligations before being entitled to payment. Once our right to consideration becomes unconditional, the contract asset amount is reclassified as Accounts receivable. Contract liabilities represent our obligation to transfer goods or services to a customer. We record a contract liability generally upon receipt of consideration in advance of fulfilling one or more of our contractual performance obligations. Upon completing each performance obligation, the corresponding contract liability amount is reversed and income is recognized. Cost of Revenues . Cost of revenues includes all costs directly related to bringing both purchased and manufactured products to their final selling destination. Amounts include purchasing and receiving costs, direct and indirect costs to manufacture products including direct materials, direct labor and direct overhead expenses necessary to acquire and convert purchased materials and supplies into finished goods, royalties paid or owed by Endo on certain in-licensed products, inspection costs, depreciation of certain property, plant and equipment, amortization of intangible assets, lease costs, warehousing costs, freight charges, costs to operate our equipment and other shipping and handling costs, among others. |
Acquisitions / Contingent Consideration | Acquisitions . We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, further determination is required as to whether or not we have acquired inputs and processes that have the ability to create outputs, which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. Acquisitions meeting the definition of business combinations are accounted for using the acquisition method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. In a business combination, any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Contingent Consideration . Certain of the Company’s acquisitions involve the potential for future payment of consideration that is contingent upon the occurrence of a future event, such as: (i) the achievement of specified regulatory, operational and/or commercial milestones or (ii) royalty payments, such as those relating to future product sales. Contingent consideration liabilities related to an asset acquisition are initially recorded when considered probable and reasonably estimable, which may occur subsequent to the acquisition date. Subsequent changes in the recorded amounts are generally recorded as adjustments to the cost of the acquired assets. Contingent consideration liabilities related to a business combination are initially recorded at fair value on the acquisition date using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the Company remeasures its contingent consideration liabilities to their current estimated fair values, with changes recorded in earnings. Changes to any of the inputs used in determining fair value may result in fair value adjustments that differ significantly from the actual remeasurement adjustments recognized. |
Asset Acquisitions | For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Direct transaction costs are recognized as part of the cost of an asset acquisition. We also evaluate which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. The cost of an asset acquisition, including transaction costs, is allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. The accounting for costs associated with acquiring in-process research and development assets, including contractual upfront and milestone payments to third parties, is further discussed below. |
R&D | R&D . Expenditures for R&D are expensed as incurred and included as Research and development in the Consolidated Statements of Operations. Such expenses include, among other things, the costs of discovery research, preclinical development, early- and late-clinical development and drug formulation, clinical trials, materials and medical support of marketed products. R&D spending also includes enterprise-wide costs which support our overall R&D infrastructure. Property, plant and equipment that are acquired or constructed for R&D activities and that have alternate future uses are capitalized and depreciated over their estimated useful lives on a straight-line basis. The accounting for costs associated with acquiring in-process research and development assets, including contractual upfront and milestone payments to third parties, is further discussed below. |
Cash and Cash Equivalents | Cash and Cash Equivalents . The Company considers all highly liquid money market instruments with an original maturities of three months or less when purchased to be cash equivalents. At December 31, 2022 and 2021, cash equivalents were deposited in financial institutions and consisted almost entirely of immediately available fund balances. The Company maintains its cash deposits and cash equivalents with financial institutions it believes to be well-known and stable. |
Restricted Cash and Cash Equivalents | Restricted Cash and Cash Equivalents . Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are excluded from Cash and cash equivalents in the Consolidated Balance Sheets. For additional information see Note 7. Fair Value Measurements. |
Accounts Receivable | Accounts Receivable . Our accounts receivable balance is stated at amortized cost less an allowance determined using the expected credit loss model. In addition, our accounts receivable balance is reduced by certain sales deduction reserves where we have the right of offset with the customer. We generally do not require collateral. |
Concentrations of Credit Risk and Credit Losses | Concentrations of Credit Risk and Credit Losses . Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash equivalents, restricted cash equivalents and accounts receivable. From time to time, we invest our excess cash in high-quality, liquid money market instruments maintained by major banks and financial institutions. We have not experienced any losses on our cash equivalents. With respect to our accounts receivable, we have no history of significant losses. Approximately 83% and 91% of our gross trade accounts receivable balances represent amounts due from three customers (Cardinal Health, Inc., McKesson Corporation and AmerisourceBergen Corporation) at December 31, 2022 and December 31, 2021, respectively. We perform ongoing credit evaluations of these and our other customers based on information available to us. We consider these and other factors, including changes in the composition and aging of our accounts receivable, in developing our allowance for expected credit losses. The estimated allowance was not material to the Company’s Consolidated Financial Statements at December 31, 2022 or December 31, 2021, nor were the changes to the allowance during any of the periods presented. We do not currently expect our current or future exposures to credit losses to have a significant impact on us. However, our customers’ ability to pay us on a timely basis, or at all, could be affected by factors specific to their respective businesses and/or by economic conditions, including those related to the COVID-19 pandemic, the extent of which cannot be fully predicted. |
Inventories | Inventories . Inventories consist of raw materials, work-in-process and finished goods. Inventory that is in excess of the amount expected to be sold within one year is classified as long-term inventory and is recorded in Other assets in the Consolidated Balance Sheets. The Company capitalizes inventory costs associated with certain products prior to regulatory approval and product launch when it is reasonably certain, based on management’s judgment of future commercial use and net realizable value, that the pre-launch inventories will be saleable. The determination to capitalize is made on a product-by-product basis. The Company could be required to write down previously capitalized costs related to pre-launch inventories upon a change in such judgment, a denial or delay of approval by regulatory bodies, a delay in commercialization or other potential factors. Our inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. It includes materials, direct labor and an allocation of overhead, but excludes certain period charges and unallocated overheads that are charged to expense in the period in which they are incurred. Unallocated overheads can occur as a consequence of abnormally low production or idle facilities. |
Property, Plant and Equipment | Property, Plant and Equipment . |
Computer Software | Computer Software . The Company capitalizes certain costs incurred in connection with obtaining or developing internal-use software, including external direct costs of material and services, and payroll costs for employees directly involved with the software development. Capitalized software costs are included in Property, plant and equipment, net in the Consolidated Balance Sheets and depreciated beginning when the software project is substantially complete and the asset is ready for its intended use. Costs incurred during the preliminary project stage and post-implementation stage, as well as maintenance and training costs, are expensed as incurred. |
Lease Accounting | Lease Accounting. Whenever the Company enters into a new arrangement, it must determine, at the inception date, whether the arrangement is or contains a lease. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. If a lease exists, the Company must then determine the separate lease and nonlease components of the arrangement. Each right to use an underlying asset conveyed by a lease arrangement should generally be considered a separate lease component if it both: (i) can benefit the Company without depending on other resources not readily available to the Company and (ii) does not significantly affect and is not significantly affected by other rights of use conveyed by the lease. Aspects of a lease arrangement that transfer other goods or services to the Company but do not meet the definition of lease components are considered nonlease components. The consideration owed by the Company pursuant to a lease arrangement is generally allocated to each lease and nonlease component for accounting purposes. However, the Company has elected, for all of its leases, to not separate lease and nonlease components. Each lease component is accounted for separately from other lease components, but together with the associated nonlease components. For each lease, the Company must then determine the lease term, the present value of lease payments and the classification of the lease as either an operating or finance lease. The lease term is the period of the lease not cancellable by the Company, together with periods covered by: (i) renewal options the Company is reasonably certain to exercise; (ii) termination options the Company is reasonably certain not to exercise; and (iii) renewal or termination options that are controlled by the lessor. The present value of lease payments is calculated based on: • Lease payments—Lease payments include fixed and certain variable payments, less lease incentives, together with amounts probable of being owed by the Company under residual value guarantees and, if reasonably certain of being paid, the cost of certain renewal options and early termination penalties set forth in the lease arrangement. Lease payments exclude consideration that is not related to the transfer of goods and services to the Company. • Discount rate—The discount rate must be determined based on information available to the Company upon the commencement of a lease. Lessees are required to use the rate implicit in the lease whenever such rate is readily available; however, as the implicit rate in the Company’s leases is generally not readily determinable, the Company generally uses the hypothetical incremental borrowing rate it would have to pay to borrow an amount equal to the lease payments, on a collateralized basis, over a timeframe similar to the lease term. In making the determination of whether a lease is an operating lease or a finance lease, the Company considers the lease term in relation to the economic life of the leased asset, the present value of lease payments in relation to the fair value of the leased asset and certain other factors, including the lessee’s and lessor’s rights, obligations and economic incentives over the term of the lease. Generally, upon the commencement of a lease, the Company will record a lease liability and a right-of-use asset. However, the Company has elected, for all underlying assets with initial lease terms of twelve months or less (known as short-term leases), to not recognize a lease liability or right-of-use asset. Lease liabilities are initially recorded at lease commencement as the present value of future lease payments. Right-of-use assets are initially recorded at lease commencement as the initial amount of the lease liability, together with the following, if applicable: (i) initial direct costs incurred by the lessee and (ii) lease payments made by the lessor, net of lease incentives received, prior to lease commencement. Over the lease term, the Company generally increases its lease liabilities using the effective interest method and decreases its lease liabilities for lease payments made. For finance leases, amortization expense and interest expense are recognized separately in the Consolidated Statements of Operations, with amortization expense generally recorded on a straight-line basis over the lease term and interest expense recorded using the effective interest method. For operating leases, a single lease cost is generally recognized in the Consolidated Statements of Operations on a straight-line basis over the lease term unless an impairment has been recorded with respect to a leased asset. Lease costs for short-term leases not recognized in the Consolidated Balance Sheets are recognized in the Consolidated Statements of Operations on a straight-line basis over the lease term. Variable lease costs not initially included in the lease liability and right-of-use asset impairment charges are expensed as incurred. Right-of-use assets are assessed for impairment, similar to other long-lived assets. |
Cloud Computing Arrangements | Cloud Computing Arrangements. The Company may from time to time incur costs in connection with hosting arrangements that are service contracts. The Company capitalizes any such implementation costs, expenses them over the terms of the respective hosting arrangements and subjects them to impairment testing consistent with other long-lived assets. |
Finite-Lived Intangible Assets / Developed Technology / License Rights | Finite-Lived Intangible Assets . Our finite-lived intangible assets consist of license rights and developed technology. Upon acquisition, intangible assets are generally initially recorded at fair value if acquired in a business combination, or at cost if otherwise. There are several methods that can be used to determine fair value. For intangible assets, we typically use an income approach. This approach starts with our forecast of all of the expected future net cash flows. Revenues are estimated based on relevant market size and growth factors, expected industry trends, individual project life cycles and, if applicable, the life of any estimated period of marketing exclusivity, such as that granted by a patent. The pricing, margins and expense levels of similar products are considered if available. For certain licensed assets, our estimates of future cash flows consider periods covered by renewal options to the extent we have the intent and ability, at the date of the estimate, to renew the underlying license agreements. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. To the extent an intangible asset is deemed to have a finite life and to be held and used, it is amortized over its estimated useful life using either the straight-line method or, in the case of certain developed technology assets, an accelerated amortization model. The values of these various assets are subject to continuing scientific, medical and marketplace uncertainty. Factors giving rise to our initial estimate of useful lives are subject to change. Significant changes to any of these factors may result in adjustments to the useful life of the asset and an acceleration of related amortization expense, which could cause our net income and net income per share to decrease. Amortization expense is not recorded on assets held for sale. As further described under the heading “Long-Lived Asset Impairment Testing,” our finite-lived intangible assets are also subject to impairment reviews. Developed Technology . Our developed technology assets subject to amortization have useful lives ranging from 6 years to 16 years, with a weighted average useful life of approximately 12 years. We determine amortization periods and methods of amortization for developed technology assets based on our assessment of various factors impacting estimated useful lives and the timing and extent of estimated cash flows of the acquired assets, including the strength of the intellectual property protection of the product (if applicable), contractual terms and various other competitive and regulatory issues. License Rights . Our license rights subject to amortization have useful lives ranging from 7 years to 15 years, with a weighted average useful life of approximately 14 years. We determine amortization periods for licenses based on our assessment of various factors including the expected launch date of the product, the strength of the intellectual property protection of the product (if applicable), contractual terms and various other competitive, developmental and regulatory issues. |
Long-Lived Asset Impairment Testing | Long-Lived Asset Impairment Testing . Long-lived assets, including property, plant and equipment and finite-lived intangible assets, are assessed for impairment whenever events or changes in circumstances indicate the assets may not be recoverable. Recoverability of an asset that will continue to be used in our operations is measured by comparing the carrying amount of the asset to the forecasted undiscounted future cash flows related to the asset. In the event the carrying amount of the asset exceeds its undiscounted future cash flows and the carrying amount is not considered recoverable, impairment may exist. An impairment loss, if any, is measured as the excess of the asset’s carrying amount over its fair value, generally based on a discounted future cash flow method, independent appraisals or offers from prospective buyers. An impairment loss would be recognized in the Consolidated Statements of Operations in the period that the impairment occurs. In the case of long-lived assets to be disposed of by sale or otherwise, including assets held for sale, the assets and the associated liabilities to be disposed of together as a group in a single transaction (the disposal group) are measured at the lower of their carrying amount or fair value less cost to sell. Prior to disposal, losses are recognized for any initial or subsequent write-down to fair value less cost to sell, while gains are recognized for any subsequent increase in fair value less cost to sell, but not in excess of any cumulative losses previously recognized. Any gains or losses not previously recognized that result from the sale of a disposal group shall be recognized at the date of sale. |
Acquired in-Process Research and Development Assets | Acquired in-Process Research and Development Assets . Acquired in-process research and development charges are generally recognized in periods in which in-process research and development assets (with no alternative future use in other research and development projects) are acquired from third parties in connection with an asset acquisition, or when costs are incurred (up to the point of regulatory approval) for upfront or milestone payments to third parties associated with in-process research and development. Otherwise, acquired in-process research and development assets are generally recognized as indefinite-lived intangible assets. Such assets are generally initially recorded at fair value if acquired in a business combination, or at cost if otherwise. Any indefinite-lived intangible assets are not subject to amortization. Instead, they are tested for impairment annually, as of October 1, and when events or changes in circumstances indicate that the asset might be impaired. If the fair value of the intangible assets is less than its carrying amount, an impairment loss is recognized for the difference. Assets that receive regulatory approval are reclassified and accounted for as finite-lived intangible assets. |
