Amneal Reports Fourth Quarter and Full Year 2019 Financial Results

‒ Q4 2019 Net Revenue of $397 million; GAAP Loss per share of ($0.23); Net Loss of ($32 million) ‒

‒ Q4 2019 Adjusted EBITDA⁽¹⁾ of $81 million; Adjusted Diluted EPS ⁽¹⁾ of $0.08 ‒

‒ Full Year Net Revenue of $1.63 billion; GAAP Loss per share of ($2.74); Net Loss of ($362 million) ‒

‒ Full Year Adjusted EBITDA⁽¹⁾ of $356 million; Adjusted Diluted EPS ⁽¹⁾ of $0.35 ‒

‒ Provides 2020 Financial Outlook ‒

BRIDGEWATER, N.J.--(BUSINESS WIRE)--Amneal Pharmaceuticals, Inc. (NYSE: AMRX) (the “Company”) announced its results today for the fourth quarter and full year ended December 31, 2019.

Net revenue in the fourth quarter of 2019 was $397 million, a decrease of 20% compared to $498 million in the fourth quarter of 2018, primarily due to lower Generics business revenue. Net loss attributable to Amneal Pharmaceuticals, Inc. was $32 million in the fourth quarter of 2019 compared to a net loss of $9 million in the prior year period, due to lower revenue and lower gross margins partially offset by a decline in restructuring and intangible impairment charges. Diluted EPS in the fourth quarter of 2019 was a loss of $0.23 compared to a loss of $0.07 in the prior year period.

Adjusted net income⁽¹⁾ in the fourth quarter of 2019 was $23 million, a decrease of 77% compared to the prior year period. Adjusted EBITDA⁽¹⁾ in the fourth quarter of 2019 was $81 million, a decrease of 57% compared to the prior year period, due to lower revenue and lower gross margins, partially offset by lower operating expenses as a result of cost savings initiatives. Adjusted diluted EPS in the fourth quarter of 2019 was $0.08, compared to $0.33 for the prior year period.

“Since our return as Co-CEOs last August, we have made significant progress reinvigorating our business and taking the necessary actions to support growth in 2020 and beyond,” said Chirag and Chintu Patel, Co-Chief Executive Officers. “2019 was a transition year, but we entered 2020 with strong momentum driven by our team’s relentless focus on execution and addressing inefficiencies across the business. Our execution was highlighted by 30 new awards across our base Generics portfolio and 15 new product launches since August, including two key complex first-to-market launches. Our Specialty business drove impressive growth for our key marketed products, we continued work to expand our pipeline and launched an aggressive strategy to identify near-term opportunities to grow our franchises. We also delivered on our promise to diversify our business with the AvKARE transaction - enhancing our government distribution business and unit dose capabilities - and broadening our geographic reach with our license and supply agreement with Fosun Pharma to supply products for the growing Chinese market. These achievements are helping to propel our 2020 focus and we are confident Amneal is well-positioned to drive long-term growth and value for all our stakeholders in 2020 and beyond.”

⁽¹⁾ See “Non-GAAP Financial Measures” below.

2020 Financial Outlook

Amneal’s full year 2020 estimates, which include the impact of our January 31, 2020 transaction with AvKARE, Inc. and its related affiliate doing business as R&S Northeast LLC, are based on management's current expectations, including with respect to prescription trends, pricing levels, inventory levels, the costs incurred and benefits realized of restructuring activities and the anticipated timing of future product launches and events. The Company cannot provide a reconciliation between non-GAAP projections and the most directly comparable GAAP measures without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for the reconciliation. The items include, but are not limited to, acquisition-related expenses, restructuring expenses and benefits, asset impairments and other gains and losses. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for 2020.

	Full Year 2020 Financial Guidance
Net revenue	$1,875 million - $1,975 million
Adjusted gross margin	44% - 46%
Adjusted EBITDA ^(14)	$400 million - $450 million
Adjusted diluted EPS ^(15)	$0.45 - $0.60
Operating cash flow	$150 million - $200 million
Capital expenditures	$60 million - $70 million
Weighted average diluted shares outstanding ^(16)	Approximately 300 million

(14)	Includes 100% of EBITDA from the AvKARE and R&S Northeast transaction.
(15)	Accounts for 35% non-controlling interest in AvKARE and R&S Northeast.
(16)	Assumes the weighted average diluted shares outstanding of Class A and Class B shares under the if-converted method.

Conference Call Information

Amneal will hold a conference call on February 26, 2020 at 8:30 a.m. Eastern Time to discuss its results. The call and presentation can also be accessed via a live Webcast through the Investors section of Amneal’s Web site at https://investors.amneal.com/investor-relations, or directly at https://event.on24.com/wcc/r/2151439/4C4EB837C71C6C5471232024C3FDFD00. The number to call from within the United States is [phone] and [phone] internationally. A replay of the conference call will be available shortly after the call for a period of seven days. To access the replay, dial [phone] (in the U.S.) and [phone] (international callers). The access code for the replay is 10138831.

Amneal Pharmaceuticals, Inc.
Consolidated Statements of Operations
(Unaudited; In thousands, except per share amounts)
	Three Months Ended						Years Ended
	December 31,						December 31,
	2019			2018			2019			2018
Net revenue	$	397,328		$	497,528		$	1,626,373		$	1,662,991
Cost of goods sold		273,373			304,120			1,147,214			938,773
Cost of goods sold impairment charges		13,721			—			126,162			7,815
Gross profit		110,234			193,408			352,997			716,403
Selling, general and administrative		74,084			71,236			289,598			227,846
Research and development		48,050			57,297			188,049			194,190
In-process research and development impairment charges		450			38,609			46,619			39,259
Acquisition, transaction-related and integration expenses		3,706			4,945			16,388			221,818
Restructuring and other charges		4,412			14,104			34,345			56,413
(Gains) charges related to legal matters, net		(2,308	)		(19,300	)		12,442			(19,711	)
Intellectual property legal development expenses		4,975			3,237			14,238			16,261
Operating (loss) income		(23,135	)		23,280			(248,682	)		(19,673	)
Other (expense) income:
Interest expense, net		(38,829	)		(42,880	)		(168,205	)		(143,571	)
Foreign exchange gain (loss)		4,722			2,817			(4,962	)		(19,701	)
Loss on extinguishment of debt		—			—			—			(19,667	)
Gain (loss) on sale of international businesses		328			(146	)		7,258			(2,958	)
Gain from reduction of tax receivable agreement liability		—			1,665			192,884			1,665
Other (expense) income		(197	)		458			1,465			1,183
Total other (expense) income, net		(33,976	)		(38,086	)		28,440			(183,049	)
Loss before income taxes		(57,111	)		(14,806	)		(220,242	)		(202,722	)
Provision for (benefit from) income taxes		7,792			5,524			383,331			(1,419	)
Net loss		(64,903	)		(20,330	)		(603,573	)		(201,303	)
Less: Net loss attributable to Amneal Pharmaceuticals LLC pre-Combination		—			—			—			148,806
Less: Net loss attributable to non-controlling interests		32,775			11,562			241,656			32,753
Net loss attributable to Amneal Pharmaceuticals, Inc. before accretion of redeemable non-controlling interest		(32,128	)		(8,768	)		(361,917	)		(19,744	)
Accretion of redeemable non-controlling interest		—			—			—			(1,176	)
Net loss attributable to Amneal Pharmaceuticals, Inc.	$	(32,128	)	$	(8,768	)	$	(361,917	)	$	(20,920	)
Net loss per share attributable to Amneal Pharmaceuticals, Inc.'s common stockholders:
Class A and Class B-1 basic and diluted	$	(0.23	)	$	(0.07	)	$	(2.74	)	$	(0.16	)
Weighted-average common shares outstanding:
Class A and Class B-1 basic and diluted		141,853			127,343			132,106			127,252

