COVER
COVER - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 22, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 333-280767 | |
Entity Registrant Name | Endo, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 30-1390281 | |
Entity Address, Address Line One | 1400 Atwater Drive | |
Entity Address, City or Town | Malvern, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19355 | |
City Area Code | 484 | |
Local Phone Number | 216-0000 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Ordinary Shares Outstanding (in shares) | 76,400,000 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0002008861 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | Jun. 30, 2024 USD ($) |
CURRENT ASSETS: | |
Cash and cash equivalents | $ 293,536,000 |
Restricted cash and cash equivalents | 166,851,000 |
Accounts receivable, net | 365,778,000 |
Inventories, net | 659,027,000 |
Prepaid expenses and other current assets | 85,305,000 |
Income taxes receivable | 116,000 |
Total current assets | 1,570,613,000 |
PROPERTY, PLANT AND EQUIPMENT, NET | 554,563,000 |
OPERATING LEASE ASSETS | 20,544,000 |
GOODWILL | 0 |
OTHER INTANGIBLES, NET | 2,251,701,000 |
DEFERRED INCOME TAXES | 92,214,000 |
OTHER ASSETS | 466,405,000 |
TOTAL ASSETS | 4,956,040,000 |
CURRENT LIABILITIES: | |
Accounts payable and accrued expenses | 514,998,000 |
Current portion of legal settlement accrual | 1,234,000 |
Current portion of operating lease liabilities | 8,244,000 |
Current portion of long-term debt | 11,250,000 |
Income taxes payable | 63,832,000 |
Total current liabilities | 599,558,000 |
DEFERRED INCOME TAXES | 5,657,000 |
LONG-TERM DEBT, LESS CURRENT PORTION, NET | 2,426,503,000 |
LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION | 5,624,000 |
OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | 13,025,000 |
OTHER LIABILITIES | 72,716,000 |
LIABILITIES SUBJECT TO COMPROMISE | 0 |
COMMITMENTS AND CONTINGENCIES (NOTE 15) | |
SHAREHOLDERS’ EQUITY (DEFICIT): | |
Ordinary shares and Common Stock | 76,000 |
Endo, Inc. preferred stock, $0.001 par value, 25,000,000 shares authorized; none issued and outstanding at June 30, 2024 | 0 |
Additional paid in capital | 1,981,480,000 |
Accumulated deficit | (148,776,000) |
Accumulated other comprehensive income (loss) | 177,000 |
Total shareholders’ equity (deficit) | 1,832,957,000 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ 4,956,040,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Common stock, par value (in dollars per shares) | $ 0.001 | |
Common stock, shares authorized (in shares) | 1,000,000,000 | |
Common stock, shares issued (in shares) | 76,155,520 | |
Common stock, shares outstanding (in shares) | 76,155,520 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 25,000,000 | |
Preferred stock, shares issued (in shares) | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | |
Predecessor | ||
Euro deferred shares, par value (in dollars per share) | $ 0.01 | |
Euro deferred shares, shares authorized (in shares) | 4,000,000 | |
Euro deferred shares, shares issued (in shares) | 4,000,000 | |
Common stock, par value (in dollars per shares) | $ 0.0001 | |
Common stock, shares authorized (in shares) | 1,000,000,000 | |
Common stock, shares issued (in shares) | 235,219,612 | |
Common stock, shares outstanding (in shares) | 235,219,612 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
TOTAL REVENUES, NET | $ 284,163 | ||||
COSTS AND EXPENSES: | |||||
Cost of revenues | 333,695 | ||||
Selling, general and administrative | 95,992 | ||||
Research and development | 22,448 | ||||
Acquired in-process research and development | 0 | ||||
Litigation-related and other contingencies, net | 0 | ||||
Asset impairment charges | 0 | ||||
Acquisition-related and integration items, net | (130) | ||||
Interest expense (income), net | 44,669 | ||||
Reorganization items, net | 0 | ||||
Other expense (income), net | 246 | ||||
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX | (212,757) | $ 6,248,991 | $ 37,240 | ||
INCOME TAX (BENEFIT) EXPENSE | (63,981) | ||||
(LOSS) INCOME FROM CONTINUING OPERATIONS | (148,776) | ||||
DISCONTINUED OPERATIONS, NET OF TAX (NOTE 5) | 0 | ||||
NET (LOSS) INCOME | $ (148,776) | ||||
NET (LOSS) INCOME PER SHARE—BASIC: | |||||
Continuing operations (in dollars per share) | $ (1.95) | ||||
Discontinued operations (in dollars per share) | 0 | ||||
Basic (in dollars per share) | (1.95) | ||||
NET (LOSS) INCOME PER SHARE—DILUTED: | |||||
Continuing operations (in dollars per share) | (1.95) | ||||
Discontinued operations (in dollars per share) | 0 | ||||
Diluted (in dollars per share) | $ (1.95) | ||||
WEIGHTED AVERAGE SHARES: | |||||
Basic (in shares) | 76,156 | ||||
Diluted (in shares) | 76,156 | ||||
Predecessor | |||||
TOTAL REVENUES, NET | $ 162,467 | $ 546,852 | 581,974 | 1,062,119 | |
COSTS AND EXPENSES: | |||||
Cost of revenues | 60,539 | 233,852 | 259,552 | 466,594 | |
Selling, general and administrative | 28,323 | 137,729 | 158,391 | 288,522 | |
Research and development | 6,120 | 28,037 | 32,022 | 55,740 | |
Acquired in-process research and development | 750 | 0 | |||
Litigation-related and other contingencies, net | 200 | 28,013 | 200 | 43,213 | |
Asset impairment charges | 1,799 | 0 | 2,103 | 146 | |
Acquisition-related and integration items, net | (817) | 365 | (196) | 762 | |
Interest expense (income), net | (2) | 229 | |||
Reorganization items, net | (6,328,145) | 84,267 | (6,125,099) | 169,619 | |
Other expense (income), net | (493) | 179 | 5,262 | 54 | |
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX | 6,394,943 | 34,290 | 6,248,991 | 37,240 | |
INCOME TAX (BENEFIT) EXPENSE | 50,629 | 10,279 | 58,511 | 16,052 | |
(LOSS) INCOME FROM CONTINUING OPERATIONS | 6,344,314 | 24,011 | 6,190,480 | 21,188 | |
DISCONTINUED OPERATIONS, NET OF TAX (NOTE 5) | 183,234 | (573) | 182,838 | (1,029) | |
NET (LOSS) INCOME | $ 6,527,548 | $ 23,438 | $ 6,373,318 | $ 20,159 | |
NET (LOSS) INCOME PER SHARE—BASIC: | |||||
Continuing operations (in dollars per share) | $ 26.97 | $ 0.10 | $ 26.32 | $ 0.09 | |
Discontinued operations (in dollars per share) | 0.78 | 0 | 0.78 | 0 | |
Basic (in dollars per share) | 27.75 | 0.10 | 27.10 | 0.09 | |
NET (LOSS) INCOME PER SHARE—DILUTED: | |||||
Continuing operations (in dollars per share) | 26.97 | 0.10 | 26.32 | 0.09 | |
Discontinued operations (in dollars per share) | 0.78 | 0 | 0.78 | 0 | |
Diluted (in dollars per share) | $ 27.75 | $ 0.10 | $ 27.10 | $ 0.09 | |
WEIGHTED AVERAGE SHARES: | |||||
Basic (in shares) | 235,220 | 235,220 | 235,220 | 235,218 | |
Diluted (in shares) | 235,220 | 235,220 | 235,220 | 235,662 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
NET (LOSS) INCOME | $ (148,776) | ||||
OTHER COMPREHENSIVE INCOME: | |||||
Net unrealized gain on foreign currency | 177 | ||||
Total other comprehensive income | 177 | ||||
COMPREHENSIVE (LOSS) INCOME | $ (148,599) | ||||
Predecessor | |||||
NET (LOSS) INCOME | $ 6,527,548 | $ 23,438 | $ 6,373,318 | $ 20,159 | |
OTHER COMPREHENSIVE INCOME: | |||||
Net unrealized gain on foreign currency | 226,686 | 2,891 | 223,762 | 3,498 | |
Total other comprehensive income | 226,686 | 2,891 | 223,762 | 3,498 | |
COMPREHENSIVE (LOSS) INCOME | $ 6,754,234 | $ 26,329 | $ 6,597,080 | $ 23,657 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 2 Months Ended | 4 Months Ended | 6 Months Ended |
Jun. 30, 2024 | Apr. 23, 2024 | Jun. 30, 2023 | |
OPERATING ACTIVITIES: | |||
NET (LOSS) INCOME | $ (148,776) | ||
Adjustments to reconcile Net (loss) income to Net cash provided by operating activities: | |||
Depreciation and amortization | 60,399 | ||
Inventory step-up | 191,987 | ||
Share-based compensation | 0 | ||
Amortization of debt issuance costs and discount | 1,513 | ||
Deferred income taxes | (126,892) | ||
Change in fair value of contingent consideration | (58) | ||
Acquired in-process research and development | 0 | ||
Asset impairment charges | 0 | ||
Reorganization items, net | 0 | ||
Loss (gain) on sale of business and other assets | 52 | ||
Other | 572 | ||
Changes in assets and liabilities which provided (used) cash: | |||
Accounts receivable | 37,003 | ||
Inventories | (15,952) | ||
Prepaid and other assets | (6,140) | ||
Accounts payable, accrued expenses and other liabilities | 14,292 | ||
Income taxes payable/receivable, net | 63,839 | ||
Liabilities subject to compromise, excluding financing activities | 0 | ||
Net cash provided by operating activities | 71,839 | ||
INVESTING ACTIVITIES: | |||
Capital expenditures | (8,921) | ||
Proceeds from the U.S. Government Agreement | 1,161 | ||
Acquisitions, including in-process research and development, net of cash and restricted cash acquired | 0 | ||
Proceeds from sale of business and other assets | 1,631 | ||
Net cash used in investing activities | (6,129) | ||
FINANCING ACTIVITIES: | |||
Proceeds from issuance of notes, net | 0 | ||
Proceeds from issuance of term loans | 0 | ||
Payments for settlement of first lien claims | 0 | ||
Adequate protection payments | 0 | ||
Repayments of other indebtedness | (1,190) | ||
Payments for debt issuance and extinguishment costs | 0 | ||
Payments for contingent consideration | (1,577) | ||
Proceeds from issuance of common stock | 0 | ||
Payments for backstop commitment premium | 0 | ||
Payments for equity issuance | 0 | ||
Net cash used in financing activities | (2,767) | ||
Effect of foreign exchange rate | 439 | ||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | 63,382 | ||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD | 397,005 | ||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD | 460,387 | $ 397,005 | |
Predecessor | |||
OPERATING ACTIVITIES: | |||
NET (LOSS) INCOME | 6,373,318 | $ 20,159 | |
Adjustments to reconcile Net (loss) income to Net cash provided by operating activities: | |||
Depreciation and amortization | 92,556 | 155,003 | |
Inventory step-up | 0 | 0 | |
Share-based compensation | 0 | 11,240 | |
Amortization of debt issuance costs and discount | 0 | 0 | |
Deferred income taxes | 9,345 | (2,287) | |
Change in fair value of contingent consideration | 284 | 762 | |
Acquired in-process research and development | 750 | 0 | |
Asset impairment charges | 2,103 | 146 | |
Reorganization items, net | (6,471,963) | 0 | |
Loss (gain) on sale of business and other assets | (115) | (622) | |
Other | 1,577 | (477) | |
Changes in assets and liabilities which provided (used) cash: | |||
Accounts receivable | (19,173) | 43,916 | |
Inventories | (11,660) | 769 | |
Prepaid and other assets | 4,565 | 19,902 | |
Accounts payable, accrued expenses and other liabilities | (27,762) | (58,598) | |
Income taxes payable/receivable, net | 3,687 | (499) | |
Liabilities subject to compromise, excluding financing activities | (702,153) | 0 | |
Net cash provided by operating activities | (744,641) | 189,414 | |
INVESTING ACTIVITIES: | |||
Capital expenditures | (19,751) | (53,516) | |
Proceeds from the U.S. Government Agreement | 7,728 | 19,354 | |
Acquisitions, including in-process research and development, net of cash and restricted cash acquired | (750) | 0 | |
Proceeds from sale of business and other assets | 2,188 | 2,259 | |
Net cash used in investing activities | (10,585) | (31,903) | |
FINANCING ACTIVITIES: | |||
Proceeds from issuance of notes, net | 1,000,000 | 0 | |
Proceeds from issuance of term loans | 1,500,000 | 0 | |
Payments for settlement of first lien claims | (2,591,609) | 0 | |
Adequate protection payments | (192,341) | (291,689) | |
Repayments of other indebtedness | (2,381) | (3,299) | |
Payments for debt issuance and extinguishment costs | (58,485) | 0 | |
Payments for contingent consideration | (2,134) | (2,083) | |
Proceeds from issuance of common stock | 500,321 | 0 | |
Payments for backstop commitment premium | (25,540) | 0 | |
Payments for equity issuance | (4,223) | 0 | |
Net cash used in financing activities | 123,608 | (297,071) | |
Effect of foreign exchange rate | (1,998) | 944 | |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | (633,616) | (138,616) | |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD | $ 397,005 | 1,030,621 | 1,249,241 |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD | $ 397,005 | $ 1,110,625 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Predecessor | Ordinary Shares / Common Stock | Ordinary Shares / Common Stock Predecessor | Euro Deferred Shares / Preferred Stock | Euro Deferred Shares / Preferred Stock Predecessor | Additional Paid-in Capital | Additional Paid-in Capital Predecessor | (Accumulated Deficit) Retained Earnings | (Accumulated Deficit) Retained Earnings Predecessor | Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income Predecessor |
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 235,208,039 | |||||||||||
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 4,000,000 | |||||||||||
Shareholders' equity, beginning balance at Dec. 31, 2022 | $ (4,162,172) | $ 24 | $ 43 | $ 8,969,322 | $ (12,904,620) | $ (226,941) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net Income (Loss) | (3,279) | (3,279) | ||||||||||
Shares issued (in shares) | 11,573 | |||||||||||
Other comprehensive income (loss) | 607 | 607 | ||||||||||
Compensation related to share-based awards | 11,240 | 11,240 | ||||||||||
Other | (1) | (1) | ||||||||||
Shareholders' equity, ending balance (in shares) at Mar. 31, 2023 | 235,219,612 | |||||||||||
Shareholders' equity, ending balance (in shares) at Mar. 31, 2023 | 4,000,000 | |||||||||||
Shareholders' equity, ending balance at Mar. 31, 2023 | (4,153,605) | $ 24 | $ 43 | 8,980,561 | (12,907,899) | (226,334) | ||||||
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 235,208,039 | |||||||||||
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 4,000,000 | |||||||||||
Shareholders' equity, beginning balance at Dec. 31, 2022 | (4,162,172) | $ 24 | $ 43 | 8,969,322 | (12,904,620) | (226,941) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net Income (Loss) | 20,159 | |||||||||||
Other comprehensive income (loss) | 3,498 | |||||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2023 | 235,219,612 | |||||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2023 | 4,000,000 | |||||||||||
Shareholders' equity, ending balance at Jun. 30, 2023 | (4,127,275) | $ 24 | $ 44 | 8,980,561 | (12,884,461) | (223,443) | ||||||
Shareholders' equity, beginning balance (in shares) at Mar. 31, 2023 | 235,219,612 | |||||||||||
Shareholders' equity, beginning balance (in shares) at Mar. 31, 2023 | 4,000,000 | |||||||||||
Shareholders' equity, beginning balance at Mar. 31, 2023 | (4,153,605) | $ 24 | $ 43 | 8,980,561 | (12,907,899) | (226,334) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net Income (Loss) | 23,438 | 23,438 | ||||||||||
Other comprehensive income (loss) | 2,891 | 2,891 | ||||||||||
Other | 1 | $ 1 | ||||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2023 | 235,219,612 | |||||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2023 | 4,000,000 | |||||||||||
Shareholders' equity, ending balance at Jun. 30, 2023 | $ (4,127,275) | $ 24 | $ 44 | 8,980,561 | (12,884,461) | (223,443) | ||||||
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2023 | 235,219,612 | 0 | 235,219,612 | |||||||||
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2023 | 0 | 4,000,000 | ||||||||||
Shareholders' equity, beginning balance at Dec. 31, 2023 | $ 0 | $ (6,597,560) | $ 0 | $ 24 | $ 0 | $ 44 | $ 0 | 8,980,561 | $ 0 | (15,354,427) | $ 0 | (223,762) |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net Income (Loss) | 0 | (154,230) | 0 | (154,230) | ||||||||
Other comprehensive income (loss) | (2,924) | (2,924) | ||||||||||
Other | (1) | $ (1) | ||||||||||
Shareholders' equity, ending balance (in shares) at Mar. 31, 2024 | 0 | 235,219,612 | ||||||||||
Shareholders' equity, ending balance (in shares) at Mar. 31, 2024 | 0 | 4,000,000 | ||||||||||
Shareholders' equity, ending balance at Mar. 31, 2024 | 0 | $ (6,754,715) | $ 0 | $ 24 | $ 0 | $ 43 | 0 | 8,980,561 | 0 | (15,508,657) | 0 | (226,686) |
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2023 | 235,219,612 | 0 | 235,219,612 | |||||||||
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2023 | 0 | 4,000,000 | ||||||||||
Shareholders' equity, beginning balance at Dec. 31, 2023 | 0 | $ (6,597,560) | $ 0 | $ 24 | $ 0 | $ 44 | 0 | 8,980,561 | 0 | (15,354,427) | 0 | (223,762) |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net Income (Loss) | 6,373,318 | |||||||||||
Other comprehensive income (loss) | 223,762 | |||||||||||
Shareholders' equity, ending balance (in shares) at Apr. 23, 2024 | 76,155,520 | |||||||||||
Shareholders' equity, ending balance (in shares) at Apr. 23, 2024 | 0 | |||||||||||
Shareholders' equity, ending balance at Apr. 23, 2024 | 1,981,556 | (6,778,920) | $ 76 | $ 0 | 1,981,480 | 0 | 0 | |||||
Shareholders' equity, beginning balance (in shares) at Mar. 31, 2024 | 0 | 235,219,612 | ||||||||||
Shareholders' equity, beginning balance (in shares) at Mar. 31, 2024 | 0 | 4,000,000 | ||||||||||
Shareholders' equity, beginning balance at Mar. 31, 2024 | 0 | (6,754,715) | $ 0 | $ 24 | $ 0 | $ 43 | 0 | 8,980,561 | 0 | (15,508,657) | 0 | (226,686) |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net Income (Loss) | 6,527,548 | 6,527,548 | ||||||||||
Shares issued (in shares) | 76,155,520 | |||||||||||
Issuance of common stock | 1,981,556 | $ 76 | 1,981,480 | |||||||||
Other comprehensive income (loss) | 226,686 | 226,686 | ||||||||||
Cancellation of Predecessor equity (in shares) | (235,219,612) | (4,000,000) | ||||||||||
Cancellation of Predecessor equity | 0 | $ (24) | $ (43) | (8,980,561) | 8,980,628 | |||||||
Other | (481) | (481) | ||||||||||
Shareholders' equity, ending balance (in shares) at Apr. 23, 2024 | 76,155,520 | |||||||||||
Shareholders' equity, ending balance (in shares) at Apr. 23, 2024 | 0 | |||||||||||
Shareholders' equity, ending balance at Apr. 23, 2024 | 1,981,556 | (6,778,920) | $ 76 | $ 0 | 1,981,480 | 0 | 0 | |||||
Shareholders' equity, beginning balance (in shares) at Mar. 31, 2024 | 0 | 235,219,612 | ||||||||||
Shareholders' equity, beginning balance (in shares) at Mar. 31, 2024 | 0 | 4,000,000 | ||||||||||
Shareholders' equity, beginning balance at Mar. 31, 2024 | 0 | (6,754,715) | $ 0 | $ 24 | $ 0 | $ 43 | 0 | $ 8,980,561 | 0 | $ (15,508,657) | 0 | $ (226,686) |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net Income (Loss) | (148,776) | (148,776) | ||||||||||
Shares issued (in shares) | 76,155,520 | |||||||||||
Issuance of common stock | 1,981,556 | $ 76 | 1,981,480 | |||||||||
Other comprehensive income (loss) | $ 177 | 177 | ||||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2024 | 76,155,520 | 76,155,520 | ||||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2024 | 0 | |||||||||||
Shareholders' equity, ending balance at Jun. 30, 2024 | $ 1,832,957 | $ 76 | $ 0 | 1,981,480 | (148,776) | 177 | ||||||
Shareholders' equity, beginning balance (in shares) at Apr. 23, 2024 | 76,155,520 | |||||||||||
Shareholders' equity, beginning balance (in shares) at Apr. 23, 2024 | 0 | |||||||||||
Shareholders' equity, beginning balance at Apr. 23, 2024 | 1,981,556 | $ (6,778,920) | $ 76 | $ 0 | 1,981,480 | 0 | 0 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net Income (Loss) | (148,776) | |||||||||||
Other comprehensive income (loss) | $ 177 | |||||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2024 | 76,155,520 | 76,155,520 | ||||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2024 | 0 | |||||||||||
Shareholders' equity, ending balance at Jun. 30, 2024 | $ 1,832,957 | $ 76 | $ 0 | $ 1,981,480 | $ (148,776) | $ 177 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 1. BASIS OF PRESENTATION Basis of Presentation Unless otherwise indicated or required by the context, references throughout to “Endo,” the “Company,” the “Successor,” “we,” “our” or “us” refer to Endo, Inc. and its subsidiaries, as successor entity for accounting and financial reporting purposes following the consummation of the Plan (as defined below) on the Effective Date (April 23, 2024, as further defined below). References to Endo International plc and its direct and indirect subsidiaries on a consolidated basis, refer to the predecessor entity to Endo, Inc. for accounting and financial reporting purposes prior to and including the consummation of the Plan on the Effective Date. Historically, our business has been operated by Endo International plc, together with its subsidiaries. On August 16, 2022 (the Petition Date), Endo International plc, together with certain of its direct and indirect subsidiaries (the Debtors), filed voluntary petitions for relief under chapter 11 of title 11 of the United States (U.S.) Code (the Bankruptcy Code). The Debtors 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 . On December 19, 2023, the Debtors filed a proposed chapter 11 plan of reorganization (as amended, including on January 5, 2024, January 9, 2024 and March 18, 2024, and including any exhibits and supplements filed with respect thereto, the Plan or Plan of Reorganization) and related disclosure statement with the Bankruptcy Court. The Bankruptcy Court confirmed the Plan on March 19, 2024, and the Debtors satisfied all conditions required for the Plan effectiveness (the Effective Date) on April 23, 2024. Pursuant to the Plan and the Purchase and Sale Agreement (PSA), Endo, Inc. acquired from the Debtors substantially all of the assets, as well as certain equity interests of the Debtors and non-debtor affiliates and assumed certain liabilities of Endo International plc. Endo International plc will be dissolved in connection with the consummation of the Plan. Refer to Note 2. Effectiveness of the Plan of Reorganization for additional information about the effects of the Plan. Endo, Inc. was incorporated as a Delaware corporation on December 5, 2023 for the express purpose of completing the transactions contemplated in the Plan and PSA, which was entered into among Endo, Inc., certain other applicable purchaser entities, certain Debtors and certain non-debtor affiliates. From its formation on December 5, 2023 through the Effective Date, Endo, Inc. had no operations or business transactions or activities other than those taken in furtherance of the transactions contemplated by the Plan including in connection with the incurrence of the Exit Financing Debt (as defined below) and those incidental to the preparation of its registration statement. Accordingly, all incidental charges have been capitalized in Endo, Inc.’s Condensed Consolidated Balance Sheet as incurred, primarily concentrated in the lead up to, or on, the Effective Date and, where applicable, reflected as Reorganization Adjustments (as defined below) in the application of fresh start accounting. Immediately prior to the consummation of the Plan, Endo, Inc. had approximately $8 million of assets and liabilities in connection with Exit Financing Debt activities. Endo, Inc. had no other assets, liabilities or operating costs prior to the consummation of the Plan. As of the Effective Date, and continuing through the date of this report, Endo, Inc. was a holding company and all of its business was conducted through its subsidiaries, and the financial results of such subsidiaries are consolidated in its financial statements. In accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 852 - Reorganizations (ASC 852), Endo, Inc. has become the Successor reporting entity. As the application of fresh start accounting resulted in a new basis of accounting, our financial statements and notes for the Successor are not comparable to the historical financial statements and notes of Endo International plc. The accompanying unaudited Condensed Consolidated Financial Statements of Endo, Inc. and its subsidiaries and the Predecessor have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements of Endo, Inc. and its subsidiaries and the Predecessor, which are unaudited, include all normal and recurring adjustments necessary for a fair statement of the Company’s financial position as of June 30, 2024 and the results of operations and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The year-end Condensed Consolidated Balance Sheet data as of December 31, 2023, was derived from the audited financial statements of Endo International plc but does not include all disclosures required by U.S. GAAP. The information included in the accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the annual financial statements of Endo International plc within the Company’s final prospectus, dated July 31, 2024, filed with the SEC pursuant to Rule 424(b) under the Securities Act (the Prospectus), in connection with the Company’s registration statement on Form S-1, as amended (File No. 333-280767) (the Registration Statement). Certain prior period amounts have been reclassified to conform to the current period presentation for comparability purposes. The reclassification adjustments primarily relate to, among others: (i) while maintaining the same segment profitability measure as the Predecessor, the Company has updated the categories presented to reconcile to segment adjusted income from continuing operations in Note 6. Segment Results and aligned the three and six month ended June 2023 categories for comparability; and (ii) while maintaining the same historical balances of the Predecessor, the Company has updated the previously disclosed categories of intangible assets to align with Endo, Inc.’s naming convention in Note 3. Fresh Start Accounting and Note 10. Goodwill and Other Intangibles. |
EFFECTIVENESS OF THE PLAN OF RE
EFFECTIVENESS OF THE PLAN OF REORGANIZATION | 6 Months Ended |
Jun. 30, 2024 | |
Reorganizations [Abstract] | |
EFFECTIVENESS OF THE PLAN OF REORGANIZATION | NOTE 2. EFFECTIVENESS OF THE PLAN OF REORGANIZATION Beginning on the Petition Date, the Debtors filed voluntary petitions for relief under the Bankruptcy Code. Certain additional then-newly formed Debtors, filed petitions for relief under the Bankruptcy Code on May 25, 2023 and May 31, 2023. Certain entities consolidated by Endo International plc and included in these Condensed Consolidated Financial Statements were not party to the Chapter 11 Cases. These entities are collectively referred to herein as the Non-Debtor Affiliates. On and after the Petition Date, the Debtors operated their businesses and managed their properties as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. On the Petition Date, the Debtors entered into a Restructuring Support Agreement (as amended, the RSA) with an ad hoc group of certain creditors holding in excess of 50% of the aggregate outstanding principal amount of Endo International plc’s first lien secured indebtedness (the Ad Hoc First Lien Group). Following extensive negotiations with their key stakeholders, including in connection with a mediation process authorized by the Bankruptcy Court, the Debtors filed the Plan. The Plan incorporates settlements reached with, among others, the two official committees that were appointed in the Chapter 11 Cases, the future claimants’ representative, the ad hoc groups of first lien claimants and unsecured note holders, all forty-five states who had not previously settled with the Debtors and several U.S. territories, representatives of thirteen Canadian provinces and territories and an ad hoc group of public school districts. These settlements are discussed in more detail in the annual financial statements of Endo International plc within the Company’s Prospectus, in connection with the Company’s Registration Statement and Note 15. Commitments and Contingencies. In addition to the other settlements reached with various stakeholders during the Chapter 11 Cases, the Plan also incorporates the U.S. Government Economic Settlement (as defined below) and sets forth a post-reorganization governance structure and includes releases for the Debtors and certain other parties. The resolution reached with the Ad Hoc First Lien Group and the U.S. Department of Justice (DOJ) with respect to claims filed in the Chapter 11 Cases by the United States of America, acting through the United States Attorney’s Office for the Southern District of New York, for and on behalf of: (i) the United States Department of Justice Civil Division’s Consumer Protection Branch; (ii) the United States Attorney’s Office for the Southern District of Florida (S.D. Florida); (iii) the United States Department of Justice Civil Division’s Fraud Section, acting on behalf of the Office of Inspector General of the Department of Health and Human Services, the Defense Health Agency, as administrator of the TRICARE program, the Office of Personnel Management, as administrator of the Federal Employees Health Benefits program, and the Department of Veteran Affairs (VA); (iv) the U.S. Internal Revenue Service (IRS); (v) the U.S. Department of Health and Human Services (HHS), U.S. Centers for Medicare and Medicaid Services (CMS) and Indian Health Service; and (vi) the VA (collectively, the U.S. Government), including criminal, civil and tax-related claims provided for payment by Endo International plc of $364.9 million over 10 years, or $200 million if the obligation is paid in full on the Effective Date of the Plan, plus contingent consideration of $25 million in each of 2024 through 2028 (up to $100 million in aggregate) if our Earnings Before Interest, Taxes Depreciation and Amortization (EBITDA) sufficiently exceeds defined baselines (U.S. Government Economic Settlement). Refer below for further discussion of the payments made on the Effective Date. Under the Plan, the Debtors’ first lien creditors received 96.3% of equity in Endo, Inc. (subject to dilution) and an opportunity to participate in a $340 million rights offering (First Lien Rights Offering). The second lien creditors and unsecured noteholders received the remaining 3.7% of the equity (also subject to dilution). Second lien creditors and unsecured noteholders also received $23.3 million in cash, certain proceeds of litigation claims and insurance rights, and the opportunity to participate in a $160 million rights offering (GUC Rights Offering) which was subscribed in July 2023. Holders of allowed other general unsecured claims received approximately $2 million in cash and a small percentage of the proceeds of trust litigation claims and insurance rights, subject to certain qualifications. Opioid claimants received distributions from certain trusts and sub-trusts as detailed further below. To facilitate the First Lien Rights Offering, certain first lien claim holders (the First Lien Backstop Parties), entered into an agreement to purchase the shares not purchased by the non-First Lien Backstop Parties in the First Lien Rights Offering (the First Lien BCA). In exchange for providing the backstop commitments, Endo, Inc. agreed to issue 0.8 million shares of common stock and Endo International plc agreed to pay certain First Lien Backstop Parties a cash amount not to exceed approximately $25.5 million as an “Additional Premium” in exchange for their commitments (First Lien Backstop Premium). To facilitate the GUC Rights Offering, certain first lien claim holders (GUC Backstop Parties) entered into an agreement to purchase any unsubscribed shares in the GUC Rights Offering (GUC BCA). In exchange for providing the backstop commitments, Endo, Inc. agreed to issue a certain number of shares of common stock (GUC Backstop Premium). To protect Endo International plc’s Irish entities and assets from the risk of value-destructive litigation and enforcement efforts not enjoined by the Plan, the Debtors also executed an Irish scheme of arrangement in parallel with the Plan to implement certain terms of the Plan as a matter of Irish law. The scheme of arrangement was widely approved by creditors and sanctioned by the High Court of Ireland on April 18, 2024. The final order approving the scheme was filed on April 19, 2024. In connection with approval of the scheme, on the Effective Date, all claims against the Debtors covered by the scheme were completely released and discharged as a matter of Irish law. On January 12, 2024, the Bankruptcy Court entered an order conditionally approving the disclosure statement which authorized Endo International plc to solicit votes on the Plan. The Bankruptcy Court also scheduled a combined hearing for: (i) final approval of the disclosure statement as containing “adequate information” as required by the Bankruptcy Code; and (ii) confirmation of the Plan for March 19, 2024. The Bankruptcy Court confirmed the Plan on March 19, 2024, and the Debtors satisfied all conditions required for the Plan effectiveness on the Effective Date. On or following the Effective Date and pursuant to the terms of the Plan, the following occurred or became effective: • Endo, Inc. appointed six new members to its board of directors to replace all of the directors of Endo International plc, other than the director also serving as the President and Chief Executive Officer, who was re-appointed pursuant to the Plan; • All equity interests of Endo International plc that were outstanding immediately prior to the Effective Date were terminated and cancelled; • Endo, Inc.’s authorized capital stock now consists of 1 billion shares of common stock, par value $0.001 per share, and 25 million shares of preferred stock, par value $0.001 per share; • Shares of Endo, Inc. common stock issued in reliance upon section 1145 of the Bankruptcy Code (except with respect to any entity that is an underwriter) are exempt from, among other things, the registration requirements of Section 5 of the Securities Act and any other applicable U.S. state or local law requiring registration for the offer or sale of securities and (i) are not “restricted securities” as defined in Rule 144(a)(3) under the Securities Act, and (ii) are freely tradable and transferable by any holder thereof that, at the time of transfer, (1) is not an “affiliate” (as defined in Rule 144(a)(1) under the Securities Act) of Endo, Inc. or any of its subsidiaries; (2) has not been such an “affiliate” within 90 days of such transfer; and (3) is not an entity that is an underwriter; • The shares of Endo, Inc. common stock issued in reliance on Section 4(a)(2) of the Securities Act and/or Regulation D or Regulation S thereunder, are “restricted securities” subject to resale restrictions and may be resold, exchanged, assigned or otherwise transferred only in a transaction registered, or exempt from registration, under the Securities Act and other applicable law. In that regard, each of the recipients of such shares of common stock issued pursuant to the Plan made customary representations, including that each was an “accredited investor” (within the meaning of Rule 501(a) of the Securities Act) or a “qualified institutional buyer” (as defined under Rule 144A promulgated under the Securities Act); • Endo, Inc. issued approximately 33.0 million shares of common stock, in transactions exempt from registration under the Securities Act pursuant to section 1145 of the Bankruptcy Code (Unrestricted Shares), as further described above, to holders of first lien claims and holders of second lien deficiency claims and unsecured notes claims in exchange for the satisfaction of their claims; • Endo, Inc. issued approximately 0.2 million of Unrestricted Shares deposited in escrow with a third-party escrow agent (Escrowed Equity) with such Escrowed Equity to be distributed to holders of second lien deficiency claims and unsecured notes claims in accordance with the “Net Debt Equity Split Adjustment” defined under the Plan, which is excluded for purposes of calculating basic net income (loss) per share in the Condensed Consolidated Statements of Operations for the Successor three and six months ended June 30, 2024; • Endo, Inc. issued approximately 25.8 million of Unrestricted Shares to first lien creditors who participated in the Endo, Inc. First Lien Rights Offering; • Endo, Inc. issued approximately 3.6 million shares, of which approximately 2.8 million were Unrestricted Shares and approximately 0.8 million were issued in transactions exempt from registration under the Securities Act pursuant to Section 4(a)(2) and/or Regulation D or Regulation S thereunder (Restricted Shares), as further described above, to First Lien Backstop Parties and Endo International plc paid approximately $25.5 million in satisfaction of the First Lien Backstop Premium owed pursuant to the First Lien BCA; • Endo, Inc. issued less than 0.1 million of Restricted Shares to holders of claims that participated in the GUC Rights Offering; • Endo, Inc. issued approximately 13.7 million shares, including approximately 12.5 million Restricted Shares to GUC Backstop Parties in connection with the GUC Rights Offering and approximately 1.2 million Unrestricted Shares in satisfaction of the GUC Backstop Premium owed pursuant to the GUC BCA; • Endo, Inc., through its wholly-owned subsidiary Endo Finance Holdings, Inc. incurred funded indebtedness, collectively Exit Financing Debt, of: (i) a $400 million senior secured five-year superpriority revolving credit facility (New Revolving Credit Facility); (ii) a $1,500 million senior secured seven-year term loan facility (New Term Facility); and (iii) senior secured notes in the aggregate principal amount of $1,000 million, due in 2031 (New Senior Secured Notes); • The Debtors established and funded various trusts and sub-trusts for the benefit of specified claimants in exchange for the resolution of specified claims against the Debtors, as further described in the Plan and in the applicable settlement and trust agreements and Note 15. Commitments and Contingencies. Where a settlement or trust agreement provided for an option to prepay the settlement consideration at a discounted amount on the Effective Date, such trusts were fully funded on the Effective Date in an aggregate amount equal to approximately $445.5 million; • The Debtors paid approximately $200.0 million in connection with the U.S. Government Economic Settlement; • Endo, Inc. received cash of approximately $340.0 million and approximately $160.0 million from the First Lien Rights Offering and GUC Rights Offering, respectively, less certain issuance costs; • The net proceeds received from the Exit Financing Debt of approximately $2,485.0 million was paid to holders of first lien claims; • Cash in excess of $200 million (as defined in the Plan as Exit Cash), of approximately $141.9 million was paid to the holders of first lien claims; and • Intercompany interests among Endo International plc and its direct and indirect subsidiaries were either transferred, directly or indirectly, to the applicable purchaser entities, reinstated or deemed automatically cancelled. Subordinated, Recharacterized or Disallowed Claims (each as defined in the Plan) were cancelled and did not receive any distribution under the Plan. Existing equity interests in subsidiaries and affiliates of the Debtors were cancelled. Remaining Debtors. Prior to the Effective Date, in accordance with the Plan, Endo, Inc. designated assets and liabilities as “excluded assets” and “excluded liabilities,” respectively. Such excluded assets and excluded liabilities remained in the possession of the entities that were not purchased by or transferred to Endo, Inc. (Remaining Debtors). Refer to Note 3. Fresh Start Accounting for additional information about the assets and liabilities that were excluded from the purchase and therefore remained in possession of the Remaining Debtors. The Plan with respect to the Remaining Debtors following the Effective Date is being implemented by a plan administrator pursuant to a plan administrator agreement. On the Effective Date, an initial $39 million was funded by the Debtors, of which $38 million was funded pursuant to the plan administrator agreement. This amount has been, and may be adjusted as agreed to between the plan administrator and Endo, Inc. Any amounts required beyond the initial amount will be funded by Endo, Inc. and any residual amounts that may remain shall be subject to a reversionary interest to Endo, Inc. As of June 30, 2024, the Company has no accrual for loss contingencies related to the wind down of the Remaining Debtors. 