Amneal Pharmaceuticals Inc

Previous wording

The following discussion and analysis for the three months ended March 31, 2024 should also be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements for the year ended December 31, 2023 included in our 2023 Annual Report on Form 10-K.

Current wording

The following discussion and analysis for the three and six months ended June 30, 2024 should also be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements for the year ended December 31, 2023 included in our 2023 Annual Report on Form 10-K.

Previous wording

While it is difficult to accurately measure the impact of inflation, we estimate our business will experience an increase in costs due to inflation of approximately $15.0 million to $20.0 million for the year ending December 31, 2024, excluding the impact of rising interest rates. Notwithstanding our estimates, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations, which would further adversely impact our operating results in future periods.

Current wording

While it is difficult to accurately measure the impact of inflation, we estimate our business will experience an increase in costs due to inflation of approximately $10.0 million to $15.0 million for the year ending December 31, 2024, excluding the impact of rising interest rates. Notwithstanding our estimates, rising inflationary pressures due to higher input costs, including higher material, transportation, labor and other costs, could exceed our expectations, which would further adversely impact our operating results in future periods.

Previous wording

•Growth in our AvKARE segment net revenue of $40.6 million, primarily driven bygrowth in our distribution and government label channels resulting from growth in new product introductions.

Current wording

•Growth in our AvKARE segment net revenue of $42.1 million, primarily driven bygrowth in our distribution channel and government label channel which resulted from new product introductions.

Previous wording

•Growth in our Specialty segment net revenue of $13.6 million primarily driven by a $9.4 million increase in our promoted neurology portfolio, of which $4.0 million was comprised of sales of ONGENTYS®, which launched during the first quarter of 2024, and growth in our promoted endocrinology portfolio of $4.6 million, partially offset by declines in our non-promoted products.

Current wording

•Growth in our Specialty segment net revenue of $7.0 million, primarily driven by a $9.4 million increase in our promoted neurology portfolio, of which $3.5 million was comprised of sales of ONGENTYS®, which launched during the first quarter of 2024, and growth in our promoted endocrinology portfolio of $2.7 million, partially offset by declines in our non-promoted products.

Previous wording

Selling, general, and administrative (“SG&A”) expenses for the three months ended March 31, 2024 increased 10.3% as compared to the prior year period primarily due to increases in employee compensation, promotion associated with

Current wording

Selling, general, and administrative (“SG&A”) expenses for the three months ended June 30, 2024 increased 10.3% as compared to the prior year period primarily due to increases in employee compensation, promotion associated with ONGENTYS® and our planned launch of IPX203, and costs associated with growth in biosimilar revenues.

Previous wording

Generics R&D expenses for the three months ended March 31, 2024 increased 6.2% as compared to the prior year period primarily due to an increase in in-licensing and upfront milestone payments of $3.5 million, partially offset by reduced project spend of $0.8 million and operating efficiencies in our infrastructure.

Current wording

Research and development (“R&D”) expenses for the three months ended June 30, 2024 decreased 4.6% as compared to the prior year period primarily due to a decrease in in-licensing and upfront milestone payments of $0.7 million and operating efficiencies in our infrastructure.

Previous wording

Total other expense, net for the three months ended March 31, 2024 increased 47.6% as compared to the prior year period. The increase was primarily driven by a $16.4 million increase in interest expense as a result of higher rates on our variable-rate debt.

Current wording

Total other expense, net for the three months ended June 30, 2024 increased 48.9% as compared to the prior year period. The increase was primarily driven by a $14.9 million increase in interest expense as a result of higher rates on our variable-rate debt and an increase in the amount outstanding on our revolving credit facility and a $13.0 million increase in our tax receivable agreement liability (refer to Note 5. Income Taxes for additional information), partially offset by a gain on the sale of a subsidiary in India of $3.8 million (refer to Note 19. Related Party Transactions for additional information).

Previous wording

Specialty net revenue for the three months ended March 31, 2024 increased 14.8% compared to the prior year period, primarily driven by a $9.4 million increase in our promoted neurology portfolio, of which $4.0 million was comprised of sales of ONGENTYS®, which launched during the first quarter of 2024, and growth in our promoted endocrinology portfolio of $4.6 million, partially offset by declines in our non-promoted products.

