What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-28 compared with 2021-03-01 · 495 added, 675 removed, 1705 unchanged (41% of the section changed)

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Management’s Report on Internal Control over Financial Reporting

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets as of December 31, 202 1 and 20 20

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Notes to Consolidated Financial Statements

Supplementary Financial Information

Management’s Report on Internal Control over Financial Reporting

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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.

On November 16, 2020, the combination of Mylan and the Upjohn Business was completed, with Mylan considered the accounting acquirer of the Upjohn Business.

The Upjohn Business represented 7% of the Company’s consolidated total revenues for the year ended December 31, 2020, and assets (including intangible assets and goodwill) represented 48% of the Company’s consolidated total assets, as of December 31, 2020.

Management did not include the Upjohn Business when conducting its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020.

As a result of this assessment, management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2021 based on the criteria in Internal Control - Integrated Framework (2013) issued by COSO.

Our independent registered public accounting firm, Deloitte & Touche LLP, has audited the effectiveness of the Company’s internal control over financial reporting.

Our independent registered public accounting firm, Deloitte & Touche LLP (PCAOB ID No.

34 ), has audited the effectiveness of the Company’s internal control over financial reporting.

Deloitte & Touche LLP’s opinion on the Company’s internal control over financial reporting appears on page 83 of this Annual Report on Form 10-K.

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We have audited the accompanying consolidated balance sheets of Viatris Inc.

and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive (loss) earnings, equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the consolidated financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive (loss) earnings, equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also 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, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also 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, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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The communication of critical audit matters does not alter in any way our opinion on the 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.

Goodwill – Mylan N.V.

Europe Reporting Unit – Refer to Note 8 to the financial statements.

Goodwill – Viatris Inc.

Europe and JANZ Reporting Units – Refer to Note 8 to the financial statements.

Critical Audit Matter Description

The Company has performed an interim goodwill impairment test and its annual goodwill impairment test as of March 31 and April 1, 2020, respectively.

As of March 31, 2020 and April 1, 2020, the Company had $9.3 billion of consolidated goodwill, $4.43 billion of which was allocated to the Mylan N.V.

Europe reporting unit (“Europe reporting unit”).

The Company performed its annual goodwill impairment test as of April 1, 2021.

As of April 1, 2021, the Company had $11.91 billion of consolidated goodwill, $5.15 billion and $0.82 billion of which was allocated to the Viatris Inc.

Europe and JANZ reporting units, respectively.

The Company’s evaluation of goodwill for impairment involves the comparison of the estimated fair value of each reporting unit to its carrying value.

The Company performed its valuation analysis, using both income and market-based approaches, to determine the fair value of its Europe reporting unit.

The Company performed its valuation analysis, using both income and market-based approaches, to determine the fair value of its Europe and JANZ reporting units.

The determination of the fair value requires management to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows.

These estimates and assumptions, utilizing Level 3 inputs, primarily include, but are not limited to, market multiples, control premiums, the discount rate, terminal growth rates, operating income before depreciation and amortization, and capital expenditures forecasts.

The fair value of the Europe reporting unit exceeded its carrying value by approximately $1.2 billion, or 11%, as of March 31 and April 1, 2020 and, therefore, no impairment was recognized.

Given that the Europe reporting unit’s revenues are sensitive to changes in consumer demand, the approval of new product launches, the expansion of existing products into new jurisdictions (which have differentiated distribution and commercialization models throughout the region), and the impact of business development activity, auditing management’s judgments regarding forecasts of future revenues, and the selection of the discount rate and terminal growth rate required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

These estimates and assumptions, utilizing Level 3 valuation inputs, primarily include, but are not limited to, market multiples, control premiums, discount rates, terminal growth rates, operating income before depreciation and amortization, and capital expenditures forecasts.

The fair values of the Europe and the JANZ reporting units exceeded their carrying values by approximately $0.91 billion, or 5.8%, and $0.23 billion, or 7.0%, respectively, as of April 1, 2021 and, therefore, no impairments were recognized.

Given that the Europe and JANZ reporting unit’s revenues are sensitive to changes in consumer demand, the approval of new product launches, the expansion of existing products into new jurisdictions (which have differentiated distribution and commercialization models throughout the regions), and the impact of business development activity, auditing management’s judgments regarding forecasts of future revenues, and the selection of the discount rates and terminal growth rates required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of future revenues (“forecasts”), and the selection of the discount rate and terminal growth rate for the Europe reporting unit included the following, among others:

• We tested the effectiveness of controls over the review of the goodwill impairment tests, including those over the development of the business forecasts of future revenues and the selection of the discount rate and terminal growth rate.

• We evaluated management’s ability to accurately forecast future revenues of the Europe reporting unit by comparing actual results to management’s historical forecasts.

Our audit procedures related to the forecasts of future revenues (“forecasts”), and the selection of the discount rates and terminal growth rates for the Europe and the JANZ reporting units included the following procedures, among others:

• We tested the effectiveness of controls over the review of the goodwill impairment test, including those over the development of the business forecasts of future revenues and the selection of the discount rates and terminal growth rates.

• We evaluated management’s ability to accurately forecast future revenues of the Europe and JANZ reporting units by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s revenue forecasts by comparing the projections to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in Company press releases.

We also considered third party reports related to macroeconomic and industry trends and made inquiries of management, including various regional commercial and operations leaders to assess key inputs in the forecast assumptions.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, discount rate, and terminal growth rate, including (1) testing the source information underlying the determination of the discount rate and terminal growth rate and the mathematical accuracy of the calculations, (2) developing a range of independent estimates and comparing those to the discount rates selected by management, and (3) considering third party macroeconomic reports.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, discount rates, and terminal growth rates, including (1) testing the source information underlying the determination of the discount rates and terminal growth rates and the mathematical accuracy of the calculations, (2) developing a range of independent estimates and comparing those to the discount rates selected by management, and (3) considering third party macroeconomic reports.

Net Revenue Provisions – Chargebacks Accrual at Mylan Pharmaceuticals Inc.

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1) historical sales and returns activity, 2) remaining shelf life information, 3) finished goods inventory on-hand at the end of the period, and 4) adjustments for known or anticipated sales return activity based on market dynamics (market prior to Viatris launch, impact of competition, and overall regulatory environment) and compared those to the recorded amounts.

Upjohn Business Combination Agreement – Refer to Notes 4 and 12 to the financial statements.

Critical Audit Matter Description

was formed in November 2020 through the combination of Mylan and Upjohn, a legacy division of Pfizer (“the Combination”).

The transaction between Mylan and Viatris involved multiple legal entity restructuring transactions and a reverse merger acquisition with Viatris representing the legal acquirer and Mylan representing the accounting acquirer of the Upjohn Business.

The Company applied the acquisition method to the acquired assets and assumed liabilities of the Upjohn Business.

The preliminary allocation of the purchase price included $18.04 billion of identified intangible assets, which were valued based on company specific information and financial projections which are not observable in the market and are thus considered Level 3 fair value measurements as defined by U.S.

In addition, the Company evaluated its tax positions arising from the legal entity restructuring transactions for those positions considered to be more likely than not of being sustained upon audit, based on the technical merits of the position.

Given that the accounting for the transaction required management to make (1) significant judgments related to the accounting acquirer determination, (2) significant estimates and assumptions, in particular those associated with the valuation of the acquired intangible assets, and (3) significant judgments in analyzing and interpreting tax laws and positions across multiple jurisdictions arising from the legal entity restructuring transactions, performing audit procedures to evaluate the accounting for the transaction required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value and tax specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the accounting for the transaction included the following, among others:

• We tested the effectiveness of controls related to the transaction, including controls over management’s determination of accounting acquirer, application of the acquisition method, and evaluation of uncertain tax positions.

• We evaluated the determination of the accounting acquirer in the combination with the assistance of our subject matter experts.

• We evaluated the reasonableness of management’s forecasts of future cash flows of the acquired intangible assets by comparing the projections to (1) historical Upjohn results (2) internal communications to management and the Board of Directors, and (3) third party industry reports.

Further, we made inquiries of management, including various regional commercial and operations leaders, to assess key inputs in the forecast assumptions.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, and we evaluated the reasonableness of the discount rates by:

– Testing the source information underlying the determination of the discount rates and testing the mathematical accuracy of the calculation.

– Developing a range of independent estimates and comparing those to the discount rates selected by management.

• With the assistance of our tax specialists, we evaluated the uncertain tax positions associated with the transaction by:

– Obtaining management’s detailed step-by-step plan of the pre-close and post-close transactions and evaluating whether tax consequences of the transactions are consistent with our interpretation.

– Obtaining copies of technical tax support, including memorandums, and evaluating whether the conclusions reached are reasonable and supportable and consistent with our interpretation.

– Testing the underlying calculations and assumptions used to support reserves related to tax uncertainty.

/s/ DELOITTE & TOUCHE LLP

Pittsburgh, Pennsylvania

March 1, 2021

February 28, 2022

We have served as the Company's auditor since 1976.

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated March 1, 2021, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting of the Upjohn Business, which was acquired on November 16, 2020.

The Upjohn Business represented 7% of the Company’s consolidated total revenues for the year ended December 31, 2020 and assets (including intangible assets and goodwill) represented 48% of the Company’s consolidated total assets as of December 31, 2020.

Accordingly, our audit did not include the internal control over financial reporting of the Upjohn Business.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated February 28, 2022, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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Pittsburgh, Pennsylvania

March 1, 2021

February 28, 2022

AND SUBSIDIARIES

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shareholders’ equity

Common stock — par value $ 0.01 per share as of December 31, 2020 and ordinary shares — nominal value € 0.01 per share as of December 31, 2019

Shares authorized:

3,000,000,000 and 1,200,000,000 as of December 31, 2020 and December 31, 2019

Shares issued:

1,206,895,644 and 540,746,871 as of December 31, 2020 and December 31, 2019

Common stock:

$ 0.01 par value, 3,000,000,000 shares authorized;

shares issued and outstanding:

1,209,507,463 and 1,206,895,644 , respectively

Additional paid-in capital 18,536.1 18,438.8

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Accumulated other comprehensive loss ( 1,744.3 ) ( 858.0 )

22,954.1 12,883.5

Treasury stock — at cost

Ordinary shares:

24,598,074 as of December 31, 2019

Total equity 20,492.7 22,954.1

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Interest expense 636.2 497.8 517.3

Other expense, net 12.6 43.8 64.9

Other (income) expense, net ( 5.8 ) 12.6 43.8

(Loss) earnings before income taxes ( 664.4 ) ( 721.2 ) 154.4

Income tax (benefit) provision ( 51.3 ) 137.6 ( 54.1 )

Income tax provision (benefit) 604.7 ( 51.3 ) 137.6

Net (loss) earnings ( 1,269.1 ) ( 669.9 ) 16.8

Earnings (loss) per share attributable to Viatris Inc.

(Loss) earnings per share attributable to Viatris Inc.

Basic $ ( 1.05 ) $ ( 1.11 ) $ 0.03

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Net (loss) earnings $ ( 1,269.1 ) $ ( 669.9 ) $ 16.8

Other comprehensive earnings (loss), before tax:

Other comprehensive (loss) earnings, before tax:

Foreign currency translation adjustment ( 1,340.9 ) 1,213.0 ( 415.5 )

Change in unrecognized loss and prior service cost related to defined benefit plans 73.9 ( 14.0 ) ( 24.8 )

Net unrecognized gain (loss) on derivatives in cash flow hedging relationships 18.2 37.1 ( 79.2 )

Net unrecognized (loss) gain on derivatives in net investment hedging relationships ( 305.2 ) 59.6 111.6

Net unrealized gain (loss) on marketable securities 0.6 0.5 ( 0.1 )

Other comprehensive earnings (loss), before tax 912.6 ( 343.1 ) ( 1,096.7 )

Income tax (benefit) provision ( 26.6 ) 9.2 ( 24.1 )

Other comprehensive earnings (loss), net of tax 939.2 ( 352.3 ) ( 1,072.6 )

Comprehensive earnings (loss) $ 269.3 $ ( 335.5 ) $ ( 720.1 )

Net unrecognized gain on derivatives in cash flow hedging relationships 36.1 18.2 37.1

Net unrecognized gain (loss) on derivatives in net investment hedging relationships 456.8 ( 305.2 ) 59.6

Net unrealized (loss) gain on marketable securities ( 1.1 ) 0.6 0.5

Other comprehensive (loss) earnings, before tax ( 775.2 ) 912.6 ( 343.1 )

Income tax provision (benefit) 111.1 ( 26.6 ) 9.2

Other comprehensive (loss) earnings, net of tax ( 886.3 ) 939.2 ( 352.3 )

Comprehensive (loss) earnings $ ( 2,155.4 ) $ 269.3 $ ( 335.5 )

See Notes to Consolidated Financial Statements

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Additional Paid-In Capital Retained

Earnings Accumulated Other Comprehensive Loss Noncontrolling

Interest Total

Earnings Accumulated Other Comprehensive Loss Total

Common Stock (1)

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Other comprehensive loss, net of tax — — — — — — ( 352.3 ) ( 352.3 )

Issuance of restricted stock and stock options exercised, net 1,387,239 — 17.7 — — — — — 17.7

Share-based compensation expense — — 56.8 — — — — 56.8

Ordinary share repurchase — — — — 9,795,616 ( 432.0 ) — — ( 432.0 )

Taxes related to the net share settlement of equity awards — — ( 9.0 ) — — — — — ( 9.0 )

Cumulative effect of the adoption of new accounting standards — — — 13.7 — — ( 7.5 ) — 6.2

Balance at December 31, 2018 539,289,665 $ 6.0 $ 8,591.4 $ 6,010.7 23,490,867 $ ( 999.7 ) $ ( 1,441.3 ) $ — $ 12,167.1

Net earnings — $ — $ — $ 16.8 — $ — $ — $ — $ 16.8

Other comprehensive loss, net of tax — — — — — — ( 352.3 ) — ( 352.3 )

Ordinary share repurchase — — — — — — — — —

Share-based compensation income — — 56.8 — — — — — 56.8

Issuance of restricted stock and stock options exercised, net 1,457,206 0.1 8.1 — — — — 8.2

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Balance at December 31, 2020 1,206,895,644 $ 12.1 $ 18,438.8 $ 5,361.2 — $ — $ ( 858.0 ) $ 22,954.1

Net loss — $ — $ — $ ( 1,269.1 ) — $ — $ — $ ( 1,269.1 )

Other comprehensive loss, net of tax — — — — — — ( 886.3 ) ( 886.3 )

Share-based compensation expense — — 111.2 — — — — 111.2

Issuance of restricted stock and stock options exercised, net 2,611,819 — — — — — — —

Taxes related to the net share settlement of equity awards — — ( 13.9 ) — — — — ( 13.9 )

Cash dividends declared, $ 0.33 per common share

— — — ( 403.3 ) — — — ( 403.3 )

Balance at December 31, 2021 1,209,507,463 $ 12.1 $ 18,536.1 $ 3,688.8 — $ — $ ( 1,744.3 ) $ 20,492.7

__________________

(1) Ordinary Shares prior to November 16, 2020.