2024 Stock Incentive Plan. As contemplated by the Plan, after the Effective Date, Endo, Inc. adopted a long-term incentive plan and authorized and reserved 3.6 million shares for issuance pursuant to equity incentive awards to be granted under such plan. As of August 22, 2024, no shares have been issued under Endo, Inc.’s 2024 Stock Incentive Plan. Sources of Cash for Plan Distribution. On the Effective Date, the Debtors (or Endo, Inc.) used cash on hand (including certain restricted cash), proceeds from the GUC Rights Offering and the First Lien Rights Offering and proceeds from the Exit Financing Debt to, among other things to: (i) make settlement payments under the Plan to the various trust beneficiaries and the U.S. federal government; (ii) make distributions of cash to holders of first lien claims; and (iii) pay certain professional fees. A portion of the proceeds of the First Lien Rights Offering and GUC Rights Offering was retained by Endo, Inc. and will be used for general corporate purposes, referred to elsewhere as Exit Cash. Reorganization Items, Net In accordance with ASC 852, certain expenses, gains and losses resulting from and recognized during the Debtor’s bankruptcy proceedings were recorded in Reorganization items, net in the Predecessor Condensed Consolidated Statements of Operations. The following table sets forth information about the amounts presented as Reorganization items, net in the Predecessor Condensed Consolidated Statements of Operations (in thousands): Predecessor April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Professional fees $ 16,065 $ 84,267 $ 68,163 $ 169,619 Debt valuation adjustments (1) 41,394 — 192,342 — Reorganization Adjustments (5,996,096) — (5,996,096) — Fresh Start Adjustments (389,508) — (389,508) — Total $ (6,328,145) $ 84,267 $ (6,125,099) $ 169,619 __________ (1) For the period January 1, 2024 through April 23, 2024, adequate protection payments were $192.3 million and recognized as a reduction to the carrying amount of the respective Predecessor First Lien Debt Instruments. Concurrently, as a result of adjusting to the estimated allowed claim amount for the corresponding debt instruments, a charge was recognized within Reorganization items, net. For the six months ended June 30, 2023, adequate protection payments were $291.7 million and recognized as a reduction to the carrying amount of the respective Predecessor First Lien Debt Instruments. During the period January 1, 2024 through April 23, 2024 and the six months ended June 30, 2023, the Predecessor operating cash flows included net cash outflows of $848.2 million and $162.0 million, respectively, related to certain amounts classified as Reorganization items, net. During the period January 1, 2024 through April 23, 2024, operating cash outflows primarily related to, among other things, settlement payments under the Plan to the various trust beneficiaries and U.S. Government, plan administrator funding, described in more detail above, as well as payments for professional fees made prior to or on the Effective Date. Also funded, but not reflected in the $848.2 million net cash outflow described above, were payments of $80.5 million placed into escrow prior to or on the Effective Date and reflected as restricted cash in the Successor Condensed Consolidated Balance Sheet. Following the Effective Date, the Successor operating cashflows included net cash outflows of approximately $16.0 million related to certain amounts classified as Reorganization items, net in the Predecessor Condensed Consolidated Statements of Operations. Refer to Note 3. Fresh Start Accounting for additional information about cash payments made pursuant to the Plan. During the six months ended June 30, 2023, operating cash outflows primarily consisted of payments for professional fees. Refer also to Note 14. Debt for information about the non-cash debt valuation adjustments reflected in Reorganization items, net, as well as how the bankruptcy proceedings and certain related developments have affected our debt service payments and how such payments are being reflected in the Condensed Consolidated Financial Statements. Liabilities Subject to Compromise Since the Petition Date, Endo International plc operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. In accordance with ASC 852, on the Predecessor Condensed Consolidated Balance Sheets prior to the Effective Date, the caption “Liabilities subject to compromise” reflects the expected allowed amount of the pre-petition claims that were not fully secured and that have at least a possibility of not being repaid at the full claim amount. Endo International plc considered the chapter 11 motions approved by the Bankruptcy Court with respect to the amount and classification of its pre-petition liabilities, as applicable. Endo International plc evaluated and adjusted the amount of classification of its pre-petition liabilities through the Effective Date, as applicable. NOTE 3. FRESH START ACCOUNTING Pursuant to the Plan, on the Effective Date, Endo, Inc. purchased substantially all of the assets, as well as certain equity interests of the Debtors and non-debtor affiliates and assumed certain liabilities of Endo International plc. In accordance with ASC 852, fresh start accounting was applied on the Effective Date because (i) the holders of existing Endo International plc voting shares received less than 50% of the voting shares of Endo, Inc., and (ii) the reorganization value of assets, which approximated $5.0 billion, immediately prior to the confirmation of the Plan was less than the corresponding total of all post-petition liabilities and allowed claims, which approximated $11.8 billion. Applying fresh start accounting resulted in a new reporting entity with no beginning retained earnings or accumulated deficit. Accordingly, our financial statements and notes of the Successor are not comparable to the Predecessor financial statements and notes on and prior to the Effective Date. The application of fresh start accounting required the reorganization value be assigned to Endo, Inc.’s identifiable tangible and intangible assets and liabilities (except for deferred income taxes) based on each of their estimated fair values, as determined in conformity with ASC Topic 805, Business Combinations (ASC 805). The amount of deferred taxes was determined in accordance with ASC Topic 740, Income Taxes (ASC 740) and ASC 852. Fresh start accounting requires that the reorganization value be assigned to Endo, Inc.’s identified tangible and intangible assets based on their respective fair values, with any excess recorded as goodwill, if applicable; post-petition liabilities have generally been assumed by Endo, Inc. at their historical carrying values; Exit Financing Debt liabilities are measured and recorded by Endo, Inc. at their fair values; and historical accumulated deficit and accumulated other comprehensive loss of Endo International plc is reset to zero by Endo, Inc. As applicable, Endo International plc’s liabilities subject to compromise and certain other liabilities were satisfied in accordance with the Plan’s terms. The Effective Date fair values of our assets and liabilities differed materially from their recorded values as reflected on the historic balance sheets of Endo International plc. Reorganization Value Reorganization value represents the fair value of Endo, Inc.’s total assets and approximates the amount a willing buyer would pay for the assets of the entity immediately after the restructuring. Reorganization value was derived from an estimate of the enterprise value of Endo, Inc., which represents the estimated fair value of Endo, Inc.’s long-term debt and equity, excluding non-operating assets. The Plan and disclosure statement approved by the Bankruptcy Court did not include an enterprise value or reorganization value. With the assistance of a third-party valuation firm, we estimated the enterprise value to be approximately $4.5 billion on the Effective Date. Enterprise value was estimated using an income approach that utilized a discounted cash flow (DCF) model. The net cash flows were discounted using an after-tax weighted average cost of capital (WACC), methodology reflecting a rate of return that would be expected by a market participant. The WACC also takes into consideration a company specific risk premium reflecting the risk associated with the financial projections used to estimate future cash flows. The present value of future expected net cash flows projected through 2046 is calculated using a discount rate of approximately 16.6%. The enterprise value and corresponding equity value are dependent upon achieving future financial results set forth in our valuations, as well as the realization of certain other assumptions. All estimates, assumptions, valuations and financial projections, including fair value adjustments, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, the estimates, assumptions, valuations or financial projections may not be realized and actual results could vary materially. The following table reconciles the enterprise value to the reorganization value as of the Effective Date (in thousands): April 23, 2024 Enterprise value $ 4,456,000 Plus: Other non-operating assets 20,450 Plus: Fair value of non-debt current liabilities excluding Escrowed Equity 504,344 Plus: Fair value of non-debt, non-current liabilities excluding long-term acquisition-related contingent consideration 173,363 Less: Debt issuance costs attributable to the New Term Facility and New Senior Secured Notes (48,469) Reorganization value of Endo, Inc.'s assets to be allocated $ 5,105,688 The following table reconciles the enterprise value to the implied value of Endo, Inc.’s common stock as of the Effective Date (in thousands): April 23, 2024 Enterprise value $ 4,456,000 Less: Exit Financing Debt (2,485,000) Less: Unsecured creditors committee Escrowed Equity (6,382) Less: Long-term acquisition-related contingent consideration (3,512) Plus: Other non-operating assets 20,450 Implied value of Endo, Inc.'s common stock $ 1,981,556 Valuation Process With the assistance of third-party valuation experts, we conducted an analysis of the Condensed Consolidated Balance Sheet to determine if any of the net assets would require a fair value adjustment as of the Effective Date. The results of our analysis indicated that the principal assets requiring fair value adjustments on the Effective Date include inventory, property plant and equipment, identified intangible assets and leased assets. Further detail regarding the valuation process is described below. Inventory The fair value of inventory was determined using both the bottom-up and top-down approach. The bottom-up approach considers the inventory value that had been created by the seller including costs incurred, profit realized and tangible and intangible assets used. The top-down approach measures the incremental inventory value created by the market participant buyer as part of its selling effort. It begins with the estimated selling price and is adjusted for the costs to complete the production process (for work-in-process), including consideration of the tangible and intangible assets that will be used by Endo, Inc. as well as costs associated with the selling efforts and consideration of a normal profit margin. Property, Plant and Equipment Personal property consisted of computer hardware, computer software, furniture and fixtures, leasehold improvements, machinery and equipment, office equipment and vehicles. The cost approach was primarily utilized for personal property. This approach considers the amount required to construct or purchase a new asset of equal utility at current prices, with adjustments in value for physical deterioration, and functional and economic obsolescence. Physical deterioration is an adjustment made in the cost approach to reflect the real operating age of an asset with regard to wear and tear, decay and deterioration that is not prevented by maintenance. Functional obsolescence is the loss in value or usefulness of an asset caused by inefficiencies or inadequacies, as compared to a more efficient or less costly replacement asset or newer technology. Economic obsolescence is the loss in value or usefulness of an asset due to factors external to the asset, such as the economics of the industry, reduced demand, increased competition or similar factors. The valuation of owned land improvements, building and building improvements was performed using either the direct or indirect cost approach. The owned land was valued using the sales comparison approach. Intangible Assets The fair value of marketed products, licenses and in-process research and development (IPR&D) intangible assets were determined using the income approach. The cash flows were discounted commensurate with the level of risk associated with each asset or its projected cash flows. The valuation used discount rates ranging from approximately 12.3% to 27.7%, depending on the asset. The IPR&D discount rates and underlying cash flows reflect the uncertainties relevant to development projects, including consideration of probability of technical and regulatory success based on the current stages of development, inherent uncertainty in the U.S. Food and Drug Administration (FDA) approval process and risks associated with commercialization of a new product. Lease Liabilities and Right of Use Assets Finance and operating lease liabilities were estimated as the present value of the remaining lease payments. The Company estimated an incremental borrowing rate as of the Effective Date and used it as the discount rate in the analysis. Right of use asset values were estimated by adjusting the lease liability estimates of off-market value of leases. Off-market (or above/below market) value was estimated as the present value of the differential between contract rates and market rates of the remaining term of the lease. Condensed Consolidated Balance Sheet on the Effective Date The adjustments set forth in the following Condensed Consolidated Balance Sheet as of April 23, 2024 reflect the consummation of the transactions contemplated by the Plan and effectuated by the Debtors (Reorganization Adjustments) and the fair value adjustments as a result of the application of fresh start accounting (Fresh Start Adjustments). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine fair values and significant assumptions or inputs. Supplemental disclosures of non-cash financing activities that occurred pursuant to the Plan are primarily addressed in tick mark (16) below. The following table reflects the reorganization and application of ASC 852 on our Condensed Consolidated Balance Sheet as of April 23, 2024 (in thousands): Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor ASSETS CURRENT ASSETS: Cash and cash equivalents $ 716,594 $ (495,987) (2) $ — $ 220,607 Restricted cash and cash equivalents 211,224 (34,827) (3) — 176,397 Accounts receivable, net 400,519 — — 400,519 Inventories, net 252,677 — 578,455 (18) 831,132 Prepaid expenses and other current assets 105,858 (20,730) (4) — 85,128 Income taxes receivable 7,305 (7,182) (5) — 123 Total current assets $ 1,694,177 $ (558,726) $ 578,455 $ 1,713,906 PROPERTY, PLANT AND EQUIPMENT, NET 472,290 — 82,533 (19) 554,823 OPERATING LEASE ASSETS 20,476 — 897 (20) 21,373 GOODWILL 1,352,011 — (1,352,011) (21) — OTHER INTANGIBLES, NET 1,399,755 — 897,668 (22) 2,297,423 DEFERRED INCOME TAXES — 171,075 (5) (124,113) (23) 46,962 OTHER ASSETS 56,567 6,264 (6) 408,370 (24) 471,201 TOTAL ASSETS $ 4,995,276 $ (381,387) $ 491,799 $ 5,105,688 LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses 506,979 (4,258) (7) 2,516 (25) 505,237 Current portion of legal settlement accrual — 1,234 (8) — 1,234 Current portion of operating lease liabilities 1,036 3,518 (9) (298) (20) 4,256 Current portion of long-term debt — 7,500 (10) — 7,500 Income taxes payable 3,393 (3,393) (5) — — Total current liabilities $ 511,408 $ 4,601 $ 2,218 $ 518,227 DEFERRED INCOME TAXES 25,558 (25,558) (5) 87,300 (23) 87,300 LONG-TERM DEBT, LESS CURRENT PORTION, NET — 2,429,031 (11) — 2,429,031 LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION — 5,624 (12) — 5,624 OPERATING LEASE LIABILITIES, LESS CURRENT PORTION 3,755 13,749 (9) (590) (20) 16,914 OTHER LIABILITIES 108,421 (38,915) (13) (2,470) (25) 67,036 LIABILITIES SUBJECT TO COMPROMISE 11,125,054 (11,125,054) (14) — — COMMITMENTS AND CONTINGENCIES (NOTE 15) SHAREHOLDERS’ (DEFICIT) EQUITY: Euro deferred shares (Predecessor) 43 (43) (15) — — Ordinary shares (Predecessor) 24 (24) (15) — — Common stock (Successor) — 76 (16) — 76 Additional paid-in capital (Predecessor) 8,980,561 (8,980,561) (15) — — Additional paid-in capital (Successor) — 1,981,480 (16) — 1,981,480 (Accumulated deficit) retained earnings (15,531,502) 15,354,207 (17) 177,295 (26) — Accumulated other comprehensive (loss) income (228,046) — 228,046 (26) — Total shareholders’ (deficit) equity $ (6,778,920) $ 8,355,135 $ 405,341 $ 1,981,556 TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY $ 4,995,276 $ (381,387) $ 491,799 $ 5,105,688 Reorganization Adjustments (1) Represents amounts recorded as of the Fresh Start Reporting Date for the implementation of the Plan, including among other items, settlement of the Predecessor’s liabilities subject to compromise, distributions of cash, execution of the Exit Financing Debt and the issuance of the Successor common stock. (2) Changes in cash and cash equivalents include the following (in thousands): Proceeds from the issuance of Exit Financing Debt (see Note 14 below) $ 2,485,000 P |
FRESH START ACCOUNTING
FRESH START ACCOUNTING | 6 Months Ended |
Jun. 30, 2024 | |
Reorganizations [Abstract] | |
FRESH START ACCOUNTING | NOTE 2. EFFECTIVENESS OF THE PLAN OF REORGANIZATION Beginning on the Petition Date, the Debtors filed voluntary petitions for relief under the Bankruptcy Code. Certain additional then-newly formed Debtors, filed petitions for relief under the Bankruptcy Code on May 25, 2023 and May 31, 2023. Certain entities consolidated by Endo International plc and included in these Condensed Consolidated Financial Statements were not party to the Chapter 11 Cases. These entities are collectively referred to herein as the Non-Debtor Affiliates. On and after the Petition Date, the Debtors operated their businesses and managed their properties as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. On the Petition Date, the Debtors entered into a Restructuring Support Agreement (as amended, the RSA) with an ad hoc group of certain creditors holding in excess of 50% of the aggregate outstanding principal amount of Endo International plc’s first lien secured indebtedness (the Ad Hoc First Lien Group). Following extensive negotiations with their key stakeholders, including in connection with a mediation process authorized by the Bankruptcy Court, the Debtors filed the Plan. The Plan incorporates settlements reached with, among others, the two official committees that were appointed in the Chapter 11 Cases, the future claimants’ representative, the ad hoc groups of first lien claimants and unsecured note holders, all forty-five states who had not previously settled with the Debtors and several U.S. territories, representatives of thirteen Canadian provinces and territories and an ad hoc group of public school districts. These settlements are discussed in more detail in the annual financial statements of Endo International plc within the Company’s Prospectus, in connection with the Company’s Registration Statement and Note 15. Commitments and Contingencies. In addition to the other settlements reached with various stakeholders during the Chapter 11 Cases, the Plan also incorporates the U.S. Government Economic Settlement (as defined below) and sets forth a post-reorganization governance structure and includes releases for the Debtors and certain other parties. The resolution reached with the Ad Hoc First Lien Group and the U.S. Department of Justice (DOJ) with respect to claims filed in the Chapter 11 Cases by the United States of America, acting through the United States Attorney’s Office for the Southern District of New York, for and on behalf of: (i) the United States Department of Justice Civil Division’s Consumer Protection Branch; (ii) the United States Attorney’s Office for the Southern District of Florida (S.D. Florida); (iii) the United States Department of Justice Civil Division’s Fraud Section, acting on behalf of the Office of Inspector General of the Department of Health and Human Services, the Defense Health Agency, as administrator of the TRICARE program, the Office of Personnel Management, as administrator of the Federal Employees Health Benefits program, and the Department of Veteran Affairs (VA); (iv) the U.S. Internal Revenue Service (IRS); (v) the U.S. Department of Health and Human Services (HHS), U.S. Centers for Medicare and Medicaid Services (CMS) and Indian Health Service; and (vi) the VA (collectively, the U.S. Government), including criminal, civil and tax-related claims provided for payment by Endo International plc of $364.9 million over 10 years, or $200 million if the obligation is paid in full on the Effective Date of the Plan, plus contingent consideration of $25 million in each of 2024 through 2028 (up to $100 million in aggregate) if our Earnings Before Interest, Taxes Depreciation and Amortization (EBITDA) sufficiently exceeds defined baselines (U.S. Government Economic Settlement). Refer below for further discussion of the payments made on the Effective Date. Under the Plan, the Debtors’ first lien creditors received 96.3% of equity in Endo, Inc. (subject to dilution) and an opportunity to participate in a $340 million rights offering (First Lien Rights Offering). The second lien creditors and unsecured noteholders received the remaining 3.7% of the equity (also subject to dilution). Second lien creditors and unsecured noteholders also received $23.3 million in cash, certain proceeds of litigation claims and insurance rights, and the opportunity to participate in a $160 million rights offering (GUC Rights Offering) which was subscribed in July 2023. Holders of allowed other general unsecured claims received approximately $2 million in cash and a small percentage of the proceeds of trust litigation claims and insurance rights, subject to certain qualifications. Opioid claimants received distributions from certain trusts and sub-trusts as detailed further below. To facilitate the First Lien Rights Offering, certain first lien claim holders (the First Lien Backstop Parties), entered into an agreement to purchase the shares not purchased by the non-First Lien Backstop Parties in the First Lien Rights Offering (the First Lien BCA). In exchange for providing the backstop commitments, Endo, Inc. agreed to issue 0.8 million shares of common stock and Endo International plc agreed to pay certain First Lien Backstop Parties a cash amount not to exceed approximately $25.5 million as an “Additional Premium” in exchange for their commitments (First Lien Backstop Premium). To facilitate the GUC Rights Offering, certain first lien claim holders (GUC Backstop Parties) entered into an agreement to purchase any unsubscribed shares in the GUC Rights Offering (GUC BCA). In exchange for providing the backstop commitments, Endo, Inc. agreed to issue a certain number of shares of common stock (GUC Backstop Premium). To protect Endo International plc’s Irish entities and assets from the risk of value-destructive litigation and enforcement efforts not enjoined by the Plan, the Debtors also executed an Irish scheme of arrangement in parallel with the Plan to implement certain terms of the Plan as a matter of Irish law. The scheme of arrangement was widely approved by creditors and sanctioned by the High Court of Ireland on April 18, 2024. The final order approving the scheme was filed on April 19, 2024. In connection with approval of the scheme, on the Effective Date, all claims against the Debtors covered by the scheme were completely released and discharged as a matter of Irish law. On January 12, 2024, the Bankruptcy Court entered an order conditionally approving the disclosure statement which authorized Endo International plc to solicit votes on the Plan. The Bankruptcy Court also scheduled a combined hearing for: (i) final approval of the disclosure statement as containing “adequate information” as required by the Bankruptcy Code; and (ii) confirmation of the Plan for March 19, 2024. The Bankruptcy Court confirmed the Plan on March 19, 2024, and the Debtors satisfied all conditions required for the Plan effectiveness on the Effective Date. On or following the Effective Date and pursuant to the terms of the Plan, the following occurred or became effective: • Endo, Inc. appointed six new members to its board of directors to replace all of the directors of Endo International plc, other than the director also serving as the President and Chief Executive Officer, who was re-appointed pursuant to the Plan; • All equity interests of Endo International plc that were outstanding immediately prior to the Effective Date were terminated and cancelled; • Endo, Inc.’s authorized capital stock now consists of 1 billion shares of common stock, par value $0.001 per share, and 25 million shares of preferred stock, par value $0.001 per share; • Shares of Endo, Inc. common stock issued in reliance upon section 1145 of the Bankruptcy Code (except with respect to any entity that is an underwriter) are exempt from, among other things, the registration requirements of Section 5 of the Securities Act and any other applicable U.S. state or local law requiring registration for the offer or sale of securities and (i) are not “restricted securities” as defined in Rule 144(a)(3) under the Securities Act, and (ii) are freely tradable and transferable by any holder thereof that, at the time of transfer, (1) is not an “affiliate” (as defined in Rule 144(a)(1) under the Securities Act) of Endo, Inc. or any of its subsidiaries; (2) has not been such an “affiliate” within 90 days of such transfer; and (3) is not an entity that is an underwriter; • The shares of Endo, Inc. common stock issued in reliance on Section 4(a)(2) of the Securities Act and/or Regulation D or Regulation S thereunder, are “restricted securities” subject to resale restrictions and may be resold, exchanged, assigned or otherwise transferred only in a transaction registered, or exempt from registration, under the Securities Act and other applicable law. In that regard, each of the recipients of such shares of common stock issued pursuant to the Plan made customary representations, including that each was an “accredited investor” (within the meaning of Rule 501(a) of the Securities Act) or a “qualified institutional buyer” (as defined under Rule 144A promulgated under the Securities Act); • Endo, Inc. issued approximately 33.0 million shares of common stock, in transactions exempt from registration under the Securities Act pursuant to section 1145 of the Bankruptcy Code (Unrestricted Shares), as further described above, to holders of first lien claims and holders of second lien deficiency claims and unsecured notes claims in exchange for the satisfaction of their claims; • Endo, Inc. issued approximately 0.2 million of Unrestricted Shares deposited in escrow with a third-party escrow agent (Escrowed Equity) with such Escrowed Equity to be distributed to holders of second lien deficiency claims and unsecured notes claims in accordance with the “Net Debt Equity Split Adjustment” defined under the Plan, which is excluded for purposes of calculating basic net income (loss) per share in the Condensed Consolidated Statements of Operations for the Successor three and six months ended June 30, 2024; • Endo, Inc. issued approximately 25.8 million of Unrestricted Shares to first lien creditors who participated in the Endo, Inc. First Lien Rights Offering; • Endo, Inc. issued approximately 3.6 million shares, of which approximately 2.8 million were Unrestricted Shares and approximately 0.8 million were issued in transactions exempt from registration under the Securities Act pursuant to Section 4(a)(2) and/or Regulation D or Regulation S thereunder (Restricted Shares), as further described above, to First Lien Backstop Parties and Endo International plc paid approximately $25.5 million in satisfaction of the First Lien Backstop Premium owed pursuant to the First Lien BCA; • Endo, Inc. issued less than 0.1 million of Restricted Shares to holders of claims that participated in the GUC Rights Offering; • Endo, Inc. issued approximately 13.7 million shares, including approximately 12.5 million Restricted Shares to GUC Backstop Parties in connection with the GUC Rights Offering and approximately 1.2 million Unrestricted Shares in satisfaction of the GUC Backstop Premium owed pursuant to the GUC BCA; • Endo, Inc., through its wholly-owned subsidiary Endo Finance Holdings, Inc. incurred funded indebtedness, collectively Exit Financing Debt, of: (i) a $400 million senior secured five-year superpriority revolving credit facility (New Revolving Credit Facility); (ii) a $1,500 million senior secured seven-year term loan facility (New Term Facility); and (iii) senior secured notes in the aggregate principal amount of $1,000 million, due in 2031 (New Senior Secured Notes); • The Debtors established and funded various trusts and sub-trusts for the benefit of specified claimants in exchange for the resolution of specified claims against the Debtors, as further described in the Plan and in the applicable settlement and trust agreements and Note 15. Commitments and Contingencies. Where a settlement or trust agreement provided for an option to prepay the settlement consideration at a discounted amount on the Effective Date, such trusts were fully funded on the Effective Date in an aggregate amount equal to approximately $445.5 million; • The Debtors paid approximately $200.0 million in connection with the U.S. Government Economic Settlement; • Endo, Inc. received cash of approximately $340.0 million and approximately $160.0 million from the First Lien Rights Offering and GUC Rights Offering, respectively, less certain issuance costs; • The net proceeds received from the Exit Financing Debt of approximately $2,485.0 million was paid to holders of first lien claims; • Cash in excess of $200 million (as defined in the Plan as Exit Cash), of approximately $141.9 million was paid to the holders of first lien claims; and • Intercompany interests among Endo International plc and its direct and indirect subsidiaries were either transferred, directly or indirectly, to the applicable purchaser entities, reinstated or deemed automatically cancelled. Subordinated, Recharacterized or Disallowed Claims (each as defined in the Plan) were cancelled and did not receive any distribution under the Plan. Existing equity interests in subsidiaries and affiliates of the Debtors were cancelled. Remaining Debtors. Prior to the Effective Date, in accordance with the Plan, Endo, Inc. designated assets and liabilities as “excluded assets” and “excluded liabilities,” respectively. Such excluded assets and excluded liabilities remained in the possession of the entities that were not purchased by or transferred to Endo, Inc. (Remaining Debtors). Refer to Note 3. Fresh Start Accounting for additional information about the assets and liabilities that were excluded from the purchase and therefore remained in possession of the Remaining Debtors. The Plan with respect to the Remaining Debtors following the Effective Date is being implemented by a plan administrator pursuant to a plan administrator agreement. On the Effective Date, an initial $39 million was funded by the Debtors, of which $38 million was funded pursuant to the plan administrator agreement. This amount has been, and may be adjusted as agreed to between the plan administrator and Endo, Inc. Any amounts required beyond the initial amount will be funded by Endo, Inc. and any residual amounts that may remain shall be subject to a reversionary interest to Endo, Inc. As of June 30, 2024, the Company has no accrual for loss contingencies related to the wind down of the Remaining Debtors. 2024 Stock Incentive Plan. As contemplated by the Plan, after the Effective Date, Endo, Inc. adopted a long-term incentive plan and authorized and reserved 3.6 million shares for issuance pursuant to equity incentive awards to be granted under such plan. As of August 22, 2024, no shares have been issued under Endo, Inc.’s 2024 Stock Incentive Plan. Sources of Cash for Plan Distribution. On the Effective Date, the Debtors (or Endo, Inc.) used cash on hand (including certain restricted cash), proceeds from the GUC Rights Offering and the First Lien Rights Offering and proceeds from the Exit Financing Debt to, among other things to: (i) make settlement payments under the Plan to the various trust beneficiaries and the U.S. federal government; (ii) make distributions of cash to holders of first lien claims; and (iii) pay certain professional fees. A portion of the proceeds of the First Lien Rights Offering and GUC Rights Offering was retained by Endo, Inc. and will be used for general corporate purposes, referred to elsewhere as Exit Cash. Reorganization Items, Net In accordance with ASC 852, certain expenses, gains and losses resulting from and recognized during the Debtor’s bankruptcy proceedings were recorded in Reorganization items, net in the Predecessor Condensed Consolidated Statements of Operations. The following table sets forth information about the amounts presented as Reorganization items, net in the Predecessor Condensed Consolidated Statements of Operations (in thousands): Predecessor April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Professional fees $ 16,065 $ 84,267 $ 68,163 $ 169,619 Debt valuation adjustments (1) 41,394 — 192,342 — Reorganization Adjustments (5,996,096) — (5,996,096) — Fresh Start Adjustments (389,508) — (389,508) — Total $ (6,328,145) $ 84,267 $ (6,125,099) $ 169,619 __________ (1) For the period January 1, 2024 through April 23, 2024, adequate protection payments were $192.3 million and recognized as a reduction to the carrying amount of the respective Predecessor First Lien Debt Instruments. Concurrently, as a result of adjusting to the estimated allowed claim amount for the corresponding debt instruments, a charge was recognized within Reorganization items, net. For the six months ended June 30, 2023, adequate protection payments were $291.7 million and recognized as a reduction to the carrying amount of the respective Predecessor First Lien Debt Instruments. During the period January 1, 2024 through April 23, 2024 and the six months ended June 30, 2023, the Predecessor operating cash flows included net cash outflows of $848.2 million and $162.0 million, respectively, related to certain amounts classified as Reorganization items, net. During the period January 1, 2024 through April 23, 2024, operating cash outflows primarily related to, among other things, settlement payments under the Plan to the various trust beneficiaries and U.S. Government, plan administrator funding, described in more detail above, as well as payments for professional fees made prior to or on the Effective Date. Also funded, but not reflected in the $848.2 million net cash outflow described above, were payments of $80.5 million placed into escrow prior to or on the Effective Date and reflected as restricted cash in the Successor Condensed Consolidated Balance Sheet. Following the Effective Date, the Successor operating cashflows included net cash outflows of approximately $16.0 million related to certain amounts classified as Reorganization items, net in the Predecessor Condensed Consolidated Statements of Operations. Refer to Note 3. Fresh Start Accounting for additional information about cash payments made pursuant to the Plan. During the six months ended June 30, 2023, operating cash outflows primarily consisted of payments for professional fees. Refer also to Note 14. Debt for information about the non-cash debt valuation adjustments reflected in Reorganization items, net, as well as how the bankruptcy proceedings and certain related developments have affected our debt service payments and how such payments are being reflected in the Condensed Consolidated Financial Statements. Liabilities Subject to Compromise Since the Petition Date, Endo International plc operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. In accordance with ASC 852, on the Predecessor Condensed Consolidated Balance Sheets prior to the Effective Date, the caption “Liabilities subject to compromise” reflects the expected allowed amount of the pre-petition claims that were not fully secured and that have at least a possibility of not being repaid at the full claim amount. Endo International plc considered the chapter 11 motions approved by the Bankruptcy Court with respect to the amount and classification of its pre-petition liabilities, as applicable. Endo International plc evaluated and adjusted the amount of classification of its pre-petition liabilities through the Effective Date, as applicable. NOTE 3. FRESH START ACCOUNTING Pursuant to the Plan, on the Effective Date, Endo, Inc. purchased substantially all of the assets, as well as certain equity interests of the Debtors and non-debtor affiliates and assumed certain liabilities of Endo International plc. In accordance with ASC 852, fresh start accounting was applied on the Effective Date because (i) the holders of existing Endo International plc voting shares received less than 50% of the voting shares of Endo, Inc., and (ii) the reorganization value of assets, which approximated $5.0 billion, immediately prior to the confirmation of the Plan was less than the corresponding total of all post-petition liabilities and allowed claims, which approximated $11.8 billion. Applying fresh start accounting resulted in a new reporting entity with no beginning retained earnings or accumulated deficit. Accordingly, our financial statements and notes of the Successor are not comparable to the Predecessor financial statements and notes on and prior to the Effective Date. The application of fresh start accounting required the reorganization value be assigned to Endo, Inc.’s identifiable tangible and intangible assets and liabilities (except for deferred income taxes) based on each of their estimated fair values, as determined in conformity with ASC Topic 805, Business Combinations (ASC 805). The amount of deferred taxes was determined in accordance with ASC Topic 740, Income Taxes (ASC 740) and ASC 852. Fresh start accounting requires that the reorganization value be assigned to Endo, Inc.’s identified tangible and intangible assets based on their respective fair values, with any excess recorded as goodwill, if applicable; post-petition liabilities have generally been assumed by Endo, Inc. at their historical carrying values; Exit Financing Debt liabilities are measured and recorded by Endo, Inc. at their fair values; and historical accumulated deficit and accumulated other comprehensive loss of Endo International plc is reset to zero by Endo, Inc. As applicable, Endo International plc’s liabilities subject to compromise and certain other liabilities were satisfied in accordance with the Plan’s terms. The Effective Date fair values of our assets and liabilities differed materially from their recorded values as reflected on the historic balance sheets of Endo International plc. Reorganization Value Reorganization value represents the fair value of Endo, Inc.’s total assets and approximates the amount a willing buyer would pay for the assets of the entity immediately after the restructuring. Reorganization value was derived from an estimate of the enterprise value of Endo, Inc., which represents the estimated fair value of Endo, Inc.’s long-term debt and equity, excluding non-operating assets. The Plan and disclosure statement approved by the Bankruptcy Court did not include an enterprise value or reorganization value. With the assistance of a third-party valuation firm, we estimated the enterprise value to be approximately $4.5 billion on the Effective Date. Enterprise value was estimated using an income approach that utilized a discounted cash flow (DCF) model. The net cash flows were discounted using an after-tax weighted average cost of capital (WACC), methodology reflecting a rate of return that would be expected by a market participant. The WACC also takes into consideration a company specific risk premium reflecting the risk associated with the financial projections used to estimate future cash flows. The present value of future expected net cash flows projected through 2046 is calculated using a discount rate of approximately 16.6%. The enterprise value and corresponding equity value are dependent upon achieving future financial results set forth in our valuations, as well as the realization of certain other assumptions. All estimates, assumptions, valuations and financial projections, including fair value adjustments, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, the estimates, assumptions, valuations or financial projections may not be realized and actual results could vary materially. The following table reconciles the enterprise value to the reorganization value as of the Effective Date (in thousands): April 23, 2024 Enterprise value $ 4,456,000 Plus: Other non-operating assets 20,450 Plus: Fair value of non-debt current liabilities excluding Escrowed Equity 504,344 Plus: Fair value of non-debt, non-current liabilities excluding long-term acquisition-related contingent consideration 173,363 Less: Debt issuance costs attributable to the New Term Facility and New Senior Secured Notes (48,469) Reorganization value of Endo, Inc.'s assets to be allocated $ 5,105,688 The following table reconciles the enterprise value to the implied value of Endo, Inc.’s common stock as of the Effective Date (in thousands): April 23, 2024 Enterprise value $ 4,456,000 Less: Exit Financing Debt (2,485,000) Less: Unsecured creditors committee Escrowed Equity (6,382) Less: Long-term acquisition-related contingent consideration (3,512) Plus: Other non-operating assets 20,450 Implied value of Endo, Inc.'s common stock $ 1,981,556 Valuation Process With the assistance of third-party valuation experts, we conducted an analysis of the Condensed Consolidated Balance Sheet to determine if any of the net assets would require a fair value adjustment as of the Effective Date. The results of our analysis indicated that the principal assets requiring fair value adjustments on the Effective Date include inventory, property plant and equipment, identified intangible assets and leased assets. Further detail regarding the valuation process is described below. Inventory The fair value of inventory was determined using both the bottom-up and top-down approach. The bottom-up approach considers the inventory value that had been created by the seller including costs incurred, profit realized and tangible and intangible assets used. The top-down approach measures the incremental inventory value created by the market participant buyer as part of its selling effort. It begins with the estimated selling price and is adjusted for the costs to complete the production process (for work-in-process), including consideration of the tangible and intangible assets that will be used by Endo, Inc. as well as costs associated with the selling efforts and consideration of a normal profit margin. Property, Plant and Equipment Personal property consisted of computer hardware, computer software, furniture and fixtures, leasehold improvements, machinery and equipment, office equipment and vehicles. The cost approach was primarily utilized for personal property. This approach considers the amount required to construct or purchase a new asset of equal utility at current prices, with adjustments in value for physical deterioration, and functional and economic obsolescence. Physical deterioration is an adjustment made in the cost approach to reflect the real operating age of an asset with regard to wear and tear, decay and deterioration that is not prevented by maintenance. Functional obsolescence is the loss in value or usefulness of an asset caused by inefficiencies or inadequacies, as compared to a more efficient or less costly replacement asset or newer technology. Economic obsolescence is the loss in value or usefulness of an asset due to factors external to the asset, such as the economics of the industry, reduced demand, increased competition or similar factors. The valuation of owned land improvements, building and building improvements was performed using either the direct or indirect cost approach. The owned land was valued using the sales comparison approach. Intangible Assets The fair value of marketed products, licenses and in-process research and development (IPR&D) intangible assets were determined using the income approach. The cash flows were discounted commensurate with the level of risk associated with each asset or its projected cash flows. The valuation used discount rates ranging from approximately 12.3% to 27.7%, depending on the asset. The IPR&D discount rates and underlying cash flows reflect the uncertainties relevant to development projects, including consideration of probability of technical and regulatory success based on the current stages of development, inherent uncertainty in the U.S. Food and Drug Administration (FDA) approval process and risks associated with commercialization of a new product. Lease Liabilities and Right of Use Assets Finance and operating lease liabilities were estimated as the present value of the remaining lease payments. The Company estimated an incremental borrowing rate as of the Effective Date and used it as the discount rate in the analysis. Right of use asset values were estimated by adjusting the lease liability estimates of off-market value of leases. Off-market (or above/below market) value was estimated as the present value of the differential between contract rates and market rates of the remaining term of the lease. Condensed Consolidated Balance Sheet on the Effective Date The adjustments set forth in the following Condensed Consolidated Balance Sheet as of April 23, 2024 reflect the consummation of the transactions contemplated by the Plan and effectuated by the Debtors (Reorganization Adjustments) and the fair value adjustments as a result of the application of fresh start accounting (Fresh Start Adjustments). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine fair values and significant assumptions or inputs. Supplemental disclosures of non-cash financing activities that occurred pursuant to the Plan are primarily addressed in tick mark (16) below. The following table reflects the reorganization and application of ASC 852 on our Condensed Consolidated Balance Sheet as of April 23, 2024 (in thousands): Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor ASSETS CURRENT ASSETS: Cash and cash equivalents $ 716,594 $ (495,987) (2) $ — $ 220,607 Restricted cash and cash equivalents 211,224 (34,827) (3) — 176,397 Accounts receivable, net 400,519 — — 400,519 Inventories, net 252,677 — 578,455 (18) 831,132 Prepaid expenses and other current assets 105,858 (20,730) (4) — 85,128 Income taxes receivable 7,305 (7,182) (5) — 123 Total current assets $ 1,694,177 $ (558,726) $ 578,455 $ 1,713,906 PROPERTY, PLANT AND EQUIPMENT, NET 472,290 — 82,533 (19) 554,823 OPERATING LEASE ASSETS 20,476 — 897 (20) 21,373 GOODWILL 1,352,011 — (1,352,011) (21) — OTHER INTANGIBLES, NET 1,399,755 — 897,668 (22) 2,297,423 DEFERRED INCOME TAXES — 171,075 (5) (124,113) (23) 46,962 OTHER ASSETS 56,567 6,264 (6) 408,370 (24) 471,201 TOTAL ASSETS $ 4,995,276 $ (381,387) $ 491,799 $ 5,105,688 LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses 506,979 (4,258) (7) 2,516 (25) 505,237 Current portion of legal settlement accrual — 1,234 (8) — 1,234 Current portion of operating lease liabilities 1,036 3,518 (9) (298) (20) 4,256 Current portion of long-term debt — 7,500 (10) — 7,500 Income taxes payable 3,393 (3,393) (5) — — Total current liabilities $ 511,408 $ 4,601 $ 2,218 $ 518,227 DEFERRED INCOME TAXES 25,558 (25,558) (5) 87,300 (23) 87,300 LONG-TERM DEBT, LESS CURRENT PORTION, NET — 2,429,031 (11) — 2,429,031 LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION — 5,624 (12) — 5,624 OPERATING LEASE LIABILITIES, LESS CURRENT PORTION 3,755 13,749 (9) (590) (20) 16,914 OTHER LIABILITIES 108,421 (38,915) (13) (2,470) (25) 67,036 LIABILITIES SUBJECT TO COMPROMISE 11,125,054 (11,125,054) (14) — — COMMITMENTS AND CONTINGENCIES (NOTE 15) SHAREHOLDERS’ (DEFICIT) EQUITY: Euro deferred shares (Predecessor) 43 (43) (15) — — Ordinary shares (Predecessor) 24 (24) (15) — — Common stock (Successor) — 76 (16) — 76 Additional paid-in capital (Predecessor) 8,980,561 (8,980,561) (15) — — Additional paid-in capital (Successor) — 1,981,480 (16) — 1,981,480 (Accumulated deficit) retained earnings (15,531,502) 15,354,207 (17) 177,295 (26) — Accumulated other comprehensive (loss) income (228,046) — 228,046 (26) — Total shareholders’ (deficit) equity $ (6,778,920) $ 8,355,135 $ 405,341 $ 1,981,556 TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY $ 4,995,276 $ (381,387) $ 491,799 $ 5,105,688 Reorganization Adjustments (1) Represents amounts recorded as of the Fresh Start Reporting Date for the implementation of the Plan, including among other items, settlement of the Predecessor’s liabilities subject to compromise, distributions of cash, execution of the Exit Financing Debt and the issuance of the Successor common stock. (2) Changes in cash and cash equivalents include the following (in thousands): Proceeds from the issuance of Exit Financing Debt (see Note 14 below) $ 2,485,000 P |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies Predecessor/Successor Accounting Policies. There were no significant policy changes as a result of the adoption of fresh start accounting. Unless otherwise noted, Endo, Inc. has adopted the existing policies of Endo International plc. Predecessor accounting policies that are not currently applicable to the Successor have been excluded from this report. Refer to the annual financial statements of Endo International plc within the Company’s Prospectus, in connection with the Company’s Registration Statement for additional discussion of the accounting policies specific to the Predecessor, including: (i) Goodwill; (ii) Share Repurchases; and (iii) Share-Based Compensation. References in this section to “Endo,” the “Company,” “we,” or “our” policy therefore represent the accounting policy in place for all periods presented. Consolidation and Basis of Presentation . The Condensed Consolidated Financial Statements include the accounts of subsidiaries and affiliates over which control is maintained after the elimination of intercompany accounts and transactions. Bankruptcy Accounting. Refer to Note 2. Effectiveness of the Plan of Reorganization for a discussion of accounting considerations during the Debtor’s bankruptcy proceedings. Fresh Start Accounting. Refer to Note 3. Fresh Start Accounting for a discussion of accounting considerations related to the adoption of Fresh Start Accounting. Use of Estimates . The preparation of our Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts and disclosures in our Condensed Consolidated Financial Statements, including the Notes thereto, and elsewhere in this report. For example, we are required, or were required in the predecessor period, to make significant estimates and assumptions related to revenue recognition, including sales deductions, long-lived assets, goodwill, intangible assets, income taxes, contingencies, financial instruments, share-based compensation, estimated allowed claim amounts, liabilities subject to compromise and reorganization items, net, among others. Some of these estimates can be subjective and complex. Uncertainties related to the magnitude and duration of potential public health crises, like the COVID-19 pandemic, and epidemics, the extent to which it may impact our estimated future financial results, worldwide macroeconomic conditions including interest rates, employment rates, consumer spending and health insurance coverage, among others, have increased the complexity of developing these estimates, including the allowance for expected credit losses and the carrying amounts of long-lived assets and intangible assets. Additionally, we may sell or otherwise dispose of or liquidate assets or settle liabilities for amounts other than those reflected in the accompanying Condensed 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 Condensed Consolidated Balance Sheets. 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 Condensed 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 managed care organizations (MCOs). Refer to the annual financial statements of Endo International plc within the Company’s Prospectus, in connection with the Company’s Registration Statement for additional information about the customers that have contributed 10% or more of total consolidated revenues for the years ended December 31, 2023, 2022 and 2021. There have not been significant changes in such customers or percentages for the periods covered by this report. We have agreements with certain third parties for the manufacture, supply and processing of certain of our existing pharmaceutical products. See Note 15. 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, distribution service agreements (DSAs) 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 June 30, 2024 and December 31, 2023, reserves for sales deductions totaled $377.5 million and $434.0 million, respectively. Reserves for sales deductions relate primarily to 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. These 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. 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 12. 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 Condensed 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 . Highly liquid investments with original maturities of three months or less when purchased are considered to be cash equivalents. At June 30, 2024 and December 31 2023, 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 legally restricted as to withdrawal or use are excluded from Cash and cash equivalents and reported separately as Restricted cash and cash equivalents in the Condensed 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 82% and 81% of our gross trade accounts receivable balances represent amounts due from three customers (Cardinal Health, Inc., McKesson Corporation and Cencora, Inc.) at June 30, 2024 and December 31, 2023, 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 Condensed Consolidated Financial Statements at June 30, 2024 or December 31, 2023, 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, 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 Condensed 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. Refer to Note 3. Fresh Start Accounting for discussion of the fair value adjustments to inventory on the Effective Date. The amortization of the fair value adjustment will be recognized as Cost of revenues in future periods as the inventory is sold. 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 June 30, 2024, the useful lives of our property, plant and equipment range from 1 year to up to 30 years for buildings, 10 years for machinery and equipment, 5 years for computer equipment and software and 7 years for furniture and fixtures. Depreciation expense is not recorded on assets held for sale. Gains and losses on disposals are included in Other expense, net in the Condensed 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 Condensed 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. In connection with fresh start accounting, lease liabilities and right-of-use assets were recorded for lease assets that had an initial lease term greater than twelve months at commencement but had a remaining lease term of twelve months or less as of the Effective Date. 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 Condensed 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 Condensed 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 Condensed Consolidated Balance Sheets are recognized in the Condensed 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 the implementation of 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 marketed products and licenses. Intangible assets are generally initially recorded at fair value if acquired in a business combination, or at cost if acquired in an asset acquisition. 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 projections 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. 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 assets in certain situations, an accelerated amortization model if such model better reflects the consumption of benefits of the asset. 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 (loss) and net income (loss) per share to decrease (increase). 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. Marketed Products . Intellectual property that generates operating profit through sales of products to customers is presented herein as marketed product intangible assets. We determine amortization periods and methods of amortization for marketed product 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. Refer to Note 10. Goodwill and Other Intangibles, for additional information about the range of useful lives of certain marketed product assets. Licenses . Contracts with other parties that generate operating profit, other than through sales of products to customers, are presented herein as licensed intangible assets. We determine amortization periods for licenses based on our assessment of various factors including the strength of the intellectual property protection of the product (if applicable), contractual terms and various other competitive, developmental and regulatory issues. Refer to Note 10. Goodwill and Other Intangibles, for additional information about the range of useful lives of certain licensed assets. Long-Lived Asset Impairme |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 5. DISCONTINUED OPERATIONS The operating results of Endo International plc’s legacy Astora business, which was resolved to be wound down in 2016, are reported as Discontinued operations, net of tax in the Predecessor Condensed Consolidated Statements of Operations for all periods presented, if applicable. The following tables provide the operating results of Astora Discontinued operations, net of tax (in thousands): Predecessor Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Litigation-related and other contingencies, net $ — $ 500 Income (loss) from discontinued operations before income taxes $ 183,152 $ (660) Income tax benefit $ (82) $ (87) Discontinued operations, net of tax $ 183,234 $ (573) Predecessor Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Litigation-related and other contingencies, net $ — $ 500 Income (loss) from discontinued operations before income taxes $ 182,696 $ (1,186) Income tax benefit $ (142) $ (157) Discontinued operations, net of tax $ 182,838 $ (1,029) For the period from April 1, 2024 through April 23, 2024 and January 1, 2024 through April 23, 2024, the income from discontinued operations before income taxes is primarily related to the impacts of the Plan. Refer to Note 3. Fresh Start Accounting for additional information about the impacts of the Plan. For the three and six months ended 2023 the loss from discontinued operations is primarily related to mesh-related legal defense costs and certain other items. For the period January 1, 2024 through April 23, 2024, the cash out flows from discontinued operating activities related to Astora included the impact of net loss, prior to the impacts of the Plan, of approximately $0.9 million as well as cash out flows in connection with the Plan of approximately $37.1 million. For the six months ended June 30, 2023, the cash flows from discontinued operating activities related to Astora included the impact of net loss of $1.0 million 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. There are no discontinued operations in the Successor period. Refer to Note 3. Fresh Start Accounting and Note 15. Commitments and Contingencies for amounts and additional information relating to vaginal mesh-related matters and the impacts of the Plan. |
SEGMENT RESULTS
SEGMENT RESULTS | 6 Months Ended |
Jun. 30, 2024 | |
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 operations before income tax, which we define as (Loss) income 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 (in the Predecessor periods); and certain other items. For the three and six months ended June 30, 2024, the Successor does not have operating results classified as Discontinued operations, net of tax. 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 therapeutic areas of urology, orthopedics, endocrinology and bariatrics, among others. Products in this segment include XIAFLEX ® , SUPPRELIN ® LA, AVEED ® , PERCOCET ® , TESTOPEL ® and EDEX ® , among others. Sterile Injectables Our Sterile Injectables segment consists primarily of branded sterile injectable products such as ADRENALIN ® , VASOSTRICT ® and APLISOL ® , among others, and certain generic sterile injectable products. 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 over-the-counter (OTC) products, sold outside the U.S., primarily in Canada through our operating company Paladin Pharma Inc. (Paladin). The following represents selected information for the Company’s reportable segments (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Net revenues from external customers: Branded Pharmaceuticals $ 146,151 $ 78,918 $ 212,377 Sterile Injectables 56,474 34,297 137,028 Generic Pharmaceuticals 69,722 40,360 178,579 International Pharmaceuticals (1) 11,816 8,892 18,868 Total net revenues from external customers $ 284,163 $ 162,467 $ 546,852 Segment adjusted income from operations before income tax: Branded Pharmaceuticals $ 81,359 $ 57,499 $ 115,340 Sterile Injectables 10,028 14,907 69,546 Generic Pharmaceuticals 15,361 16,922 80,404 International Pharmaceuticals 940 4,249 4,861 Total segment adjusted income from operations before income tax $ 107,688 $ 93,577 $ 270,151 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Net revenues from external customers: Branded Pharmaceuticals $ 146,151 $ 279,714 $ 409,950 Sterile Injectables 56,474 132,531 238,283 Generic Pharmaceuticals 69,722 143,677 376,759 International Pharmaceuticals (1) 11,816 26,052 37,127 Total net revenues from external customers $ 284,163 $ 581,974 $ 1,062,119 Segment adjusted income from operations before income tax: Branded Pharmaceuticals $ 81,359 $ 161,592 $ 211,605 Sterile Injectables 10,028 51,977 110,636 Generic Pharmaceuticals 15,361 42,378 172,091 International Pharmaceuticals 940 7,735 10,208 Total segment adjusted income from operations before income tax $ 107,688 $ 263,682 $ 504,540 __________ (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) income 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 (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Total consolidated (loss) income from continuing operations before income tax $ (212,757) $ 6,394,943 $ 34,290 Interest expense, net 44,669 (2) 120 Corporate unallocated costs (1) 29,513 10,686 37,696 Asset impairment charges — 1,799 — Acquisitions and divestitures (2) 240,938 14,264 64,915 Restructuring or similar transactions (3) 1,900 (1) 14,281 Reorganization items, net — (6,328,145) 84,267 Other, net (4) 3,425 33 34,582 Total segment adjusted income from operations before income tax $ 107,688 $ 93,577 $ 270,151 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Total consolidated (loss) income from continuing operations before income tax $ (212,757) $ 6,248,991 $ 37,240 Interest expense, net 44,669 (2) 229 Corporate unallocated costs (1) 29,513 48,238 77,353 Asset impairment charges — 2,103 146 Acquisition and divestitures (2) 240,938 77,543 130,693 Restructuring or similar transactions (3) 1,900 4,960 25,954 Reorganization items, net — (6,125,099) 169,619 Other, net (4) 3,425 6,948 63,306 Total segment adjusted income from operations before income tax $ 107,688 $ 263,682 $ 504,540 __________ (1) For all periods presented, amounts include certain corporate overhead costs, such as headcount, facility and corporate litigation expenses and certain other income and expenses. (2) Amounts for the Successor three and six months ended June 30, 2024, primarily relate to approximately $192.0 million of inventory step up amortization and approximately $50.0 million of intangible assets amortization. Refer to Note 3. Fresh Start Accounting for additional information about the fair value adjustments to the Company’s inventory and intangible assets. Amounts for the Predecessor period from April 1, 2024 through April 23, 2024 and January 1, 2024 through April 23, 2024 as well as the three and six months ended June 30, 2023 primarily relate to amortization of intangible assets. (3) Amounts for the Successor three and six months ended June 30, 2024, primarily relate to net employee separation charges. Amounts for the Predecessor period from January 1, 2024 through April 23, 2024 primarily relate to net employee separation charges. The amount for the Predecessor three months ended June 30, 2023 included net employee separation, continuity and other benefit-related charges of $15.1 million, partially offset by a net reversal of certain inventory charges related to restructuring of $0.9 million. Amounts for the six months ended June 30, 2023 include net employee separation, continuity and other benefit-related charges of $25.9 million and other net charges of $0.6 million, partially offset by a net reversal of certain inventory charges related to restructurings of $0.6 million. (4) Amounts for the Predecessor period from January 1, 2024 through April 23, 2024 primarily relate to a charge of approximately $6 million associated with the rejection of an executory contract, which was approved by the Bankruptcy Court in February 2024. Amounts for the Predecessor three and six months ended June 30, 2023 primarily relates to adjustments to accruals for litigation-related settlement charges, which are described in more detail in Note 15. Commitments and Contingencies, and amounts related to opioid-related legal expenses. The Predecessor six months ended June 30, 2023 also includes a charge of approximately $9.2 million associated with the rejection of certain equity award agreements, which was approved by the Bankruptcy Court in March 2023. Other amounts in this row relate to gains and losses on sales of 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. 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. Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Branded Pharmaceuticals: Specialty Products: XIAFLEX ® $ 87,054 $ 39,588 $ 117,291 SUPPRELIN ® LA 14,518 6,078 28,223 Other Specialty (1) 9,339 5,902 19,839 Total Specialty Products $ 110,911 $ 51,568 $ 165,353 Established Products: PERCOCET ® $ 13,910 $ 9,348 $ 26,445 TESTOPEL ® 8,382 2,734 11,600 Other Established (2) 12,948 15,268 8,979 Total Established Products $ 35,240 $ 27,350 $ 47,024 Total Branded Pharmaceuticals (3) $ 146,151 $ 78,918 $ 212,377 Sterile Injectables: ADRENALIN ® $ 14,642 $ 11,233 $ 27,133 VASOSTRICT ® 7,926 7,356 24,419 Other Sterile Injectables (4) 33,906 15,708 85,476 Total Sterile Injectables (3) $ 56,474 $ 34,297 $ 137,028 Total Generic Pharmaceuticals (5) $ 69,722 $ 40,360 $ 178,579 Total International Pharmaceuticals (6) $ 11,816 $ 8,892 $ 18,868 Total revenues, net $ 284,163 $ 162,467 $ 546,852 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Branded Pharmaceuticals: Specialty Products: XIAFLEX ® $ 87,054 $ 152,638 $ 214,201 SUPPRELIN ® LA 14,518 26,213 51,800 Other Specialty (1) 9,339 21,120 41,533 Total Specialty Products $ 110,911 $ 199,971 $ 307,534 Established Products: PERCOCET ® $ 13,910 $ 33,892 $ 52,501 TESTOPEL ® 8,382 13,225 22,589 Other Established (2) 12,948 32,626 27,326 Total Established Products $ 35,240 $ 79,743 $ 102,416 Total Branded Pharmaceuticals (3) $ 146,151 $ 279,714 $ 409,950 Sterile Injectables: ADRENALIN ® $ 14,642 $ 38,601 $ 52,708 VASOSTRICT ® 7,926 34,309 50,370 Other Sterile Injectables (4) 33,906 59,621 135,205 Total Sterile Injectables (3) $ 56,474 $ 132,531 $ 238,283 Total Generic Pharmaceuticals (5) $ 69,722 $ 143,677 $ 376,759 Total International Pharmaceuticals (6) $ 11,816 $ 26,052 $ 37,127 Total revenues, net $ 284,163 $ 581,974 $ 1,062,119 __________ (1) Products included within Other Specialty include AVEED ® and NASCOBAL ® Nasal Spray. (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 either the Successor three or six months ended June 30, 2024, the Predecessor periods from April 1, 2024 through April 23, 2024 or January 1, 2024 through April 23, 2024 and/or any product having revenues in excess of $25 million during any period presented for 2024 or 2023. (4) Products included within Other Sterile Injectables include, but are not limited to, APLISOL ® . During the second quarter of 2023, Endo International plc and/or certain of its subsidiaries executed a Settlement Agreement and Release of Claims with Novavax, Inc. (the Novavax Settlement Agreement) to resolve a dispute under a previous manufacturing services agreement. For the Predecessor three months and six months ended June 30, 2023, the cash and non-cash consideration received in connection with the Novavax Settlement Agreement made up 6% of consolidated total revenue. No individual product within Other Sterile Injectables has exceeded 5% of consolidated total revenues for the periods presented. (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. Lidocaine patch 5%, the generic version of LIDODERM ® made up 9%, for the Successor three and six months ended June 2024, of consolidated revenues. Varenicline tablets (Endo’s generic version of Pfizer Inc.’s Chantix ® ), which launched in September 2021, made up 10% and 13%, for the three and six months ended June 30, 2023, respectively, of consolidated total revenues. During the six months ended June 30, 2023, Dexlansoprazole delayed release capsules (Endo’s generic version of Takeda Pharmaceuticals USA, Inc.’s Dexilant ® ), which launched in November 2022, made up 5% of consolidated total revenues. (6) No individual product within the International Pharmaceuticals segment accounted for more than 5% of consolidated total revenues for any of the periods presented. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2024 | |
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 the Condensed 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 June 30, 2024 and December 31, 2023 (in thousands): Successor Predecessor Balance Sheet Line Items June 30, 2024 December 31, 2023 Restricted cash and cash equivalents—current (1) Restricted cash and cash equivalents $ 166,851 $ 167,702 Restricted cash and cash equivalents—noncurrent (2) Other assets — 85,000 Total restricted cash and cash equivalents $ 166,851 $ 252,702 __________ (1) Amounts at June 30, 2024 include restricted cash and cash equivalents of approximately $85.9 million related to certain self-insurance related matters and approximately $81.0 million for funds placed into escrow for retained and non-retained professional accruals assumed by the Successor. Amounts at December 31, 2023 primarily relate to: (i) restricted cash and cash equivalents associated with litigation-related matters, including $49.8 million held in Qualified Settlement Funds (QSFs) for mesh and/or opioid-related matters, and (ii) approximately $85.9 million of restricted cash and cash equivalents related to certain self-insurance related matters. These balances are classified as current assets in the Condensed Consolidated Balance Sheets as the potential for, and timing of, future claims and/or payment is unknown and could result in distributions within the next twelve months. (2) The amount at December 31, 2023 relates to the Predecessor TLC Agreement. This balance, which was anticipated to be used to fund certain future contractual obligations or returned upon satisfaction of certain conditions, was classified as a noncurrent asset at December 31, 2023 and subsequently released to the Predecessor as part of the TLC Settlement discussed in more detail in see Note 11. License, Collaboration and Asset Acquisition Agreements. 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 financial assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Successor Fair Value Measurements at June 30, 2024 using: Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Liabilities: Acquisition-related contingent consideration—current $ — $ — $ 2,753 $ 2,753 Acquisition-related contingent consideration—noncurrent $ — $ — $ 5,838 $ 5,838 Predecessor Fair Value Measurements at December 31, 2023 using: Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Money market funds (1) $ 7,123 $ — $ — $ 7,123 Liabilities: Acquisition-related contingent consideration (2) $ — $ — $ 12,447 $ 12,447 __________ (1) At December 31, 2023, money market funds include $7.1 million in QSFs. Amounts in QSFs were considered restricted cash equivalents. (2) At December 31, 2023, the Company’s liabilities for acquisition-related contingent consideration, which are governed by executory contracts and recorded at the expected amount of the total allowed claim, were classified within Liabilities subject to compromise in the Condensed Consolidated Balance Sheets. The relevant executory contracts were assumed and assigned to Endo, Inc. and recognized at fair value on the Effective Date and as of June 30, 2024 and classified as current or non-current as of June 30, 2024 based on the anticipated timing of payment of such obligations. Fair Value Measurements Using Significant Unobservable Inputs The following tables present changes to the liability for acquisition-related contingent consideration, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands): Successor Predecessor Three Months Ended June 30, 2024 (1) Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Beginning of period $ — $ 12,050 $ 15,697 Acquisition of contingent consideration from Predecessor 10,195 — — Amounts settled (1,577) (1,499) (1,890) Changes in fair value recorded in earnings (58) (338) 365 Effect of currency translation 31 (18) 481 End of period $ 8,591 $ 10,195 $ 14,653 Successor Predecessor Six Months Ended June 30, 2024 (1) Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Beginning of period $ — $ 12,447 $ 16,571 Acquisition of contingent consideration from Predecessor 10,195 — — Amounts settled (1,577) (2,475) (2,769) Changes in fair value recorded in earnings (58) 284 762 Effect of currency translation 31 (61) 89 End of period $ 8,591 $ 10,195 $ 14,653 __________ (1) Prior to the Effective Date, the Successor entity had no liabilities for acquisition-related contingent consideration. The Successor entity assumed the liabilities for acquisition-related contingent consideration in connection with the Plan. At June 30, 2024, the fair value measurements of the contingent consideration obligations were determined using risk-adjusted discount rates ranging from 8.9% to 19.0% (weighted average rate of approximately 17.1%, weighted based on relative fair value). Changes in fair value recorded in earnings The following tables present changes to the liability for acquisition-related contingent consideration by acquisition (in thousands): Successor Balance as of December 31, 2023 (2) Acquisition of Contingent Consideration from Predecessor Changes in Fair Value Recorded in Earnings Amounts Settled and Other Balance as of June 30, 2024 Auxilium acquisition $ — $ 8,262 $ (215) $ (1,055) $ 6,992 Other — 1,933 157 (491) 1,599 Total $ — $ 10,195 $ (58) $ (1,546) $ 8,591 Predecessor Balance as of December 31, 2023 (1) Acquisition of Contingent Consideration from Predecessor Changes in Fair Value Recorded in Earnings Amounts Settled and Other Balance as of April 23, 2024 Auxilium acquisition $ 9,494 $ — $ (85) $ (1,147) $ 8,262 Other 2,953 — 369 (1,389) 1,933 Total $ 12,447 $ — $ 284 $ (2,536) $ 10,195 __________ (1) At December 31, 2023, the Company’s liabilities for acquisition-related contingent consideration, which are governed by executory contracts and recorded at the expected amount of the total allowed claim, were classified within Liabilities subject to compromise in the Condensed Consolidated Balance Sheets. (2) Prior to the Effective Date, the Successor entity had no liabilities for acquisition-related contingent consideration. The Successor entity assumed the liability for acquisition-related contingent consideration in connection with the Plan. Nonrecurring Fair Value Measurements Property, plant and equipment, goodwill and other intangible assets have been and may in the future be subject to nonrecurring fair value measurement for the evaluation of potential impairment. During the periods covered by this report, nonrecurring fair value measurements, which related to certain property, plant and equipment, were not material. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 8. INVENTORIES Inventories, net of applicable reserves, consisted of the following (in thousands): Successor Predecessor June 30, 2024 December 31, 2023 Raw materials $ 120,277 $ 103,336 Work-in-process 142,249 29,827 Finished goods 396,501 112,854 Total $ 659,027 $ 246,017 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 June 30, 2024 and December 31, 2023, $436.2 million and $29.7 million, respectively, of noncurrent inventory was included in Other assets in the Condensed Consolidated Balance Sheets. The June 30, 2024 noncurrent inventory balance reflects the impact of fresh start accounting, as discussed in more detail in Note 3. Fresh Start Accounting. As of June 30, 2024, the reported inventory balances include approximately $793.1 million of remaining unamortized step up in fair value, including $406.7 million classified as long term inventory and classified as Other assets in the Successor Condensed Consolidated Balance Sheet, which will be reflected as Cost of revenue in future periods as the inventory is sold. As of June 30, 2024 and December 31, 2023, the Company’s Condensed Consolidated Balance Sheets included approximately $4.4 million and $2.7 million, respectively, of capitalized pre-launch inventories related to products that were not yet available to be sold. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
LEASES | NOTE 9. LEASES The following table presents information about the Company’s right-of-use assets and lease liabilities (in thousands): Successor Predecessor Balance Sheet Line Items June 30, 2024 December 31, 2023 Right-of-use assets: Operating lease right-of-use assets Operating lease assets $ 20,544 $ 23,033 Finance lease right-of-use assets Property, plant and equipment, net 7,413 18,668 Total right-of-use assets $ 27,957 $ 41,701 Operating lease liabilities, excluding amounts classified as Liabilities subject to compromise: Current operating lease liabilities Current portion of operating lease liabilities $ 8,244 $ 956 Noncurrent operating lease liabilities Operating lease liabilities, less current portion 13,025 4,132 Total operating lease liabilities $ 21,269 $ 5,088 Finance lease liabilities, excluding amounts classified as Liabilities subject to compromise: Current finance lease liabilities Accounts payable and accrued expenses $ 4,823 $ — Noncurrent finance lease liabilities Other liabilities $ 2,461 $ 1,386 Total finance lease liabilities $ 7,284 $ 1,386 Operating and finance leases, amounts classified as Liabilities subject to compromise: Operating lease liabilities Liabilities subject to compromise $ — $ 20,635 Finance lease liabilities Liabilities subject to compromise — 9,981 Total operating and finance leases classified as Liabilities subject to compromise $ — $ 30,616 The following tables present information about lease costs and expenses and sublease income (in thousands): Successor Predecessor Statement of Operations Line Items Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Operating lease cost Various (1) $ 356 $ (436) $ 1,837 Finance lease cost: Amortization of right-of-use assets Various (1) $ 1,346 $ 495 $ 2,017 Interest on lease liabilities Interest expense, net $ 87 $ 30 $ 206 Other lease costs and income: Variable lease costs (2) Various (1) $ 2,371 $ 606 $ 2,195 Sublease income Various (1) $ (459) $ (229) $ (1,544) Successor Predecessor Statement of Operations Line Items Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Operating lease cost Various (1) $ 356 $ 550 $ 4,030 Finance lease cost: Amortization of right-of-use assets Various (1) $ 1,346 $ 2,519 $ 4,044 Interest on lease liabilities Interest expense, net $ 87 $ 169 $ 435 Other lease costs and income: Variable lease costs (2) Various (1) $ 2,371 $ 3,588 $ 5,201 Sublease income Various (1) $ (459) $ (1,129) $ (3,088) __________ (1) Amounts are included in the Condensed Consolidated Statements of Operations based on the function that the underlying leased asset supports. The following tables present the components of such aggregate amounts (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Cost of revenues 1,055 468 1,437 Selling, general and administrative 2,559 (32) 3,020 Research and development — — 48 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Cost of revenues 1,055 2,130 3,053 Selling, general and administrative 2,559 3,398 7,032 Research and development — — 102 (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 certain additional information related to our leases (in thousands): Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash payments for operating leases $ 1,105 $ 1,863 $ 5,921 Operating cash payments for finance leases $ 132 $ 366 $ 693 Financing cash payments for finance leases $ 1,190 $ 2,381 $ 3,299 |
LEASES | NOTE 9. LEASES The following table presents information about the Company’s right-of-use assets and lease liabilities (in thousands): Successor Predecessor Balance Sheet Line Items June 30, 2024 December 31, 2023 Right-of-use assets: Operating lease right-of-use assets Operating lease assets $ 20,544 $ 23,033 Finance lease right-of-use assets Property, plant and equipment, net 7,413 18,668 Total right-of-use assets $ 27,957 $ 41,701 Operating lease liabilities, excluding amounts classified as Liabilities subject to compromise: Current operating lease liabilities Current portion of operating lease liabilities $ 8,244 $ 956 Noncurrent operating lease liabilities Operating lease liabilities, less current portion 13,025 4,132 Total operating lease liabilities $ 21,269 $ 5,088 Finance lease liabilities, excluding amounts classified as Liabilities subject to compromise: Current finance lease liabilities Accounts payable and accrued expenses $ 4,823 $ — Noncurrent finance lease liabilities Other liabilities $ 2,461 $ 1,386 Total finance lease liabilities $ 7,284 $ 1,386 Operating and finance leases, amounts classified as Liabilities subject to compromise: Operating lease liabilities Liabilities subject to compromise $ — $ 20,635 Finance lease liabilities Liabilities subject to compromise — 9,981 Total operating and finance leases classified as Liabilities subject to compromise $ — $ 30,616 The following tables present information about lease costs and expenses and sublease income (in thousands): Successor Predecessor Statement of Operations Line Items Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Operating lease cost Various (1) $ 356 $ (436) $ 1,837 Finance lease cost: Amortization of right-of-use assets Various (1) $ 1,346 $ 495 $ 2,017 Interest on lease liabilities Interest expense, net $ 87 $ 30 $ 206 Other lease costs and income: Variable lease costs (2) Various (1) $ 2,371 $ 606 $ 2,195 Sublease income Various (1) $ (459) $ (229) $ (1,544) Successor Predecessor Statement of Operations Line Items Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Operating lease cost Various (1) $ 356 $ 550 $ 4,030 Finance lease cost: Amortization of right-of-use assets Various (1) $ 1,346 $ 2,519 $ 4,044 Interest on lease liabilities Interest expense, net $ 87 $ 169 $ 435 Other lease costs and income: Variable lease costs (2) Various (1) $ 2,371 $ 3,588 $ 5,201 Sublease income Various (1) $ (459) $ (1,129) $ (3,088) __________ (1) Amounts are included in the Condensed Consolidated Statements of Operations based on the function that the underlying leased asset supports. The following tables present the components of such aggregate amounts (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Cost of revenues 1,055 468 1,437 Selling, general and administrative 2,559 (32) 3,020 Research and development — — 48 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Cost of revenues 1,055 2,130 3,053 Selling, general and administrative 2,559 3,398 7,032 Research and development — — 102 (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 certain additional information related to our leases (in thousands): Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash payments for operating leases $ 1,105 $ 1,863 $ 5,921 Operating cash payments for finance leases $ 132 $ 366 $ 693 Financing cash payments for finance leases $ 1,190 $ 2,381 $ 3,299 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | NOTE 10. GOODWILL AND OTHER INTANGIBLES Goodwill The Successor has no goodwill balance as of June 30, 2024. Refer to Note 3. Fresh Start Accounting for additional information about the impact of fresh start accounting on the Predecessor goodwill balance. The following table presents changes in the carrying amounts of Predecessor goodwill (in thousands): Branded Pharmaceuticals Sterile Injectables Generic Pharmaceuticals International Pharmaceuticals Total Goodwill as of December 31, 2023 (Predecessor) $ 828,818 $ 523,193 $ — $ — $ 1,352,011 Impact of fresh start accounting (828,818) (523,193) — — (1,352,011) Goodwill as of April 23, 2024 (Predecessor) $ — $ — $ — $ — $ — The carrying amounts of goodwill are net of the following accumulated impairments, if applicable (in thousands): Branded Pharmaceuticals Sterile Injectables Generic Pharmaceuticals International Pharmaceuticals Total Accumulated impairment losses as of December 31, 2023 (Predecessor) $ 855,810 $ 2,208,000 $ 3,142,657 $ 525,244 $ 6,731,711 Impact of fresh start accounting (855,810) (2,208,000) (3,142,657) (525,244) (6,731,711) Accumulated impairment losses as of April 23, 2024 (Predecessor) $ — $ — $ — $ — $ — Other Intangible Assets Changes in the amounts of other intangible assets are set forth in the tables below (in thousands): Successor Cost basis: Balance as of December 31, 2023 Acquired by Successor Other Post Effective Date Acquisitions Effect of Currency Translation Balance as of June 30, 2024 Indefinite-lived intangibles: In-process research and development $ — $ 298,334 $ — $ — $ 298,334 Total indefinite-lived intangibles $ — $ 298,334 $ — $ — $ 298,334 Finite-lived intangibles: Marketed products (weighted average life of 8 years) $ — $ 1,929,332 $ 3,293 $ (56) $ 1,932,569 Licenses (weighted average life of 5 years) — 69,757 — — 69,757 Total finite-lived intangibles (weighted average life of 8 years) $ — $ 1,999,089 $ 3,293 $ (56) $ 2,002,326 Total other intangibles $ — $ 2,297,423 $ 3,293 $ (56) $ 2,300,660 Accumulated amortization: Balance as of December 31, 2023 Amortization Other Effect of Currency Translation Balance as of June 30, 2024 Finite-lived intangibles: Marketed products $ — $ (46,419) $ — $ 170 $ (46,249) Licenses — (2,710) — — (2,710) Total other intangibles $ — $ (49,129) $ — $ 170 $ (48,959) Net other intangibles $ — $ 2,251,701 Predecessor Cost basis: Balance as of December 31, 2023 Acquisitions Other (1) Effect of Currency Translation Balance as of April 23, 2024 Indefinite-lived intangibles: In-process research and development $ — $ — $ 298,334 $ — $ 298,334 Total indefinite-lived intangibles $ — $ — $ 298,334 $ — $ 298,334 Finite-lived intangibles: Licenses (weighted average life of 5 years) (Predecessor) $ 432,107 $ — $ (432,107) $ — $ — Tradenames (Predecessor) 6,409 — (6,409) — — Developed technology (weighted average life of 8 years) (Predecessor) 5,925,662 — (5,917,445) (8,217) — Marketed products (weighted average life of 8 years (Successor) — — 1,929,332 — 1,929,332 Licenses (weighted average life of 5 years (Successor) — — 69,757 — 69,757 Total finite-lived intangibles (weighted average life of 8 years) $ 6,364,178 $ — $ (4,356,872) $ (8,217) $ 1,999,089 Total other intangibles $ 6,364,178 $ — $ (4,058,538) $ (8,217) $ 2,297,423 Accumulated amortization: Balance as of December 31, 2023 Amortization Other (1) Effect of Currency Translation Balance as of April 23, 2024 Finite-lived intangibles: Licenses (Predecessor) $ (419,084) $ (1,277) $ 420,361 $ — $ — Tradenames (Predecessor) (6,409) — 6,409 — — Developed technology (Predecessor) (4,460,802) (75,712) 4,529,436 7,078 — Marketed products (Successor) — — — — — Licenses (Successor) — — — — — Total other intangibles $ (4,886,295) $ (76,989) $ 4,956,206 $ 7,078 $ — Net other intangibles $ 1,477,883 $ 2,297,423 __________ (1) The net impact of the fresh start adjustments recorded as part of fresh start accounting. Refer to Note 3. Fresh Start Accounting for additional information. As part of fresh start accounting, as of the Effective Date, the Company wrote-off the existing intangible assets and accumulated amortization of the Predecessor and recorded $2,297.4 million to reflect the fair value of intangible assets of the Successor, as discussed in Note 3. Fresh Start Accounting. The following table summarizes the components of the estimated fair value of identified intangible assets (dollars in thousands): Carrying Amount Amortization Method Useful Life Range Discount Rate Range Intangible assets subject to amortization Marketed products $ 1,929,332 Straight-line 3 years to 11 years 12.3% to 26.7% Licenses 69,757 Straight-line 5 years 26.7% Intangible assets not subject to amortization In-process research and development 298,334 n/a n/a 24.8% to 27.7% Total identified intangible assets $ 2,297,423 Amortization expense for the periods Successor three and six months ended June 30, the Predecessor periods from April 1, 2024 through April 23, 2024, January 1, 2024 through April 23, 2024 and the three and six months ended June 30, 2023, totaled approximately $49.1 million, $15.1 million, $77.0 million, $64.4 million and $129.7 million, respectively. Amortization expense is included in Cost of revenues in the Condensed Consolidated Statements of Operations. For intangible assets subject to amortization, estimated amortization expense for the five fiscal years subsequent to June 30, 2024 (Successor) is as follows (in thousands): 2024 $ 130,654 2025 $ 259,177 2026 $ 257,824 2027 $ 242,935 2028 $ 242,935 Impairments 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 Condensed Consolidated Statements of Operations. During the periods covered by this report we did not record any impairment charges associated with goodwill or intangible assets. |