Current wording

Specialty net revenue for the three months ended June 30, 2024 increased 7.3% compared to the prior year period, primarily driven by a $9.4 million increase in our promoted neurology portfolio, of which $3.5 million was comprised of sales of ONGENTYS®, which launched during the first quarter of 2024, and growth in our promoted endocrinology portfolio of $2.7 million, partially offset by declines in our non-promoted products.

Previous wording

Specialty R&D expenses for the three months ended March 31, 2024 decreased 22.2% as compared to the prior year period primarily due to reduced project spend of $0.6 million and reduced infrastructure costs.

Current wording

Specialty R&D expenses for the three months ended June 30, 2024 decreased 35.0% as compared to the prior year period primarily due to reduced project spend of $1.1 million and reduced infrastructure costs.

Previous wording

AvKARE SG&A expense for the three months ended March 31, 2024 increased 15.2% as compared to the prior year period primarily due to higher employee compensation and sales-related expenses.

Current wording

AvKARE SG&A expense for the three months ended June 30, 2024 increased 4.5% as compared to the prior year period primarily due to higher sales-related expenses and professional fees, partially offset by reduced logistic costs.

Previous wording

•Growth in our Generics segment net revenue of $47.5 million primarily due to new generic products launched in 2024 and 2023, which include biosimilars that contributed $24.6 million and other new generic products that contributed $19.2 million of year-over-year growth and strong volume growth, partially offset by price erosion. Net revenue for thethree months ended March 31, 2023 included a non-recurring customer order of $21.0 million.

Current wording

•Growth in our Generics segment net revenue of $101.1 million, primarily due to new generic products launched in 2024 and 2023, which include biosimilars that contributed $41.3 million of year-over-year growth and other new generic products that contributed $55.4 million of year-over-year growth, and strong volume growth. Net revenue for thesix months ended June 30, 2023 included a non-recurring customer order of $21.0 million.

Previous wording

Cost of goods sold increased 11.0% for the three months ended March 31, 2024 as compared to the prior year period. The increase in cost of goods sold was primarily due to increased AvKARE and Generics volume and increased plant costs, partially offset by efficiencies in our supply costs. Cost of goods sold for the three months ended March 31, 2023 included $11.0 million associated with the non-recurring customer order in our Generics segment discussed above.

Current wording

Cost of goods sold increased 15.1% for the six months ended June 30, 2024 as compared to the prior year period. The increase in cost of goods sold was primarily due to increased AvKARE and Generics volume and increased plant and freight costs, partially offset by efficiencies in our supply costs. Cost of goods sold for the six months ended June 30, 2023 included $11.0 million associated with the non-recurring customer order in our Generics segment discussed above.

Previous wording

ONGENTYS® and our planned launch of IPX203, and annual fees assessed on branded prescription drug manufacturers, which are also applicable to certain of our generic products.

Current wording

SG&A expenses for the six months ended June 30, 2024 increased 10.3% as compared to the prior year period primarily due to increases in employee compensation, promotion associated with ONGENTYS® and our planned launch of IPX203, charges associated with our growing biosimilars, and annual fees assessed on branded prescription drug manufacturers, which are also applicable to certain of our generic products.

Previous wording

Research and development (“R&D”) expenses for the three months ended March 31, 2024 increased 1.6% as compared to the prior year period primarily due to an increase in in-licensing and upfront milestone payments of $3.5 million, partially offset by lower project spend of $1.4 million and operating efficiencies in our infrastructure.

Current wording

R&D expenses for the six months ended June 30, 2024 decreased 1.5% as compared to the prior year period primarily due to lower project spend of $1.4 million and operating efficiencies in our infrastructure, partially offset by an increase in in-licensing and upfront milestone payments of $2.8 million.

Previous wording

For the three months ended March 31, 2024, our provision for income taxes and effective tax rate were$6.2 million and(8.2)%, respectively, as compared to a provision for income taxes of $0.7 million and an effective tax rate of (7.1)% for the three months ended March 31, 2023. The period-over-period changes in the provision for income taxes and effective tax rate were primarily related to changes in the jurisdictional mix of income.