Goodwill | Goodwill . While amortization expense is not recorded on goodwill, goodwill is subject to impairment reviews. An impairment assessment is conducted as of October 1, or more frequently whenever events or changes in circumstances indicate that the asset might be impaired. We perform the goodwill impairment test by estimating the fair value of the reporting units using an income approach that utilizes a discounted cash flow model or, where appropriate, a market approach. Any goodwill impairment charge we recognize for a reporting unit is equal to the lesser of: (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount exceeds its fair value. |
Contingencies | Contingencies . The Company is subject to various patent challenges, product liability claims, government investigations and other legal proceedings in the ordinary course of business. Contingent accruals and legal settlements are recorded in the Consolidated Statements of Operations as Litigation-related and other contingencies, net (or as Discontinued operations, net of tax in the case of vaginal mesh matters) when the Company determines that a loss is both probable and reasonably estimable. Legal fees and other expenses related to litigation are expensed as incurred and are generally included in Selling, general and administrative expenses in the Consolidated Statements of Operations (or as Discontinued operations, net of tax in the case of vaginal mesh matters). Due to the fact that legal proceedings and other contingencies are inherently unpredictable, our estimates of the probability and amount of any such liabilities involve significant judgment regarding future events. The Company records receivables from its insurance carriers only when the realization of the potential claim for recovery is considered probable. |
Share Repurchases | Share Repurchases . The Company accounts for the repurchase of ordinary shares, if any, at par value. Under applicable Irish law, ordinary shares repurchased are retired and not displayed separately as treasury stock. Upon retirement of the ordinary shares, the Company records the difference between the weighted average cost of such ordinary shares and the par value of the ordinary shares as an adjustment to Accumulated deficit in the Consolidated Balance Sheets. |
Advertising Costs | Advertising Costs . |
Restructuring | Restructuring . Restructuring charges related to nonretirement postemployment benefits that fall under Accounting Standards Codification Topic 712, Compensation—Nonretirement Postemployment Benefits are recognized when the severance liability is determined to be probable of being paid and reasonably estimable. One-time benefits related to restructurings, if any, are recognized in accordance with Accounting Standards Codification Topic 420, Exit or Disposal Cost Obligations when the programs are approved, the affected employees are identified, the terms of the arrangement are established, it is determined changes to the plan are unlikely to occur and the arrangements are communicated to employees. Other restructuring costs are generally expensed as incurred. |
Share-Based Compensation | Share-Based Compensation . From time to time, the Company grants share-based compensation awards to certain employees and non-employee directors. Generally, the grant-date fair value of each award is recognized as expense over the requisite service period. However, expense recognition differs in the case of certain PSUs where the ultimate payout is performance-based. For these awards, at each reporting period, the Company generally estimates the ultimate payout and adjusts the cumulative expense based on its estimate and the percent of the requisite service period that has elapsed. Share-based compensation expense is reduced for estimated future forfeitures. These estimates are revised in future periods if actual forfeitures differ from the estimates. Changes in forfeiture estimates impact compensation expense in the period in which the change in estimate occurs. New ordinary shares are generally issued upon the exercise of stock options or vesting of stock awards by employees and non-employee directors. Refer to Note 19. Share-based Compensation for additional discussion. |
Foreign Currency | Foreign Currency . The Company operates in various jurisdictions both inside and outside of the U.S. While the Company’s reporting currency is the U.S. dollar, the Company has concluded that certain of its distinct and separable operations have functional currencies other than the U.S. dollar. Further, certain of the Company’s operations hold assets and liabilities and recognize income and expenses denominated in various local currencies, which may differ from their functional currencies. Assets and liabilities are first remeasured from local currency to functional currency, generally using end-of-period exchange rates. Foreign currency income and expenses are generally remeasured using average exchange rates in effect during the year. In the case of nonmonetary assets and liabilities such as inventories, prepaid expenses, property, plant and equipment, goodwill and other intangible assets, and related income statement amounts, such as depreciation expense, historical exchange rates are used for remeasurement. The net effect of remeasurement is included in Other income, net in the Consolidated Statements of Operations. As part of the Company’s consolidation process, assets and liabilities of entities with functional currencies other than the U.S. dollar are translated into U.S. dollars at end-of-period exchange rates. Income and expenses are translated using average exchange rates in effect during the year. The net effect of translation, as well as any foreign currency gains or losses on intercompany transactions considered to be of a long-term investment nature, are recognized as foreign currency translation, a component of Other comprehensive (loss) income. Upon the sale or liquidation of an investment in a foreign operation, the Company records a reclassification adjustment out of Other comprehensive (loss) income for the corresponding accumulated amount of foreign currency translation gain or loss. |
Income Taxes | Income Taxes . The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such a determination, the Company considers all available positive and negative evidence, including projected future taxable income, tax-planning strategies and results of recent operations. In the event that the Company were to determine that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income tax. The Company records unrecognized income tax positions (UTPs) on the basis of a two-step process whereby the Company first determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and then measures those tax positions that meet the more-likely-than-not recognition threshold. The Company recognizes the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the tax authority. The Company generally recognizes changes in UTPs, interest and penalties in the Income tax expense line in the Consolidated Statements of Operations. Refer to Note 21. Income Taxes for information about the classification of liabilities related to UTPs, including interest and penalties, in the Consolidated Balance Sheets. |
Comprehensive Income | Comprehensive Income . Comprehensive income or loss includes all changes in equity during a period except those that resulted from investments by or distributions to a company’s shareholders. Other comprehensive income or loss refers to revenues, expenses, gains and losses that are included in comprehensive income, but excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity. Government Assistance Transactions . Our PSP LLC subsidiary is party to the U.S. Government Agreement. Under the terms of the U.S. Government Agreement, our Rochester facility will establish new sterile fill-finish manufacturing assets capable of processing liquid or lyophilized products requiring Biosafety Level (BSL) 2 containment in order to establish and sustain BSL 2 sterile fill-finish production capacity to create and maintain industrial base capabilities for the national defense. The Company has concluded that reimbursements it receives pursuant to the U.S. Government Agreement, which are further described below, are not within the scope of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) because the U.S. government does not meet the definition of a “customer” as defined by ASC 606. We are instead accounting for the U.S. Government Agreement under other guidance including, for elements of the contract for which there is no authoritative guidance under U.S. GAAP, by applying the relevant accounting principles contained in International Accounting Standards 20—Accounting for Government Grants and Disclosure of Government Assistance by analogy. Under this model, reimbursements we receive from the U.S. government for qualifying capital expenditures meet the definition of grants related to assets as the primary purpose for the reimbursements is to fund the purchase and construction of capital assets to increase production capacity. We recognize these reimbursements as deferred income in the Consolidated Balance Sheets as either Accounts payable and accrued expenses (for any current portion) or Other liabilities (for any noncurrent portion) when there is reasonable assurance the conditions of the grant will be met and the grant will be received. Refer to Note 16. Commitments and Contingencies for additional discussion of this agreement. |
BANKRUPTCY PROCEEDINGS (Tables)
BANKRUPTCY PROCEEDINGS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Reorganizations [Abstract] | |
Schedule of Liabilities Subject to Compromise | The following table sets forth, as of December 31, 2022, information about the amounts presented as Liabilities subject to compromise in our Consolidated Balance Sheets (in thousands): December 31, 2022 Accounts payable $ 30,317 Accrued interest 160,617 Debt 7,834,717 Litigation accruals 820,805 Uncertain tax positions 235,176 Other (1) 87,150 Total $ 9,168,782 __________ (1) Amounts include operating and finance lease liabilities as further described in Note 9. Leases, acquisition-related contingent consideration liabilities as further described in Note 7. Fair Value Measurements and a variety of other miscellaneous liabilities. |
Schedule of Reorganisation Item in Consolidated Condensed Statements of Operations | The following table sets forth, for the year ended December 31, 2022, information about the amounts presented as Reorganization items, net in our Consolidated Statements of Operations (in thousands): 2022 Professional fees $ 113,781 Debt valuation adjustments 89,197 Total $ 202,978 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Net revenues from direct customers that accounted for 10% or more of our total consolidated net revenues during the years ended December 31, 2022, 2021 and 2020 are as follows: 2022 2021 2020 AmerisourceBergen Corporation 35 % 36 % 33 % McKesson Corporation 26 % 32 % 27 % Cardinal Health, Inc. 20 % 22 % 24 % |
DISCONTINUED OPERATIONS AND A_2
DISCONTINUED OPERATIONS AND ASSETS SALES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, including Discontinued Operations, Operations Results of Astora | The following table provides the operating results of Astora Discontinued operations, net of tax, for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Litigation-related and other contingencies, net $ — $ 25,000 $ 41,097 Loss from discontinued operations before income taxes $ (15,543) $ (49,594) $ (67,847) Income tax benefit $ (2,056) $ (5,430) $ (4,327) Discontinued operations, net of tax $ (13,487) $ (44,164) $ (63,520) |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following pre-tax net amounts related to the 2020 Restructuring Initiative are included in the Company’s Consolidated Statements of Operations during the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Net restructuring charges (charge reversals) related to: Accelerated depreciation $ 3,773 $ 24,718 $ 22,459 Asset impairments — 42,155 7,391 Inventory adjustments 1,494 6,968 3,097 Employee separation, continuity and other benefit-related costs 1,216 (7,384) 60,025 Certain other restructuring costs 795 2,012 664 Total $ 7,278 $ 68,469 $ 93,636 The following pre-tax net amounts related to the 2020 Restructuring Initiative are included in the Company’s Consolidated Statements of Operations during the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Net restructuring charges (charge reversals) included in: Cost of revenues $ 3,966 $ 6,244 $ 53,297 Selling, general and administrative 208 20,788 27,857 Research and development 3,104 1,367 5,091 Asset impairment charges — 42,155 7,391 Other income, net — (2,085) — Total $ 7,278 $ 68,469 $ 93,636 The following pre-tax net amounts related to the 2022 Restructuring Initiative are included in the Company’s Consolidated Statements of Operations during the year ended December 31, 2022 (in thousands): 2022 Net restructuring charges related to: Asset impairments $ 180,248 Inventory adjustments 34,870 Employee separation, continuity and other benefit-related costs 28,345 Certain other restructuring costs 8,656 Total $ 252,119 The following pre-tax net amounts related to the 2022 Restructuring Initiative are included in the Company’s Consolidated Statements of Operations during the year ended December 31, 2022 (in thousands): 2022 Net restructuring charges included in: Cost of revenues $ 49,078 Selling, general and administrative 18,692 Research and development 4,101 Asset impairment charges 180,248 Total $ 252,119 |
Schedule of Restructuring Reserve by Type of Cost | Changes to the liability for the 2020 Restructuring Initiative during the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands): Employee Separation, Continuity and Other Benefit-Related Costs Certain Other Restructuring Costs Total Liability balance as of December 31, 2019 $ — $ — $ — Net charges 60,025 664 60,689 Cash payments (1,687) — (1,687) Liability balance as of December 31, 2020 $ 58,338 $ 664 $ 59,002 Net (charge reversals) charges (7,384) 3,711 (3,673) Cash payments (39,975) (4,170) (44,145) Liability balance as of December 31, 2021 $ 10,979 $ 205 $ 11,184 Net charges 1,216 796 2,012 Cash payments (11,926) (1,001) (12,927) Liability balance as of December 31, 2022 $ 269 $ — $ 269 Changes to the liability for the 2022 Restructuring Initiative during the year ended December 31, 2022 were as follows (in thousands): Employee Separation, Continuity and Other Benefit-Related Costs Certain Other Restructuring Costs Total Liability balance as of December 31, 2021 $ — $ — $ — Net charges 28,345 1,102 29,447 Cash payments (13,348) (1,102) (14,450) Liability balance as of December 31, 2022 $ 14,997 $ — $ 14,997 |
SEGMENT RESULTS (Tables)
SEGMENT RESULTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments Information | The following represents selected information for the Company’s reportable segments for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Net revenues from external customers: Branded Pharmaceuticals $ 851,142 $ 893,617 $ 781,780 Sterile Injectables 589,633 1,266,097 1,238,847 Generic Pharmaceuticals 795,457 740,586 783,110 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 Injectables 349,424 998,453 950,145 Generic Pharmaceuticals 336,133 160,046 87,178 International Pharmaceuticals 19,920 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. 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): 2022 2021 2020 Total consolidated loss from continuing operations before income tax $ (2,888,102) $ (546,603) $ (26,518) Interest expense, net 349,776 562,353 532,939 Corporate unallocated costs (1) 182,335 180,866 157,723 Amortization of intangible assets 337,311 372,907 427,543 Acquired in-process research and development charges 68,700 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. The following represents depreciation expense for our reportable segments for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Branded Pharmaceuticals $ 9,862 $ 10,632 $ 11,758 Sterile Injectables 20,224 17,796 17,400 Generic Pharmaceuticals 16,952 47,343 52,614 International Pharmaceuticals 3,638 4,242 4,530 Corporate unallocated 3,642 4,178 4,962 Total depreciation expense $ 54,318 $ 84,191 $ 91,264 |
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. 2022 2021 2020 Branded Pharmaceuticals: Specialty Products: XIAFLEX® $ 438,680 $ 432,344 $ 316,234 SUPPRELIN® LA 113,011 114,374 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. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Restricted Cash and Cash Equivalents | The following table presents current and noncurrent restricted cash and cash equivalent balances at December 31, 2022 and December 31, 2021 (in thousands): Balance Sheet Line Items December 31, 2022 December 31, 2021 Restricted cash and cash equivalents—current (1) Restricted cash and cash equivalents $ 145,358 $ 124,114 Restricted cash and cash equivalents—noncurrent (2) Other assets 85,000 — Total restricted cash and cash equivalents $ 230,358 $ 124,114 __________ (1) Amounts at December 31, 2022 and December 31, 2021 include: (i) restricted cash and cash equivalents associated with litigation-related matters, including $50.7 million and $78.4 million, respectively, held in Qualified Settlement Funds (QSFs) for mesh- and/or opioid-related matters, and (ii) approximately $86.0 million and $45.0 million, respectively, of restricted cash and cash equivalents related to certain insurance-related matters. See Note 16. Commitments and Contingencies for further information about litigation-related matters. (2) The amount at December 31, 2022 relates to the TLC Agreement. See Note 12. License, Collaboration and Asset Acquisition Agreements for further information about this amount. |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2022 and December 31, 2021 were as follows (in thousands): Fair Value Measurements at December 31, 2022 using: Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Money market funds (1) $ 12,226 $ — $ — $ 12,226 Liabilities: Acquisition-related contingent consideration (2) $ — $ — $ 16,571 $ 16,571 Fair Value Measurements at December 31, 2021 using: Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Money market funds (1) $ 134,847 $ — $ — $ 134,847 Liabilities: Acquisition-related contingent consideration (2) $ — $ — $ 20,076 $ 20,076 __________ (1) At December 31, 2022 and December 31, 2021, money market funds include $12.2 million and $16.2 million, respectively, in QSFs. Amounts in QSFs are considered restricted cash equivalents. See Note 16. Commitments and Contingencies for further discussion of our litigation. At December 31, 2022 and December 31, 2021, the differences between the amortized cost and the fair value of our money market funds were not material, individually or in the aggregate. (2) At December 31, 2022, the balance of the Company’s liability for acquisition-related contingent consideration, which is governed by executory contracts and recorded at the expected amount of the total allowed claim, is classified within Liabilities subject to compromise in the Consolidated Balance Sheets. At December 31, 2021, this amount is classified in the Consolidated Balance Sheets as follows: $5.7 million is classified as a current liability and included within Accounts payable and accrued expenses and $14.3 million is classified as a noncurrent liability and included within Other liabilities. |