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Cash flows from operating activities:

Net earnings $ ( 669.9 ) $ 16.8 $ 352.5

Net (loss) earnings $ ( 1,269.1 ) $ ( 669.9 ) $ 16.8

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization 4,506.5 2,216.1 2,019.3

Deferred income tax benefit ( 213.2 ) ( 192.6 ) ( 264.3 )

Deferred income tax expense (benefit) 675.7 ( 213.2 ) ( 192.6 )

Litigation settlements and other contingencies, net 323.7 101.1 ( 11.5 )

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Share-based compensation expense 111.2 79.2 56.8

Write off of financing fees — — 2.7

Other non-cash items 411.8 366.4 360.6

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Change in short-term borrowings, net 392.1 1,099.6 ( 1.8 )

Purchase of ordinary shares — — ( 432.0 )

Proceeds from exercise of stock options — 0.6 8.1

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Contingent consideration payments ( 28.6 ) ( 48.5 ) ( 60.3 )

Acquisition of noncontrolling interest — — ( 0.6 )

Cash dividends paid ( 399.0 ) — —

Non-contingent payments for product rights ( 456.0 ) ( 143.3 ) —

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Effect on cash of changes in exchange rates ( 30.9 ) 33.8 ( 7.5 )

Net increase (decrease) in cash, cash equivalents and restricted cash 358.8 101.8 19.4

Net (decrease) increase in cash, cash equivalents and restricted cash ( 143.8 ) 358.8 101.8

Cash, cash equivalents and restricted cash — beginning of period 850.0 491.1 389.3

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Nature of Operations

Viatris is a global healthcare company formed in November 2020 through the combination of Mylan and the Upjohn Business whose mission is to empower people worldwide to live healthier at every stage of life.

By integrating the strengths of these two businesses, including our global workforce of approximately 45,000 employees and contractors, Viatris aims to deliver increased access to affordable, quality medicines for patients worldwide regardless of geography or circumstance.

Viatris brings together industry leading commercial, R&D, regulatory, manufacturing, legal and medical expertise complemented by a strong commitment to quality and unparalleled geographic footprint to deliver high-quality medicines to patients in more than 165 countries and territories.

Viatris’ portfolio comprises more than 1,400 approved molecules across a wide range of key therapeutic areas, including globally recognized iconic and key brands, generic, complex generic, and biosimilar products.

Viatris operates approximately 50 manufacturing sites worldwide that produce oral solid doses, injectables, complex dosage forms and APIs.

Viatris is a global healthcare company formed in November 2020 whose mission is to empower people worldwide to live healthier at every stage of life, regardless of geography or circumstance.

Improving the ability of patients to gain access to sustainable and high-quality healthcare is our relentless pursuit.

One that rests on visionary thinking, determination and best-in-class capabilities that were strategically built to remove barriers across the health spectrum and advance access globally.

Viatris’ portfolio comprises more than 1,400 approved molecules across a wide range of key therapeutic areas, including globally recognized iconic and key brands, generics, complex generics, and biosimilars.

The Company operates approximately 40 manufacturing sites worldwide that produce oral solid doses, injectables, complex dosage forms and APIs.

We conduct our business through four segments:

Developed Markets, Greater China, JANZ, and Emerging Markets.

Viatris is headquartered in the U.S., with global centers in Pittsburgh, Pennsylvania, Shanghai, China and Hyderabad, India.

Viatris reports segment information on the basis of markets and geography.

In conjunction with the formation of Viatris, the Company has changed its reportable segments, from North America, Europe, and Rest of World, to Developed Markets, Greater China, JANZ, and Emerging Markets.

This approach reflects the Company’s focus on bringing its broad and diversified portfolio of branded, complex generics and biosimilars, and generic products to people in markets everywhere.

Our Developed Markets segment comprises our operations primarily in North America and Europe.

Our Greater China segment includes our operations in China, Taiwan and Hong Kong.

Our JANZ segment reflects our operations in Japan, Australia and New Zealand.

Our Emerging Markets segment encompasses our operations in countries with developing markets and emerging economies including countries in Asia, the Middle East, South and Central America, Africa and Eastern Europe, and also includes the Company’s anti-retroviral franchise.

In accordance with ASC 805, Business Combinations , Mylan is considered the accounting acquirer of the Upjohn Business and all historical financial information of the Company prior to November 16, 2020 represents Mylan’s historical results and the Company’s thereafter.

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Investments in equity method affiliates are recorded at cost and adjusted for the Company’s share of the affiliates’ cumulative results of operations, capital contributions and distributions.

Noncontrolling interests in the Company’s subsidiaries are generally recorded net of tax as net earnings attributable to noncontrolling interests.

Use of Estimates in the Preparation of Financial Statements.

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Debt and Equity Securities.

Debt securities classified as available-for-sale on the date of purchase are recorded at fair value, with net unrealized gains and losses, net of income taxes, reflected in accumulated other comprehensive loss as a

component of shareholders’ equity.

Net realized gains and losses on sales of available-for-sale debt securities are computed on a specific security basis and are included in other expense, net, in the consolidated statements of operations.

Debt securities classified as trading securities are valued using the quoted market price from broker or dealer quotations or transparent pricing sources at the reporting date.

Debt securities classified as trading securities are valued using the quoted market price from broker or dealer quotations or transparent pricing sources at the reporting date, with gains and losses included in other expense, net, in the consolidated statements of operations.

Fair value is determined based on observable market quotes or valuation models using assessments of counterparty credit worthiness, credit risk or underlying security and overall capital market liquidity.

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The Company periodically reviews the estimated useful lives of intangible assets and makes adjustments when events indicate that a shorter life is appropriate.

The Company accounts for acquired businesses using the acquisition method of accounting in accordance with the provisions of the ASC 805, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective estimated fair values.

The Company accounts for acquired businesses using the acquisition method of accounting in accordance with the provisions of ASC 805, Business Combinations , which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective estimated fair values.

The cost to acquire businesses is allocated to the underlying net assets of the acquired business based on estimates of their respective fair values.

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The Company reviews goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable based on management's assessment of the fair value of the Company's reporting units as compared to their related carrying value.

Under the authoritative guidance issued by the FASB, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the

fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test.

Under the authoritative guidance issued by the FASB, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test.

If we choose to use qualitative factors and determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the goodwill impairment test would be required.

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The Company’s subsidiaries in India have working capital facilities with several banks which are secured by its current assets.

MPI, a wholly owned subsidiary of the Company, also has the CP Notes, Receivables Facility, which will expire in April 2022 and the Note Securitization Facility.

The Company also has the CP Notes, Receivables Facility, which will expire in April 2022 and the Note Securitization Facility, which will expire in August 2022.

Under the terms of each of the Receivables Facility and Note Securitization Facility, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities.

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Revenue Recognition.

The Company recognizes revenues in accordance with ASC 606.

The Company recognizes revenues in accordance with ASC 606, Revenue from Contracts with Customers .

Under ASC 606, the Company recognizes net revenue for product sales when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

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We estimate discounts on branded prescription drug sales to Medicare Part D participants in the Medicare “coverage gap” based on historical experience of prescriptions and utilization expected to result in the discount of the “coverage gap”.

Outside the U.S.

the majority of our pharmaceutical sales are contractually or legislatively governed.

Outside the U.S., the majority of our pharmaceutical sales are contractually or legislatively governed.

In certain European countries, certain rebates are calculated on the governments total pharmaceutical spending or on specific product sale thresholds.

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Royalty or profit share amounts, which are based on sales of licensed products or technology, are recorded when the customer’s subsequent sales or usages occur.

Such consideration is included in other revenue in the consolidated statements of operations.

Such consideration is included in other revenues in the consolidated statements of operations.

Research and Development.

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common stock by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding related to potentially dilutive securities or instruments, if the impact is dilutive.

Mylan was authorized to repurchase up to $1 billion of its ordinary shares under its repurchase program that was previously approved by the Mylan’s board of directors and announced on November 16, 2015, but was not obligated to acquire

any particular amount of ordinary shares.

In 2018, Mylan repurchased approximately 9.8 million of ordinary shares at a cost of approximately $ 432.0 million.

Basic and diluted earnings per share attributable to Viatris Inc.

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Weighted average shares outstanding 1,208.8 601.2 515.7

Share-based awards and warrants — 0.8 2.0

Share-based awards — — 0.8

Total dilutive shares outstanding 1,208.8 601.2 516.5

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Such excluded shares and anti-dilutive awards represented 12.7 million, 10.3 million and 9.1 million shares for the years ended December 31, 2021, 2020 and 2019, respectively .

The Company paid quarterly cash dividends of $ 0.11 per share on the Company’s issued and outstanding common stock on June 16, 2021, September 16, 2021, and December 16, 2021.

On January 4, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $ 0.12 per share on the Company’s issued and outstanding common stock, which will be payable on March 16, 2022 to shareholders of record as of the close of business on February 24, 2022.

The declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion of the Board of Directors, and will depend upon factors, including but not limited to, the Company’s financial condition, earnings, capital requirements of its businesses, legal requirements, regulatory constraints, industry practice, and other factors that the Board of Directors deems relevant.

On February 28, 2022, the Company announced that its Board of Directors had authorized a share repurchase program for the repurchase of up to $ 1.0 billion of the Company’s shares of common stock.

The Company has not yet repurchased any shares of common stock under the share repurchase program and the share repurchase program does not obligate the Company to acquire any particular amount of common stock.

Share-Based Compensation.

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As a policy, the Company does not engage in speculative or leveraged transactions.

The Company uses derivative financial instruments for the purpose of hedging foreign currency and interest rate exposures, which exist as part of ongoing business operations, or to hedge cash, and have been used to hedge share payments required on conversion of issued convertible notes.

The Company carries derivative instruments in the consolidated balance sheets at fair value, determined by reference to market data such as forward rates for currencies, implied volatilities, and interest

rate swap yield curves.

The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it.

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Recent Accounting Pronouncements.

Adoption of New Accounting Standards and Amended SEC Rules

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses (“ASU 2016-13”) , which requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.

In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic 326):

Targeted Transition Relie f (“ASU 2019-05”).

ASU 2019-05 provides transition relief for ASU 2016-13 by providing entities with an alternative to irrevocably elect the fair value option for eligible financial assets measured at amortized cost upon adoption of ASU 2016-13.

The Company applied the provisions of ASU 2016-13 and its subsequent revisions as of January 1, 2020 and the adoption did not have a material impact on its consolidated financial statements and disclosures.

In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-03”), which adds to and modifies certain disclosure requirements for fair value measurements including a requirement to disclose changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and a requirement to disclose the range and weighted average used to develop significant inputs for Level 3 fair value measurements.

The Company applied the provisions of ASU 2018-13 as of January 1, 2020.

The adoption of this guidance did not have a material impact on the Company’s disclosures.

In August 2018, the FASB issued Accounting Standards Update 2018-15, Intangibles - Goodwill and Other - Internal-Use Software:

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”).

The objective of this update is to clarify and align the accounting and capitalization of implementation costs for hosting arrangements, regardless of whether they convey a license to the hosted software.

The updated guidance will require an entity in a hosting arrangement that is a service contract, to follow guidance in ASC Topic 350, Intangibles-Goodwill and Other, to determine which implementation costs to capitalize as an asset and which costs to expense.

Adoption of New Accounting Standards

In January 2020, the FASB issued Accounting Standards Update 2020-01, Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 (“ASU 2020-01”) , which clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method.

In addition, ASU 2020-01 states that for the purpose of applying paragraph 815-10-15-141(a) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825.

The Company applied the provisions of ASU 2020-01 as of January 1, 2021.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and disclosures.

In November 2018, the FASB issued Accounting Standards Update 2018-18, Collaborative Arrangements (Topic 808)—Clarifying the Interaction between Topic 808 and Topic 606 (“ASU 2018-18”).

The amendments in ASU 2018-18 make targeted improvements to U.S.

GAAP for collaborative arrangements by clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account.

In those situations, all the guidance in Topic 606 should be applied, including recognition, measurement, presentation, and disclosure requirements.

In addition, unit-of-account guidance in Topic 808 was aligned with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606.

The Company applied the provisions of ASU 2018-18 as of January 1, 2020.

In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740) which is intended to simplify the accounting for income taxes by eliminating certain exceptions and simplifying certain requirements under Topic 740.

The Company applied the provisions of ASU 2019-12 on a prospective basis as of January 1, 2021.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and disclosures.

In March 2020, the SEC amended Rule 3-10 of Regulation S-X regarding the financial disclosure requirements for guarantors and issuers of guaranteed securities registered or being registered.

Among other things, the amendments narrow the circumstances that require separate financial statements of subsidiary issuers and guarantors and streamline the alternative disclosures required in lieu of those financial statements.

The effective date of the amendment is January 4, 2021 with earlier voluntary compliance permitted.

We have chosen to voluntarily comply with the amended rules effective during the three months ended March 31, 2020 and have included the required disclosures as a component of Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-K as permitted by the amendments.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) which supersedes FASB Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors.

The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.

This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-

line basis over the term of the lease, respectively.

A lessee is also required to record a ROU asset and a lease liability for all leases with a term of greater than twelve months regardless of classification.

Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases.

The Company adopted the provisions of Topic 842 as of January 1, 2019 on a modified retrospective basis applying the guidance to leases existing as of this effective date.

We elected to apply the available package of transitional practical expedients which permitted us not to reassess under the new standard our prior conclusions regarding lease identification, lease classification and initial direct costs.

We have also elected to apply the short-term lease recognition exemption which means we will not recognize ROU assets or lease liabilities for leases that qualify both at transition and on a go-forward basis.

In addition, we have elected to apply the practical expedient to not separate lease and non-lease components for our leases except for those related to certain limited supply arrangements.

We will continue to report periods prior to January 1, 2019 in our financial statements under prior guidance as outlined in Topic 840.

Upon adoption of Topic 842, the Company determined that there was no cumulative-effect adjustment to beginning retained earnings in the consolidated balance sheets.

Adoption of the standard did not have a material impact on our consolidated statements of operations or cash flows.