Current wording

For the six months ended June 30, 2024, our provision for income taxes and effective tax rate were$9.8 million and(17.7)%, respectively, as compared to a provision for income taxes and effective tax rate of$0.6 million and 3.2%, respectively, for the six months ended June 30, 2023. The period-over-period changes in the provision for income taxes and effective tax rate primarily related to changes in the jurisdictional mix of income.

Previous wording

Generics net revenue for the three months ended March 31, 2024 increased 13.8% as compared to the prior year period primarily due to new generic products launched in 2024 and 2023, which include biosimilars that contributed $24.6 million and other new generic products that contributed $19.2 million of year-over-year growth and strong volume growth, partially offset by price erosion. Net revenue for thethree months ended March 31, 2023 included a non-recurring customer order of $21.0 million.

Current wording

Generics net revenue for the six months ended June 30, 2024 increased 14.1% as compared to the prior year period primarily due to new generic products launched in 2024 and 2023, which include biosimilars that contributed $41.3 million of year-over-year growth and other new generic products that contributed $55.4 million of year-over-year growth, and strong volume growth. Net revenue for thesix months ended June 30, 2023 included a non-recurring customer order of $21.0 million.

Previous wording

Generics cost of goods sold for the three months ended March 31, 2024 increased 4.1% as compared to the prior year period primarily due to costs associated with increased sales volume and increased plant costs, partially offset by efficiencies in our supply costs. Cost of goods sold for thethree months ended March 31, 2023 included $11.0 million associated with the non-recurring customer order discussed above.

Current wording

Generics cost of goods sold for the six months ended June 30, 2024 increased 9.9% as compared to the prior year period primarily due to costs associated with increased sales volume and increased plant and freight costs, partially offset by efficiencies in our supply costs. Cost of goods sold for thesix months ended June 30, 2023 included $11.0 million associated with the non-recurring customer order discussed above.

Previous wording

Generics SG&A expense for the three months ended March 31, 2024 increased 19.9% as compared to the prior year period primarily due to increases in employee compensation, promotion associated with our biosimilars, and the annual fees assessed on branded prescription drug manufacturers.

Current wording

Generics SG&A expense for the six months ended June 30, 2024 increased 16.3% as compared to the prior year period primarily due to increases in employee compensation driven by infrastructure expansion and promotion associated with our biosimilar launches and the annual fees assessed on branded prescription drug manufacturers.

Previous wording

Specialty cost of goods sold for the three months ended March 31, 2024 increased 3.7% as compared to the prior year period, primarily due to an increase in volumes, partially offset by favorable product mix. Specialty gross profit as a percentage of net revenue increased to 57.4% for the three months ended March 31, 2024 as compared to 52.9% in the prior year period due to growth in our higher margin promoted products.

Current wording

Specialty cost of goods sold for the six months ended June 30, 2024 increased 1.4% as compared to the prior year period, primarily due to growth in our promoted products, partially offset by declines in our lower margin non-promoted products. Specialty gross profit as a percentage of net revenue increased to 56.5% for the six months ended June 30, 2024 as compared to 52.5% in the prior year period due to growth in our higher margin promoted products.

Previous wording

Specialty SG&A expense for the three months ended March 31, 2024 increased 12.6% as compared to the prior year period primarily due to increases in promotional costs associated with ONGENTYS® and our planned launch of IPX203 and an increase in the annual fees assessed on branded prescription drug manufacturers.

Current wording

Specialty SG&A expense for the six months ended June 30, 2024 increased 14.8% as compared to the prior year period primarily due to increases in promotional costs associated with ONGENTYS® and our planned launch of IPX203 and an increase in the annual fees assessed on branded prescription drug manufacturers.

Previous wording

AvKARE cost of goods sold for the three months ended March 31, 2024 increased 29.2% as compared to the prior year period, and gross profit as a percentage of net revenue increased to 16.1% for the three months ended March 31, 2024 from 13.5% in the prior year period, primarily due to the increase in sales through our higher margin government channel, including higher margin new product introductions.

Current wording

AvKARE cost of goods sold for the six months ended June 30, 2024 increased 32.1% as compared to the prior year period, and gross profit as a percentage of net revenue increased to 15.6% for the six months ended June 30, 2024 from 15.0% in the prior year period, primarily due to the increase in sales through our higher margin government channel, including higher margin new product introductions.