LICENSE, COLLABORATION AND ASSE
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS | NOTE 11. 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. TLC Agreement In June 2022, Endo International plc announced that it had entered into an agreement with Taiwan Liposome Company, Ltd. (TLC) to commercialize TLC599 (the TLC Agreement). Endo International plc accounted for the agreement as an asset acquisition. During the second quarter of 2022, Endo International plc made an upfront payment of $30.0 million to TLC and recorded a corresponding charge to Acquired in-process research and development in the Condensed Consolidated Statements of Operations. Pursuant to the terms of the TLC Agreement, Endo International plc deposited $85.0 million into an escrow account which was anticipated to be used to fund certain future obligations or returned to us upon satisfaction of certain conditions. On October 13, 2023, the Debtors commenced an adversary proceeding against TLC in the Bankruptcy Court. In March 2024, the parties to the adversary proceeding entered into a settlement agreement which was filed with the Bankruptcy Court and became effective upon Bankruptcy Court approval in April 2024 (TLC Settlement), prior to the Effective Date. In connection with the TLC Settlement the Debtors agreed to settle all disputes arising out of or relating to, and terminate the TLC Agreement. Under the terms of the TLC Settlement, among other things, TLC relinquished any liens on, claims to, rights to payment from, or control over the $85.0 million restricted cash and returned the $85.0 million to the Debtors prior to the Effective Date. |
CONTRACT ASSETS AND LIABILITIES
CONTRACT ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 30, 2024 | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | |
CONTRACT ASSETS AND LIABILITIES | NOTE 12. 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 June 30, 2024, 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): Successor Predecessor June 30, 2024 December 31, 2023 $ Change % Change Contract assets (1) $ 8,854 $ 11,387 $ (2,533) (22) % Contract liabilities (2) $ 3,251 $ 3,534 $ (283) (8) % __________ (1) At June 30, 2024 and December 31, 2023, approximately $2.0 million and $2.1 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 Condensed Consolidated Balance Sheets. The remaining amounts are classified as noncurrent and are included in Other assets. (2) At both June 30, 2024 and December 31, 2023, approximately $0.6 million of these contract liability amounts are classified as current and are included in Accounts payable and accrued expenses in the Company’s Condensed Consolidated Balance Sheets. The remaining amounts are classified as noncurrent and are included in Other liabilities. During Successor six months ended June 30, 2024 and Predecessor period January 1, 2024 through April 23, 2024, approximately $0.1 million and $0.2 million, respectively, of revenue was recognized that was included in the contract liability balance at December 31, 2023. During the Successor six months ended June 30, 2024 and Predecessor period January 1, 2024 through April 23, 2024, we recognized revenue of $13.7 million and $0.3 million, respectively, 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 | 6 Months Ended |
Jun. 30, 2024 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 13. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses included the following at June 30, 2024 and December 31, 2023 (in thousands): Successor Predecessor June 30, 2024 December 31, 2023 Trade accounts payable $ 77,655 $ 94,735 Returns and allowances 111,662 119,577 Rebates 86,127 105,428 Other sales deductions 4,192 3,212 Accrued interest 42,914 — Accrued payroll and related benefits 57,495 81,145 Accrued royalties and other distribution partner payables 18,931 35,856 Acquisition-related contingent consideration—current 2,753 — Other (1) 113,269 97,783 Total $ 514,998 $ 537,736 __________ (1) Amounts include a wide variety of accrued expenses, the most significant of which relate to accrued legal and other professional fees incurred prior to the Effective Date. Approximately $80.5 million was placed into escrow prior to or on the Effective Date for the settlement of certain of these liabilities, and reflected in Restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets. At June 30, 2024, approximately $76.2 million remains in escrow. The decrease in the Returns and allowances and Rebates accruals are primarily due to changes in gross sales and customer mix, as well as other factors. The increase in accrued interest expense is directly related to Exit Financing Debt, described in more detail in Note 14. Debt. The increase in the Other accrued expense category, inclusive of accrued legal and other professional fee accruals, is primarily a result of timing of payments. Refer to Note 2. Effectiveness of the Plan of Reorganization for additional information about certain professional fees recognized during the bankruptcy proceedings. The amounts in the table above at December 31, 2023 do not include amounts classified as Liabilities subject to compromise in the Predecessor Condensed Consolidated Balance Sheets. Refer to Note 2. Effectiveness of the Plan of Reorganization for additional information about Liabilities subject to compromise. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 14. DEBT The following table presents information about the Company’s total indebtedness at June 30, 2024 and December 31, 2023 (dollars in thousands): Successor Predecessor June 30, 2024 December 31, 2023 Effective Interest Rate Principal Amount (2) Carrying Amount (4) Effective Interest Rate (1) Principal Amount (2) Carrying Amount (3) 5.375% Senior Notes due 2023 $ — $ — 5.38 % $ 6,127 $ 6,127 6.00% Senior Notes due 2023 — — 6.00 % 56,436 56,436 5.875% Senior Secured Notes due 2024 — — 6.88 % 300,000 300,000 6.00% Senior Notes due 2025 — — 6.00 % 21,578 21,578 7.50% Senior Secured Notes due 2027 — — 8.50 % 2,015,479 2,015,479 9.50% Senior Secured Second Lien Notes due 2027 — — 9.50 % 940,590 940,590 6.00% Senior Notes due 2028 — — 6.00 % 1,260,416 1,260,416 6.125% Senior Secured Notes due 2029 — — 7.13 % 1,295,000 1,295,000 8.50% Senior Notes Due 2031 8.87 % 1,000,000 981,263 — — Term Loan Facility (Successor) 10.43 % 1,500,000 1,456,490 — — Term Loan Facility (Predecessor) — — 14.50 % 1,975,000 1,975,000 Revolving Credit Facility (Predecessor) — — 12.00 % 277,200 277,200 Total $ 2,500,000 $ 2,437,753 $ 8,147,826 $ 8,147,826 Less: current portion, net 11,250 11,250 — — Total long-term debt, less current portion, net $ 2,488,750 $ 2,426,503 $ 8,147,826 $ 8,147,826 __________ (1) Beginning on the Petition Date, the Predecessor ceased recognition of interest expense related to all debt instruments and began to incur “adequate protection payments” related to First Lien Debt Instruments (representing all debt instruments except for the senior unsecured notes and the 9.50% Senior Secured Second Lien Notes due 2027). The December 31, 2023 “effective interest rates” included in the table above represent the rates in effect on such dates used to calculate: (i) future adequate protection payments related Predecessor First Lien Debt Instruments and (ii) future contractual interest related to the Predecessor’s 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. (2) The June 30, 2024 and December 31, 2023 principal amounts represent the amount of unpaid contractual principal owed on the respective instruments. (3) As of December 31, 2023, the entire carrying amount of the Predecessor debt, as well as any related remaining accrued and unpaid interest that existed as of the Petition Date, was included in the Liabilities subject to compromise line in the Predecessor Condensed Consolidated Balance Sheets. (4) As of June 30, 2024, the carrying amount of the respective debt instruments represents the unpaid contractual principal amounts owed less applicable deferred financing fees and original issue discounts. General Information The aggregate estimated fair value of long-term debt, which was determined based on Level 2 quoted market price inputs for the same or similar debt issuances, was approximately $2.5 billion at June 30, 2024 and $4.1 billion at December 31, 2023. Exit Financing Debt New Credit Facilities On the Effective Date, as contemplated in the Plan, Endo Finance Holdings, Inc., a wholly owned subsidiary of Endo, Inc., also referred to herein as the Issuer, entered into a credit agreement (the New Credit Agreement) by and among the Issuer, as borrower, Endo, Inc., as parent guarantor, the lenders from time to time party thereto and Goldman Sachs Bank USA, as administrative agent, collateral agent, issuing bank and swingline lender, which provides for, among other things: (i) the New Revolving Credit Facility, presented in the table above as Revolving Credit Facility (Successor) and (ii) the New Term Facility, presented in the table above as Term Loan Facility (Successor) (the New Term Facility and, together with the New Revolving Credit Facility, the New Credit Facilities). The New Credit Agreement provides the Issuer with the option to raise certain incremental credit facilities, subject to certain limitations and conditions specified in the New Credit Agreement. The New Revolving Credit Facility has a maturity date of April 23, 2029 and the New Term Facility has a maturity date of April 23, 2031. At June 30, 2024, approximately $400 million of capacity under the New Revolving Credit Facility is undrawn and available to the Company, net of outstanding standby letters of credit. The New Credit Agreement contains affirmative and negative covenants that the Company believes to be customary for a senior secured credit facility of this type. The negative covenants include, among other things, indebtedness, fundamental changes, dispositions of property and assets (including sale-leaseback transactions), investments, restricted payments, restrictive agreements, transactions with affiliates, swap arrangements, amending subordinated debt documents, changes in fiscal year and changes in the nature of business. If we draw more than 40% of total available credit under our New Revolving Credit Facility (other than (a) undrawn letters of credit in an amount not to exceed $20.0 million and (b) cash collateralized or backstopped letters of credit), we will be required to comply with a maximum first lien net leverage ratio not to exceed 6.10 to 1.00. As of June 30, 2024, we were in compliance with all such covenants. Borrowings under the New Revolving Credit Facility bear interest, at the borrower’s election, based on: (i) the alternate base rate; (ii) the Canadian prime rate; (iii) Term SOFR (as defined in the New Credit Agreement); or (iv) adjusted Term CORRA (which includes a credit spread adjustment based on the interest period, and as defined in the New Credit Agreement)), in each case, plus the applicable margin; provided that Term SOFR and adjusted Term CORRA shall not be less than, with respect to loans under the New Revolving Credit Facility, 0.00% per annum, and with respect to loans under the New Term Facility, 0.50%. The applicable margins are based upon a first lien net leverage ratio as set forth in the New Credit Agreement, which range from: (i) for loans under the New Revolving Credit Facility based on (x) Term SOFR or adjusted Term CORRA, 3.00% to 3.50% and (y) alternate base rate or Canadian prime rate, 2.00% to 2.50%; and (ii) for loans under the New Term Facility based on (x) Term SOFR, 4.25% to 4.50% and (y) alternate base rate, 3.25% to 3.50%. The obligations under the New Credit Agreement are guaranteed by Endo, Inc. and certain subsidiaries of the borrower from time to time, or the guarantors, and secured by a lien on substantially all the assets (with certain exceptions) of the borrower and the guarantors in accordance with the terms of the New Credit Agreement and the other related security documents and that certain first-lien intercreditor agreement, dated as of the Effective Date, among the New Senior Secured Notes collateral agent, the New Credit Agreement collateral agent, the Issuer, the guarantors and the other agents from time to time party thereto (the Intercreditor Agreement). Pursuant to the Intercreditor Agreement, with respect to any Shared Collateral (as defined in the Intercreditor Agreement) proceeds received after the occurrence, and during the continuance, of an event of default under the applicable secured debt documents, holders of the obligations under the New Revolving Credit Facility and certain specified cash management and hedging obligations secured in connection therewith (the Revolving Facility Obligations), shall be paid prior to the lenders under the New Term Facility and the noteholders. Moreover, the New Credit Agreement collateral agent is the controlling agent under the Intercreditor Agreement and, prior to the discharge of the Revolving Facility Obligations, will take direction from lenders holding a majority of the commitments under the New Revolving Credit Facility in respect of the exercise of rights and remedies including in any insolvency proceeding, consent to debtor-in-possession (DIP) financing, sale of collateral, use of cash collateral, adequate protection and other customary bankruptcy provisions. New Senior Secured Notes On the Effective Date, the Issuer issued the New Senior Secured Notes (presented in the table above as 8.50% Senior Notes Due 2031) at an issue price of 100%. The New Senior Secured Notes were issued in a private offering to qualified institutional buyers pursuant to Rule 144A and outside the United States to non-U.S. persons pursuant to Regulation S. The New Senior Secured Notes are the Issuer’s senior secured obligations and are guaranteed on a senior secured basis by Endo, Inc. and the subsidiaries that guarantee the New Credit Agreement. The New Senior Secured Notes are secured on a pari passu basis by first-priority liens, subject to permitted liens and certain other exceptions, and the prior payment of the Revolving Facility Obligations from proceeds of the collateral, on the same collateral that secures the New Credit Agreement. The New Senior Secured Notes will mature on April 15, 2031, subject to earlier repurchase or redemption in accordance with the terms of the Indenture (as defined below), and bear interest at 8.50% per annum, payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing on October 15, 2024. Before April 15, 2027, the New Senior Secured Notes are redeemable by the Issuer, in whole or in part, at a redemption price equal to 100.00% of the principal amount of the New Senior Secured Notes redeemed, plus a “make-whole” premium, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. In addition, at any time prior to April 15, 2027, the Issuer may redeem up to 10.00% of the original aggregate principal amount of the New Senior Secured Notes during each twelve-month period commencing with the Effective Date at a redemption price equal to 103.00% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. In addition, at any time prior to April 15, 2027, the Issuer may redeem up to 40.00% of the aggregate principal amount of the New Senior Secured Notes with the net cash proceeds from specified equity offerings at a redemption price equal to 108.50% of the aggregate principal amount of the New Senior Secured Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. If Endo, Inc. experiences certain change of control events, the Issuer must offer to repurchase the New Senior Secured Notes at 101.00% of their aggregate principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of purchase. The New Senior Secured Notes are redeemable by the Issuer, in whole or in part, at any time on or after April 15, 2027 at a redemption price expressed as a percentage of the principal amount thereof, which percentage is 104.25%, approximately 102.13% and 100.00% during the twelve-month period beginning on April 15 of 2027, 2028 and 2029 and thereafter, respectively, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. The New Senior Secured Notes and guarantees were issued pursuant to an indenture by and among the Issuer, Endo, Inc., the subsidiary guarantors and Computershare Trust Company, National Association, as trustee and notes collateral agent (the Indenture). The Indenture contains covenants that, among other things, restrict Endo, Inc.’s ability and the ability of its restricted subsidiaries to incur certain additional indebtedness and issue preferred stock, make certain dividend payments, distributions, investments and other restricted payments, sell certain assets, agree to any restrictions on the ability of restricted subsidiaries to make payments to the Issuer, create certain liens, merge, consolidate, or sell all or substantially all of Endo, Inc.’s or any restricted subsidiary’s assets, or enter into certain transactions with affiliates. These covenants are subject to a number of important exceptions and qualifications, including the suspension of certain of these covenants upon the New Senior Secured Notes receiving investment grade credit ratings. As of June 30, 2024, we were in compliance with all such covenants. Maturities For each of the five fiscal years subsequent to June 30, 2024, the maturities on our Exit Financing Debt are as follows (in thousands): Maturities (1) 2024 $ 3,750 2025 $ 15,000 2026 $ 15,000 2027 $ 15,000 2028 $ 15,000 __________ (1) The amounts in this maturities table do not reflect any potential early repayments or refinancings. Endo International plc Events of Default and Bankruptcy-Related Matters Endo International plc and certain of its subsidiaries were party to the Legacy Credit Agreement (as amended from time to time, the Legacy Credit Agreement), including: (i) a $1,000.0 million senior secured revolving credit facility (the Legacy Revolving Credit Facility) and (ii) a $2,000.0 million senior secured term loan facility (the Legacy Term Loan Facility and, together with the Legacy Revolving Credit Facility, the Legacy Credit Facilities). On the Petition Date, the Debtors filed voluntary petitions for relief under the Bankruptcy Code, which constituted an event of default that accelerated Endo International plc’s obligations under substantially all of its then-outstanding debt instruments. Section 362 of the Bankruptcy Code stayed creditors from taking any action to enforce the related financial obligations and creditors’ rights of enforcement in respect of the debt instruments were subject to the applicable provisions of the Bankruptcy Code until the Effective Date. As a result of the Chapter 11 Cases, from the Petition Date through the Effective Date, Endo International plc did not make any scheduled principal or interest payments on the Legacy Credit Facilities or its various then-outstanding senior notes and senior secured notes but was required to make certain adequate protection payments as further discussed below. As a result of uncertainties regarding the ultimate allowance of claims in connection with the Chapter 11 Cases, all secured and unsecured debt instruments were classified as Liabilities subject to compromise in the Predecessor Condensed Consolidated Balance Sheets, and Endo International plc ceased the recognition of interest expense related to these instruments as of the Petition Date through the Effective Date. During the Predecessor period April 1, 2024 through April 23, 2024 and January 1, 2024 through April 23, 2024, Endo International plc did not recognize approximately $43 million and $204 million, respectively, of contractual interest expense that would have been recognized if not for the Chapter 11 Cases. Endo International plc was, among other things, obligated to make certain adequate protection payments during the bankruptcy proceedings on each of certain debt instruments. On a cumulative basis through April 23, 2024, Endo International plc made the following adequate protection payments: • $54.1 million with respect to the Legacy Revolving Credit Facility; • $471.2 million with respect to the Legacy Term Loan Facility; and • $572.0 million with respect to the applicable senior secured notes. During the period ended January 1, 2024 through April 23, 2024 and the six months ended June 30, 2023, adequate protection payments of $192.3 million and $291.7 million, respectively were recorded as a reduction of the carrying amount of the respective first lien debt instruments. The respective debt instruments were then adjusted to the estimated allowed claim amount resulted in a charge within Reorganization items, net in the Predecessor Condensed Consolidated Statements of Operations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15. 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 Cooperative Agreement In November 2021, Endo International plc and/or certain subsidiaries entered into a cooperative agreement with the U.S. Department of Defense (DoD), pursuant to an interagency agreement with the U.S. Department of Health and Human Service (HHS) whereby the DoD provided contracting support to HHS during the COVID-19 pandemic. The cooperative agreement with the DoD concluded in the third quarter of 2023 and a new cooperative agreement with HHS, containing substantially the same terms, was simultaneously executed (the U.S. Government Cooperative Agreement). The U.S. Government Cooperative Agreement and the relationship with HHS is being transitioned to Endo, Inc. and/or certain of its subsidiaries. The purpose of the U.S. Government Cooperative Agreement, is to expand our Sterile Injectables segment’s fill-finish manufacturing production capacity and capabilities at our Rochester, Michigan facility to support the U.S. government’s national defense efforts regarding production of critical medicines advancing pandemic preparation. The U.S. Government Cooperative 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 Cooperative 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. Legal Proceedings and Investigations Endo, Inc. and certain of its subsidiaries as well as Endo International plc and certain of its subsidiaries, including certain Debtors, 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. Endo, Inc. and certain of its subsidiaries 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. Effectiveness of the Plan of Reorganization, on the Petition Date, certain of the Debtors filed voluntary petitions for relief under the Bankruptcy Code. Certain additional Debtors filed voluntary petitions for relief under the Bankruptcy Code on May 25, 2023 and May 31, 2023. 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 were generally subject to an automatic stay. Such automatic stay remained in place until the Effective Date, at which point claims against the Debtors were discharged and channeled to the applicable trusts in accordance with the Plan. Endo, Inc. believes that certain settlements and judgments, as well as legal defense costs, relating to certain Debtors’ 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. Debtors have vigorously contested any disputes with the insurance carriers to enforce their 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 insurers 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. 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. 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. 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. Pursuant to the Plan, on the Effective Date thereof, all persons (subject to limited exceptions) who had or may have had in the future claims based on, arising out of, attributable to or in any way connected with certain specified Debtor insurance policies (Specified Policies), including those that may provide coverage for the claims that were filed against the Debtors, were enjoined from taking any action to collect, recover or receive payment with respect to any such claims. The foregoing injunction does not preclude the General Unsecured Creditors Trust (GUC Trust) from pursuing any claim based on, arising under or attributable to the Specified Policies or any claim that may exist under any Specified Policy against the insurer(s) thereof. Thus, the rights under the Specified Policies were effectively transferred to the GUC Trust. As of June 30, 2024, our accrual for loss contingencies of approximately $6.9 million represents the unpaid portion of the settlement consideration payable under the Debtor’s settlement with the future claims representative (the FCR), which Endo, Inc. assumed on the Effective Date. As of December 31, 2023, Endo International plc had an accrual for loss contingencies of $2,431.5 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. Although 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 the time. As of December 31, 2023, Endo International plc’s entire accrual for loss contingencies is classified as Liabilities subject to compromise in the Condensed Consolidated Balance Sheets and recorded at the expected allowed claim amount, even if they were ultimately settled for different amounts. As noted above, pursuant to the Plan, on the Effective Date thereof, all such claims against the Debtors were discharged and channeled to the applicable trusts. As part of the Chapter 11 Cases, persons and entities believing that they have claims or causes of action against the Debtors, including litigants, were instructed to file proofs of claim evidencing such claims. On April 3, 2023, the Bankruptcy Court entered the Bar Date Order, as subsequently amended on June 23, 2023 and July 14, 2023, setting July 7, 2023 as the general bar date (deadline) for persons and non-governmental entities to file proofs of claim against the Debtors. The Bankruptcy Court also set May 31, 2023 as the bar date for governmental entities to file claims other than certain claims relating to opioids against the Debtors. Certain claims, including most governmental claims relating to opioids, were subject to separate bar date procedures as set forth in more detail in the Bar Date Order. At the Debtors’ request, the Bankruptcy Court appointed the 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 personal injury claims against the Debtors or a successor of the Debtors’ businesses relating to the Debtors’ opioid or transvaginal surgical mesh products, but who could not assert such claims in the Chapter 11 Cases because, among other reasons, such individuals were unaware of the alleged injury, had a latent manifestation of the alleged injury or were otherwise unable to assert or incapable of asserting claims based on the alleged injury. Although the FCR was initially appointed to represent the rights of individuals who may in the future assert one or more personal injury claims against the Debtors or a successor of the Debtors’ businesses relating to the Debtors’ ranitidine products, in August 2023 the Bankruptcy Court entered an order terminating the FCR’s appointment with respect to claims relating to the Debtors’ ranitidine products. Vaginal Mesh Matters Since 2008, certain Debtors, 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 pelvic organ prolapse (POP) and stress urinary incontinence (SUI). Endo International plc and its subsidiaries 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, Endo International plc 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 Endo International plc or any of its subsidiaries. All MSAs were subject to a process that included guidelines and procedures for administering the settlements and the release of funds. In certain cases, the MSAs provided for the creation of QSFs into which settlement funds were deposited, established participation requirements and allowed for a reduction of the total settlement payment in the event participation thresholds were not met. In certain circumstances, participation requirements or other conditions for payment were not satisfied prior to the Petition Date. Prior to the Effective Date, funds deposited in QSFs were considered restricted cash and/or restricted cash equivalents. Distribution of funds to any individual claimant was 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 was required to 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 applied 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 period from December 31, 2023 through the Effective Date (in thousands): Predecessor Mesh Qualified Settlement Funds Mesh Liability Accrual (1) Balance as of December 31, 2023 $ 49,464 $ 222,592 Cash received for reversionary interests (11,048) — Cash distributions to settle disputes from Qualified Settlement Funds (1,523) (1,523) Other 199 199 Impacts of the Plan (2) (37,092) (221,268) Balance as of April 23, 2024 $ — $ — __________ (1) As of December 31, 2023, the entire accrual is classified as Liabilities subject to compromise in the Condensed Consolidated Balance Sheets. (2) Pursuant to the Plan, on the Effective Date thereof, all mesh claims against the Debtors were discharged and channeled to the applicable trusts. Additionally, the QSFs were not transferred to Endo, Inc. Refer to Note 3. Fresh Start Accounting for additional information about the impacts of the Plan. Charges related to vaginal mesh associated legal fees and other expenses for all predecessor periods presented are reported in Discontinued operations, net of tax in our Condensed Consolidated Statements of Operations. As of the Effective Date, Endo International and/or its subsidiaries made total cumulative mesh liability payments of approximately $3.6 billion. Pursuant to the Plan, on the Effective Date thereof, all mesh claims against the Debtors were discharged and channeled to the applicable trusts, and as such, we do not expect to make new payments under previously executed MSAs. In June 2023, the Debtors filed a motion in the Bankruptcy Court seeking: (i) confirmation that the automatic stay does not apply to certain distributions to mesh claimants under the QSFs and (ii) authorization to request the return of the QSF funds to relevant parties (the QSF Motion). In July 2023, the Bankruptcy Court entered an order confirming that the automatic stay does not apply to certain distributions from QSFs for mesh claimants for whom the Debtors do not have a reversionary interest, as scheduled in the QSF Motion, and authorizing the Debtors to request the return of the QSF funds for the mesh claimants who did not object to the QSF Motion (the QSF Order). Objecting mesh claimants had until April 11, 2024 to file a formal objection to the QSF Motion, unless otherwise agreed by the Debtors and such claimants. No such objections were filed, and in April 2024, the Debtors filed amended schedules to the QSF Order, which became immediately subject to terms of the QSF Order upon filing. The amended schedules to the QSF Order fully resolved each mesh claim subject to the QSF Motion. During the period December 31, 2023 through the Effective Date, approximately $11.0 million of the undisputed reversionary QSF funds were returned to the Debtors. As of the Petition Date, mesh personal injury claims against AMS and Astora, in the U.S., became subject to the automatic stay applicable under the Bankruptcy Code, and stays of mesh litigation have been obtained in the United Kingdom and Australia, and recognized as to claims in other jurisdictions as well. Pursuant to the Plan, on the Effective Date thereof, all mesh claims against the Debtors were discharged and channeled to the applicable trusts. Certain of Endo International plc’s subsidiaries 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, certain of Endo International plc’s subsidiaries received a subpoena relating to this investigation from the state of California, and subsequently received additional subpoenas from California and other states. Following the occurrence of the Effective Date, any potential claims relating to the prepetition conduct at issue in this investigation were discharged. The resolution reached with the UCC, as embodied in the Plan, contemplated the creation and funding of a trust for the benefit of certain unsecured creditors and sub-trusts established thereunder, one of which was established for the benefit of certain mesh claimants following the period covered by these Quarterly Financial Statements. Additionally, on April 13, 2023, an ad hoc group (the Ad Hoc First Lien Group) of certain creditors and the FCR filed a resolution with the Bankruptcy Court, which is also embodied in the Plan, that contemplated that the Future PI Trust allocate an aggregate amount of approximately $0.5 million to eligible future mesh claimants in exchange for certain releases provided to (among others) the Ad Hoc First Lien Group (Purchaser) and Endo International plc, its subsidiaries and affiliated entities and persons. As previously noted, prior to or on the Effective Date of the Plan, the establishment and funding of the GUC Trust (and the sub-trusts thereunder) contemplated under the Plan occurred. In connection therewith, all mesh claims against the Debtors were discharged and channeled to such trusts. 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 Endo International plc and/or certain of its subsidiaries, including Endo Health Solutions Inc. (EHSI), Endo Pharmaceuticals Inc. (EPI), Par Pharmaceutical, Inc. (PPI), Par Pharmaceutical Companies, Inc. (PPCI), Endo Generics Holdings, Inc. (EGHI), Vintage Pharmaceuticals, LLC, Generics Bidco I, LLC, DAVA Pharmaceuticals, LLC, Par Sterile Products, LLC (PSP LLC) and in Canada, Paladin Labs Inc. (PLI) and Endo Ventures Unlimited (EVU), 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 Endo International plc’s subsidiaries products. Prior to the Effective Date of the Plan, pending cases against the Debtors in the U.S. of which the Debtors were aware included, 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. Pursuant to the Plan, on the Effective Date thereof, all such cases against the Debtors were discharged and channeled to the applicable trusts. The complaints in the cases that were pending as against the Debtors prior to the Effective Date of the Plan asserted 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 were 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 sought 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 exceeded Endo International plc’s applicable insurance. Many of the U.S. cases were 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 were pending in various federal or state courts. Following the Petition Date, litigation activity against Endo International plc 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. In February 2024, the Bankruptcy Court extended the preliminary injunction through and including June 30, 2024. A similar cessation of litigation activity was in place in Canada. Pursuant to the Plan, on the Effective Date thereof, such litigation activity as against the Debtors was discharged and channeled to the applicable trusts. In June 2020, the New York State Department of Financial Services (DFS) commenced an administrative action against Endo International plc, 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 alleged 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 sought 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. Endo International’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 and have since been discharged and channeled following the Effective Date of the Plan. Between 2019 and the Petition Date, Endo International plc 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 such claims were resolved pursuant to the Plan. • 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. The State of Florida elected to return a portion of the settlement amount in accordance with the Plan and in resolution of any claims the Company or the Debtors may have for the return of the settlement amount pursuant to the Bankruptcy Code. The resolution was approved by the Bankruptcy Court in August 2024. • 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 such claims were resolved pursuant to the Plan. • 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 such claims were resolved pursuant to the Plan. • 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. The State of Arkansas elected to return a portion of the settlement amount in accordance with the Plan and in resolution of any claims the Company or the Debtors may have for the return of the settlement amount pursuant to the Bankruptcy Code. The resolution was approved by the Bankruptcy Court in May 2024. • 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 such claims were resolved pursuant to the Plan. • 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 such claims were resolved pursuant to the Plan. 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 Endo International or any of its 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 may have been considered restricted cash and/or restricted cash equivalents for a period of time subsequent to the initial funding. Distribution of funds from the QSFs was conditioned upon certain criteria that vary by agreement. Certain of the settlement agreements described above provided for injunctive relief. The RSA also provided for certain voluntary injunctive terms that bound the Debtors during the course of the bankruptcy proceedings and were intended to 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. These voluntary injunctive terms were updated and amended in the Plan and binds Endo, Inc. and certain of its subsidiaries’ business following the Effective Date. The Plan provided for the establishment by the Debtors of opioid trusts, and other forms of funding, for the benefit of certain public, tribal and private present and future 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 Plan, the opioid trusts would be funded over a period of ten years (subject to prepayment mechanics), with up to a total of approximately $613 million to be distributed to eligible claimants, and the opioid school district recovery trust would be funded, over a period of two years, with up to $3 million to be distributed to public school districts that elect to participate in such initiative. As previously noted, on the Effective Date, where a prepayment option was available, the various opioid trusts were funded in an aggregate amount equal to approximately $446 million. Under the public claimant opioid trust, states |
OTHER COMPREHENSIVE (LOSS) INCO
OTHER COMPREHENSIVE (LOSS) INCOME | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE (LOSS) INCOME | NOTE 16. OTHER COMPREHENSIVE (LOSS) INCOME During the periods covered by this report, substantially all of the Accumulated other comprehensive income (loss) balances at June 30, 2024 and December 31, 2023 consist of Foreign currency translation gain (loss). There were no tax effects in Other comprehensive (loss) income and there were no reclassifications out of Accumulated other comprehensive income (loss). In connection with the adoption of fresh start accounting, Accumulated other comprehensive income (loss) of the Predecessor was eliminated as part of the Fresh Start Adjustments, as discussed in more detail in Note 3. Fresh Start Accounting, |
OTHER EXPENSE (INCOME), NET
OTHER EXPENSE (INCOME), NET | 6 Months Ended |
Jun. 30, 2024 | |
Other Income and Expenses [Abstract] | |