Refer to Note 6 Leases for additional information.

In June 2018, the FASB issued Accounting Standards Update 2018-07, Compensation - Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting , which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees.

The changes took effect for the Company as of January 1, 2019.

The impact of the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and disclosures.

In August 2018, the FASB issued Accounting Standards Update 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20):

Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”) .

ASU 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and added additional disclosures.

The new standard is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2020 with early adoption in any interim period permitted.

The amendments in ASU 2018-14 would need to be applied on a retrospective basis.

The adoption of this guidance did not have a material impact on the Company’s disclosures.

Accounting Standards Issued Not Yet Adopted

ASU 2020-01 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 with early adoption in any interim period permitted.

The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements and disclosures.

In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) , which provides optional expedients and exceptions for applying U.S.

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The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements and disclosures.

ASU 2019-12 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 with early adoption in any interim period permitted.

In October 2021, the FASB issued Accounting Standards Update 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires entities (acquirers) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606.

ASU 2021-08 will be effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022 with early adoption permitted.

The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements and disclosures.

Revenue from Contracts with Customers

In November 2021, the FASB issued Accounting Standards Update 2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance (“ASU 2021-10”), which requires entities to provide annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy.

ASU 2021-10 will be effective for fiscal years beginning after December 15, 2021 with early adoption permitted.

The Company is currently assessing the impact of the adoption of this guidance on its disclosures.

Revenue Recognition and Accounts Receivable

The following table presents the Company’s net sales by product category for each of our reportable segments for the years ended December 31, 2021, 2020, and 2019, respectively:

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Total Viatris $ 8,240.0 $ 214.6 $ 1,192.5 $ 1,723.2 $ 11,370.3

Variable Consideration

The following table presents net sales on a consolidated basis for select key products for the year ended December 31, 2021:

(In millions) Year Ended December 31, 2021

Select Key Global Products

Norvasc ® 824.7

Lyrica ® 728.5

Viagra ® 533.8

EpiPen® Auto-Injectors 391.7

Creon ® 309.8

Xalabrands 226.0

Select Key Segment Products

Influvac ® $ 299.3

Amitiza ® 201.5

Xanax ® 185.9

Dymista ® 168.0

Yupelri ® 161.9

(a) The Company does not disclose net sales for any products considered competitively sensitive.

(b) Products disclosed may change in future periods, including as a result of seasonality, competition or new product launches.

Variable Consideration and Accounts Receivable

The following table presents a reconciliation of gross sales to net sales by each significant category of variable consideration during the years ended December 31, 2021, 2020 and 2019, respectively:

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The following is a rollforward of the categories of variable consideration during 2021:

(In millions) Balance at December 31, 2019 Current Provision Related to Sales Made in the Current Period Balances Acquired Through Acquisition Checks/ Credits Issued to Third Parties Effects of Foreign Exchange Balance at December 31, 2020

(In millions) Balance at December 31, 2020 Current Provision Related to Sales Made in the Current Period Measurement Period Adjustments and Reclasses Checks/ Credits Issued to Third Parties Effects of Foreign Exchange Balance at December 31, 2021

Chargebacks $ 585.2 $ 5,530.1 $ 63.4 $ ( 5,585.4 ) $ ( 1.6 ) $ 591.7

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Total $ 3,014.7 $ 12,739.8 $ 385.4 $ ( 13,056.7 ) $ ( 32.5 ) $ 3,050.7

Accruals for these provisions are presented in the consolidated financial statements as reductions in determining net revenues and in accounts receivable and other current liabilities.

Accruals for these provisions are presented in the consolidated financial statements as reductions in determining net revenues and as a contra-asset in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash).

Accounts receivable are presented net of allowances relating to these provisions, which were comprised of the following at December 31, 2021 and 2020, respectively:

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2021 December 31,

Accounts receivable $ 1,802.9 $ 1,512.0

Accounts receivable, net $ 1,688.6 $ 1,802.9

Other current liabilities 1,362.1 1,211.8

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Historically, we have not recorded in any current period any material amounts related to adjustments made to prior period reserves.

Accounts receivable, net was comprised of the following at December 31, 2021 and December 31, 2020, respectively:

(In millions) December 31, 2021 December 31, 2020

Trade receivables, net $ 3,774.4 $ 3,891.3

Other receivables 492.0 952.5

Accounts receivable, net $ 4,266.4 $ 4,843.8

Total allowances for doubtful accounts were $ 154.5 million and $ 159.9 million at December 31, 2021 and 2020, respectively.

Viatris performs ongoing credit evaluations of its customers and generally does not require collateral.

Approximately 18 % and 12 % of the accounts receivable balances represent amounts due from three customers at December 31, 2021 and 2020, respectively.

Accounts Receivable Factoring Arrangements

We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S.

accounts receivable.

These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers.

Our factoring agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest in the underlying accounts receivable once sold.

We derecognized $ 29.6 million and $ 153.0 million of accounts receivable as of December 31, 2021 and 2020 under these factoring arrangements, respectively.

Acquisitions and Other Transactions

Upjohn Business Combination Agreement

On July 29, 2019, Mylan, Pfizer, Upjohn Inc., a wholly-owned subsidiary of Pfizer, and certain other affiliated entities entered into a Business Combination Agreement pursuant to which the Company would combine with the Upjohn Business in a Reverse Morris Trust transaction.

On July 29, 2019, Mylan, Pfizer, Upjohn, a wholly-owned subsidiary of Pfizer, and certain other affiliated entities entered into a Business Combination Agreement pursuant to which Mylan would combine with the Upjohn Business in a Reverse Morris Trust transaction.

The Upjohn Business was a global, primarily off-patent branded and generic established medicines business, which includes 20 primarily off-patent solid oral dose legacy brands, such as Lyrica®, Lipitor®, Celebrex® and Viagra®.

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The fair value of the debt as of November 16, 2020 was $ 13.08 billion.

The purchase price consists of the issuance of approximately 689.9 million Viatris shares of common stock at a fair value of approximately $ 10.73 billion based on the closing price of Mylan’s ordinary shares on November 13, 2020, as reported

by the NASDAQ.

In accordance with U.S.

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Under the acquisition method of accounting, the assets acquired and liabilities assumed in the transaction have been recorded at their respective estimated fair values at the acquisition date.

Acquisition related costs of approximately $ 602.9 million were incurred during the twelve months ended December 31, 2020, which were recorded primarily in SG&A in the consolidated statements of operations.

The preliminary allocation of the $ 10.73 billion purchase price to the assets acquired and liabilities assumed under the Combination is as follows:

(In millions)

During the twelve months ended December 31, 2021 and 2020, the Company incurred acquisition related costs of approximately $ 234.6 million and $ 602.9 million, respectively.

Acquisition related costs were recorded primarily in SG&A in the consolidated statements of operations for such periods.

During the year ended December 31, 2021, adjustments were made to the preliminary purchase price recorded at December 31, 2020, and are reflected as “Measurement Period and Other Adjustments” in the table below.

The allocation of the $ 10.73 billion purchase price to the assets acquired and liabilities assumed under the Combination is as follows:

(In millions) Preliminary Purchase Price Allocation as of December 31, 2020 (a)

Measurement Period and Other Adjustments (b)

Purchase Price Allocation as of December 31, 2021 (as adjusted)

Current assets (excluding inventories and net of cash acquired) $ 2,841.9 $ ( 38.7 ) $ 2,803.2

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Net assets acquired (net of $ 415.8 of cash acquired)

The preliminary fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations, valuations and assumptions that are subject to change as the Company obtains additional information during the measurement period (up to one year from the acquisition date).

The primary areas subject to change relate to the finalization of the working capital components, the valuation of intangible and tangible assets and income taxes.

We expect that the new company will transform and accelerate each businesses’ ability to serve patients’ needs and expand their capabilities across more than 165 markets by combining two highly complementary businesses.

Mylan brings a diverse portfolio across many geographies and key therapeutic areas, such as central nervous system and anesthesia, infectious disease and cardiovascular, as well as a robust pipeline, high-quality manufacturing and supply chain excellence.

The Upjohn Business brings trusted, iconic brands, such as Lipitor® (atorvastatin calcium), Celebrex® (celecoxib) and Viagra® (sildenafil), and proven commercialization capabilities, including leadership positions in China and other emerging markets.

The Company recorded a step-up in the fair value of inventory of approximately $ 1.43 billion.

During the twelve months ended December 31, 2020, the Company recorded amortization of the inventory step-up of approximately $238.2 million, which is included in cost of sales in the consolidated statements of operations.

$ 10,311.6 $ — $ 10,311.6

(a) As previously reported in Viatris’ Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

(b) The measurement period adjustments are primarily for 1) certain working capital adjustments, an increase in litigation reserves to reflect facts and circumstances that existed as of the date of the Combination, and other adjustments and 2) the tax implications of these and other adjustments.

These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and accordingly, the Company has not retrospectively adjusted those consolidated financial statements.

The Combination enhanced each businesses’ ability to serve patients’ needs and expand their capabilities across more than 165 markets.

Mylan brought a diverse portfolio across many geographies and key therapeutic areas, such as central nervous system and anesthesia, infectious disease and cardiovascular, as well as a robust pipeline, high-quality manufacturing and supply chain excellence.

The Upjohn Business brought trusted, iconic brands, such as Lipitor® (atorvastatin calcium), Celebrex® (celecoxib) and Viagra® (sildenafil), and proven commercialization capabilities, including leadership positions in China and other emerging markets.

The Company recorded a step-up in the fair value of inventory of approximately $ 1.43 billion at the acquisition date.

During the twelve months ended December 31, 2021 and 2020, the Company recorded amortization of the inventory step-up of approximately $ 1.19 billion and $ 238.2 million, respectively, which is included in cost of sales in the consolidated statements of operations.

The inventory step-up was fully amortized during 2021.

In addition, a step-up in the fair value of property, plant and equipment of approximately $ 385.0 million was recognized.

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The goodwill of $ 2.40 billion arising from the Combination consisted largely of the value of the employee workforce and products to be sold in new markets leveraging the combined entity.

The newly acquired operations have been included within each of the Company’s segments for the twelve months ended December 31, 2020.

In addition, an allocation of the goodwill was assigned to the respective segments.

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The unaudited pro forma results do not include any anticipated synergies which may be achievable, or have been achieved, subsequent to the closing of the Combination.

Accordingly, the unaudited pro forma results are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on the stated dates above, nor are they indicative of the future operating results of Viatris and its subsidiaries.

Year Ended Year Ended

(Unaudited, in millions, except per share amounts) December 31, 2020 December 31, 2019

Accordingly, the unaudited pro forma results are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on the stated date above, nor are they indicative of the future operating results of Viatris and its subsidiaries.

Year Ended December 31,

(Unaudited, in millions, except per share amounts) 2020 2019

Total revenues $ 18,284.8 $ 21,582.7

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Diluted 1,207.7 1,206.4

TOBI Purchase Agreement

On August 31, 2018, the Company completed an agreement (for purposes of this section, the “purchase agreement”) with certain subsidiaries of Novartis to purchase the worldwide rights to their global cystic fibrosis products consisting of the TOBI Podhaler® and TOBI® solution.

Under the terms of the purchase agreement, Novartis received fixed consideration of $ 463.0 million, which consisted of $ 240.0 million which was paid at closing, $ 130.0 million which was paid in August 2019 and $ 93.0 million which was paid in August 2020.

The Company also entered into a supply agreement with Novartis to purchase the products for up to three years from the date of closing and initially recorded a liability of approximately $ 91.8 million related to supply obligations.

Additionally, Novartis was also eligible to receive a contingent payment of up to $ 20.0 million if the Company did not acquire the Facility (as defined in the glossary), which the Company accrued for at closing.

The Company originally accounted for this transaction as an asset acquisition since the exercise of the option agreement (described below) was not deemed probable at the time of the closing of the purchase agreement and accordingly recognized an intangible asset for the product rights of $ 574.8 million on the closing date of the purchase agreement.

In conjunction with the purchase agreement, Mylan and Novartis entered into an option agreement pursuant to which Novartis granted Mylan an exclusive option to acquire certain equipment and employees relating to the Novartis TOBI Podhaler® production facility in San Carlos, California.

The option also included the transfer of certain agreements to Mylan.

On May 28, 2019, Mylan notified Novartis of its election to exercise the purchase option.

As a result of the option exercise, Novartis was no longer eligible to receive the contingent payment and during the second quarter of 2019 the Company reversed the accrual for the $ 20.0 million contingent payment with the offset being a reduction in the value of the intangible asset.

This transaction closed in the third quarter of 2019, and the Company paid Novartis $ 10.0 million for the Facility.

In addition, the Company received reimbursement from Novartis for certain restructuring and other costs at the Facility and has purchased the remaining inventory at closing.

As a result of the option exercise and the acquisition of the Facility, the Company has accounted for these transactions as a single transaction and revised its accounting to an acquisition of a business under ASC Topic 805 Business Combinations .

The allocation of the $ 481.9 million purchase price to the assets acquired and liabilities assumed for this business is as follows:

(In millions)

Current assets $ 29.2

Property, plant and equipment 30.0

Intangible and other noncurrent assets 496.7

Total assets acquired 555.9

Current liabilities ( 54.0 )

Long-term debt and other noncurrent obligations ( 20.0 )

Net assets acquired $ 481.9

The identified intangible assets are comprised of product rights with a weighted average useful life of ten years .

The impact of the revised accounting included a reduction of approximately $ 100.0 million in value of the intangible assets and liabilities related to an unfavorable supply contract and the contingent payment.

Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S.

The acquisition did not have a material impact on the Company’s results of operations since the acquisition date or on a pro forma basis for the year ended December 31, 2019.

Other Transactions

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Under the terms of the amendment and termination agreement, Viatris purchased all collaboration related inventory held by Pfizer.

As a result of the termination, and the repurchase of collaboration inventory, the Company reduced revenue by $ 86.5 million.

As a result of the termination, and the repurchase of collaboration inventory, the Company reduced revenue by $ 86.5 million during the year ended December 31, 2020.

In September 2020, the Company entered into an agreement to acquire the related intellectual property and commercialization rights of Aspen’s thrombosis product portfolio in Europe for € 641.9 million.

The portfolio consists of well-established injectable anticoagulants sold in Europe under the brand names, and variations of the brand names, Arixtra®, Fraxiparine®, Mono-Embolex® and Orgaran®.

Upon closing of the transaction in November 2020, the Company made a payment of € 263.2 million to Aspen with the remaining payment of € 378.7 million due on June 25, 2021.

Upon closing of the transaction in November 2020, the Company made a payment of € 263.2 million to Aspen and the remaining payment of € 378.7 million was made on June 25, 2021.