Previous wording

Our primary source of liquidity is cash generated from operations, available cash on hand, and borrowings under debt financing arrangements (as defined and discussed in Note 16. Debt in our 2023 Annual Report on Form 10-K). We have access to$397.7 million of available capacity under the Amended New Revolving Credit Facility and$28.0 million of available capacity under the Amended Rondo Revolving Credit Facility as of March 31, 2024. We believe these sources are sufficient to fund our planned operations, meet our interest and contractual obligations, including acquisitions, and provide sufficient liquidity over the next 12 months from the date of filing of this Form 10-Q. 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.

Current wording

Our primary source of liquidity is cash generated from operations, available cash on hand, and borrowings under debt financing arrangements (as defined and discussed in Note 16. Debt in our 2023 Annual Report on Form 10-K). We have access to$416.9 million of available capacity under the Amended New Revolving Credit Facility and$28.0 million of available capacity under the Amended Rondo Revolving Credit Facility as of June 30, 2024. We believe these sources are sufficient to fund our planned operations, meet our interest and contractual obligations, including acquisitions, and provide sufficient liquidity over the next 12 months from the date of filing of this Form 10-Q. 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.

Previous wording

Over the next 12 months, we expect to make substantial payments, including monthly interest and quarterly principal amounts due for our Term Loan Due 2028, monthly interest on our Term Loan Due 2025 and Amended New Credit Facility, and contractual payments for leased premises. Refer to Note 16. Debt, Note 18. Leases, and Commitments and Contractual Obligations under Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K for additional information on our indebtedness and leases, respectively.

Current wording

Over the next 12 months, we expect to make substantial payments, including monthly interest and quarterly principal amounts due for our Term Loan Due 2028, monthly interest and the remaining principal balance on our Term Loan Due 2025, monthly interest on our Amended New Credit Facility, and contractual payments for leased premises. Refer to Note 16. Debt, Note 18. Leases, and Commitments and Contractual Obligations under Part II, Item 7. Management’s Discussion and Analysis of

Previous wording

In late April 2024, we reached a settlement in principle on the primary financial terms, with no admission of wrongdoing, for a nationwide resolution to the opioids cases that have been filed and that might have been filed against us by states, counties, municipalities, and Native American tribes across the U.S. Refer to Note 17. Commitments and Contingencies for additional information.

Current wording

In late April 2024, we reached a nationwide settlement in principle on the primary financial terms, with no admission of wrongdoing, for a nationwide resolution to the opioids cases that have been filed and that might have been filed by Attorneys General, political subdivisions and Native American tribes. Refer to Note 17. Commitments and Contingencies for additional information.

Previous wording

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 (as defined in Note 1. Nature of Operations in our 2023 Annual Report on Form 10-K), 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 approximately $185.0 million.

Current wording

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 (as defined in Note 1. Nature of Operations in our 2023 Annual Report on Form 10-K), 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 both June 30, 2024 and December 31, 2023, the contingent TRA liability, including the impact of the amendment, was approximately $185.0 million.

Previous wording

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 (as defined in Item 1. Businessin the Company’s 2023 Annual Report on Form 10-K) 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. Since the combined rate for federal and state and local income taxes, as of March 31, 2024, has not changed significantly since December 31, 2023, the contingent TRA liability has not changed significantly from the year end amount described above. 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 in our 2023 Annual Report on Form 10-K and Note 5. Income Taxesin this Form 10-Q.

Current wording

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 (as defined in Item 1. Businessin the Company’s 2023 Annual Report on Form 10-K) 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. Since the combined rate for federal and state and local income taxes, as of June 30, 2024, has not changed significantly since December 31, 2023, the contingent TRA liability has not changed significantly during 2024. 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 in our 2023 Annual Report on Form 10-K and Note 5. Income Taxesin this Form 10-Q.

Previous wording

Prior to the Reorganization, Amneal was obligated to make tax distributions to the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members”). During the three months ended March 31, 2023, the Company recorded nettax distributions to the Members of $26.8 million as a reduction of non-controlling interests. Subsequent to the Reorganization, the Company is no longer obligated to make tax distributions to the Members.

Current wording

Prior to the Reorganization, Amneal was obligated to make tax distributions to the group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members”). During thesix months ended June 30, 2023, the Company recorded nettax distributions to the Members of $29.7 million as a reduction of non-controlling interests. Subsequent to the Reorganization, the Company is no longer obligated to make tax distributions to the Members.