OTHER EXPENSE (INCOME), NET | NOTE 17. OTHER EXPENSE (INCOME), NET The components of Other expense, net are as follows (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Net loss (gain) on sale of business and other assets (1) $ 52 $ 63 $ (95) Foreign currency loss (gain), net (2) 266 (540) 1,891 Net (gain) loss from our investments in the equity of other companies (3) (64) — (34) Other miscellaneous, net (4) (8) (16) (1,583) Other expense (income), net $ 246 $ (493) $ 179 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Net loss (gain) on sale of business and other assets (1) $ 52 $ (115) $ (622) Foreign currency loss (gain), net (2) 266 (376) 2,008 Net (gain) loss from our investments in the equity of other companies (3) (64) 5 88 Other miscellaneous, net (4) (8) 5,748 (1,420) Other expense, net $ 246 $ 5,262 $ 54 __________ (1) Amounts primarily relate to the sales of certain intellectual property rights and certain other assets. (2) Amounts relate to the remeasurement of 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) |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 18. INCOME TAXES The following table displays our (Loss) income from continuing operations before income tax, Income tax expense and Effective tax rate (dollars in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 (Loss) income from continuing operations before income tax $ (212,757) $ 6,394,943 $ 34,290 Income tax (benefit) loss $ (63,981) $ 50,629 $ 10,279 Effective tax rate 30.1 % 0.8 % 30.0 % Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 (Loss) income from continuing operations before income tax $ (212,757) $ 6,248,991 $ 37,240 Income tax (benefit) loss $ (63,981) $ 58,511 $ 16,052 Effective tax rate 30.1 % 0.9 % 43.1 % The income tax benefit of $64.0 million for the Successor three and six months ended June 30, 2024 primarily related to a $37.6 million tax benefit associated with a deferred tax benefit on a post-emergence intra-entity transfer during the Successor three months ended June 30, 2024, and a $27.1 million tax benefit on pre-tax losses outside of the United States (OUS). The income tax expense of $50.6 million for the Predecessor period from April 1, 2024, through April 23, 2024 primarily consisted of the income tax impacts of the Plan and Fresh Start Adjustments, including adjustments to historical valuation allowances. Endo International plc recorded an income tax benefit of $196.6 million for a reduction to the historical valuation allowance associated with deferred tax assets, and an income tax expense of $3.8 million for the reduction in income taxes payable/receivables. These benefits are offset by $211.4 million of income tax expense for the net decrease in deferred tax assets resulting from Fresh Start Adjustments. The Company also recorded income tax expenses of $16.7 million related to increases in accrued interest on uncertain tax positions, $4.2 million Indian capital gain tax on the intercompany transfer of shares, and $9.3 million related to changes in valuation allowances. The income tax expense of $58.5 million for the Predecessor period from January 1, 2024 through April 23, 2024 consisted of the income tax impacts of the Plan and Fresh Start Adjustments, including adjustments to historical valuation allowances. Endo International plc recorded an income tax benefit of $196.6 million for a reduction to the historical valuation allowance associated with deferred tax assets, and an income tax expense of $3.8 million for the reduction in income taxes payable/receivables. These benefits are offset by $211.4 million of income tax expense for the net decrease in deferred tax assets resulting from Fresh Start Adjustments. The Company also recorded income tax expenses of $30.1 million related to increases in accrued interest on uncertain tax positions, $4.2 million Indian capital gain tax on the intercompany transfer of shares, and $9.3 million related to changes in valuation allowances. This was offset by an income tax benefit of $10.3 million associated with a reduction to our net UTP liability related to a Canadian statute lapse. The income tax expense of $10.3 million and $16.1 million for the Predecessor three and six months ending June 30, 2023, respectively, primarily related to an increase in accrued interest on uncertain tax positions. Reinvested Earnings Historically, Endo International plc, an Irish-domiciled entity, was the parent company and the reinvestment analysis was completed from an Irish parent perspective. Endo, Inc. is a U.S.-based parent company and therefore our reinvestment analysis going forward will be completed from a U.S.-based parent perspective. Accordingly, Endo, Inc.’s evaluation and conclusions as to whether some or all of the undistributed earnings of our subsidiaries are indefinitely reinvested may differ from those of Endo International plc and such conclusions may materially impact our result of operations. Endo, Inc. has determined that the undistributed earnings of certain subsidiaries will be indefinitely reinvested. No additional provision has been made in the U.S. and non-U.S. 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. The additional income taxes related to indefinitely reinvested earnings for which a deferred tax liability is not recorded is expected to be immaterial. Bankruptcy-Related Developments In connection with the bankruptcy proceedings, the IRS filed multiple proofs of claim against several of the Debtors. The total amount of the asserted claims filed by the IRS, which related to tax years ended 2006 through 2014, 2016 through 2018 and 2020 through 2021, was approximately $20 billion. A number of the claims were in respect of the same proposed tax liability but were 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 were approximately $4 billion. In general, the claims primarily related to the IRS’s challenges of Endo International plc’s historic tax positions for certain intercompany arrangements, including the level of profit earned by Endo International plc’s U.S. subsidiaries pursuant to such arrangements, and a product liability loss carryback claim. Pursuant to the Plan, on the Effective Date thereof, these claims against the Debtors were discharged and are being administered in accordance with the Plan. The IRS’s claims and uncertain tax positions related to the historical federal income tax positions not specifically challenged by the IRS, as well as certain federal income tax related claims that arose during the Chapter 11 Cases and as a result of the consummation of the Plan, were resolved in accordance with the U.S. Government Economic Settlement which became effective on the Effective Date of the Plan. The claims brought against the Debtors by the IRS were deemed to be, in part, an allowed unsubordinated priority claim and, in part, an allowed, unsubordinated general unsecured claim, each in such amount equal to the settlement amounts to be received by the IRS as allocated by the U.S. Government. |
NET (LOSS) INCOME PER SHARE
NET (LOSS) INCOME PER SHARE | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
NET (LOSS) INCOME PER SHARE | NOTE 19. NET (LOSS) INCOME PER SHARE The following is a reconciliation of the numerator and denominator of basic and diluted net (loss) income per share (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Numerator: (Loss) income from continuing operations $ (148,776) $ 6,344,314 $ 24,011 (Loss) income from discontinued operations, net of tax — 183,234 (573) Net (loss) income $ (148,776) $ 6,527,548 $ 23,438 Denominator: For basic per share data—weighted average shares 76,156 235,220 235,220 Dilutive effect of common stock/ordinary share equivalents — — — For diluted per share data—weighted average shares 76,156 235,220 235,220 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Numerator: (Loss) income from continuing operations $ (148,776) $ 6,190,480 $ 21,188 (Loss) income from discontinued operations, net of tax — 182,838 (1,029) Net (loss) income $ (148,776) $ 6,373,318 $ 20,159 Denominator: For basic per share data—weighted average shares 76,156 235,220 235,218 Dilutive effect of common stock/ordinary share equivalents — — 444 For diluted per share data—weighted average shares 76,156 235,220 235,662 Basic per share amounts are computed based on the weighted average number of common stock or ordinary shares outstanding, as applicable, during the period. Diluted per share amounts are computed based on the weighted average number of common stock or ordinary shares, as applicable, outstanding and, if there is net income from continuing operations during the period, the dilutive effect of common stock/ordinary share equivalents outstanding during the period. The dilutive effect of common stock/ordinary share equivalents, if any, is measured using the treasury stock method. Endo, Inc. issued approximately 0.2 million of Escrowed Equity, with such Escrowed Equity to be distributed to holders of second lien deficiency claims and unsecured notes claims in accordance with the “Net Debt Equity Split Adjustment” defined under the Plan, which is excluded for purposes of calculating basic net income (loss) per share in the Condensed Consolidated Statements of Operations for the Successor three and six months ended June 30, 2024. As contemplated by the Plan, after the Effective Date, the Company adopted a long-term incentive plan and authorized and reserved 3.6 million shares for issuance pursuant to equity incentive awards to be granted under such plan. As of August 22, 2024, no shares have been issued under the Company’s 2024 Stock Incentive Plan. On March 3, 2023, in connection with its bankruptcy proceedings, Endo International plc took action to reject all outstanding award agreements associated with its stock options and stock awards. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 20. SUBSEQUENT EVENT On August 25, 2024, the Board of Directors (the “Board”) of Endo, Inc. (the “Company”) determined that Blaise Coleman will no longer serve as the Company’s President and Chief Executive Officer, effective August 29, 2024. Mr. Coleman will also resign from the Board and all other officer and director positions he holds with the Company and all of its affiliates, effective August 29, 2024. In connection with Mr. Coleman’s departure, Mr. Coleman will be eligible to receive the severance payments and benefits specified in his employment agreement with Endo USA Inc. (“Endo USA”), an affiliate of the Company, dated as of May 10, 2024 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ (148,776) | $ (148,776) | $ 0 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Predecessor/Successor Accounting Policies / Bankruptcy Accounting / Fresh Start Accounting | Predecessor/Successor Accounting Policies. There were no significant policy changes as a result of the adoption of fresh start accounting. Unless otherwise noted, Endo, Inc. has adopted the existing policies of Endo International plc. Predecessor accounting policies that are not currently applicable to the Successor have been excluded from this report. Refer to the annual financial statements of Endo International plc within the Company’s Prospectus, in connection with the Company’s Registration Statement for additional discussion of the accounting policies specific to the Predecessor, including: (i) Goodwill; (ii) Share Repurchases; and (iii) Share-Based Compensation. References in this section to “Endo,” the “Company,” “we,” or “our” policy therefore represent the accounting policy in place for all periods presented. Bankruptcy Accounting. Refer to Note 2. Effectiveness of the Plan of Reorganization for a discussion of accounting considerations during the Debtor’s bankruptcy proceedings. Fresh Start Accounting. |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation . The Condensed Consolidated Financial Statements include the accounts of subsidiaries and affiliates over which control is maintained after the elimination of intercompany accounts and transactions. |
Use of Estimates | Use of Estimates . The preparation of our Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts and disclosures in our Condensed Consolidated Financial Statements, including the Notes thereto, and elsewhere in this report. For example, we are required, or were required in the predecessor period, to make significant estimates and assumptions related to revenue recognition, including sales deductions, long-lived assets, goodwill, intangible assets, income taxes, contingencies, financial instruments, share-based compensation, estimated allowed claim amounts, liabilities subject to compromise and reorganization items, net, among others. Some of these estimates can be subjective and complex. Uncertainties related to the magnitude and duration of potential public health crises, like the COVID-19 pandemic, and epidemics, the extent to which it may impact our estimated future financial results, worldwide macroeconomic conditions including interest rates, employment rates, consumer spending and health insurance coverage, among others, have increased the complexity of developing these estimates, including the allowance for expected credit losses and the carrying amounts of long-lived assets and intangible assets. Additionally, we may sell or otherwise dispose of or liquidate assets or settle liabilities for amounts other than those reflected in the accompanying Condensed 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 Condensed Consolidated Balance Sheets. 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 Condensed Consolidated Financial Statements on a prospective basis. |
Customer Product and Supplier Concentration | 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 managed care organizations (MCOs). Refer to the annual financial statements of Endo International plc within the Company’s Prospectus, in connection with the Company’s Registration Statement for additional information about the customers that have contributed 10% or more of total consolidated revenues for the years ended December 31, 2023, 2022 and 2021. There have not been significant changes in such customers or percentages for the periods covered by this report. |
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, distribution service agreements (DSAs) 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 June 30, 2024 and December 31, 2023, reserves for sales deductions totaled $377.5 million and $434.0 million, respectively. Reserves for sales deductions relate primarily to 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. These 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. 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, amortization of inventory step up, 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 prior acquisitions involved 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. Pre-existing contingent consideration liabilities of Endo International plc were recognized and measured at fair value on the Effective Date. Subsequent to the Effective 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 Condensed 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 . Highly liquid investments with original maturities of three months or less when purchased are considered to be cash equivalents. At June 30, 2024 and December 31 2023, 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 legally restricted as to withdrawal or use are excluded from Cash and cash equivalents and reported separately as Restricted cash and cash equivalents in the Condensed 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 82% and 81% of our gross trade accounts receivable balances represent amounts due from three customers (Cardinal Health, Inc., McKesson Corporation and Cencora, Inc.) at June 30, 2024 and December 31, 2023, 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 Condensed Consolidated Financial Statements at June 30, 2024 or December 31, 2023, 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, 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 Condensed 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. Refer to Note 3. Fresh Start Accounting for discussion of the fair value adjustments to inventory on the Effective Date. The amortization of the fair value adjustment will be recognized as Cost of revenues in future periods as the inventory is sold. |
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 Condensed 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. In connection with fresh start accounting, lease liabilities and right-of-use assets were recorded for lease assets that had an initial lease term greater than twelve months at commencement but had a remaining lease term of twelve months or less as of the Effective Date. 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 Condensed 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 Condensed 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 Condensed Consolidated Balance Sheets are recognized in the Condensed 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 the implementation of 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 marketed products and licenses. Intangible assets are generally initially recorded at fair value if acquired in a business combination, or at cost if acquired in an asset acquisition. 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 projections 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. 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 assets in certain situations, an accelerated amortization model if such model better reflects the consumption of benefits of the asset. 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 (loss) and net income (loss) per share to decrease (increase). 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. Marketed Products . Intellectual property that generates operating profit through sales of products to customers is presented herein as marketed product intangible assets. We determine amortization periods and methods of amortization for marketed product 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. Refer to Note 10. Goodwill and Other Intangibles, for additional information about the range of useful lives of certain marketed product assets. Licenses . Contracts with other parties that generate operating profit, other than through sales of products to customers, are presented herein as licensed intangible assets. We determine amortization periods for licenses based on our assessment of various factors including the strength of the intellectual property protection of the product (if applicable), contractual terms and various other competitive, developmental and regulatory issues. Refer to Note 10. Goodwill and Other Intangibles, for additional information about the range of useful lives of certain licensed assets. |
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 determined using an income approach based on a discounted future cash flow method, independent appraisals or binding 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 . Costs incurred to acquire in-process research and development charges in an asset acquisition are expensed in the period incurred, which may be at the time of acquisition or when applicable future milestone payments prior to regulatory approval are made. In-process research and development assets acquired in a business combination are generally recognized as indefinite-lived intangible assets at fair value. Indefinite-lived intangible assets are not subject to amortization. Instead, they are tested for impairment annually, as of October 1, or 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. |
Contingencies | Contingencies . The Company could be subject to various loss contingencies, including those arising from litigation claims, contractual disputes, government investigations or other matters arising in the ordinary course of business. Liabilities for loss contingencies are recorded in the Condensed Consolidated Statements of Operations 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 Condensed Consolidated Statements of Operations, as applicable. Due to the fact that loss contingencies are inherently unpredictable, our determination of the probability of loss and the estimated amount of any such loss involve significant judgment. The Company recognizes gain contingencies and records related receivables only when the realization of the potential claim for recovery is considered probable. |
Advertising Costs | Advertising Costs . Advertising costs are expensed as incurred and included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. Refer to the annual financial statements of Endo International plc within the Company’s Prospectus, in connection with the Company’s Registration Statement for additional information about advertising costs incurred for the years ended December 31, 2023, 2022 and 2021. There have not been significant changes in such spending trends for the periods covered by this report. |
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. |
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 foreign operations have functional currencies other than the U.S. dollar. Further, certain of the Company’s foreign 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 expense, net in the Condensed 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 Accumulated other comprehensive income (loss) 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 initially records 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. The Company routinely evaluates whether the recognized deferred tax assets will more likely than not be realized. A valuation allowance is established for deferred tax assets when it is more likely than not that they will not be realized. If the Company were to later determine that it would be able to realize a portion or all of its deferred tax assets in the future in excess of their net recorded amount, the Company would release a portion or all of the valuation allowance. 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 Condensed Consolidated Statements of Operations. |
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 . We are party to the U.S. Government Cooperative Agreement (as defined and discussed in more detail below). Under the terms of the U.S. Government Cooperative 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 Cooperative 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 Cooperative 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 (IAS) 20—Accounting for Government Grants and Disclosure of Government Assistance (IAS 20) 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. Under IAS 20, government grants related to assets are presented in the Condensed Consolidated Balance Sheets either by presenting the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset. Either of these two methods of presentation of grants related to assets in the Condensed Consolidated Balance Sheets are regarded as acceptable alternatives under IAS 20. Reimbursements received prior to the asset being placed into service are recognized as deferred income in the Condensed 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. When the constructed capital assets are placed into service we deduct the grant reimbursement from Property, plant and equipment and the grant income is recognized over the useful life of the asset as a reduction to depreciation expense. Refer to Note 15. Commitments and Contingencies for additional discussion of this agreement. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent Accounting Pronouncements Not Yet Adopted at June 30, 2024 In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 14, 2024, on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standards update on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures (ASU 2023-09) to enhance the transparency and decision usefulness of income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standards update on its consolidated financial statements and related disclosures. |
EFFECTIVENESS OF THE PLAN OF _2
EFFECTIVENESS OF THE PLAN OF REORGANIZATION (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Reorganizations [Abstract] | |
Schedule of Reorganization Item in Consolidated Condensed Statements of Operations | The following table sets forth information about the amounts presented as Reorganization items, net in the Predecessor Condensed Consolidated Statements of Operations (in thousands): Predecessor April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Professional fees $ 16,065 $ 84,267 $ 68,163 $ 169,619 Debt valuation adjustments (1) 41,394 — 192,342 — Reorganization Adjustments (5,996,096) — (5,996,096) — Fresh Start Adjustments (389,508) — (389,508) — Total $ (6,328,145) $ 84,267 $ (6,125,099) $ 169,619 __________ (1) For the period January 1, 2024 through April 23, 2024, adequate protection payments were $192.3 million and recognized as a reduction to the carrying amount of the respective Predecessor First Lien Debt Instruments. Concurrently, as a result of adjusting to the estimated allowed claim amount for the corresponding debt instruments, a charge was recognized within Reorganization items, net. For the six months ended June 30, 2023, adequate protection payments were $291.7 million and recognized as a reduction to the carrying amount of the respective Predecessor First Lien Debt Instruments. |
FRESH START ACCOUNTING (Tables)
FRESH START ACCOUNTING (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Reorganizations [Abstract] | |
Reorganization, Chapter 11 Schedules | The following table reconciles the enterprise value to the reorganization value as of the Effective Date (in thousands): April 23, 2024 Enterprise value $ 4,456,000 Plus: Other non-operating assets 20,450 Plus: Fair value of non-debt current liabilities excluding Escrowed Equity 504,344 Plus: Fair value of non-debt, non-current liabilities excluding long-term acquisition-related contingent consideration 173,363 Less: Debt issuance costs attributable to the New Term Facility and New Senior Secured Notes (48,469) Reorganization value of Endo, Inc.'s assets to be allocated $ 5,105,688 The following table reconciles the enterprise value to the implied value of Endo, Inc.’s common stock as of the Effective Date (in thousands): April 23, 2024 Enterprise value $ 4,456,000 Less: Exit Financing Debt (2,485,000) Less: Unsecured creditors committee Escrowed Equity (6,382) Less: Long-term acquisition-related contingent consideration (3,512) Plus: Other non-operating assets 20,450 Implied value of Endo, Inc.'s common stock $ 1,981,556 The following table reflects the reorganization and application of ASC 852 on our Condensed Consolidated Balance Sheet as of April 23, 2024 (in thousands): Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor ASSETS CURRENT ASSETS: Cash and cash equivalents $ 716,594 $ (495,987) (2) $ — $ 220,607 Restricted cash and cash equivalents 211,224 (34,827) (3) — 176,397 Accounts receivable, net 400,519 — — 400,519 Inventories, net 252,677 — 578,455 (18) 831,132 Prepaid expenses and other current assets 105,858 (20,730) (4) — 85,128 Income taxes receivable 7,305 (7,182) (5) — 123 Total current assets $ 1,694,177 $ (558,726) $ 578,455 $ 1,713,906 PROPERTY, PLANT AND EQUIPMENT, NET 472,290 — 82,533 (19) 554,823 OPERATING LEASE ASSETS 20,476 — 897 (20) 21,373 GOODWILL 1,352,011 — (1,352,011) (21) — OTHER INTANGIBLES, NET 1,399,755 — 897,668 (22) 2,297,423 DEFERRED INCOME TAXES — 171,075 (5) (124,113) (23) 46,962 OTHER ASSETS 56,567 6,264 (6) 408,370 (24) 471,201 TOTAL ASSETS $ 4,995,276 $ (381,387) $ 491,799 $ 5,105,688 LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses 506,979 (4,258) (7) 2,516 (25) 505,237 Current portion of legal settlement accrual — 1,234 (8) — 1,234 Current portion of operating lease liabilities 1,036 3,518 (9) (298) (20) 4,256 Current portion of long-term debt — 7,500 (10) — 7,500 Income taxes payable 3,393 (3,393) (5) — — Total current liabilities $ 511,408 $ 4,601 $ 2,218 $ 518,227 DEFERRED INCOME TAXES 25,558 (25,558) (5) 87,300 (23) 87,300 LONG-TERM DEBT, LESS CURRENT PORTION, NET — 2,429,031 (11) — 2,429,031 LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION — 5,624 (12) — 5,624 OPERATING LEASE LIABILITIES, LESS CURRENT PORTION 3,755 13,749 (9) (590) (20) 16,914 OTHER LIABILITIES 108,421 (38,915) (13) (2,470) (25) 67,036 LIABILITIES SUBJECT TO COMPROMISE 11,125,054 (11,125,054) (14) — — COMMITMENTS AND CONTINGENCIES (NOTE 15) SHAREHOLDERS’ (DEFICIT) EQUITY: Euro deferred shares (Predecessor) 43 (43) (15) — — Ordinary shares (Predecessor) 24 (24) (15) — — Common stock (Successor) — 76 (16) — 76 Additional paid-in capital (Predecessor) 8,980,561 (8,980,561) (15) — — Additional paid-in capital (Successor) — 1,981,480 (16) — 1,981,480 (Accumulated deficit) retained earnings (15,531,502) 15,354,207 (17) 177,295 (26) — Accumulated other comprehensive (loss) income (228,046) — 228,046 (26) — Total shareholders’ (deficit) equity $ (6,778,920) $ 8,355,135 $ 405,341 $ 1,981,556 TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY $ 4,995,276 $ (381,387) $ 491,799 $ 5,105,688 Reorganization Adjustments (1) Represents amounts recorded as of the Fresh Start Reporting Date for the implementation of the Plan, including among other items, settlement of the Predecessor’s liabilities subject to compromise, distributions of cash, execution of the Exit Financing Debt and the issuance of the Successor common stock. Proceeds from the issuance of Exit Financing Debt (see Note 14 below) $ 2,485,000 Proceeds from the equity First Lien Rights Offering (a) 340,219 Proceeds from the GUC Rights Offering (a) 160,102 Transfers from restricted cash 135 Distribution of Exit Financing Debt proceeds to holders of first lien claims (2,449,679) Payments to fund trusts for settlement of claims (441,377) Payment of cash in excess of Exit Cash to holders of first lien claims (141,930) Payment for settlement of U.S. Government Economic Settlement (200,075) Payment of professional fees, including success fees (53,389) Payment of plan administration fees and expenses related to the wind-down of Remaining Debtors (39,113) Payment of First Lien Backstop Premium (25,540) Payment for cure and other amounts related to the assumption of executory contracts (36,069) Payment of debt issuance costs associated with Exit Financing Debt (43,485) Payment of other costs (6,992) Payment to fund other trusts at the Effective Date for settlement of claims classified as restricted cash due to certain reversionary interest rights (1,400) Payment of adequate protection to holders of first lien claims (41,394) Transfer of cash to restricted cash to fund escrow to pay non-retained professionals (1,000) Net change in cash and cash equivalents $ (495,987) __________ (a) Excess proceeds of $0.3 million related to the Equity Rights Offering represents rounding of fractional shares issued. Payment to fund other trusts at the Effective Date for settlement of claims classified as restricted cash due to certain reversionary interest rights 1,400 Restricted cash of Qualified Settlement Funds, (QSFs) for mesh-related matters classified as liabilities subject to compromise to stay with Remaining Debtors (37,092) Transfer of cash to restricted cash to fund escrow to pay non-retained professionals 1,000 Transfer of restricted cash to cash for release of utility deposit (135) Net change in restricted cash and cash equivalents $ (34,827) Reclassification of prepaid debt issuance costs to capitalized debt issuance costs $ (20,977) Capitalization of debt issuance costs classified as short-term related to the New Revolving Credit Facility 1,566 Transfer of recovery insurance asset to fund GUC Trust (1,319) Net change in prepaid expenses and other current assets $ (20,730) Reinstatement of short-term finance lease liabilities 5,337 Payment of other Plan related amounts (13,710) Payment of professional fees, including hold-backs (19,664) Reinstatement of short-term contingent consideration liabilities related to executory contracts 4,125 Reinstatement of certain contracts 1,173 Accrual of derivative classified liability related to the Escrowed Equity as a result of the implementation of the Plan 6,382 Accrual for future payment of excess cash to holders of first lien claims 12,099 Net change in accounts payable and accrued expenses $ (4,258) Proceeds from issuance of the New Term Facility (net of stated 1% unamortized original issue discount) $ 1,477,500 Proceeds from issuance of the New Senior Secured Notes 1,000,000 Capitalized debt issuance costs for the New Term Facility and New Senior Secured Notes (48,469) Net change in long-term debt $ 2,429,031 Reinstatement of finance lease liabilities $ 2,202 Settlement of tax liabilities in connection with resolution of the U.S. Government Economic Settlement (46,707) Reinstatement of long-term contingent consideration liabilities related to executory contracts 5,590 Net change in other liabilities $ (38,915) Liabilities subject to compromise $ 11,125,054 Distribution of Exit Financing Debt proceeds to holders of first lien claims (2,449,679) Issuance of Endo, Inc. common stock to creditors (857,968) Excess implied value of Endo, Inc. common stock ascribed to creditors participating in the First Lien Rights Offering and GUC Rights Offering (a) (517,643) Issuance of Endo, Inc. common stock for the First Lien and GUC BCA (105,624) Payment of cash in excess of Exit Cash to holders of first lien claims (141,930) Accrual for future payment of excess cash to holders of first lien claims (12,100) Payment of adequate protection to holders of first lien claims (41,394) Payment for settlement of U.S. Government Economic Settlement (200,075) Payments and other considerations to fund trusts for settlement of claims (444,089) Reinstatement of liabilities subject to compromise to accrued liabilities (b) (35,693) Payment of restricted cash of QSFs for mesh-related matters classified as liabilities subject to compromise (37,092) Payment for cure and other amounts related to the assumption of executory contracts (23,591) Accrual of derivative classified liability related to the Escrowed Equity as a result of the implementation of the Plan (6,382) Accrual for funding of certain trusts for settlement of claims (5,458) Gain on settlement of liabilities subject to compromise (c) $ 6,246,336 __________ (a) Difference between implied value of Endo, Inc. common stock sold, amounting to $1,018.0 million, and proceeds received under the terms of the First Lien Rights Offering and GUC Rights Offering, amounting to $500.3 million. (b) Primarily includes lease liabilities, contingent obligations and certain tax liabilities. (c) See note (17). Issuance of Endo, Inc. common stock, at par, to holders of first lien claims, second lien claims and unsecured notes claims $ 33 Issuance of Endo, Inc. common stock, at par, in connection with the First Lien Rights Offering and GUC Rights Offering 39 Issuance of Endo, Inc. common stock, at par, for the First Lien and GUC Backstop Commitments 4 Net change in Endo, Inc. common stock $ 76 Issuance of Endo, Inc. common stock to holders of claims $ 857,935 Issuance of Endo, Inc. common stock in connection with the First Lien Rights Offering and GUC Rights Offering 1,017,925 Issuance of Endo, Inc. common stock for the First Lien and GUC Backstop Commitments 105,620 Net change in Endo, Inc. additional paid-in capital $ 1,981,480 Cancellation of Endo International plc ordinary shares and additional paid-in capital (direct charge to equity) $ 8,980,628 Net deferred tax impacts and the elimination of a tax receivable on the effectiveness of the Plan $ 192,844 Reorganization items, net: Gain on settlement of liabilities subject to compromise (a) $ 6,246,336 Gain on settlement of U.S. tax liabilities as part of the resolution of U.S. Government Claims 46,707 Payment of success fees (46,113) Payment of First Lien Backstop Premium (25,540) Payment of other costs (2,775) Payment for plan administration fees and expense related to the wind-down of remaining debtor entities (net of sales & use and franchise tax liabilities) (37,880) Total reorganization items, net $ 6,180,735 Net change in accumulated deficit $ 15,354,207 __________ (a) $184.6 million represents the reorganization items expense classified as discontinued operations related to the Company’s Astora business. Refer to Note 5. Discontinued Operations for additional information. Successor Fair Value Predecessor Historical Value Raw materials $ 100,082 $ 100,082 Work in process 143,906 40,185 Finished goods 587,144 112,410 Total current inventory $ 831,132 $ 252,677 Successor Fair Value Predecessor Historical Value Land and buildings $ 141,460 $ 245,428 Machinery and equipment 159,190 253,298 Leasehold improvements 18,524 41,286 Computer equipment and software 21,915 99,266 Furniture and fixtures 2,160 7,928 Assets under construction 211,574 204,622 Total property, plant and equipment, at cost $ 554,823 $ 851,828 Less accumulated depreciation — (379,538) Total property, plant and equipment, net $ 554,823 $ 472,290 Successor Fair Value Predecessor Historical Value In-process research and development $ 298,334 $ — Marketed products (a) 1,929,332 6,355,961 Licenses 69,757 — Total other intangibles, at cost $ 2,297,423 $ 6,355,961 Less accumulated amortization — (4,956,206) Total other intangibles, net $ 2,297,423 $ 1,399,755 _________ (a) In the Predecessor period, Endo International plc identified the components of identified intangible assets as either developed technology or license rights. For comparability, the Company has recharacterized the prior period balances as marketed products. There were no capitalized intangibles in the Predecessor period classified as Licenses consistent with the policy applied by Endo, Inc. and discussed in more detail in Note 4. Summary of Significant Accounting Policies. Successor Fair Value Predecessor Historical Value Raw materials $ 1,008 $ 1,008 Work in process 439,571 32,902 Finished goods — — Total noncurrent inventory $ 440,579 $ 33,910 Inventory $ 985,124 Other intangibles 897,668 Property, plant and equipment 82,533 Goodwill (1,352,011) Other assets fair value adjustments 2,598 Other liabilities fair value adjustments 842 Fresh start valuation gain $ 616,754 Deferred income taxes (211,413) Elimination of Predecessor accumulated other comprehensive (loss) (a) (228,046) Net change in accumulated deficit $ 177,295 _________ (a) $0.9 million represents the reorganization items expense as a result of the elimination of Predecessor other comprehensive loss classified as discontinued operations related to the Company’s Astora business. Refer to Note 5. Discontinued Operations for additional information. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, including Discontinued Operations, Operations Results of Astora | The following tables provide the operating results of Astora Discontinued operations, net of tax (in thousands): Predecessor Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Litigation-related and other contingencies, net $ — $ 500 Income (loss) from discontinued operations before income taxes $ 183,152 $ (660) Income tax benefit $ (82) $ (87) Discontinued operations, net of tax $ 183,234 $ (573) Predecessor Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Litigation-related and other contingencies, net $ — $ 500 Income (loss) from discontinued operations before income taxes $ 182,696 $ (1,186) Income tax benefit $ (142) $ (157) Discontinued operations, net of tax $ 182,838 $ (1,029) |
SEGMENT RESULTS (Tables)
SEGMENT RESULTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments Information | The following represents selected information for the Company’s reportable segments (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Net revenues from external customers: Branded Pharmaceuticals $ 146,151 $ 78,918 $ 212,377 Sterile Injectables 56,474 34,297 137,028 Generic Pharmaceuticals 69,722 40,360 178,579 International Pharmaceuticals (1) 11,816 8,892 18,868 Total net revenues from external customers $ 284,163 $ 162,467 $ 546,852 Segment adjusted income from operations before income tax: Branded Pharmaceuticals $ 81,359 $ 57,499 $ 115,340 Sterile Injectables 10,028 14,907 69,546 Generic Pharmaceuticals 15,361 16,922 80,404 International Pharmaceuticals 940 4,249 4,861 Total segment adjusted income from operations before income tax $ 107,688 $ 93,577 $ 270,151 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Net revenues from external customers: Branded Pharmaceuticals $ 146,151 $ 279,714 $ 409,950 Sterile Injectables 56,474 132,531 238,283 Generic Pharmaceuticals 69,722 143,677 376,759 International Pharmaceuticals (1) 11,816 26,052 37,127 Total net revenues from external customers $ 284,163 $ 581,974 $ 1,062,119 Segment adjusted income from operations before income tax: Branded Pharmaceuticals $ 81,359 $ 161,592 $ 211,605 Sterile Injectables 10,028 51,977 110,636 Generic Pharmaceuticals 15,361 42,378 172,091 International Pharmaceuticals 940 7,735 10,208 Total segment adjusted income from operations before income tax $ 107,688 $ 263,682 $ 504,540 __________ (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) income 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 (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Total consolidated (loss) income from continuing operations before income tax $ (212,757) $ 6,394,943 $ 34,290 Interest expense, net 44,669 (2) 120 Corporate unallocated costs (1) 29,513 10,686 37,696 Asset impairment charges — 1,799 — Acquisitions and divestitures (2) 240,938 14,264 64,915 Restructuring or similar transactions (3) 1,900 (1) 14,281 Reorganization items, net — (6,328,145) 84,267 Other, net (4) 3,425 33 34,582 Total segment adjusted income from operations before income tax $ 107,688 $ 93,577 $ 270,151 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Total consolidated (loss) income from continuing operations before income tax $ (212,757) $ 6,248,991 $ 37,240 Interest expense, net 44,669 (2) 229 Corporate unallocated costs (1) 29,513 48,238 77,353 Asset impairment charges — 2,103 146 Acquisition and divestitures (2) 240,938 77,543 130,693 Restructuring or similar transactions (3) 1,900 4,960 25,954 Reorganization items, net — (6,125,099) 169,619 Other, net (4) 3,425 6,948 63,306 Total segment adjusted income from operations before income tax $ 107,688 $ 263,682 $ 504,540 __________ (1) For all periods presented, amounts include certain corporate overhead costs, such as headcount, facility and corporate litigation expenses and certain other income and expenses. (2) Amounts for the Successor three and six months ended June 30, 2024, primarily relate to approximately $192.0 million of inventory step up amortization and approximately $50.0 million of intangible assets amortization. Refer to Note 3. Fresh Start Accounting for additional information about the fair value adjustments to the Company’s inventory and intangible assets. Amounts for the Predecessor period from April 1, 2024 through April 23, 2024 and January 1, 2024 through April 23, 2024 as well as the three and six months ended June 30, 2023 primarily relate to amortization of intangible assets. (3) Amounts for the Successor three and six months ended June 30, 2024, primarily relate to net employee separation charges. Amounts for the Predecessor period from January 1, 2024 through April 23, 2024 primarily relate to net employee separation charges. The amount for the Predecessor three months ended June 30, 2023 included net employee separation, continuity and other benefit-related charges of $15.1 million, partially offset by a net reversal of certain inventory charges related to restructuring of $0.9 million. Amounts for the six months ended June 30, 2023 include net employee separation, continuity and other benefit-related charges of $25.9 million and other net charges of $0.6 million, partially offset by a net reversal of certain inventory charges related to restructurings of $0.6 million. (4) Amounts for the Predecessor period from January 1, 2024 through April 23, 2024 primarily relate to a charge of approximately $6 million associated with the rejection of an executory contract, which was approved by the Bankruptcy Court in February 2024. Amounts for the Predecessor three and six months ended June 30, 2023 primarily relates to adjustments to accruals for litigation-related settlement charges, which are described in more detail in Note 15. Commitments and Contingencies, and amounts related to opioid-related legal expenses. The Predecessor six months ended June 30, 2023 also includes a charge of approximately $9.2 million associated with the rejection of certain equity award agreements, which was approved by the Bankruptcy Court in March 2023. Other amounts in this row relate to gains and losses on sales of assets and certain other items. |
