Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Amneal Pharmaceuticals, Inc. (the “Company”, “we,” “us,” or “our”) is a global pharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines, including retail generics, injectables, biosimilars and specialty branded pharmaceuticals. We operate principally in the United States (“U.S.”), India, and Ireland, and sell to wholesalers, distributors, hospitals, governmental agencies, chain pharmacies and individual pharmacies, either directly or indirectly.

Prior to the Reorganization (as defined herein), the Company was a holding company, whose principal assets were common units (the “Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”). As of September 30, 2023, we held 50.4% of the Amneal Common Units and the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members” or the “Amneal Group”) held the remaining 49.6%. On November 7, 2023, we implemented a plan pursuant to which the Company and Amneal reorganized and simplified our corporate structure by eliminating our umbrella partnership-C-corporation structure and converting to a more traditional structure whereby all stockholders hold their voting and economic interests directly through the public company (the “Reorganization”). Effective with the Reorganization, the Company holds 100% of the Amneal Common Units and consolidates the financial statements of Amneal and its subsidiaries. Refer to Note 1. Nature of Operations in our consolidated financial statements for additional information about the Reorganization.

Although we had a minority economic interest in Amneal prior to March 31, 2023, we were Amneal’s sole managing member, having the sole voting power to make all of Amneal’s business decisions and control its management. Therefore, we consolidated the financial statements of Amneal and its subsidiaries prior to the Reorganization. We recorded non-controlling interests for the portion of Amneal’s economic interests that we did not hold prior to the Reorganization.

The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under Item 1A. Risk Factors and under the heading Forward-Looking Statements in this Annual Report on Form 10-K. The following discussion and analysis, as well as other sections in this report, should be read in conjunction with the consolidated financial statements and related notes to consolidated financial statements included elsewhere herein.

For a discussion of our financial condition and results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, see “Results of Operations” and “Liquidity and Capital Resources” under Part II,Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K.

Overview

Segments

We have three reportable segments: Generics, Specialty, and AvKARE.

Generics

Our Generics segment includes over 260 product families covering an extensive range of dosage forms and delivery systems, including both immediate and extended release oral solids, powders, liquids, sterile injectables, nasal sprays, inhalation and respiratory products, ophthalmics, films, transdermal patches and topicals. We focus on developing products with substantial barriers-to-entry resulting due to complex drug formulations or manufacturing, or legal or regulatory challenges. Generic products, particularly in the U.S., generally contribute most significantly to revenues and gross margins at the time of their launch, and even more so in periods of market exclusivity, or in periods of limited generic competition. As such, the timing of new product introductions can have a significant impact on our financial results. The entrance into the market of additional competition generally has a negative impact on the volume and/or pricing of the affected products. Additionally, pricing is determined by market place dynamics and is often affected by factors outside of our control.

Specialty

Our Specialty segment is engaged in the development, promotion, sale and distribution of proprietary branded pharmaceutical products, with a focus on products addressing central nervous system (“CNS”) disorders, including Parkinson’s disease, and endocrine disorders. Our portfolio of products includes RYTARY®, an extended release oral capsule formulation of carbidopa-levodopa for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication or manganese intoxication. In addition to RYTARY®, our promoted Specialty portfolio also includes

UNITHROID® (levothyroxine sodium), for the treatment of hypothyroidism, which is sold under a license and distribution agreement with Jerome Stevens Pharmaceuticals, Inc., and ONGENTYS® (opicapone), an add-on treatment to carbidopa/levodopa in patients with Parkinson’s disease experiencing “Off” episodes, which we commenced selling in early 2024 under a license agreement with BIAL.

On June 30, 2023, we received a complete response letter (“CRL”) from the FDA regarding our new drug application (“NDA”) for IPX203 for the treatment of Parkinson’s disease. The CRL indicated that although an adequate scientific bridge was established for the safety of one ingredient, levodopa, based on pharmacokinetic studies, it was not adequately established for the other ingredient, carbidopa, and the FDA requested additional information. The CRL did not identify any issues with respect to the efficacy or manufacturing of IPX203. During October 2023, we met with the FDA to align on the path to approval for IPX203. During the meeting, the FDA asked us to complete a QT study, a routine cardiac safety study that is required for new drugs. We completed the QT study and resubmitted our NDA for IPX203 on February 7, 2024.

Our Specialty products are marketed through skilled specialty sales and marketing teams, who call on neurologists, movement disorder specialists, endocrinologists and primary care physicians in key markets throughout the U.S. Our Specialty segment also has a number of product candidates that are in varying stages of development.

For Specialty products, the majority of the product’s commercial value is usually realized during the period in which the product has market exclusivity. In the U.S., when market exclusivity expires and generic versions of a product are approved and marketed, there can often be very substantial and rapid declines in the branded product’s sales.

AvKARE

Our AvKARE segment provides pharmaceuticals, medical and surgical products and services primarily to governmental agencies. AvKARE is a re-packager of bottle and unit dose pharmaceuticals under the registered names of AvKARE and AvPAK, which service the Department of Defense and Department of Veteran Affairs. AvKARE is also a wholesale distributor of pharmaceuticals, over the counter drugs and medical supplies to its retail and institutional customers that are located throughout the U.S. focused primarily on offering 340b-qualified entities products to provide consistency in care and pricing.

The Pharmaceutical Industry

The pharmaceutical industry is highly competitive and highly regulated. As a result, we face a number of industry-specific factors and challenges, which can significantly impact our results. For a more detailed explanation of our business and its risks, refer to Item 1. Business and Item 1A. Risk Factors in this Form 10-K.

Inflation

While it is difficult to accurately measure the impact of inflation, we estimate our business experienced an increase in costs due to inflation of approximately $15.0 million for the year ended December 31, 2023. We expect an inflationary impact of approximately $15.0 million to $20.0 million for the year ending December 31, 2024. Notwithstanding our estimates, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods.

Results of Operations

Consolidated Results

The following table sets forth our summarized, consolidated results of operations (dollars in thousands):

Years Ended December 31, Increase (Decrease)

Intellectual property legal development expenses 3,828 4,358 (530) (12.2)%

Acquisition, transaction-related and integration expenses — 709 (709) (100.0)%

Change in fair value of contingent consideration (14,497) 731 (15,228) nm

nm - not meaningful

Net Revenue

Net revenue for the year ended December 31, 2023 increased 8.2% from the prior year primarily due to:

•Growth in our Generics segment of $39.3 million primarily due to new generics products launched in 2023 and 2022, which included biosimilars that contributed $62.6 million and new generic products that contributed $47.4 million, partially offset by price erosion. Net revenue for the year ended December 31, 2023 included a non-recurring customer order of $21.0 million.

•Growth in our AvKARE segment of $125.6 million primarily driven by growth in our distribution and government channels resulting from new product introductions.

•Growth in our Specialty segment of $16.3 million primarily driven by growth in our endocrinology portfolio of $21.0 million, or 23.8% and a $2.2 million, or 1.2% increase in our neurology portfolio, which was negatively impacted by Medicare rebates associated with the Inflation Reduction Act of approximately $6.4 million. Excluding these rebates, net revenue from our neurology portfolio increased 4.7%.

Cost of Goods Sold and Gross Profit

Cost of goods sold increased 10.2% for the year ended December 31, 2023 as compared to the prior year. The increase in cost of goods sold was primarily due to increased AvKARE and Generics volume, a $25.0 million increase in marketed product intangible asset impairment charges primarily related to a reduction in promotional focus on LYVISPAHTM in our Specialty segment, and an increase in the inventory provision, partially offset by efficiencies in our supply costs. Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order in our Generics segment discussed above.

Gross profit as a percentage of net revenue decreased to 34.3% for the year ended December 31, 2023 from 35.5% in the prior year, primarily as a result of the factors noted above.

Selling, General and Administrative

Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2023 increased 7.5% as compared to the prior year primarily due to increases in employee compensation, higher costs associated with our biosimilar launches, higher freight charges driven by increased sales volume, and higher professional fees associated with the Reorganization, partially offset by a decrease of $5.0 million associated with a biosimilar regulatory approval in the prior year.

Research and Development

R&D expenses for the year ended December 31, 2023 decreased 16.2% from the prior year primarily due to lower project spend of $17.3 million, a decrease in in-licensing and upfront milestone payments of $2.5 million and operating efficiencies in our infrastructure.

In-Process Research and Development Impairment Charges

In process research and development (“IPR&D”) impairment charges of $30.8 million for the year ended December 31, 2023 were related to one Generics asset and one Specialty asset, both of which experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows. IPR&D impairment charges of $13.0 million in the prior year were related to one Generics asset which experienced a delay in its expected launch date and one Generics asset which experienced significant expected price erosion, both of which resulted in significantly lower than expected future cash flows.

Change in Fair Value of Contingent Consideration

Refer to Note 19. Fair Value Measurements for information about the estimation of our contingent consideration liabilities. The $15.2 million decrease in the change in fair value of contingent consideration for the year ended December 31, 2023 as compared to the prior year was primarily related to a reduction in promotional focus on LYVISPAHTM.

Charges Related to Legal Matters, Net

For the year ended December 31, 2023, charges related to legal matters, net was $1.8 million, comprised of $3.9 million in charges associated with Generics civil prescription opioid litigation, a $3.0 million charge for the settlement of a Generics customer claim, a $3.0 million charge for the settlement of Generics commercial antitrust litigation, and a $1.9 million charge for the settlement of a corporate stockholder derivative lawsuit, partially offset by a $10.0 million credit from the settlement of Generics patent infringement matters. For the year ended December 31, 2022, we recorded charges of $269.9 million primarily for the corporate Opana® ER antitrust litigation of $262.8 million and Generics segment civil prescription opioid litigation of $18.0 million, partially offset by corporate insurance recoveries associated with securities class actions of $15.5 million. For further details, refer to Note 21. Commitments and Contingencies.

Other Operating Income

Other operating income for the year ended December 31, 2023 and 2022 was comprised of income earned from the India Production Linked Incentive Scheme for the Pharmaceutical Sector in our Generics segment. Refer to Note 6. Government Grants for additional information.

Total Other Expense, Net

Total other expense, net increased 59.7% for the year ended December 31, 2023. The increase was primarily driven by a $52.3 million increase in net interest expense as a result of higher rates on our variable rate debt and a $40.8 million loss on refinancing the Term Loan Due 2025 and amending the New Revolving Credit Facility.