Amneal Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(Unaudited; In thousands)
	December 31, 2019		December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	151,197	$	213,394
Restricted cash		1,625		5,385
Trade accounts receivable, net		604,390		481,495
Inventories		381,067		457,219
Prepaid expenses and other current assets		70,164		128,321
Related party receivables		1,767		830
Total current assets		1,210,210		1,286,644
Property, plant and equipment, net		477,997		544,146
Goodwill		419,504		426,226
Intangible assets, net		1,382,753		1,654,969
Deferred tax asset, net		—		373,159
Operating lease right-of-use assets		53,344		—
Operating lease right-of-use assets - related party		16,528		—
Financing lease right-of-use assets - related party		61,284		—
Other assets		44,270		67,592
Total assets	$	3,665,890	$	4,352,736
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$	507,483	$	514,440
Current portion of long-term debt, net		21,479		21,449
Current portion of operating lease liabilities		11,874		—
Current portion of operating and financing lease liabilities - related party		3,601		—
Current portion of financing obligation - related party		—		266
Related party payables		5,969		17,695
Total current liabilities		550,406		553,850
Long-term debt, net		2,609,046		2,630,598
Financing obligations - related party		—		39,083
Deferred income taxes		—		1,178
Liabilities under tax receivable agreement		—		192,884
Operating lease liabilities		43,135		—
Operating lease liabilities - related party		15,469		—
Financing lease liabilities - related party		61,463		—
Other long-term liabilities		39,583		38,780
Total long-term liabilities		2,768,696		2,902,523
Total stockholders' equity		346,788		896,363
Total liabilities and stockholders' equity	$	3,665,890	$	4,352,736

Amneal Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows
(Unaudited; In thousands)
	Twelve Months Ended December 31,
	2019			2018
Cash flows from operating activities:
Net loss	$	(603,573	)	$	(201,303	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Gain from reduction of tax receivable agreement liability		(192,884	)		(1,665	)
Depreciation and amortization		207,235			137,403
Amortization of Levothyroxine Transition Agreement asset		36,393			10,423
Unrealized foreign currency loss		7,342			18,582
Amortization of debt issuance costs		6,478			5,859
Loss on extinguishment of debt		—			19,667
(Gain) loss on sale of international businesses, net		(7,258	)		2,958
Intangible asset impairment charges		172,781			47,074
Non-cash restructuring and asset-related charges		12,459			11,295
Deferred tax provision (benefit)		371,716			(9,439	)
Stock-based compensation and PPU expense		21,679			167,597
Inventory provision		82,245			44,539
Other operating charges and credits, net		7,309			(1,866	)
Changes in assets and liabilities:
Trade accounts receivable, net		(132,726	)		89,084
Inventories		(20,393	)		(42,021	)
Prepaid expenses, other current assets and other assets		38,870			8,775
Related party receivables		(939	)		10,928
Accounts payable, accrued expenses and other liabilities		(10,257	)		(53,547	)
Related party payables		5,228			(14,113	)
Net cash provided by operating activities		1,705			250,230
Cash flows from investing activities:
Purchases of property, plant and equipment		(47,181	)		(83,088	)
Acquisition of product rights and licenses		(50,250	)		(14,000	)
Acquisitions, net of cash acquired		—			(324,634	)
Proceeds from surrender of corporate owned life insurance		43,017			—
Proceeds from sales of property, plant and equipment		—			25,344
Proceeds from sale of international businesses, net of cash sold		34,834			—
Net cash used in investing activities		(19,580	)		(396,378	)
Cash flows from financing activities:
Payments of deferred financing costs and debt extinguishment costs		—			(54,955	)
Proceeds from issuance of debt		—			1,325,383
Payments of principal on debt and capital leases		(27,000	)		(617,051	)
Net payments on revolving credit line		—			(75,000	)
Payments of principal on financing obligation - related party		—			(243	)
Proceeds from exercise of stock options		1,400			3,797
Employee payroll tax withholding on restricted stock unit vesting		(926	)		—
Equity contributions		—			27,742
Capital contribution from non-controlling interest		—			360
Acquisition of redeemable non-controlling interest		—			(11,775	)
Acquisition of non-controlling interest		(3,543	)		—
Tax distribution to non-controlling interest		(13,494	)		(35,543	)
Distributions to members		—			(182,998	)
Payments of principal on financing lease - related party		(2,270	)		—
Repayment of related party notes		—			(92,042	)
Net cash (used in) provided by financing activities		(45,833	)		287,675
Effect of foreign exchange rate on cash		(2,249	)		(670	)
Net (decrease) increase in cash, cash equivalents, and restricted cash		(65,957	)		140,857
Cash, cash equivalents, and restricted cash - beginning of period		218,779			77,922
Cash, cash equivalents, and restricted cash - end of period	$	152,822		$	218,779
Cash and cash equivalents - end of period	$	151,197		$	213,394
Restricted cash - end of period		1,625			5,385
Cash, cash equivalents, and restricted cash - end of period	$	152,822		$	218,779