The Company accounted for this transaction as an asset acquisition and recognized an intangible asset of € 641.9 million for the product rights, which is being amortized over a useful life of 8 years.

On February 28, 2018, the Company and Revance entered into the Revance Collaboration Agreement pursuant to which the Company and Revance are collaborat exclusively, on a world-wide basis (excluding Japan), to develop, manufacture and commercialize a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX®.

Under the Revance Collaboration Agreement, the Company is primarily responsible for (a) clinical development activities outside of North America (excluding Japan) (the “ex-U.S.

Mylan territories”), (b) regulatory activities, and (c) commercialization for any approved product.

Revance is primarily responsible for (a) non-clinical development activities, (b) clinical development activities in North America, and (c) manufacturing and supply of clinical drug substance and drug product;

Revance is solely responsible for an initial portion of non-clinical development costs.

The remaining portion of any non-clinical development costs and clinical development costs for obtaining approval in the U.S.

and Europe is shared equally between the parties, and the Company is responsible for all other clinical development costs and commercialization expenses.

Upon closing, Revance received a non-refundable upfront payment of $ 25.0 million.

In addition, under the Revance Collaboration Agreement, Revance can receive potential development milestone payments of up to $ 100.0 million, in the aggregate, upon the achievement of specified clinical and regulatory milestones and potential tiered sales milestones of up to $ 225.0 million.

In addition, Viatris will pay Revance royalties on sales of the biosimilar in the ex-U.S.

Viatris territories.

The Company accounted for this transaction as an asset acquisition of IPR&D and the total upfront payment was expensed as a component of R&D expense during the year ended December 31, 2018.

Under the agreement, the Company had an option to terminate the program.

On June 1, 2020, the Company and Revance announced a decision to continue the development program for a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX®.

As a result, during the year ended December 31, 2020, the Company recorded $ 30 million of R&D expense for a milestone payment that was due upon the decision to continue the program.

During the year ended December 31, 2018, the Company completed four agreements to acquire certain intellectual property rights and marketing authorizations for products that were in the development stage, including agreements with FKB, Mapi Pharma Ltd., and Lupin Limited.

The Company also completed the acquisition of intellectual property rights and marketing authorizations related to a commercialized product in certain rest of world markets for $ 220.0 million, of which $ 160.0 million was paid at closing, $ 20.0 million was paid in the fourth quarter of 2018 and the remaining amount was paid in the second quarter of 2019.

The Company is accounting for these transactions as asset acquisitions and a useful life of five years is being used to amortize the asset related to the commercialized product.

The Company recorded expense of approximately $ 53.7 million as a component of R&D expense related to non-refundable upfront payments for agreements for products in development during the year ended December 31, 2018.

Certain of the agreements include additional development and commercial milestones.

On February 22, 2018, the Company in-licensed European rights to Hulio™, a biosimilar to AbbVie’s Humira® (adalimumab), including a sub-license to certain of AbbVie’s European patents, from FKB.

On February 27, 2019, the Company updated its arrangements with FKB for the commercialization of Hulio™.

Under the updated arrangements, Mylan has in-licensed exclusive global commercialization rights for Hulio™.

The Company accounted for this transaction as an asset acquisition of IPR&D and a net non-contingent amount paid to FKB of approximately $ 23.3 million was expensed as a component of R&D expense during the year ended December 31, 2019.

On December 1, 2018, the Company and certain subsidiaries of Aspen Pharmacare Holdings Limited entered into an agreement for Mylan to distribute a portfolio of prescription and OTC products in Australia and New Zealand.

The agreement included an option for Mylan to purchase the rights to the portfolio.

In March 2019, the Company exercised the option, and acquired the product rights in the second quarter of 2019 for approximately $ 130.9 million.

The purchase consideration of approximately $ 130.9 million included a payment made at closing of approximately $ 64.3 million and a payment made in 2020 totaling approximately $ 66.6 million.

The Company accounted for this transaction as an asset acquisition and recognized an intangible asset for the product rights of approximately $ 130.9 million.

The intangible asset is being amortized over a useful life of five years.

The Company has entered into certain agreements to acquire intellectual property rights for products that are in the development stage.

These agreements include additional development and commercial milestones.

During the year ended December 31, 2019, the Company recorded expense of approximately $ 56.1 million as a component of R&D expense related to non-refundable upfront and milestone payments during the year.

Balance Sheet Components

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Cash and cash equivalents $ 701.2 $ 844.4 $ 475.6

Restricted cash, included in prepaid expenses and other current assets 5.6 15.5 1.2

Restricted cash, included in other current and non-current assets 5.0 5.6 15.5

Cash, cash equivalents and restricted cash $ 706.2 $ 850.0 $ 491.1

Accounts receivable, net

(In millions) December 31, 2021 December 31, 2020

Trade receivables, net $ 3,891.3 $ 2,640.1

Other receivables 952.5 418.7

Accounts receivable, net $ 4,843.8 $ 3,058.8

Total allowances for doubtful accounts were $ 159.9 million and $ 72.8 million at December 31, 2020 and 2019, respectively.

Viatris performs ongoing credit evaluations of its customers and generally does not require collateral.

Approximately 12 % and 21 % of the accounts receivable balances represent amounts due from three customers at December 31, 2020 and December 31, 2019, respectively.

Accounts Receivable Factoring Arrangements

We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S.

accounts receivable.

Our factoring agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest in the underlying accounts receivable once sold.

We derecognized $ 153.0 million and $ 90.1 million of accounts receivable as of December 31, 2020 and 2019 under these factoring arrangements, respectively.

(In millions) December 31, 2020 December 31, 2019

Raw materials $ 922.4 $ 958.4

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Contingent consideration 66.7 100.5

Restructuring 149.2 26.0

Accrued restructuring 233.5 149.2

Equity method investments, clean energy investments 10.9 47.5

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Employee benefit liabilities $ 876.4 $ 1,020.4

Equity method investments, clean energy investments — 57.2

Contingent consideration 133.0 123.1

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We also have operating leases of certain equipment, primarily automobiles, and certain limited supply arrangements.

As of December 31, 2020, the Company recognized a ROU asset of $ 323.6 million and a total lease liability of $ 322.4 million.

We elected to apply the practical expedient to not separate lease and non-lease components for our leases except for those related to certain limited supply arrangements.

We have also elected to apply the short-term lease recognition exemption which means we will not recognize ROU assets or lease liabilities for leases with an initial term of 12 months of less.

As of December 31, 2021, the Company recognized ROU assets of $ 290.8 million and total lease liabilities of $ 287.6 million.

The Company’s ROU assets are recorded in other assets.

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Thereafter 68.2

As of December 31, 2020, we have additional operating leases, primarily for production and distribution facilities, that have not yet commenced totaling approximately $ 18.7 million.

These leases are expected to commence in 2021 and have lease terms of 4 years to 9 years.

Total lease payments $ 310.8

Less imputed interest 23.2

Total lease liability $ 287.6

As of December 31, 2021, we have additional operating leases, primarily for administrative offices, that have not yet commenced totaling approximately $ 13.6 million.

These leases are expected to commence in 2022 and have lease terms of 5 to 9 years.

For the years ended December 31, 2021, 2020 and 2019, the Company had operating lease expense of approximately $ 97.6 million, $ 80.7 million and $ 87.6 million, respectively.

Operating lease costs are classified primarily as selling, general and administrative expenses and cost of sales.

Operating lease costs are classified primarily as selling, general and administrative expenses and cost of sales in the consolidated statements of operations.

Equity Method Investments

The Company currently has three equity method investments in limited liability companies that own refined coal production plants whose activities qualify for income tax credits under Section 45 of the Code.

The Company does not consolidate these entities as we have determined that we are not the primary beneficiary of these entities and do not have the power to individually direct the activities of these entities.

Accordingly, these investments are accounted for under the equity method of accounting.

For each of the clean energy investments, the Company has entered into notes payable with the respective project sponsor, which in part will be paid to the sponsor as certain production levels are met.

The Company’s clean energy investments will wind down upon the expiration of the refined coal tax credit at the end of 2021.

The Company had three equity method investments in limited liability companies that owned refined coal production plants whose activities qualified for income tax credits under Section 45 of the Code.

The Company did not consolidate these entities as we had determined that we were not the primary beneficiary of these entities and did not have the power to individually direct the activities of these entities.

Accordingly, these investments were accounted for under the equity method of accounting.

For each of the clean energy investments, the Company had entered into notes payable with the respective project sponsor, which in part were paid to the sponsor as certain production levels were met.

The law that provides for IRC Section 45 tax credits expired during the year ended December 31, 2021 for all three clean energy investments and all of the clean energy investments have wound down operations.

During the years ended December 31, 2021, 2020, and 2019, the Company reduced its long-term obligations for its three investments as a result of lower than anticipated production levels and lower expected future variable debt payments to the respective project sponsor.

The Company recognized a net gain of approximately $ 21.4 million and $ 7.0 million, respectively, which was recognized as a component of the net loss of the equity method investments in the consolidated statements of operations.

The Company recognized a net gain of approximately $ 5.7 million, $ 21.4 million and $ 7.0 million, respectively, which was recognized as a component of the net loss of the equity method investments in the consolidated statements of operations.

The carrying values and respective balance sheet locations of the Company’s clean energy investments were as follows at December 31, 2021 and 2020, respectively:

1 unchanged sentence

Other assets $ — $ 47.9

Total liabilities 47.5 104.9

Included in other current liabilities 47.5 47.7

Included in other long-term obligations — 57.2

Other current liabilities 10.9 47.5

Summarized financial information, in the aggregate, for the Company’s significant equity method investments on a 100% basis as of December 31, 2021 and 2020 and for the years ended December 31, 2021, 2020 and 2019 are as follows:

23 unchanged sentences

7,873.0 67.8 584.8 1,065.0 9,590.6

Acquisitions 704.3 652.8 217.4 533.0 2,107.5

Foreign currency translation 607.2 17.7 61.8 ( 37.8 ) 648.9

4 unchanged sentences

9,184.5 738.3 864.0 1,560.2 12,347.0

Acquisitions 704.3 652.8 217.4 533.0 2,107.5

Measurement period and other adjustments 67.7 220.4 ( 30.9 ) 38.4 295.6

Foreign currency translation ( 528.8 ) 10.8 ( 56.8 ) 45.9 ( 528.9 )

4 unchanged sentences

$ 8,723.4 $ 969.5 $ 776.3 $ 1,644.5 $ 12,113.7

As a result of the Combination, the Company revised its reportable segments in the fourth quarter of 2020.

The Company has four reportable segments:

Developed Markets, Greater China, JANZ and Emerging Markets.

Refer to Note 15 Segment Information included in Part II.

Item 8 of this Form 10-K for additional information.

Intangible assets consist of the following components at December 31, 2021 and 2020:

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Total Product Rights and Licenses $ 17,514.5 $ 4,385.0 $ 2,803.2 $ 4,896.0 $ 29,598.7

2021 amounts include the finalization of the allocation of the intangible assets relating to the Combination.

Amortization expense and intangible asset impairment charges, which are included as a component of amortization expense, which is classified primarily within cost of sales in the consolidated statements of operations, for the years ended December 31, 2021, 2020 and 2019 was as follows:

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Discount rates ranging between 9.0 % and 11.0 % were utilized in the valuations performed during the years ended December 31, 2021, 2020 and 2019.

At December 31, 2020 and 2019, the Company’s finite-lived intangible assets totaled $ 29.60 billion and $ 11.53 billion, respectively.

Any future long-lived assets impairment charges could have a material impact in the Company’s consolidated financial condition and results of operations.

On April 30, 2021, the Company completed an agreement to divest a group of OTC products in the U.S.

As a result of this transaction, the Company recognized an intangible asset impairment charge of approximately $ 83.4 million during the year ended December 31, 2021.

The Company’s IPR&D assets are tested at least annually for impairment or upon the occurrence of a triggering event.

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The fair value of both IPR&D and finite-lived intangible assets was determined based upon detailed valuations employing the income approach which utilized Level 3 inputs, as defined in Note 9, Financial Instruments and Risk Management .

Changes to any of the Company’s assumptions including changes to or abandonment of development programs,

regulatory timelines, discount rates or the competitive environment related to the assets could lead to future material impairment charges.

The Company reviews goodwill for impairment annually on April 1st or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

As a result of the decline in the Mylan share price during the first quarter of 2020, and the general uncertainty and volatility in the economic environments in which the Company operates, including the impacts of the COVID-19 pandemic, the Company performed an interim goodwill impairment test as of March 31, 2020.

The Company performed the annual goodwill impairment test as of April 1, 2020.

There were no significant changes from the interim goodwill test performed at March 31, 2020 and the results were consistent with the interim goodwill impairment test.

Mylan performed both the interim and annual goodwill impairment tests on a quantitative basis for its four reporting units, North America Generics, North America Brands, Europe and Rest of World.

In estimating each reporting unit’s fair value, Mylan performed an extensive valuation analysis, utilizing both income and market-based approaches, except for the North America Brands reporting unit where the fair value was estimated utilizing the income approach.

The determination of the fair value of the reporting units requires management to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows.

Changes to any of the Company’s assumptions including changes to or abandonment of development programs, regulatory timelines, discount rates or the competitive environment related to the assets could lead to future material impairment charges.

The Company performed its annual goodwill impairment test as of April 1, 2021 on a quantitative basis for its five reporting units, North America, Europe, Emerging Markets, JANZ, and Greater China.

See Note 15, Segment Information , for further discussion.

Additionally, the net assets acquired as part of the Combination were included in the respective reporting units and in the annual impairment test for the first time.

In estimating each reporting unit’s fair value, the Company performed an extensive valuation analysis, utilizing both income and market-based approaches.

The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows.

As of March 31, 2020 and April 1, 2020, the allocation of the goodwill among the reporting units was as follows:

North America Generics $ 2.60 billion, North America Brands $ 0.65 billion, Europe $ 4.43 billion and Rest of World $ 1.65 billion.

As of March 31, 2020 and April 1, 2020, Mylan determined that the fair value of the North America Generics, North America Brands and Rest of World reporting units was substantially in excess of the respective unit’s carrying value.

However, when compared to the April 1, 2019 test, the fair value of the overall business declined because of future forecasts and the decline in share price.

For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $1.2 billion or 11.0% for both the interim and annual goodwill impairment test.

As it relates to the income approach for the Europe reporting unit at March 31, 2020 and April 1, 2020, the Company forecasted cash flows for the next 5 years.