Provision For Income Taxes

The provision for income taxes was $8.5 million and $6.7 million for the years ended December 31, 2023 and 2022, respectively. The effective tax rates for the years ended December 31, 2023 and 2022 were (21.0)% and (2.7%), respectively. The year-over-year change in the provision for income taxes was primarily related to the timing and mix of income, and to the release of liabilities for uncertain tax positions in 2022.

Generics

The following table sets forth the results of operations for our Generics segment (dollars in thousands):

Years Ended December 31, Increase (Decrease)

Intellectual property legal development expenses 3,708 4,251 (543) (12.8)%

Acquisition, transaction-related and integration expenses — 25 (25) (100.0)%

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Net Revenue

Generics net revenue for the year ended December 31, 2023 increased 2.7% as compared to the prior year, primarily due to new generic products launched in 2023 and 2022, which included biosimilars that contributed $62.6 million and new generic products that contributed $47.4 million, partially offset by price erosion. Net revenue for the year ended December 31, 2023 included a non-recurring customer order of $21.0 million.

Cost of Goods Sold and Gross Profit

Generics cost of goods sold for the year ended December 31, 2023 increased 2.0% compared to the prior year primarily due to costs associated with increased sales volume and an increased inventory provision, partially offset by efficiencies in our supply costs. Cost of goods sold for the year ended December 31, 2023 included $11.0 million associated with the non-recurring customer order discussed above.

Generics gross profit as a percentage of net revenue increased to 37.9% for the year ended December 31, 2023 from 37.4% in the prior year as a result of the factors described above.

Selling, General, and Administrative

Generics SG&A for the year ended December 31, 2023 increased by 9.2% compared to the prior year primarily due to an increase in employee compensation, higher costs associated with our biosimilar launches, and higher freight charges driven by increased sales volume, partially offset by a decrease of $5.0 million associated with a biosimilar regulatory approval in the prior year.

Research and Development

Generics R&D expense for the year ended December 31, 2023 decreased 21.1% compared to the prior year primarily due to lower project spend of $25.0 million and operating efficiencies in our infrastructure, including reduced employee compensation costs, partially offset by an increase in in-licensing and upfront milestone payments of $2.0 million.

In-Process Research and Development Impairment Charges

Generics IPR&D impairment charges of $26.5 million for the year ended December 31, 2023 were related to one asset that experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future

cash flows. Generics IPR&D impairment charges of $13.0 million in the prior year were related to one asset that experienced a delay in its expected launch date and one asset that experienced significant expected price erosion, both of which resulted in significantly lower than expected future cash flows.

(Credit) Charges Related to Legal Matters, Net

For the year ended December 31, 2023, Generics credit related to legal matters, net was $(0.1) million, comprised of a $(10.0) million credit from the settlement of patent infringement matters, net of $3.9 million in charges associated with civil prescription opioid litigation, a $3.0 million charge for the settlement of a customer claim, and a $3.0 million charge for the settlement of commercial antitrust litigation. For the year ended December 31, 2022, Generics charges related to legal matters, net were $22.4 million, primarily comprised of $18.0 million of charges for civil prescription opioid litigation. Refer to Note 21. Commitments and Contingencies for additional information.

Other Operating Income

Generics other operating income for the years ended December 31, 2023 and 2022 was comprised of income earned from the India Production Linked Incentive Scheme for the Pharmaceutical Sector. Refer to Note 6. Government Grants for additional information.

Specialty

The following table sets forth the results of operations for our Specialty segment (dollars in thousands):

Years Ended December 31, Increase (Decrease)

In-process research and development impairment charges 4,300 — 4,300 nm

Intellectual property legal development expenses 120 107 13 12.1%

Acquisition, transaction-related and integration expenses — 49 (49) (100.0)%

Restructuring and other charges 1,105 — 1,105 nm

Change in fair value of contingent consideration (14,497) 731 (15,228) nm

nm - not meaningful

Net Revenue

Specialty net revenue for the year ended December 31, 2023 increased 4.4% as compared to the prior year, driven by the growth in our endocrinology portfolio of $21.0 million, or 23.8%, and a $2.2 million, or 1.2%, increase in our neurology portfolio, which was negatively impacted by Medicare rebates associated with the Inflation Reduction Act of approximately $6.4 million. Excluding these rebates, net revenue from our neurology portfolio increased 4.7%.

Cost of Goods Sold and Gross Profit

Specialty cost of goods sold for the year ended December 31, 2023 increased 17.5% as compared to the prior year primarily due to an increase in volumes and a $25.0 million increase in marketed product intangible asset impairment charges primarily related to a reduction in promotional focus on LYVISPAHTM. Specialty gross profit as a percentage of net revenue decreased to 45.1% for the year ended December 31, 2023 as compared to 51.2% in the prior year as a result of the factors described above.

Selling, General, and Administrative

Specialty SG&A expense for the year ended December 31, 2023 decreased 2.1% as compared to the prior year primarily due to a decrease in third-party marketing spend for our promoted products.

Research and Development

Specialty R&D expense for the year ended December 31, 2023 increased 12.6% as compared to the prior year primarily due to an increase in project related spend of $7.7 million and increased employee compensation, partially offset by a decrease in in-licensing and upfront milestone payments of $4.5 million.

Change in Fair Value of Contingent Consideration

AvKARE

The following table sets forth the results of operations for our AvKARE segment (dollars in thousands):

Years Ended December, 31 Increase

Net Revenue

AvKARE net revenue for the year ended December 31, 2023 increased 30.9% as compared to the prior year primarily driven by growth in our distribution and government channels resulting from new product introductions.

Cost of Goods Sold and Gross Profit

AvKARE cost of goods sold for the year ended December 31, 2023 increased 27.4% as compared to the prior year, and gross profit as a percentage of net revenue increased to 16.3% for the year ended December 31, 2023 from 14.0% in the prior year primarily due to the increase in sales through our higher margin government channel, including higher margin new product introductions.

Selling, General, and Administrative

AvKARE SG&A expense for the year ended December 31, 2023 increased 3.1% as compared to the prior year primarily due to higher employee compensation.

Liquidity and Capital Resources

Our primary source of liquidity is cash generated from operations, available cash and borrowings under debt financing arrangements (as defined and described in Note 16. Debt), including $225.2 million of available capacity on our Amended New Revolving Credit Facility and $28.0 million of available capacity under the Amended Rondo Revolving Credit Facility as of December 31, 2023. We believe these sources are sufficient to fund our planned operations, meet our interest and contractual obligations and provide sufficient liquidity over the next 12 months. However, our ability to satisfy our working capital requirements and debt obligations will depend upon economic conditions, our ability to negotiate and maintain satisfactory terms under our borrowing and debt facilities in the future, and demand for our products, which are factors that may be out of our control. Our primary uses of capital resources are to fund operating activities, including R&D expenses associated with new product filings, and pharmaceutical product manufacturing expenses, license payments, spending on production facility expansions, capital equipment, acquisitions, and legal settlements.

We estimate that we will invest approximately $60.0 million to $70.0 million during 2024 for capital expenditures to support and grow our existing operations, primarily related to investments in manufacturing equipment, IT and facilities.

Debt Instruments

Over the next 12 months, we expect to make substantial payments for monthly interest and quarterly principal amounts due for our Term Loan Due 2028, monthly interest under our Term Loan Due 2025, and contractual payments for leased premises. Annually, we are also required to calculate the amount of excess cash flow payments, as defined in our term loan agreements. Based on the results of the excess cash flows calculation for the years ended December 31, 2023, 2022 and 2021, no excess cash flows principal payments were required. Based on the results of the excess cash flows calculation for the year ended December 31, 2020, the Company made a $14.4 million additional principal payment towards our Term Loan Due 2025 in March 2021.

In the year ended December 31, 2023, we paid the remaining outstanding principal under our Rondo Term Loan from cash on hand, of which we made prepayments totaling $63.0 million in excess of planned principal payments (refer to Note 16. Debt for additional information).

Legal Settlements

In January 2024, we paid $52.4 million to the plaintiffs of the Opana ER® antitrust litigation under the terms of the related settlement agreements with cash on hand (refer to Note 21. Commitments and Contingencies for additional information).

Tax Receivable Agreement

In 2018, we entered into a tax receivable agreement (“TRA”) for which we were generally required to pay the other holders of Amneal Common Units 85% of the applicable tax savings, if any, in U.S. federal and state income tax that we were deemed to realize as a result of certain tax attributes of their Amneal Common Units sold to us (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Amneal Common Units for shares of Class A common stock and (ii) tax benefits attributable to payments made under the TRA. As part of the Reorganization, the TRA was amended to reduce our future obligation to pay 85% of the realized tax benefits subject to the TRA to 75% of such realized benefits. As of December 31, 2023, the contingent TRA liability, including the impact of the amendment, was $185.2 million.

The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the corporate tax rate in effect at the time of realization of our taxable income (the TRA liability is determined based on a percentage of the corporate tax savings from the use of the TRA’s attributes). Because the Amneal Group has exchanged all of its Amneal Common Units pursuant to the Reorganization, the primary remaining factor that could increase the contingent TRA liability is an increase in the effective tax rate. In addition, any future payments under the TRA may create additional basis adjustments, which may result in an additional layer of depreciation and amortization allocable to the Company, resulting in additional TRA payments. The timing and amount of payments may also be accelerated under certain conditions, such as a change of control or other early termination event, which could give rise to our obligation to make TRA payments in advance of tax benefits being realized.

For further information, refer to Item 1A. Risk Factors and Note 7. Income Taxes.

Tax-related Distributions to Amneal Members

Prior to the Reorganization, Amneal was obligated to make tax distributions to the Members. For the years ended December 31, 2023, 2022, and 2021, the Company recorded net tax distributions of $56.7 million, $10.6 million, and $53.5 million, respectively, as a reduction of non-controlling interests. Subsequent to the Reorganization, we are no longer obligated to make tax distributions to the Members. There was no liability for tax distributions payable to the Members as of December 31, 2023 and 2022.

Cash Balances

At December 31, 2023, our cash and cash equivalents consist of cash on deposit and highly liquid investments. A portion of our cash flows are derived outside the U.S. As a result, we are subject to market risk associated with changes in foreign exchange rates. We maintain cash balances at both U.S. based and foreign country based commercial banks. At various times during the year, our cash balances held in the U.S. may exceed amounts that are insured by the Federal Deposit Insurance Corporation. We make our investments in accordance with our investment policy. The primary objectives of our investment policy are liquidity and safety of principal.

Cash Flows

For a discussion comparing of our cash flows for the fiscal years 2022 to 2021, see Cash Flows under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K.