Amneal Pharmaceuticals, Inc.
Generics Operating Results
(Unaudited; In thousands)
Generics	Three Months Ended December 31,
	2019			2018
Net revenue - Generics	$	300,281		$	410,897
Cost of goods sold		224,708			263,002
Cost of goods sold impairment charges		13,721			—
Gross profit		61,852			147,895
Selling, general, and administrative		16,100			16,572
Research and development		42,281			53,650
In-process research and development impairment charges		450			38,609
Restructuring and other charges		2,900			12,031
Gains related to legal matters, net		(2,308	)		(19,300	)
Intellectual property legal development expenses		4,975			3,263
Acquisition, integration and transaction related expenses		547			—
Operating (loss) income	$	(3,093	)	$	43,070
Gross margin		20.6	%		36.0	%
Adjusted gross profit (Non-GAAP)^(2)	$	99,770		$	185,268
Adjusted gross margin (Non-GAAP) ^(3)		33.2	%		45.1	%
Adjusted operating income (Non-GAAP)	$	48,740		$	150,166

^(1)	See “Non-GAAP Financial Measures” below.
^(2)	Adjusted gross profit is calculated as net revenue less adjusted cost of goods sold. See Non-GAAP reconciliations below for calculation of adjusted cost of goods sold.
^(3)	Adjusted gross margin is calculated as adjusted gross profit divided by net revenue. See “Non-GAAP Financial Measures” below.

Amneal Pharmaceuticals, Inc.
Reconciliation of Generics Operating (Loss) Income to Generics Combined Operating (Loss) Income
(Unaudited; In thousands)
Generics	Year Ended December 31, 2019									Year Ended December 31, 2018
				Add:			(Non-GAAP)						Add:			(Non-GAAP)
	Actual			Impax/ Gemini			Combined			Actual			Impax/ Gemini			Combined
Net revenue - Generics	$	1,308,843		$	—		$	1,308,843		$	1,439,031		$	102,237		$	1,541,268
Cost of goods sold		984,782			—			984,782			835,181			122,761			957,942
Cost of goods sold impairment charges		119,145			—			119,145			7,815			—			7,815
Gross profit		204,916			—			204,916			596,035			(20,524	)		575,511
Selling, general, and administrative		68,883			—			68,883			68,426			7,334			75,760
Research and development		172,196			—			172,196			183,412			13,623			197,035
In-process research and development impairment charges		46,619			—			46,619			39,259			—			39,259
Restructuring and other charges		20,101			—			20,101			33,943			—			33,943
Charges (gains) related to legal matters, net		12,442			—			12,442			(22,300	)		89,159			66,859
Intellectual property legal development expenses		13,193			—			13,193			15,772			23			15,795
Acquisition, integration and transaction related expenses		4,633			—			4,633			114,622			—			114,622
Operating (loss) income	$	(133,151	)	$	—		$	(133,151	)	$	162,901		$	(130,663	)	$	32,238
Gross margin		15.7	%		—	%		15.7	%		41.4	%		(20.1	)%		37.3	%
Adjusted gross profit (Non-GAAP) ^(2)	$	464,270		$	—		$	464,270		$	712,839		$	3,246		$	716,085
Adjusted gross margin (Non-GAAP) ^(3)		35.5	%		—	%		35.5	%		49.5	%		3.2	%		46.5	%
Adjusted operating income (Non-GAAP)	$	250,000		$	—		$	250,000		$	489,740		$	(16,752	)	$	472,988

(1)	See “Non-GAAP Financial Measures” below.
(2)	Adjusted gross profit is calculated as net revenue less adjusted cost of goods sold or combined net revenue less adjusted combined cost of goods sold, as applicable. See Non-GAAP reconciliations below for calculation of adjusted cost of goods sold.
(3)	Adjusted gross margin is calculated as adjusted gross profit divided by net revenue or adjusted combined gross profit divided by combined net revenue, as applicable. See “Non-GAAP Financial Measures” below.

Generics net revenue was $300 million in the fourth quarter of 2019 compared to $411 million for the prior year period. The decrease is primarily attributable to price erosion due to additional competition on our existing portfolio, the reclassification of Oxymorphone HCI to the Specialty segment in the third quarter of 2019 and the divestiture of international businesses in the U.K. and Germany. The decrease was partially offset by new product launches in 2019, which included EluRyng (Generic NuvaRing) and Sucralfate.

Generics gross margin for the fourth quarter of 2019 was 21% compared to 36% for the prior year period. The decrease is primarily related to impairment and inventory obsolescence charges, and the impact of price erosion. Generics adjusted gross margin⁽¹⁾ for the fourth quarter of 2019 was 33% compared to 45% for the prior year period primarily due to price erosion, product sales mix, an increase in inventory obsolescence charges and the impact of volume declines period over period leading to underutilization of manufacturing facilities.

Generics operating loss for the fourth quarter of 2019 was $3 million compared to operating income of $43 million for the prior year period. The decrease is primarily due to lower revenue and gross profit as noted above, and an increase in impairment charges. Generics adjusted operating income⁽¹⁾ for the fourth quarter of 2019 was $49 million compared to $150 million for the prior year period primarily due to lower revenue and lower gross profit, partially offset by lower operating expenses as a result of cost savings initiatives.

Amneal Pharmaceuticals, Inc.
Specialty Operating Results
(Unaudited; In thousands)
Specialty	Three Months Ended December 31,
	2019			2018
Net revenue - Specialty:
Rytary®	$	39,235		$	42,680
Unithroid®		12,309			10,758
Zomig®		15,458			18,308
All other specialty products		30,045			14,885
Total net revenue - Specialty		97,047			86,631
Cost of goods sold		48,665			41,118
Gross profit		48,382			45,513
Selling, general, and administrative		21,960			16,200
Research and development		5,769			3,647
Intellectual property legal development expenses		—			(26	)
Restructuring and other charges		—			1,682
Acquisition, integration and transaction related expenses		2,641			—
Operating income	$	18,012		$	24,010
Gross margin		49.9	%		52.5	%
Adjusted gross profit (Non-GAAP) ^(2)	$	73,077		$	70,058
Adjusted gross margin (Non-GAAP) ^(3)		75.3	%		80.9	%
Adjusted operating income (Non-GAAP)	$	45,880		$	50,600

(1)	See “Non-GAAP Financial Measures” below.
(2)	Adjusted gross profit is calculated as net revenue less adjusted cost of goods sold. See Non-GAAP reconciliations below for calculation of adjusted cost of goods sold.
(3)	Adjusted gross margin is calculated as adjusted gross profit divided by net revenue. See “Non-GAAP Financial Measures” below.