Previous wording

In 2020, we acquired a 65.1% controlling 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”). The sellers of AvKARE, LLC and R&S (the “AvKARE Sellers”) hold the remaining 34.9% interest in the holding company that directly owns the acquired companies (“Rondo”). We attribute 34.9% of the net income or loss associated with Rondo to redeemable non-controlling interests. During the three months ended March 31, 2024 and 2023, we made cash tax distributions of $0.6 million and $0.2 million, respectively, to the AvKARE Sellers. During April 2024, we made cash tax distributions of $3.7 million to the AvKARE Sellers.

Current wording

In 2020, we acquired a 65.1% controlling 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”). The sellers of AvKARE, LLC and R&S (the “AvKARE Sellers”) hold the remaining 34.9% interest in the holding company that directly owns the acquired companies (“Rondo”). We attribute 34.9% of the net income or loss associated with Rondo to redeemable non-controlling interests. During the six months ended June 30, 2024 and 2023, we made cash tax distributions of $8.9 million and $5.8 million, respectively, to the AvKARE Sellers.

Previous wording

The following table sets forth our summarized, consolidated cash flows for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table sets forth our summarized, consolidated cash flows for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Net cash used in operating activities was $4.4 million for the three months ended March 31, 2024 as compared to net cash provided by operating activities of $139.7 million in the prior year period. The decrease in net operating cash flows in the three months ended March 31, 2024 as compared to the prior year period was primarily driven by (i) lower collections of outstanding accounts receivable due to timing of sales in the quarter ended December 31, 2022, which benefited the three months ended March 31, 2023 and (ii) receipt of a $21.4 million upfront payment associated with thelicense agreement with Orion Corporation in the three months ended March 31, 2023, partially offset by (i) lower period over period payments associated with the Opana ER® antitrust litigation settlement and (ii) favorable working capital movements.

Current wording

Net cash provided by operating activities was $35.2 million for the six months ended June 30, 2024 as compared to $128.4 million in the prior year period. The decrease in net operating cash flows for the six months ended June 30, 2024 as compared to the prior year period was primarily driven by (i) lower collections of outstanding accounts receivable due to timing of sales in the quarter ended December 31, 2022, which benefited the six months ended June 30, 2023 and (ii) receipt of a $21.4 million upfront payment associated with thelicense agreement with Orion Corporation during the six months ended June 30, 2023, partially offset by (i) increased profitability adjusted for non-cash items, (ii) lower period over period payments associated with the Opana ER® antitrust litigation settlement and (iii) favorable working capital movements.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2024 was $19.8 million as compared to $11.7 million in the prior year period. The period over period increase in net cash used in investing activities was primarily due to the payment of a sales-based milestone related tothe licensing and supply agreement with mAbxience S.L. for its biosimilar candidate for Avastin® (bevacizumab).

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 was $26.2 million as compared to $24.0 million in the prior year period. The period over period increase in net cash used in investing activities was primarily due to the payment of a sales-based milestone related tothe licensing and supply agreement with mAbxience S.L. for its biosimilar candidate for Avastin® (bevacizumab), partially offset by (i) $5.0 million in proceeds from the sale of a subsidiary in India to a subsidiary of Kashiv (refer to Note 19. Related Party Transactions for additional information) and (ii) lower capital expenditures.

Previous wording

Net cash used in financing activities was $23.2 million for the three months ended March 31, 2024 as compared to $12.9 million in the prior year period. The period over period increase in net cash used in financing activities was primarily due to (i) net payments of principal on debt and other financing liabilities in the three months ended March 31, 2024 as compared to net borrowings in the prior year period and (ii) an increase in employee payroll tax withholding on restricted stock unit vesting, partially offset bya period over period decrease in tax distributions to non-controlling interests.

Current wording

Net cash used in financing activities was $58.2 million for the six months ended June 30, 2024 as compared to $25.2 million in the prior year period. The period over period increase in net cash used in financing activities was primarily due to a year over year decrease in net debt of $55.1 million (including payments on the Sellers Notes) and an increase in employee payroll tax withholding on restricted stock unit vesting, partially offset bya period over period decrease in tax distributions to non-controlling interests of $26.7 million.