The following table sets forth our summarized, consolidated cash flows for the years ended December 31, 2023 and 2022 (in thousands):

Years Ended December 31, Increase (Decrease)

Cash provided by (used in):

Cash Flows from Operating Activities

Net cash provided by operating activities was $345.6 million for the year ended December 31, 2023 as compared to $65.1 million for the prior year. The year-over-year increase was primarily driven by increased profitability adjusted for non-cash items and timing of collections of receivables, partially offset by other working capital uses of cash.

Cash Flows from Investing Activities

Net cash used in investing activities was $69.2 million for the year ended December 31, 2023 as compared to $174.3 million for the prior year. The year-over-year decrease in net cash used in investing activities was primarily due to $84.7 million of cash paid to acquire the baclofen franchise from entities affiliated with Saol International Limited during the prior year period and a year-over-year decrease in cash paid for intangible assets associated with marketed product licenses.

Cash Flows from Financing Activities

Net cash used in financing activities was $212.6 million for the year ended December 31, 2023 as compared to net cash used in financing activities of $106.6 million for prior year. The year-over-year increase was primarily due to: (i) an increase in debt related costs due to the Refinancing (refer to Note 16. Debt) and (ii) an increase in tax distributions, partially offset by (i) a net increase in long-term debt (refer to Note 16. Debt) and (ii) a payment made in the prior year for the acquisition of the baclofen franchise of certain entities affiliated with Saol International Limited (refer to Note 3).

Commitments and Contractual Obligations

Our contractual obligations as of December 31, 2023 were as follows (in thousands):

Payments Due by Period

Contractual Obligations Total LessThan 1Year 1-3Years 3-5Years MoreThan 5Years

(1)A description of our Term Loan Due 2025 and Term Loan Due 2028, and related debt service and interest requirements is contained in Note 16. Debt. Interest on our Term Loan Due 2025 and Term Loan Due 2028 was calculated based on applicable rates at December 31, 2023, excluding the impact of our interest rate swap.

(2)A description of our Amended New Revolving Credit Facility is contained in Note 16. Debt. The table assumes the balance outstanding as of December 31, 2023 will be repaid by December 31, 2024. The actual balance outstanding may fluctuate significantly in future periods. The interest rate on borrowings under the Amended New Revolving Credit Facility resets every 30, 90 or 180 days based on the term that we select.

(3)Amounts represent future minimum rental payments under non-cancelable facility leases. A discussion of our operating lease obligations is contained in Note 18. Leases.

(4)Amounts primarily represent future minimum rental payments under a non-cancelable financing lease obligation for a production facility in New York. A discussion of our financing lease obligations is contained in Note 18. Leases.

(5)Refer to Note 21. Commitments and Contingencies for additional information.

(6)Represents minimum sales and marketing spending obligations and a minimum royalty obligation.

The foregoing table does not include milestone payments potentially payable by us under our collaboration agreements and potential payments under our contingent consideration arrangements. Such payments are dependent upon the occurrence of specific and contingent events, and not the passage of time. A discussion of our significant contingent milestones is contained in Note 5. Alliance and Collaboration and Note 24. Related Party Transactions and a discussion of our contingent consideration arrangements is contained in Note 3. Acquisitions and Note 19. Fair Value Measurements. Additionally, the foregoing table does not include$44.2 million of aggregate principal and related interest due on the Sellers Notes as of December 31, 2023 (as defined in Note 16. Debt). The Sellers Notes are not included because the timing of the associated payments is dependent on the occurrence of future events. Refer to the section Rondo Acquisitions Financing – Notes Payable-Related Party in Note 16. Debt for a discussion of the terms of this indebtedness and descriptions of terms.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2023.

Critical Accounting Policies

Our significant accounting policies are described in Note 2. Summary of Significant Accounting Policies.

Included within these policies are certain policies which contain critical accounting estimates and, therefore, have been deemed to be “critical accounting policies.” Critical accounting estimates are those which require management to make assumptions about matters that were uncertain at the time the estimate was made and for which the use of different estimates, which reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur from period to

period could have a material impact on our financial condition or results of operations. We have identified the following to be our critical accounting policies: certain sales-related deductions, business combinations (including contingent consideration) impairment of goodwill and intangible assets, income taxes and contingencies.

Certain Sales-Related Deductions

Our gross product revenue is subject to a variety of deductions, which are estimated and recorded in the same period that the revenue is recognized. Certain deductions represent estimates of rebates related to gross sales for the reporting period and, as such, knowledge and judgment of market conditions and practice are required when estimating the impact of these revenue deductions on gross sales for a reporting period.

Historically, our changes of estimates reflecting actual results or updated expectations have not been material to our overall business. If any of our ratios, factors, assessments, experiences or judgments are not indicative or accurate predictors of our future experience, our results could be materially affected. The sensitivity of our estimates can vary by program, type of customer and geographic location. However, estimates associated with Medicaid rebates and sales returns are most at risk for material adjustment because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year. Because of this time lag, in any given quarter, our adjustments to actual can incorporate revisions of several prior quarters.

Business Combinations

We account for acquired businesses using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. The consolidated financial statements and results of operations reflect an acquired business after the completion of the acquisition. The fair value of the consideration paid is assigned to the underlying net assets of the acquired business based on their respective fair values as determined using a market participant concept. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill.

Intangible assets are amortized over the estimated useful life of the asset. Significant judgments are used in determining the estimated fair values assigned to the assets acquired and liabilities assumed and in determining estimates of useful lives of long-lived assets. Fair value determinations and useful life estimates are based on, among other factors, estimates of expected future net cash flows, estimates of appropriate discount rates used to present value expected future net cash flow streams, the assessment of each asset’s life cycle, competitive trends impacting the asset and each cash flow stream, as well as other factors. These judgments can materially impact the estimates used to allocate acquisition date fair values to assets acquired and liabilities assumed and the future useful lives. For these and other reasons, actual results may vary significantly from estimated results.

Impairment of Goodwill and Intangible Assets

Goodwill

Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. We test goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

In order to test goodwill for impairment, an entity is permitted to first assess qualitative factors to determine whether a quantitative assessment of goodwill is necessary. The qualitative factors that we consider may include, but are not limited to, general economic conditions, our outlook, market performance of our industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. If a quantitative assessment is required, we determine the fair value of our reporting unit using a combination of the income and market approaches. If the net book value of the reporting unit exceeds its fair value, we recognize a goodwill impairment charge for the reporting unit equal to the lesser of (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount exceeds its fair value.

Goodwill is allocated and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. Our reportable segments are the same as the respective operating segments and reporting units. As of December 31, 2023, $366.3 million, $162.8 million, and $69.5 million of goodwill was allocated to our Specialty,

Generics, and AvKARE segments, respectively. During the fourth quarter of 2023, we tested our Specialty and Generics reporting units for impairment using a quantitative assessment and utilized a qualitative assessment for our AvKARE reporting unit. The determination of fair value in the quantitative assessment required us to make significant estimates and assumptions. These estimates and assumptions primarily included, but were not limited to: the selection of appropriate peer group companies, the discount rate, terminal growth rates, forecasts of revenue, operating income, depreciation and amortization, restructuring charges and capital expenditures. For more information about goodwill, including our interim impairment test, see Note 13. Goodwill and Other Intangible Assets. There was no impairment of goodwill in any reporting unit for the year ended December 31, 2023.

Significant judgment is used in determining the assumptions utilized in our quantitative assessment. Accordingly, any changes in assumptions described above could have a material impact on our consolidated results of operations. Additionally, for each of our reporting units, there are a number of future events and factors that may impact future results and the outcome of subsequent goodwill impairment testing. For a list of these factors, see Item 1A. Risk Factors.

Intangible Assets

We review our long-lived assets, including intangible assets with finite lives, for recoverability whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. We evaluate assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value which is generally an expected present value cash flow technique. Our policy in determining whether an impairment indicator exists comprises measurable operating performance criteria as well as other qualitative measures. Events giving rise to impairment are an inherent risk in the pharmaceutical industry and cannot be predicted. Factors that we consider in deciding when to perform an impairment review include significant under-performance of a product in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. If our assumptions are not correct, there could be an impairment loss in subsequent periods or, in the case of a change in the estimated useful life of the asset, a change in amortization expense.

Intangible assets with indefinite lives, including IPR&D, are tested for impairment if impairment indicators arise and, at a minimum, annually. However, an entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. The indefinite-lived intangible asset impairment test consists of a one-step analysis that compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. We consider many factors in evaluating whether the value of its intangible assets with indefinite lives may not be recoverable, including, but not limited to the discount rate, terminal growth rates, general economic conditions, our outlook and market performance of our industry and recent and forecasted financial performance.

For the year ended December 31, 2023, we recognized $66.9 million of intangible asset impairment charges, of which $36.1 million was recognized in cost of goods sold and $30.8 million was recognized in in-process research and development impairment charges. Cost of sales impairment charges for the year ended December 31, 2023 of $36.1 million primarily related to a reduction in promotional focus on LYVISPAHTM in our Specialty segment, resulting in significantly lower than expected future cash flows. IPR&D impairment charges for the year ended December 31, 2023 of $30.8 million were related to one Generics asset and one Specialty asset, both of which experienced adverse clinical trials results in the fourth quarter of 2023 and resulted in significantly lower than expected future cash flows.

For the year ended December 31, 2022, we recognized a total of $24.1 million of intangible asset impairment charges, of which $11.1 million was recognized in cost of goods sold and $13.0 million was recognized in in-process research and development impairment charges. Cost of sales impairment charges for the year ended December 31, 2022 of $11.1 million related to currently marketed products of which (i) one product experienced significant price erosion during 2022, resulting in significantly lower than expected future cash flows and negative margins, (ii) the supply agreement of one product was terminated during 2022 and therefore the asset was not recoverable and (iii) one product was no longer expected to be sold to a key customer, therefore, the asset was not recoverable. IPR&D impairment charges for the year ended December 31, 2022 of $13.0 million related to (i) one asset that experienced a delay in its expected launch date and (ii) one asset that experienced significant expected price erosion, both of which resulted in significantly lower than expected future cash flows.

Income Taxes

We record valuation allowances against our DTAs when it is more likely than not that all or a portion of a DTA will not be realized. We routinely evaluate the realizability of our DTAs by assessing the likelihood that our DTAs will be recovered based on all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, estimates of future taxable income, tax planning strategies and results of operations. Estimating future taxable income is inherently uncertain and requires judgment. In projecting future taxable income, we consider our historical results and incorporate certain assumptions, including projected new product launches, revenue growth, and operating margins, among others.