Amneal Pharmaceuticals, Inc.
Reconciliation of Specialty Operating Income to Specialty Combined Operating Income
(Unaudited; In thousands)
Specialty	Year Ended December 31, 2019									Year Ended December 31, 2018
				Add:			(Non-GAAP)						Add:			(Non-GAAP)
	Actual			Impax/ Gemini			Combined			Actual			Impax/ Gemini			Combined
Net revenue - Specialty:
Rytary®	$	134,773		$	—		$	134,773		$	95,541		$	35,086		$	130,627
Unithroid®		41,089			—			41,089			23,011			9,716			32,727
Zomig®		54,980			—			54,980			43,111			14,411			57,522
All other specialty products		86,688			—			86,688			62,297			37,032			99,329
Total net revenue - Specialty		317,530			—			317,530			223,960			96,245			320,205
Cost of goods sold		162,432			—			162,432			103,592			26,731			130,323
Cost of goods sold impairment charges		7,017			—			7,017			—			—			—
Gross profit		148,081			—			148,081			120,368			69,514			189,882
Selling, general, and administrative		79,665			—			79,665			49,465			27,942			77,407
Research and development		15,853			—			15,853			10,778			3,664			14,442
Intellectual property legal development expenses		1,045			—			1,045			489			—			489
Restructuring and other charges		391			—			391			4,076			—			4,076
Charges related to legal matters, net		—			—			—			—			940			940
Acquisition, integration and transaction related expenses		8,346			—			8,346			—			—			—
Operating income	$	42,781		$	—		$	42,781		$	55,560		$	36,968		$	92,528
Gross margin		46.6	%		—	%		46.6	%		53.7	%		72.2	%		59.3	%
Adjusted gross profit (Non-GAAP) ^(2)	$	247,267		$	—		$	247,267		$	178,022		$	75,626		$	253,648
Adjusted gross margin (Non-GAAP) ^(3)		77.9	%		—	%		77.9	%		79.5	%		78.6	%		79.2	%
Adjusted operating income (Non-GAAP)	$	154,825		$	—		$	154,825		$	118,127		$	45,144		$	163,271

(1)	See “Non-GAAP Financial Measures” below.
(2)	Adjusted gross profit is calculated as net revenue less adjusted cost of goods sold or combined net revenue less adjusted combined cost of goods sold, as applicable. See Non-GAAP reconciliations below for calculation of adjusted cost of goods sold.
(3)	Adjusted gross margin is calculated as adjusted gross profit divided by net revenue or adjusted combined gross profit divided by combined net revenue, as applicable. See “Non-GAAP Financial Measures” below.

Specialty net revenue was $97 million in the fourth quarter of 2019 compared to $87 million for the prior year period, primarily due to the reclassification of Oxymorphone HCI to the Specialty segment during the third quarter of 2019, and higher revenue from Unithroid®.

Specialty gross margin for the fourth quarter of 2019 was 50% compared to 53% for the prior year period primarily due to product sales mix. Specialty adjusted gross margin⁽¹⁾ for the fourth quarter of 2019 was 75% compared to 81% for the prior year period primarily due to the addition of lower margin Oxymorphone HCI as noted above.

Specialty operating income for the fourth quarter of 2019 was $18 million compared to $24 million for the prior year period, primarily due to higher cost of goods sold and operating expenses. Specialty adjusted operating income⁽¹⁾ for the fourth quarter of 2019 was $46 million compared to $51 million for the prior year period primarily due to the higher cost of goods sold and selling, general and administrative expenses.

Corporate and Other Information
(Unaudited; In thousands)
							Three Months Ended December 31,
							2019				2018
General and administrative expense							$			36,024	$			38,464
Acquisition, transaction-related and integration expenses										518				4,945
Restructuring and other charges										1,512				391
Total general, administrative and other operating expenses							$			38,054	$			43,800
	Year Ended December 31, 2019						Year Ended December 31, 2018
			Add:		(Non-GAAP)				Add:				(Non-GAAP)
	Actual		Impax/ Gemini		Combined		Actual		Impax/ Gemini				Combined
General and administrative expense	$	141,050	$	—	$	141,050	$	109,955	$			28,737	$	138,692
Acquisition, transaction-related and integration expenses		3,409		—		3,409		107,196				10,925		118,121
Restructuring and other charges		13,853		—		13,853		18,394				5,123		23,517
Charges related to legal matters, net		—		—		—		2,589				—		2,589
Total general, administrative and other operating expenses	$	158,312	$	—	$	158,312	$	238,134	$		$	44,785	$	282,919

General and administrative and other operating expenses in the fourth quarter of 2019 decreased to $38 million compared to $44 million in the prior year period. The decrease is primarily due to synergies associated with the combination with Impax and the Gemini acquisition including lower acquisition, transaction-related and integration expenses, partially offset by restructuring and other charges relating to recent cost savings initiatives.

About Amneal

Amneal Pharmaceuticals, Inc. (NYSE: AMRX), headquartered in Bridgewater, NJ, is a fully-integrated pharmaceutical company focused on the development, manufacturing and distribution of generic and specialty drug products. The Company has manufacturing operations in North America, Asia, and Europe, working together to bring high-quality medicines to patients primarily within the United States.

Amneal has an extensive portfolio of more than 225 marketed commercial products and is expanding its portfolio to include complex dosage forms, including biosimilars, in a broad range of therapeutic areas. The Company also markets a portfolio of branded pharmaceutical products through its Specialty segment focused principally on central nervous system and endocrine disorders. For more information, visit https://www.amneal.com.

Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, adjusted net income per diluted share, adjusted gross profit, adjusted gross margin and adjusted operating income, which are intended as supplemental measures of the Company’s performance that are not required by or presented in accordance with GAAP. In addition, this release includes these non-GAAP measures and our reported results on a non-GAAP combined basis to include the historical results of Impax and Gemini, not adjusted for financing and acquisition accounting impacts of the combination with Impax, as if the transaction closing dates had occurred on the first day of all periods presented herein. All combined business results presented in this release are not prepared in accordance with Article 11 of Regulation S-X. The calculation of non-GAAP adjusted diluted earnings per share assumes the conversion of all outstanding shares of Class B Common Stock to shares of Class A Common Stock.