As of April 1, 2021, the allocation of the Company’s total goodwill was as follows:

North America $ 3.66 billion, Europe $ 5.15 billion, Emerging Markets $ 1.58 billion, JANZ $ 0.82 billion and Greater China $ 0.70 billion.

As of April 1, 2021, the Company determined that the fair value of the North America, Emerging Markets and Greater China reporting units was substantially in excess of the respective unit’s carrying value.

For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $ 0.91 billion or 5.8 % for the annual goodwill impairment test.

As it relates to the income approach for the Europe reporting unit at April 1, 2021, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately 3.0 %.

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If all other assumptions are held constant, a reduction in the terminal value growth rate by 2.9 % or an increase in discount rate by 1.5 % would result in an impairment charge for the Europe reporting unit.

For the JANZ reporting unit, the estimated fair value exceeded its carrying value by approximately $ 0.23 billion or 7.0 % for the annual goodwill impairment test.

As it relates to the income approach for the JANZ reporting unit at April 1, 2021, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately negative 1.5 %.

A terminal year value was calculated with a 0.7 % revenue growth rate applied.

The discount rate utilized was 8.5 % and the estimated tax rate was 30.5 %.

Under the market-based approach, we utilized an estimated market multiple of 6.0 times EBITDA plus a control premium of 15.0 %.

If all other assumptions are held constant, a reduction in the terminal value growth rate by 4.2 % or an increase in discount rate by 2.0 % would result in an impairment charge for the JANZ reporting unit.

Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates.

In addition, changes in underlying assumptions, especially as it relates to the key assumptions detailed, could have a significant impact on the fair value of the reporting units.

Intangible asset amortization expense for the years ended December 31, 2021 through 2025 is estimated to be as follows:

In addition, changes in underlying assumptions, especially as they relate to the key assumptions detailed, could have a significant impact on the fair value of the reporting units.

Intangible asset amortization expense for the years ending December 31, 2022 through 2026 is estimated to be as follows:

(In millions)

6 unchanged sentences

Any gains or losses on the foreign exchange forward contracts are recognized in earnings in the period incurred in the consolidated statements of operations.

The Company has also entered into forward contracts to hedge forecasted foreign currency denominated sales from certain international subsidiaries.

The Company has also entered into forward contracts to hedge forecasted foreign currency denominated sales from certain international subsidiaries and a portion of forecasted intercompany inventory sales denominated in Euro, Japanese Yen and Chinese Renminbi for up to eighteen months.

These contracts are designated as cash flow hedges to manage foreign currency transaction risk and are measured at fair value and reported as current assets or current liabilities in the consolidated balance sheets.

2 unchanged sentences

The Company may hedge the foreign currency risk associated with certain net investment positions in foreign subsidiaries by either borrowing directly in foreign currencies and designating all or a portion of the foreign currency debt as a hedge of the applicable net investment position or entering into foreign currency swaps that are designated as hedges of net investments.

The Company has designated certain Euro borrowings as a hedge of its investment in certain Euro-functional currency subsidiaries in order to manage foreign currency translation risk.

The Company has designated certain Euro and Yen borrowings as a hedge of its investment in certain Euro-functional and Yen-functional currency subsidiaries in order to manage foreign currency translation risk.

Borrowings designated as net investment hedges are marked-to-market using the current spot exchange rate as of the end of the period, with gains and losses included in the foreign currency translation component of AOCE until the sale or substantial liquidation of the underlying net investments.

In addition, the Company manages the related foreign exchange risk of the Euro borrowings not designated as net investment hedges through certain Euro denominated financial assets and forward currency swaps.

The following table summarizes the principal amounts of the Company’s outstanding Euro borrowings and the notional amounts of the Euro borrowings designated as net investment hedges:

In addition, the Company manages the related foreign exchange risk of the Euro and Yen borrowings not designated as net investment hedges through certain Euro and Yen denominated financial assets and forward currency swaps.

The following table summarizes the principal amounts of the Company’s outstanding Euro and Yen borrowings and the notional amounts of the Euro and Yen borrowings designated as net investment hedges:

Notional Amount Designated as a Net Investment Hedge

15 unchanged sentences

1,250.0 1,250.0 1,250.0

1.908 % Euro Senior Notes due 2032

1,250.0 1,250.0 —

Foreign currency forward contracts 105.6 — 105.6

Total € 6,705.6 € 5,955.6 € 2,354.0

Euro Total € 5,955.6 € 5,850.0 € 5,955.6

YEN Term Loan ¥ 40,000.0 ¥ 40,000.0 ¥ —

Yen Total ¥ 40,000.0 ¥ 40,000.0 ¥ —

At December 31,2021, the principal amount of the Company’s outstanding Yen borrowings and the notional amount of the Yen borrowings designated as net investment hedge was $ 347.6 million.

Interest Rate Risk Management

11 unchanged sentences

Any changes in the fair value of these derivative instruments, as well as the offsetting change in fair value of the portion of the fixed-rate debt being hedged, is included in interest expense.

The total notional amount of the Company’s fair value hedge was $ 750 million as of December 31, 2019 and terminated during 2020.

The Company’s fair value hedge was terminated during 2020.

Credit Risk Management

4 unchanged sentences

Accordingly, there are no offsetting amounts that net assets against liabilities.

The Effect of Derivative Instruments in the Consolidated Balance Sheets

Fair Values of Derivative Instruments

Derivatives Designated as Hedging Instruments

Asset Derivatives

December 31, 2020 December 31, 2019

(In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Interest rate swaps Prepaid expenses and other current assets $ — Prepaid expenses and other current assets $ 22.3

Foreign currency forward contracts Prepaid expenses and other current assets 28.3 Prepaid expenses and other current assets 12.5

Total $ 28.3 $ 34.8

Liability Derivatives

December 31, 2020 December 31, 2019

Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Foreign currency forward contracts Other current liabilities $ 0.8 Other current liabilities $ —

The Effect of Derivative Instruments in the Consolidated Balance Sheets

Fair Values of Derivative Instruments

Derivatives Not Designated as Hedging Instruments

Asset Derivatives

December 31, 2020 December 31, 2019

(In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Foreign currency forward contracts Prepaid expenses and other current assets $ 90.3 Prepaid expenses and other current assets $ 8.5

Total $ 90.3 $ 8.5

Liability Derivatives

December 31, 2020 December 31, 2019

(In millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value

Foreign currency forward contracts Other current liabilities $ 102.8 Other current liabilities $ 12.9

Total $ 102.8 $ 12.9

The Effect of Derivative Instruments in the Consolidated Statements of Operations

Derivatives in Fair Value Hedging Relationships

Location of Gain or (Loss) Recognized in Earnings on Derivatives Amount of Gain or (Loss) Recognized in Earnings on Derivatives

Year Ended December 31,

(In millions) 2020 2019 2018

The following table summarizes the classification and fair values of derivative instruments in our consolidated balance sheets:

Asset Derivatives Liability Derivatives

(In millions) Balance Sheet Location December 31, 2021 Fair Value December 31, 2020 Fair Value Balance Sheet Location December 31, 2021 Fair Value December 31, 2020 Fair Value

Derivatives designated as hedges:

Foreign currency forward contracts Prepaid expenses & other current assets $ 62.0 $ 28.3 Other current liabilities $ 4.3 $ 0.8

Total derivatives designated as hedges 62.0 28.3 4.3 0.8

Derivatives not designated as hedges:

Foreign currency forward contracts Prepaid expenses & other current assets 82.6 90.3 Other current liabilities 56.7 102.8

Total derivatives not designated as hedges 82.6 90.3 56.7 102.8

Total derivatives $ 144.6 $ 118.6 $ 61.0 $ 103.6

The following tables summarize information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk:

Amount of Gains/(Losses) Recognized in Earnings Amount of Gain Excluded from the Assessment of Hedge Effectiveness

Year Ended December 31, Year Ended December 31,

(In millions) Location of Gain/(Loss) 2021 2020 2019 2021 2020 2019

Derivative Financial Instruments in Fair Value Hedge Relationships (1) :

Interest rate swaps Interest expense (3)

Total $ 22.1 $ 18.7 $ ( 12.6 )

Location of Gain or (Loss) Recognized in Earnings on Hedged Items Amount of Gain or (Loss) Recognized in Earnings on Hedging Items

Year Ended December 31,

(In millions) 2020 2019 2018

2023 Senior Notes ( 3.125 % coupon)

Interest expense $ ( 22.1 ) $ ( 18.7 ) $ 12.6

Total $ ( 22.1 ) $ ( 18.7 ) $ 12.6

In the first quarter of 2020, the Company terminated interest rate swaps designated as a fair value hedge resulting in net proceeds of approximately $45 million.

The amount included in the above tables represents the fair value adjustment recognized at the date the interest rate swaps were settled.

The Effect of Derivative Instruments in the Consolidated Statements of Comprehensive (Loss) Earnings

Derivatives in Net Investment Hedging Relationships

Amount of Gain or (Loss) Recognized in AOCE (Net of Tax) on Derivatives (Effective Portion)

Year Ended December 31,

(In millions) 2020 2019 2018

Foreign currency borrowings and forward contracts $ ( 346.4 ) $ 56.7 $ 108.9

Total $ ( 346.4 ) $ 56.7 $ 108.9

The Effect of Derivative Instruments in the Consolidated Statements of Comprehensive (Loss) Earnings

Derivatives in Cash Flow Hedging Relationships

Amount of Gain or (Loss) Recognized in AOCE (Net of Tax) on Derivatives (Effective Portion)

Year Ended December 31,

(In millions) 2020 2019 2018

Foreign currency forward contracts $ 20.6 $ 16.6 $ ( 46.6 )

Interest rate swaps — 3.0 —

$ — $ 22.1 $ 18.7 $ — $ — $ —

2023 Senior Notes (3.125% coupon) Interest expense (3)

— ( 22.1 ) ( 18.7 ) — — —

Derivative Financial Instruments in Cash Flow Hedging Relationships :

Foreign currency forward contracts Other expense, net (5)

— — — — 7.1 —

Derivative Financial Instruments Not Designated as Hedging Instruments:

Foreign currency option and forward contracts Other expense, net (3)

39.3 ( 10.1 ) ( 17.3 ) — — —

Total $ 39.3 $ ( 10.1 ) $ ( 17.3 ) $ — $ 7.1 $ —

The Effect of Derivative Instruments in the Consolidated Statements of Operations

Derivatives in Cash Flow Hedging Relationships

Location of Gain or (Loss) Reclassified from AOCE into Earnings (Effective Portion) Amount of Gain or (Loss) Reclassified from AOCE into Earnings (Effective Portion)

Year Ended December 31,

(In millions) 2020 2019 2018

Amount of Gains/(Losses) Recognized in AOCE (Net of Tax) on Derivatives Amount of Gains/(Losses) Reclassified from AOCE into Earnings

Year Ended December 31, Year Ended December 31,

(In millions) Location of Gain/(Loss) 2021 2020 2019 2021 2020 2019

Derivative Financial Instruments in Cash Flow Hedging Relationships (2) :

Foreign currency forward contracts Net sales (4)

$ 45.8 $ 20.6 $ 16.6 $ 30.9 $ 4.8 $ ( 0.7 )

Interest rate swaps Interest expense (4)

Total $ 0.3 $ ( 7.8 ) $ ( 1.5 )

Location of Gain Excluded from the Assessment of Hedge Effectiveness Amount of Gaom Excluded from the Assessment of Hedge Effectiveness

Year Ended December 31,

(In millions) 2020 2019 2018

Foreign currency forward contracts Other expense, net $ 7.1 $ — $ —

Total $ 7.1 $ — $ —

At December 31, 2020, the Company expects that approximately $ 9.0 million of pre-tax net losses on cash flow hedges will be reclassified from AOCE into earnings during the next twelve months.

The Effect of Derivative Instruments in the Consolidated Statements of Operations

Derivatives Not Designated as Hedging Instruments

Location of Gain or (Loss) Recognized in Earnings on Derivatives Amount of Gain or (Loss) Recognized in Earnings on Derivatives

Year Ended December 31,

(In millions) 2020 2019 2018

Foreign currency option and forward contracts Other expense, net $ ( 10.1 ) $ ( 17.3 ) $ 34.8

( 3.4 ) — 3.0 ( 4.3 ) ( 4.5 ) ( 7.1 )

Derivative Financial Instruments in Net Investment Hedging Relationships:

Foreign currency borrowings and forward contracts 436.6 ( 346.4 ) 56.7 — — —

Total $ 479.0 $ ( 325.8 ) $ 76.3 $ 26.6 $ 0.3 $ ( 7.8 )

(1) In the first quarter of 2020, the Company terminated interest rate swaps designated as a fair value hedge resulting in net proceeds of approximately $45 million.

The amount included in the above tables represents the fair value adjustment recognized at the date the interest rate swaps were settled.

(2) At December 31, 2021, the Company expects that approximately $ 21.0 million of pre-tax net gains on cash flow hedges will be reclassified from AOCE into earnings during the next twelve months.

(3) Represents the location of the gain/(loss) recognized in earnings on derivatives.

(4) Represents the location of the gain/(loss) reclassified from AOCE into earnings.

(5) Represents the location of the gain excluded from the assessment of hedge effectiveness.

Fair Value Measurement

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Foreign exchange derivative assets — 144.6 — 144.6

Interest rate swap derivative assets — — — —

Total assets at recurring fair value measurement $ 101.9 $ 182.8 $ — $ 284.7

22 unchanged sentences

Foreign exchange derivative assets — 118.6 — 118.6

Interest rate swap derivative assets — 22.3 — 22.3

Total assets at recurring fair value measurement $ 46.7 $ 157.7 $ — $ 204.4

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The Company accounted for this transaction as a purchase of a business and utilized the acquisition method of accounting.

On January 30, 2019, the Company received FDA approval of Wixela TM Inhub TM (fluticasone propionate and salmeterol inhalation powder, USP), the first generic of GlaxoSmithKline’s Advair Diskus ® .

The commercial launch of the Wixela TM Inhub TM occurred in February 2019.

On January 30, 2019, the Company received FDA approval of Wixela® Inhub® (fluticasone propionate and salmeterol inhalation powder, USP), the first generic of GlaxoSmithKline’s Advair Diskus®.

The commercial launch of the Wixela® Inhub® occurred in February 2019.

As of December 31, 2021, the Company has a contingent consideration liability of $ 177.8 million related to the respiratory delivery platform.

12 unchanged sentences

Accretion — 11.6 11.6

Fair value loss (gain) (3)

Fair value loss (3)

33.8 39.3 73.1

4 unchanged sentences

Fair value loss (3)

33.8 39.3 73.1

Balance at December 31, 2021 $ 66.7 $ 133.0 $ 199.7

2 unchanged sentences

(3) Included in litigation settlements and other contingencies, net in the consolidated statements of operations.