Schedule of Changes to Liability for Acquisition-Related Contingent Consideration | The following table presents changes to the Company’s liability for acquisition-related contingent consideration, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the years ended December 31, 2022 and 2021 (in thousands): 2022 2021 Beginning of period $ 20,076 $ 36,249 Amounts settled (3,127) (7,449) Changes in fair value recorded in earnings 408 (8,793) Effect of currency translation (786) 69 End of period (1) $ 16,571 $ 20,076 __________ (1) At December 31, 2022, the balance of the Company’s liability for acquisition-related contingent consideration, which is governed by executory contracts and recorded at the expected amount of the total allowed claim, is classified within Liabilities subject to compromise in the Consolidated Balance Sheets. The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the year ended December 31, 2022 by acquisition (in thousands): Balance as of December 31, 2021 Changes in Fair Value Recorded in Earnings Amounts Settled and Other Balance as of December 31, 2022 (1) Auxilium acquisition $ 9,038 $ 2,116 $ (536) $ 10,618 Lehigh Valley Technologies, Inc. acquisitions 3,600 (635) (665) 2,300 Other 7,438 (1,073) (2,712) 3,653 Total $ 20,076 $ 408 $ (3,913) $ 16,571 __________ (1) At December 31, 2022, the balance of the Company’s liability for acquisition-related contingent consideration, which is governed by executory contracts and recorded at the expected amount of the total allowed claim, is classified within Liabilities subject to compromise in the Consolidated Balance Sheets. The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the year ended December 31, 2021 by acquisition (in thousands): Balance as of December 31, 2020 Changes in Fair Value Recorded in Earnings Amounts Settled and Other Balance as of December 31, 2021 Auxilium acquisition $ 14,484 $ (3,471) $ (1,975) $ 9,038 Lehigh Valley Technologies, Inc. acquisitions 13,100 (6,061) (3,439) 3,600 Other 8,665 739 (1,966) 7,438 Total $ 36,249 $ (8,793) $ (7,380) $ 20,076 |
Schedule of Nonrecurring Fair Value Measurements | The Company’s financial assets and liabilities measured at fair value on a nonrecurring basis during the years ended December 31, 2022 and 2021 were as follows (in thousands): Fair Value Measurements during the Year Ended December 31, 2022 (1) using: Total Expense for the Year Ended December 31, 2022 Level 1 Inputs Level 2 Inputs Level 3 Inputs Intangible assets, excluding goodwill (2)(3) $ — $ — $ 67,082 $ (288,701) Certain property, plant and equipment — — — (9,045) Total $ — $ — $ 67,082 $ (297,746) Fair Value Measurements during the Year Ended December 31, 2021 (1) using: Total Expense for the Year Ended December 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Intangible assets, excluding goodwill (2)(3) $ — $ — $ 5,011 $ (7,811) Certain property, plant and equipment — — — (2,011) Total $ — $ — $ 5,011 $ (9,822) __________ (1) The fair value amounts are presented as of the date of the fair value measurement as these assets are not measured at fair value on a recurring basis. Such measurements generally occur in connection with our quarter-end financial reporting close procedures. (2) For 2022, these fair value measurements were determined using risk-adjusted discount rates ranging from 9.5% to 12.0% (weighted average rate of approximately 11.8%, weighted based on relative fair value). For 2021, these fair value measurements were determined using risk-adjusted discount rates ranging from 10.0% to 12.0% (weighted average rate of approximately 11.1%, weighted based on relative fair value). (3) The Company also performed fair value measurements in connection with its goodwill impairment tests. Refer to Note 11. Goodwill and Other Intangibles for additional information on goodwill and other intangible asset impairment tests, including information about the valuation methodologies used. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following at December 31, 2022 and December 31, 2021 (in thousands): December 31, 2022 December 31, 2021 Raw materials (1) $ 105,975 $ 90,453 Work-in-process (1) 43,057 82,728 Finished goods (1) 125,467 110,371 Total $ 274,499 $ 283,552 __________ (1) The components of inventory shown in the table above are net of allowances. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Assets and Liabilities, Lessee | The following table presents information about the Company’s right-of-use assets and lease liabilities at December 31, 2022 and December 31, 2021 (in thousands): Balance Sheet Line Items December 31, 2022 December 31, 2021 Right-of-use assets: Operating lease right-of-use assets Operating lease assets $ 28,070 $ 34,832 Finance lease right-of-use assets Property, plant and equipment, net 26,761 38,365 Total right-of-use assets $ 54,831 $ 73,197 Operating lease liabilities (1): Current operating lease liabilities Current portion of operating lease liabilities $ 903 $ 10,992 Noncurrent operating lease liabilities Operating lease liabilities, less current portion 5,129 33,727 Total operating lease liabilities $ 6,032 $ 44,719 Finance lease liabilities (1): Current finance lease liabilities Accounts payable and accrued expenses $ — $ 6,841 Noncurrent finance lease liabilities Other liabilities 1,392 18,374 Total finance lease liabilities $ 1,392 $ 25,215 __________ (1) Amounts at December 31, 2022 exclude operating lease liabilities of $28.4 million and finance lease liabilities of $17.1 million that are classified as Liabilities subject to compromise in the Consolidated Balance Sheets. |
Schedule of Lease, Cost | The following table presents information about lease costs and expenses and sublease income for the years ended December 31, 2022, 2021 and 2020 (in thousands): Statement of Operations Line Items 2022 2021 2020 Operating lease cost Various (1) $ 10,959 $ 13,892 $ 14,175 Finance lease cost: Amortization of right-of-use assets Various (1) $ 8,479 $ 9,244 $ 9,244 Interest on lease liabilities Interest expense, net $ 1,127 $ 1,480 $ 1,716 Other lease costs and income: Variable lease costs (2) Various (1) $ 11,707 $ 13,202 $ 10,305 Finance lease right-of-use asset impairment charges Asset impairment charges $ 3,063 $ — $ — Operating lease right-of-use asset impairment charges Asset impairment charges $ — $ — $ 6,392 Sublease income Various (1) $ (6,436) $ (3,793) $ (3,803) __________ (1) Amounts are included in the Consolidated Statements of Operations based on the function that the underlying leased asset supports. The following table presents the components of such aggregate amounts for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Cost of revenues $ 6,189 $ 11,316 $ 11,610 Selling, general and administrative $ 18,305 $ 21,013 $ 18,108 Research and development $ 215 $ 216 $ 203 (2) Amounts represent variable lease costs incurred that were not included in the initial measurement of the lease liability such as common area maintenance and utilities costs associated with leased real estate and certain costs associated with our automobile leases. The following table provides the undiscounted amount of future cash flows included in our lease liabilities at December 31, 2022 for each of the five years subsequent to December 31, 2022 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at December 31, 2022 (in thousands): Operating Leases Finance Leases 2023 $ 11,518 $ 7,881 2024 6,599 8,038 2025 5,381 896 2026 5,337 896 2027 5,345 896 Thereafter 4,630 9,303 Total future lease payments $ 38,810 $ 27,910 Less: amounts representing interest 4,391 9,440 Present value of future lease payments (lease liabilities, including amounts classified as Liabilities subject to compromise) $ 34,419 $ 18,470 Less: amounts classified as Liabilities subject to compromise 28,387 17,078 Lease liabilities, excluding amounts classified as Liabilities subject to compromise $ 6,032 $ 1,392 The following table provides the weighted average remaining lease term and weighted average discount rates for our leases as of December 31, 2022 and December 31, 2021: December 31, 2022 December 31, 2021 Weighted average remaining lease term (years), weighted based on lease liability balances: Operating leases 4.9 years 5.1 years Finance leases 9.9 years 9.5 years Weighted average discount rate (percentages), weighted based on the remaining balance of lease payments: Operating leases 6.1 % 5.9 % Finance leases 7.5 % 7.6 % The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash payments for operating leases $ 13,152 $ 14,478 $ 14,598 Operating cash payments for finance leases $ 1,673 $ 2,256 $ 2,666 Financing cash payments for finance leases $ 6,062 $ 5,448 $ 4,884 Lease liabilities arising from obtaining right-of-use assets: Operating leases (1) $ 1,296 $ 5,807 $ — __________ (1) The amount in 2022 primarily relates to a new lease agreement. The amount in 2021 primarily relates to an increase in lease liabilities and right-of-use assets related to a lease modification. |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, net consists of the following at December 31, 2022 and December 31, 2021 (in thousands): December 31, 2022 December 31, 2021 Land and buildings $ 239,207 $ 234,219 Machinery and equipment 241,930 206,971 Leasehold improvements 54,388 55,020 Computer equipment and software 92,566 118,959 Furniture and fixtures 9,129 11,939 Assets under construction 142,560 120,483 Total property, plant and equipment, gross $ 779,780 $ 747,591 Less: accumulated depreciation (341,466) (350,879) Total property, plant and equipment, net $ 438,314 $ 396,712 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill | Changes in the carrying amounts of our goodwill for the years ended December 31, 2022 and December 31, 2021 were as follows (in thousands): Branded Pharmaceuticals Sterile Injectables Generic Pharmaceuticals International Pharmaceuticals Total Goodwill as of December 31, 2020 $ 828,818 $ 2,731,193 $ — $ — $ 3,560,011 Goodwill impairment charges — (363,000) — — (363,000) Goodwill as of December 31, 2021 $ 828,818 $ 2,368,193 $ — $ — $ 3,197,011 Goodwill impairment charges — (1,845,000) — — (1,845,000) Goodwill as of December 31, 2022 $ 828,818 $ 523,193 $ — $ — $ 1,352,011 The carrying amounts of goodwill at December 31, 2022 and December 31, 2021 are net of the following accumulated impairments (in thousands): Branded Pharmaceuticals Sterile Injectables Generic Pharmaceuticals International Pharmaceuticals Total Accumulated impairment losses as of December 31, 2021 $ 855,810 $ 363,000 $ 3,142,657 $ 550,355 $ 4,911,822 Accumulated impairment losses as of December 31, 2022 $ 855,810 $ 2,208,000 $ 3,142,657 $ 513,211 $ 6,719,678 |
Schedule of Other Intangible Assets | Changes in the amounts of other intangible assets for the year ended December 31, 2022 are set forth in the table below (in thousands). Cost basis: Balance as of December 31, 2021 Acquisitions Impairments Effect of Currency Translation Balance as of December 31, 2022 Licenses (weighted average life of 14 years) $ 442,107 $ — $ — $ — $ 442,107 Tradenames 6,409 — — — 6,409 Developed technology (weighted average life of 12 years) 6,226,139 — (288,701) (17,417) 5,920,021 Total other intangibles (weighted average life of 12 years) $ 6,674,655 $ — $ (288,701) $ (17,417) $ 6,368,537 Accumulated amortization: Balance as of December 31, 2021 Amortization Impairments Effect of Currency Translation Balance as of December 31, 2022 Licenses $ (419,932) $ (4,576) $ — $ — $ (424,508) Tradenames (6,409) — — — (6,409) Developed technology (3,885,491) (332,735) — 13,541 (4,204,685) Total other intangibles $ (4,311,832) $ (337,311) $ — $ 13,541 $ (4,635,602) Net other intangibles $ 2,362,823 $ 1,732,935 |
Schedule of Future Amortization Expense | For intangible assets subject to amortization, estimated amortization expense for the five fiscal years subsequent to December 31, 2022 is as follows (in thousands): 2023 $ 255,869 2024 $ 245,751 2025 $ 232,668 2026 $ 209,532 2027 $ 134,364 |
LICENSE, COLLABORATION AND AS_2
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Scheduled of Asset Acquisition | The following table represents the costs accumulated to acquire BioSpecifics (in thousands): December 2, 2020 Base purchase price (1) $ 650,029 Vested employee options and benefits (2) 10,280 Transaction costs 10,268 Less: royalty obligations discharged (3) (14,909) Total acquisition consideration $ 655,668 __________ (1) Represents cash consideration paid for 6,159,975 shares tendered and 1,184,980 remaining shares not tendered, but automatically cancelled and funded in an escrow account. (2) In accordance with BioSpecifics’ stock plan and employment arrangements, certain unvested options and employee bonus compensation immediately vested and accelerated, with no future service requirement, upon change in control. We have accounted for the accelerated vestings as a component of consideration transferred. (3) Represents the total reduction to the base purchase price for the pre-acquisition accrued and unpaid royalty liability discharged on the date of closing. The following table summarizes the allocation of consideration transferred on a relative fair value basis to identifiable tangible and intangible assets and other information about the assets and liabilities acquired at the BioSpecifics acquisition date (in thousands): December 2, 2020 Cash and cash equivalents $ 21,073 Investments (1) 89,050 Intangible assets—developed technology 673,796 Intangible assets—in-process research and development 28,602 Other acquired assets 3,089 Deferred tax liability (156,441) Other assumed liabilities (3,501) Net identifiable assets acquired $ 655,668 __________ (1) Investments acquired primarily consisted of debt securities acquired from BioSpecifics on December 2, 2020. Investments acquired were fully liquidated prior to December 31, 2020. No material gains or losses were recognized upon liquidation. Gross Carrying Amount Accumulated Amortization Net Book Amount Asset balances immediately prior to BioSpecifics acquisition $ 1,580,600 $ (725,123) $ 855,477 Additional costs incurred in connection with BioSpecifics acquisition 673,796 — 673,796 Asset balances immediately following BioSpecifics acquisition $ 2,254,396 $ (725,123) $ 1,529,273 |
CONTRACT ASSETS AND LIABILITI_2
CONTRACT ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | |
Schedule of Contract Assets and Liabilities | The following table shows the opening and closing balances of contract assets and contract liabilities from contracts with customers (dollars in thousands): December 31, 2022 December 31, 2021 $ Change % Change Contract assets (1) $ 8,193 $ 13,005 $ (4,812) (37) % Contract liabilities (2) $ 4,099 $ 4,663 $ (564) (12) % __________ (1) At December 31, 2022 and December 31, 2021, approximately $1.5 million and $2.8 million, respectively, of these contract asset amounts are classified as current and are included in Prepaid expenses and other current assets in the Company’s Consolidated Balance Sheets. The remaining amounts are classified as noncurrent and are included in Other assets. The net decrease in contract assets during the year ended December 31, 2022 primarily relates to: (i) reclassifications of certain amounts to receivables as a result of rights to consideration becoming unconditional and (ii) net changes in estimates with respect to amounts of consideration expected to be received from sales of certain intellectual property rights. (2) At December 31, 2022 and December 31, 2021, approximately $0.6 million and $0.6 million, respectively, of these contract liability amounts are classified as current and are included in Accounts payable and accrued expenses in the Company’s Consolidated Balance Sheets. The remaining amounts are classified as noncurrent and are included in Other liabilities. During the year ended December 31, 2022, approximately $0.6 million of revenue was recognized that was included in the contract liability balance at December 31, 2021. |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses included the following at December 31, 2022 and December 31, 2021 (in thousands): December 31, 2022 December 31, 2021 Trade accounts payable $ 109,033 $ 123,129 Returns and allowances 160,619 183,116 Rebates 167,516 150,039 Chargebacks 920 2,617 Other sales deductions 6,197 2,500 Accrued interest 68 106,735 Accrued payroll and related benefits 95,666 90,029 Accrued royalties and other distribution partner payables 24,072 58,422 Acquisition-related contingent consideration—current — 5,748 Other (1) 123,092 114,563 Total $ 687,183 $ 836,898 __________ (1) Amounts include a wide variety of accrued expenses, the most significant of which relate to accrued legal and other professional fees. |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | The following table presents information about the Company’s total indebtedness at December 31, 2022 and December 31, 2021 (dollars in thousands): December 31, 2022 December 31, 2021 Effective Interest Rate (1) Principal Amount (2) Carrying Amount (2) Effective Interest Rate Principal Amount Carrying Amount 7.25% Senior Notes due 2022 $ — $ — 7.25 % $ 8,294 $ 8,294 5.75% Senior Notes due 2022 — — 5.75 % 172,048 172,048 5.375% Senior Notes due 2023 5.38 % 6,127 6,127 5.62 % 6,127 6,111 6.00% Senior Notes due 2023 6.00 % 56,436 56,436 6.28 % 56,436 56,203 5.875% Senior Secured Notes due 2024 6.88 % 300,000 286,375 6.14 % 300,000 297,928 6.00% Senior Notes due 2025 6.00 % 21,578 21,578 6.27 % 21,578 21,413 7.50% Senior Secured Notes due 2027 8.50 % 2,015,479 1,894,774 7.70 % 2,015,479 1,997,777 9.50% Senior Secured Second Lien Notes due 2027 9.50 % 940,590 940,590 9.68 % 940,590 933,330 6.00% Senior Notes due 2028 6.00 % 1,260,416 1,260,416 6.11 % 1,260,416 1,252,667 6.125% Senior Secured Notes due 2029 7.13 % 1,295,000 1,230,799 6.34 % 1,295,000 1,278,718 Term Loan Facility 13.50 % 1,975,000 1,871,894 6.12 % 1,985,000 1,947,633 Revolving Credit Facility 11.00 % 277,200 265,728 2.63 % 277,200 277,200 Total (3) $ 8,147,826 $ 7,834,717 $ 8,338,168 $ 8,249,322 __________ (1) As noted below, beginning on the Petition Date, we ceased recognition of interest expense related to all of our debt instruments and began to incur “adequate protection payments” (further discussed below) related to our First Lien Debt Instruments (representing all of our debt instruments except for our senior unsecured notes and the 9.50% Senior Secured Second Lien Notes due 2027). The December 31, 2022 “effective interest rates” included in the table above represent the rates in effect on such date used to calculate: (i) future adequate protection payments related to our First Lien Debt Instruments and (ii) future contractual interest related to our other debt instruments, notwithstanding the fact that such interest is not currently being recognized. These rates are expressed as a percentage of the contractual principal amounts outstanding as of such date and, with respect to our First Lien Debt Instruments, without consideration of any reductions related to adequate protection payments made through such date. (2) The December 31, 2022 principal amounts represent the amount of unpaid contractual principal owed on the respective instruments. During the third quarter of 2022, in accordance with ASC 852, we adjusted the carrying amounts of all unsecured and potentially undersecured debt instruments to equal the expected amount of the allowed claim by expensing (within Reorganization items, net in the Consolidated Statements of Operations) $89.2 million of previously-deferred and unamortized costs associated with these instruments. The December 31, 2022 carrying amounts of our First Lien Debt Instruments also reflect reductions for certain adequate protection payments made since the Petition Date, as further discussed herein. (3) As of December 31, 2022, the entire carrying amount our debt, as well as any related remaining accrued and unpaid interest that existed as of the Petition Date, is included in the Liabilities subject to compromise line in the Consolidated Balance Sheets. As of December 31, 2021, $200.3 million of the carrying amount of our debt is classified as a current liability and is included in the Current portion of long-term debt line in the Consolidated Balance Sheets. The remaining carrying amount of our debt as of December 31, 2021 is included in the Long-term debt, less current portion, net line in the Consolidated Balance Sheets. |