Management uses these non-GAAP historical and combined measures internally to evaluate and manage the Company’s operations and to better understand its business because they facilitate a comparative assessment of the Company's operating performance relative to its performance based on results calculated under GAAP. These non-GAAP measures also isolate the effects of some items that vary from period to period without any correlation to core operating performance and eliminate certain charges that management believes do not reflect the Company's operations and underlying operational performance. The compensation committee of the Company’s board of directors also uses certain of these measures to evaluate management's performance and set its compensation. The Company believes that these non-GAAP measures also provide useful information to investors regarding certain financial and business trends relating to the Company’s financial condition and operating results, and doing so on a combined basis facilitates an evaluation of the financial performance of the Company and its operations on a consistent basis. Providing this information therefore allows investors to make independent assessments of the Company’s financial performance, results of operation and trends while viewing the information through the eyes of management.

These non-GAAP measures are subject to limitations. The non-GAAP measures presented in this release may not be comparable to similarly titled measures used by other companies because other companies may not calculate one or more in the same manner. Additionally, the non-GAAP performance measures exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements; do not reflect changes in, or cash requirements for, working capital needs; and do not reflect interest expense, or the requirements necessary to service interest or principal payments on debt. Further, the combined results may not represent what our combined results of operations and financial position would have been had the transactions occurred on the dates indicated, nor are they intended to project our combined results of operations or financial position for any future period. To compensate for these limitations, management presents and considers these non-GAAP measures in conjunction with the Company’s GAAP results; no non-GAAP measure should be considered in isolation from or as alternatives to net income, diluted earnings per share or any other measure determined in accordance with GAAP. Readers should review the reconciliations included below, and should not rely on any single financial measure to evaluate the Company’s business.

A reconciliation of each non-GAAP measure to the most directly comparable GAAP measure is set forth below.

Safe Harbor Statement

Certain statements contained herein, regarding matters that are not historical facts, may be forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include statements regarding management’s intentions, plans, beliefs, expectations or forecasts for the future, including, among other things, future operating results and financial performance, product development and launches, integration strategies and resulting cost reduction, market position and business strategy. Words such as “may,” “will,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “assume,” “continue,” and similar words are intended to identify estimates and forward-looking statements.

The reader is cautioned not to rely on these forward-looking statements. These forward-looking statements are based on current expectations of future events. If the underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Amneal Pharmaceuticals, Inc. (the “Company”). Such risks and uncertainties include, but are not limited to: the risk that our goodwill may become impaired, which could adversely affect our financial condition and results of operations, our ability to integrate the operations of Amneal Pharmaceuticals LLC and Impax Laboratories, LLC pursuant to the business combination completed on May 4, 2018, and our ability to realize the anticipated synergies and other benefits of the combination with Impax; the impact of global economic conditions; our ability to successfully develop, license, acquire and commercialize new products on a timely basis; our ability to obtain exclusive marketing rights for our products; the competition we face in the pharmaceutical industry from brand and generic drug product companies, and the impact of that competition on our ability to set prices; our ability to manage our growth through acquisitions and otherwise; our dependence on the sales of a limited number of products for a substantial portion of our total revenues; the risk of product liability and other claims against us by consumers and other third parties; risks related to changes in the regulatory environment, including United States federal and state laws related to healthcare fraud abuse and health information privacy and security and changes in such laws; changes to FDA product approval requirements; risks related to federal regulation of arrangements between manufacturers of branded and generic products; the impact of healthcare reform and changes in coverage and reimbursement levels by governmental authorities and other third-party payers; the continuing trend of consolidation of certain customer groups; our reliance on certain licenses to proprietary technologies from time to time; our dependence on third-party suppliers and distributors for raw materials for our products and certain finished goods; our dependence on third-party agreements for a portion of our product offerings; our ability to identify and make acquisitions of or investments in complementary businesses and products on advantageous terms; legal, regulatory and legislative efforts by our brand competitors to deter competition from our generic alternatives; the significant amount of resources we expend on research and development; our substantial amount of indebtedness and our ability to generate sufficient cash to service our indebtedness in the future, and the impact of interest rate fluctuations on such indebtedness; and the high concentration of ownership of our Class A Common Stock and the fact that we are controlled by the Amneal Group. A further list and descriptions of these risks, uncertainties and other factors can be found in the Company’s most recently filed Annual Report on Form 10-K, as supplemented by any subsequently filed Quarterly Reports on Form 10-Q. Copies of these filings are available online at www.sec.gov, www.amneal.com or on request from the Company.

Forward-looking statements included herein speak only as of the date hereof and we undertake no obligation to revise or update such statements to reflect the occurrence of events or circumstances after the date hereof.

Amneal Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Combined Results of Operations
(Unaudited; In thousands)
	Year Ended December 31, 2019								Year Ended December 31, 2018
				Add:		(Non-GAAP)						Add:			(Non-GAAP)
	Actual			Impax/ Gemini		Combined			Actual			Impax/ Gemini			Combined
Net revenue:
Generics	$	1,308,843		$	—	$	1,308,843		$	1,439,031		$	102,237		$	1,541,268
Specialty		317,530			—		317,530			223,960			96,245			320,205
Total net revenue		1,626,373			—		1,626,373			1,662,991			198,482			1,861,473
Cost of goods sold		1,147,214			—		1,147,214			938,773			149,492			1,088,265
Cost of goods sold impairment charges		126,162			—		126,162			7,815			—			7,815
Gross profit		352,997			—		352,997			716,403			48,990			765,393
Selling, general and administrative		289,598			—		289,598			227,846			64,013			291,859
Research and development		188,049			—		188,049			194,190			17,287			211,477
In-process research and development impairment charges		46,619			—		46,619			39,259			—			39,259
Acquisition, transaction-related and integration expenses		16,388			—		16,388			221,818			10,925			232,743
Restructuring and other charges		34,345			—		34,345			56,413			5,123			61,536
Charges (gains) related to legal matters, net		12,442					12,442			(19,711	)		90,099			70,388
Intellectual property legal development expenses		14,238			—		14,238			16,261			23			16,284
Operating loss		(248,682	)		—		(248,682	)		(19,673	)		(138,480	)		(158,153	)
Other income (expense):
Interest expense, net		(168,205	)		—		(168,205	)		(143,571	)		(18,231	)		(161,802	)
Foreign exchange (loss) gain, net		(4,962	)		—		(4,962	)		(19,701	)		921			(18,780	)
Loss on extinguishment of debt		—			—		—			(19,667	)		—			(19,667	)
Gain (loss) on sale of international businesses		7,258			—		7,258			(2,958	)		—			(2,958	)
Gain from reduction of tax receivable agreement liability		192,884			—		192,884			1,665			—			1,665
Other income (expense)		1,465			—		1,465			1,183			(638	)		545
Total other income (expense), net		28,440			—		28,440			(183,049	)		(17,948	)		(200,997	)
Loss before income taxes		(220,242	)		—		(220,242	)		(202,722	)		(156,428	)		(359,150	)
Provision for (benefit from) income taxes		383,331			—		383,331			(1,419	)		(6,273	)		(7,692	)
Net loss		(603,573	)		—		(603,573	)		(201,303	)	$	(150,155	)	$	(351,458	)
Less: Net loss attributable to Amneal Pharmaceuticals LLC pre-Combination		—			—		—			148,806
Less: Net loss attributable to non-controlling interests		241,656			—		241,656			32,753
Accretion of redeemable non-controlling interest		—			—		—			(1,176	)
Net loss attributable to Amneal Pharmaceuticals, Inc.	$	(361,917	)	$	—	$	(361,917	)	$	(20,920	)