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. Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Branded Pharmaceuticals: Specialty Products: XIAFLEX ® $ 87,054 $ 39,588 $ 117,291 SUPPRELIN ® LA 14,518 6,078 28,223 Other Specialty (1) 9,339 5,902 19,839 Total Specialty Products $ 110,911 $ 51,568 $ 165,353 Established Products: PERCOCET ® $ 13,910 $ 9,348 $ 26,445 TESTOPEL ® 8,382 2,734 11,600 Other Established (2) 12,948 15,268 8,979 Total Established Products $ 35,240 $ 27,350 $ 47,024 Total Branded Pharmaceuticals (3) $ 146,151 $ 78,918 $ 212,377 Sterile Injectables: ADRENALIN ® $ 14,642 $ 11,233 $ 27,133 VASOSTRICT ® 7,926 7,356 24,419 Other Sterile Injectables (4) 33,906 15,708 85,476 Total Sterile Injectables (3) $ 56,474 $ 34,297 $ 137,028 Total Generic Pharmaceuticals (5) $ 69,722 $ 40,360 $ 178,579 Total International Pharmaceuticals (6) $ 11,816 $ 8,892 $ 18,868 Total revenues, net $ 284,163 $ 162,467 $ 546,852 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Branded Pharmaceuticals: Specialty Products: XIAFLEX ® $ 87,054 $ 152,638 $ 214,201 SUPPRELIN ® LA 14,518 26,213 51,800 Other Specialty (1) 9,339 21,120 41,533 Total Specialty Products $ 110,911 $ 199,971 $ 307,534 Established Products: PERCOCET ® $ 13,910 $ 33,892 $ 52,501 TESTOPEL ® 8,382 13,225 22,589 Other Established (2) 12,948 32,626 27,326 Total Established Products $ 35,240 $ 79,743 $ 102,416 Total Branded Pharmaceuticals (3) $ 146,151 $ 279,714 $ 409,950 Sterile Injectables: ADRENALIN ® $ 14,642 $ 38,601 $ 52,708 VASOSTRICT ® 7,926 34,309 50,370 Other Sterile Injectables (4) 33,906 59,621 135,205 Total Sterile Injectables (3) $ 56,474 $ 132,531 $ 238,283 Total Generic Pharmaceuticals (5) $ 69,722 $ 143,677 $ 376,759 Total International Pharmaceuticals (6) $ 11,816 $ 26,052 $ 37,127 Total revenues, net $ 284,163 $ 581,974 $ 1,062,119 __________ (1) Products included within Other Specialty include AVEED ® and NASCOBAL ® Nasal Spray. (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 either the Successor three or six months ended June 30, 2024, the Predecessor periods from April 1, 2024 through April 23, 2024 or January 1, 2024 through April 23, 2024 and/or any product having revenues in excess of $25 million during any period presented for 2024 or 2023. (4) Products included within Other Sterile Injectables include, but are not limited to, APLISOL ® . During the second quarter of 2023, Endo International plc and/or certain of its subsidiaries executed a Settlement Agreement and Release of Claims with Novavax, Inc. (the Novavax Settlement Agreement) to resolve a dispute under a previous manufacturing services agreement. For the Predecessor three months and six months ended June 30, 2023, the cash and non-cash consideration received in connection with the Novavax Settlement Agreement made up 6% of consolidated total revenue. No individual product within Other Sterile Injectables has exceeded 5% of consolidated total revenues for the periods presented. (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. Lidocaine patch 5%, the generic version of LIDODERM ® made up 9%, for the Successor three and six months ended June 2024, of consolidated revenues. Varenicline tablets (Endo’s generic version of Pfizer Inc.’s Chantix ® ), which launched in September 2021, made up 10% and 13%, for the three and six months ended June 30, 2023, respectively, of consolidated total revenues. During the six months ended June 30, 2023, Dexlansoprazole delayed release capsules (Endo’s generic version of Takeda Pharmaceuticals USA, Inc.’s Dexilant ® ), which launched in November 2022, made up 5% of consolidated total revenues. (6) No individual product within the International Pharmaceuticals segment accounted for more than 5% of consolidated total revenues for any of the periods presented. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023 (in thousands): Successor Predecessor Balance Sheet Line Items June 30, 2024 December 31, 2023 Restricted cash and cash equivalents—current (1) Restricted cash and cash equivalents $ 166,851 $ 167,702 Restricted cash and cash equivalents—noncurrent (2) Other assets — 85,000 Total restricted cash and cash equivalents $ 166,851 $ 252,702 __________ (1) Amounts at June 30, 2024 include restricted cash and cash equivalents of approximately $85.9 million related to certain self-insurance related matters and approximately $81.0 million for funds placed into escrow for retained and non-retained professional accruals assumed by the Successor. Amounts at December 31, 2023 primarily relate to: (i) restricted cash and cash equivalents associated with litigation-related matters, including $49.8 million held in Qualified Settlement Funds (QSFs) for mesh and/or opioid-related matters, and (ii) approximately $85.9 million of restricted cash and cash equivalents related to certain self-insurance related matters. These balances are classified as current assets in the Condensed Consolidated Balance Sheets as the potential for, and timing of, future claims and/or payment is unknown and could result in distributions within the next twelve months. (2) The amount at December 31, 2023 relates to the Predecessor TLC Agreement. This balance, which was anticipated to be used to fund certain future contractual obligations or returned upon satisfaction of certain conditions, was classified as a noncurrent asset at December 31, 2023 and subsequently released to the Predecessor as part of the TLC Settlement discussed in more detail in see Note 11. License, Collaboration and Asset Acquisition Agreements. |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The financial assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Successor Fair Value Measurements at June 30, 2024 using: Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Liabilities: Acquisition-related contingent consideration—current $ — $ — $ 2,753 $ 2,753 Acquisition-related contingent consideration—noncurrent $ — $ — $ 5,838 $ 5,838 Predecessor Fair Value Measurements at December 31, 2023 using: Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Money market funds (1) $ 7,123 $ — $ — $ 7,123 Liabilities: Acquisition-related contingent consideration (2) $ — $ — $ 12,447 $ 12,447 __________ (1) At December 31, 2023, money market funds include $7.1 million in QSFs. Amounts in QSFs were considered restricted cash equivalents. (2) At December 31, 2023, the Company’s liabilities for acquisition-related contingent consideration, which are governed by executory contracts and recorded at the expected amount of the total allowed claim, were classified within Liabilities subject to compromise in the Condensed Consolidated Balance Sheets. The relevant executory contracts were assumed and assigned to Endo, Inc. and recognized at fair value on the Effective Date and as of June 30, 2024 and classified as current or non-current as of June 30, 2024 based on the anticipated timing of payment of such obligations. |
Schedule of Changes to Liability for Acquisition-Related Contingent Consideration | The following tables present changes to the liability for acquisition-related contingent consideration, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands): Successor Predecessor Three Months Ended June 30, 2024 (1) Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Beginning of period $ — $ 12,050 $ 15,697 Acquisition of contingent consideration from Predecessor 10,195 — — Amounts settled (1,577) (1,499) (1,890) Changes in fair value recorded in earnings (58) (338) 365 Effect of currency translation 31 (18) 481 End of period $ 8,591 $ 10,195 $ 14,653 Successor Predecessor Six Months Ended June 30, 2024 (1) Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Beginning of period $ — $ 12,447 $ 16,571 Acquisition of contingent consideration from Predecessor 10,195 — — Amounts settled (1,577) (2,475) (2,769) Changes in fair value recorded in earnings (58) 284 762 Effect of currency translation 31 (61) 89 End of period $ 8,591 $ 10,195 $ 14,653 __________ (1) Prior to the Effective Date, the Successor entity had no liabilities for acquisition-related contingent consideration. The Successor entity assumed the liabilities for acquisition-related contingent consideration in connection with the Plan. The following tables present changes to the liability for acquisition-related contingent consideration by acquisition (in thousands): Successor Balance as of December 31, 2023 (2) Acquisition of Contingent Consideration from Predecessor Changes in Fair Value Recorded in Earnings Amounts Settled and Other Balance as of June 30, 2024 Auxilium acquisition $ — $ 8,262 $ (215) $ (1,055) $ 6,992 Other — 1,933 157 (491) 1,599 Total $ — $ 10,195 $ (58) $ (1,546) $ 8,591 Predecessor Balance as of December 31, 2023 (1) Acquisition of Contingent Consideration from Predecessor Changes in Fair Value Recorded in Earnings Amounts Settled and Other Balance as of April 23, 2024 Auxilium acquisition $ 9,494 $ — $ (85) $ (1,147) $ 8,262 Other 2,953 — 369 (1,389) 1,933 Total $ 12,447 $ — $ 284 $ (2,536) $ 10,195 __________ (1) At December 31, 2023, the Company’s liabilities for acquisition-related contingent consideration, which are governed by executory contracts and recorded at the expected amount of the total allowed claim, were classified within Liabilities subject to compromise in the Condensed Consolidated Balance Sheets. (2) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories, net of applicable reserves, consisted of the following (in thousands): Successor Predecessor June 30, 2024 December 31, 2023 Raw materials $ 120,277 $ 103,336 Work-in-process 142,249 29,827 Finished goods 396,501 112,854 Total $ 659,027 $ 246,017 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Assets and Liabilities, Lessee | The following table presents information about the Company’s right-of-use assets and lease liabilities (in thousands): Successor Predecessor Balance Sheet Line Items June 30, 2024 December 31, 2023 Right-of-use assets: Operating lease right-of-use assets Operating lease assets $ 20,544 $ 23,033 Finance lease right-of-use assets Property, plant and equipment, net 7,413 18,668 Total right-of-use assets $ 27,957 $ 41,701 Operating lease liabilities, excluding amounts classified as Liabilities subject to compromise: Current operating lease liabilities Current portion of operating lease liabilities $ 8,244 $ 956 Noncurrent operating lease liabilities Operating lease liabilities, less current portion 13,025 4,132 Total operating lease liabilities $ 21,269 $ 5,088 Finance lease liabilities, excluding amounts classified as Liabilities subject to compromise: Current finance lease liabilities Accounts payable and accrued expenses $ 4,823 $ — Noncurrent finance lease liabilities Other liabilities $ 2,461 $ 1,386 Total finance lease liabilities $ 7,284 $ 1,386 Operating and finance leases, amounts classified as Liabilities subject to compromise: Operating lease liabilities Liabilities subject to compromise $ — $ 20,635 Finance lease liabilities Liabilities subject to compromise — 9,981 Total operating and finance leases classified as Liabilities subject to compromise $ — $ 30,616 |
Schedule of Lease, Cost | The following tables present information about lease costs and expenses and sublease income (in thousands): Successor Predecessor Statement of Operations Line Items Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Operating lease cost Various (1) $ 356 $ (436) $ 1,837 Finance lease cost: Amortization of right-of-use assets Various (1) $ 1,346 $ 495 $ 2,017 Interest on lease liabilities Interest expense, net $ 87 $ 30 $ 206 Other lease costs and income: Variable lease costs (2) Various (1) $ 2,371 $ 606 $ 2,195 Sublease income Various (1) $ (459) $ (229) $ (1,544) Successor Predecessor Statement of Operations Line Items Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Operating lease cost Various (1) $ 356 $ 550 $ 4,030 Finance lease cost: Amortization of right-of-use assets Various (1) $ 1,346 $ 2,519 $ 4,044 Interest on lease liabilities Interest expense, net $ 87 $ 169 $ 435 Other lease costs and income: Variable lease costs (2) Various (1) $ 2,371 $ 3,588 $ 5,201 Sublease income Various (1) $ (459) $ (1,129) $ (3,088) __________ (1) Amounts are included in the Condensed Consolidated Statements of Operations based on the function that the underlying leased asset supports. The following tables present the components of such aggregate amounts (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Cost of revenues 1,055 468 1,437 Selling, general and administrative 2,559 (32) 3,020 Research and development — — 48 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Cost of revenues 1,055 2,130 3,053 Selling, general and administrative 2,559 3,398 7,032 Research and development — — 102 (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 certain additional information related to our leases (in thousands): Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash payments for operating leases $ 1,105 $ 1,863 $ 5,921 Operating cash payments for finance leases $ 132 $ 366 $ 693 Financing cash payments for finance leases $ 1,190 $ 2,381 $ 3,299 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill | The following table presents changes in the carrying amounts of Predecessor goodwill (in thousands): Branded Pharmaceuticals Sterile Injectables Generic Pharmaceuticals International Pharmaceuticals Total Goodwill as of December 31, 2023 (Predecessor) $ 828,818 $ 523,193 $ — $ — $ 1,352,011 Impact of fresh start accounting (828,818) (523,193) — — (1,352,011) Goodwill as of April 23, 2024 (Predecessor) $ — $ — $ — $ — $ — The carrying amounts of goodwill are net of the following accumulated impairments, if applicable (in thousands): Branded Pharmaceuticals Sterile Injectables Generic Pharmaceuticals International Pharmaceuticals Total Accumulated impairment losses as of December 31, 2023 (Predecessor) $ 855,810 $ 2,208,000 $ 3,142,657 $ 525,244 $ 6,731,711 Impact of fresh start accounting (855,810) (2,208,000) (3,142,657) (525,244) (6,731,711) Accumulated impairment losses as of April 23, 2024 (Predecessor) $ — $ — $ — $ — $ — |
Schedule of Other Intangible Assets | Changes in the amounts of other intangible assets are set forth in the tables below (in thousands): Successor Cost basis: Balance as of December 31, 2023 Acquired by Successor Other Post Effective Date Acquisitions Effect of Currency Translation Balance as of June 30, 2024 Indefinite-lived intangibles: In-process research and development $ — $ 298,334 $ — $ — $ 298,334 Total indefinite-lived intangibles $ — $ 298,334 $ — $ — $ 298,334 Finite-lived intangibles: Marketed products (weighted average life of 8 years) $ — $ 1,929,332 $ 3,293 $ (56) $ 1,932,569 Licenses (weighted average life of 5 years) — 69,757 — — 69,757 Total finite-lived intangibles (weighted average life of 8 years) $ — $ 1,999,089 $ 3,293 $ (56) $ 2,002,326 Total other intangibles $ — $ 2,297,423 $ 3,293 $ (56) $ 2,300,660 Accumulated amortization: Balance as of December 31, 2023 Amortization Other Effect of Currency Translation Balance as of June 30, 2024 Finite-lived intangibles: Marketed products $ — $ (46,419) $ — $ 170 $ (46,249) Licenses — (2,710) — — (2,710) Total other intangibles $ — $ (49,129) $ — $ 170 $ (48,959) Net other intangibles $ — $ 2,251,701 Predecessor Cost basis: Balance as of December 31, 2023 Acquisitions Other (1) Effect of Currency Translation Balance as of April 23, 2024 Indefinite-lived intangibles: In-process research and development $ — $ — $ 298,334 $ — $ 298,334 Total indefinite-lived intangibles $ — $ — $ 298,334 $ — $ 298,334 Finite-lived intangibles: Licenses (weighted average life of 5 years) (Predecessor) $ 432,107 $ — $ (432,107) $ — $ — Tradenames (Predecessor) 6,409 — (6,409) — — Developed technology (weighted average life of 8 years) (Predecessor) 5,925,662 — (5,917,445) (8,217) — Marketed products (weighted average life of 8 years (Successor) — — 1,929,332 — 1,929,332 Licenses (weighted average life of 5 years (Successor) — — 69,757 — 69,757 Total finite-lived intangibles (weighted average life of 8 years) $ 6,364,178 $ — $ (4,356,872) $ (8,217) $ 1,999,089 Total other intangibles $ 6,364,178 $ — $ (4,058,538) $ (8,217) $ 2,297,423 Accumulated amortization: Balance as of December 31, 2023 Amortization Other (1) Effect of Currency Translation Balance as of April 23, 2024 Finite-lived intangibles: Licenses (Predecessor) $ (419,084) $ (1,277) $ 420,361 $ — $ — Tradenames (Predecessor) (6,409) — 6,409 — — Developed technology (Predecessor) (4,460,802) (75,712) 4,529,436 7,078 — Marketed products (Successor) — — — — — Licenses (Successor) — — — — — Total other intangibles $ (4,886,295) $ (76,989) $ 4,956,206 $ 7,078 $ — Net other intangibles $ 1,477,883 $ 2,297,423 __________ (1) The net impact of the fresh start adjustments recorded as part of fresh start accounting. Refer to Note 3. Fresh Start Accounting for additional information. |
Schedule of Preliminary Fair Value of Identified Intangible Assets | The following table summarizes the components of the estimated fair value of identified intangible assets (dollars in thousands): Carrying Amount Amortization Method Useful Life Range Discount Rate Range Intangible assets subject to amortization Marketed products $ 1,929,332 Straight-line 3 years to 11 years 12.3% to 26.7% Licenses 69,757 Straight-line 5 years 26.7% Intangible assets not subject to amortization In-process research and development 298,334 n/a n/a 24.8% to 27.7% Total identified intangible assets $ 2,297,423 |
Schedule of Future Amortization Expense | For intangible assets subject to amortization, estimated amortization expense for the five fiscal years subsequent to June 30, 2024 (Successor) is as follows (in thousands): 2024 $ 130,654 2025 $ 259,177 2026 $ 257,824 2027 $ 242,935 2028 $ 242,935 |
CONTRACT ASSETS AND LIABILITI_2
CONTRACT ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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): Successor Predecessor June 30, 2024 December 31, 2023 $ Change % Change Contract assets (1) $ 8,854 $ 11,387 $ (2,533) (22) % Contract liabilities (2) $ 3,251 $ 3,534 $ (283) (8) % __________ (1) At June 30, 2024 and December 31, 2023, approximately $2.0 million and $2.1 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 Condensed Consolidated Balance Sheets. The remaining amounts are classified as noncurrent and are included in Other assets. (2) At both June 30, 2024 and December 31, 2023, approximately $0.6 million of these contract liability amounts are classified as current and are included in Accounts payable and accrued expenses in the Company’s Condensed Consolidated Balance Sheets. The remaining amounts are classified as noncurrent and are included in Other liabilities. During Successor six months ended June 30, 2024 and Predecessor period January 1, 2024 through April 23, 2024, approximately $0.1 million and $0.2 million, respectively, of revenue was recognized that was included in the contract liability balance at December 31, 2023. |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses included the following at June 30, 2024 and December 31, 2023 (in thousands): Successor Predecessor June 30, 2024 December 31, 2023 Trade accounts payable $ 77,655 $ 94,735 Returns and allowances 111,662 119,577 Rebates 86,127 105,428 Other sales deductions 4,192 3,212 Accrued interest 42,914 — Accrued payroll and related benefits 57,495 81,145 Accrued royalties and other distribution partner payables 18,931 35,856 Acquisition-related contingent consideration—current 2,753 — Other (1) 113,269 97,783 Total $ 514,998 $ 537,736 __________ (1) Amounts include a wide variety of accrued expenses, the most significant of which relate to accrued legal and other professional fees incurred prior to the Effective Date. Approximately $80.5 million was placed into escrow prior to or on the Effective Date for the settlement of certain of these liabilities, and reflected in Restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets. At June 30, 2024, approximately $76.2 million remains in escrow. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | The following table presents information about the Company’s total indebtedness at June 30, 2024 and December 31, 2023 (dollars in thousands): Successor Predecessor June 30, 2024 December 31, 2023 Effective Interest Rate Principal Amount (2) Carrying Amount (4) Effective Interest Rate (1) Principal Amount (2) Carrying Amount (3) 5.375% Senior Notes due 2023 $ — $ — 5.38 % $ 6,127 $ 6,127 6.00% Senior Notes due 2023 — — 6.00 % 56,436 56,436 5.875% Senior Secured Notes due 2024 — — 6.88 % 300,000 300,000 6.00% Senior Notes due 2025 — — 6.00 % 21,578 21,578 7.50% Senior Secured Notes due 2027 — — 8.50 % 2,015,479 2,015,479 9.50% Senior Secured Second Lien Notes due 2027 — — 9.50 % 940,590 940,590 6.00% Senior Notes due 2028 — — 6.00 % 1,260,416 1,260,416 6.125% Senior Secured Notes due 2029 — — 7.13 % 1,295,000 1,295,000 8.50% Senior Notes Due 2031 8.87 % 1,000,000 981,263 — — Term Loan Facility (Successor) 10.43 % 1,500,000 1,456,490 — — Term Loan Facility (Predecessor) — — 14.50 % 1,975,000 1,975,000 Revolving Credit Facility (Predecessor) — — 12.00 % 277,200 277,200 Total $ 2,500,000 $ 2,437,753 $ 8,147,826 $ 8,147,826 Less: current portion, net 11,250 11,250 — — Total long-term debt, less current portion, net $ 2,488,750 $ 2,426,503 $ 8,147,826 $ 8,147,826 __________ (1) Beginning on the Petition Date, the Predecessor ceased recognition of interest expense related to all debt instruments and began to incur “adequate protection payments” related to First Lien Debt Instruments (representing all debt instruments except for the senior unsecured notes and the 9.50% Senior Secured Second Lien Notes due 2027). The December 31, 2023 “effective interest rates” included in the table above represent the rates in effect on such dates used to calculate: (i) future adequate protection payments related Predecessor First Lien Debt Instruments and (ii) future contractual interest related to the Predecessor’s 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. (2) The June 30, 2024 and December 31, 2023 principal amounts represent the amount of unpaid contractual principal owed on the respective instruments. (3) As of December 31, 2023, the entire carrying amount of the Predecessor debt, as well as any related remaining accrued and unpaid interest that existed as of the Petition Date, was included in the Liabilities subject to compromise line in the Predecessor Condensed Consolidated Balance Sheets. (4) As of June 30, 2024, the carrying amount of the respective debt instruments represents the unpaid contractual principal amounts owed less applicable deferred financing fees and original issue discounts. |
Schedule of Maturities of Exit Financing Debt | For each of the five fiscal years subsequent to June 30, 2024, the maturities on our Exit Financing Debt are as follows (in thousands): Maturities (1) 2024 $ 3,750 2025 $ 15,000 2026 $ 15,000 2027 $ 15,000 2028 $ 15,000 __________ (1) The amounts in this maturities table do not reflect any potential early repayments or refinancings. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 period from December 31, 2023 through the Effective Date (in thousands): Predecessor Mesh Qualified Settlement Funds Mesh Liability Accrual (1) Balance as of December 31, 2023 $ 49,464 $ 222,592 Cash received for reversionary interests (11,048) — Cash distributions to settle disputes from Qualified Settlement Funds (1,523) (1,523) Other 199 199 Impacts of the Plan (2) (37,092) (221,268) Balance as of April 23, 2024 $ — $ — __________ (1) As of December 31, 2023, the entire accrual is classified as Liabilities subject to compromise in the Condensed Consolidated Balance Sheets. (2) Pursuant to the Plan, on the Effective Date thereof, all mesh claims against the Debtors were discharged and channeled to the applicable trusts. Additionally, the QSFs were not transferred to Endo, Inc. Refer to Note 3. Fresh Start Accounting for additional information about the impacts of the Plan. |
OTHER EXPENSE (INCOME), NET (Ta
OTHER EXPENSE (INCOME), NET (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | The components of Other expense, net are as follows (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Net loss (gain) on sale of business and other assets (1) $ 52 $ 63 $ (95) Foreign currency loss (gain), net (2) 266 (540) 1,891 Net (gain) loss from our investments in the equity of other companies (3) (64) — (34) Other miscellaneous, net (4) (8) (16) (1,583) Other expense (income), net $ 246 $ (493) $ 179 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Net loss (gain) on sale of business and other assets (1) $ 52 $ (115) $ (622) Foreign currency loss (gain), net (2) 266 (376) 2,008 Net (gain) loss from our investments in the equity of other companies (3) (64) 5 88 Other miscellaneous, net (4) (8) 5,748 (1,420) Other expense, net $ 246 $ 5,262 $ 54 __________ (1) Amounts primarily relate to the sales of certain intellectual property rights and certain other assets. (2) Amounts relate to the remeasurement of 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) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income (Loss) Tax Benefit | The following table displays our (Loss) income from continuing operations before income tax, Income tax expense and Effective tax rate (dollars in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 (Loss) income from continuing operations before income tax $ (212,757) $ 6,394,943 $ 34,290 Income tax (benefit) loss $ (63,981) $ 50,629 $ 10,279 Effective tax rate 30.1 % 0.8 % 30.0 % Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 (Loss) income from continuing operations before income tax $ (212,757) $ 6,248,991 $ 37,240 Income tax (benefit) loss $ (63,981) $ 58,511 $ 16,052 Effective tax rate 30.1 % 0.9 % 43.1 % |
NET (LOSS) INCOME PER SHARE (Ta
NET (LOSS) INCOME PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 (in thousands): Successor Predecessor Three Months Ended June 30, 2024 Period From April 1, 2024 through April 23, 2024 Three Months Ended June 30, 2023 Numerator: (Loss) income from continuing operations $ (148,776) $ 6,344,314 $ 24,011 (Loss) income from discontinued operations, net of tax — 183,234 (573) Net (loss) income $ (148,776) $ 6,527,548 $ 23,438 Denominator: For basic per share data—weighted average shares 76,156 235,220 235,220 Dilutive effect of common stock/ordinary share equivalents — — — For diluted per share data—weighted average shares 76,156 235,220 235,220 Successor Predecessor Six Months Ended June 30, 2024 Period From January 1, 2024 through April 23, 2024 Six Months Ended June 30, 2023 Numerator: (Loss) income from continuing operations $ (148,776) $ 6,190,480 $ 21,188 (Loss) income from discontinued operations, net of tax — 182,838 (1,029) Net (loss) income $ (148,776) $ 6,373,318 $ 20,159 Denominator: For basic per share data—weighted average shares 76,156 235,220 235,218 Dilutive effect of common stock/ordinary share equivalents — — 444 For diluted per share data—weighted average shares 76,156 235,220 235,662 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) $ in Millions | Mar. 18, 2024 USD ($) |
Predecessor | |
Reorganization | |
Assets and liabilities | $ 8 |
EFFECTIVENESS OF THE PLAN OF _3
EFFECTIVENESS OF THE PLAN OF REORGANIZATION - Narrative (Details) | 1 Months Ended | 2 Months Ended | 4 Months Ended | 6 Months Ended | 8 Months Ended | ||||
Apr. 23, 2024 USD ($) board_member $ / shares shares | Mar. 19, 2024 USD ($) | Mar. 31, 2023 USD ($) | Jun. 30, 2024 USD ($) $ / shares shares | Apr. 23, 2024 USD ($) board_member $ / shares shares | Jun. 30, 2023 USD ($) | Aug. 22, 2024 shares | Dec. 31, 2023 USD ($) | Aug. 16, 2022 committee state | |
Reorganization | |||||||||
Number of officials commitments appointed | committee | 2 | ||||||||
Number of states debtor had not settled | state | 45 | ||||||||
Common stock, shares issued (in shares) | shares | 76,200,000 | 76,155,520 | 76,200,000 | ||||||
Number of board members | board_member | 6 | 6 | |||||||
Common stock, shares authorized (in shares) | shares | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||||||
Common stock, par value (in dollars per shares) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Preferred stock, shares authorized (in shares) | shares | 25,000,000 | 25,000,000 | 25,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Principal amount | $ 2,500,000,000 | ||||||||
Payments for settlement of first lien claims | 0 | ||||||||
Exit cash | $ 200,000,000 | ||||||||
Payment to debtors | 39,000,000 | ||||||||
Payment to plan administrator | 38,000,000 | ||||||||
Reserve for loss contingencies | 0 | $ 2,431,500,000 | |||||||
Reorganisation items, net | $ 848,200,000 | $ 162,000,000 | |||||||
Cash into bank account | 80,500,000 | ||||||||
Reorganization value, operating cash flows of emerging entity | 16,000,000 | 16,000,000 | |||||||
Chapter 11 Bankruptcy Settlement | |||||||||
Reorganization | |||||||||
Reserve for loss contingencies | 445,500,000 | $ 445,500,000 | |||||||
Reorganization Adjustments | |||||||||
Reorganization | |||||||||
Payment of cash in excess of Exit Cash to holders of first lien claims | $ 141,930,000 | ||||||||
Managment Incentive Plan | |||||||||
Reorganization | |||||||||
Number of shares available for grant (in shares) | shares | 3,600,000 | 3,600,000 | |||||||
First Lien Creditors | |||||||||
Reorganization | |||||||||
Plan of reorganization, percentage of right of receive equity (as a percent) | 96.30% | ||||||||
Plan of reorganization, offer rights | $ 340,000,000 | ||||||||
Common stock, shares issued (in shares) | shares | 33,000,000 | 33,000,000 | |||||||
Proceeds from exit financing debt | $ 340,000,000 | ||||||||
Payments for settlement of first lien claims | $ 2,485,000,000 | ||||||||
First Lien Creditors | Unrestricted Stock | |||||||||
Reorganization | |||||||||
Common stock, shares issued (in shares) | shares | 25,800,000 | 25,800,000 | |||||||
Second Lien Creditors | |||||||||
Reorganization | |||||||||
Plan of reorganization, percentage of right of receive equity (as a percent) | 3.70% | ||||||||
Plan of reorganization, offer rights | $ 160,000,000 | ||||||||
Plan of reorganization, cash settlement to be paid | 23,300,000 | ||||||||
Second Lien Creditors | Unrestricted Stock | |||||||||
Reorganization | |||||||||
Common stock, shares issued (in shares) | shares | 200,000 | 200,000 | |||||||
Unsecured Creditors | |||||||||
Reorganization | |||||||||
Plan of reorganization, maximum cash settlement to be paid | $ 2,000,000 | ||||||||
First Lien BCA | |||||||||
Reorganization | |||||||||
Plan of reorganization, maximum cash settlement to be paid | $ 25,500,000 | ||||||||
First Lien BCA | Unrestricted Stock | |||||||||
Reorganization | |||||||||
Common stock, shares issued (in shares) | shares | 2,800,000 | 2,800,000 | |||||||
First Lien BCA | Restricted and Unrestricted Shares | |||||||||
Reorganization | |||||||||
Common stock, shares issued (in shares) | shares | 3,600,000 | 3,600,000 | |||||||
First Lien BCA | Restricted Stock | |||||||||
Reorganization | |||||||||
Common stock, shares issued (in shares) | shares | 800,000 | 800,000 | |||||||
GUC Rights Offering | |||||||||
Reorganization | |||||||||
Proceeds from exit financing debt | $ 160,000,000 | ||||||||
GUC Rights Offering | Unrestricted Stock | |||||||||
Reorganization | |||||||||
Common stock, shares issued (in shares) | shares | 1,200,000 | 1,200,000 | |||||||
GUC Rights Offering | Restricted and Unrestricted Shares | |||||||||
Reorganization | |||||||||
Common stock, shares issued (in shares) | shares | 13,700,000 | 13,700,000 | |||||||
GUC Rights Offering | Restricted Stock | |||||||||
Reorganization | |||||||||
Common stock, shares issued (in shares) | shares | 100,000 | 100,000 | |||||||
GUC Rights Offering, Backstop Premium | Restricted Stock | |||||||||
Reorganization | |||||||||
Common stock, shares issued (in shares) | shares | 12,500,000 | 12,500,000 | |||||||
Subsequent event | Managment Incentive Plan | |||||||||
Reorganization | |||||||||
Shares issued (in shares) | shares | 0 | ||||||||
Ad Hoc First Lien Group | Event One | |||||||||
Reorganization | |||||||||
Settlement, amount awarded to other party | $ 364,900,000 | ||||||||
Litigation settlement, amount awarded to other party, term (in days) | 10 years | ||||||||
Ad Hoc First Lien Group | Event Two | |||||||||
Reorganization | |||||||||
Settlement, amount awarded to other party | $ 200,000,000 | ||||||||
Plan of reorganization commitment consideration | $ 25,000,000 | ||||||||
EBITDA exceed | $ 100,000,000 | ||||||||
New Revolving Credit Facility | Revolving Credit Facility (Predecessor) | Line of Credit | |||||||||
Reorganization | |||||||||
Maximum borrowing capacity | $ 400,000,000 | $ 400,000,000 | |||||||
Debt instrument term | 5 years | ||||||||
Term Loan Facility | |||||||||
Reorganization | |||||||||
Principal amount | 1,500,000,000 | ||||||||
Term Loan Facility | Revolving Credit Facility (Predecessor) | Line of Credit | |||||||||
Reorganization | |||||||||
Maximum borrowing capacity | $ 1,500,000,000 | 1,500,000,000 | |||||||
Debt instrument term | 7 years | ||||||||
8.50% Senior Notes Due 2031 | |||||||||
Reorganization | |||||||||
Principal amount | $ 1,000,000,000 | ||||||||
8.50% Senior Notes Due 2031 | Senior Notes | |||||||||
Reorganization | |||||||||
Principal amount | $ 1,000,000,000 | $ 1,000,000,000 | |||||||
Restructuring Support Agreement | |||||||||
Reorganization | |||||||||
Outstanding principal amount of secured debt (as a percent) | 50% |
EFFECTIVENESS OF THE PLAN OF _4
EFFECTIVENESS OF THE PLAN OF REORGANIZATION - Reorganization Items (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
Reorganization | |||||
Total | $ 0 | ||||
Adequate protection payments | $ 0 | ||||
Predecessor | |||||
Reorganization | |||||
Professional fees | $ 16,065 | $ 84,267 | $ 68,163 | $ 169,619 | |
Debt valuation adjustments | 41,394 | 0 | 192,342 | 0 | |
Reorganization Adjustments | (5,996,096) | 0 | (5,996,096) | 0 | |
Fresh Start Adjustments | (389,508) | 0 | (389,508) | 0 | |
Total | $ (6,328,145) | $ 84,267 | (6,125,099) | 169,619 | |
Adequate protection payments | $ 192,341 | $ 291,689 |
FRESH START ACCOUNTING - Narrat
FRESH START ACCOUNTING - Narrative (Details) - USD ($) | Apr. 23, 2024 | Jun. 30, 2024 | Dec. 31, 2023 |
Reorganization | |||
Percent of voting shares received by holders | 50% | ||
Assets | $ 5,105,688,000 | $ 4,956,040,000 | |
Accumulated deficit | 0 | (148,776,000) | |
Accumulated other comprehensive income (loss) | 0 | $ 177,000 | |
Enterprise value | $ 4,456,000,000 | ||
Net cash flows, discount rate | 16.60% | ||
Minimum | |||
Reorganization | |||
Valuation discount rate | 12.30% | ||
Maximum | |||
Reorganization | |||
Valuation discount rate | 27.70% | ||
Predecessor | |||
Reorganization | |||
Assets | $ 4,995,276,000 | $ 5,137,294,000 | |
Liabilities | 11,800,000,000 | ||
Accumulated deficit | (15,531,502,000) | (15,354,427,000) | |
Accumulated other comprehensive income (loss) | (228,046,000) | $ (223,762,000) | |
Fresh Start Adjustments | |||
Reorganization | |||
Assets | 491,799,000 | ||
Accumulated deficit | 177,295,000 | ||
Accumulated other comprehensive income (loss) | 228,046,000 | ||
Decrease finance lease, fair value | 400,000 | ||
Increase in contingent consideration liability | $ 500,000 | ||
Term Facility | |||
Reorganization | |||
Debt instrument term | 12 months |
FRESH START ACCOUNTING - Reconc
FRESH START ACCOUNTING - Reconciliation of Enterprise Value (Details) $ in Thousands | Apr. 23, 2024 USD ($) |
Reorganizations [Abstract] | |
Enterprise value | $ 4,456,000 |
Plus: Other non-operating assets | 20,450 |
Plus: Fair value of non-debt current liabilities excluding Escrowed Equity | 504,344 |
Plus: Fair value of non-debt, non-current liabilities excluding long-term acquisition-related contingent consideration | 173,363 |
Less: Debt issuance costs attributable to the New Term Facility and New Senior Secured Notes | (48,469) |
Reorganization value of Endo, Inc.'s assets to be allocated | $ 5,105,688 |
FRESH START ACCOUNTING - Reco_2
FRESH START ACCOUNTING - Reconciliation of Enterprise Value for Equity (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Mar. 31, 2024 | Dec. 31, 2023 |
Reorganizations [Abstract] | ||||
Enterprise value | $ 4,456,000 | |||
Less: Exit Financing Debt | $ (2,500,000) | (2,485,000) | $ (4,100,000) | |
Less: Unsecured creditors committee Escrowed Equity | (6,382) | |||
Less: Long-term acquisition-related contingent consideration | (3,512) | |||
Plus: Other non-operating assets | 20,450 | |||
Implied value of Endo, Inc.'s common stock | $ 1,832,957 | $ 1,981,556 | $ 0 | $ 0 |
FRESH START ACCOUNTING - CONDEN
FRESH START ACCOUNTING - CONDENSED COMBINED BALANCE SHEETS (Details) - USD ($) | Jun. 30, 2024 | Apr. 23, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ 293,536,000 | $ 220,607,000 | |||||
Restricted cash and cash equivalents | 166,851,000 | 176,397,000 | |||||
Accounts receivable, net | 365,778,000 | 400,519,000 | |||||
Inventories, net | 659,027,000 | 831,132,000 | |||||
Prepaid expenses and other current assets | 85,305,000 | 85,128,000 | |||||
Income taxes receivable | 116,000 | 123,000 | |||||
Total current assets | 1,570,613,000 | 1,713,906,000 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 554,563,000 | 554,823,000 | |||||
OPERATING LEASE ASSETS | 20,544,000 | 21,373,000 | |||||
GOODWILL | 0 | 0 | |||||
OTHER INTANGIBLES, NET | 2,251,701,000 | 2,297,423,000 | $ 0 | ||||
DEFERRED INCOME TAXES | 92,214,000 | 46,962,000 | |||||
OTHER ASSETS | 466,405,000 | 471,201,000 | |||||
TOTAL ASSETS | 4,956,040,000 | 5,105,688,000 | |||||
CURRENT LIABILITIES: | |||||||
Accounts payable and accrued expenses | 514,998,000 | 505,237,000 | |||||
Current portion of legal settlement accrual | 1,234,000 | 1,234,000 | |||||
Current portion of operating lease liabilities | 8,244,000 | 4,256,000 | |||||
Current portion of long-term debt | 11,250,000 | 7,500,000 | |||||
Income taxes payable | 63,832,000 | 0 | |||||
Total current liabilities | 599,558,000 | 518,227,000 | |||||
DEFERRED INCOME TAXES | 5,657,000 | 87,300,000 | |||||
LONG-TERM DEBT, LESS CURRENT PORTION, NET | 2,426,503,000 | 2,429,031,000 | |||||
LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION | 5,624,000 | 5,624,000 | |||||
OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | 13,025,000 | 16,914,000 | |||||
OTHER LIABILITIES | 72,716,000 | 67,036,000 | |||||
LIABILITIES SUBJECT TO COMPROMISE | 0 | 0 | |||||
COMMITMENTS AND CONTINGENCIES (NOTE 15) | |||||||
SHAREHOLDERS’ EQUITY (DEFICIT): | |||||||
Ordinary shares and Common Stock | 76,000 | 76,000 | |||||
Additional paid in capital | 1,981,480,000 | 1,981,480,000 | |||||
Accumulated deficit | (148,776,000) | 0 | |||||
Accumulated other comprehensive income (loss) | 177,000 | 0 | |||||
Total shareholders’ equity (deficit) | 1,832,957,000 | 1,981,556,000 | $ 0 | 0 | |||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ 4,956,040,000 | 5,105,688,000 | |||||
Predecessor | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | 716,594,000 | 777,919,000 | |||||
Restricted cash and cash equivalents | 211,224,000 | 167,702,000 | |||||
Accounts receivable, net | 400,519,000 | 386,919,000 | |||||
Inventories, net | 252,677,000 | 246,017,000 | |||||
Prepaid expenses and other current assets | 105,858,000 | 82,163,000 | |||||
Income taxes receivable | 7,305,000 | 7,781,000 | |||||
Total current assets | 1,694,177,000 | 1,668,501,000 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 472,290,000 | 476,240,000 | |||||
OPERATING LEASE ASSETS | 20,476,000 | 23,033,000 | |||||
GOODWILL | 1,352,011,000 | 1,352,011,000 | |||||
OTHER INTANGIBLES, NET | 1,399,755,000 | 1,477,883,000 | |||||
DEFERRED INCOME TAXES | 0 | 0 | |||||
OTHER ASSETS | 56,567,000 | 139,626,000 | |||||
TOTAL ASSETS | 4,995,276,000 | 5,137,294,000 | |||||
CURRENT LIABILITIES: | |||||||
Accounts payable and accrued expenses | 506,979,000 | 537,736,000 | |||||
Current portion of legal settlement accrual | 0 | 0 | |||||
Current portion of operating lease liabilities | 1,036,000 | 956,000 | |||||
Current portion of long-term debt | 0 | 0 | |||||
Income taxes payable | 3,393,000 | 102,000 | |||||
Total current liabilities | 511,408,000 | 538,794,000 | |||||
DEFERRED INCOME TAXES | 25,558,000 | 16,248,000 | |||||
LONG-TERM DEBT, LESS CURRENT PORTION, NET | 0 | 8,147,826,000 | |||||
LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION | 0 | 0 | |||||
OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | 3,755,000 | 4,132,000 | |||||
OTHER LIABILITIES | 108,421,000 | 79,812,000 | |||||
LIABILITIES SUBJECT TO COMPROMISE | 11,125,054,000 | 11,095,868,000 | |||||
COMMITMENTS AND CONTINGENCIES (NOTE 15) | |||||||
SHAREHOLDERS’ EQUITY (DEFICIT): | |||||||
Euro deferred stock | 43,000 | 44,000 | |||||
Ordinary shares and Common Stock | 24,000 | 24,000 | |||||
Additional paid in capital | 8,980,561,000 | 8,980,561,000 | |||||
Accumulated deficit | (15,531,502,000) | (15,354,427,000) | |||||
Accumulated other comprehensive income (loss) | (228,046,000) | (223,762,000) | |||||
Total shareholders’ equity (deficit) | (6,778,920,000) | $ (6,754,715,000) | (6,597,560,000) | $ (4,127,275,000) | $ (4,153,605,000) | $ (4,162,172,000) | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | 4,995,276,000 | $ 5,137,294,000 | |||||
Reorganization Adjustments | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | (495,987,000) | ||||||