Schedule of Maturities of Long-Term Debt | The following table presents, as of December 31, 2022, for each of the five fiscal years subsequent to December 31, 2022, the stated maturities on our long-term debt that would have been applicable if not for such acceleration (in thousands): Maturities (1) 2023 $ 82,563 2024 (2) $ 394,600 2025 $ 41,578 2026 (2) $ 222,600 2027 $ 2,976,069 __________ (1) The terms of the Credit Agreement provide that certain amounts borrowed pursuant to the Credit Facilities could mature prior to their scheduled maturity date if certain of our senior notes are not refinanced or repaid prior to the date that is 91 days prior to the respective stated maturity dates thereof. The amounts in this maturities table do not reflect any potential early repayments or refinancings. (2) Based on the Company’s borrowings under the Revolving Credit Facility that were outstanding at December 31, 2022, $74.6 million would have matured in 2024, with the remainder maturing in 2026. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Changes in Qualified Settlement Funds Accounts and Product Liability Balance | The following table presents the changes in the mesh-related QSFs and liability accrual balances during the year ended December 31, 2022 (in thousands): Mesh Qualified Settlement Funds Mesh Liability Accrual Balance as of December 31, 2021 $ 78,402 $ 258,137 Cash received for reversionary interests, net of cash contributions to Qualified Settlement Funds (367) — Cash distributions to settle disputes from Qualified Settlement Funds (28,159) (28,159) Other cash distributions to settle disputes — (6,499) Other (1) 463 (507) Balance as of December 31, 2022 (2) $ 50,339 $ 222,972 __________ (1) Amounts deposited in the QSFs earn interest from time to time that is reflected in the table above as an increase to the QSF and Mesh Liability Accrual balances. Subject to any restrictions on making payments as a result of the Chapter 11 Cases, such interest is generally used to pay administrative costs of the funds and any interest remaining after all claims have been paid will generally be distributed to the claimants who participated in that settlement. Also included within this line are foreign currency adjustments for settlements not denominated in U.S. dollars. (2) As of December 31, 2022, this balance is classified as Liabilities subject to compromise in the Consolidated Balance Sheets. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Allocation of Stock-Based Compensation | Presented below are the components of total share-based compensation as recorded in our Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 (in thousands). 2022 2021 2020 Selling, general and administrative expenses $ 16,019 $ 23,400 $ 32,368 Research and development expenses 1,059 1,378 2,504 Cost of revenues 1,136 5,268 6,485 Total share-based compensation expense $ 18,214 $ 30,046 $ 41,357 |
Schedule of Activity Under Stock Incentive Plans | A summary of the activity for each of the years ended December 31, 2022, 2021 and 2020 is presented below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (1) Outstanding as of December 31, 2019 7,280,539 $ 18.93 Forfeited (16,953) $ 11.81 Expired (347,000) $ 35.56 Outstanding as of December 31, 2020 6,916,586 $ 18.11 Exercised (82,331) $ 7.55 Forfeited (11,887) $ 13.19 Expired (438,454) $ 40.76 Outstanding as of December 31, 2021 6,383,914 $ 16.70 Expired (1,304,602) $ 20.04 Outstanding as of December 31, 2022 (2) 5,079,312 $ 15.84 2.01 $ — Vested and expected to vest as of December 31, 2022 (2) 5,079,312 $ 15.84 2.01 $ — Exercisable as of December 31, 2022 (2) 5,079,312 $ 15.84 2.01 $ — __________ (1) The intrinsic value of a stock option is the excess, if any, of the closing price of the Company’s ordinary shares on the last trading day of the fiscal year over the exercise price. The aggregate intrinsic values presented in the table above represent sum of the intrinsic values of all corresponding stock options that are “in-the-money,” if any. (2) On March 3, 2023, the Bankruptcy Court entered orders authorizing the Company to reject outstanding stock option agreements, restricted stock award agreements and performance award agreements. |
Schedule of Non-vested RSUs and PSUs | A summary of our non-vested RSUs and PSUs for the years ended December 31, 2022, 2021 and 2020 is presented below: Number of Shares Aggregate Intrinsic Value (1) Non-vested as of December 31, 2019 12,916,289 Granted 3,761,648 Forfeited (824,299) Vested (5,513,359) Non-vested as of December 31, 2020 10,340,279 Granted 4,483,385 Forfeited (1,302,292) Vested (5,380,262) Non-vested as of December 31, 2021 8,141,110 Granted 280,373 Forfeited (1,116,960) Vested (2,324,696) Non-vested as of December 31, 2022 (2) 4,979,827 $ 348,588 Vested and expected to vest as of December 31, 2022 (2) 4,751,674 $ 332,617 __________ (1) The aggregate intrinsic values presented in the table above were calculated by multiplying the closing price of the Company’s ordinary shares on the last trading day of the fiscal year by the corresponding quantities above. (2) On March 3, 2023, the Bankruptcy Court entered orders authorizing the Company to reject outstanding stock option agreements, restricted stock award agreements and performance award agreements. In connection with the rejection of these agreements, the Company currently expects to recognize any remaining unrecognized compensation cost associated with these agreements during the first quarter of 2023. |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Component of Operating Income [Abstract] | |
Schedule of Components of Other Expense, Net | The components of Other income, net for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands): 2022 2021 2020 Net gain on sale of business and other assets (1) $ (26,183) $ (4,516) $ (16,353) Foreign currency (gain) loss, net (2) (2,087) 1,253 2,466 Net loss (gain) from our investments in the equity of other companies (3) 378 453 (2,160) Other miscellaneous, net (4) (6,162) (16,964) (5,063) Other income, net $ (34,054) $ (19,774) $ (21,110) __________ (1) Amounts primarily relate to the sales of certain intellectual property rights and certain other assets including, in 2022 and 2021, assets associated with the sale transactions that are further discussed in Note 4. Discontinued Operations and Asset Sales. (2) Amounts relate to the remeasurement of the Company’s foreign currency denominated assets and liabilities. (3) Amounts relate to the income statement impacts of our investments in the equity of other companies, including investments accounted for under the equity method. (4) Amounts in 2021 include gains of $15.5 million associated with the termination of certain contracts. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss from Continuing Operations | The components of our Loss from continuing operations before income tax by geography for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands): 2022 2021 2020 U.S. $ (2,429,315) $ 4,792,852 $ (375,262) International (458,787) (5,339,455) 348,744 Total loss from continuing operations before income tax $ (2,888,102) $ (546,603) $ (26,518) |
Schedule of Components of Income Tax Expense (Benefit) | Income tax from continuing operations consists of the following for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Current: U.S. Federal $ 21,057 $ 13,649 $ (108,866) U.S. State 1,731 1,491 (434) International 6,031 10,495 (1,124) Total current income tax $ 28,819 $ 25,635 $ (110,424) Deferred: U.S. Federal $ (622) $ 118 $ (143,411) U.S. State 1,065 (564) (11,773) International (7,746) (2,711) (8,374) Total deferred income tax $ (7,303) $ (3,157) $ (163,558) Total income tax $ 21,516 $ 22,478 $ (273,982) |
Schedule of Reconciliation of Income Tax | A reconciliation of income tax from continuing operations at the U.S. federal statutory income tax rate to the total income tax provision from continuing operations for the years ended December 31, 2022, 2021 and 2020 is as follows (in thousands): 2022 2021 2020 Notional U.S. federal income tax provision at the statutory rate $ (606,502) $ (114,787) $ (5,569) State income tax, net of federal benefit (9,517) 6,750 (17,311) U.S. tax reform impact — — (129,599) Uncertain tax positions 21,930 42,415 35,941 Residual tax on non-U.S. net earnings (32,257) (181,739) (83,550) Non-deductible goodwill impairment 385,459 76,230 7,490 Change in valuation allowance 306,497 495,565 (97,752) Base erosion minimum tax — — 77,438 Non-deductible expenses 47,221 39,791 8,875 Executive compensation limitation 5,580 6,215 5,857 Equity based compensation 3,247 2,695 6,495 Financing activities (1) 73,629 (287,012) (33,217) Investment activities (2) (178,018) (68,943) (44,964) Other 4,247 5,298 (4,116) Income tax $ 21,516 $ 22,478 $ (273,982) __________ (1) The amount in 2022 primarily relates to non-deductible foreign currency adjustments on intercompany debt. The amount in 2021 primarily relates to a net tax benefit of approximately $1.2 billion related to non-taxable intercompany cancellation of indebtedness income, which was partially offset by a net tax expense of approximately $465 million related to non-deductible bad debt expense and a net tax expense of approximately $427 million related to non-deductible intercompany interest expense. The net tax benefit is fully offset by an increase to the valuation allowance. (2) The amounts in 2022 and 2021 primarily relate to tax deductible losses associated with the investment in consolidated subsidiaries. The tax benefit is fully offset by an increase to the valuation allowance. |
Schedule of Deferred Income Taxes | Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The significant components of the net deferred income tax liability shown on the balance sheets as of December 31, 2022 and 2021 are as follows (in thousands): December 31, 2022 December 31, 2021 Deferred tax assets: Accrued expenses and reserves $ 220,415 $ 144,573 Deferred interest deduction 421,552 347,501 Fixed assets, intangible assets and deferred amortization 560,257 512,584 Loss on capital assets 23,511 64,503 Net operating loss carryforward 9,214,688 9,258,122 Other 49,943 50,694 Research and development and other tax credit carryforwards 7,777 8,254 Total gross deferred income tax assets $ 10,498,143 $ 10,386,231 Deferred tax liabilities: Other $ (3,156) $ (8,586) Investments (107) (124,311) Intercompany notes (72,286) (104,530) Total gross deferred income tax liabilities $ (75,549) $ (237,427) Valuation allowance (10,436,419) (10,169,294) Net deferred income tax liability $ (13,825) $ (20,490) |
Schedule of Tax Credit Carryforwards | As of December 31, 2022, the Company had significant deferred tax assets for tax credits, net operating and capital loss carryforwards, net of unrecognized tax positions, as presented below (in thousands): Jurisdiction Amount Begin to Expire Ireland $ 79,617 Indefinite Luxembourg $ 8,934,046 2034 U.S.: Federal-ordinary losses $ 19,105 2037 Federal-capital losses $ 13,699 2023 Federal-tax credits $ 14,081 2025 State-ordinary losses $ 227,587 2023 State-capital losses $ 11,871 2023 State-tax credits $ 3,256 2037 |
Schedule of Valuation Allowance | As of December 31, 2022, the Company had the following significant valuation allowances (in thousands): Jurisdiction December 31, 2022 Ireland $ 289,500 Luxembourg $ 8,862,060 U.S. $ 1,278,026 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to UTPs during the years ended December 31, 2022, 2021 and 2020 (in thousands): Unrecognized Tax Positions Federal, State and Foreign Tax UTP Balance at December 31, 2019 $ 486,481 Gross additions for current year positions 33,402 Gross reductions for prior period positions (577) Gross additions for prior period positions 16,914 Decrease due to lapse of statute of limitations (7,033) Currency translation adjustment 588 UTP Balance at December 31, 2020 $ 529,775 Gross additions for current year positions 36,662 Gross reductions for prior period positions (702) Gross additions for prior period positions 1,203 Decrease due to lapse of statute of limitations (475) Currency translation adjustment (24) UTP Balance at December 31, 2021 $ 566,439 Gross additions for current year positions 20,061 Decrease due to lapse of statute of limitations (4,451) Currency translation adjustment (2,419) UTP Balance at December 31, 2022 $ 579,630 Accrued interest and penalties 66,736 Total UTP balance including accrued interest and penalties $ 646,366 |
Schedule of Income Tax Examinations | As of December 31, 2022, we may be subject to examination in the following major tax jurisdictions: Jurisdiction Open Years Canada 2016 through 2022 India 2012 through 2022 Ireland 2016 through 2022 Luxembourg 2015 through 2022 U.S. - federal, state and local 2006 through 2022 |
NET (LOSS) INCOME PER SHARE (Ta
NET (LOSS) INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Numerator and Denominator of Basic and Diluted Net (Loss) Income Per Share | The following is a reconciliation of the numerator and denominator of basic and diluted net (loss) income per share for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Numerator: (Loss) income from continuing operations $ (2,909,618) $ (569,081) $ 247,464 Income (loss) from discontinued operations, net of tax (13,487) (44,164) (63,520) Net (loss) income $ (2,923,105) $ (613,245) $ 183,944 Denominator: For basic per share data—weighted average shares 234,840 232,785 229,314 Dilutive effect of ordinary share equivalents — — 4,339 For diluted per share data—weighted average shares 234,840 232,785 233,653 |
Schedule of Computation of Diluted Income Per Share Amount | The following table presents, for the years ended December 31, 2022, 2021 and 2020, outstanding stock options and stock awards that could potentially dilute per share amounts in the future that were not included in the computation of diluted per share amounts for the periods presented because to do so would have been antidilutive (in thousands): 2022 2021 2020 Stock options 5,453 6,584 7,073 Stock awards 5,789 9,256 5,197 |
CONDENSED COMBINED DEBTOR-IN-_2
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Reorganizations [Abstract] | |
Schedule of Condensed Combined Financial Statements of the Debtors | The financial statements included in this Note represent the Condensed Combined Financial Statements of the Debtors only, which include Endo International plc and most of its wholly-owned subsidiaries, except for its Indian subsidiaries and certain subsidiaries associated with the Company’s former Astora business. These statements reflect the results of operations, financial position and cash flows of the combined Debtors, including certain amounts and activities between Debtors and Non-Debtor Affiliates of the Company that are eliminated in the Consolidated Financial Statements. CONDENSED COMBINED BALANCE SHEETS (Dollars in thousands) December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 991,901 Restricted cash and cash equivalents 59,358 Accounts receivable, net 478,889 Inventories, net 241,349 Prepaid expenses and other current assets 111,807 Income taxes receivable 7,038 Receivables from Non-Debtor Affiliates 94,608 Total current assets $ 1,984,950 PROPERTY, PLANT AND EQUIPMENT, NET 233,114 OPERATING LEASE ASSETS 23,200 GOODWILL 1,352,011 OTHER INTANGIBLES, NET 1,732,935 INVESTMENTS IN NON-DEBTOR AFFILIATES 50,001 RECEIVABLES FROM NON-DEBTOR AFFILIATES 240,002 OTHER ASSETS 126,494 TOTAL ASSETS $ 5,742,707 LIABILITIES AND DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ 654,414 Current portion of operating lease liabilities 230 Income taxes payable 10 Payables to Non-Debtor Affiliates 20,162 Total current liabilities $ 674,816 DEFERRED INCOME TAXES 13,479 OPERATING LEASE LIABILITIES, LESS CURRENT PORTION 994 OTHER LIABILITIES 37,367 LIABILITIES SUBJECT TO COMPROMISE 9,168,782 TOTAL DEFICIT (4,152,731) TOTAL LIABILITIES AND DEFICIT $ 5,742,707 CONDENSED COMBINED STATEMENTS OF OPERATIONS (Dollars in thousands) 2022 TOTAL REVENUES, NET $ 2,321,426 COSTS AND EXPENSES: Cost of revenues 1,106,855 Selling, general and administrative 764,768 Research and development 137,851 Acquired in-process research and development 68,700 Litigation-related and other contingencies, net 478,722 Asset impairment charges 2,137,107 Acquisition-related and integration items, net 408 Interest expense, net 345,593 Reorganization items, net 202,978 Other income, net (13,409) LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX $ (2,908,147) INCOME TAX EXPENSE 17,721 LOSS FROM CONTINUING OPERATIONS $ (2,925,868) DISCONTINUED OPERATIONS, NET OF TAX (13,468) NET LOSS ATTRIBUTABLE TO DEBTOR ENTITIES $ (2,939,336) EQUITY IN INCOME OF NON-DEBTOR AFFILIATES, NET OF TAX 22,671 NET LOSS $ (2,916,665) CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE LOSS (Dollars in thousands) 2022 NET LOSS $ (2,916,665) OTHER COMPREHENSIVE LOSS: Net unrealized loss on foreign currency $ (10,496) Total other comprehensive loss $ (10,496) COMPREHENSIVE LOSS $ (2,927,161) CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Dollars in thousands) 2022 OPERATING ACTIVITIES: Net cash provided by operating activities (1) $ 209,523 INVESTING ACTIVITIES: Capital expenditures, excluding capitalized interest (43,743) Capitalized interest payments (3,140) Proceeds from the U.S. Government Agreement 18,635 Acquisitions, including in-process research and development, net of cash and restricted cash acquired (90,320) Proceeds from sale of business and other assets, net 41,400 Proceeds from loans made to Non-Debtor Affiliates 2,355 Disbursements for loans made to Non-Debtor Affiliates (51,486) Net cash used in investing activities $ (126,299) FINANCING ACTIVITIES: Repayments of notes (180,342) Repayments of term loans (10,000) Adequate protection payments (313,109) Repayments of other indebtedness (6,062) Payments for contingent consideration (2,462) Payments of tax withholding for restricted shares (1,898) Net cash used in financing activities $ (513,873) Effect of foreign exchange rate (1,790) NET DECREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS $ (432,439) CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD 1,568,698 CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD $ 1,136,259 __________ (1) The difference between the amount of Net cash provided by operating activities included in the table above and the amount of Net cash provided by operating activities included in the Consolidated Statements of Cash Flows for the same period primarily relates to the fact that the table above: (i) excludes the operating cash flows of our Non-Debtor Affiliates, which are included in the Consolidated Statements of Cash Flows, and (ii) includes the effects of the operating cash flows of the Debtors with the Non-Debtor Affiliates, which are eliminated in the Consolidated Statements of Cash Flows. |
BANKRUPTCY PROCEEDINGS (Details
BANKRUPTCY PROCEEDINGS (Details) - USD ($) $ in Millions | 4 Months Ended | |||
Aug. 17, 2022 | Aug. 16, 2022 | Dec. 31, 2022 | Oct. 31, 2022 | |
Reorganization | ||||
Liquidity requirement | $ 600 | |||
Reorganisation items, net | $ 53.7 | |||
Staling Horse Bid | ||||
Reorganization | ||||
Potential proceeds from settlement of unencumbered assets | $ 5 | |||
Potential reimbursement closing cost | $ 115 | $ 122 | ||
Restructuring Support Agreement | ||||
Reorganization | ||||
Outstanding principal amount of secured debt, percentage | 50% |
BANKRUPTCY PROCEEDINGS - Liabil
BANKRUPTCY PROCEEDINGS - Liabilities Subject to Compromise (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Reorganizations [Abstract] | ||
Accounts payable | $ 30,317 | |
Accrued interest | 160,617 | |
Debt | 7,834,717 | |
Litigation accruals | 820,805 | |
Uncertain tax positions | 235,176 | |
Other | 87,150 | |
Total | $ 9,168,782 | $ 0 |
BANKRUPTCY PROCEEDINGS - Reorga
BANKRUPTCY PROCEEDINGS - Reorganization Items (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reorganizations [Abstract] | |||
Professional fees | $ 113,781 | ||
Debt valuation adjustments | 89,197 | $ 0 | $ 0 |
Total | $ 202,978 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidated Revenue (Details) - Revenue from Contract with Customer Benchmark | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Product Concentration Risk | XIAFLEX® | |||
Product Information | |||
Concentration risk, percentage | 19% | 14% | 11% |
Product Concentration Risk | Varenicline Tablets | Maximum | |||
Product Information | |||
Concentration risk, percentage | 13% | ||
Product Concentration Risk | VASOSTRICT® | |||
Product Information | |||
Concentration risk, percentage | 11% | 30% | 27% |
AmerisourceBergen Corporation | Customer Concentration Risk | |||
Product Information | |||
Concentration risk, percentage | 35% | 36% | 33% |
McKesson Corporation | Customer Concentration Risk | |||