 

Amneal Pharmaceuticals, Inc.
Non-GAAP Reconciliations
(Unaudited; In thousands)
Reconciliations of Cost of Goods Sold to Adjusted Cost of Goods Sold
Generics							Three Months Ended December 31,
							2019						2018
Cost of goods sold							$				224,708		$		263,002
Cost of goods sold impairment charges											13,721				—
Adjusted to deduct:
Amortization											15,483				10,030
Inventory related charges ^(5)											3,089				3,620
Acquisition and site closure expenses ^(6)											4,715				12,384
Asset impairment charges ^(7)											13,721				510
Stock-based compensation expense											910				406
Amortization of upfront payment^(9)											—				10,423
Adjusted cost of goods sold (Non-GAAP)							$		200,511				$		225,629
Generics	Year Ended December 31, 2019						Year Ended December 31, 2018
			Add:		(Non-GAAP)					Add:				(Non-GAAP)
	Actual		Impax/ Gemini		Combined		Actual			Impax/ Gemini				Combined
Cost of goods sold	$	984,782	$	—	$	984,782	$	835,181		$		122,761		$	957,942
Cost of goods sold impairment charges		119,145		—		119,145		7,815		—					7,815
Adjusted to deduct:
Amortization		51,783		—		51,783		23,940		13,823					37,763
Inventory related charges ^(5)		22,828		—		22,828		45,615		9,894					55,509
Acquisition and site closure expenses ^(6)		25,151		—		25,151		27,619		—					27,619
Asset impairment charges ^(7)		119,145		—		119,145		8,401		53					8,454
Stock-based compensation expense		3,030		—		3,030		806		—					806
Amortization of upfront payment^(9)		36,393		—		36,393		10,423		—					10,423
Other		1,024		—		1,024		—		—					—
Adjusted cost of goods sold (Non-GAAP)	$	844,573	$	—	$	844,573	$	726,192		$		98,991		$	825,183
Specialty							Three Months Ended December 31,
							2019						2018
Cost of goods sold							$				48,665		$		41,118
Adjusted to deduct:
Amortization											24,695				18,848
Inventory related charges ^(5)											—				5,697
Adjusted cost of goods sold (Non-GAAP)							$				23,970		$		16,573
Specialty	Year Ended December 31, 2019						Year Ended December 31, 2018
			Add:		(Non-GAAP)					Add:				(Non-GAAP)
	Actual		Impax/ Gemini		Combined		Actual			Impax/ Gemini				Combined
Cost of goods sold	$	162,432	$	—	$	162,432	$	103,592		$		26,731		$	130,323
Cost of goods sold impairment charges		7,017		—		7,017		—		—					—
Adjusted to deduct:
Amortization		92,169		—		92,169		49,047		6,112					55,159
Asset impairment charges ^(7)		7,017		—		7,017		—		—					—
Inventory related charges ^(5)		—		—		—		8,607		—					8,607
Adjusted cost of goods sold (Non-GAAP)	$	70,263	$	—	$	70,263	$	45,938		$		20,619		$	66,557

Amneal Pharmaceuticals, Inc.
Non-GAAP Reconciliations
(Unaudited; In thousands)
Reconciliations of Generics Operating (Loss) Income to Adjusted Operating Income
Generics									Three Months Ended December 31,
									2019						2018
Operating (loss) income									$				(3,093	)	$				43,070
Adjusted to add (deduct):
Acquisition and site closure expenses ^(6)													6,028						20,905
Amortization													15,483						10,030
Inventory related charges ^(5)													5,938						3,620
Stock-based compensation expense													2,588						1,926
Asset impairment charges ^(7)													14,655						39,119
Restructuring and other charges ^(8)													2,900						12,031
Gains related to legal matters, net ^(10)													(2,409	)					(97	)
Amortization of upfront payment ^(9)													—						10,423
R&D milestone payment													6,650						5,300
Other													—						3,839
Adjusted operating income (Non-GAAP)									$				48,740		$				150,166
Generics	Year Ended December 31, 2019								Year Ended December 31, 2018
				Add:		(Non-GAAP)						Add:						(Non-GAAP)
	Actual			Impax/ Gemini		Combined			Actual			Impax/ Gemini						Combined
Operating (loss) income	$	(133,151	)	$	—	$	(133,151	)	$	162,901		$				(130,663	)	$	32,238
Adjusted to add (deduct):
Acquisition and site closure expenses ^(6)		41,639			—		41,639			150,762						—			150,762
Amortization		51,783			—		51,783			23,940						13,823			37,763
Inventory related charges ^(5)		25,677			—		25,677			45,615						9,894			55,509
Stock-based compensation expense		11,943			—		11,943			3,348						982			4,330
Asset impairment charges ^(7)		166,396			—		166,396			47,660						53			47,713
Restructuring and other charges ^(8)		20,101			—		20,101			33,943						—			33,943
Charges (gains) related to legal matters, net ^(10)		12,591			—		12,591			(97	)					89,159			89,062
Amortization of upfront payment ^(9)		36,393			—		36,393			10,423						—			10,423
R&D milestone payment		16,579			—		16,579			8,000						—			8,000
Other		49			—		49			3,245						—			3,245
Adjusted operating income (Non-GAAP)	$	250,000		$	—	$	250,000		$	489,740		$				(16,752	)	$	472,988