A valuation allowance, if needed, reduces DTAs to the amount expected to be realized. When determining the amount of net DTAs that are more likely than not to be realized, we assess all available positive and negative evidence. This evidence includes, but is not limited to, prior earnings history, projected future earnings, carryback and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a DTA. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income to outweigh objective negative evidence of recent financial reporting losses.

As of December 31, 2023, based upon all available objective and verifiable evidence both positive and negative, including historical levels of pre-tax loss and income both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies, we determined that it is more likely than not that we will not realize the benefits of our gross DTAs. Accordingly, as of December 31, 2023, this valuation allowance was $566.5 million and reduced the carrying value of these gross DTAs, net of the impact of the reversal of taxable temporary differences, to zero.

As described in Item 1A. Risk Factors and Note 7. Income Taxes in our consolidated financial statements, we are a party to a TRA under which we are generally required to pay to the Amneal Group 75% of the applicable tax savings, if any, in U.S. federal and state income tax that we are deemed to realize and that are created as a result of tax benefits attributable to payments made under the TRA.

The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and amount of our taxable income, and the tax rate in effect at the time of realization of the our taxable income (the TRA liability is determined based on a percentage of the corporate tax savings from the use of the TRA’s attributes). Because the Amneal Group has sold or exchanged all of their Amneal Common Units, effective with the Reorganization, there is no longer the associated risk of increased future obligations under the TRA (i.e., there cannot be further sales or exchanges giving rise to increased TRA liability occurring subsequent to December 31, 2023).

The projection of future taxable income involves significant judgment. Actual taxable income may differ materially from our estimates, which could significantly impact the timing and payment of the TRA. As noted above, we have determined it is more-likely-than-not we will be unable to utilize all of our DTAs subject to the TRA; and, as of December 31, 2023 and 2022, we had not recognized the entire contingent liability under the TRA related to the tax savings we may realize from Amneal common units sold or exchanged. If utilization of these DTAs becomes more-likely-than-not in the future, at such time, these TRA liabilities (which amount to approximately $185.2 million as of December 31, 2023, as a result of basis adjustments under Internal Revenue Code Section 754) will be recorded through charges to our statements of operations.However, if the tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRA in excess of the $3.7 million accrued as of December 31, 2023.Should we determine that a DTA with a valuation allowance is realizable in a subsequent period, the related valuation allowance will be reversed and if a resulting TRA payment is determined to be probable, a corresponding TRA liability will be recorded.

Contingencies

We are involved in various litigation, government investigations and other legal proceedings that arise from time to time in the ordinary course of business. Our legal proceedings are complex, constantly evolving and subject to uncertainty. As such, we cannot predict the outcome or impact of our legal proceedings.

While we believe we have valid claims and/or defenses for the matters described in Note 21. Commitments and Contingencies, the nature of litigation is unpredictable and the outcome of the proceedings could include damages, fines, penalties and injunctive or administrative remedies. For any proceedings where losses are probable and reasonably capable of estimation, we accrue for a potential loss. When we have a probable loss for which a reasonable estimate of the liability is a range of losses and no amount within that range is a better estimate than any other amount, we record the loss at the low end of the range. While

these accruals have been deemed reasonable by our management, the assessment process relies heavily on estimates and assumptions that may ultimately prove inaccurate or incomplete. Additionally, unforeseen circumstances or events may lead us to subsequently change our estimates and assumptions. The process of analyzing, assessing and establishing reserve estimates relative to legal proceedings involves a high degree of judgment.

The ultimate resolution of any or all claims, legal proceedings or investigations are inherently uncertain and difficult to predict, could differ materially from our estimates and could have a material adverse effect on our results of operations and/or cash flows in any given accounting period, or on our overall financial condition.

For further details, see Note 21. Commitments and Contingencies.

Recently Issued Accounting Standards

Recently issued accounting standards are discussed in Note 2. Summary of Significant Accounting Policies.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Our cash is held on deposit in demand accounts at large financial institutions in amounts in excess of the FDIC insurance coverage limit of $250,000 per depositor, per FDIC-insured bank, per ownership category. Our cash equivalents are comprised of highly rated money market funds. We had no short-term investments as of December 31, 2023 or December 31, 2022.

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents and accounts receivable. We limit our credit risk associated with cash equivalents by placing investments with high credit quality securities, including U.S. government securities, treasury bills, corporate debt, short-term commercial paper and highly rated money market funds. As discussed in Note 16. Debt, we are party to term loans with an aggregate principal amount of $2.5 billion and an asset backed revolving credit facility under which loans and letters of credit up to a principal amount of $225.2 million are available as of December 31, 2023 (principal amount of up to $20.9 million remains available for letters of credit). The proceeds for any loans made under our asset backed revolving credit facility are available for capital expenditures, acquisitions, working capital needs and other general corporate purposes.

We limit our credit risk with respect to accounts receivable by performing credit evaluations when deemed necessary. We do not require collateral to secure amounts owed to us by our customers.

By the nature of our global operations, we are exposed to cash flow and earnings fluctuations resulting from foreign exchange rate variation. These exposures are transactional and translational in nature. Since we manufacture and sell our products throughout the world, we believe our foreign currency risk is diversified. Principal drivers of this diversified foreign exchange exposure include the European Euro and the Indian Rupee. Our transactional exposure arises from the purchase and sale of goods and services in currencies other than the functional currency of our operational units. We also have exposure related to the translation of financial statements of our foreign divisions into U.S. dollars, our functional currency. The financial statements of our operations outside the U.S. are measured using the local currency as the functional currency. Adjustments to translate the assets and liabilities of these foreign operations into U.S. dollars are accumulated as a component of other comprehensive (loss) income. Transaction gains and losses are included in the determination of our net (loss) income in our statements of operations. Such foreign currency transaction gains and losses include fluctuations related to long term intercompany loans that are payable in the foreseeable future.

While it is difficult to accurately measure the impact of inflation, we estimate our business experienced an increase in costs due to inflation of approximately $15.0 million for the year ended December 31, 2023. We expect an inflationary impact of approximately $15.0 million to $20.0 million for the year ending December 31, 2024. However, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations and may adversely impact our operating results in future periods.

In the normal course of operations, we are exposed to market risks relating to our long-term debt arising from adverse changes in interest rates. Market risk is defined for these purposes as the potential change in the fair value of a financial asset or liability resulting from an adverse movement in interest rates. Changes in interest rates impact fixed and variable rate debt differently. For fixed rate debt, a change in interest rates will impact only the fair value of the debt, whereas for variable rate debt, a change in the interest rates will impact interest expense and cash flows.

At December 31, 2023 and 2022, we had $2.54 billion and $2.64 billion, respectively, of variable rate debt. Our debt as of December 31, 2023 comprised of our Term Loan Due 2028 with principal outstanding of $2.35 billion and our Term Loan Due

2025 with principal outstanding of $192.0 million. We estimated the fair values of the Term Loan Due 2028 and Term Loan Due 2025 using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments. At December 31, 2023 and 2022, we estimated the fair value of the Term Loan Due 2025 to be $190.8 million and $2.29 billion, respectively. At December 31, 2023, we estimated the fair value of the Term Loan Due 2028 to be $2.33 billion. At December 31, 2022, we estimated the fair value of the Rondo Term Loan to be $70.9 million.

In October 2019, we entered into an interest rate lock agreement for a total notional amount of $1.3 billion whereby we exchanged floating for fixed rate interest payments for our LIBOR based borrowing under our Term Loan Due 2025 (the “October 2019 Swap”). On May 31, 2023, we executed an amendment to the interest rate swap that changed the reference rate from LIBOR to the one-month secured overnight financing rate (“SOFR”). On November 14, 2023, in connection with our refinancing of the Term Loan Due 2025 and the New Credit Facility, as defined in Note 16. Debt, we novated the October 2019 Swap to another counterparty and, in connection with such novation, amended the October 2019 Swap. Specifically, the amendments modified (i) the fixed rate payable by the counterparty from 1.366% to a new fixed rate of 2.7877% and (ii) extended the termination date through May 4, 2027 (i.e., one year before the Term Loan Due 2028 matures). The amendments did not change the notional amount of $1.3 billion. Refer to Note 20. Financial Instruments for additional information. At inception and at year end, we assessed hedge effectiveness and determined it to continue to be highly effective. We also reviewed the credit standing of the counterparty at year end and deemed the counterparties to have the ability to honor their obligations. The fair value of the variable-to-fixed interest rate swap was an asset of $37.1 million as of December 31, 2023. We estimated that a hypothetical 100 basis point increase in the forward one-month SOFR curve would potentially increase the fair value of the variable-to-fixed interest rate swap asset to $73.4 million. We estimated that a hypothetical 100 basis point decrease in the forward one-month SOFR curve would potentially change the fair value of the variable-to fixed interest rate swap from an asset of $37.1 million to a liability of $5.0 million as of December 31, 2023.

Increases or decreases in interest rates would affect our annual interest expense. Based on the principal amount of the Term Loan Due 2028 and Term Loan Due 2025 outstanding as of December 31, 2023, a hypothetical 100 basis point increase or decrease in interest rates would have affected our annual interest expense by approximately $23.5 million and $1.9 million, respectively, before the impact of the interest rate lock agreement discussed above.

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements listed in Item 15. Exhibits, Financial Statement Schedules are filed as part of this Annual Report on Form 10-K and incorporated by reference herein.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our Co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, our Co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on the assessment, management has

concluded that our internal control over financial reporting was effective as of December 31, 2023. Ernst & Young LLP has independently assessed the effectiveness of our internal control over financial reporting and its report is included below.

Changes in Internal Control over Financial Reporting

During the quarter ended December 31, 2023, there were no changes in internal control over financial reporting which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitation on Effective Controls

Management, including our Co-Chief Executive Officers and Chief Financial Officer, does not expect that our disclosure controls and procedures or its system of internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed or operated, can provide only reasonable, but not absolute, assurance that the objectives of the system of internal control are met. The design of our control system reflects the fact that there are resource constraints, and that the benefits of such control system must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control failures and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the intentional acts of individuals, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part on certain assumptions about the likelihood of future events, and there can be no assurance that the design of any particular control will always succeed in achieving its objective under all potential future conditions.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Amneal Pharmaceuticals, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Amneal Pharmaceuticals, Inc.’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Amneal Pharmaceuticals, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss) income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated March 14, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Iselin, New Jersey

March 14, 2024

Item 9B. Other Information

Not applicable.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III.