Product Information | |||
Concentration risk, percentage | 26% | 32% | 27% |
Cardinal Health, Inc. | Customer Concentration Risk | |||
Product Information | |||
Concentration risk, percentage | 20% | 22% | 24% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition and Concentrations of Credit Risk and Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information | ||
Allowances for sales returns and allowances | $ 600.2 | $ 588.7 |
Minimum | ||
Product Information | ||
Revenue from contract with customer, return period | 6 months | |
Trade Accounts Receivable | Credit Concentration Risk | Cardinal Health, Inc. | ||
Product Information | ||
Concentration risk, percentage | 83% | 91% |
Trade Accounts Receivable | Credit Concentration Risk | McKesson Corporation | ||
Product Information | ||
Concentration risk, percentage | 83% | 91% |
Trade Accounts Receivable | Credit Concentration Risk | AmerisourceBergen Corporation | ||
Product Information | ||
Concentration risk, percentage | 83% | 91% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment, Developed Technology and License Rights (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Machinery and equipment | |
Property, Plant and Equipment | |
Useful life (year) | 15 years |
Computer equipment and software | |
Property, Plant and Equipment | |
Useful life (year) | 10 years |
Furniture and fixtures | |
Property, Plant and Equipment | |
Useful life (year) | 10 years |
Minimum | Developed technology | |
Property, Plant and Equipment | |
Intangible life (years) | 6 years |
Minimum | Licensing | |
Property, Plant and Equipment | |
Intangible life (years) | 7 years |
Minimum | Building | |
Property, Plant and Equipment | |
Useful life (year) | 1 year |
Maximum | Developed technology | |
Property, Plant and Equipment | |
Intangible life (years) | 16 years |
Maximum | Licensing | |
Property, Plant and Equipment | |
Intangible life (years) | 15 years |
Maximum | Building | |
Property, Plant and Equipment | |
Useful life (year) | 30 years |
Weighted average | Developed technology | |
Property, Plant and Equipment | |
Intangible life (years) | 12 years |
Weighted average | Licensing | |
Property, Plant and Equipment | |
Intangible life (years) | 14 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 130.4 | $ 136.8 | $ 76 |
DISCONTINUED OPERATIONS AND A_3
DISCONTINUED OPERATIONS AND ASSETS SALES - Astora - Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Discontinued operations, net of tax | $ (13,487) | $ (44,164) | $ (63,520) |
Discontinued operations, disposed of by means other than sale, abandonment | Astora | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Litigation-related and other contingencies, net | 0 | 25,000 | 41,097 |
Loss from discontinued operations before income taxes | (15,543) | (49,594) | (67,847) |
Income tax benefit | (2,056) | (5,430) | (4,327) |
Discontinued operations, net of tax | $ (13,487) | $ (44,164) | $ (63,520) |
DISCONTINUED OPERATIONS AND A_4
DISCONTINUED OPERATIONS AND ASSETS SALES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Income (loss) from discontinued operations, net of tax | $ (13,487) | $ (44,164) | $ (63,520) | |
Asset impairments | 2,142,746 | 414,977 | 120,344 | |
2020 Restructuring Initiative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Asset impairments | 0 | 42,155 | 7,391 | |
Pre-tax reversal of severance costs | (1,216) | 7,384 | (60,025) | |
Discontinued operations, disposed of by means other than sale, abandonment | Astora | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Income (loss) from discontinued operations, net of tax | $ (13,487) | (44,164) | $ (63,520) | |
Disposal group, disposed of by sale, not discontinued operations | Manufacturing facilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Aggregate cash consideration from sale of assets | $ 18,500 | 25,600 | ||
Non-cash consideration from disposal | 5,800 | |||
Disposal group, disposed of by sale, not discontinued operations | Manufacturing facilities | 2020 Restructuring Initiative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Asset impairments | $ 8,400 | |||
Disposal group, disposed of by sale, not discontinued operations | Endo International PLC | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Asset impairments | 42,200 | |||
Pre-tax reversal of severance costs | $ 25,400 |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Apr. 30, 2022 USD ($) position | Nov. 30, 2020 USD ($) position | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||
Asset impairments | $ 2,142,746 | $ 414,977 | $ 120,344 | |||
2020 Restructuring Initiative | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related cost, expected number of positions eliminated | position | 300 | |||||
Restructuring charges | 7,278 | 68,469 | 93,636 | |||
Asset impairments | 0 | 42,155 | 7,391 | |||
2020 Restructuring Initiative | Disposal group, disposed of by sale, not discontinued operations | Manufacturing facilities | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Asset impairments | $ 8,400 | |||||
2020 Restructuring Initiative | Accelerated depreciation | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related cost, cost incurred to date | 51,000 | 51,000 | ||||
2020 Restructuring Initiative | Asset impairments | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related cost, cost incurred to date | 49,500 | 49,500 | ||||
2020 Restructuring Initiative | Inventory adjustments | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related cost, cost incurred to date | 11,600 | 11,600 | ||||
2020 Restructuring Initiative | Employee Separation, Continuity and Other Benefit-Related Costs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 1,216 | (7,384) | 60,025 | |||
Restructuring and related cost, cost incurred to date | 53,900 | 53,900 | ||||
2020 Restructuring Initiative | Other restructuring charges | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 796 | 3,711 | 664 | |||
Restructuring and related cost, cost incurred to date | 3,500 | 3,500 | ||||
2020 Restructuring Initiative | Operating segments | Generic Pharmaceuticals | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 5,400 | 49,900 | 79,000 | |||
Restructuring and related cost, cost incurred to date | $ 134,300 | 134,300 | ||||
2020 Restructuring Initiative | Cost of revenues | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 3,966 | $ 6,244 | $ 53,297 | |||
2020 Restructuring Initiative | Minimum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related costs, expected cost savings | $ 85,000 | |||||
2020 Restructuring Initiative | Minimum | Cost of revenues | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related costs, expected cost savings | 65,000 | |||||
2020 Restructuring Initiative | Minimum | Other expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related costs, expected cost savings | 20,000 | |||||
2020 Restructuring Initiative | Maximum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related costs, expected cost savings | 95,000 | |||||
2020 Restructuring Initiative | Maximum | Cost of revenues | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related costs, expected cost savings | 70,000 | |||||
2020 Restructuring Initiative | Maximum | Other expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related costs, expected cost savings | $ 25,000 | |||||
April, 2022 Restructuring Initiative | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related cost, expected number of positions eliminated | position | 190 | |||||
Restructuring charges | 252,119 | |||||
April, 2022 Restructuring Initiative | Employee Separation, Continuity and Other Benefit-Related Costs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 28,345 | |||||
April, 2022 Restructuring Initiative | Other restructuring charges | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 1,102 | |||||
April, 2022 Restructuring Initiative | Operating segments | Generic Pharmaceuticals | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 238,600 | |||||
April, 2022 Restructuring Initiative | Cost of revenues | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 49,078 | |||||
April, 2022 Restructuring Initiative | Minimum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related costs, expected cost savings | $ 105,000 | |||||
April, 2022 Restructuring Initiative | Maximum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related costs, expected cost savings | $ 125,000 |
RESTRUCTURING - Pre-tax Net Cha
RESTRUCTURING - Pre-tax Net Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net restructuring charges (charge reversals) related to: | |||
Accelerated depreciation | $ 180,248 | ||
Asset impairments | 2,142,746 | $ 414,977 | $ 120,344 |
2020 Restructuring Initiative | |||
Net restructuring charges (charge reversals) related to: | |||
Accelerated depreciation | 3,773 | 24,718 | 22,459 |
Asset impairments | 0 | 42,155 | 7,391 |
Inventory adjustments | 1,494 | 6,968 | 3,097 |
Employee separation, continuity and other benefit-related costs | 1,216 | (7,384) | 60,025 |
Certain other restructuring costs | 795 | 2,012 | 664 |
Total | 7,278 | $ 68,469 | $ 93,636 |
April, 2022 Restructuring Initiative | |||
Net restructuring charges (charge reversals) related to: | |||
Inventory adjustments | 34,870 | ||
Employee separation, continuity and other benefit-related costs | 28,345 | ||
Certain other restructuring costs | 8,656 | ||
Total | $ 252,119 |
RESTRUCTURING - Pre-tax Net C_2
RESTRUCTURING - Pre-tax Net Charges Included in the Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
2020 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | $ 7,278 | $ 68,469 | $ 93,636 |
April, 2022 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | 252,119 | ||
Cost of revenues | 2020 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | 3,966 | 6,244 | 53,297 |
Cost of revenues | April, 2022 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | 49,078 | ||
Selling, general and administrative | 2020 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | 208 | 20,788 | 27,857 |
Selling, general and administrative | April, 2022 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | 18,692 | ||
Research and development | 2020 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | 3,104 | 1,367 | 5,091 |
Research and development | April, 2022 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | 4,101 | ||
Asset impairments | 2020 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | 0 | 42,155 | 7,391 |
Asset impairments | April, 2022 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | 180,248 | ||
Other income, net | 2020 Restructuring Initiative | |||
Net restructuring charges (charge reversals) included in: | |||
Restructuring charges | $ 0 | $ (2,085) | $ 0 |
RESTRUCTURING - Changes to the
RESTRUCTURING - Changes to the Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
2020 Restructuring Initiative | |||
Restructuring Reserve | |||
Net charges | $ 7,278 | $ 68,469 | $ 93,636 |
April, 2022 Restructuring Initiative | |||
Restructuring Reserve | |||
Net charges | 252,119 | ||
Total | 2020 Restructuring Initiative | |||
Restructuring Reserve | |||
Beginning liability balance | 11,184 | 59,002 | 0 |
Net charges | 2,012 | (3,673) | 60,689 |
Cash payments | (12,927) | (44,145) | (1,687) |
Ending liability balance | 269 | 11,184 | 59,002 |
Total | April, 2022 Restructuring Initiative | |||
Restructuring Reserve | |||
Beginning liability balance | 0 | ||
Net charges | 29,447 | ||
Cash payments | (14,450) | ||
Ending liability balance | 14,997 | 0 | |
Employee Separation, Continuity and Other Benefit-Related Costs | 2020 Restructuring Initiative | |||
Restructuring Reserve | |||
Beginning liability balance | 10,979 | 58,338 | 0 |
Net charges | 1,216 | (7,384) | 60,025 |
Cash payments | (11,926) | (39,975) | (1,687) |
Ending liability balance | 269 | 10,979 | 58,338 |
Employee Separation, Continuity and Other Benefit-Related Costs | April, 2022 Restructuring Initiative | |||
Restructuring Reserve | |||
Beginning liability balance | 0 | ||
Net charges | 28,345 | ||
Cash payments | (13,348) | ||
Ending liability balance | 14,997 | 0 | |
Certain Other Restructuring Costs | 2020 Restructuring Initiative | |||
Restructuring Reserve | |||
Beginning liability balance | 205 | 664 | 0 |
Net charges | 796 | 3,711 | 664 |
Cash payments | (1,001) | (4,170) | 0 |
Ending liability balance | 0 | 205 | $ 664 |
Certain Other Restructuring Costs | April, 2022 Restructuring Initiative | |||
Restructuring Reserve | |||
Beginning liability balance | 0 | ||
Net charges | 1,102 | ||
Cash payments | (1,102) | ||
Ending liability balance | $ 0 | $ 0 |
SEGMENT RESULTS - Schedule of R
SEGMENT RESULTS - Schedule of Reportable Segments Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 4 | ||
Segment Reporting Information | |||
Total net revenues from external customers | $ 2,318,875 | $ 2,993,206 | $ 2,903,074 |
Total segment adjusted income from continuing operations before income tax | 1,072,031 | 1,573,010 | 1,455,871 |
Branded Pharmaceuticals | |||
Segment Reporting Information | |||
Total net revenues from external customers | 851,142 | 893,617 | 781,780 |
Total segment adjusted income from continuing operations before income tax | 366,554 | 384,186 | 377,526 |
Sterile Injectables | |||
Segment Reporting Information | |||
Total net revenues from external customers | 589,633 | 1,266,097 | 1,238,847 |
Total segment adjusted income from continuing operations before income tax | 349,424 | 998,453 | 950,145 |
Generic Pharmaceuticals | |||
Segment Reporting Information | |||
Total net revenues from external customers | 795,457 | 740,586 | 783,110 |
Total segment adjusted income from continuing operations before income tax | 336,133 | 160,046 | 87,178 |
International Pharmaceuticals | |||
Segment Reporting Information | |||
Total net revenues from external customers | 82,643 | 92,906 | 99,337 |
Total segment adjusted income from continuing operations before income tax | $ 19,920 | $ 30,325 | $ 41,022 |
SEGMENT RESULTS - Schedule of_2
SEGMENT RESULTS - Schedule of Reconciliations of Consolidated Adjusted Income (Loss) Before Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information | ||||
Total consolidated loss from continuing operations before income tax | $ (2,888,102) | $ (546,603) | $ (26,518) | |
Amortization of intangible assets | 337,311 | |||
Acquired in-process research and development charges | 68,700 | 25,120 | 33,329 | |
Asset impairment charges | 2,142,746 | 414,977 | 120,344 | |
Acquisition-related and integration items, net | 408 | (8,379) | 16,549 | |
Loss on extinguishment of debt | 0 | 13,753 | 0 | |
Reorganization items, net | 202,978 | 0 | 0 | |
Total segment adjusted income from continuing operations before income tax | 1,072,031 | 1,573,010 | 1,455,871 | |
Accelerated depreciation | 180,248 | |||
Gain (loss) from prior contract dispute | 15,500 | |||
Cost Reduction | ||||
Segment Reporting Information | ||||
Accelerated depreciation | 3,800 | 24,700 | 22,500 | |
6.125% Senior Secured Notes due 2029 | ||||
Segment Reporting Information | ||||
Loss on extinguishment of debt | $ 6,000 | |||
6.125% Senior Secured Notes due 2029 | Selling, general and administrative | ||||
Segment Reporting Information | ||||
Loss on extinguishment of debt | $ 3,900 | |||
Debt modification costs | 3,900 | 31,100 | ||
Employee severance | Cost Reduction | ||||
Segment Reporting Information | ||||
Restructuring charges | 85,600 | 8,800 | 86,900 | |
Other restructuring charges | Cost Reduction | ||||
Segment Reporting Information | ||||
Restructuring charges | 72,700 | 57,400 | 16,900 | |
Inventory adjustments | Cost Reduction | ||||
Segment Reporting Information | ||||
Restructuring charges | 36,400 | |||
Segment reconciling items | ||||
Segment Reporting Information | ||||
Interest expense, net | 349,776 | 562,353 | 532,939 | |
Corporate unallocated costs | 182,335 | 180,866 | 157,723 | |
Amortization of intangible assets | 337,311 | 372,907 | 427,543 | |
Acquired in-process research and development charges | 68,700 | 25,120 | 33,329 | |
Amounts related to continuity and separation benefits, cost reductions and strategic review initiatives | 198,381 | 90,912 | 126,282 | |
Certain litigation-related and other contingencies, net | 478,722 | 345,495 | (19,049) | |
Certain legal costs | 31,756 | 136,148 | 67,819 | |
Asset impairment charges | 2,142,746 | 414,977 | 120,344 | |
Acquisition-related and integration items, net | 408 | (8,379) | 16,549 | |
Loss on extinguishment of debt | 0 | 13,753 | 0 | |
Foreign currency impact related to the remeasurement of intercompany debt instruments | (5,328) | 797 | 1,919 | |
Reorganization items, net | 202,978 | 0 | 0 | |
Other, net | (27,652) | (15,336) | 16,991 | |
Operating segments | ||||
Segment Reporting Information | ||||
Total segment adjusted income from continuing operations before income tax | $ 1,072,031 | $ 1,573,010 | $ 1,455,871 |
SEGMENT RESULTS - Schedule of D
SEGMENT RESULTS - Schedule of Disaggregation of Revenues (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | $ 2,318,875,000 | $ 2,993,206,000 | $ 2,903,074,000 |
Product line revenue reporting threshold | $ 25,000,000 | $ 25,000,000 | |
XIAFLEX® | Revenue from Contract with Customer Benchmark | Product Concentration Risk | |||
Disaggregation of Revenue | |||
Concentration risk, percentage | 19% | 14% | 11% |
VASOSTRICT® | Revenue from Contract with Customer Benchmark | Product Concentration Risk | |||
Disaggregation of Revenue | |||
Concentration risk, percentage | 11% | 30% | 27% |
Varenicline Tablets | Revenue from Contract with Customer Benchmark | Product Concentration Risk | Maximum | |||
Disaggregation of Revenue | |||
Concentration risk, percentage | 13% | ||
Branded Pharmaceuticals | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | $ 851,142,000 | $ 893,617,000 | $ 781,780,000 |
Branded Pharmaceuticals | Specialty Products | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 621,700,000 | 633,150,000 | 497,078,000 |
Branded Pharmaceuticals | XIAFLEX® | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 438,680,000 | 432,344,000 | 316,234,000 |
Branded Pharmaceuticals | SUPPRELIN® LA | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 113,011,000 | 114,374,000 | 88,182,000 |
Branded Pharmaceuticals | Other Specialty | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 70,009,000 | 86,432,000 | 92,662,000 |
Branded Pharmaceuticals | Established Products | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 229,442,000 | 260,467,000 | 284,702,000 |
Branded Pharmaceuticals | PERCOCET® | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 103,943,000 | 103,788,000 | 110,112,000 |
Branded Pharmaceuticals | TESTOPEL® | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 38,727,000 | 43,636,000 | 35,234,000 |
Branded Pharmaceuticals | Other Established | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 86,772,000 | 113,043,000 | 139,356,000 |
Sterile Injectables | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 589,633,000 | 1,266,097,000 | 1,238,847,000 |
Sterile Injectables | VASOSTRICT® | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 253,696,000 | 901,735,000 | 785,646,000 |
Sterile Injectables | ADRENALIN® | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 114,304,000 | 124,630,000 | 152,074,000 |
Sterile Injectables | Other Sterile Injectables | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 221,633,000 | 239,732,000 | 301,127,000 |
Generic Pharmaceuticals | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | 795,457,000 | 740,586,000 | 783,110,000 |
International Pharmaceuticals | |||
Disaggregation of Revenue | |||
TOTAL REVENUES, NET | $ 82,643,000 | $ 92,906,000 | $ 99,337,000 |
International Pharmaceuticals | Revenue from Contract with Customer Benchmark | Product Concentration Risk | Maximum | |||
Disaggregation of Revenue | |||
Concentration risk, percentage | 5% | 5% |
SEGMENT RESULTS- Schedule of De
SEGMENT RESULTS- Schedule of Depreciation Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information | |||
Total depreciation expense | $ 54,318 | $ 84,191 | $ 91,264 |
Operating segments | Branded Pharmaceuticals | |||
Segment Reporting Information | |||
Total depreciation expense | 9,862 | 10,632 | 11,758 |
Operating segments | Sterile Injectables | |||
Segment Reporting Information | |||