2019 Changes to Contingent Consideration:

During the year ended December 31, 2019, the Company recorded a fair value gain of $ 20.4 million related to the respiratory delivery platform contingent consideration which was partially offset by the net accretion of approximately $ 14.8 million.

In addition, the Company made payments of approximately $ 99.0 million related to the respiratory delivery platform contingent consideration.

2020 Changes to Contingent Consideration:

During the year ended December 31, 2020, the Company recorded a fair value loss of $ 73.1 million related to the respiratory delivery platform contingent consideration and accretion of approximately $ 11.6 million.

In addition, the Company made payments of approximately $ 111.8 million related to the respiratory delivery platform contingent consideration.

The Company expects to incur approximately $ 6 million to $ 8 million of non-cash accretion expense related to the increase in the net present value of the contingent consideration liabilities in 2022.

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Short-Term Borrowings

The Company had $ 1.10 billion of short-term borrowings as of December 31, 2020 and had no short-term borrowings as of December 31, 2019.

The Company had $ 1.49 billion and $ 1.10 billion of borrowings as of December 31, 2021 and 2020, respectively.

(In millions) December 31, 2021 December 31, 2020

2 unchanged sentences

Note Securitization Facility — 200.0

Other 1.1 1.2

Short-term borrowings $ 1,493.0 $ 1,100.9

2 unchanged sentences

On November 16, 2020, the Company established the Commercial Paper Program to support its working capital requirements and for general purposes.

This program replaced a similar program at Mylan.

There was $ 651.3 million of CP Notes outstanding under this program as of December 31, 2020 and no balance as of December 31, 2019.

There was $ 1.17 billion and $ 651.3 million of CP Notes outstanding under this program as of December 31, 2021 and 2020, respectively.

Amounts available under the Commercial Paper Program may be borrowed, repaid and re-borrowed from time to time, with the aggregate principal amount of CP Notes outstanding at any time not to exceed $ 1.65 billion.

7 unchanged sentences

In August 2020, the Company entered into the Note Securitization Facility for borrowings up to $ 200 million.

In July 2021, the Note Securitization Facility was amended to extend its maturity to August 2022.

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Current portion of long-term debt:

2020 Floating Rate Euro Notes (a) **

2020 Euro Senior Notes (b) **

2021 Senior Notes (a) **

3.150 % — 2,249.7

2020 Senior Notes (c) **

2022 Euro Senior Notes ****

0.816 % 856.6 —

5 unchanged sentences

Non-current portion of long-term debt:

2021 Senior Notes **

3.150 % — 2,249.2

2022 Euro Senior Notes ****

2 unchanged sentences

1.125 % — 1,008.8

2023 Senior Notes (d) *

2023 Senior Notes (b) *

3.125 % 766.1 781.6

19 unchanged sentences

4.550 % 748.7 748.6

2032 Euro Senior Notes ****

1.908 % 1,672.6 —

2030 Senior Notes ***

2.700 % 1,520.5 1,528.0

2032 Euro Senior Notes ****

1.908 % 1,546.6 1,672.6

2040 Senior Notes ***

8 unchanged sentences

4.000 % 2,205.1 2,209.3

USD Term Loan 600.0 —

USD Term Loan Facility — 600.0

YEN Term Loan Facility 347.6 —

Other 1.9 17.4

1 unchanged sentence

Long-term debt $ 19,717.1 $ 22,429.2

(a) The 2020 Floating Rate Euro Notes were repaid at maturity in the second quarter of 2020.

The instrument bore interest at a rate of three-month EURIBOR plus 0.50 % per annum, reset quarterly.

(b) The 2020 Euro Senior Notes were repaid at maturity in the fourth quarter of 2020.

(d) During 2020, the Company terminated interest rate swaps designated as a fair value hedge resulting in net proceeds of approximately $45 million.

The fair value adjustment will be amortized to interest expense over the remaining term of the notes.

(a) The 2021 Senior Notes were repaid at maturity in the second quarter of 2021.

(b) In the first quarter of 2020, the Company terminated interest rate swaps designated as a fair value hedge resulting in net proceeds of approximately $ 45 million.

The fair value adjustment is being amortized to interest expense over the remaining term of the notes.

* Instrument was issued by Mylan Inc.

** Instrument was originally issued by Mylan N.V.;

now held by Utah Acquisition Sub Inc.

*** Instrument was issued by Viatris Inc.

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In connection with the Combination, in June 2020, Viatris and Upjohn Finance B.V.

completed privately placed debt offerings of $ 7.45 billion of senior unsecured notes (the “Upjohn U.S.

Dollar Notes”) and €3.60 billion aggregate principal amount of senior unsecured notes (the “Upjohn Euro Notes” and, together with the Upjohn U.S.

Dollar Notes, the “Upjohn Senior Notes”), respectively, and entered into other financing arrangements described below under “Term Loan and Revolving Facility.” The Upjohn U.S.

completed privately placed debt offerings of $ 7.45 billion aggregate principal amount of the Unregistered Upjohn U.S.

Dollar Notes and € 3.60 billion aggregate principal amount of the Upjohn Euro Notes, respectively, and entered into other financing arrangements described below under “USD Term Loan Facility, 2020 Revolving Facility, YEN Term Loan Facility and 2021 Revolving Facility”.

The Unregistered Upjohn U.S.

Dollar Notes were issued pursuant to an indenture dated June 22, 2020.

The Upjohn U.S.

The Unregistered Upjohn U.S.

Dollar Notes were issued in a private offering exempt from the registration requirements of the Securities Act to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to persons outside of the U.S.

pursuant to Regulation S under the Securities Act.

Viatris has entered into a registration rights agreement, dated as of June 22, 2020 pursuant to which Viatris is required to use commercially reasonable efforts to file a registration statement with respect to an offer to exchange each series of the Upjohn U.S.

Viatris entered into a registration rights agreement, dated as of June 22, 2020 pursuant to which Viatris was required to use commercially reasonable efforts to file a registration statement with respect to an offer to exchange each series of the Unregistered Upjohn U.S.

Dollar Notes for new notes with the same aggregate principal amount and terms substantially identical in all material respects.

In September 2021, Viatris filed a registration statement with the SEC with respect to an offer to exchange up to $ 7.45 billion aggregate principal amount of Unregistered Upjohn U.S.

Dollar Notes with Registered Upjohn Notes in the same aggregate principal amount and with terms substantially identical in all material respects, which was declared effective on September 28, 2021.

The exchange offer expired on October 28, 2021 and settled on October 29, 2021.

More than 99.9 % of the aggregate principal amount of the Unregistered Upjohn U.S.

Dollar Notes were exchanged for Registered Upjohn Notes.

The Upjohn Euro Notes were issued pursuant to an indenture dated June 23, 2020.

16 unchanged sentences

Total $ 11,847.8

The net proceeds from the offerings of the Upjohn Senior Notes, together with the proceeds from the $600 million Term Loan were utilized to fund the $ 12 billion cash payment by Viatris to Pfizer as partial consideration for Pfizer’s contribution of the Upjohn Business to Viatris and related transaction fees and expenses.

The net proceeds from the offerings of the Upjohn Senior Notes, together with the proceeds from the $ 600 million USD Term Loan Facility, were utilized to fund the $ 12 billion cash payment by Viatris to Pfizer as partial consideration for Pfizer’s contribution of the Upjohn Business to Viatris and related transaction fees and expenses.

Assumptions and Guarantees of Senior Unsecured Notes

In connection with the Combination, on November 16, 2020, Viatris, Upjohn Finance B.V., Utah Acquisition Sub, a Delaware corporation and an indirect wholly owned subsidiary of Viatris, Mylan II, a company incorporated under the laws of the Netherlands and an indirect wholly owned subsidiary of Viatris, and Mylan Inc.

entered into the Viatris Supplemental Indentures relating to the Upjohn Senior Notes.

The Viatris Supplemental Indentures provide for full and unconditional guarantees of the Upjohn Senior Notes by Utah Acquisition Sub, Mylan II and Mylan Inc.

On November 16, 2020, Viatris, Utah Acquisition Sub, Mylan II and Mylan Inc.

entered into supplemental indentures (collectively, the “Mylan Supplemental Indentures”) relating to the senior unsecured notes previously issued by Mylan and guaranteed by Mylan Inc.

(the “Legacy Mylan N.V.

Notes”) and the senior unsecured notes previously issued by Mylan Inc.

and guaranteed by Mylan (the “Legacy Mylan Inc.

Notes” and, together with the Legacy Mylan N.V.

Notes, the “Legacy Mylan Notes”).

The Mylan Supplemental Indentures provide for (i) the assumption of Mylan N.V.’s obligations as issuer under the Legacy Mylan N.V.

Notes and the indentures governing the Legacy Mylan N.V.

Notes by Utah Acquisition Sub, (ii) full and unconditional guarantees of the Legacy Mylan N.V.

Notes by Viatris and Mylan II, (iii) the assumption of Mylan N.V.’s obligations as guarantor under the Legacy Mylan Inc.

Notes and the indentures governing the Legacy Mylan Inc.

Notes by either Mylan II or Utah Acquisition Sub, as applicable, and (iv) full and unconditional guarantees of the Legacy Mylan Inc.

Notes by Viatris and either Mylan II or Utah Acquisition Sub, as applicable.

Term Loan and Revolving Facility

In June 2020, Viatris entered into (i) the $600 million Term Loan Agreement and (ii) the $4.0 billion Revolving Facility with various syndicates of banks.

The Term Loan Agreement matures on May 16, 2022 and the Revolving Facility matures on November 16, 2023.

Both the Term Loan Agreement and the Revolving Facility contain customary affirmative covenants for facilities of this type, including among others, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of corporate existence and rights, property, and insurance and compliance with laws, as well as customary negative covenants for facilities of this type, including limitations on the incurrence of subsidiary indebtedness, liens, mergers and certain other fundamental changes, investments and loans, acquisitions, transactions with affiliates, payments of dividends and other restricted payments and changes in our lines of business.

The Term Loan Agreement and the Revolving Facility contain a maximum consolidated leverage ratio financial covenant requiring maintenance of a maximum ratio of consolidated total indebtedness as of the end of any quarter to consolidated EBITDA for the trailing four quarters as defined in the related credit agreements.

The maximum leverage ratio is 4.25 to 1.00 for the first four full fiscal quarters following the close of the Combination and 3.75 to 1.00 thereafter, except in circumstances as defined in the related credit agreements.

is the issuer of the Upjohn U.S.

Dollar Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Mylan II B.V.

and Utah Acquisition Sub Inc.

Upjohn Finance B.V.

is the issuer of the Upjohn Euro Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by Viatris Inc., Mylan Inc., Mylan II B.V.

and Utah Acquisition Sub Inc.

Following the Combination, Utah Acquisition Sub Inc.

is the issuer of the Utah U.S.

Dollar Notes and the Utah Euro Notes, which are each fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc.

and Mylan II B.V.

is the issuer of the Mylan Inc.

Dollar Notes and the Mylan Inc.

Euro Notes, which are each fully and unconditionally guaranteed on a senior unsecured basis by Mylan II B.V., Viatris Inc.

and Utah Acquisition Sub Inc.

USD Term Loan Facility, 2020 Revolving Facility, YEN Term Loan Facility and 2021 Revolving Facility

In June 2020, Viatris entered into (i) the $ 600 million USD Term Loan Facility and (ii) the $ 4.0 billion 2020 Revolving Facility with various syndicates of banks.

The USD Term Loan Facility and the 2020 Revolving Facility were fully repaid and terminated in July 2021.

In July 2021, Viatris entered into (i) the ¥ 40 billion YEN Term Loan Facility and (ii) the $ 4.0 billion 2021 Revolving Facility with various syndicates of banks.

The 2021 Revolving Facility amended and restated the 2020 Revolving Facility and proceeds from the 2021 Revolving Facility were used to repay outstanding obligations under the 2020 Revolving Facility and the 2020 Revolving Facility was terminated.

Proceeds from the YEN Term Loan Facility and the 2021 Revolving Facility were also used to repay the USD Term Loan Facility in full and the USD Term Loan Facility was terminated.

The 2021 Revolving Facility and the YEN Term Loan Facility have substantially identical terms to the 2020 Revolving Facility and USD Term Loan Facility, respectively, with the following exceptions:

1) the maturity of both the YEN Term Loan Facility and the 2021 Revolving Facility is July 2026, 2) the pricing was adjusted to reflect current market prices (which were generally more favorable) and 3) the maximum leverage ratio as of the end of any quarter was set at 4.25 to 1.00 for each quarter ending after June 30, 2021 through and including June 30, 2022, 4.0 to 1.00 for each quarter ending after June 30, 2022 through and including December 31, 2022 and 3.75 to 1.00 thereafter, except in circumstances as defined in the related credit agreement.

The YEN Term Loan Facility and the 2021 Revolving Facility contain customary affirmative covenants for facilities of this type, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of corporate existence and rights, property, and insurance and compliance with laws, as well as customary negative covenants for facilities of this type, including limitations on the incurrence of subsidiary indebtedness, liens, mergers and certain other fundamental changes, investments and loans, acquisitions, transactions with affiliates, payments of dividends and other restricted payments and changes in our lines of business.

At December 31, 2021 and 2020, the aggregate fair value of the Company’s outstanding notes was approximately $ 22.01 billion and $ 25.90 billion, respectively.