Item 10. Directors, Executive Officers and Corporate Governance

The information required in this Item 10 will be included in the following sections in the 2024 Proxy Statement, which sections are incorporated in this Item 10 by reference: “Proposal No. 1-Election of Directors”, “Our Management”, “Committees of the Board of Directors”, “Audit Committee” and, if included in the 2024 Proxy Statement, “Delinquent Section 16(a) Reports”.

Code of Business Conduct for Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. We have adopted a Code of Business Conduct that applies to all of our employees, officers and directors. The full text of our Code of Business Conduct is available at the investors section of our website, http://investors.amneal.com. We intend to disclose any amendment to, or waiver from, a provision of the Code of Business Conduct that applies to our principal executive officer, principal financial officer or principal accounting officer in the investors section of our website.

Item 11. Executive Compensation

The information required in this Item 11 will be included in the following sections in the 2024 Proxy Statement, which sections are incorporated in this Item 11 by reference to the extent required by this Item 11: “Compensation Discussion and Analysis,” “Executive Compensation,” “Director Compensation,” “The Board’s Role in Risk Oversight,” “Compensation Committee Interlocks and Insider Participation” and “Report of the Compensation Committee.” Notwithstanding the foregoing, the information in the section entitled “Report of the Compensation Committee” and “Pay Versus Performance” is only “furnished” herein and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Except as set forth below, the information required in this Item 12 will be included in the section entitled “Beneficial Ownership” in the 2024 Proxy Statement, which section is incorporated in this Item 12 by reference.

Securities Authorized for Issuance Under Equity Compensation Plans. The following table summarizes information, as of December 31, 2023, relating to the Amneal Pharmaceuticals, Inc. 2018 Incentive Award Plan, which was approved by the Company’s stockholders and which authorizes the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other stock or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants.

Equity Compensation Plan Information

Equity compensation plans not approved by security holders — — —

(1)Equity compensation plans approved by security holders which are included in column (a) of the table are the amended and restated 2018 Incentive Award Plan (including 2,387,989 shares of Class A Common Stock to be issued upon exercise of outstanding options and 17,454,703 shares of Class A Common Stock to be issued upon vesting and settlement of outstanding restricted stock units (“RSUs”) and market performance-based restricted stock units (“MPRSUs”) subject to continued employment) and 28,376 of options remaining from the Impax option conversion associated with the acquisition of Impax on May 4, 2018. RSUs and MPRSUs included in column (a) of the table represent the full number of RSUs and MPRSUs awarded and outstanding whereas the number of shares of Class A

Common Stock to be issued upon vesting will be lower than what is reflected on the table because the value of shares required to meet employee tax withholding requirements are not issued.

(2)Column (b) relates to stock options and does not include any exercise price for RSUs and MPRSUs because their value is dependent upon attainment of continued employment or service and they are settled for shares of Class A Common Stock on a one-for-one basis.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required in this Item 13 will be included in the following sections in the 2024 Proxy Statement, which sections are incorporated in this Item 13 by reference: “Certain Related Parties and Related Party Transactions,” “Controlled Company Status” and “Committees of the Board of Directors.”

Item 14. Principal Accounting Fees and Services

The independent registered public accounting firm is Ernst & Young LLP, Iselin, NJ, PCAOB ID 42 .

The information required in this Item 14 will be included in the section entitled “Independent Registered Public Accounting Firm Fees” in the 2024 Proxy Statement, which section is incorporated in this Item 14 by reference.

PART IV.

Item 15. Exhibits, Financial Statement Schedules

(a)(1) Consolidated Financial Statements

Index to financial statements and supplementary data filed as part of this Report.

Report of Independent Registered Public Accounting Firm (PCAOB ID 42) F-1

Consolidated Statements of Operations F-5

Consolidated Statements of Comprehensive (Loss) Income F-6

Consolidated Balance Sheets F-7

Consolidated Statements of Changes in Stockholders’ Equity F-8

Consolidated Statements of Cash Flows F-11

Notes to Consolidated Financial Statements F-13

(a)(2) Financial Statement Schedules

All schedules are omitted because they are not required or because the required information is included in the Consolidated Financial Statements or notes thereto.

(a)(3) Exhibits

See the "Exhibit Index" prior to the signature page of this Annual Report on Form 10-K.

Item 16. Form 10-K Summary

None.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Amneal Pharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Amneal Pharmaceuticals, Inc. (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss) income, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 14, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-1

Medicaid Rebates

F-2

Sales Returns

Impairment of Goodwill and Other Indefinite-lived Intangible Assets

F-3

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2008.

Iselin, New Jersey

March 14, 2024

F-4

Amneal Pharmaceuticals, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

Years Ended December 31,

In-process research and development impairment charges 30,800 12,970 710

Intellectual property legal development expenses 3,828 4,358 7,716

Acquisition, transaction-related and integration expenses — 709 8,055

Change in fair value of contingent consideration (14,497) 731 200

Other (expense) income:

Accretion of redeemable non-controlling interest — (438) —

Weighted-average common shares outstanding:

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Amneal Pharmaceuticals, Inc.

Consolidated Statements of Comprehensive (Loss) Income

(in thousands)

Years Ended December 31,

Accretion of redeemable non-controlling interest — (438) —

Other comprehensive (loss) income:

Unrealized (loss) gain on cash flow hedge, net of tax (48,497) 97,059 42,430

Reclassification of cash flow hedge to earnings, net of tax (3,366) — —

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Amneal Pharmaceuticals, Inc.

Consolidated Balance Sheets

(in thousands)

Assets

Current assets:

Prepaid expenses and other current assets 82,685 103,565

Related party receivables 955 500

Operating lease right-of-use assets - related party 12,954 17,910

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of liabilities for legal matters 76,988 107,483

Current portion of long-term debt, net 34,125 29,961

Current portion of operating lease liabilities 9,207 8,321

Current portion of operating lease liabilities - related party 2,825 2,869

Current portion of financing lease liabilities 2,467 3,488

Related party payables - short term 7,321 2,479

Operating lease liabilities - related party 12,787 15,914

Related party payable - long term 11,776 9,649

Commitments and contingencies (Notes 5 and 21)

Stockholders’ equity:

Accumulated other comprehensive (loss) income (32,349) 9,939

Total Amneal Pharmaceuticals, Inc. stockholders' equity 19,781 298,421

The accompanying notes are an integral part of these consolidated financial statements.

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Amneal Pharmaceuticals, Inc.

Consolidated Statement of Changes in Stockholders’ Equity

(in thousands)

Old PubCo New PubCo

Shares Amount Shares Amount Shares Amount

Foreign currency translation adjustments — — — — — — — — (433) (626) (1,059) —

Stock-based compensation — — — — — — 26,822 — — — 26,822 —

The accompanying notes are an integral part of these consolidated financial statements.

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Amneal Pharmaceuticals, Inc.

Consolidated Statement of Changes in Stockholders’ Equity

(in thousands)

Old PubCo

Shares Amount Shares Amount

Stock-based compensation — — — — 31,847 — — — 31,847 —

The accompanying notes are an integral part of these consolidated financial statements.

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Amneal Pharmaceuticals, Inc.

Consolidated Statement of Changes in Stockholders’ Equity

(in thousands)

Old PubCo

Shares Amount Shares Amount

Foreign currency translation adjustments — — — — — — (4,255) (4,363) (8,618) —

Stock-based compensation — — — — 28,412 — — — 28,412 —

Non-controlling interests from KSP Acquisition — — — — — — — 2,000 2,000 —

Non-controlling interests from Puniska Acquisition — — — — — — — — — 1,742

The accompanying notes are an integral part of these consolidated financial statements.

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Amneal Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

(in thousands)

Years Ended December 31,

Cash flows from operating activities:

Unrealized foreign currency (gain) loss (768) 15,190 175

Amortization of debt issuance costs and discount 8,182 8,595 9,203

Change in fair value of contingent consideration (14,497) 731 200

Insurance recoveries for property and equipment losses — (1,000) (5,000)

Non-cash property losses — — 5,152

Changes in assets and liabilities:

Prepaid expenses, other current assets and other assets 37,814 9,882 (21,981)

Cash flows from investing activities:

Acquisitions of businesses, net of cash acquired — (84,714) (146,543)

Cash flows from financing activities:

Payments of deferred financing and refinancing costs (162,415) (1,663) —

Proceeds from issuance of debt 217,732 — —

Borrowings on revolving credit facility 219,000 85,000 —

Proceeds from exercise of stock options 451 662 853

Payments of deferred consideration for acquisitions - related party — (44,498) —

Acquisition of redeemable non-controlling interests — (1,722) —

Payments of principal on financing lease - related party — — (93)

Repayment of related party note — — (1,000)

Effect of foreign exchange rate on cash 65 (5,683) 102

The accompanying notes are an integral part of these consolidated financial statements.

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Amneal Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows (continued)

(in thousands)

Years Ended December 31,

Supplemental disclosure of cash flow information:

Supplemental disclosure of non-cash investing and financing activity:

Notes payable for acquisitions - related party $ — $ — $ 14,162

Deferred consideration for acquisition - related party $ — $ — $ 30,099

Contingent consideration for acquisition $ — $ 8,796 $ —

Contingent consideration for acquisition - related party $ — $ — $ 5,700

Payable for acquisition of product rights and licenses $ 2,100 $ — $ 300

The accompanying notes are an integral part of these consolidated financial statements.

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Amneal Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements

1. Nature of Operations

Amneal Pharmaceuticals, Inc. (the “Company”) is a global pharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines, including retail generics, injectables, biosimilars and specialty branded pharmaceuticals. The Company operates principally in the United States (“U.S.”), India, and Ireland, and sells to wholesalers, distributors, hospitals, governmental agencies, chain pharmacies and individual pharmacies, either directly or indirectly.

The Company is a holding company, whose principal assets are common units (“Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”). Immediately prior to the Reorganization (as defined herein), the Company held 50.4% of the Amneal Common Units and the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members” or the “Amneal Group”) held the remaining 49.6%. On November 7, 2023, the Company implemented a plan pursuant to which the Company and Amneal reorganized and simplified the Company’s corporate structure by eliminating its umbrella partnership-C-corporation structure and converting to a more traditional C-corporation structure whereby all stockholders hold their voting and economic interests directly through the public company (the “Reorganization”). Effective with the Reorganization, the Company holds 100% of the Amneal Common Units.