Total depreciation expense | 20,224 | 17,796 | 17,400 |
Operating segments | Generic Pharmaceuticals | |||
Segment Reporting Information | |||
Total depreciation expense | 16,952 | 47,343 | 52,614 |
Operating segments | International Pharmaceuticals | |||
Segment Reporting Information | |||
Total depreciation expense | 3,638 | 4,242 | 4,530 |
Corporate unallocated | |||
Segment Reporting Information | |||
Total depreciation expense | $ 3,642 | $ 4,178 | $ 4,962 |
FAIR VALUE MEASUREMENTS - Restr
FAIR VALUE MEASUREMENTS - Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Restricted Cash and Cash Equivalents | ||
Restricted cash and cash equivalents, current | $ 145,358 | $ 124,114 |
Restricted cash and cash equivalents, noncurrent | 85,000 | 0 |
Total restricted cash and cash equivalents | 230,358 | 124,114 |
Restricted Cash and Cash Equivalents, Insurance Coverage | ||
Restricted Cash and Cash Equivalents | ||
Restricted cash and cash equivalents, current | 86,000 | 45,000 |
Opioid Related Cases and Mesh Related Cases | ||
Restricted Cash and Cash Equivalents | ||
Restricted cash and cash equivalents, current | $ 50,700 | $ 78,400 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Assets And Liabilities Measured At Fair Value On Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Acquisition-related contingent consideration | Accounts payable and accrued expenses | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | $ 5,700 | |
Acquisition-related contingent consideration | Other Liabilities | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 14,300 | |
Money Market Funds | Restricted cash and cash equivalents | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | $ 12,200 | 16,200 |
Fair value, measurements, recurring | Acquisition-related contingent consideration | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 16,571 | 20,076 |
Fair value, measurements, recurring | Money Market Funds | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | 12,226 | 134,847 |
Fair value, measurements, recurring | Level 1 Inputs | Acquisition-related contingent consideration | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 0 | 0 |
Fair value, measurements, recurring | Level 1 Inputs | Money Market Funds | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | 12,226 | 134,847 |
Fair value, measurements, recurring | Level 2 Inputs | Acquisition-related contingent consideration | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 0 | 0 |
Fair value, measurements, recurring | Level 2 Inputs | Money Market Funds | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | 0 | 0 |
Fair value, measurements, recurring | Level 3 Inputs | Acquisition-related contingent consideration | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 16,571 | 20,076 |
Fair value, measurements, recurring | Level 3 Inputs | Money Market Funds | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - Discount rate | Dec. 31, 2022 |
Minimum | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Discount rate applied | 0.100 |
Maximum | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Discount rate applied | 0.150 |
Weighted average | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Discount rate applied | 0.107 |
FAIR VALUE MEASUREMENTS - Fin_2
FAIR VALUE MEASUREMENTS - Financial Liabilities Measured At Fair Value On Recurring Basis Using Significant Unobservable Inputs (Details) - Acquisition-related contingent consideration - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning of period | $ 20,076 | $ 36,249 |
Amounts settled | (3,127) | (7,449) |
Changes in fair value recorded in earnings | 408 | (8,793) |
Effect of currency translation | (786) | 69 |
Changes in Fair Value Recorded in Earnings | 408 | (8,793) |
Amounts Settled and Other | (3,913) | (7,380) |
End of period | $ 16,571 | $ 20,076 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Acquisition-related and integration items, net | Acquisition-related and integration items, net |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Acquisition-related and integration items, net | Acquisition-related and integration items, net |
Auxilium acquisition | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning of period | $ 9,038 | $ 14,484 |
Changes in Fair Value Recorded in Earnings | 2,116 | (3,471) |
Amounts Settled and Other | (536) | (1,975) |
End of period | 10,618 | 9,038 |
Lehigh Valley Technologies, Inc. acquisitions | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning of period | 3,600 | 13,100 |
Changes in Fair Value Recorded in Earnings | (635) | (6,061) |
Amounts Settled and Other | (665) | (3,439) |
End of period | 2,300 | 3,600 |
Other | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning of period | 7,438 | 8,665 |
Changes in Fair Value Recorded in Earnings | (1,073) | 739 |
Amounts Settled and Other | (2,712) | (1,966) |
End of period | $ 3,653 | $ 7,438 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets Measured At Fair Value On A Nonrecurring Basis (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Assets: | |||
Intangible assets, excluding goodwill | $ (288,701) | $ (7,800) | $ (79,900) |
Total | (2,142,746) | (414,977) | $ (120,344) |
Fair value, measurements, nonrecurring | |||
Assets: | |||
Intangible assets, excluding goodwill | (288,701) | (7,811) | |
Certain property, plant and equipment | (9,045) | (2,011) | |
Total | $ (297,746) | $ (9,822) | |
Fair value, measurements, nonrecurring | Discount rate | Minimum | |||
Assets: | |||
Discount rate applied | 0.095 | 0.100 | |
Fair value, measurements, nonrecurring | Discount rate | Maximum | |||
Assets: | |||
Discount rate applied | 0.120 | 0.120 | |
Fair value, measurements, nonrecurring | Discount rate | Weighted average | |||
Assets: | |||
Discount rate applied | 0.118 | 0.111 | |
Level 1 Inputs | Fair value, measurements, nonrecurring | |||
Assets: | |||
Intangible assets, excluding goodwill | $ 0 | $ 0 | |
Certain property, plant and equipment | 0 | 0 | |
Total | 0 | 0 | |
Level 2 Inputs | Fair value, measurements, nonrecurring | |||
Assets: | |||
Intangible assets, excluding goodwill | 0 | 0 | |
Certain property, plant and equipment | 0 | 0 | |
Total | 0 | 0 | |
Level 3 Inputs | Fair value, measurements, nonrecurring | |||
Assets: | |||
Intangible assets, excluding goodwill | 67,082 | 5,011 | |
Certain property, plant and equipment | 0 | 0 | |
Total | $ 67,082 | $ 5,011 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 105,975 | $ 90,453 |
Work-in-process | 43,057 | 82,728 |
Finished goods | 125,467 | 110,371 |
Total | 274,499 | 283,552 |
Long-term inventory | 23,000 | 10,700 |
Inventories not yet available for sale | $ 5,800 | $ 12,200 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Dec. 31, 2022 renewal_options |
Leases [Abstract] | |
Number of renewal options | 3 |
Renewal term of finance lease | 60 months |
LEASES - Assets and Liabilities
LEASES - Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Right-of-use assets: | ||
Operating lease right-of-use assets | $ 28,070 | $ 34,832 |
Finance lease right-of-use assets | 26,761 | 38,365 |
Total right-of-use assets | $ 54,831 | $ 73,197 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization |
Operating lease liabilities | ||
Current operating lease liabilities | $ 903 | $ 10,992 |
Noncurrent operating lease liabilities | 5,129 | 33,727 |
Total operating lease liabilities | $ 6,032 | $ 44,719 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current operating lease liabilities | Current operating lease liabilities |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Noncurrent operating lease liabilities | Noncurrent operating lease liabilities |
Finance lease liabilities | ||
Current finance lease liabilities | $ 0 | $ 6,841 |
Noncurrent finance lease liabilities | 1,392 | 18,374 |
Total finance lease liabilities | $ 1,392 | $ 25,215 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Less: amounts classified as Liabilities subject to compromise | $ 28,387 | |
Less: amounts classified as Liabilities subject to compromise | $ 17,078 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating lease cost | $ 10,959 | $ 13,892 | $ 14,175 |
Finance lease cost: | |||
Amortization of right-of-use assets | 8,479 | 9,244 | 9,244 |
Interest on lease liabilities | 1,127 | 1,480 | 1,716 |
Other lease costs and income: | |||
Variable lease costs | 11,707 | 13,202 | 10,305 |
Finance lease right-of-use asset impairment charges | 3,063 | 0 | 0 |
Operating lease right-of-use asset impairment charges | 0 | 0 | 6,392 |
Sublease income | (6,436) | (3,793) | (3,803) |
Cost of revenues | |||
Lessee, Lease, Description | |||
Lease, cost | 6,189 | 11,316 | 11,610 |
Selling, general and administrative | |||
Lessee, Lease, Description | |||
Lease, cost | 18,305 | 21,013 | 18,108 |
Research and development | |||
Lessee, Lease, Description | |||
Lease, cost | $ 215 | $ 216 | $ 203 |
LEASES - Future Cash Flows Incl
LEASES - Future Cash Flows Included In Our Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 11,518 | |
2024 | 6,599 | |
2025 | 5,381 | |
2026 | 5,337 | |
2027 | 5,345 | |
Thereafter | 4,630 | |
Total future lease payments | 38,810 | |
Less: amounts representing interest | 4,391 | |
Total operating lease liabilities | 34,419 | |
Less: amounts classified as Liabilities subject to compromise | 28,387 | |
Present value of future lease payments (lease liabilities, including amounts classified as Liabilities subject to compromise) | 6,032 | $ 44,719 |
Finance Leases | ||
2023 | 7,881 | |
2024 | 8,038 | |
2025 | 896 | |
2026 | 896 | |
2027 | 896 | |
Thereafter | 9,303 | |
Total future lease payments | 27,910 | |
Less: amounts representing interest | 9,440 | |
Total finance lease liabilities | 18,470 | |
Less: amounts classified as Liabilities subject to compromise | 17,078 | |
Present value of future lease payments (lease liabilities, including amounts classified as Liabilities subject to compromise) | $ 1,392 | $ 25,215 |
LEASES - Weighted Average Remai
LEASES - Weighted Average Remaining Lease Term And Weighted Average Discount Rates (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Weighted average remaining lease term (years), weighted based on lease liability balances: | ||
Operating leases | 4 years 10 months 24 days | 5 years 1 month 6 days |
Finance leases | 9 years 10 months 24 days | 9 years 6 months |
Weighted average discount rate (percentages), weighted based on the remaining balance of lease payments: | ||
Operating leases | 6.10% | 5.90% |
Finance leases | 7.50% | 7.60% |
LEASES - Cash Flow and Suppleme
LEASES - Cash Flow and Supplemental Noncash Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash payments for operating leases | $ 13,152 | $ 14,478 | $ 14,598 |
Operating cash payments for finance leases | 1,673 | 2,256 | 2,666 |
Financing cash payments for finance leases | 6,062 | 5,448 | 4,884 |
Operating lease | $ 1,296 | $ 5,807 | $ 0 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | $ 779,780 | $ 747,591 |
Less: accumulated depreciation | (341,466) | (350,879) |
Total property, plant and equipment, net | 438,314 | 396,712 |
Land and buildings | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 239,207 | 234,219 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 241,930 | 206,971 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 54,388 | 55,020 |
Computer equipment and software | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 92,566 | 118,959 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | 9,129 | 11,939 |
Assets under construction | ||
Property, Plant and Equipment | ||
Total property, plant and equipment, gross | $ 142,560 | $ 120,483 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment | |||
Total depreciation expense | $ 54,318 | $ 84,191 | $ 91,264 |
Asset impairment charges of long-lived assets | $ 9,000 | 2,000 | $ 1,200 |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset impairments | ||
India | |||
Property, Plant and Equipment | |||
Total property, plant and equipment, net | $ 205,200 | $ 162,100 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES - Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill | ||
Goodwill, beginning balance | $ 3,197,011 | $ 3,560,011 |
Goodwill impairment charges | (1,845,000) | (363,000) |
Goodwill, ending balance | 1,352,011 | 3,197,011 |
Branded Pharmaceuticals | ||
Goodwill | ||
Goodwill, beginning balance | 828,818 | 828,818 |
Goodwill impairment charges | 0 | 0 |
Goodwill, ending balance | 828,818 | 828,818 |
Sterile Injectables | ||
Goodwill | ||
Goodwill, beginning balance | 2,368,193 | 2,731,193 |
Goodwill impairment charges | (1,845,000) | (363,000) |
Goodwill, ending balance | 523,193 | 2,368,193 |
Generic Pharmaceuticals | ||
Goodwill | ||
Goodwill, beginning balance | 0 | 0 |
Goodwill impairment charges | 0 | 0 |
Goodwill, ending balance | 0 | 0 |
International Pharmaceuticals | ||
Goodwill | ||
Goodwill, beginning balance | 0 | 0 |
Goodwill impairment charges | 0 | 0 |
Goodwill, ending balance | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES - Accumulated Impairment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill | ||
Accumulated impairment losses | $ 6,719,678 | $ 4,911,822 |
Branded Pharmaceuticals | ||
Goodwill | ||
Accumulated impairment losses | 855,810 | 855,810 |
Sterile Injectables | ||
Goodwill | ||
Accumulated impairment losses | 2,208,000 | 363,000 |
Generic Pharmaceuticals | ||
Goodwill | ||
Accumulated impairment losses | 3,142,657 | 3,142,657 |
International Pharmaceuticals | ||
Goodwill | ||
Accumulated impairment losses | $ 513,211 | $ 550,355 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLES - Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets, Gross | |||
Beginning balance | $ 6,674,655 | ||
Acquisitions | 0 | ||
Impairments | (288,701) | $ (7,800) | $ (79,900) |
Effect of Currency Translation | (17,417) | ||
Ending balance | 6,368,537 | 6,674,655 | |
Accumulated amortization: | |||
Beginning Balance | (4,311,832) | ||
Amortization | (337,311) | ||
Impairments | 0 | ||
Effect of Currency Translation | 13,541 | ||
Ending Balance | (4,635,602) | (4,311,832) | |
Net other intangibles | 1,732,935 | 2,362,823 | |
Licenses | |||
Finite-lived intangibles: | |||
Beginning Balance | 442,107 | ||
Acquisitions | 0 | ||
Impairments | 0 | ||
Effect of Currency Translation | 0 | ||
Ending Balance | 442,107 | 442,107 | |
Accumulated amortization: | |||
Beginning Balance | (419,932) | ||
Amortization | (4,576) | ||
Impairments | 0 | ||
Effect of Currency Translation | 0 | ||
Ending Balance | (424,508) | (419,932) | |
Tradenames | |||
Finite-lived intangibles: | |||
Beginning Balance | 6,409 | ||
Acquisitions | 0 | ||
Impairments | 0 | ||
Effect of Currency Translation | 0 | ||
Ending Balance | 6,409 | 6,409 | |
Accumulated amortization: | |||
Beginning Balance | (6,409) | ||
Amortization | 0 | ||
Impairments | 0 | ||
Effect of Currency Translation | 0 | ||
Ending Balance | (6,409) | (6,409) | |
Developed technology | |||
Finite-lived intangibles: | |||
Beginning Balance | 6,226,139 | ||
Acquisitions | 0 | ||
Impairments | (288,701) | ||
Effect of Currency Translation | (17,417) | ||
Ending Balance | 5,920,021 | 6,226,139 | |
Accumulated amortization: | |||
Beginning Balance | (3,885,491) | ||
Amortization | (332,735) | ||
Impairments | 0 | ||
Effect of Currency Translation | 13,541 | ||
Ending Balance | $ (4,204,685) | $ (3,885,491) | |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset impairments | ||
Weighted average | |||
Accumulated amortization: | |||
Intangible life (years) | 12 years | ||
Weighted average | Licenses | |||
Accumulated amortization: | |||
Intangible life (years) | 14 years | ||
Weighted average | Developed technology | |||
Accumulated amortization: | |||
Intangible life (years) | 12 years |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLES - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Oct. 01, 2022 | Oct. 01, 2021 | Oct. 01, 2020 | |
Goodwill | ||||||||||
Amortization expense | $ 337,311 | |||||||||
Impairment of intangible assets | 288,701 | $ 7,800 | $ 79,900 | |||||||
Goodwill impairment charges | 1,845,000 | 363,000 | ||||||||
Sterile Injectables | ||||||||||
Goodwill | ||||||||||
Goodwill impairment charges | $ 97,000 | $ 1,748,000 | ||||||||
Sterile Injectables | ||||||||||
Goodwill | ||||||||||
Impairment of intangible assets | $ 363,000 | |||||||||
Paladin labs inc. | ||||||||||
Goodwill | ||||||||||
Impairment of intangible assets | $ 32,800 | |||||||||
Discount rate | Branded Pharmaceuticals | ||||||||||
Goodwill | ||||||||||
Intangible assets and goodwill, measurement input | 0.150 | 0.135 | 0.150 | 0.145 | 0.150 | |||||
Goodwill impairment charges | $ 0 | |||||||||
Discount rate | Sterile Injectables | ||||||||||
Goodwill | ||||||||||
Intangible assets and goodwill, measurement input | 0.195 | 0.185 | 0.195 | 0.110 | 0.100 | |||||
Discount rate | Paladin labs inc. | ||||||||||
Goodwill | ||||||||||
Intangible assets and goodwill, measurement input | 0.095 | |||||||||
Segment reconciling items | ||||||||||
Goodwill | ||||||||||
Amortization expense | $ 337,311 | $ 372,907 | $ 427,543 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLES - Schedule of Estimated Amortization of Intangibles (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 255,869 |
2024 | 245,751 |
2025 | 232,668 |
2026 | 209,532 |
2027 | $ 134,364 |
LICENSE, COLLABORATION AND AS_3
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 01, 2020 shares | May 31, 2022 USD ($) project | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Oct. 19, 2020 $ / shares | |
Nevakar Injectables, Inc | |||||
Collaborative Arrangement and Arrangement Other than Collaborative | |||||
Number of in process research and development projects acquired | project | 6 | ||||
Acquired in-process research and development | $ 35 | ||||
TLC Agreement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative | |||||
Acquired in-process research and development | $ 30 | ||||
Investment in subsidiary | 110 | ||||
Payments of additional achievement certain development and regulatory milestones | 30 | ||||
Payments of additional achievement certain commercial milestones | $ 500 | ||||
Cash into bank account | $ 85 | ||||
Minimum | |||||
Collaborative Arrangement and Arrangement Other than Collaborative | |||||
Royalty rate on net sales | 5% | ||||
Maximum | |||||
Collaborative Arrangement and Arrangement Other than Collaborative | |||||
Royalty rate on net sales | 15% | ||||
BioSpecifics | |||||
Collaborative Arrangement and Arrangement Other than Collaborative | |||||
Price per share of BioSpecifics Technologies Corp acquired (in dollars per shares) | $ / shares | $ 88.50 | ||||
Number of shares issued as a part of asset acquisition (in shares) | shares | 6,159,975 | ||||
BioSpecifics | XIAFLEX and QWO | |||||
Collaborative Arrangement and Arrangement Other than Collaborative | |||||
Intangible life (years) | 13 years 7 months 6 days |
LICENSE, COLLABORATION AND AS_4
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS - Schedule of Costs Accumulated to Acquire Biospecifics (Details) - BioSpecifics - USD ($) $ in Thousands | Dec. 02, 2020 | Dec. 01, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Base purchase price | $ 650,029 | |
Vested employee options and benefits | 10,280 | |
Transaction costs | 10,268 | |
Less: royalty obligations discharged | (14,909) | |
Total acquisition consideration | $ 655,668 | |
Number of shares issued as a part of asset acquisition (in shares) | 6,159,975 | |
Business acquisition, equity interest canceled, not tendered (in shares) | 1,184,980 |
LICENSE, COLLABORATION AND AS_5
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS - Summarizes of Allocation of Consideration Transferred (Details) - BioSpecifics $ in Thousands | Dec. 02, 2020 USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative | |
Cash and cash equivalents | $ 21,073 |
Investments | 89,050 |
Acquisitions | 673,796 |
Acquisitions | 28,602 |
Other acquired assets | 3,089 |
Deferred tax liability | (156,441) |
Other assumed liabilities | (3,501) |
Net identifiable assets acquired | $ 655,668 |
LICENSE, COLLABORATION AND AS_6
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS - Summary of Changes to the Gross Carrying Amount, Accumulated Amortization and Net Book Amount (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 03, 2020 | Dec. 02, 2020 | Dec. 01, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative | |||||