Restricted cash and cash equivalents | (34,827,000) | ||||||
Accounts receivable, net | 0 | ||||||
Inventories, net | 0 | ||||||
Prepaid expenses and other current assets | (20,730,000) | ||||||
Income taxes receivable | (7,182,000) | ||||||
Total current assets | (558,726,000) | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 0 | ||||||
OPERATING LEASE ASSETS | 0 | ||||||
GOODWILL | 0 | ||||||
OTHER INTANGIBLES, NET | 0 | ||||||
DEFERRED INCOME TAXES | 171,075,000 | ||||||
OTHER ASSETS | 6,264,000 | ||||||
TOTAL ASSETS | (381,387,000) | ||||||
CURRENT LIABILITIES: | |||||||
Accounts payable and accrued expenses | (4,258,000) | ||||||
Current portion of legal settlement accrual | 1,234,000 | ||||||
Current portion of operating lease liabilities | 3,518,000 | ||||||
Current portion of long-term debt | 7,500,000 | ||||||
Income taxes payable | (3,393,000) | ||||||
Total current liabilities | 4,601,000 | ||||||
DEFERRED INCOME TAXES | (25,558,000) | ||||||
LONG-TERM DEBT, LESS CURRENT PORTION, NET | 2,429,031,000 | ||||||
LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION | 5,624,000 | ||||||
OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | 13,749,000 | ||||||
OTHER LIABILITIES | (38,915,000) | ||||||
LIABILITIES SUBJECT TO COMPROMISE | (11,125,054,000) | ||||||
COMMITMENTS AND CONTINGENCIES (NOTE 15) | |||||||
SHAREHOLDERS’ EQUITY (DEFICIT): | |||||||
Euro deferred stock | (43,000) | ||||||
Ordinary shares and Common Stock | (24,000) | ||||||
Additional paid in capital | (8,980,561,000) | ||||||
Accumulated deficit | 15,354,207,000 | ||||||
Accumulated other comprehensive income (loss) | 0 | ||||||
Total shareholders’ equity (deficit) | 8,355,135,000 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | (381,387,000) | ||||||
Fresh Start Adjustments | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | 0 | ||||||
Restricted cash and cash equivalents | 0 | ||||||
Accounts receivable, net | 0 | ||||||
Inventories, net | 578,455,000 | ||||||
Prepaid expenses and other current assets | 0 | ||||||
Income taxes receivable | 0 | ||||||
Total current assets | 578,455,000 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 82,533,000 | ||||||
OPERATING LEASE ASSETS | 897,000 | ||||||
GOODWILL | (1,352,011,000) | ||||||
OTHER INTANGIBLES, NET | 897,668,000 | ||||||
DEFERRED INCOME TAXES | (124,113,000) | ||||||
OTHER ASSETS | 408,370,000 | ||||||
TOTAL ASSETS | 491,799,000 | ||||||
CURRENT LIABILITIES: | |||||||
Accounts payable and accrued expenses | 2,516,000 | ||||||
Current portion of legal settlement accrual | 0 | ||||||
Current portion of operating lease liabilities | (298,000) | ||||||
Current portion of long-term debt | 0 | ||||||
Income taxes payable | 0 | ||||||
Total current liabilities | 2,218,000 | ||||||
DEFERRED INCOME TAXES | 87,300,000 | ||||||
LONG-TERM DEBT, LESS CURRENT PORTION, NET | 0 | ||||||
LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION | 0 | ||||||
OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | (590,000) | ||||||
OTHER LIABILITIES | (2,470,000) | ||||||
LIABILITIES SUBJECT TO COMPROMISE | 0 | ||||||
COMMITMENTS AND CONTINGENCIES (NOTE 15) | |||||||
SHAREHOLDERS’ EQUITY (DEFICIT): | |||||||
Euro deferred stock | 0 | ||||||
Ordinary shares and Common Stock | 0 | ||||||
Additional paid in capital | 0 | ||||||
Accumulated deficit | 177,295,000 | ||||||
Accumulated other comprehensive income (loss) | 228,046,000 | ||||||
Total shareholders’ equity (deficit) | 405,341,000 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ 491,799,000 |
FRESH START ACCOUNTING - Change
FRESH START ACCOUNTING - Change in Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | 2 Months Ended | |
Apr. 23, 2024 | Jun. 30, 2024 | |
Reorganization | ||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | $ 63,382 | |
Reorganization Adjustments | ||
Reorganization | ||
Proceeds from issuance of debt | $ 2,485,000 | |
Proceeds from the First Lien Rights Offering | 340,219 | |
Proceeds from the GUC Rights Offering | 160,102 | |
Transfers from restricted cash | 135 | |
Distribution of Exit Financing Debt proceeds to holders of first lien claims | (2,449,679) | |
Payments to fund trusts for settlement of claims | (441,377) | |
Payment of cash in excess of Exit Cash to holders of first lien claims | (141,930) | |
Payment for settlement of U.S. Government Claims | (200,075) | |
Professional Fees | (53,389) | |
Payment of plan administration fees and expenses related to the wind-down of Remaining Debtors | (39,113) | |
Payment of Additional Premium | (25,540) | |
Payment for cure and other amounts related to the assumption of executory contracts | (36,069) | |
Payment of debt issuance costs associated with Exit Financing Debt | (43,485) | |
Payment of other costs | (6,992) | |
Payment to fund other trusts at the Effective Date for settlement of claims classified as restricted cash due to certain reversionary interest rights | (1,400) | |
Payment of adequate protection to holders of first lien claims | (41,394) | |
Transfer of cash to restricted cash to fund escrow to pay non-retained professionals | (1,000) | |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | (495,987) | |
Reorganization Adjustments | First Lien Creditors | ||
Reorganization | ||
Proceeds from the First Lien Rights Offering | $ 300 |
FRESH START ACCOUNTING - Chan_2
FRESH START ACCOUNTING - Change in Restricted Cash (Details) - USD ($) $ in Thousands | Apr. 23, 2024 | Jun. 30, 2024 |
Reorganization | ||
Restricted cash and cash equivalents | $ 176,397 | $ 166,851 |
Reorganization Adjustments | ||
Reorganization | ||
Payment to fund other trusts at the Effective Date for settlement of claims classified as restricted cash due to certain reversionary interest rights | 1,400 | |
Restricted cash of Qualified Settlement Funds, (QSFs) for mesh-related matters classified as liabilities subject to compromise to stay with Remaining Debtors | (37,092) | |
Transfer of cash to restricted cash to fund escrow to pay non-retained professionals | 1,000 | |
Transfer of restricted cash to cash for release of utility deposit | (135) | |
Restricted cash and cash equivalents | $ (34,827) |
FRESH START ACCOUNTING - Chan_3
FRESH START ACCOUNTING - Change in Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Apr. 23, 2024 | Jun. 30, 2024 |
Reorganization | ||
Prepaid expenses and other current assets | $ 85,128 | $ 85,305 |
Reorganization Adjustments | ||
Reorganization | ||
Reclassification of prepaid debt issuance costs to capitalized debt issuance costs | (20,977) | |
Capitalization of debt issuance costs classified as short-term related to the New Revolving Credit Facility | 1,566 | |
Transfer of recovery insurance asset to fund GUC Trust | (1,319) | |
Prepaid expenses and other current assets | $ (20,730) |
FRESH START ACCOUNTING - Chan_4
FRESH START ACCOUNTING - Change in Accounts payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Apr. 23, 2024 | Jun. 30, 2024 |
Reorganization | ||
Accounts payable and accrued expenses | $ 505,237 | $ 514,998 |
Reorganization Adjustments | ||
Reorganization | ||
Reinstatement of short-term finance lease liabilities | 5,337 | |
Payment of other Plan related amounts | (13,710) | |
Payment of professional fees, including hold-backs | (19,664) | |
Reinstatement of short-term contingent consideration liabilities related to executory contracts | 4,125 | |
Reinstatement of certain contracts | 1,173 | |
Accrual of derivative classified liability related to the Escrowed Equity as a result of the implementation of the Plan | 6,382 | |
Accrual for future payment of excess cash to holders of first lien claims | 12,099 | |
Accounts payable and accrued expenses | $ (4,258) |
FRESH START ACCOUNTING - Chan_5
FRESH START ACCOUNTING - Change in Long-Term Debt (Details) - USD ($) $ in Thousands | Apr. 23, 2024 | Jun. 30, 2024 |
Reorganization | ||
Net change in long-term debt | $ 2,437,753 | |
Reorganization Adjustments | ||
Reorganization | ||
Proceeds from issuance of the New Term Facility (net of stated 1% unamortized original issue discount) | $ 1,477,500 | |
Proceeds from issuance of the New Senior Secured Notes | 1,000,000 | |
Capitalized debt issuance costs for the New Term Facility and New Senior Secured Notes | (48,469) | |
Net change in long-term debt | $ 2,429,031 | |
Unamortized original issue discount rate | 1% |
FRESH START ACCOUNTING - Chan_6
FRESH START ACCOUNTING - Change in Other Liabilities (Details) - USD ($) $ in Thousands | Apr. 23, 2024 | Jun. 30, 2024 |
Reorganization | ||
Net change in other liabilities | $ 67,036 | $ 72,716 |
Reorganization Adjustments | ||
Reorganization | ||
Accrual for funding of certain trusts for settlements of claims expected to be funded beyond one year | 4,200 | |
Liabilities related to the funding of other trusts at the Effective Date for settlement of claims where Endo, Inc. has certain reversionary interest rights | 1,400 | |
Reinstatement of short-term finance lease liabilities | 2,202 | |
Settlement of tax liabilities in connection with resolution of the U.S. Government Economic Settlement | (46,707) | |
Reinstatement of long-term contingent consideration liabilities related to executory contracts | 5,590 | |
Net change in other liabilities | $ (38,915) |
FRESH START ACCOUNTING - Gain o
FRESH START ACCOUNTING - Gain on Settlement of Liabilities Subject to Compromise (Details) - USD ($) $ in Thousands | 2 Months Ended | |
Apr. 23, 2024 | Jun. 30, 2024 | |
Reorganization | ||
LIABILITIES SUBJECT TO COMPROMISE | $ 0 | $ 0 |
Proceeds from issuance of common stock | $ 0 | |
Difference in implied value of common shares | 1,018,000 | |
First Lien Rights Offering and GUC Rights Offering | ||
Reorganization | ||
Proceeds from issuance of common stock | (500,300) | |
Reorganization Adjustments | ||
Reorganization | ||
LIABILITIES SUBJECT TO COMPROMISE | 11,125,054 | |
Distribution of Exit Financing Debt proceeds to holders of first lien claims | (2,449,679) | |
Excess Implied Value Of Common Shares Ascribed To Creditors | (517,643) | |
Proceeds from issuance of common stock | (857,968) | |
Payment of cash in excess of Exit Cash to holders of first lien claims | (141,930) | |
Accrual for future payment of excess cash to holders of first lien claims | (12,099) | |
Payment of adequate protection to holders of first lien claims | (41,394) | |
Payment for settlement of U.S. Government Claims | (200,075) | |
Payments to fund trusts for settlement of claims | (444,089) | |
Reinstatement of liabilities subject to compromise to accrued liabilities (b) | (35,693) | |
Payment of restricted cash of QSFs for mesh-related matters classified as liabilities subject to compromise | (37,092) | |
Payment for cure and other amounts related to the assumption of executory contracts | (23,591) | |
Accrual of derivative classified liability related to the Escrowed Equity as a result of the implementation of the Plan | (6,382) | |
Accrual for funding of certain trusts for settlement of claims | (5,458) | |
Adjustments of other claims | 6,246,336 | |
Reorganization Adjustments | First Lien BCA | ||
Reorganization | ||
Proceeds from issuance of common stock | (105,624) | |
Accrual for future payment of excess cash to holders of first lien claims | $ (12,100) |
FRESH START ACCOUNTING - Chan_7
FRESH START ACCOUNTING - Change in Common Stock and Additional paid in Capital (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 23, 2024 | Jun. 30, 2024 |
Reorganizations [Abstract] | ||
Issuance of Endo, Inc. common stock, at par, to holders of first lien claims, second lien claims and unsecured notes claims | $ 33 | |
Issuance of Endo, Inc. common stock, at par, in connection with the First Lien Rights Offering and GUC Rights Offering | 39 | |
Issuance of Endo, Inc. common stock, at par, for the First Lien and GUC Backstop Commitments | 4 | |
Net change in Endo, Inc. common stock | 76 | $ 76 |
Issuance of Endo, Inc. common stock to holders of claims | 857,935 | |
Issuance of Endo, Inc. common stock in connection with the First Lien Rights Offering and GUC Rights Offering | 1,017,925 | |
Issuance of Endo, Inc. common stock for the First Lien and GUC Backstop Commitments | 105,620 | |
Net change in Endo, Inc. additional paid-in capital | $ 1,981,480 | $ 1,981,480 |
Common stock, shares issued (in shares) | 76,200,000 | 76,155,520 |
Common stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 |
FRESH START ACCOUNTING - Net Ch
FRESH START ACCOUNTING - Net Change in Accumulated Deficit (Details) - USD ($) | 2 Months Ended | |
Apr. 23, 2024 | Jun. 30, 2024 | |
Reorganization items, net: | ||
Reorganization items, net | $ 0 | |
Net change in accumulated deficit | $ 0 | $ (148,776,000) |
Reorganization Adjustments | ||
Reorganization | ||
Cancellation of Endo International plc ordinary shares and additional paid-in capital (direct charge to equity) | 8,980,628,000 | |
Net deferred tax impacts and the elimination of a tax receivable on the effectiveness of the Plan | 192,844,000 | |
Reorganization items, net: | ||
Adjustments of other claims | 6,246,336,000 | |
Gain on settlement of U.S. tax liabilities as part of the resolution of U.S. Government Claims | 46,707,000 | |
Professional fees | (46,113,000) | |
Payment of Additional Premium | (25,540,000) | |
Payment of other costs | (2,775,000) | |
Payment for plan administration fees and expense related to the wind-down of remaining debtor entities (net of sales & use and franchise tax liabilities) | (37,880,000) | |
Reorganization items, net | 6,180,735,000 | |
Net change in accumulated deficit | 15,354,207,000 | |
Discontinued Operations, Disposed Of By Means Other Than Sale, Abandonment | Astora | ||
Reorganization items, net: | ||
Reorganization items, net | $ 184,600,000 |
FRESH START ACCOUNTING - Invent
FRESH START ACCOUNTING - Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Reorganization | |||
Raw materials | $ 120,277 | $ 100,082 | |
Work-in-process | 142,249 | 143,906 | |
Finished goods | 396,501 | 587,144 | |
Total | $ 659,027 | 831,132 | |
Predecessor | |||
Reorganization | |||
Raw materials | 100,082 | $ 103,336 | |
Work-in-process | 40,185 | 29,827 | |
Finished goods | 112,410 | 112,854 | |
Total | $ 252,677 | $ 246,017 |
FRESH START ACCOUNTING - Proper
FRESH START ACCOUNTING - Property Plant and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Reorganization | |||
Total property, plant and equipment, gross | $ 554,823 | ||
Less: accumulated depreciation | 0 | ||
Total property, plant and equipment, net | $ 554,563 | 554,823 | |
Predecessor | |||
Reorganization | |||
Total property, plant and equipment, gross | 851,828 | ||
Less: accumulated depreciation | (379,538) | ||
Total property, plant and equipment, net | 472,290 | $ 476,240 | |
Land and buildings | |||
Reorganization | |||
Total property, plant and equipment, gross | 141,460 | ||
Land and buildings | Predecessor | |||
Reorganization | |||
Total property, plant and equipment, gross | 245,428 | ||
Machinery and equipment | |||
Reorganization | |||
Total property, plant and equipment, gross | 159,190 | ||
Machinery and equipment | Predecessor | |||
Reorganization | |||
Total property, plant and equipment, gross | 253,298 | ||
Leasehold improvements | |||
Reorganization | |||
Total property, plant and equipment, gross | 18,524 | ||
Leasehold improvements | Predecessor | |||
Reorganization | |||
Total property, plant and equipment, gross | 41,286 | ||
Computer equipment and software | |||
Reorganization | |||
Total property, plant and equipment, gross | 21,915 | ||
Computer equipment and software | Predecessor | |||
Reorganization | |||
Total property, plant and equipment, gross | 99,266 | ||
Furniture and fixtures | |||
Reorganization | |||
Total property, plant and equipment, gross | 2,160 | ||
Furniture and fixtures | Predecessor | |||
Reorganization | |||
Total property, plant and equipment, gross | 7,928 | ||
Assets under construction | |||
Reorganization | |||
Total property, plant and equipment, gross | 211,574 | ||
Assets under construction | Predecessor | |||
Reorganization | |||
Total property, plant and equipment, gross | $ 204,622 |
FRESH START ACCOUNTING - Intang
FRESH START ACCOUNTING - Intangible Assts (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Reorganization | |||
Gross Carrying Amount | $ 2,300,660 | $ 2,297,423 | $ 0 |
Accumulated Amortization | (48,959) | 0 | 0 |
Net other intangibles | $ 2,251,701 | 2,297,423 | 0 |
Marketed products | |||
Reorganization | |||
Gross Carrying Amount | 1,929,332 | ||
Accumulated Amortization | 0 | 0 | |
License | |||
Reorganization | |||
Gross Carrying Amount | 69,757 | ||
In-process research and development | |||
Reorganization | |||
Gross Carrying Amount | 298,334 | ||
Predecessor | |||
Reorganization | |||
Gross Carrying Amount | 6,355,961 | 6,364,178 | |
Accumulated Amortization | (4,956,206) | (4,886,295) | |
Net other intangibles | 1,399,755 | $ 1,477,883 | |
Predecessor | Marketed products | |||
Reorganization | |||
Gross Carrying Amount | 6,355,961 | ||
Predecessor | License | |||
Reorganization | |||
Gross Carrying Amount | 0 | ||
Predecessor | In-process research and development | |||
Reorganization | |||
Gross Carrying Amount | $ 0 |
FRESH START ACCOUNTING - Inve_2
FRESH START ACCOUNTING - Inventory, Noncurrent (Details) - USD ($) $ in Thousands | Apr. 23, 2024 | Jun. 30, 2024 | Dec. 31, 2023 |
Reorganization | |||
Raw materials | $ 1,008 | ||
Work in process | 439,571 | ||
Finished goods | 0 | ||
Long-term inventory | 440,579 | $ 436,200 | $ 29,700 |
Predecessor | |||
Reorganization | |||
Raw materials | 1,008 | ||
Work in process | 32,902 | ||
Finished goods | 0 | ||
Long-term inventory | 33,910 | ||
Fresh Start Adjustments | |||
Reorganization | |||
Fair value adjustment, noncurrent inventory and equity method investments | $ 1,700 |
FRESH START ACCOUNTING - Chan_8
FRESH START ACCOUNTING - Change in Accumulated Deficit (Details) - USD ($) | 2 Months Ended | |
Apr. 23, 2024 | Jun. 30, 2024 | |
Reorganization | ||
GOODWILL | $ 0 | $ 0 |
Deferred income taxes | (126,892,000) | |
Accumulated deficit | 0 | $ (148,776,000) |
Discontinued Operations, Disposed Of By Means Other Than Sale, Abandonment | Astora | ||
Reorganization | ||
Elimination of predecessor other comprehensive loss | 900,000 | |
Fresh Start Adjustments | ||
Reorganization | ||
Inventories, net | 985,124,000 | |
Other intangibles | 897,668,000 | |
Total property, plant and equipment, net | 82,533,000 | |
GOODWILL | (1,352,011,000) | |
Other assets fair value adjustments | 2,598,000 | |
Other liabilities fair value adjustments | 842,000 | |
Fresh start valuation gain | 616,754,000 | |
Deferred income taxes | (211,413,000) | |
Elimination of predecessor other comprehensive loss | (228,046,000) | |
Accumulated deficit | $ 177,295,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition and Concentrations of Credit Risk and Credit Losses (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Product Information | ||
Allowance for credit loss | $ 377.5 | $ 434 |
Trade Accounts Receivable | Credit Concentration Risk | Cardinal Health, Inc., McKesson Corporation and Cencora, Inc. | ||
Product Information | ||
Concentration risk, percentage | 82% | 81% |
Minimum | ||
Product Information | ||
Contracts general fall date | 30 days | |
Revenue from contract with customer, return period | 6 months | |
Maximum | ||
Product Information | ||
Contracts general fall date | 120 days |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) | Jun. 30, 2024 |
Machinery and equipment | |
Property, Plant and Equipment | |
Useful life (year) | 10 years |
Computer equipment and software | |
Property, Plant and Equipment | |
Useful life (year) | 5 years |
Furniture and fixtures | |
Property, Plant and Equipment | |
Useful life (year) | 7 years |
Minimum | Building | |
Property, Plant and Equipment | |
Useful life (year) | 1 year |
Maximum | Building | |
Property, Plant and Equipment | |
Useful life (year) | 30 years |
DISCONTINUED OPERATIONS - Astor
DISCONTINUED OPERATIONS - Astora - Discontinued Operations (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Discontinued operations, net of tax | $ 0 | ||||
Predecessor | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Discontinued operations, net of tax | $ 183,234 | $ (573) | $ 182,838 | $ (1,029) | |
Discontinued Operations, Disposed Of By Means Other Than Sale, Abandonment | Astora | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Discontinued operations, net of tax | (37,100) | (1,000) | |||
Discontinued Operations, Disposed Of By Means Other Than Sale, Abandonment | Astora | Predecessor | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Litigation-related and other contingencies, net | 0 | 500 | 0 | 500 | |
Income (loss) from discontinued operations before income taxes | 183,152 | (660) | 182,696 | (1,186) | |
Income tax benefit | (82) | (87) | (142) | (157) | |
Discontinued operations, net of tax | $ 183,234 | $ (573) | $ 182,838 | $ (1,029) |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Loss from discontinued operations, net of tax | $ 0 | ||||
Asset impairments | $ 0 | ||||
Discontinued Operations, Disposed Of By Means Other Than Sale, Abandonment | Astora | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Loss from discontinued operations, net of tax | $ (37,100,000) | $ (1,000,000) | |||
Asset impairments | $ 0 | $ 0 | 0 | $ 0 | |
Discontinued Operations, Disposed Of By Means Other Than Sale, Abandonment | Astora | Debtor-in-Possession | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Loss from discontinued operations, net of tax | $ (900,000) |
SEGMENT RESULTS - Narrative (De
SEGMENT RESULTS - Narrative (Details) | 6 Months Ended |
Jun. 30, 2024 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
SEGMENT RESULTS - Schedule of R
SEGMENT RESULTS - Schedule of Reportable Segments Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
Segment Reporting Information | |||||
Total net revenues from external customers | $ 284,163 | ||||
Total segment adjusted income from continuing operations before income tax | 107,688 | ||||
Predecessor | |||||
Segment Reporting Information | |||||
Total net revenues from external customers | $ 162,467 | $ 546,852 | $ 581,974 | $ 1,062,119 | |
Total segment adjusted income from continuing operations before income tax | 93,577 | 270,151 | 263,682 | 504,540 | |
Branded Pharmaceuticals | |||||
Segment Reporting Information | |||||
Total net revenues from external customers | 146,151 | ||||
Total segment adjusted income from continuing operations before income tax | 81,359 | ||||
Branded Pharmaceuticals | Predecessor | |||||
Segment Reporting Information | |||||
Total net revenues from external customers | 78,918 | 212,377 | 279,714 | 409,950 | |
Total segment adjusted income from continuing operations before income tax | 57,499 | 115,340 | 161,592 | 211,605 | |
Sterile Injectables | |||||
Segment Reporting Information | |||||
Total net revenues from external customers | 56,474 | ||||
Total segment adjusted income from continuing operations before income tax | 10,028 | ||||
Sterile Injectables | Predecessor | |||||
Segment Reporting Information | |||||
Total net revenues from external customers | 34,297 | 137,028 | 132,531 | 238,283 | |
Total segment adjusted income from continuing operations before income tax | 14,907 | 69,546 | 51,977 | 110,636 | |
Generic Pharmaceuticals | |||||
Segment Reporting Information | |||||
Total net revenues from external customers | 69,722 | ||||
Total segment adjusted income from continuing operations before income tax | 15,361 | ||||
Generic Pharmaceuticals | Predecessor | |||||
Segment Reporting Information | |||||
Total net revenues from external customers | 40,360 | 178,579 | 143,677 | 376,759 | |
Total segment adjusted income from continuing operations before income tax | 16,922 | 80,404 | 42,378 | 172,091 | |
International Pharmaceuticals | |||||
Segment Reporting Information | |||||
Total net revenues from external customers | 11,816 | ||||
Total segment adjusted income from continuing operations before income tax | $ 940 | ||||
International Pharmaceuticals | Predecessor | |||||
Segment Reporting Information | |||||
Total net revenues from external customers | 8,892 | 18,868 | 26,052 | 37,127 | |
Total segment adjusted income from continuing operations before income tax | $ 4,249 | $ 4,861 | $ 7,735 | $ 10,208 |
SEGMENT RESULTS - Schedule of_2
SEGMENT RESULTS - Schedule of Reconciliations of Consolidated Adjusted Loss Before Income Tax (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | ||
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information | |||||||
Total consolidated (loss) income from continuing operations before income tax | $ (212,757) | $ (212,757) | $ 6,248,991 | $ 37,240 | |||
Interest expense, net | 44,669 | ||||||
Asset impairments | 0 | ||||||
Reorganization items, net | 0 | ||||||
Total segment adjusted income from continuing operations before income tax | 107,688 | ||||||
Amortization of inventory | 192,000 | $ 192,000 | |||||
Charges related to rejection and cancellation of equity awards | 6,000 | 9,200 | |||||
Predecessor | |||||||
Segment Reporting Information | |||||||
Total consolidated (loss) income from continuing operations before income tax | $ 6,394,943 | $ 34,290 | 6,248,991 | 37,240 | |||
Interest expense, net | (2) | 120 | |||||
Asset impairments | 1,799 | 0 | 2,103 | 146 | |||
Reorganization items, net | (6,328,145) | 84,267 | (6,125,099) | 169,619 | |||
Total segment adjusted income from continuing operations before income tax | 93,577 | 270,151 | 263,682 | 504,540 | |||
Charges related to rejection and cancellation of equity awards | 6,000 | ||||||
Segment Reconciling Items | |||||||
Segment Reporting Information | |||||||
Interest expense, net | 44,669 | 44,669 | (2) | 229 | |||
Corporate unallocated costs | 29,513 | 29,513 | 48,238 | 77,353 | |||
Asset impairments | 0 | 0 | 2,103 | 146 | |||
Acquisitions and divestitures | 240,938 | 240,938 | 77,543 | 130,693 | |||
Restructuring or similar transactions | 1,900 | 1,900 | 4,960 | 25,954 | |||
Reorganization items, net | 0 | 0 | (6,125,099) | 169,619 | |||
Other, net | 3,425 | 3,425 | 6,948 | 63,306 | |||
Segment Reconciling Items | Net employee separation, continuity and other benefit-related charges | |||||||
Segment Reporting Information | |||||||
Restructuring or similar transactions | 15,100 | 25,900 | |||||
Segment Reconciling Items | Reversal of inventory charges related to restructuring | |||||||
Segment Reporting Information | |||||||
Restructuring or similar transactions | 900 | 600 | |||||
Segment Reconciling Items | Other net charges | |||||||
Segment Reporting Information | |||||||
Restructuring or similar transactions | 600 | ||||||
Segment Reconciling Items | Predecessor | |||||||
Segment Reporting Information | |||||||
Interest expense, net | (2) | 120 | |||||
Corporate unallocated costs | 10,686 | 37,696 | |||||
Asset impairments | 1,799 | 0 | |||||
Acquisitions and divestitures | 14,264 | 64,915 | |||||
Restructuring or similar transactions | (1) | 14,281 | |||||
Reorganization items, net | (6,328,145) | 84,267 | |||||
Other, net | 33 | 34,582 | |||||
Operating Segments | |||||||
Segment Reporting Information | |||||||
Total segment adjusted income from continuing operations before income tax | $ 107,688 | $ 107,688 | $ 263,682 | $ 504,540 | |||
Operating Segments | Predecessor | |||||||
Segment Reporting Information | |||||||
Total segment adjusted income from continuing operations before income tax | $ 93,577 | $ 270,151 |
SEGMENT RESULTS - Schedule of D
SEGMENT RESULTS - Schedule of Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | ||
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | $ 284,163 | |||||||
Product line revenue reporting threshold | $ 25,000 | 25,000 | $ 25,000 | $ 25,000 | ||||
Predecessor | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 162,467 | $ 546,852 | 581,974 | $ 1,062,119 | ||||
Branded Pharmaceuticals | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 146,151 | |||||||
Branded Pharmaceuticals | Specialty Products | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 110,911 | |||||||
Branded Pharmaceuticals | XIAFLEX® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 87,054 | |||||||
Branded Pharmaceuticals | SUPPRELIN® LA | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 14,518 | |||||||
Branded Pharmaceuticals | Other Specialty | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 9,339 | |||||||
Branded Pharmaceuticals | Established Products | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 35,240 | |||||||
Branded Pharmaceuticals | PERCOCET® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 13,910 | |||||||
Branded Pharmaceuticals | TESTOPEL® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 8,382 | |||||||
Branded Pharmaceuticals | Other Established | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 12,948 | |||||||
Branded Pharmaceuticals | Predecessor | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 78,918 | 212,377 | 279,714 | 409,950 | ||||
Branded Pharmaceuticals | Predecessor | Specialty Products | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 51,568 | 165,353 | 199,971 | 307,534 | ||||
Branded Pharmaceuticals | Predecessor | XIAFLEX® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 39,588 | 117,291 | 152,638 | 214,201 | ||||
Branded Pharmaceuticals | Predecessor | SUPPRELIN® LA | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 6,078 | 28,223 | 26,213 | 51,800 | ||||
Branded Pharmaceuticals | Predecessor | Other Specialty | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 5,902 | 19,839 | 21,120 | 41,533 | ||||
Branded Pharmaceuticals | Predecessor | Established Products | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 27,350 | 47,024 | 79,743 | 102,416 | ||||
Branded Pharmaceuticals | Predecessor | PERCOCET® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 9,348 | 26,445 | 33,892 | 52,501 | ||||
Branded Pharmaceuticals | Predecessor | TESTOPEL® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 2,734 | 11,600 | 13,225 | 22,589 | ||||
Branded Pharmaceuticals | Predecessor | Other Established | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 15,268 | $ 8,979 | 32,626 | $ 27,326 | ||||
Sterile Injectables | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 56,474 | |||||||
Sterile Injectables | Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||||||||
Disaggregation of Revenue | ||||||||
Concentration risk, percentage | 6% | 6% | ||||||
Sterile Injectables | ADRENALIN® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 14,642 | |||||||
Sterile Injectables | VASOSTRICT® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 7,926 | |||||||
Sterile Injectables | Other Sterile Injectables | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 33,906 | |||||||
Sterile Injectables | Other Sterile Injectables | Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||||||||
Disaggregation of Revenue | ||||||||
Concentration risk, percentage | 5% | |||||||
Sterile Injectables | Predecessor | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 34,297 | $ 137,028 | 132,531 | $ 238,283 | ||||
Sterile Injectables | Predecessor | ADRENALIN® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 11,233 | 27,133 | 38,601 | 52,708 | ||||
Sterile Injectables | Predecessor | VASOSTRICT® | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 7,356 | 24,419 | 34,309 | 50,370 | ||||
Sterile Injectables | Predecessor | Other Sterile Injectables | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 15,708 | $ 85,476 | 59,621 | $ 135,205 | ||||
Generic Pharmaceuticals | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 69,722 | |||||||
Generic Pharmaceuticals | Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||||||||
Disaggregation of Revenue | ||||||||
Concentration risk, percentage | 9% | 10% | 9% | 13% | ||||
Generic Pharmaceuticals | Dexlansoprazole | Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||||||||
Disaggregation of Revenue | ||||||||
Concentration risk, percentage | 5% | |||||||
Generic Pharmaceuticals | Predecessor | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | 40,360 | $ 178,579 | 143,677 | $ 376,759 | ||||
International Pharmaceuticals | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | $ 11,816 | |||||||
International Pharmaceuticals | Predecessor | ||||||||
Disaggregation of Revenue | ||||||||
TOTAL REVENUES, NET | $ 8,892 | $ 18,868 | $ 26,052 | $ 37,127 | ||||
International Pharmaceuticals | Predecessor | Revenue from Contract with Customer Benchmark | Product Concentration Risk | Maximum | ||||||||
Disaggregation of Revenue | ||||||||
Concentration risk, percentage | 5% | 5% |
FAIR VALUE MEASUREMENTS - Restr
FAIR VALUE MEASUREMENTS - Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Restricted Cash and Cash Equivalents | |||
Restricted cash and cash equivalents, current | $ 166,851 | $ 176,397 | |
Restricted cash and cash equivalents, noncurrent | 0 | ||
Total restricted cash and cash equivalents | 166,851 | ||
Escrow deposit, professional accruals | 81,000 | ||
Predecessor | |||
Restricted Cash and Cash Equivalents | |||
Restricted cash and cash equivalents, current | $ 211,224 | $ 167,702 | |
Restricted cash and cash equivalents, noncurrent | 85,000 | ||
Total restricted cash and cash equivalents | 252,702 | ||
Restricted Cash and Cash Equivalents, Insurance Coverage | |||
Restricted Cash and Cash Equivalents | |||
Restricted cash and cash equivalents, current | $ 85,900 | 85,900 | |
Estimated litigation liability | $ 49,800 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Assets And Liabilities Measured At Fair Value On Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Money Market Funds | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | $ 7,100 | |
Liabilities: | ||
Investment, Type [Extensible Enumeration] | Restricted cash and cash equivalents | |
Fair Value, Measurements, Recurring | Acquisition-related contingent consideration—current | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | $ 2,753 | |
Fair Value, Measurements, Recurring | Acquisition-related contingent consideration—noncurrent | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 5,838 | |
Fair Value, Measurements, Recurring | Acquisition-related Contingent Consideration | Predecessor | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | $ 12,447 | |
Fair Value, Measurements, Recurring | Money Market Funds | Predecessor | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | 7,123 | |
Fair Value, Measurements, Recurring | Level 1 Inputs | Acquisition-related contingent consideration—current | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 0 | |
Fair Value, Measurements, Recurring | Level 1 Inputs | Acquisition-related contingent consideration—noncurrent | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 0 | |
Fair Value, Measurements, Recurring | Level 1 Inputs | Acquisition-related Contingent Consideration | Predecessor | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 0 | |
Fair Value, Measurements, Recurring | Level 1 Inputs | Money Market Funds | Predecessor | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | 7,123 | |
Fair Value, Measurements, Recurring | Level 2 Inputs | Acquisition-related contingent consideration—current | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 0 | |
Fair Value, Measurements, Recurring | Level 2 Inputs | Acquisition-related contingent consideration—noncurrent | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 0 | |
Fair Value, Measurements, Recurring | Level 2 Inputs | Acquisition-related Contingent Consideration | Predecessor | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 0 | |
Fair Value, Measurements, Recurring | Level 2 Inputs | Money Market Funds | Predecessor | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | 0 | |
Fair Value, Measurements, Recurring | Level 3 Inputs | Acquisition-related contingent consideration—current | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 2,753 | |
Fair Value, Measurements, Recurring | Level 3 Inputs | Acquisition-related contingent consideration—noncurrent | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | $ 5,838 | |
Fair Value, Measurements, Recurring | Level 3 Inputs | Acquisition-related Contingent Consideration | Predecessor | ||
Liabilities: | ||
Fair value of financial liabilities measured on recurring basis | 12,447 | |
Fair Value, Measurements, Recurring | Level 3 Inputs | Money Market Funds | Predecessor | ||
Assets: | ||
Fair value of financial assets measured on recurring basis | $ 0 |
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 | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||||
Beginning of period | $ 0 | $ 0 | $ 0 | |||
Acquisition of contingent consideration from Predecessor | 10,195 | 10,195 | ||||
Amounts settled | (1,577) | |||||
Changes in Fair Value Recorded in Earnings | (58) | |||||
Changes in fair value recorded in earnings | (58) | |||||
Effect of currency translation | 31 | |||||
Amounts Settled and Other | (1,546) | |||||
End of period | $ 0 | $ 8,591 | 0 | $ 8,591 | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Business Combination, Acquisition Related Costs | Business Combination, Acquisition Related Costs | ||||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Business Combination, Acquisition Related Costs | |||||
Auxilium Pharmaceuticals, Inc. | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||||
Beginning of period | 0 | $ 0 | ||||
Acquisition of contingent consideration from Predecessor | 8,262 | |||||
Changes in Fair Value Recorded in Earnings | (215) | |||||
Amounts Settled and Other | (1,055) | |||||
End of period | $ 6,992 | 6,992 | ||||
Other | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||||
Beginning of period | 0 | 0 | ||||
Acquisition of contingent consideration from Predecessor | 1,933 | |||||
Changes in Fair Value Recorded in Earnings | 157 | |||||
Amounts Settled and Other | (491) | |||||
End of period | 1,599 | 1,599 | ||||
Predecessor | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||||
Beginning of period | 12,050 | 10,195 | $ 15,697 | 12,447 | 12,447 | $ 16,571 |
Acquisition of contingent consideration from Predecessor | 0 | |||||
Amounts settled | (1,499) | (1,890) | (2,475) | (2,769) | ||
Changes in Fair Value Recorded in Earnings | 284 | |||||
Changes in fair value recorded in earnings | (338) | 365 | 284 | 762 | ||
Effect of currency translation | (18) | 481 | (61) | 89 | ||
Amounts Settled and Other | (2,536) | |||||
End of period | $ 10,195 | $ 14,653 | $ 10,195 | $ 14,653 | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Business Combination, Acquisition Related Costs | Business Combination, Acquisition Related Costs | Business Combination, Acquisition Related Costs | Business Combination, Acquisition Related Costs | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Business Combination, Acquisition Related Costs | Business Combination, Acquisition Related Costs | Business Combination, Acquisition Related Costs | Business Combination, Acquisition Related Costs | ||
Predecessor | Auxilium Pharmaceuticals, Inc. | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||||
Beginning of period | 8,262 | $ 9,494 | 9,494 | |||
Acquisition of contingent consideration from Predecessor | 0 | |||||
Changes in Fair Value Recorded in Earnings | (85) | |||||
Amounts Settled and Other | (1,147) | |||||
End of period | $ 8,262 | 8,262 | ||||
Predecessor | Other | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||||
Beginning of period | $ 1,933 | 2,953 | $ 2,953 | |||
Acquisition of contingent consideration from Predecessor | 0 | |||||
Changes in Fair Value Recorded in Earnings | 369 | |||||
Amounts Settled and Other | (1,389) | |||||
End of period | $ 1,933 | $ 1,933 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - Discount Rate | Jun. 30, 2024 |
Minimum | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | |
Discount rate applied (percent) | 0.089 |
Maximum | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | |
Discount rate applied (percent) | 0.190 |
Weighted Average | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | |
Discount rate applied (percent) | 0.171 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Reorganization | |||
Raw materials | $ 120,277 | $ 100,082 | |
Work-in-process | 142,249 | 143,906 | |
Finished goods | 396,501 | 587,144 | |
Total | $ 659,027 | 831,132 | |
Predecessor | |||
Reorganization | |||
Raw materials | 100,082 | $ 103,336 | |
Work-in-process | 40,185 | 29,827 | |
Finished goods | 112,410 | 112,854 | |
Total | $ 252,677 | $ 246,017 |
INVENTORIES - Narrative (Detail
INVENTORIES - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | |||
Long-term inventory | $ 436,200 | $ 440,579 | $ 29,700 |
Inventory, fair value | 793,100 | ||
Long term inventory | 406,700 | ||
Inventories not yet available for sale | $ 4,400 | $ 2,700 |
LEASES - Assets and Liabilities
LEASES - Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Right-of-use assets: | |||
Operating lease right-of-use assets | $ 20,544 | $ 21,373 | |
Finance lease right-of-use assets | 7,413 | ||
Total right-of-use assets | $ 27,957 | ||
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 | ||
Operating lease liabilities, excluding amounts classified as Liabilities subject to compromise: | |||
Current operating lease liabilities | $ 8,244 | 4,256 | |
Noncurrent operating lease liabilities | 13,025 | 16,914 | |
Total operating lease liabilities | $ 21,269 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current operating lease liabilities | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Noncurrent operating lease liabilities | ||
Finance lease liabilities, excluding amounts classified as Liabilities subject to compromise: | |||
Current finance lease liabilities | $ 4,823 | ||
Noncurrent finance lease liabilities | 2,461 | ||
Total finance lease liabilities | $ 7,284 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Net change in other liabilities | ||
Operating and finance leases, amounts classified as Liabilities subject to compromise: | |||
Operating lease liabilities | $ 0 | ||
Finance lease liabilities | 0 | ||
Total operating and finance leases classified as Liabilities subject to compromise | $ 0 | ||
Predecessor | |||
Right-of-use assets: | |||
Operating lease right-of-use assets | 20,476 | $ 23,033 | |
Finance lease right-of-use assets | 18,668 | ||
Total right-of-use assets | $ 41,701 | ||
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 | ||
Operating lease liabilities, excluding amounts classified as Liabilities subject to compromise: | |||
Current operating lease liabilities | 1,036 | $ 956 | |
Noncurrent operating lease liabilities | $ 3,755 | 4,132 | |
Total operating lease liabilities | $ 5,088 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current operating lease liabilities | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Noncurrent operating lease liabilities | ||
