Segment Results (Tables)

3 Months Ended

Mar. 31, 2017

Schedule of reportable segments information

The following represents selected information for the Company’s reportable segments for the three months ended March 31, 2017 and 2016 (in thousands):



	Three Months Ended March 31,
	2017		2016
Net revenues to external customers:
U.S. Generic Pharmaceuticals	$	721,983	$	583,390
U.S. Branded Pharmaceuticals	250,159		308,813
International Pharmaceuticals (1)	65,458		71,336
Total net revenues to external customers	$	1,037,600	$	963,539

Adjusted income from continuing operations before income tax:
U.S. Generic Pharmaceuticals	$	341,599	$	211,768
U.S. Branded Pharmaceuticals	129,492		168,781
International Pharmaceuticals	14,882		21,754
Total segment adjusted income from continuing operations before income tax	$	485,973	$	402,303

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(1)	Revenues generated by our International Pharmaceuticals segment are primarily attributable to Canada, Latin America and South Africa.

Schedule of reconciliations of consolidated loss from continuing operations before income tax

The table below provides reconciliations of our consolidated loss from continuing operations before income tax, which is determined in accordance with U.S. GAAP, to our total segment adjusted income from continuing operations before income tax for the three months ended March 31, 2017 and 2016 (in thousands):



	Three Months Ended March 31,
	2017			2016
Total consolidated loss from continuing operations before income tax	$	(177,351	)	$	(207,478	)
Interest expense, net	111,999			116,793
Corporate unallocated costs (1)	47,468			36,280
Amortization of intangible assets	263,134			211,669
Inventory step-up and certain manufacturing costs that will be eliminated pursuant to integration plans	115			68,476
Upfront and milestone payments to partners	3,095			1,417
Separation benefits and other cost reduction initiatives (2)	22,670			38,456
Impact of VOLTAREN^® Gel generic competition	—			(7,750		)
Certain litigation-related charges, net (3)	936			5,200
Asset impairment charges (4)	203,962			129,625
Acquisition-related and integration items (5)	10,880			12,554
Foreign currency impact related to the remeasurement of intercompany debt instruments	(2,694		)	1,255
Other, net	1,759			(4,194		)
Total segment adjusted income from continuing operations before income tax	$	485,973		$	402,303

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(1)	Corporate unallocated costs include certain corporate overhead costs, such as headcount and facility expenses and certain other income and expenses.

(2)

Separation benefits and other cost reduction initiatives include employee separation costs of $20.8 million and $6.8 million for the three months ended March 31, 2017 and 2016, respectively. During the three months ended March 31, 2017, there were other restructuring costs of $1.9 million. Other amounts in the comparable 2016 period primarily consist of $26.9 million of inventory write-offs and $4.4 million of other restructuring costs. These amounts were primarily recorded as Cost of revenues and Selling, general and administrative expense in our Condensed Consolidated Statements of Operations. See Note 4. Restructuring for discussion of our material restructuring initiatives.


(3)	These amounts include charges for Litigation-related and other contingencies, net as further described in Note 11. Commitments and Contingencies.


(4)	Asset impairment charges primarily relate to charges to write down goodwill and intangible assets as further described in Note 8. Goodwill and Other Intangibles.

(5)

Acquisition-related and integration items include costs directly associated with previous acquisitions of $4.7 million and $23.2 million for three months ended March 31, 2017 and 2016, respectively. In addition, during the three months ended March 31, 2017, there was a charge due to changes in fair value of contingent consideration of $6.2 million. During the three months ended March 31, 2016, there was a benefit due to changes in the fair value of contingent consideration of $10.7 million.