Following the implementation of the Reorganization, Amneal Pharmaceuticals, Inc. (“Old PubCo”) became a wholly owned subsidiary of a new holding company, Amneal NewCo Inc. (“New PubCo”), which replaced Old PubCo as the public company trading on the New York Stock Exchange under Old PubCo’s ticker symbol “AMRX.” In addition, New PubCo changed its name to “Amneal Pharmaceuticals, Inc.” and Old PubCo changed its name to “Amneal Intermediate, Inc.” In connection with the Reorganization, holders of shares of Class A common stock, par value $0.01 per share, of Old PubCo (“Old PubCo Class A Common Stock”) ceased to hold such shares and received an equivalent number of shares of Class A common stock, par value $0.01 per share, of New PubCo that have the same voting and economic rights as Old PubCo Class A Common Stock. Additionally, holders of shares of Class B common stock, par value $0.01 per share, of Old PubCo (“Old PubCo Class B Common Stock”), ceased to hold such shares and received an equivalent number of shares of Class A common stock, par value $0.01 per share, of New PubCo that have the same voting and economic rights as Old PubCo Class A Common Stock. All outstanding shares of Old PubCo Class B Common Stock were surrendered and canceled. Accordingly, upon consummation of the Reorganization, Old PubCo stockholders automatically became stockholders of New PubCo, on a one-for-one basis, with the same number and ownership percentage of shares they held in Old PubCo immediately prior to the effective time of the Reorganization. On December 27, 2023, the Company voluntarily withdrew the listing of its Class A common stock from the New York Stock Exchange and transferred the listing to the Nasdaq Stock Market LLC under the same name and ticker symbol.

2. Summary of Significant Accounting Policies

Accounting Principles

The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated.

Principles of Consolidation

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

Although the Company had a minority economic interest in Amneal prior to March 31, 2023, it was Amneal’s sole managing member (and it continues to be the sole managing member), having the sole voting power to make all of Amneal’s business decisions and control its management. Therefore, the Company also consolidated the financial statements of Amneal and its subsidiaries for all periods prior to the Reorganization.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the reported financial position at the date of the financial statements and the reported results of operations during the reporting period. Such estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The following are some, but not all, of such estimates: the determination of chargebacks, sales returns,

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rebates, billbacks, valuation of intangible and other assets acquired in business combinations, allowances for accounts receivable, accrued liabilities, liabilities for legal matters, contingent liabilities, initial and subsequent valuation of contingent consideration recognized in business combinations, stock-based compensation, valuation of inventory balances, the determination of useful lives for product rights and the assessment of expected cash flows used in evaluating goodwill and other long-lived assets for impairment. Actual results could differ from those estimates.

Revenue Recognition

When assessing its revenue recognition, the Company performs the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies the performance obligation. The Company recognizes revenue when it transfers control of its products to customers, in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those products.

From time to time, the Company may enter into arrangements where it licenses certain products to a third-party distributor. Licensing arrangement performance obligations generally include intellectual property (“IP”) rights and research and development (“R&D”) and contract manufacturing services. The Company accounts for IP rights and services separately if they are distinct. The consideration is allocated between IP rights and services based on their relative stand-alone selling prices.

Revenue for distinct IP rights is accounted for based on the nature of the promise to grant the license. In determining whether the Company’s promise is to provide a right to access its IP or a right to use its IP, the Company considers the nature of the IP to which the customer will have rights. IP is either functional IP which has significant standalone functionality or symbolic IP which does not have significant standalone functionality. Revenue from functional IP is recognized at the point in time when control of the distinct license is transferred to the customer. Revenue from symbolic IP is recognized over the access period to the Company’s IP.

Revenue from sales-based milestones and royalties promised in exchange for a license of IP is recognized only when, or as, the later of subsequent sale or the performance obligation to which some or all of the sales-based royalty has been allocated, is satisfied.

For further details on the Company’s revenue recognition policies, refer to Note 4. Revenue Recognition.

Stock-Based Compensation

The Company’s stock-based compensation consists of stock options, restricted stock units (“RSUs”) and market performance-based restricted stock units (“MPRSUs”) awarded to employees and non-employee directors. Stock options are measured at their fair value on the grant date or date of modification, as applicable. RSUs, including MPRSUs, are measured at the stock price on the grant date or date of modification, as applicable. The Company recognizes compensation expense on a straight-line basis over the requisite service and/or performance period, as applicable. Forfeitures of awards are accounted for as a reduction in stock-based compensation expense in the period such awards are forfeited. The Company's policy is to issue new shares upon option exercises and the vesting of RSUs and MPRSUs.

Contingent consideration

Business acquisitions may include future payments that are contingent upon the occurrence of certain pharmaceutical regulatory milestones or net sales of pharmaceutical products. For acquisitions that are accounted for as a business combination, the obligations for such contingent consideration payments are recorded at fair value on the acquisition date. For contingent milestone payments, the Company uses a probability-weighted income approach utilizing an appropriate discount rate. For contingent tiered royalties on net sales, the Company uses a Monte Carlo simulation model. Contingent consideration liabilities are revalued to fair value at the end of each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in fair value of contingent consideration in the consolidated statements of operations. Refer to Note 3. Acquisitions and Note 19. Fair Value Measurements for additional information.

Foreign Currencies

The Company has operations in the U.S., India, Ireland, and other foreign jurisdictions. Generally, the Company’s foreign operating subsidiaries’ functional currency is the local currency. The results of its non-U.S. dollar based operations are translated to U.S. dollars at the average exchange rates during the period. Assets and liabilities are translated at the rate of

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exchange prevailing on the balance sheet date. Translation adjustments are included in accumulated other comprehensive (loss) income and non-controlling interests in the consolidated balance sheets and are included in comprehensive (loss) income. Transaction gains and losses are included in net (loss) income in the Company’s consolidated statements of operations as a component of foreign exchange gain (loss), net. Such foreign currency transaction gains and losses include fluctuations related to long term intercompany loans that are payable in the foreseeable future. Translation gains and losses on intercompany balances of a long-term investment nature are included in foreign currency translation adjustments in accumulated other comprehensive (loss) income and non-controlling interests, and comprehensive (loss) income.

Business Combinations

Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, the acquiring entity in a business combination records the assets acquired and liabilities assumed at the date of acquisition at their fair values. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill. Acquisition-related costs, primarily professional fees, are expensed as incurred.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on deposit and highly liquid investments with original maturities of three months or less. A portion of the Company’s cash flows are derived outside the U.S. As a result, the Company is subject to market risk associated with changes in foreign exchange rates. The Company maintains cash balances at both U.S.-based and international-based commercial banks. At various times during the year, cash balances in the U.S. may exceed amounts that are insured by the Federal Deposit Insurance Corporation.

Restricted Cash

At December 31, 2023 and 2022, respectively, the Company had restricted cash balances of $7.6 million and $9.3 million, respectively, in its bank accounts primarily related to the purchase of certain land and equipment in India.

Accounts Receivable and Allowance for Credit Losses

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company limits its credit risk with respect to accounts receivable by performing credit evaluations when deemed necessary. The Company does not require collateral to secure amounts owed to it by its customers.

Trade accounts receivable are stated at their net realizable value. The allowance for credit losses reflects the best estimate of expected credit losses of the accounts receivable portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. The Company determines its allowance methodology by pooling receivable balances at the customer level. The Company consider various factors, including its previous loss history, individual credit risk associated to each customer, and the current and future condition of the general economy. These credit risk factors are monitored on a quarterly basis and updated as necessary. To the extent that any individual debtor is identified whose credit quality has deteriorated, the Company establishes allowances based on the individual risk characteristics of such customer. The Company makes concerted efforts to collect all outstanding balances due from customers; however, account balances are charged off against the allowance when management believes it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to customers.

Chargebacks Received from Manufacturers

When a sale occurs on a contracted item, the difference between the cost the Company pays to the manufacturer of that item and the contract price that the end customer has with the manufacturer is rebated to the Company by the manufacturer as a chargeback. Chargebacks are recorded as a reduction to cost of sales and either a reduction in the amount due to the manufacturer (if there is a right of offset) or as a receivable from the manufacturer.

Inventories

Inventories consist of finished goods held for sale, raw materials, and work in process. Inventories are stated at net realizable value, with cost determined using the first-in, first-out method. Adjustments for excess and obsolete inventories are established based upon historical experience and management’s assessment of current product demand. These assessments include inventory obsolescence based on its expiration date, damaged or rejected product, and slow-moving products.

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Property, Plant, and Equipment

Property, plant, and equipment are stated at historical cost less accumulated depreciation. Depreciation expense is computed primarily using the straight-line method over the estimated useful lives of the assets, which are as follows:

Asset Classification Estimated Useful Life

Buildings 30 years

Computer equipment 5 years

Furniture and fixtures 7 years

Leasehold improvements Shorter of asset's useful life or remaining life of lease

Machinery and equipment 5 - 10 years

Vehicles 5 years

Upon retirement or disposal, the cost of the asset disposed and the accumulated depreciation are removed from the accounts, and any gain or loss is reflected as part of operating income (loss) in the period of disposal. Expenditures that significantly increase value or extend useful lives of property, plant, and equipment are capitalized, whereas those for normal maintenance and repairs are expensed. The Company capitalizes interest on borrowings during the construction period of major capital projects as part of the related asset and amortizes the capitalized interest into earnings over the related asset’s remaining useful life.

Leases

All significant lease arrangements are recognized as right-of-use (“ROU”) assets and lease liabilities at lease commencement. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of the future lease payments using the Company's incremental borrowing rate.

Operating lease expense is recognized on a straight-line basis over the lease term. At each balance sheet date, operating and financing lease liabilities continue to represent the present value of the future payments. Financing lease ROU assets are expensed using the straight-line method, unless another basis is more representative of the pattern of economic benefit, to lease expense. Interest on financing lease liabilities is recognized in interest expense.

Leases with an initial term of 12 months or less (short-term leases) are not recognized in the balance sheet and the related lease payments are recognized as incurred over the lease term. The Company separates lease and non-lease components. A portion of the Company's real estate leases are subject to periodic changes in the Consumer Price Index (“CPI”). The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.

For further details regarding the Company's leases, refer to Note 18. Leases.

In-Process Research and Development

The fair value of in-process research and development (“IPR&D”) acquired in a business combination is determined based on the present value of each research project’s projected cash flows using an income approach. Revenues are estimated based on relevant market size and growth factors, expected industry trends, individual project life cycles and the life of each research project’s underlying marketability. In determining the fair value of each research project, expected cash flows are adjusted for certain risks of completion, including technical and regulatory risk.