Amneal Pharmaceuticals, Inc.
Non-GAAP Reconciliations
(Unaudited; In thousands)
Reconciliations of Specialty Operating Income to Adjusted Operating Income
Specialty							Three Months Ended December 31,
							2019				2018
Operating income							$			18,012	$			24,010
Adjusted to add:
Amortization										24,695				18,848
Inventory related charges ^(5)										—				5,697
Acquisition and site closure expenses ^(6)										2,641				189
Stock-based compensation expense										532				11
Restructuring and other charges ^(8)										—				1,682
Other										—				163
Adjusted operating income (Non-GAAP)							$			45,880	$			50,600
Specialty	Year Ended December 31, 2019						Year Ended December 31, 2018
			Add:		(Non-GAAP)				Add:				(Non-GAAP)
	Actual		Impax/ Gemini		Combined		Actual		Impax/ Gemini				Combined
Operating income	$	42,781	$	—	$	42,781	$	55,560	$			36,968	$	92,528
Adjusted to add:
Amortization		92,169		—		92,169		49,047				6,112		55,159
Inventory related charges ^(5)		—		—		—		8,607				—		8,607
Acquisition and site closure expenses ^(6)		10,969		—		10,969		189				—		189
Stock-based compensation expense		1,498		—		1,498		11				1,124		1,135
Restructuring and other charges ^(8)		391		—		391		4,076				—		4,076
Charges related to legal matters, net		—		—		—		—				940		940
Asset impairment charges ^(7)		7,017		—		7,017		—				—		—
Other		—		—		—		637				—		637
Adjusted operating income (Non-GAAP)	$	154,825	$	—	$	154,825	$	118,127	$			45,144	$	163,271

Amneal Pharmaceuticals, Inc.
Non-GAAP Reconciliations
(Unaudited; In thousands, except per share amounts)
Reconciliation of Net Loss to Adjusted Net Income and Calculation of Adjusted Diluted EPS
	Three Months Ended December 31,
	2019			2018
Net loss	$	(64,903	)	$	(20,330	)
Adjusted to add (deduct):
Non-cash interest		1,629		$	1,640
GAAP Income tax expense		7,792		$	5,524
Gain from reduction of tax receivable agreement liability ^(4)		—		$	(1,665	)
Amortization		40,178		$	28,878
Stock-based compensation expense		5,013		$	3,606
Acquisition and site closure expenses ^(6)		14,983		$	28,966
Restructuring and other charges ^(8)		4,412		$	14,104
Inventory related charges ^(5)		5,963		$	9,317
Gains related to legal matters, net ^(10)		(2,409	)	$	(497	)
Asset impairment charges ^(7)		14,655		$	39,119
Amortization of upfront payment ^(9)		—		$	10,423
Foreign exchange gain		(4,722	)	$	(2,817	)
(Gain) loss on sale of international business ^(11)		(328	)	$	146
R&D milestone payments		6,650		$	5,300
Other		342		$	5,077
Income tax at 21%		(6,138	)	$	(26,626	)
Net income attributable to NCI not associated with our Class B shares		(113	)		(189	)
Adjusted net income (Non-GAAP)	$	23,004		$	99,976
Adjusted diluted EPS (Non-GAAP) ^(12)	$	0.08		$	0.33

(12)

For the three months ended December 31, 2019, utilizes weighted average diluted shares outstanding of 299,298, which consists of Class A shares and Class B shares under the if-converted method. For the three months ended December 31, 2018, utilizes weighted average diluted shares outstanding of 299,345, which consists of Class A shares, Class B and Class B-1 shares under the if-converted method.

Amneal Pharmaceuticals, Inc.
Non-GAAP Reconciliations
(Unaudited; In thousands, except per share amounts)
Reconciliation of Net Loss to Combined Adjusted Net Income and Calculation of Adjusted Diluted EPS
	Year Ended December 31, 2019								Year Ended December 31, 2018
				Add:		(Non-GAAP)						Add:			(Non-GAAP)
	Actual			Impax/ Gemini		Combined			Actual			Impax/ Gemini			Combined
Net loss	$	(603,573	)	$	—	$	(603,573	)	$	(201,303	)	$	(150,155	)	$	(351,458	)
Adjusted to add (deduct):
Non-cash interest		6,478			—		6,478			8,669			9,413			18,082
Gain from reduction of tax receivable agreement liability ^(4)		(192,884	)		—		(192,884	)		(1,665	)		—			(1,665	)
GAAP Income tax expense (benefit)		383,331			—		383,331			(1,419	)		(6,273	)		(7,692	)
Amortization		143,952			—		143,952			72,987			19,935			92,922
Stock-based compensation expense		21,679			—		21,679			8,840			4,816			13,656
Acquisition and site closure expenses ^(6)		73,471			—		73,471			264,424			10,925			275,349
Restructuring and other charges ^(8)		34,345			—		34,345			56,413			5,123			61,536
Loss on extinguishment of debt		—			—		—			19,667			—			19,667
Inventory related charges ^(5)		25,702			—		25,702			54,222			9,894			64,116
Charges related to legal matters, net ^(10)		12,591			—		12,591			2,092			90,099			92,191
Asset impairment charges ^(7)		175,210			—		175,210			47,660			53			47,713
Amortization of upfront payment ^(9)		36,393			—		36,393			10,423			—			10,423
Foreign exchange loss (gain)		4,962			—		4,962			19,701			(921	)		18,780
(Gain) loss on sale of international businesses, net ^(11)		(7,258	)		—		(7,258	)		2,958			—			2,958
R&D milestone payments		16,579			—		16,579			8,000			—			8,000
Other		578			—		578			5,732			1,953			7,685
Income tax at 21%		(27,621	)		—		(27,621	)		(79,485	)		1,309			(78,176	)
Net income attributable to NCI not associated with our Class B shares		(344	)		—		(344	)		(386	)		—			(386	)
Adjusted net income (Non-GAAP)	$	103,591		$	—	$	103,591		$	297,530		$	(3,829	)	$	293,701
Adjusted diluted EPS (Non-GAAP) ^(13)						$	0.35								$	0.98

(13)

For the twelve months ended December 31, 2019, utilizes weighted average diluted shares outstanding of 299,194, which consists of Class A shares and Class B shares under the if-converted method. For the twelve months ended December 31, 2018, utilizes weighted average diluted shares outstanding of 299,328, which consists of Class A, Class B and Class B-1 shares under the if-converted method.