Finance lease liabilities, excluding amounts classified as Liabilities subject to compromise: | |||
Current finance lease liabilities | $ 0 | ||
Noncurrent finance lease liabilities | 1,386 | ||
Total finance lease liabilities | $ 1,386 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Net change in other liabilities | ||
Operating and finance leases, amounts classified as Liabilities subject to compromise: | |||
Operating lease liabilities | $ 20,635 | ||
Finance lease liabilities | 9,981 | ||
Total operating and finance leases classified as Liabilities subject to compromise | $ 30,616 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
Lessee, Lease, Description | |||||
Operating lease cost | $ 356 | ||||
Finance lease cost: | |||||
Amortization of right-of-use assets | 1,346 | ||||
Interest on lease liabilities | 87 | ||||
Other lease costs and income: | |||||
Variable lease costs | 2,371 | ||||
Sublease income | (459) | ||||
Predecessor | |||||
Lessee, Lease, Description | |||||
Operating lease cost | $ (436) | $ 1,837 | $ 550 | $ 4,030 | |
Finance lease cost: | |||||
Amortization of right-of-use assets | 495 | 2,017 | 2,519 | 4,044 | |
Interest on lease liabilities | 30 | 206 | 169 | 435 | |
Other lease costs and income: | |||||
Variable lease costs | 606 | 2,195 | 3,588 | 5,201 | |
Sublease income | (229) | (1,544) | (1,129) | (3,088) | |
Cost of revenues | |||||
Other lease costs and income: | |||||
Lease, cost | 1,055 | ||||
Cost of revenues | Predecessor | |||||
Other lease costs and income: | |||||
Lease, cost | 468 | 1,437 | 2,130 | 3,053 | |
Selling, general and administrative | |||||
Other lease costs and income: | |||||
Lease, cost | 2,559 | ||||
Selling, general and administrative | Predecessor | |||||
Other lease costs and income: | |||||
Lease, cost | (32) | 3,020 | 3,398 | 7,032 | |
Research and development | |||||
Other lease costs and income: | |||||
Lease, cost | $ 0 | ||||
Research and development | Predecessor | |||||
Other lease costs and income: | |||||
Lease, cost | $ 0 | $ 48 | $ 0 | $ 102 |
LEASES - Cash Flow and Suppleme
LEASES - Cash Flow and Supplemental Noncash Information (Details) - USD ($) $ in Thousands | 2 Months Ended | 4 Months Ended | 6 Months Ended |
Jun. 30, 2024 | Apr. 23, 2024 | Jun. 30, 2023 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash payments for operating leases | $ 1,105 | ||
Operating cash payments for finance leases | 132 | ||
Financing cash payments for finance leases | $ 1,190 | ||
Predecessor | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash payments for operating leases | $ 1,863 | $ 5,921 | |
Operating cash payments for finance leases | 366 | 693 | |
Financing cash payments for finance leases | $ 2,381 | $ 3,299 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES - Changes in the Carrying Amount of Goodwill (Details) $ in Thousands | 4 Months Ended |
Apr. 23, 2024 USD ($) | |
Goodwill | |
Goodwill, ending balance | $ 0 |
Branded Pharmaceuticals | |
Goodwill | |
Goodwill, ending balance | 0 |
Sterile Injectables | |
Goodwill | |
Goodwill, ending balance | 0 |
Generic Pharmaceuticals | |
Goodwill | |
Goodwill, ending balance | 0 |
International Pharmaceuticals | |
Goodwill | |
Goodwill, ending balance | 0 |
Predecessor | |
Goodwill | |
Goodwill, beginning balance | 1,352,011 |
Goodwill, ending balance | 1,352,011 |
Predecessor | Branded Pharmaceuticals | |
Goodwill | |
Goodwill, beginning balance | 828,818 |
Predecessor | Sterile Injectables | |
Goodwill | |
Goodwill, beginning balance | 523,193 |
Predecessor | Generic Pharmaceuticals | |
Goodwill | |
Goodwill, beginning balance | 0 |
Predecessor | International Pharmaceuticals | |
Goodwill | |
Goodwill, beginning balance | 0 |
Fresh Start Adjustments | |
Goodwill | |
Other | (1,352,011) |
Goodwill, ending balance | (1,352,011) |
Fresh Start Adjustments | Branded Pharmaceuticals | |
Goodwill | |
Other | (828,818) |
Fresh Start Adjustments | Sterile Injectables | |
Goodwill | |
Other | (523,193) |
Fresh Start Adjustments | Generic Pharmaceuticals | |
Goodwill | |
Other | 0 |
Fresh Start Adjustments | International Pharmaceuticals | |
Goodwill | |
Other | $ 0 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES - Accumulated Impairment (Details) $ in Thousands | 4 Months Ended |
Apr. 23, 2024 USD ($) | |
Goodwill | |
Accumulated impairment losses ending balance | $ 0 |
Predecessor | |
Goodwill | |
Accumulated impairment losses beginning balance | 6,731,711 |
Fresh Start Adjustments | |
Goodwill | |
Impact of fresh start accounting | (6,731,711) |
Branded Pharmaceuticals | |
Goodwill | |
Accumulated impairment losses ending balance | 0 |
Branded Pharmaceuticals | Predecessor | |
Goodwill | |
Accumulated impairment losses beginning balance | 855,810 |
Branded Pharmaceuticals | Fresh Start Adjustments | |
Goodwill | |
Impact of fresh start accounting | (855,810) |
Sterile Injectables | |
Goodwill | |
Accumulated impairment losses ending balance | 0 |
Sterile Injectables | Predecessor | |
Goodwill | |
Accumulated impairment losses beginning balance | 2,208,000 |
Sterile Injectables | Fresh Start Adjustments | |
Goodwill | |
Impact of fresh start accounting | (2,208,000) |
Generic Pharmaceuticals | |
Goodwill | |
Accumulated impairment losses ending balance | 0 |
Generic Pharmaceuticals | Predecessor | |
Goodwill | |
Accumulated impairment losses beginning balance | 3,142,657 |
Generic Pharmaceuticals | Fresh Start Adjustments | |
Goodwill | |
Impact of fresh start accounting | (3,142,657) |
International Pharmaceuticals | |
Goodwill | |
Accumulated impairment losses ending balance | 0 |
International Pharmaceuticals | Predecessor | |
Goodwill | |
Accumulated impairment losses beginning balance | 525,244 |
International Pharmaceuticals | Fresh Start Adjustments | |
Goodwill | |
Impact of fresh start accounting | $ (525,244) |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLES - Intangible Assets - Successor (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | Apr. 23, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Indefinite-lived intangibles: | |||||
Beginning Balance | $ 298,334 | $ 0 | $ 0 | ||
Acquisitions | 298,334 | ||||
Other | 0 | ||||
Effect of Currency Translation | 0 | ||||
Ending Balance | 298,334 | $ 298,334 | 298,334 | 298,334 | |
Finite-lived intangibles: | |||||
Beginning Balance | 1,999,089 | 0 | 0 | ||
Acquisitions | 1,999,089 | ||||
Other | 3,293 | ||||
Effect of Currency Translation | (56) | ||||
Ending Balance | 2,002,326 | 2,002,326 | 1,999,089 | 2,002,326 | |
Intangible Assets, Gross | |||||
Beginning balance | 2,297,423 | 0 | 0 | ||
Acquired by Successor | 2,297,423 | ||||
Other | 3,293 | ||||
Effect of Currency Translation | (56) | ||||
Ending balance | 2,300,660 | 2,300,660 | 2,297,423 | 2,300,660 | |
Accumulated amortization: | |||||
Beginning Balance | 0 | 0 | 0 | ||
Amortization | (50,000) | (50,000) | |||
Other | 0 | ||||
Effect of Currency Translation | 170 | ||||
Ending Balance | (48,959) | (48,959) | 0 | (48,959) | |
Net other intangibles | 2,251,701 | 2,251,701 | 2,297,423 | 2,251,701 | $ 0 |
Marketed products | |||||
Finite-lived intangibles: | |||||
Beginning Balance | 1,929,332 | 0 | 0 | ||
Acquisitions | 0 | 1,929,332 | |||
Other | 1,929,332 | 3,293 | |||
Effect of Currency Translation | 0 | (56) | |||
Ending Balance | 1,932,569 | 1,932,569 | 1,929,332 | 1,932,569 | |
Intangible Assets, Gross | |||||
Beginning balance | 1,929,332 | ||||
Ending balance | 1,929,332 | ||||
Accumulated amortization: | |||||
Beginning Balance | 0 | 0 | 0 | ||
Amortization | 0 | ||||
Other | 0 | ||||
Effect of Currency Translation | 0 | ||||
Ending Balance | 0 | ||||
Licenses | |||||
Finite-lived intangibles: | |||||
Beginning Balance | 69,757 | 0 | 0 | ||
Acquisitions | 0 | 69,757 | |||
Other | 69,757 | 0 | |||
Effect of Currency Translation | 0 | 0 | |||
Ending Balance | 69,757 | 69,757 | 69,757 | 69,757 | |
Accumulated amortization: | |||||
Beginning Balance | 0 | 0 | 0 | ||
Amortization | 0 | (46,419) | |||
Other | 0 | 0 | |||
Effect of Currency Translation | 0 | 170 | |||
Ending Balance | (46,249) | (46,249) | $ 0 | (46,249) | |
Intangible life (years) | 5 years | ||||
In-process research and development | |||||
Indefinite-lived intangibles: | |||||
Beginning Balance | 298,334 | $ 0 | 0 | ||
Acquisitions | 298,334 | ||||
Other | 0 | ||||
Effect of Currency Translation | 0 | ||||
Ending Balance | 298,334 | $ 298,334 | 298,334 | $ 298,334 | |
Intangible Assets, Gross | |||||
Beginning balance | $ 298,334 | ||||
Ending balance | $ 298,334 | ||||
Weighted Average | |||||
Accumulated amortization: | |||||
Intangible life (years) | 8 years | 8 years | 8 years | ||
Weighted Average | Marketed products | |||||
Accumulated amortization: | |||||
Intangible life (years) | 8 years | 8 years | 8 years | 8 years | |
Weighted Average | Licenses | |||||
Accumulated amortization: | |||||
Intangible life (years) | 5 years | 5 years | 5 years | 5 years |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLES - Other Intangible Assets (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | Apr. 23, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Indefinite-lived intangibles: | |||||
Beginning Balance | $ 298,334 | $ 0 | $ 0 | ||
Acquired by Successor | 298,334 | ||||
Other | 0 | ||||
Effect of Currency Translation | 0 | ||||
Ending Balance | 298,334 | $ 298,334 | 298,334 | 298,334 | |
Finite-lived intangibles: | |||||
Beginning Balance | 1,999,089 | 0 | 0 | ||
Acquisitions | 1,999,089 | ||||
Other | 3,293 | ||||
Effect of Currency Translation | (56) | ||||
Ending Balance | 2,002,326 | 2,002,326 | 1,999,089 | 2,002,326 | |
Intangible Assets, Gross | |||||
Beginning balance | 2,297,423 | 0 | 0 | ||
Acquired by Successor | 2,297,423 | ||||
Other | 3,293 | ||||
Effect of Currency Translation | (56) | ||||
Ending balance | 2,300,660 | 2,300,660 | 2,297,423 | 2,300,660 | |
Accumulated amortization: | |||||
Beginning Balance | 0 | 0 | 0 | ||
Amortization | (50,000) | (50,000) | |||
Other | 0 | ||||
Effect of Currency Translation | 170 | ||||
Ending Balance | (48,959) | (48,959) | 0 | (48,959) | |
Net other intangibles | 2,251,701 | 2,251,701 | 2,297,423 | 2,251,701 | $ 0 |
In-process research and development | |||||
Indefinite-lived intangibles: | |||||
Beginning Balance | 298,334 | 0 | 0 | ||
Acquired by Successor | 298,334 | ||||
Other | 0 | ||||
Effect of Currency Translation | 0 | ||||
Ending Balance | 298,334 | 298,334 | 298,334 | 298,334 | |
Intangible Assets, Gross | |||||
Beginning balance | 298,334 | ||||
Ending balance | 298,334 | ||||
Predecessor | |||||
Indefinite-lived intangibles: | |||||
Beginning Balance | 0 | 0 | |||
Acquired by Successor | 0 | ||||
Other | 298,334 | ||||
Effect of Currency Translation | 0 | ||||
Finite-lived intangibles: | |||||
Beginning Balance | 6,364,178 | 6,364,178 | |||
Acquisitions | 0 | ||||
Other | (4,356,872) | ||||
Effect of Currency Translation | (8,217) | ||||
Intangible Assets, Gross | |||||
Beginning balance | 6,355,961 | 6,364,178 | 6,364,178 | ||
Acquired by Successor | 0 | ||||
Other | (4,058,538) | ||||
Effect of Currency Translation | (8,217) | ||||
Ending balance | 6,355,961 | ||||
Accumulated amortization: | |||||
Beginning Balance | (4,956,206) | (4,886,295) | (4,886,295) | ||
Amortization | (76,989) | ||||
Other | 4,956,206 | ||||
Effect of Currency Translation | 7,078 | ||||
Ending Balance | (4,956,206) | ||||
Net other intangibles | 1,399,755 | $ 1,477,883 | |||
Predecessor | In-process research and development | |||||
Indefinite-lived intangibles: | |||||
Beginning Balance | 0 | 0 | |||
Acquired by Successor | 0 | ||||
Other | 298,334 | ||||
Effect of Currency Translation | 0 | ||||
Intangible Assets, Gross | |||||
Beginning balance | 0 | ||||
Ending balance | 0 | ||||
Licenses | |||||
Finite-lived intangibles: | |||||
Beginning Balance | 69,757 | 0 | 0 | ||
Acquisitions | 0 | 69,757 | |||
Other | 69,757 | 0 | |||
Effect of Currency Translation | 0 | 0 | |||
Ending Balance | 69,757 | 69,757 | 69,757 | 69,757 | |
Accumulated amortization: | |||||
Beginning Balance | 0 | 0 | 0 | ||
Amortization | 0 | (46,419) | |||
Other | 0 | 0 | |||
Effect of Currency Translation | 0 | 170 | |||
Ending Balance | (46,249) | (46,249) | $ 0 | (46,249) | |
Intangible life (years) | 5 years | ||||
Licenses | Predecessor | |||||
Finite-lived intangibles: | |||||
Beginning Balance | 0 | $ 432,107 | 432,107 | ||
Acquisitions | 0 | ||||
Other | (432,107) | ||||
Effect of Currency Translation | 0 | ||||
Ending Balance | 0 | ||||
Accumulated amortization: | |||||
Beginning Balance | (419,084) | (419,084) | |||
Amortization | (1,277) | ||||
Other | 420,361 | ||||
Effect of Currency Translation | 0 | ||||
Tradenames (Predecessor) | |||||
Accumulated amortization: | |||||
Beginning Balance | 0 | ||||
Ending Balance | 0 | ||||
Tradenames (Predecessor) | Predecessor | |||||
Finite-lived intangibles: | |||||
Beginning Balance | 0 | 6,409 | 6,409 | ||
Acquisitions | 0 | ||||
Other | (6,409) | ||||
Effect of Currency Translation | 0 | ||||
Ending Balance | 0 | ||||
Accumulated amortization: | |||||
Beginning Balance | (6,409) | (6,409) | |||
Amortization | 0 | ||||
Other | 6,409 | ||||
Effect of Currency Translation | 0 | ||||
Developed Technology | |||||
Accumulated amortization: | |||||
Beginning Balance | 0 | 0 | 0 | ||
Amortization | (2,710) | ||||
Other | 0 | ||||
Effect of Currency Translation | 0 | ||||
Ending Balance | (2,710) | (2,710) | 0 | (2,710) | |
Developed Technology | Predecessor | |||||
Finite-lived intangibles: | |||||
Beginning Balance | 0 | 5,925,662 | 5,925,662 | ||
Acquisitions | 0 | ||||
Other | (5,917,445) | ||||
Effect of Currency Translation | (8,217) | ||||
Ending Balance | 0 | ||||
Accumulated amortization: | |||||
Beginning Balance | (4,460,802) | (4,460,802) | |||
Amortization | (75,712) | ||||
Other | 4,529,436 | ||||
Effect of Currency Translation | 7,078 | ||||
Marketed products | |||||
Finite-lived intangibles: | |||||
Beginning Balance | 1,929,332 | 0 | 0 | ||
Acquisitions | 0 | 1,929,332 | |||
Other | 1,929,332 | 3,293 | |||
Effect of Currency Translation | 0 | (56) | |||
Ending Balance | 1,932,569 | $ 1,932,569 | 1,929,332 | 1,932,569 | |
Intangible Assets, Gross | |||||
Beginning balance | 1,929,332 | ||||
Ending balance | 1,929,332 | ||||
Accumulated amortization: | |||||
Beginning Balance | 0 | 0 | $ 0 | ||
Amortization | 0 | ||||
Other | 0 | ||||
Effect of Currency Translation | 0 | ||||
Ending Balance | 0 | ||||
Marketed products | Predecessor | |||||
Intangible Assets, Gross | |||||
Beginning balance | $ 6,355,961 | ||||
Ending balance | $ 6,355,961 | ||||
Weighted Average | |||||
Accumulated amortization: | |||||
Intangible life (years) | 8 years | 8 years | 8 years | ||
Weighted Average | Predecessor | |||||
Accumulated amortization: | |||||
Intangible life (years) | 8 years | ||||
Weighted Average | Licenses | |||||
Accumulated amortization: | |||||
Intangible life (years) | 5 years | 5 years | 5 years | 5 years | |
Weighted Average | Licenses | Predecessor | |||||
Accumulated amortization: | |||||
Intangible life (years) | 5 years | ||||
Weighted Average | Developed Technology | Predecessor | |||||
Accumulated amortization: | |||||
Intangible life (years) | 8 years | ||||
Weighted Average | Marketed products | |||||
Accumulated amortization: | |||||
Intangible life (years) | 8 years | 8 years | 8 years | 8 years |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLES - Narrative (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | |||
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Goodwill | ||||||||
Goodwill | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||
Amortization expense | $ 50,000,000 | 50,000,000 | ||||||
Predecessor | ||||||||
Goodwill | ||||||||
Goodwill | 1,352,011,000 | 1,352,011,000 | $ 1,352,011,000 | |||||
Amortization expense | 76,989,000 | |||||||
Segment Reconciling Items | ||||||||
Goodwill | ||||||||
Amortization expense | $ 49,100,000 | $ 64,400,000 | $ 49,129,000 | $ 129,700,000 | ||||
Segment Reconciling Items | Predecessor | ||||||||
Goodwill | ||||||||
Amortization expense | $ 15,100,000 | $ 77,000,000 |
GOODWILL AND OTHER INTANGIBLE_7
GOODWILL AND OTHER INTANGIBLES - Intangible Asset Impairment Charges Including Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Schedule of Goodwill And Other Intangibles [Line Items] | |||
Intangible assets subject to amortization, Carrying Amount | $ 2,002,326 | $ 1,999,089 | $ 0 |
In-process research and development, Carrying Amount | 298,334 | 298,334 | 0 |
Total identified intangible assets | 2,300,660 | 2,297,423 | 0 |
In-process research and development | |||
Schedule of Goodwill And Other Intangibles [Line Items] | |||
In-process research and development, Carrying Amount | 298,334 | 298,334 | 0 |
Total identified intangible assets | 298,334 | ||
Marketed products | |||
Schedule of Goodwill And Other Intangibles [Line Items] | |||
Intangible assets subject to amortization, Carrying Amount | 1,932,569 | 1,929,332 | 0 |
Total identified intangible assets | $ 1,929,332 | ||
Marketed products | Minimum | |||
Schedule of Goodwill And Other Intangibles [Line Items] | |||
Intangible assets subject to amortization, Useful Life Range | 3 years | ||
Intangible assets subject to amortization, Discount Rate Range | 12.30% | ||
Marketed products | Maximum | |||
Schedule of Goodwill And Other Intangibles [Line Items] | |||
Intangible assets subject to amortization, Useful Life Range | 11 years | ||
Intangible assets subject to amortization, Discount Rate Range | 26.70% | ||
Licenses | |||
Schedule of Goodwill And Other Intangibles [Line Items] | |||
Intangible assets subject to amortization, Carrying Amount | $ 69,757 | $ 69,757 | $ 0 |
Intangible assets subject to amortization, Useful Life Range | 5 years | ||
Intangible assets subject to amortization, Discount Rate Range | 26.70% | ||
In-process research and development | Minimum | In-process research and development | |||
Schedule of Goodwill And Other Intangibles [Line Items] | |||
Intangible assets subject to amortization, Discount Rate Range | 24.80% | ||
In-process research and development | Maximum | In-process research and development | |||
Schedule of Goodwill And Other Intangibles [Line Items] | |||
Intangible assets subject to amortization, Discount Rate Range | 27.70% |
GOODWILL AND OTHER INTANGIBLE_8
GOODWILL AND OTHER INTANGIBLES - Schedule of Estimated Amortization of Intangibles (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 130,654 |
2025 | 259,177 |
2026 | 257,824 |
2027 | 242,935 |
2028 | $ 242,935 |
LICENSE, COLLABORATION AND AS_2
LICENSE, COLLABORATION AND ASSET ACQUISITION AGREEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2024 | |
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Cash into bank account | $ 80.5 | |
TLC Agreement | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Acquired in-process research and development | $ 30 | |
Cash into bank account | $ 85 |
CONTRACT ASSETS AND LIABILITI_3
CONTRACT ASSETS AND LIABILITIES - Contract Assets and Contract Liabilities from Contracts with Customers (Details) - USD ($) $ in Thousands | 2 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Apr. 23, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
Reorganization | ||||
Contract assets | $ 8,854 | $ 8,854 | ||
Contract liabilities | 3,251 | 3,251 | ||
Contract with customer, asset, after allowance for credit loss, current | 2,000 | 2,000 | $ 2,100 | |
Contract liability amounts classified as current | 600 | 600 | 600 | |
Increase in contract liability | $ 100 | $ 200 | ||
Predecessor | ||||
Reorganization | ||||
Contract assets | 11,387 | |||
Contract assets - $ change | $ (2,533) | |||
Contract assets - % change | (22.00%) | |||
Contract liabilities | $ 3,534 | |||
Contract liabilities - $ change | $ (283) | |||
Contract liabilities - % change | (8.00%) |
CONTRACT ASSETS AND LIABILITI_4
CONTRACT ASSETS AND LIABILITIES - Narrative (Details) - USD ($) $ in Millions | 2 Months Ended | 4 Months Ended |
Jun. 30, 2024 | Apr. 23, 2024 | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | ||
Performance obligation satisfied in previous period | $ 13.7 | $ 0.3 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Reorganization | |||
Trade accounts payable | $ 77,655 | ||
Returns and allowances | 111,662 | ||
Rebates | 86,127 | ||
Other sales deductions | 4,192 | ||
Accrued interest | 42,914 | ||
Accrued payroll and related benefits | 57,495 | ||
Accrued royalties and other distribution partner payables | 18,931 | ||
Acquisition-related contingent consideration—current | 2,753 | ||
Other | 113,269 | ||
Total | 514,998 | $ 505,237 | |
Restricted Cash and Cash Equivalents | |||
Reorganization | |||
Escrow deposit | $ 76,200 | 80,500 | |
Predecessor | |||
Reorganization | |||
Trade accounts payable | $ 94,735 | ||
Returns and allowances | 119,577 | ||
Rebates | 105,428 | ||
Other sales deductions | 3,212 | ||
Accrued interest | 0 | ||
Accrued payroll and related benefits | 81,145 | ||
Accrued royalties and other distribution partner payables | 35,856 | ||
Acquisition-related contingent consideration—current | 0 | ||
Other | 97,783 | ||
Total | $ 506,979 | $ 537,736 |
DEBT - Components of Total Inde
DEBT - Components of Total Indebtedness (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Debt Instrument | |||
Principal amount | $ 2,500,000 | ||
Carrying amount | 2,437,753 | ||
Less: current portion, net | 11,250 | ||
Principal amount of total long-term debt, less current portion, net | 2,488,750 | ||
Less: current portion, net | 11,250 | $ 7,500 | |
Total long-term debt, less current portion, net | $ 2,426,503 | 2,429,031 | |
Predecessor | |||
Debt Instrument | |||
Principal amount | $ 8,147,826 | ||
Carrying amount | 8,147,826 | ||
Less: current portion, net | 0 | ||
Principal amount of total long-term debt, less current portion, net | 8,147,826 | ||
Less: current portion, net | 0 | 0 | |
Total long-term debt, less current portion, net | $ 0 | $ 8,147,826 | |
Revolving Credit Facility | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 12% | ||
Principal amount | $ 277,200 | ||
Carrying amount | $ 277,200 | ||
5.375% Senior Notes due 2023 | |||
Debt Instrument | |||
Interest rate (as a percent) | 5.375% | ||
5.375% Senior Notes due 2023 | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 5.38% | ||
Principal amount | $ 6,127 | ||
Carrying amount | $ 6,127 | ||
6.00% Senior Notes due 2023 | |||
Debt Instrument | |||
Interest rate (as a percent) | 6% | ||
6.00% Senior Notes due 2023 | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 6% | ||
Principal amount | $ 56,436 | ||
Carrying amount | $ 56,436 | ||
5.875% Senior Secured Notes due 2024 | |||
Debt Instrument | |||
Interest rate (as a percent) | 5.875% | ||
5.875% Senior Secured Notes due 2024 | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 6.88% | ||
Principal amount | $ 300,000 | ||
Carrying amount | $ 300,000 | ||
6.00% Senior Notes due 2025 | |||
Debt Instrument | |||
Interest rate (as a percent) | 6% | ||
6.00% Senior Notes due 2025 | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 6% | ||
Principal amount | $ 21,578 | ||
Carrying amount | $ 21,578 | ||
7.50% Senior Secured Notes due 2027 | |||
Debt Instrument | |||
Interest rate (as a percent) | 7.50% | ||
7.50% Senior Secured Notes due 2027 | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 8.50% | ||
Principal amount | $ 2,015,479 | ||
Carrying amount | $ 2,015,479 | ||
9.50% Senior Secured Second Lien Notes due 2027 | |||
Debt Instrument | |||
Interest rate (as a percent) | 9.50% | ||
9.50% Senior Secured Second Lien Notes due 2027 | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 9.50% | ||
Principal amount | $ 940,590 | ||
Carrying amount | $ 940,590 | ||
6.00% Senior Notes due 2028 | |||
Debt Instrument | |||
Interest rate (as a percent) | 6% | ||
6.00% Senior Notes due 2028 | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 6% | ||
Principal amount | $ 1,260,416 | ||
Carrying amount | $ 1,260,416 | ||
6.125% Senior Secured Notes due 2029 | |||
Debt Instrument | |||
Interest rate (as a percent) | 6.125% | ||
6.125% Senior Secured Notes due 2029 | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 7.13% | ||
Principal amount | $ 1,295,000 | ||
Carrying amount | $ 1,295,000 | ||
8.50% Senior Notes Due 2031 | |||
Debt Instrument | |||
Interest rate (as a percent) | 8.50% | ||
Effective interest rate (as a percent) | 8.87% | ||
Principal amount | $ 1,000,000 | ||
Carrying amount | $ 981,263 | ||
Term Loan Facility | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 10.43% | ||
Principal amount | $ 1,500,000 | ||
Carrying amount | $ 1,456,490 | ||
Term Loan Facility | Predecessor | |||
Debt Instrument | |||
Effective interest rate (as a percent) | 14.50% | ||
Principal amount | $ 1,975,000 | ||
Carrying amount | $ 1,975,000 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Apr. 23, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | |||
Plus: Other non-operating assets | $ 2,500,000 | $ 2,485,000 | $ 4,100,000 |
DEBT - Exit Financing Debt (Det
DEBT - Exit Financing Debt (Details) - USD ($) $ in Thousands | 2 Months Ended | ||
Apr. 24, 2024 | Jun. 30, 2024 | Apr. 23, 2024 | |
Line of Credit Facility | |||
Carrying amount | $ 2,437,753 | ||
8.50% Senior Notes Due 2031 | |||
Line of Credit Facility | |||
Carrying amount | $ 981,263 | ||
Interest rate (as a percent) | 8.50% | ||
8.50% Senior Notes Due 2031 | Senior Notes | |||
Line of Credit Facility | |||
Interest rate (as a percent) | 8.50% | ||
Redemption price (as a percent) | 100% | ||
Redemption price, term | 12 months | ||
Repurchase price, percentage (as a percent) | 101% | ||
8.50% Senior Notes Due 2031 | Senior Notes | Redemption Period One | |||
Line of Credit Facility | |||
Redemption price (as a percent) | 103% | ||
Percentage of principal amount redeemed (as a percent) | 10% | ||
8.50% Senior Notes Due 2031 | Senior Notes | Redemption Period Two | |||
Line of Credit Facility | |||
Redemption price (as a percent) | 108.50% | ||
Percentage of principal amount redeemed (as a percent) | 40% | ||
8.50% Senior Notes Due 2031 | Senior Notes | Optional Redemption Period | |||
Line of Credit Facility | |||
Redemption price (as a percent) | 104.25% | ||
8.50% Senior Notes Due 2031 | Senior Notes | Redemption period four | |||
Line of Credit Facility | |||
Redemption price (as a percent) | 102.13% | ||
8.50% Senior Notes Due 2031 | Senior Notes | Before April 1, 2022 principal redeemed, in part | |||
Line of Credit Facility | |||
Redemption price (as a percent) | 100% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | |||
Line of Credit Facility | |||
Carrying amount | $ 400,000 | ||
Maximum percentage drawn to avoid leverage ratio | 40% | ||
Maximum borrowing capacity | $ 400,000 | ||
Leverage ratio, maximum | 6.10 | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility | |||
Basis spread on variable rate, minimum (as a percent) | 0% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | CORRA Credit Spread Adjustment | |||
Line of Credit Facility | |||
Basis spread on variable rate, minimum (as a percent) | 0% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | Minimum | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 3% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | Minimum | CORRA Credit Spread Adjustment | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 3% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | Minimum | Base Rate | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 2% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | Minimum | Canadian Prime Rate | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 2% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | Maximum | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 3.50% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | Maximum | CORRA Credit Spread Adjustment | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 3.50% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | Maximum | Base Rate | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 2.50% | ||
Revolving Credit Facility | New Revolving Credit Facility | Line of Credit | Maximum | Canadian Prime Rate | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 2.50% | ||
Letter of Credit | New Revolving Credit Facility | Line of Credit | |||
Line of Credit Facility | |||
Maximum borrowing capacity | $ 20,000 | ||
Term Facility | New Revolving Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility | |||
Basis spread on variable rate, minimum (as a percent) | 0.50% | ||
Term Facility | New Revolving Credit Facility | Line of Credit | CORRA Credit Spread Adjustment | |||
Line of Credit Facility | |||
Basis spread on variable rate, minimum (as a percent) | 0.50% | ||
Term Facility | New Revolving Credit Facility | Line of Credit | Minimum | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 4.25% | ||
Term Facility | New Revolving Credit Facility | Line of Credit | Minimum | Base Rate | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 3.25% | ||
Term Facility | New Revolving Credit Facility | Line of Credit | Maximum | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 4.50% | ||
Term Facility | New Revolving Credit Facility | Line of Credit | Maximum | Base Rate | |||
Line of Credit Facility | |||
Basis spread on variable rate (as a percent) | 3.50% |
DEBT - Schedule of Maturities o
DEBT - Schedule of Maturities of Exit Financing Debt (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 3,750 |
2025 | 15,000 |
2026 | 15,000 |
2027 | 15,000 |
2028 | $ 15,000 |
DEBT - Endo International plc E
DEBT - Endo International plc Events of Default and Bankruptcy-Related Matters (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 4 Months Ended | 6 Months Ended | |
Apr. 23, 2024 | Jun. 30, 2024 | Apr. 23, 2024 | Jun. 30, 2023 | Mar. 31, 2021 | |
Debt Instrument | |||||
Principal amount | $ 2,500,000,000 | ||||
Chapter 11, interest expense not recognized | $ 43,000,000 | $ 204,000,000 | |||
Adequate protection payments | 0 | ||||
First Lien Creditors | |||||
Debt Instrument | |||||
Adequate protection payments | 192,300,000 | $ 291,700,000 | |||
Senior Notes | |||||
Debt Instrument | |||||
Adequate protection payments | 572,000,000 | ||||
Legacy Revolving Credit Facility | Revolving Credit Facility (Predecessor) | |||||
Debt Instrument | |||||
Principal amount | $ 1,000,000,000 | ||||
Adequate protection payments | 54,100,000 | ||||
Legacy Term Loan Facility | |||||
Debt Instrument | |||||
Principal amount | $ 1,500,000,000 | ||||
Legacy Term Loan Facility | Term Loan Facility | |||||
Debt Instrument | |||||
Principal amount | $ 2,000,000,000 | ||||
Adequate protection payments | $ 471,200,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||
Apr. 23, 2024 USD ($) | Jul. 13, 2023 USD ($) | Apr. 13, 2023 USD ($) | Mar. 24, 2023 USD ($) | Aug. 16, 2022 USD ($) | Aug. 01, 2022 | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) patent | Mar. 31, 2023 USD ($) | Jan. 31, 2023 patent | Dec. 31, 2022 defendant | 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 ($) county | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Apr. 23, 2024 USD ($) | Jun. 30, 2024 USD ($) claim lawsuit | Dec. 31, 2023 USD ($) | Feb. 26, 2024 claim case | Aug. 15, 2023 USD ($) | Mar. 31, 2016 case | |
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Loss contingency accrual, unpaid portion of settlement consideration payable | $ 6,900,000 | |||||||||||||||||||||||||||||||||
Reserve for loss contingencies | $ 2,431,500,000 | $ 2,431,500,000 | 0 | $ 2,431,500,000 | ||||||||||||||||||||||||||||||
Number of remaining defendants granted | defendant | 5 | |||||||||||||||||||||||||||||||||
Ad Hoc First Lien Group | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
EHSI criminal fine | $ 1,086,000,000 | |||||||||||||||||||||||||||||||||
Unsecured debt | $ 476,000,000 | |||||||||||||||||||||||||||||||||
Mesh related cases | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Payments to plaintiffs and qualified settlement funds | $ 3,600,000,000 | |||||||||||||||||||||||||||||||||
Mesh related cases | Predecessor | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Cash received for reversionary interests | $ 11,048,000 | 11,000,000 | ||||||||||||||||||||||||||||||||
Mesh related cases | American Medical Systems | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Loss contingency, claims settled, number | claim | 71,000 | |||||||||||||||||||||||||||||||||
Stalking Horse Bid - Mesh Claimant | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Settlement, amount awarded to other party | $ 500,000 | |||||||||||||||||||||||||||||||||
Opioid-related Matters | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Settlement, amount awarded to other party | $ 50,000,000 | $ 35,000,000 | $ 8,750,000 | $ 10,000,000 | ||||||||||||||||||||||||||||||
Number of cases filed by states | case | 15 | |||||||||||||||||||||||||||||||||
Pending claims, number | claim | 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 | |||||||||||||||||||||||||||||||||
Number of putative class actions | lawsuit | 3 | |||||||||||||||||||||||||||||||||
Loss contingency, plaintiffs, number of counties | county | 9 | 2 | ||||||||||||||||||||||||||||||||
Loss contingency, number of municipalities | municipality | 18 | |||||||||||||||||||||||||||||||||
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 | $ 5,000,000 | |||||||||||||||||||||||||||||||||
Subsequent settlement payments | $ 500,000 | |||||||||||||||||||||||||||||||||
Payment period (in years) | 10 years | |||||||||||||||||||||||||||||||||
Opioid-related Matters | VASOSTRICT and/or ADRENALIN | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Settlement, amount awarded to other party | $ 1,000,000 | |||||||||||||||||||||||||||||||||
Opioid-related Matters | Endo International PLC | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Settlement, amount awarded to other party | $ 9,000,000 | $ 9,750,000 | $ 26,000,000 | $ 7,500,000 | $ 65,000,000 | $ 63,000,000 | $ 25,000,000 | |||||||||||||||||||||||||||
Opioid-related Matters | Ad Hoc First Lien Group | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Reserve for loss contingencies | $ 613,000,000 | 584,000,000 | $ 599,000,000 | 584,000,000 | $ 599,000,000 | $ 550,000,000 | $ 584,000,000 | |||||||||||||||||||||||||||
Payments to plaintiffs and qualified settlement funds | $ 446,000,000 | |||||||||||||||||||||||||||||||||
Payment period (in years) | 10 years | |||||||||||||||||||||||||||||||||
Contingency charges | $ 15,000,000 | $ 34,000,000 | $ 419,000,000 | |||||||||||||||||||||||||||||||
Funding commitment related to settlement | $ 34,000,000 | |||||||||||||||||||||||||||||||||
Additional charges | $ 15,000,000 | 1,557,000,000 | $ 10,000,000 | |||||||||||||||||||||||||||||||
Loss contingency accrual, period increase (decrease) | $ 2,178,000,000 | 621,000,000 | ||||||||||||||||||||||||||||||||
Initial payment | $ 5,000,000 | |||||||||||||||||||||||||||||||||
Opioid-related Matters | Stalking Horse Bid | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Reserve for loss contingencies | $ 611,000,000 | |||||||||||||||||||||||||||||||||
Stalking Horse Bid And Public School District Creditors | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Litigation settlement voluntary trust amount | $ 3,000,000 | |||||||||||||||||||||||||||||||||
Stalking Horse Bid And Public School District Creditors | Ad Hoc First Lien Group | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Reserve for loss contingencies | $ 3,000,000 | |||||||||||||||||||||||||||||||||
Payment period (in years) | 2 years | |||||||||||||||||||||||||||||||||
Stalking Horse Bid - Opioid Claimant | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Settlement, amount awarded to other party | $ 11,500,000 | |||||||||||||||||||||||||||||||||
Litigation settlement, potential additional awarded to other party | $ 500,000 | |||||||||||||||||||||||||||||||||
Litigation settlement, expense | $ 12,000,000 | |||||||||||||||||||||||||||||||||
Stalking Horse Bid And Canadian Government | ||||||||||||||||||||||||||||||||||
Loss Contingencies | ||||||||||||||||||||||||||||||||||
Litigation settlement voluntary trust amount | $ 7,000,000 | $ 7,000,000 | ||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||
Number of patents infringed | patent | 2 | 3 | ||||||||||||||||||||||||||||||||
Stay of approval period, Hatch-Waxman Act | 30 months | 30 months |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Loss Contingencies (Details) - USD ($) $ in Thousands | 4 Months Ended | 12 Months Ended |
Apr. 23, 2024 | Dec. 31, 2023 | |
Mesh Liability Accrual | ||
Beginning balance | $ 2,431,500 | |
Ending balance | $ 2,431,500 | |
Mesh related cases | Predecessor | ||
Mesh Qualified Settlement Funds | ||
Beginning balance | 49,464 | |
Cash received for reversionary interests | (11,048) | (11,000) |
Cash distributions to settle disputes from Qualified Settlement Funds | (1,523) | |
Other | 199 | |
Impacts of the Plan | (37,092) | |
Ending balance | 0 | 49,464 |
Mesh Liability Accrual | ||
Other | 199 | |
Impacts of the Plan | (37,092) | |
Mesh related cases | Mesh Liability Accrual | Predecessor | ||
Mesh Qualified Settlement Funds | ||
Other | 199 | |
Impacts of the Plan | (221,268) | |
Mesh Liability Accrual | ||
Beginning balance | 222,592 | |
Cash received for reversionary interests | 0 | |
Cash distributions to settle disputes from Qualified Settlement Funds | (1,523) | |
Other | 199 | |
Impacts of the Plan | (221,268) | |
Ending balance | $ 0 | $ 222,592 |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
Equity [Abstract] | |||||
Other comprehensive loss, tax, portion attributable to parent | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Reclassification from AOCI | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
OTHER EXPENSE (INCOME), NET - S
OTHER EXPENSE (INCOME), NET - Schedule of Components of Other Expense, Net (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
Reorganization | |||||
Net loss (gain) on sale of business and other assets | $ 52 | ||||
Foreign currency loss (gain), net | 266 | ||||
Net (gain) loss from our investments in the equity of other companies | (64) | ||||
Other miscellaneous, net | (8) | ||||
Other expense, net | $ 246 | ||||
Charges related to rejection and cancellation of equity awards | $ 6,000 | $ 9,200 | |||
Predecessor | |||||
Reorganization | |||||
Net loss (gain) on sale of business and other assets | $ 63 | $ (95) | (115) | (622) | |
Foreign currency loss (gain), net | (540) | 1,891 | (376) | 2,008 | |
Net (gain) loss from our investments in the equity of other companies | 0 | (34) | 5 | 88 | |
Other miscellaneous, net | (16) | (1,583) | 5,748 | (1,420) | |
Other expense, net | $ (493) | $ 179 | 5,262 | $ 54 | |
Charges related to rejection and cancellation of equity awards | $ 6,000 |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
Reorganization | ||||||
(Loss) income from continuing operations before income tax | $ (212,757) | $ (212,757) | $ 6,248,991 | $ 37,240 | ||
Income tax expense | $ (63,981) | |||||
Effective tax rate (as a percent) | 30.10% | |||||
Predecessor | ||||||
Reorganization | ||||||
(Loss) income from continuing operations before income tax | $ 6,394,943 | $ 34,290 | 6,248,991 | 37,240 | ||
Income tax expense | $ 50,629 | $ 10,279 | $ 58,511 | $ 16,052 | ||
Effective tax rate (as a percent) | 0.80% | 30% | 0.90% | 43.10% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Examination | ||||||
Income tax expense | $ (63,981) | |||||
Deferred tax benefit associated with tax benefit | 37,600 | |||||
Amount of claims filed | $ 20,000,000 | |||||
Amount of claims filed excluding repetitive claims | $ 4,000,000 | |||||
Predecessor | ||||||
Income Tax Examination | ||||||
Income tax expense | $ 50,629 | $ 10,279 | $ 58,511 | $ 16,052 | ||
Valuation allowance | 196,600 | 196,600 | ||||
Reduction in income taxes payable/receivables | 3,800 | 3,800 | ||||
Net decrease in deferred tax assets | 211,400 | 211,400 | ||||
Uncertain tax positions | 16,700 | 30,100 | ||||
Change in valuation allowance | 9,300 | 9,300 | ||||
Gain tax on intercompany transfer of shares | $ 4,200 | 4,200 | ||||
UTP Liability, Canadian statue lapse | $ 10,300 | |||||
Non-US | ||||||
Income Tax Examination | ||||||
Income tax expense | $ 27,100 |
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 | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | |||
Apr. 23, 2024 | Jun. 30, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Apr. 23, 2024 | Jun. 30, 2023 | |
Numerator: | ||||||||
(Loss) income from continuing operations | $ (148,776) | |||||||
Loss from discontinued operations, net of tax | 0 | |||||||
NET (LOSS) INCOME | $ (148,776) | $ (148,776) | $ 0 | |||||
Denominator: | ||||||||
For basic per share data—weighted average shares (in shares) | 76,156 | |||||||
Dilutive effect of common stock/ordinary share equivalents (in shares) | 0 | |||||||
For diluted per share data—weighted average shares (in shares) | 76,156 | |||||||
Predecessor | ||||||||
Numerator: | ||||||||
(Loss) income from continuing operations | $ 6,344,314 | $ 24,011 | $ 6,190,480 | $ 21,188 | ||||
Loss from discontinued operations, net of tax | 183,234 | (573) | 182,838 | (1,029) | ||||
NET (LOSS) INCOME | $ 6,527,548 | $ (154,230) | $ 23,438 | $ (3,279) | $ 6,373,318 | $ 20,159 | ||
Denominator: | ||||||||
For basic per share data—weighted average shares (in shares) | 235,220 | 235,220 | 235,220 | 235,218 | ||||
Dilutive effect of common stock/ordinary share equivalents (in shares) | 0 | 0 | 0 | 444 | ||||
For diluted per share data—weighted average shares (in shares) | 235,220 | 235,220 | 235,220 | 235,662 |
NET (LOSS) INCOME PER SHARE - C
NET (LOSS) INCOME PER SHARE - Computation of Diluted Income Per Share (Details) - shares | 8 Months Ended | ||
Aug. 22, 2024 | Jun. 30, 2024 | Apr. 23, 2024 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Common stock, shares issued (in shares) | 76,155,520 | 76,200,000 | |
Second Lien Creditors | Unrestricted Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Common stock, shares issued (in shares) | 200,000 | ||
Managment Incentive Plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Number of shares available for grant (in shares) | 3,600,000 | ||
Managment Incentive Plan | Subsequent event | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Shares issued (in shares) | 0 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Subsequent event - Chief Executive Officer | Aug. 29, 2024 payment |
Subsequent Event [Line Items] | |
Multiplier for payment equal to base salary and target bonus | 2 |
Base salary and target bonus, period in which to be paid | 60 days |
Period of insurance coverage | 24 months |
Payment of base salary, period | 30 days |
Outplacement services, period | 12 months |