The value attributable to IPR&D projects at the time of acquisition is capitalized as an indefinite-lived intangible asset and tested for impairment until the project is completed or abandoned. Upon completion of the project, the indefinite-lived intangible asset is then accounted for as a finite-lived intangible asset and amortized over the estimated useful life of the asset based on the pattern in which the economic benefits are expected to be consumed or otherwise used up or, if that pattern is not readily determinable, on a straight-line basis. If the project is abandoned, the indefinite-lived intangible asset is charged to expense.

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impairment testing is required. The indefinite-lived intangible asset impairment test consists of a one-step analysis that compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company considers many factors in evaluating whether the value of its intangible assets with indefinite lives may not be recoverable, including, but not limited to, expected growth rates, the cost of equity and debt capital, general economic conditions, the Company’s outlook and market performance of the Company’s industry and recent and forecasted financial performance.

Goodwill

Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

In order to test goodwill for impairment, an entity is permitted to first assess qualitative factors to determine whether a quantitative assessment of goodwill is necessary. The qualitative factors considered by the Company may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. If a quantitative assessment is required, the Company determines the fair value of its reporting unit using a combination of the income and market approaches. If the net book value of the reporting unit exceeds its fair value, the Company recognizes a goodwill impairment charge for the reporting unit equal to the lesser of (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount exceeds its fair value. See Note 13. Goodwill and Other Intangible Assets, for further discussion of the Company's qualitative and quantitative assessments of goodwill.

Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of future cash flows and the current fair value of the asset.

Amortization of Intangible Assets with Finite Lives

Intangible assets, other than indefinite-lived intangible assets, are amortized over the estimated useful life of the asset based on the pattern in which the economic benefits are expected to be consumed or otherwise used up or, if that pattern is not readily determinable, on a straight-line basis. The useful life is the period over which the assets are expected to contribute directly or indirectly to future cash flows. Intangible assets are not written-off in the period of acquisition unless they become impaired during that period.

The Company regularly evaluates the remaining useful life of each intangible asset that is being amortized to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of the intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. See Note 13. Goodwill and Other Intangible Assets for further discussion of the Company's intangible assets.

Impairment of Long-Lived Assets (Including Intangible Assets with Finite Lives)

The Company reviews its long-lived assets, including intangible assets with finite lives, for recoverability whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value, which is generally an expected present value cash flow technique. Management’s policy in determining whether an impairment indicator exists comprises measurable operating performance criteria as well as other qualitative measures. See Note 13. Goodwill and Other Intangible Assets for further discussion of the Company’s assessment of intangible asset impairments.

Financial Instruments

The Company minimizes its risks from interest fluctuations through its normal operating and financing activities and, when deemed appropriate through the use of derivative financial instruments. Derivative financial instruments are used to manage

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risk and are not used for trading or other speculative purposes. The Company does not use leveraged derivative financial instruments. Derivative financial instruments that qualify for hedge accounting must be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract.

All derivatives are recorded on the balance sheet as assets or liabilities and measured at fair value. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive (loss) income net of income taxes and subsequently amortized as an adjustment to interest expense over the period during which the hedged forecasted transaction affects earnings, which is when the Company recognizes interest expense on the hedged cash flows. Cash flows of such derivative financial instruments are classified consistent with the underlying hedged item.

Highly effective hedging relationships that use interest rate swaps as the hedging instrument and that meet criteria under ASC 815, Derivatives and Hedging (“ASC 815”), may qualify for the “short-cut method” of assessing effectiveness. The short-cut method allows the Company to make the assumption of no ineffectiveness, which means that the change in fair value of the hedged item can be assumed to be equal to the change in fair value of the derivative. Unless critical terms change, no further evaluation of effectiveness is performed for these hedging relationships unless a critical term is changed.

For a hedging relationship that does not qualify for the short-cut method, the Company measures its effectiveness using the “hypothetical derivative method”, in which the change in fair value of the hedged item must be measured separately from the change in fair value of the derivative. At inception and quarterly thereafter, the Company formally assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. The Company compares the change in the fair value of the actual interest rate derivative to the change in the fair value of a hypothetical interest rate derivative with critical terms that match the hedged interest rate payments. After the initial quantitative assessment, this analysis is performed on a qualitative basis and, if it is determined that the hedging relationship was and continues to be highly effective, no further analysis is required.

All components of each derivative financial instrument's gain or loss are included in the assessment of hedge effectiveness. If it is determined that a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting and any deferred gains or losses related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive (loss) income net of income taxes, unless it is probable that the forecasted transaction will not occur. If it is probable that the forecasted transaction will not occur by the originally specified time period, the Company discontinues hedge accounting, and any deferred gains or losses reported in accumulated other comprehensive (loss) income are reclassified into earnings immediately.

The Company is subject to credit risk as a result of nonperformance by counterparties to the derivative agreements. Upon inception and quarterly thereafter, the Company makes judgments on each counterparty’s creditworthiness for nonperformance by counterparties.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense.

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Comprehensive (Loss) Income

Comprehensive (loss) income includes net (loss) income and all changes in stockholders’ equity (except those arising from transactions with stockholders) including foreign currency translation adjustments resulting from the consolidation of foreign subsidiaries’ financial statements and unrealized gains (losses) on cash flows hedges, net of income taxes.

Research and Development

R&D activities are expensed as incurred. R&D expenses primarily consist of direct and allocated expenses incurred with the process of formulation, clinical research, and validation associated with new product development. Upfront and milestone payments made to third parties in connection with R&D collaborations are expensed as incurred up to the point of regulatory approval or when there is no alternative future use.

Intellectual Property Legal Development Expenses

The Company expenses external IP legal development expenses as incurred. These costs relate to legal challenges of innovator’s patents for invalidity or non-infringement, which are customary in the generic pharmaceutical industry, and are incurred predominately during development of a product and prior to regulatory approval. Associated costs include, but are not limited to, formulation assessments, patent challenge opinions and strategy, and litigation expenses to defend the IP supporting the Company's regulatory filings.

Shipping Costs

The Company records the costs of shipping product to its customers as a component of selling, general, and administrative expenses as incurred. Shipping costs were $21.7 million, $18.7 million and $18.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs are included in selling, general and administrative expenses and were $12.4 million, $16.8 million and $15.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers (“ASC 606”). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. ASU 2021-08 was effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU 2021-08 effective January 1, 2023 and will apply the guidance to subsequent acquisitions. The adoption of ASU 2021-08 did not have an impact on the Company’s consolidated financial statements because the Company did not acquire a business the during the year ended December 31, 2023.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides elective amendments for entities that have contracts, hedging relationships and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), to expand and clarify the scope of Topic 848 to include derivative instruments on discounting transactions. In December 2022, the FASB issued ASU 2022-06, Reference Rate reform (Topic 848): Deferral of the Sunset Date of Topic 848, which deferred the sunset date of Topic 848, Reference Rate Reform to December 31, 2024. The Company adopted ASU 2020-04 during the three months ended June 30, 2023 (refer to Note 16. Debt for additional information). The adoption of ASU 2020-04 did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which provides improvements to reportable segment disclosure requirements, primarily through

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enhanced disclosures about significant segment expenses. ASU 2023-07 requires disclosures to include the title and position of the chief operating decision maker (“CODM”), significant segment expenses that are regularly provided to the CODM, a description of other segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how to allocate resources. ASU 2023-07 also requires all annual disclosures currently required by Topic 280 to be included in interim periods. The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which enhances the transparency and usefulness of income tax disclosures. ASU 2023-09 requires that public business entities on an annual basis disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The update is effective for fiscal years beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.

Reclassification

The prior period balances related to cost of goods sold impairment charges of $11.1 million and $22.7 million, formerly included in a separate caption in the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively, have been reclassified to be included within the caption cost of goods sold in the consolidated statements of operations to conform with the current period presentation. This reclassification did not impact gross profit or net income.

3. Acquisitions

Saol Baclofen Franchise Acquisition

On December 30, 2021, the Company entered into an asset purchase agreement with certain entities affiliated with Saol International Limited (collectively, “Saol”), a private specialty pharmaceutical company, pursuant to which it agreed to acquire Saol’s baclofen franchise, including Lioresal®, LYVISPAHTM, and a pipeline product under development (the “Saol Acquisition”). The Saol Acquisition expanded the Company’s commercial institutional and specialty portfolio in neurology while adding commercial infrastructure in advance of its entry into the biosimilar institutional market. The transaction closed on February 9, 2022.

Consideration for the Saol Acquisition included $84.7 million, paid at closing with cash on hand, and contingent royalty payments based on annual net sales for certain acquired assets, beginning in June 2023. Cash paid at closing included $1.1 million for inventory acquired in excess of the normalized level, as defined in the asset purchase agreement (working capital adjustment).

For the year ended December 31, 2022, the Company incurred $0.1 million in transaction costs associated with the Saol Acquisition, which was recorded in acquisition, transaction-related and integration expenses.

The Saol Acquisition was accounted for under the acquisition method of accounting, with Amneal as the accounting acquirer. The purchase price was calculated as follows (in thousands):

Contingent consideration (royalties) (1) 8,796

Fair value of consideration transferred $ 93,510

(1)The estimated fair value of contingent consideration on the acquisition date was $8.8 million and was based on significant Level 3 inputs that were not observable in the market. Key assumptions included the discount rate, projected year of payments and expected net product sales. Refer to Note 19. Fair Value Measurements for additional information on the methodology and determination of this liability.

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The following is a summary of the purchase price allocation for the Saol Acquisition (in thousands):

Final Fair Values as of February 9, 2022

Prepaid expenses and other current assets 98

Total assets acquired 93,628

Accounts payable and accrued expenses 118

Fair value of consideration transferred $ 93,510

The acquired intangible assets are being amortized over their estimated useful lives as follows (in thousands):

Final Fair Value Weighted-Average Useful Life (in years)

The estimated fair value of the identifiable intangible assets was determined using the “income approach,” which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. The assumptions, including the expected projected cash flows, utilized in the purchase price allocation and in determining the purchase price were based on management's best estimates as of the closing date of the Saol Acquisition on February 9, 2022.

Some of the more significant assumptions inherent in the development of those asset valuations included the estimated net cash flows for each year for each asset (including net revenues, cost of sales, selling and marketing costs and working capital/ contributory asset charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, the potential regulatory and commercial success risks, competitive trends impacting the asset and each cash flow stream, as well as other factors. The underlying assumptions used to prepare the discounted cash flow analysis may change; accordingly, for these and other reasons, actual results may vary significantly from estimated results.