Amneal Pharmaceuticals, Inc.
Non-GAAP Reconciliations
(Unaudited, In thousands)
Reconciliations of Net Loss to EBITDA and Adjusted EBITDA
									Three Months Ended December 31,
									2019						2018
Net loss									$				(64,903	)	$				(20,330	)
Adjusted to add (deduct):
Interest expense, net													38,829						42,880
Income tax expense													7,792						5,524
Depreciation and amortization													54,303						47,494
EBITDA (Non-GAAP)									$				36,021		$				75,568
Adjusted to add (deduct):
Gain from reduction of tax receivable agreement liability ^(4)									$				—		$				(1,665	)
Stock-based compensation expense													5,013						3,606
Acquisition and site closure expenses ^(6)													14,983						28,966
Restructuring and other charges ^(8)													4,412						14,104
Inventory related charges ^(5)													5,938						9,317
Gains related to legal matters, net ^(10)													(2,409	)					(497	)
Asset impairment charges ^(7)													14,655						39,119
Amortization of upfront payment ^(9)													—						10,423
Foreign exchange gain													(4,722	)					(2,817	)
(Gain) loss on sale of international businesses ^(11)													(328	)					146
R&D milestone payments													6,650						5,300
Other													342						5,077
Adjusted EBITDA (Non-GAAP)									$				80,555		$				186,647
	Year Ended December 31, 2019								Year Ended December 31, 2018
				Add:		(Non-GAAP)						Add:						(Non-GAAP)
	Actual			Impax/ Gemini		Combined			Actual			Impax/ Gemini						Combined
Net loss	$	(603,573	)	$	—	$	(603,573	)	$	(201,303	)	$				(150,155	)	$	(351,458	)
Adjusted to add (deduct):
Interest expense, net		168,205			—		168,205			143,571						18,231			161,802
Income tax expense (benefit)		383,331			—		383,331			(1,419	)					(6,273	)		(7,692	)
Depreciation and amortization		207,235			—		207,235			137,405						24,900			162,305
EBITDA (Non-GAAP)	$	155,198		$	—	$	155,198		$	78,254		$				(113,297	)	$	(35,043	)
Adjusted to add (deduct):
Gain from reduction of tax receivable agreement liability ^(4)	$	(192,884	)	$	—	$	(192,884	)	$	(1,665	)	$				—		$	(1,665	)
Stock-based compensation expense		21,679			—		21,679			8,840						4,816			13,656
Acquisition and site closure expenses ^(6)		73,471			—		73,471			264,424						10,925			275,349
Restructuring and other charges ^(8)		34,345			—		34,345			56,413						5,123			61,536
Loss on extinguishment of debt		—			—		—			19,667						—			19,667
Inventory related charges ^(5)		25,677			—		25,677			54,222						9,894			64,116
Charges related to legal matters, net ^(10)		12,591			—		12,591			2,092						90,099			92,191
Asset impairment charges ^(7)		175,210			—		175,210			47,660						53			47,713
Amortization of upfront payment ^(9)		36,393			—		36,393			10,423						—			10,423
Foreign exchange loss (gain)		4,962			—		4,962			19,701						(921	)		18,780
(Gain) loss on sale of international businesses, net ^(11)		(7,258	)		—		(7,258	)		2,958						—			2,958
R&D milestone payments		16,579			—		16,579			8,000						—			8,000
Other		(446	)		—		(446	)		5,732						653			6,385
Adjusted EBITDA (Non-GAAP)	$	355,517		$	—	$	355,517		$	576,721		$				7,345		$	584,066

Amneal Pharmaceuticals, Inc.
Non-GAAP Reconciliations
(Unaudited; In thousands)
(4)	Gain from reduction of tax receivable agreement liability represents the reversal of the accrued liability associated with the Company’s deferred tax assets created at the Impax combination.
(5)	For the three and twelve months ended December 31, 2019, inventory related charges primarily represent inventory obsolescence resulting from new initiatives and policies adopted with our restructuring efforts. Inventory charges for the three months ended December 31, 2019 also includes a charge to write-down the net realizable value of our ranitidine-based product inventory to zero.  For the three and twelve months ended December 31, 2018, inventory related charges also include a reserve for an unfavorable supply arrangement and the amortization of the Impax inventory step-up to fair value in purchase accounting.
(6)	Acquisition and site closure expenses for all periods presented include costs related to (i) plant closure and redundant employee costs and (ii) third party costs associated with the combination of Impax and related integration including legal, investment banking, accounting and information technology. For the three and twelve months ended December 31, 2018, acquisition and site closure expenses also includes costs associated with the Impax sale of its Middlesex, NJ and Taiwan facilities.
(7)	Asset impairment charges for the three and twelve months ended December 31, 2019 are primarily associated with the write-off of in process research and development and intangible asset impairment charges primarily related to products acquired in the Impax combination.  Asset impairment charges for the year ended December 31, 2018 are primarily associated with the write-off of leasehold improvements in connection with the closing of our Hayward, CA facility.
(8)	For the twelve months ended December 31, 2019, restructuring and other charges are primarily associated with cash severance provided pursuant to our severance programs for employees at our Hauppauge, NY, Hayward, CA and other facilities as well as asset-related charges associated with the impairment of property, plant and equipment and the right of use asset associated with our Hauppauge, NY facility.  For the three months ended December 31, 2019, restructuring and other charges are primarily associated with cash severance provided pursuant to our severance programs for employees at our Hauppauge, NY facility.  For the three and twelve months ended December 31, 2018, restructuring and other charges includes employee separation costs associated with the consolidation of sites due to the Impax combination of Amneal and Impax, as well as the write-off of property, plant, and equipment at those sites.
(9)	Amortization of upfront payment represents the amortization of the upfront payment made to Lannett in connection with our Transition Agreement for Levothyroxine.
(10)	For the year ended December 31, 2019, charges (gains) related to legal matters, net are primarily associated with a settlement agreement with Teva Pharmaceuticals, Inc. regarding a matter associated with Impax prior to the Combination.  Charges (gains) related to legal matters, net for the year ended December 31, 2018 relate to an Impax litigation settlement charge and a settlement for claims with the plaintiffs in the class action antitrust suits related to Solodyn®.
(11)	For the year ended December 31, 2019 gain/loss on the sale of international business, net represents the gain from the sale of our Creo Pharma Holding Limited subsidiary, which comprised substantially all of the Company's operations in the United Kingdom partially offset by the loss from the sale of our Amneal Deutschland GmbH subsidiary, which comprised substantially all of the Company's operations in Germany.  For the year ended December 31, 2018, gain/loss on the sale of international business, net represents adjustments from the 2017 sale of Amneal Pharma Pty Ltd subsidiary, which comprised substantially all of the Company's operations in Australia and from the sale of our Amneal Nordic ApS and Amneal Pharma Spain S.L. subsidiaries, which comprised substantially all of the Company's operations in Spain and Scandinavia.