Accumulated Amortization | $ (4,635,602) | $ (4,311,832) | |||
BioSpecifics | |||||
Collaborative Arrangement and Arrangement Other than Collaborative | |||||
Gross Carrying Amount | $ 2,254,396 | $ 673,796 | $ 1,580,600 | ||
Accumulated Amortization | (725,123) | 0 | (725,123) | ||
Net Book Amount | $ 1,529,273 | $ 673,796 | $ 855,477 |
CONTRACT ASSETS AND LIABILITI_3
CONTRACT ASSETS AND LIABILITIES - Contract Assets and Contract Liabilities from Contracts with Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | ||
Contract assets | $ 8,193 | $ 13,005 |
Contract assets - $ change | $ (4,812) | |
Contract assets - % change | (37.00%) | |
Contract liabilities | $ 4,099 | 4,663 |
Contract liabilities - $ change | $ (564) | |
Contract liabilities - % change | (12.00%) | |
Contract with customer, asset, after allowance for credit loss, current | $ 1,500 | 2,800 |
Contract liability amounts classified as current | 600 | $ 600 |
Increase in contract liability | $ 600 |
CONTRACT ASSETS AND LIABILITI_4
CONTRACT ASSETS AND LIABILITIES - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | |
Performance obligation satisfied in previous period | $ 11.9 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Trade accounts payable | $ 109,033 | $ 123,129 |
Returns and allowances | 160,619 | 183,116 |
Rebates | 167,516 | 150,039 |
Chargebacks | 920 | 2,617 |
Other sales deductions | 6,197 | 2,500 |
Accrued interest | 68 | 106,735 |
Accrued payroll and related benefits | 95,666 | 90,029 |
Accrued royalties and other distribution partner payables | 24,072 | 58,422 |
Acquisition-related contingent consideration—current | 0 | 5,748 |
Other | 123,092 | 114,563 |
Total | $ 687,183 | $ 836,898 |
DEBT - Components of Total Inde
DEBT - Components of Total Indebtedness (Details) - USD ($) | 3 Months Ended | ||||||
Sep. 30, 2022 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Oct. 31, 2021 | Mar. 31, 2021 | Aug. 31, 2020 | |
Debt Instrument | |||||||
Principal amount | $ 8,147,826,000 | $ 8,338,168,000 | |||||
Carrying Amount | 7,834,717,000 | 8,249,322,000 | |||||
Amortization of debt issuance cost | $ 89,200,000 | ||||||
Current portion of long-term debt | $ 0 | $ 200,342,000 | |||||
Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 2% | ||||||
Effective Interest Rate (as a percent) | 11% | 2.63% | |||||
Principal amount | $ 277,200,000 | $ 277,200,000 | |||||
Carrying Amount | $ 265,728,000 | $ 277,200,000 | |||||
7.25% Senior Notes due 2022 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 7.25% | 7.25% | |||||
Effective Interest Rate (as a percent) | 7.25% | ||||||
Principal amount | $ 0 | $ 8,294,000 | |||||
Carrying Amount | $ 0 | $ 8,294,000 | |||||
5.75% Senior Notes due 2022 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | ||||
Effective Interest Rate (as a percent) | 5.75% | ||||||
Principal amount | $ 0 | $ 172,048,000 | $ 10,000,000 | ||||
Carrying Amount | $ 0 | $ 172,048,000 | |||||
5.375% Senior Notes due 2023 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 5.375% | ||||||
Effective Interest Rate (as a percent) | 5.38% | 5.62% | |||||
Principal amount | $ 6,127,000 | $ 6,127,000 | |||||
Carrying Amount | $ 6,127,000 | $ 6,111,000 | |||||
6.00% Senior Notes due 2023 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 6% | ||||||
Effective Interest Rate (as a percent) | 6% | 6.28% | |||||
Principal amount | $ 56,436,000 | $ 56,436,000 | |||||
Carrying Amount | $ 56,436,000 | $ 56,203,000 | |||||
5.875% Senior Secured Notes due 2024 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 5.875% | ||||||
Effective Interest Rate (as a percent) | 6.88% | 6.14% | |||||
Principal amount | $ 300,000,000 | $ 300,000,000 | |||||
Carrying Amount | $ 286,375,000 | $ 297,928,000 | |||||
6.00% Senior Notes due 2025 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 6% | ||||||
Effective Interest Rate (as a percent) | 6% | 6.27% | |||||
Principal amount | $ 21,578,000 | $ 21,578,000 | |||||
Carrying Amount | $ 21,578,000 | $ 21,413,000 | |||||
7.50% Senior Secured Notes due 2027 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 7.50% | ||||||
Effective Interest Rate (as a percent) | 8.50% | 7.70% | |||||
Principal amount | $ 2,015,479,000 | $ 2,015,479,000 | |||||
Carrying Amount | $ 1,894,774,000 | $ 1,997,777,000 | |||||
9.50% Senior Secured Second Lien Notes due 2027 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 9.50% | 9.50% | |||||
Effective Interest Rate (as a percent) | 9.50% | 9.68% | |||||
Principal amount | $ 940,590,000 | $ 940,590,000 | |||||
Carrying Amount | $ 940,590,000 | $ 933,330,000 | |||||
6.00% Senior Notes due 2028 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 6% | ||||||
Effective Interest Rate (as a percent) | 6% | 6.11% | |||||
Principal amount | $ 1,260,416,000 | $ 1,260,416,000 | |||||
Carrying Amount | $ 1,260,416,000 | $ 1,252,667,000 | |||||
6.125% Senior Secured Notes due 2029 | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 6.125% | 6.125% | |||||
Effective Interest Rate (as a percent) | 7.13% | 6.34% | |||||
Principal amount | $ 1,295,000,000 | $ 1,295,000,000 | $ 1,295,000,000 | ||||
Carrying Amount | $ 1,230,799,000 | $ 1,278,718,000 | |||||
Term Loan Facility | |||||||
Debt Instrument | |||||||
Interest rate (as a percent) | 2% | ||||||
Effective Interest Rate (as a percent) | 13.50% | 6.12% | |||||
Principal amount | $ 1,975,000,000 | $ 1,985,000,000 | |||||
Carrying Amount | $ 1,871,894,000 | $ 1,947,633,000 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Feb. 28, 2021 |
Debt Instrument | |||||
Fair value of long term debt | $ 4,900 | $ 8,000 | |||
5.875% Senior Secured Notes due 2024 | |||||
Debt Instrument | |||||
Interest rate (as a percent) | 5.875% | ||||
7.50% Senior Secured Notes due 2027 | |||||
Debt Instrument | |||||
Interest rate (as a percent) | 7.50% | ||||
6.125% Senior Secured Notes due 2029 | |||||
Debt Instrument | |||||
Interest rate (as a percent) | 6.125% | 6.125% | |||
9.50% Senior Secured Second Lien Notes due 2027 | |||||
Debt Instrument | |||||
Interest rate (as a percent) | 9.50% | 9.50% | |||
Term Loan Facility | |||||
Debt Instrument | |||||
Interest rate (as a percent) | 2% | ||||
Long-term debt, gross | $ 10 | $ 3,295.5 |
DEBT - Credit Facility (Details
DEBT - Credit Facility (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Line of Credit Facility | ||
Principal amount | $ 8,147,826,000 | $ 8,338,168,000 |
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||
Line of Credit Facility | ||
Basis spread on variable rate (as a percent) | 1.50% | |
Revolving Credit Facility | Minimum | Base Rate | ||
Line of Credit Facility | ||
Basis spread on variable rate (as a percent) | 0.50% | |
Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||
Line of Credit Facility | ||
Basis spread on variable rate (as a percent) | 3% | |
Revolving Credit Facility | Maximum | Base Rate | ||
Line of Credit Facility | ||
Basis spread on variable rate (as a percent) | 2% | |
Term Loan Facility | London Interbank Offered Rate (LIBOR) | ||
Line of Credit Facility | ||
Basis spread on variable rate (as a percent) | 5% | |
Basis spread on variable rate (as a percent) | 0.75% | |
Term Loan Facility | Base Rate | ||
Line of Credit Facility | ||
Basis spread on variable rate (as a percent) | 4% | |
Basis spread on variable rate (as a percent) | 1.75% | |
2017 credit agreement | Term Loan Facility | ||
Line of Credit Facility | ||
Principal amount | $ 2,000,000,000 | |
Revolving Credit Facility | ||
Line of Credit Facility | ||
Principal amount | 277,200,000 | $ 277,200,000 |
Revolving Credit Facility | 2017 credit agreement | ||
Line of Credit Facility | ||
Principal amount | 1,000,000,000 | |
Term Loan Facility | ||
Line of Credit Facility | ||
Principal amount | $ 2,000,000,000 | |
Quarter periodic payment (as a percent) | 0.25% | |
Long-term debt, gross | $ 74,600,000 |
DEBT - Covenants and Events of
DEBT - Covenants and Events of Default (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument, Redemption [Line Items] | |||||
Interest expense, debt | $ 231,000 | ||||
Interest payments grace period | 30 days | 8 days | |||
Adequate protection payments | $ 313,109 | $ 0 | $ 0 | ||
Senior notes | |||||
Debt Instrument, Redemption [Line Items] | |||||
Interest rate (as a percent) | 1% | 1% | |||
Adequate protection payments | $ 198,500 | ||||
Revolving Credit Facility | |||||
Debt Instrument, Redemption [Line Items] | |||||
Interest rate (as a percent) | 2% | 2% | |||
Adequate protection payments | $ 11,500 | ||||
6.00% Senior Notes due 2028 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt interest payments | $ 38,000 | ||||
Interest rate (as a percent) | 6% | ||||
5.375% Senior Notes due 2023 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt interest payments | $ 2,000 | ||||
Interest rate (as a percent) | 5.375% | ||||
6.00% Senior Notes due 2023 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt interest payments | $ 2,000 | ||||
Interest rate (as a percent) | 6% | ||||
6.00% Senior Notes due 2025 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt interest payments | $ 1,000 | ||||
Interest rate (as a percent) | 6% | ||||
9.50% Senior Secured Second Lien Notes due 2027 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt interest payments | $ 45,000 | ||||
Interest rate (as a percent) | 9.50% | 9.50% | 9.50% | ||
Term Loan Facility | |||||
Debt Instrument, Redemption [Line Items] | |||||
Interest rate (as a percent) | 2% | 2% | |||
Adequate protection payments | $ 103,100 |
DEBT - Debt Financing Transacti
DEBT - Debt Financing Transactions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2021 | Jun. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 28, 2021 | Aug. 31, 2020 | |
Debt Instrument | ||||||||||
Repayments of debt | $ 47,200,000 | |||||||||
Deferred debt issuance costs | $ 31,100,000 | |||||||||
Principal amount | $ 8,147,826,000 | $ 8,338,168,000 | ||||||||
Loss on extinguishment of debt | 0 | 13,753,000 | $ 0 | |||||||
Debt issuance costs, gross | $ 56,700,000 | |||||||||
Senior notes | ||||||||||
Debt Instrument | ||||||||||
Interest rate (as a percent) | 1% | |||||||||
Long-term debt, maturity repayment deadline | 91 days | |||||||||
Revolving Credit Facility | ||||||||||
Debt Instrument | ||||||||||
Deferred debt issuance costs | $ 2,100,000 | |||||||||
Principal amount | $ 277,200,000 | 277,200,000 | ||||||||
Interest rate (as a percent) | 2% | |||||||||
Debt instrument, extended maturity modification, amount | $ 675,300,000 | 675,300,000 | ||||||||
Proceeds from long-term lines of credit | $ 76,000,000 | |||||||||
Repayments of borrowings | $ 22,800,000 | |||||||||
5.75% Senior Notes due 2022 | ||||||||||
Debt Instrument | ||||||||||
Principal amount | $ 0 | 172,048,000 | $ 10,000,000 | |||||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | |||||||
Term Loan Facility | ||||||||||
Debt Instrument | ||||||||||
Principal amount | $ 1,975,000,000 | 1,985,000,000 | ||||||||
Interest rate (as a percent) | 2% | |||||||||
Long-term debt, gross | $ 10,000,000 | $ 3,295,500,000 | ||||||||
Proceeds from issuance of debt | 2,000,000,000 | |||||||||
Extinguishment of debt, amount | 1,295,000,000 | |||||||||
Loss on extinguishment of debt | 7,800,000 | |||||||||
Debt Modification Expense | 29,200,000 | |||||||||
6.125% Senior Secured Notes due 2029 | ||||||||||
Debt Instrument | ||||||||||
Principal amount | $ 1,295,000,000 | $ 1,295,000,000 | $ 1,295,000,000 | 1,295,000,000 | ||||||
Interest rate (as a percent) | 6.125% | 6.125% | 6.125% | |||||||
Loss on extinguishment of debt | $ 6,000,000 | |||||||||
Debt issuance costs, gross | $ 17,600,000 | |||||||||
6.125% Senior Secured Notes due 2029 | Selling, general and administrative | ||||||||||
Debt Instrument | ||||||||||
Loss on extinguishment of debt | $ 3,900,000 | |||||||||
2017 credit agreement | Term Loan Facility | ||||||||||
Debt Instrument | ||||||||||
Principal amount | 2,000,000,000 | |||||||||
2017 credit agreement | Revolving Credit Facility | ||||||||||
Debt Instrument | ||||||||||
Principal amount | 1,000,000,000 | |||||||||
7.25% Senior Notes due 2022 | ||||||||||
Debt Instrument | ||||||||||
Principal amount | $ 0 | $ 8,294,000 | ||||||||
Interest rate (as a percent) | 7.25% | 7.25% |
DEBT - Maturities of Long-Term
DEBT - Maturities of Long-Term Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Maturities | |
2023 | $ 82,563 |
2024 | 394,600 |
2025 | 41,578 |
2026 | 222,600 |
2027 | 2,976,069 |
Revolving Credit Facility | |
Maturities | |
2024 | $ 74,600 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||
Aug. 16, 2022 USD ($) | Jul. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Feb. 28, 2022 USD ($) | Jan. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) county | Oct. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) county | Aug. 31, 2021 USD ($) county municipality | Jan. 31, 2020 USD ($) | Sep. 30, 2019 USD ($) case | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) lawsuit case | Mar. 03, 2023 USD ($) | Feb. 27, 2023 case | Mar. 31, 2016 case | |
Loss Contingencies | ||||||||||||||||||
Cost incurred in relation to U.S government agreement | $ 39,000 | |||||||||||||||||
Reimburseable portion | $ 3,100 | |||||||||||||||||
Initial period | 10 years | |||||||||||||||||
Reserve for loss contingencies | $ 820,800 | $ 820,800 | ||||||||||||||||
Opioid-related matters | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Number of putative class actions | lawsuit | 3 | |||||||||||||||||
Loss contingency, plaintiffs, number of counties | 9 | 2 | ||||||||||||||||
Settlement, amount awarded to other party | $ 50,000 | $ 35,000 | $ 8,750 | $ 10,000 | ||||||||||||||
Loss contingency, number of municipalities | municipality | 18 | |||||||||||||||||
Opioid-related matters | Endo International PLC | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Settlement, amount awarded to other party | $ 9,000 | $ 9,750 | $ 26,000 | $ 7,500 | $ 65,000 | $ 63,000 | $ 25,000 | |||||||||||
Opioid-related matters | Ad Hoc First Lien Group | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Reserve for loss contingencies | $ 550,000 | 584,000 | $ 550,000 | $ 584,000 | ||||||||||||||
Accrual payment period (years) | 10 years | |||||||||||||||||
Contingency charges | 34,000 | $ 419,000 | ||||||||||||||||
Opioid-related matters | New York | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Loss contingency, plaintiffs, number of counties | county | 2 | |||||||||||||||||
Opioid-related matters | Texas | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Loss contingency, plaintiffs, number of counties | county | 4 | |||||||||||||||||
Opioid-related matters | San Francisco | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Initial settlement payments | 5,000 | |||||||||||||||||
Subsequent settlement payments | $ 500 | |||||||||||||||||
Accrual payment period (years) | 10 years | |||||||||||||||||
Opioid-related matters | VASOSTRICT and/or ADRENALIN | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Settlement, amount awarded to other party | $ 1,000 | |||||||||||||||||
Opioid-related matters | Subsequent event | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Number of cases filed by states | case | 15 | |||||||||||||||||
Pending claims, number | case | 2,570 | |||||||||||||||||
Number of cases filed by hospitals, health systems, unions, welfare funds or other third-party | case | 310 | |||||||||||||||||
Number of cases alleging personal injury and/or wrongful death | case | 220 | |||||||||||||||||
Opioid-related matters | Subsequent event | Ad Hoc First Lien Group | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Funding commitment related to settlement | $ 34,000 | |||||||||||||||||
District Court For The Eastern District of Pennsylvania | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Number of cases filed by states | case | 3 | |||||||||||||||||
V A S O S T R I C T Related Matters | Par Pharmaceutical Inc. | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Stay of approval period, Hatch-Waxman Act | 30 months | |||||||||||||||||
Mesh related cases | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Payments to plaintiffs and qualified settlement funds | 3,600,000 | |||||||||||||||||
Settlement funds | $ 78,402 | $ 50,339 | $ 50,339 | |||||||||||||||
Mesh related cases | American Medical Systems | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Loss contingency, claims settled, number | case | 71,000 | |||||||||||||||||
Selling, General And Administrative Expenses And Cost Of Revenues | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Expenses charged | $ 1,000 | |||||||||||||||||
Property, Plant And Equipments | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Capital expenditures | 34,900 | |||||||||||||||||
Other Liabilities | ||||||||||||||||||
Loss Contingencies | ||||||||||||||||||
Defered revenues | $ 26,500 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Loss Contingencies (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Mesh Liability Accrual | |
Ending balance | $ 820,800 |
Mesh related cases | |
Mesh Qualified Settlement Funds | |
Beginning balance | 78,402 |
Cash received for reversionary interests, net of cash contributions to Qualified Settlement Funds | (367) |
Cash distributions to settle disputes from Qualified Settlement Funds | (28,159) |
Other | 463 |
Ending balance | 50,339 |
Mesh Liability Accrual | |
Other | 463 |
Mesh related cases | Mesh Liability Accrual | |
Mesh Qualified Settlement Funds | |
Other | (507) |
Mesh Liability Accrual | |
Beginning balance | 258,137 |
Cash distributions to settle disputes from Qualified Settlement Funds | (28,159) |
Other cash distributions to settle disputes | (6,499) |
Other | (507) |
Ending balance | $ 222,972 |
OTHER COMPREHENSIVE (LOSS) IN_2
OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | |||
Other comprehensive income (loss), tax, portion attributable to parent | $ 0 | $ 0 | $ 0 |
Reclassification from AOCI | $ 0 | $ 0 | $ 0 |
SHAREHOLDERS' DEFICIT - Narrati
SHAREHOLDERS' DEFICIT - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) shareholder $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Schedule Of Stockholders' Equity [Line Items] | ||
Euro deferred shares, shares issued (in shares) | shares | 4,000,000 | 4,000,000 |
Euro deferred shares, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Number of registered shareholders | shareholder | 7 | |
2015 Share Buyback Program Member | ||
Schedule Of Stockholders' Equity [Line Items] | ||
Stock repurchase program, authorized amount | $ | $ 2,500,000,000 | |
Treasury stock, shares, acquired (in shares) | shares | 4,400,000 | |
Treasury stock, value, acquired, cost method | $ | $ 250,000,000 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Unrecognized compensation cost | $ 10.1 | ||
Exercise price range, lower range limit (in dollars per share) | $ 7.55 | ||
Exercise price range, upper range limit (in dollars per share) | $ 86.54 | ||
Options exercised intrinsic value | $ 0.1 | ||
Tax benefit from exercise of stock options | $ 0 | $ 0 | $ 0 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expiration period | 10 years | ||
Dividend yield | 0% | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Unrecognized compensation cost | $ 3.5 | ||
Weighted average remaining requisite service period, non-vested restricted stock units | 9 months 18 days | ||
Restricted and performance stock units, weighted average grant date fair value (in dollars per share) | $ 3.21 | $ 7.39 | $ 5.54 |
Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Unrecognized compensation cost | $ 6.6 | ||
Service period | 3 years | ||
PSU award percentage using free cash flow performance metric | 50% | ||
Minimum | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expiration period | 3 years | ||
Minimum | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period | 3 years | ||
Minimum | Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award adjustment rate | 0% | ||
Maximum | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expiration period | 4 years | ||
Maximum | Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award adjustment rate | 200% | ||
2015 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of shares available for grant (in shares) | 11,400,000 | ||