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Balance at December 31, 2020, net of tax $ ( 18.0 ) $ ( 353.6 ) $ 1.2 $ ( 26.1 ) $ ( 461.5 ) $ ( 858.0 )

Other comprehensive (loss) earnings before reclassifications, before tax 18.5 ( 305.2 ) 0.6 ( 12.1 ) 1,213.0 914.8

Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:

Other comprehensive earnings (loss) before reclassifications, before tax 62.7 456.8 ( 1.1 ) 67.0 ( 1,340.9 ) ( 755.5 )

Amounts reclassified from accumulated other comprehensive earnings (loss), before tax:

Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales ( 30.9 ) ( 30.9 ) ( 30.9 )

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Amortization of actuarial loss included in SG&A 7.4 7.4

Net other comprehensive (loss) earnings, before tax 18.2 ( 305.2 ) 0.6 ( 14.0 ) 1,213.0 912.6

Income tax provision (benefit) 4.6 ( 25.9 ) — ( 5.3 ) — ( 26.6 )

Net other comprehensive earnings (loss), before tax 36.1 456.8 ( 1.1 ) 73.9 ( 1,340.9 ) ( 775.2 )

Income tax provision 8.9 86.5 0.1 15.6 — 111.1

Balance at December 31, 2021, net of tax $ 9.2 $ 16.7 $ — $ 32.2 $ ( 1,802.4 ) $ ( 1,744.3 )

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Balance at December 31, 2019, net of tax $ ( 31.6 ) $ ( 74.3 ) $ 0.6 $ ( 17.4 ) $ ( 1,674.5 ) $ ( 1,797.2 )

Other comprehensive earnings (loss) before reclassifications, before tax 29.3 59.6 0.5 ( 21.0 ) ( 415.5 ) ( 347.1 )

Other comprehensive (loss) earnings before reclassifications, before tax 18.5 ( 305.2 ) 0.6 ( 12.1 ) 1,213.0 914.8

Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:

Loss on foreign exchange forward contracts classified as cash flow hedges, included in net sales 0.7 0.7 0.7

Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales ( 4.8 ) ( 4.8 ) ( 4.8 )

Loss on interest rate swaps classified as cash flow hedges, included in interest expense 4.5 4.5 4.5

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Amortization of actuarial loss included in SG&A ( 1.9 ) ( 1.9 )

Net other comprehensive earnings (loss), before tax 37.1 59.6 0.5 ( 24.8 ) (415.5) ( 343.1 )

Net other comprehensive (loss) earnings, before tax 18.2 ( 305.2 ) 0.6 ( 14.0 ) 1,213.0 912.6

Income tax provision (benefit) 4.6 ( 25.9 ) — ( 5.3 ) — ( 26.6 )

Cumulative effect of the adoption of new accounting standards $ ( 3.4 ) $ — $ — $ ( 0.2 ) $ — $ ( 3.6 )

Balance at December 31, 2020, net of tax $ ( 18.0 ) $ ( 353.6 ) $ 1.2 $ ( 26.1 ) $ ( 461.5 ) $ ( 858.0 )

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Balance at December 31, 2018, net of tax $ ( 53.1 ) $ ( 130.9 ) $ — $ 1.7 $ ( 1,259.0 ) $ ( 1,441.3 )

Other comprehensive (loss) earnings before reclassifications, before tax ( 80.7 ) 111.6 ( 0.1 ) ( 3.0 ) ( 1,125.2 ) ( 1,097.4 )

Other comprehensive earnings (loss) before reclassifications, before tax 29.3 59.6 0.5 ( 21.0 ) ( 415.5 ) ( 347.1 )

Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax:

Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales ( 6.2 ) ( 6.2 ) ( 6.2 )

Loss on foreign exchange forward contracts classified as cash flow hedges, included in net sales 0.7 0.7 0.7

Loss on interest rate swaps classified as cash flow hedges, included in interest expense 7.1 7.1 7.1

Amortization of prior service costs included in SG&A ( 0.9 ) ( 0.9 )

Amortization of actuarial gain included in SG&A ( 0.4 ) ( 0.4 )

Net other comprehensive (loss) earnings, before tax ( 79.2 ) 111.6 ( 0.1 ) ( 3.8 ) ( 1,125.2 ) ( 1,096.7 )

Income tax (benefit) provision ( 27.3 ) 2.7 — 0.5 — ( 24.1 )

Amortization of actuarial loss included in SG&A ( 2.9 ) ( 2.9 )

Net other comprehensive earnings (loss), before tax 37.1 59.6 0.5 ( 24.8 ) ( 415.5 ) ( 343.1 )

Income tax provision (benefit) 12.2 3.0 ( 0.1 ) ( 5.9 ) — 9.2

Cumulative effect of the adoption of new accounting standards ( 3.4 ) — — ( 0.2 ) — ( 3.6 )

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777.9 224.5 177.5

Income tax (benefit) provision $ ( 51.3 ) $ 137.6 $ ( 54.1 )

Income tax provision (benefit) $ 604.7 $ ( 51.3 ) $ 137.6

Earnings before income taxes:

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Foreign - Other 1,318.1 224.3 1,185.8

Total earnings before income taxes $ ( 721.2 ) $ 154.4 $ 298.4

Total (loss) earnings before income taxes $ ( 664.4 ) $ ( 721.2 ) $ 154.4

For all periods presented, the allocation of earnings before income taxes between U.S.

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Deferred tax liabilities, net $ ( 1,482.3 ) $ ( 975.8 )

(1) As discussed in Note 6 Leases of the notes to consolidated financial statements, in 2019 we adopted an ASU that resulted in the recognition of operating lease right-of-use assets and lease liabilities.

We adopted this standard using a modified retrospective basis that does not require application to periods prior to adoption.

For those foreign subsidiaries whose investments are permanent in duration, income and foreign withholding taxes have not been provided on the unremitted earnings of those subsidiaries.

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Determination of the amount of any unrecognized deferred income tax liability on these unremitted earnings is not practicable as such determination involves material uncertainties about the potential extent and timing of any distributions, the availability and complexity of calculating foreign tax credits, and the potential indirect tax consequences of such distributions, including withholding taxes.

Prior to the Combination, the applicable income tax rate to Mylan N.V.

rate of 19%, and following the Combination, the statutory income tax rate applicable to Viatris Inc., is the U.S.

rate of 21 % for the year ended December 31, 2020.

Prior to the Combination, the applicable income tax rate to Mylan was the U.K.

rate of 19%, and following the Combination, the statutory income tax rate applicable to Viatris Inc.

rate of 21 % for the years ended December 31, 2021 and 2020.

A reconciliation of the statutory tax rate to the effective tax rate is as follows:

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Clean energy and research credits 9.8 % 12.8 % ( 43.4 ) %

rate differential — % ( 3.1 ) % ( 5.4 ) %

rate differentials — % — % ( 3.1 ) %

Impact of changes in legislation — % ( 9.2 ) % — %

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Tax settlements and resolution of certain tax positions 0.1 % 0.1 % 199.6 %

Global intangible low-taxed income ( 3.6 ) % ( 8.6 ) % 8.6 %

Incremental US Tax on Foreign Earnings ( 36.9 ) % ( 3.6 ) % ( 8.6 ) %

Waived deductions under IRC § 59A — % ( 3.3 ) % 64.5 %

Impact of the Combination 5.8 % 7.7 % — %

Impact of the Combination and Divestitures ( 2.8 ) % 5.8 % 7.7 %

items ( 6.1 ) % 1.5 % 6.9 %

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Switzerland 1.0 % 2.0 % — %

Singapore 28.8 % 1.0 % — %

Other ( 10.2 ) % ( 0.4 ) % 12.8 %

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Valuation allowance ( 8.3 ) % 16.1 % ( 9.9 ) %

Impact of the Combination ( 42.2 ) % — % — %

Impact of the Combination and divestitures ( 106.9 ) % ( 42.2 ) % — %

Withholding taxes ( 1.3 ) % ( 1.6 ) % 7.1 %

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Effective tax rate ( 91.0 ) % 7.1 % 89.1 %

In all years, our effective tax rate is impacted the jurisdictional location of earnings and the corresponding tax rates in those jurisdictions.

Subsequent to the Combination, the Company realizes benefits from lower tax rates in Singapore and Puerto Rico due to manufacturing and other incentives, which are not significant in 2020.

In all years, our effective tax rate is impacted by the jurisdictional location of earnings and the corresponding tax rates in those jurisdictions.

Subsequent to the Combination, the Company realizes benefits from lower tax rates in Singapore and Puerto Rico due to manufacturing and other incentives..

On December 22, 2017, the U.S.

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corporate subsidiaries of large U.S.

expense in the U.S., (5) limitations on the deductibility of certain executive compensation, and (6) limitations on the utilization of foreign tax credits to reduce the U.S.

shareholders and a deduction generally equal to 50 percent of GILTI ( 37.5 percent for tax years beginning after December 31, 2025) to offset the income tax liability, (4) a provision limiting the amount of deductible interest expense in the U.S., (5) limitations on the deductibility of certain executive compensation, and (6) limitations on the utilization of foreign tax credits to reduce the U.S.

income tax liability.

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The Company has elected to not record deferred taxes associated with the GILTI provision of the Tax Act.

The Company’s accounting for the impact of the 2017 Tax Act was completed during the year ended December 31, 2018.

Valuation Allowance

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On March 27, 2020, the CARES Act was enacted and signed into law.

As of December 31, 2020, CARES Act reduced our 2020 income

tax expense by $22.1 million resulting from additional deductible interest.

We will continue to monitor and assess the impact that the CARES Act may have on our business and results of operations.

The CARES Act includes several provisions, including increasing the amount of deductible interest, allowing companies to carryback certain NOLs, and increasing the amount of NOLs that corporations can use to offset income.During the year ended December 31, 2020, the CARES Act reduced the Company’s 2020 income tax expense by $ 22.1 million resulting from additional deductible interest.

Tax Examinations

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The years 2015 through 2018 are open years under examination.

The years 2012, 2013 and 2014 have one matter open, and a Tax Court petition has been filed regarding the matter and a trial was held in December 2018 and is discussed further below.

The years 2012, 2013 and 2014 have one matter open, and a Tax Court petition was filed regarding the matter and a trial was held in December 2018 and is discussed further below.

During the year ended December 31, 2019, Mylan reached an agreement in principle with the IRS to resolve all issues relating to our positions on the February 27, 2015 acquisition by Mylan N.V.

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Several international audits are currently in progress.

In some cases, the tax auditors have proposed adjustments to our tax positions including with respect to intercompany transactions, and we are in ongoing discussions with the auditors regarding the validity of their positions.

The Company has recorded a reserve for uncertain tax positions of $134.6 million and $89.2 million, including interest and penalties, in connection with its international audits at December 31, 2020 and December 31, 2019, respectively.

In certain cases, these audits can also result in non-tax consequences.

For example, under French law, certain tax matters are automatically referred for criminal investigation.

The Company’s major state taxing jurisdictions remain open from fiscal year 2013 through 2019, with several state audits currently in progress.

In some cases, the tax auditors have proposed adjustments or issued assessments to our tax positions, including with respect to intercompany transactions, and we are in ongoing discussions with some of the auditors regarding the validity of their positions.

In instances where assessments have been issued, we disagree with these assessments and believe they are without merit and incorrect as a matter of law.

As a result, we anticipate that certain of these matters may become the subject of litigation before tax courts where we intend to vigorously defend our position.

In Australia, the tax authorities have issued notices of assessments to the Company for the years ended December 2009 to December 2019, subject to additional interest and penalties, concerning our tax position with respect to certain intercompany transactions.

The tax authorities denied our objections to the assessments and we have commenced litigation in the Australian Federal Court challenging that decision.

During 2021, the Company made a partial payment of $ 56.0 million in order to stay potential interest and penalties resulting from this litigation.

In France, the tax authorities have issued notices of assessments to the Company for the years ended December 2013 to December 2016 concerning our tax position with respect to (i) certain intercompany transactions and (ii) whether income earned by a Company entity not domiciled in France should be subject to French tax.

We have resolved our position concerning certain intercompany transactions with the tax authorities.

Concerning the remaining issue, we have commenced litigation before the French tax courts where the tax authorities will seek unpaid taxes, penalties, and interest.

In India, the tax authorities have issued notices of assessments to the Company seeking unpaid taxes and interest for the financial years covering 2013 to 2018 concerning our tax position with respect to certain corporate tax deductions and certain intercompany transactions.

Some of these assessments remain in the audit phase where we are challenging them before the tax authorities while we are challenging some of the other assessments in the Indian tax courts.

The Company has recorded a net reserve for uncertain tax positions of $ 315.6 million, including interest and penalties, in connection with its international audits at December 31, 2021.

The reserve balance at December 31, 2021 reflects the impact of current year settlement payments.

In connection with our international tax audits, it is possible that we will incur material losses above the amounts reserved.

The Company’s major U.S.

state taxing jurisdictions remain open from fiscal year 2013 through 2020, with several state audits currently in progress.

The Company’s major international taxing jurisdictions remain open from 2012 through 2020.

Tax Court Proceeding

Tax Court Proceedings

The Company's U.S.

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A trial was held in U.S.

Tax Court in December 2018.

Both parties delivered their final post-trial briefs on June 27, 2019 and are awaiting the court’s final decision.

Tax Court in December 2018 and on April 27, 2021, the Court affirmed Mylan’s position and held that patent litigation expenses related to ANDAs are immediately deductible.

The IRS has appealed this decision.

Accounting for Uncertainty in Income Taxes

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No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained.

As of December 31, 2020 and 2019, the Company’s consolidated balance sheets reflect net liabilities for unrecognized tax benefits of $ 391.1 million and $ 92.1 million, of which $ 127.1 million as of December 31, 2020 would affect the Company’s effective tax rate if recognized.

As of December 31, 2021 and 2020, the Company’s consolidated balance sheets reflect net liabilities for unrecognized tax benefits of $ 322.9 million and $ 391.1 million, respectively, of which $ 230.2 million as of December 31, 2021 would affect the Company’s effective tax rate if recognized, with the remainder being offset by potential correlative adjustments.

Related accrued interest and penalties included in the consolidated balance sheets were $ 96.8 million and $ 86.7 million as of December 31, 2021 and 2020, respectively.

For the year ended December 31, 2020, 2019 and 2018, the Company recognized $ 6.0 million, $ 35.2 million, and $ 18.3 million of tax benefits, respectively, related to interest and penalties on uncertain tax positions.

For the years ended December 31, 2021, 2020 and 2019, the Company recognized $ 18.5 million of tax expense, $ 6.0 million, and $ 35.2 million of tax benefits, respectively, related to interest and penalties on uncertain tax positions.

Interest and penalties related to income taxes are included in the tax provision.

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Reductions due to expirations of statute of limitations ( 7.0 ) — ( 34.9 )

Addition due to acquisition 264.0 — —

(Reduction) addition due to acquisition ( 4.8 ) 264.0 —

Unrecognized tax benefit — end of year $ 322.9 $ 391.1 $ 92.1

The Company believes that it is reasonably possible that the amount of unrecognized tax benefits will decrease in the next twelve months by approximately $ 80.0 million, involving international and state audits and settlements.

The Company believes that it is reasonably possible that the amount of unrecognized tax benefits will decrease in the next twelve months by approximately $ 55.0 million, involving international and state audits and settlements and expiring statutes of limitations.

The Company does not anticipate significant increases to the reserve within the next twelve months.

Share-Based Incentive Plan

Prior to the Distribution, Viatris adopted and Pfizer, in the capacity as Viatris’ sole stockholder at such time approved the Viatris Inc.