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized. Of the total goodwill acquired in connection with the Saol Acquisition, $5.2 million was allocated to the Company’s Generics segment and $2.4 million was allocated to the Company’s Specialty segment, of which $4.9 million was deductible for tax purposes. Refer to Note 13. Goodwill and Other Intangible Assets for information on the impairment of the Company’s LYVISPAHTM intangible asset during the year ended December 31, 2023.

From the acquisition date of February 9, 2022 to December 31, 2022, the Saol Acquisition contributed net revenue and an operating loss of $19.8 million and $7.1 million, respectively.

Puniska Healthcare Pvt. Ltd.

On November 2, 2021, the Company entered into a definitive agreement to acquire Puniska Healthcare Pvt. Ltd. (“Puniska”), a privately held manufacturer of parenteral and injectable drugs in India, and land in a transaction valued at approximately $93.0 million (the “Puniska Acquisition”). Upon execution of the agreement, the Company paid $72.9 million with cash on hand to acquire approximately 74% of the equity interests of Puniska on November 2, 2021. Upon approval of the transaction by the government of India in March 2022, the Company paid, with cash on hand, an additional $1.7 million for the remaining 26% of the equity interests of Puniska and $14.2 million for the satisfaction of a preexisting payable to the sellers. In December 2021, the Company paid $4.3 million with cash on hand for land associated with the Puniska Acquisition.

For the year ended December 31, 2021, the Company incurred $1.0 million in transaction costs associated with the Puniska Acquisition, which were recorded in acquisition, transaction-related and integration expenses. The Puniska Acquisition, excluding the land acquired in December 2021, was accounted for under the acquisition method of accounting, with Amneal as

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the accounting acquirer. From the acquisition date of November 2, 2021 to December 31, 2021, the Puniska Acquisition contributed an operating loss of $1.8 million.

Kashiv Specialty Pharmaceuticals, LLC Acquisition

On January 11, 2021, the Company and Kashiv Biosciences, LLC (a related party, see Note 24. Related Party Transactions) (“Kashiv”) entered into a definitive agreement for Amneal to acquire a 98% interest in Kashiv Specialty Pharmaceuticals, LLC (“KSP”), a subsidiary of Kashiv focused on the development of innovative drug delivery platforms, novel 505(b)(2) drugs and complex generics (the “KSP Acquisition”).

On April 2, 2021, the Company completed the KSP Acquisition. Under the terms of the transaction, the cash portion of the consideration was $104.5 million, comprised of a purchase price of $100.1 million (including deferred consideration of $30.5 million) and a working capital adjustment of $4.4 million. The cash purchase price was funded by cash on hand. Kashiv is eligible to receive up to an additional $8.0 million in contingent payments upon the achievement of certain regulatory milestones and potential royalty payments from high single-digits to mid double-digits, depending on the amount of aggregate annual net sales for certain future pharmaceutical products. The KSP Acquisition was accounted for under the acquisition method of accounting, with Amneal as the accounting acquirer.

Transaction costs associated with the KSP Acquisition were $3.1 million for the year ended December 31, 2021 and were included in acquisition, transaction-related and integration expenses. From the acquisition date of April 2, 2021, to December 31, 2021, the KSP Acquisition contributed an operating loss to the Company’s consolidated statements of operations of $21.3 million, which included approximately $5.8 million of amortization expense from intangible assets acquired in the KSP Acquisition. Offsetting the operating loss was a reduction of third-party consulting services and the elimination of royalties due to KSP.

Acquisition, Transaction-Related and Integration Expenses

For the year ended December 31, 2022, acquisition, transaction-related and integration expenses of $0.7 million primarily consisted of professional services fees associated with the Saol Acquisition. For the year ended December 31, 2021, acquisition, transaction-related and integration expenses of $8.1 million primarily consisted of professional services fees associated with the Puniska Acquisition, the KSP Acquisition, and the January 31, 2020 acquisition of a 65.1% controlling financing interest in both AvKARE Inc., a Tennessee corporation, now a limited liability company (“AvKARE, LLC”), and Dixon-Shane, LLC d/b/a R&S Northeast LLC, a Kentucky limited liability company (“R&S”) (collectively the “Rondo Acquisitions”).

4. Revenue Recognition

Pharmaceutical Product Sales

Performance Obligations

The Company’s performance obligation is the supply of finished pharmaceutical products to its customers. The Company’s customers consist primarily of major wholesalers, retail pharmacies, managed care organizations, purchasing co-ops, hospitals, government agencies, institutions and pharmaceutical companies. The Company’s customer contracts generally consist of both a master agreement, which is signed by the Company and its customer, and a customer submitted purchase order, which is governed by the terms and conditions of the master agreement. Customers purchase product by direct channel sales from the Company or by indirect channel sales through various distribution channels.

Revenue is recognized when the Company transfers control of its products to the customer, which typically occurs at a point-in-time, upon shipment or delivery. Substantially all of the Company’s net revenues relate to products which are transferred to the customer at a point-in-time.

The Company offers standard payment terms to its customers and has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing, since the period between when the Company transfers the product to the customer and when the customer pays for that product is one year or less. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. The consideration amounts due from customers as a result of product sales are subject to variable consideration, as described further below.

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The Company offers standard product warranties which provide assurance that the product will function as expected and in accordance with specifications. Customers cannot purchase warranties separately and these warranties do not give rise to a separate performance obligation.

The Company permits the return of product under certain circumstances, mainly upon product expiration, instances of shipping errors or where product is damaged in transit. The Company accrues for the customer’s right to return as part of its variable consideration. See below for further details.

Variable Consideration

The Company includes an estimate of variable consideration in its transaction price at the time of sale, when control of the product transfers to the customer. Variable consideration includes but is not limited to: chargebacks, distribution fees, rebates, group purchasing organization (”GPO”) fees, prompt payment (cash) discounts, consideration payable to the customer, billbacks, Medicaid and other government pricing programs, price protection and shelf stock adjustments, sales returns, and profit shares.

The Company assesses whether or not an estimate of its variable consideration is constrained and has determined that the constraint does not apply, since it is probable that a significant reversal in the amount of cumulative revenue will not occur in the future when the uncertainty associated with the variable consideration is subsequently resolved. The Company’s estimates for variable consideration are adjusted as required at each reporting period for specific known developments that may result in a change in the amount of total consideration it expects to receive.

Chargebacks

In the case an indirect customer purchases product from their preferred wholesaler instead of directly from the Company, and the contract price charged to the indirect customer is lower than the wholesaler pricing, the Company pays the direct customer (wholesaler) a chargeback for the price differential. The Company estimates its chargeback accrual based on its estimates of the level of inventory of its products in the distribution channel that remain subject to chargebacks, current contract terms and historical experience. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.

Rebates

The Company pays fixed or volume-based rebates to its customers based on a fixed amount, fixed percentage of product sales or based on the achievement of a specified level of purchases. The Company’s rebate accruals are based on actual net sales, contractual rebate rates negotiated with customers, and expected purchase volumes / corresponding tiers based on actual sales to date and forecasted amounts.

Group Purchasing Organization Fees

The Company pays fees to GPOs for administrative services that the GPOs perform in connection with the purchases of product by the GPO participants who are the Company’s customers. The Company’s GPO fee accruals are based on actual net sales, contractual fee rates negotiated with GPOs and the mix of the products in the distribution channel that remain subject to GPO fees.

Prompt Payment (Cash) Discounts

The Company provides customers with prompt payment discounts which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period. The Company’s prompt payment discount accruals are based on actual net sales and contractual discount rates.

Consideration Payable to the Customer

The Company pays administrative and service fees to its customers based on a fixed percentage of the product price. These fees are not in exchange for a distinct good or service and therefore are recognized as a reduction of the transaction price. The Company accrues for these fees based on actual net sales, contractual fee rates negotiated with the customer and the mix of the products in the distribution channel that remain subject to fees.

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Billbacks

In the case an indirect customer purchases product from their preferred wholesaler instead of directly from the Company, and the contract price charged to the indirect customer is higher than contractual pricing, the Company pays the indirect customer a billback for the price differential. The Company estimates its billback accrual based on its estimates of the level of inventory of its products in the distribution channel that remain subject to billbacks, current contract terms and historical experience. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.

Medicaid and Other Government Pricing Programs

The Company complies with required rebates mandated by law under Medicaid and other government pricing programs. The Company estimates its government pricing accruals based on monthly sales, historical experience of claims submitted by the various states and jurisdictions, historical rates and estimated lag time of the rebate invoices.

Price Protection and Shelf Stock Adjustments

The Company provides customers with price protection and shelf stock adjustments which may result in an adjustment to the price charged for the product transferred, based on differences between old and new prices which may be applied to the customer’s on-hand inventory at the time of the price change. The Company accrues for these adjustments when its expected value of an adjustment is greater than zero, based on contractual pricing, actual net sales, accrual rates based on historical average rates, and estimates of the level of inventory of its products in the distribution channel that remain subject to these adjustments. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.

Sales Returns

The Company permits the return of product under certain circumstances, mainly due to product expiration, instances of shipping errors or where product is damaged in transit, and occurrences of product recalls. The Company’s product returns accrual is primarily based on estimates of future product returns based generally on actual net sales, estimates of the level of inventory of its products in the distribution channel that remain subject to returns, estimated lag time of returns and historical return rates. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.

Profit Shares

For certain product sale arrangements, the Company earns a profit share upon the customer’s sell-through of the product purchased from the Company. The Company estimates its profit shares based on actual net sales, estimates of the level of inventory of its products in the distribution channel that remain subject to profit shares, and historical rates of profit shares earned. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers.

License Agreements

Refer to Note 5. Alliance and Collaboration for further information related to revenue recognition associated with a license agreement with multiple performance obligations.

Concentration of Revenue

The following table summarizes the percentages of net revenues from each of the Company's customers that individually accounted for 10% or more of its net revenues:

For the year ended December 31,

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Disaggregated Revenue

The Company’s significant therapeutic classes for its Generics and Specialty segments and sales channels for its AvKARE segment, as determined based on net revenue for each of the years ended December 31, 2023, 2022 and 2021, are set forth below (in thousands):

AMRX US Equity

AMRX · 10-K · period ended 2023-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accounting Fees and Services

Item 15. Exhibits, Financial Statement Schedules

Item 16. Form 10-K Summary

AMRX US Equity☆

AMRX · 10-K · period ended 2023-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accounting Fees and Services

Item 15. Exhibits, Financial Statement Schedules

Item 16. Form 10-K Summary

AMRX US Equity