Plans Other Than 2015 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of shares available for grant (in shares) | 0 |
SHARE-BASED COMPENSATION - Allo
SHARE-BASED COMPENSATION - Allocation of Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock-based compensation expense | $ 18,214 | $ 30,046 | $ 41,357 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock-based compensation expense | 16,019 | 23,400 | 32,368 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock-based compensation expense | 1,059 | 1,378 | 2,504 |
Cost of revenues | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock-based compensation expense | $ 1,136 | $ 5,268 | $ 6,485 |
SHARE-BASED COMPENSATION - Acti
SHARE-BASED COMPENSATION - Activity Under Stock Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Outstanding, beginning balance (in shares) | 6,383,914 | 6,916,586 | 7,280,539 |
Exercised (in shares) | (82,331) | ||
Forfeited (in shares) | (11,887) | (16,953) | |
Expired (in shares) | (1,304,602) | (438,454) | (347,000) |
Outstanding, ending balance (in shares) | 5,079,312 | 6,383,914 | 6,916,586 |
Vested and expected to vest (in shares) | 5,079,312 | ||
Exercisable (in shares) | 5,079,312 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 16.70 | $ 18.11 | $ 18.93 |
Exercised (in dollars per share) | 7.55 | ||
Forfeited (in dollars per share) | 13.19 | 11.81 | |
Expired (in dollars per share) | 20.04 | 40.76 | 35.56 |
Outstanding, ending balance (in dollars per share) | 15.84 | $ 16.70 | $ 18.11 |
Vested and expected to vest, end of period (in dollars per share) | 15.84 | ||
Exercisable, end of period (in dollars per share) | $ 15.84 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding | 2 years 3 days | ||
Vested and expected to vest | 2 years 3 days | ||
Exercisable | 2 years 3 days | ||
Aggregate Intrinsic Value | |||
Outstanding | $ 0 | ||
Vested and expected to vest | 0 | ||
Exercisable | $ 0 |
SHARE-BASED COMPENSATION - Ac_2
SHARE-BASED COMPENSATION - Activity Under Stock Incentive Plans (Details) - Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Non-vested, beginning balance (in shares) | 8,141,110 | 10,340,279 | 12,916,289 |
Granted (in shares) | 280,373 | 4,483,385 | 3,761,648 |
Forfeited (in shares) | (1,116,960) | (1,302,292) | (824,299) |
Vested (in shares) | (2,324,696) | (5,380,262) | (5,513,359) |
Non-vested, ending balance (in shares) | 4,979,827 | 8,141,110 | 10,340,279 |
Vested and expected to vest, end of period (in shares) | 4,751,674 | ||
Aggregate Intrinsic Value | |||
Outstanding, end of period | $ 348,588 | ||
Vested and expected to vest | $ 332,617 |
OTHER INCOME, NET - Schedule of
OTHER INCOME, NET - Schedule of Components of Other Expense, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Component of Operating Income [Abstract] | |||
Net loss (gain) on sale of business and other assets | $ (26,183) | $ (4,516) | $ (16,353) |
Foreign currency (gain) loss, net | (2,087) | 1,253 | 2,466 |
Net loss from our investments in the equity of other companies | 378 | 453 | (2,160) |
Other miscellaneous, net | (6,162) | (16,964) | (5,063) |
Other income, net | $ (34,054) | (19,774) | $ (21,110) |
Gain from prior contract dispute | $ 15,500 |
INCOME TAXES - Income before In
INCOME TAXES - Income before Income Tax, Domestic and Foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (2,429,315) | $ 4,792,852 | $ (375,262) |
International | (458,787) | (5,339,455) | 348,744 |
Total loss from continuing operations before income tax | $ (2,888,102) | $ (546,603) | $ (26,518) |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
U.S. Federal | $ 21,057 | $ 13,649 | $ (108,866) |
U.S. State | 1,731 | 1,491 | (434) |
International | 6,031 | 10,495 | (1,124) |
Total current income tax | 28,819 | 25,635 | (110,424) |
Deferred: | |||
U.S. Federal | (622) | 118 | (143,411) |
U.S. State | 1,065 | (564) | (11,773) |
International | (7,746) | (2,711) | (8,374) |
Total deferred income tax | (7,303) | (3,157) | (163,558) |
Income tax | $ 21,516 | $ 22,478 | $ (273,982) |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Notional U.S. federal income tax provision at the statutory rate | $ (606,502) | $ (114,787) | $ (5,569) |
State income tax, net of federal benefit | (9,517) | 6,750 | (17,311) |
U.S. tax reform impact | 0 | 0 | (129,599) |
Uncertain tax positions | 21,930 | 42,415 | 35,941 |
Residual tax on non-U.S. net earnings | (32,257) | (181,739) | (83,550) |
Non-deductible goodwill impairment | 385,459 | 76,230 | 7,490 |
Change in valuation allowance | 306,497 | 495,565 | (97,752) |
Base erosion minimum tax | 0 | 0 | 77,438 |
Non-deductible expenses | 47,221 | 39,791 | 8,875 |
Executive compensation limitation | 5,580 | 6,215 | 5,857 |
Equity based compensation | 3,247 | 2,695 | 6,495 |
Financing activities | 73,629 | (287,012) | (33,217) |
Investment activities | (178,018) | (68,943) | (44,964) |
Other | 4,247 | 5,298 | (4,116) |
Income tax | $ 21,516 | 22,478 | $ (273,982) |
Financing activities, non-taxable intercompany cancellation of indebtedness income | 1,200,000 | ||
Financing activities, non-deductible bad debt expense | 465,000 | ||
Financing activities, non-deductible intercompany interest expense | $ 427,000 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Examination | ||||
Federal income tax expense (benefit), continuing operations | $ 129,600 | |||
Valuation allowance | $ (10,436,419) | $ (10,169,294) | ||
Increase (decrease) in valuation allowance | 267,100 | 500,700 | ||
Total unrecognized income tax benefits | 646,366 | 620,000 | ||
Unrecognized tax benefits that would impact effective tax rate | 251,400 | 241,000 | ||
Accrued interest and penalties | 66,736 | 53,600 | ||
Interest and penalties | 10,600 | |||
Uncertain tax positions | (21,930) | $ (42,415) | (35,941) | |
Amount of claims filed | 18,700,000 | |||
Amount of claims filed excluding repetitive claims | $ 2,600,000 | |||
Minimum | ||||
Income Tax Examination | ||||
Statues of limitation | 3 years | |||
Minimum | Scenario, Plan | ||||
Income Tax Examination | ||||
Net cash adjustments, excluding interest | $ 70,000 | |||
Maximum | ||||
Income Tax Examination | ||||
Statues of limitation | 5 years | |||
Maximum | Scenario, Plan | ||||
Income Tax Examination | ||||
Net cash adjustments, excluding interest | $ 250,000 | |||
CARES Act | ||||
Income Tax Examination | ||||
Uncertain tax positions | $ 16,200 | $ 78,200 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Accrued expenses and reserves | $ 220,415 | $ 144,573 |
Deferred interest deduction | 421,552 | 347,501 |
Fixed assets, intangible assets and deferred amortization | 560,257 | 512,584 |
Loss on capital assets | 23,511 | 64,503 |
Net operating loss carryforward | 9,214,688 | 9,258,122 |
Other | 49,943 | 50,694 |
Research and development and other tax credit carryforwards | 7,777 | 8,254 |
Total gross deferred income tax assets | 10,498,143 | 10,386,231 |
Deferred tax liabilities: | ||
Other | (3,156) | (8,586) |
Investments | (107) | (124,311) |
Intercompany notes | (72,286) | (104,530) |
Total gross deferred income tax liabilities | (75,549) | (237,427) |
Valuation allowance | (10,436,419) | (10,169,294) |
Net deferred income tax liability | $ (13,825) | $ (20,490) |
INCOME TAXES - Tax Credit Carry
INCOME TAXES - Tax Credit Carryforwards (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Foreign | Ireland | |
Income Tax Examination | |
Operating loss carryforwards | $ 79,617 |
Foreign | Luxembourg | |
Income Tax Examination | |
Operating loss carryforwards | 8,934,046 |
Domestic | |
Income Tax Examination | |
Operating loss carryforwards | 19,105 |
Domestic | Capital Loss Carryforward | |
Income Tax Examination | |
Operating loss carryforwards | 13,699 |
Domestic | General Business Tax Credit Carryforward | |
Income Tax Examination | |
Operating loss carryforwards | 14,081 |
State and Local Jurisdiction | |
Income Tax Examination | |
Operating loss carryforwards | 227,587 |
State and Local Jurisdiction | Capital Loss Carryforward | |
Income Tax Examination | |
Operating loss carryforwards | 11,871 |
State and Local Jurisdiction | General Business Tax Credit Carryforward | |
Income Tax Examination | |
Operating loss carryforwards | $ 3,256 |
INCOME TAXES - Valuation Allowa
INCOME TAXES - Valuation Allowance (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Examination | ||
Valuation allowance | $ 10,436,419 | $ 10,169,294 |
Foreign | Ireland | ||
Income Tax Examination | ||
Valuation allowance | 289,500 | |
Foreign | Luxembourg | ||
Income Tax Examination | ||
Valuation allowance | 8,862,060 | |
Domestic | U.S. | ||
Income Tax Examination | ||
Valuation allowance | $ 1,278,026 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 566,439 | $ 529,775 | $ 486,481 |
Gross additions for current year positions | 20,061 | 36,662 | 33,402 |
Gross reductions for prior period positions | (702) | (577) | |
Gross additions for prior period positions | 1,203 | 16,914 | |
Decrease due to lapse of statute of limitations | (4,451) | (475) | (7,033) |
Currency translation adjustment | 588 | ||
Currency translation adjustment | (2,419) | (24) | |
Unrecognized tax benefits, ending balance | 579,630 | 566,439 | $ 529,775 |
Accrued interest and penalties | 66,736 | 53,600 | |
Total UTP balance including accrued interest and penalties | $ 646,366 | $ 620,000 |
NET (LOSS) INCOME PER SHARE - R
NET (LOSS) INCOME PER SHARE - Reconciliation of the Numerator and Denominator of Basic and Diluted Net (Loss) Income Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
(Loss) income from continuing operations | $ (2,909,618) | $ (569,081) | $ 247,464 |
Income (loss) from discontinued operations, net of tax | (13,487) | (44,164) | (63,520) |
Net (loss) income | $ (2,923,105) | $ (613,245) | $ 183,944 |
Denominator: | |||
For basic per share data—weighted average shares (in shares) | 234,840 | 232,785 | 229,314 |
Dilutive effect of ordinary share equivalents (in shares) | 0 | 0 | 4,339 |
For diluted per share data—weighted average shares (in shares) | 234,840 | 232,785 | 233,653 |
NET (LOSS) INCOME PER SHARE - C
NET (LOSS) INCOME PER SHARE - Computation of Diluted Income Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,453 | 6,584 | 7,073 |
Stock awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,789 | 9,256 | 5,197 |
CONDENSED COMBINED DEBTOR-IN-_3
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION- CONDENSED COMBINED BALANCE SHEETS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 1,018,883 | $ 1,507,196 | ||
Restricted cash and cash equivalents | 145,358 | 124,114 | ||
Accounts receivable, net | 493,988 | 592,019 | ||
Inventories, net | 274,499 | 283,552 | ||
Prepaid expenses and other current assets | 136,923 | 200,484 | ||
Income taxes receivable | 7,117 | 7,221 | ||
Total current assets | 2,076,768 | 2,714,586 | ||
PROPERTY, PLANT AND EQUIPMENT, NET | 438,314 | 396,712 | ||
OPERATING LEASE ASSETS | 28,070 | 34,832 | ||
GOODWILL | 1,352,011 | 3,197,011 | $ 3,560,011 | |
OTHER INTANGIBLES, NET | 1,732,935 | 2,362,823 | ||
OTHER ASSETS | 129,839 | 60,313 | ||
TOTAL ASSETS | 5,757,937 | 8,767,415 | ||
CURRENT LIABILITIES: | ||||
Accounts payable and accrued expenses | 687,183 | 836,898 | ||
Current portion of operating lease liabilities | 903 | 10,992 | ||
Income taxes payable | 1,541 | 736 | ||
Total current liabilities | 689,627 | 1,629,962 | ||
DEFERRED INCOME TAXES | 13,825 | 21,628 | ||
OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | 5,129 | 33,727 | ||
OTHER LIABILITIES | 42,746 | 277,104 | ||
LIABILITIES SUBJECT TO COMPROMISE | 9,168,782 | 0 | ||
Total shareholders’ deficit | (4,162,172) | (1,243,986) | $ (647,939) | $ (866,544) |
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | 5,757,937 | $ 8,767,415 | ||
Debtor-in-Possession | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | 991,901 | |||
Restricted cash and cash equivalents | 59,358 | |||
Accounts receivable, net | 478,889 | |||
Inventories, net | 241,349 | |||
Prepaid expenses and other current assets | 111,807 | |||
Income taxes receivable | 7,038 | |||
Receivables from Non-Debtor Affiliates | 94,608 | |||
Total current assets | 1,984,950 | |||
PROPERTY, PLANT AND EQUIPMENT, NET | 233,114 | |||
OPERATING LEASE ASSETS | 23,200 | |||
GOODWILL | 1,352,011 | |||
OTHER INTANGIBLES, NET | 1,732,935 | |||
INVESTMENTS IN NON-DEBTOR AFFILIATES | 50,001 | |||
RECEIVABLES FROM NON-DEBTOR AFFILIATES | 240,002 | |||
OTHER ASSETS | 126,494 | |||
TOTAL ASSETS | 5,742,707 | |||
CURRENT LIABILITIES: | ||||
Accounts payable and accrued expenses | 654,414 | |||
Current portion of operating lease liabilities | 230 | |||
Income taxes payable | 10 | |||
Payables to Non-Debtor Affiliates | 20,162 | |||
Total current liabilities | 674,816 | |||
DEFERRED INCOME TAXES | 13,479 | |||
OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | 994 | |||
OTHER LIABILITIES | 37,367 | |||
LIABILITIES SUBJECT TO COMPROMISE | 9,168,782 | |||
Total shareholders’ deficit | (4,152,731) | |||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ 5,742,707 |
CONDENSED COMBINED DEBTOR-IN-_4
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION - CONDENSED COMBINED STATEMENTS OF OPERATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
TOTAL REVENUES, NET | $ 2,318,875 | $ 2,993,206 | $ 2,903,074 |
COSTS AND EXPENSES: | |||
Cost of revenues | 1,092,499 | 1,221,064 | 1,442,511 |
Selling, general and administrative | 777,169 | 861,760 | 698,506 |
Research and development | 128,033 | 123,440 | 125,573 |
Acquired in-process research and development charges | 68,700 | 25,120 | 33,329 |
Litigation-related and other contingencies, net | 478,722 | 345,495 | (19,049) |
Asset impairment charges | 2,142,746 | 414,977 | 120,344 |
Acquisition-related and integration items, net | 408 | (8,379) | 16,549 |
Interest expense, net | 349,776 | 562,353 | 532,939 |
Reorganization items, net | 202,978 | 0 | 0 |
Other income, net | (34,054) | (19,774) | (21,110) |
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | (2,888,102) | (546,603) | (26,518) |
INCOME TAX EXPENSE (BENEFIT) | 21,516 | 22,478 | (273,982) |
(LOSS) INCOME FROM CONTINUING OPERATIONS | (2,909,618) | (569,081) | 247,464 |
DISCONTINUED OPERATIONS, NET OF TAX | (13,487) | (44,164) | (63,520) |
Total loss from continuing operations before income tax | (2,888,102) | (546,603) | (26,518) |
EQUITY IN INCOME OF NON-DEBTOR AFFILIATES, NET OF TAX | (378) | (453) | 2,160 |
Net (loss) income | (2,923,105) | $ (613,245) | $ 183,944 |
Debtor-in-Possession | |||
Income Statement [Abstract] | |||
TOTAL REVENUES, NET | 2,321,426 | ||
COSTS AND EXPENSES: | |||
Cost of revenues | 1,106,855 | ||
Selling, general and administrative | 764,768 | ||
Research and development | 137,851 | ||
Acquired in-process research and development charges | 68,700 | ||
Litigation-related and other contingencies, net | 478,722 | ||
Asset impairment charges | 2,137,107 | ||
Acquisition-related and integration items, net | 408 | ||
Interest expense, net | 345,593 | ||
Reorganization items, net | 202,978 | ||
Other income, net | (13,409) | ||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | (2,908,147) | ||
INCOME TAX EXPENSE (BENEFIT) | 17,721 | ||
(LOSS) INCOME FROM CONTINUING OPERATIONS | (2,925,868) | ||
DISCONTINUED OPERATIONS, NET OF TAX | (13,468) | ||
NET LOSS ATTRIBUTABLE TO DEBTOR ENTITIES | (2,939,336) | ||
EQUITY IN INCOME OF NON-DEBTOR AFFILIATES, NET OF TAX | 22,671 | ||
Net (loss) income | $ (2,916,665) |
CONDENSED COMBINED DEBTOR-IN-_5
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION-CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
NET LOSS | $ (2,923,105) | $ (613,245) | $ 183,944 |
OTHER COMPREHENSIVE (LOSS) INCOME: | |||
Net unrealized loss on foreign currency | (10,496) | 1,308 | 1,337 |
Total other comprehensive (loss) income | (10,496) | 1,308 | 1,337 |
COMPREHENSIVE (LOSS) INCOME | (2,933,601) | $ (611,937) | $ 185,281 |
Debtor-in-Possession | |||
Statement of Comprehensive Income [Abstract] | |||
NET LOSS | (2,916,665) | ||
OTHER COMPREHENSIVE (LOSS) INCOME: | |||
Net unrealized loss on foreign currency | (10,496) | ||
Total other comprehensive (loss) income | (10,496) | ||
COMPREHENSIVE (LOSS) INCOME | $ (2,927,161) |
CONDENSED COMBINED DEBTOR-IN-_6
CONDENSED COMBINED DEBTOR-IN-POSSESSION FINANCIAL INFORMATION-CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING ACTIVITIES: | |||
Net cash provided by operating activities | $ 269,193 | $ 411,050 | $ 402,119 |
INVESTING ACTIVITIES: | |||
Capital expenditures, excluding capitalized interest | (99,722) | (77,929) | (69,971) |
Capitalized interest payments | (3,140) | (2,721) | (2,892) |
Proceeds from the U.S. Government Agreement | 18,635 | 0 | 0 |
Acquisitions, including in-process research and development, net of cash and restricted cash acquired | (90,320) | (5,000) | (654,231) |
Proceeds from sale of business and other assets, net | 41,400 | 30,283 | 6,737 |
Net cash used in investing activities | (133,147) | (59,544) | (629,594) |
FINANCING ACTIVITIES: | |||
Repayments of notes | (180,342) | 0 | (57,649) |
Repayments of term loans | (10,000) | (3,310,475) | (34,150) |
Adequate protection payments | (313,109) | 0 | 0 |
Repayments of other indebtedness | (6,062) | (5,448) | (4,884) |
Payments for contingent consideration | (2,462) | (4,010) | (3,848) |
Payments of tax withholding for restricted shares | (1,898) | (14,774) | (8,036) |
Net cash used in financing activities | (513,873) | (105,481) | (108,567) |
Effect of foreign exchange rate | (4,242) | 285 | 654 |
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | (382,069) | 246,310 | (335,388) |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,631,310 | 1,385,000 | 1,720,388 |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD | 1,249,241 | 1,631,310 | $ 1,385,000 |
Debtor-in-Possession | |||
OPERATING ACTIVITIES: | |||
Net cash provided by operating activities | 209,523 | ||
INVESTING ACTIVITIES: | |||
Capital expenditures, excluding capitalized interest | (43,743) | ||
Capitalized interest payments | (3,140) | ||
Proceeds from the U.S. Government Agreement | 18,635 | ||
Acquisitions, including in-process research and development, net of cash and restricted cash acquired | (90,320) | ||
Proceeds from sale of business and other assets, net | 41,400 | ||
Proceeds from loans made to Non-Debtor Affiliates | 2,355 | ||
Disbursements for loans made to Non-Debtor Affiliates | (51,486) | ||
Net cash used in investing activities | (126,299) | ||
FINANCING ACTIVITIES: | |||
Repayments of notes | (180,342) | ||
Repayments of term loans | (10,000) | ||
Adequate protection payments | (313,109) | ||
Repayments of other indebtedness | (6,062) | ||
Payments for contingent consideration | (2,462) | ||
Payments of tax withholding for restricted shares | (1,898) | ||
Net cash used in financing activities | (513,873) | ||
Effect of foreign exchange rate | (1,790) | ||
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | (432,439) | ||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,568,698 | ||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD | $ 1,136,259 | $ 1,568,698 |
SAVINGS AND INVESTMENT PLAN A_2
SAVINGS AND INVESTMENT PLAN AND DEFERRED COMPENSATION PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure | |||
Contributions towards defined contribution savings and investment plans | $ 6.5 | $ 7.6 | $ 7.6 |
Endo 401(k) Plan, Matching Tier One | |||
Defined Benefit Plan Disclosure | |||
Employer matching contribution (percent) | 100% | ||
Percentage of employees gross pay (percent) | 3% | ||
Endo 401(k) Plan, Matching Tier Two | |||
Defined Benefit Plan Disclosure | |||
Employer matching contribution (percent) | 50% | ||
Percentage of employees gross pay (percent) | 2% | ||
Endo 401(k) Plan | |||
Defined Benefit Plan Disclosure | |||
Maximum annual contributions per employee (percent) | 4% | ||
Vesting period | 2 years |
SCHEDULE II_VALUATION AND QUA_2
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (Details) - Valuation Allowance for Deferred Tax Assets - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Valuation Allowance For Deferred Tax Assets: | |||
Balance at Beginning of Period | $ 10,169,294 | $ 9,668,556 | $ 9,828,959 |
Additions, Costs and Expenses | 273,538 | 504,499 | 150,500 |
Deductions, Write-offs | (46) | (9) | (316,474) |
Other | (6,367) | (3,752) | 5,571 |
Balance at End of Period | $ 10,436,419 | $ 10,169,294 | $ 9,668,556 |