2020 Stock Incentive Plan (the “Plan”) which became effective as of the Distribution.

In connection with the Combination, as of November 16, 2020, the Company assumed the Mylan N.V.

Prior to the Distribution, Viatris adopted and Pfizer, in the capacity as Viatris’ sole stockholder at such time, approved the Plan (the Viatris Inc.

2020 Stock Incentive Plan) which became effective as of the Distribution.

In connection with the Combination, as of November 16, 2020, the Company assumed the 2003 LTIP ( Mylan N.V.

Amended and Restated 2003 Long-Term Incentive Plan) , which had previously been approved by Mylan shareholders.

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Stock option awards are granted with an exercise price equal to the fair market value of the shares underlying the stock options at the date of the grant, generally become exercisable over periods ranging from three to four years , and generally expire in ten years .

The following table summarizes stock option and SAR (together, “stock awards”) activity under the Plan and 2003 LTIP:

The following table summarizes stock awards (stock options and SARs) activity under the Plan and 2003 LTIP:

Number of Shares

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Outstanding at December 31, 2020 6,711,731 $ 35.36

Granted 814,351 17.37

Exercised ( 27,615 ) 21.13

Forfeited ( 1,135,241 ) 26.39

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As of December 31, 2021, stock awards outstanding, stock awards vested and expected to vest and stock awards exercisable had average remaining contractual terms of 4.6 years, 4.6 years and 4.2 years, respectively.

Also, at December 31, 2020, stock awards outstanding, stock awards vested and expected to vest and stock awards exercisable had aggregate intrinsic values of $ 1.1 million, $ 1.0 million and $ 0.0 million, respectively.

A summary of the status of the Company’s nonvested restricted stock and restricted stock unit awards, including PSUs (collectively, “restricted stock awards”), as of December 31, 2019 and the changes during the year ended December 31, 2020 are presented below:

Also, at December 31, 2021, stock awards outstanding, stock awards vested and expected to vest and stock awards exercisable had no aggregate intrinsic value.

A summary of the status of the Company’s nonvested restricted stock awards (restricted stock and restricted stock unit awards, including PSUs), as of December 31, 2020 and the changes during the year ended December 31, 2021 are presented below:

Number of Restricted

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Of the 9,850,443 restricted stock awards granted during the year ended December 31, 2021, 6,057,602 vest ratably in three years or less and are not subject to market or performance conditions.

Of the remaining restricted stock awards granted, 3,792,064 are not subject to market conditions and will cliff vest within a three year period, and 1,600,000 are subject to market or performance conditions and will cliff vest in five years or less.

Of the remaining restricted stock awards granted, 587,025 are not subject to market conditions and will cliff vest within a three -year period, and 3,205,816 are subject to market or performance conditions and will cliff vest in three years or less.

As of December 31, 2021, the Company had $ 143.1 million of total unrecognized compensation expense, net of estimated forfeitures, related to all of its stock-based awards, which we expect to recognize over the remaining weighted average vesting period of 1.7 years.

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The expected lives of the grants are derived from historical and other factors.

The assumptions used for options granted under the Plan and 2003 LTIP are as follows:

There were no options granted during the year ended December 31, 2021.

The assumptions used for options granted under the Plan and 2003 LTIP during the years ended December 31, 2020 and 2019, respectively, are as follows:

Year Ended December 31,

2020 2019 2018

Volatility 46.7 % 38.1 %

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Weighted average grant date fair value per option $ 8.07 $ 11.03

In February 2014, Mylan’s Compensation Committee and the independent members of the Mylan Board of Directors adopted the 2014 Program.

Under the 2014 Program, certain key employees received a one-time, performance-based incentive award either in the form of a grant of SARs or PSUs (the “Awards”).

The initial Awards were granted in February 2014 and contained a five -year cliff-vesting feature based on the achievement of various performance targets, external market conditions and the employee’s continued services.

Additional Awards were granted in 2016 and 2017, subject to the same performance condition.

The performance condition was not achieved by December 31, 2018 and approximately 2.6 million Awards outstanding under the 2014 Program were canceled during 2019, and approximately 1.1 million shares of restricted stock were canceled and returned to treasury stock during 2019.

There was no impact to share-based compensation expense during the year ended December 31, 2020 as all of the cumulative expense of approximately $ 70.6 million related to the Awards was reversed during the year ended December 31, 2018.

Employee Benefit Plans

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Upjohn is also the sponsor of one postretirement medical plan in Puerto Rico.

As part of the acquisition accounting, the Company has recorded the fair value of these plans using assumptions and accounting policies consistent with those historically utilized by Mylan.

As part of the acquisition accounting, the Company has recorded the fair value of these plans.

Upon completion of the Combination, the excess of projected benefit obligation over the plan assets was recognized as a liability and any existing unrecognized actuarial gains or losses and unrecognized service costs or benefits were eliminated in purchase accounting.

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(In millions) 2021 2020 2021 2020

Unrecognized actuarial loss $ 33.9 $ 20.6 $ 5.7 $ 4.8

Unrecognized prior service (credit) cost ( 1.4 ) ( 1.3 ) 0.6 0.7

Unrecognized actuarial (gain) loss $ ( 59.9 ) $ 33.9 $ 21.7 $ 5.7

Unrecognized prior service cost (credit) 6.6 ( 1.4 ) ( 3.7 ) 0.6

Total $ ( 53.3 ) $ 32.5 $ 18.0 $ 6.3

Of the December 31, 2020 amount, the Company expects to recognize approximately $ 1.6 million of unrecognized actuarial losses and $0.6 million of unrecognized prior service costs in net periodic benefit credits during 2021.

The unrecognized net actuarial losses exceeded 10 % of the higher of the market value of plan assets or the projected benefit obligation at the beginning of the year for certain of the plans, therefore, amortization of such excess has been included in net periodic benefit costs for pension and other postretirement benefits in each of the last three years.

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(In millions) Pension Benefits Other Postretirement Benefits

Unrecognized actuarial loss $ 11.1 $ 1.2

Unrecognized actuarial (gain) loss $ ( 102.2 ) $ 16.2

Amortization of actuarial gain/(loss) 7.6 ( 0.2 )

Unrecognized prior service costs — —

Unrecognized prior service credit (cost) 8.0 ( 4.3 )

Amortization of prior service costs ( 0.5 ) —

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Amortization of prior service costs 0.9 — 0.9 — — —

Recognized net actuarial (gains) losses 0.4 ( 0.8 ) ( 0.1 ) 0.3 0.2 0.2

Recognized net actuarial losses (gains) 1.3 0.4 ( 0.8 ) 0.2 0.3 0.2

Net periodic benefit cost $ ( 10.2 ) $ 18.6 $ 22.0 $ 6.2 $ 2.9 $ 5.5

During the year ended December 31, 2021, the Company recognized a settlement gain as a result of cash payments from lump sum elections related to the U.S.

and Puerto Rico pension plans.

Change in Projected Benefit Obligation, Change in Plan Assets and Funded Status

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Plan settlements and terminations ( 128.6 ) ( 23.1 ) ( 4.3 ) ( 0.2 )

Actuarial losses (gains) 37.2 57.3 1.1 7.1

Actuarial (gains) losses ( 26.1 ) 37.2 16.2 1.1

Benefits paid ( 52.8 ) ( 24.6 ) ( 20.7 ) ( 1.6 )

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Benefits paid ( 52.8 ) ( 24.6 ) ( 20.7 ) ( 1.6 )

Other — ( 1.9 ) — —

Impact of foreign currency translation ( 45.1 ) 21.3 — —

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The accumulated benefit obligation is the actuarial present value of benefits attributable to employee service rendered to date, but does not include the effects of estimated future pay increases.

The accumulated benefit obligation for the Company’s pension plans was $ 2.04 billion and $ 636.3 million at December 31, 2020 and 2019, respectively.

The accumulated benefit obligation for the Company’s pension plans was $ 1.86 billion and $ 2.04 billion at December 31, 2021 and 2020, respectively.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with an accumulated benefit obligation in excess of the fair value of plan assets at December 31, 2021 and 2020 were as follows:

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and Puerto Rico, as well as certain employees in a number of countries outside the U.S.

The Company’s domestic defined contribution plans consist primarily of a 401(k) retirement plan with a profit sharing component for non-union represented employees (the “Profit Sharing 401(k) Plan”) and a 401(k) retirement plan for union-represented employees.

The Company’s domestic defined contribution plans consist primarily of a Profit Sharing 401(k) Plan and a 401(k) retirement plan for union-represented employees.

Profit sharing contributions are made at the discretion of the Board of Directors.

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Obligations for contributions to defined contribution plans are recognized as expense in the consolidated statements of operations when they are earned.

The Company maintains a 401(k) Restoration Plan (the “Restoration Plan”), which permits employees who earn compensation in excess of the limits imposed by Section 401(a)(17) of the Code to (i) defer a portion of base salary and bonus

compensation, (ii) be credited with a Company matching contribution in respect of deferrals under the Restoration Plan, and (iii) be credited with Company non-elective contributions (to the extent so made by the Company), in each case, to the extent that participants otherwise would be able to defer or be credited with such amounts, as applicable, under the Profit Sharing 401(k) Plan if not for the limits on contributions and deferrals imposed by the Code.

The Company maintains a 401(k) Restoration Plan, which permits employees who earn compensation in excess of the limits imposed by Section 401(a)(17) of the Code to (i) defer a portion of base salary and bonus compensation, (ii) be credited with a Company matching contribution in respect of deferrals under the Restoration Plan, and (iii) be credited with Company non-elective contributions (to the extent so made by the Company), in each case, to the extent that participants otherwise would be able to defer or be credited with such amounts, as applicable, under the Profit Sharing 401(k) Plan if not for the limits on contributions and deferrals imposed by the Code.

The Company maintains an Income Deferral Plan, which permits certain management or highly compensated employees who are designated by the plan administrator to participate in the Income Deferral Plan to elect to defer up to 50 % of base salary and up to 100 % of bonus compensation, in each case, in addition to any amounts that may be deferred by such participants under the Profit Sharing 401(k) Plan and the Restoration Plan.

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The withdrawal liability was approximately $ 5.5 million and $ 8.9 million at December 31, 2021 and 2020, respectively.

The Employee Identification Number for the PACE Plan is 11-6166763.

The Employer Identification Number for the PACE Plan is 11-6166763.

Seg ment Information

Viatris reports segment information on the basis of markets and geography.

Prior year amounts have been recasted to reflect this segment structure.

We have also revised our measure of segment profitability.

This approach reflects the Company’s focus on bringing its broad and diversified portfolio of branded, complex generics and biosimilars, and generic products to people in markets everywhere.

Viatris has four reportable segments:

Developed Markets, Greater China, JANZ, and Emerging Markets.

The Company reports segment information on the basis of markets and geography, which reflects its focus on bringing its broad and diversified portfolio of branded, complex generics and biosimilars, and generic products to people in markets everywhere.

Our Developed Markets segment comprises our operations primarily in North America and Europe.

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Our JANZ segment reflects our operations in Japan, Australia and New Zealand.

Our Emerging Markets segment encompasses our presence in more than 125 countries with developing markets and emerging economies including in Asia, Africa, Eastern Europe, Latin America and the Middle East as well as the Company’s ARV franchise.

The Company’s chief operating decision maker is the Chief Executive Officer, who evaluates the performance of its segments based on total revenues and segment profitability.

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United States $ 4,176.4 $ 3,746.1 $ 3,965.9

India 1,155.4 1,171.1 1,164.8

France 1,070.8 1,047.6 1,092.7

No other country’s net sales represent more than 10% of consolidated net sales for the years ended December 31, 2020, 2019 and 2018, respectively.

China 1,981.5 216.1 171.1

No other country’s net sales represents more than 10% of consolidated net sales.

The Company has entered into employment and other agreements with certain executives and other employees that provide for compensation, retirement and certain other benefits.

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In conjunction with the Combination, Viatris entered into a TSA with Pfizer pursuant to which each party will provide certain limited transition services to the other party generally for an initial period of 24 months from closing date.

In addition to

the monthly service fees under the TSA, Viatris has agreed to reimburse Pfizer for fifty percent of the costs, up to the first $ 380 million incurred, to establish and wind down the TSA services.

In addition to the monthly service fees under the TSA, Viatris has agreed to reimburse Pfizer for fifty percent of the costs, up to the first $ 380 million incurred, to establish and wind down the TSA services.

Viatris will be required to fully reimburse Pfizer for total costs in excess of $ 380 million.

Through the year ended December 31, 2020, the Company has incurred $ 53.1 million related to this provision of the TSA.

In conjunction with the Combination, during the year ended December 31, 2020, the Company has accrued approximately $ 26.9 million due to change in control clauses in employment arrangements for certain former Mylan employees.

It is anticipated that these amounts will be paid during 2021.

In addition, the Company entered into retention agreements with certain key employees, whereby they agree to continue to provide service to the Company for a period of time after the Combination.

The Company will record the expense for these agreement over the applicable service periods.

During the years ended December 31, 2021 and 2020, the Company incurred $ 30.4 million and $ 53.1 million, respectively, related to this provision of the TSA.

In conjunction with the Combination, during the year ended December 31, 2020, the Company accrued approximately $ 26.9 million due to change in control clauses in employment arrangements for certain former Mylan employees, which was paid during 2021.

In addition, the Company entered into retention agreements with certain key employees, whereby they agreed to continue to provide service to the Company for a period of time after the Combination.

The Company is recording the expense for these agreements over the applicable service periods.

In the normal course of business, Viatris periodically enters into employment, legal settlement and other agreements which incorporate indemnification provisions.

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2020 Restructuring Program

During the fourth quarter of 2020, Viatris announced a significant global restructuring program in order to achieve synergies of $ 1 billion and ensure that the organization is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers, and other stakeholders.

During the fourth quarter of 2020, Viatris announced a significant global restructuring program in order to achieve synergies and ensure that the organization is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers, and other stakeholders.

Viatris’ restructuring initiative incorporates and expands on the restructuring program announced by Mylan N.V.

earlier in 2020 as part of its business transformation efforts.

The company expects to optimize its commercial capabilities and enabling functions, and close, downsize or divest up to 15 manufacturing facilities globally that are deemed to be no longer viable either due to surplus capacity, challenging market dynamics or a shift in its product portfolio toward more complex products.

As a result, Viatris expects that up to 20 % of its global workforce of approximately 45,000 may be impacted upon completion of the restructuring initiative.

For the committed restructuring actions, the Company expects to incur total pre-tax charges ranging between $ 1.1 billion and $ 1.4 billion.

Such charges are expected to include between $ 350 million and $ 450 million of non-cash charges mainly related to accelerated depreciation and asset impairment charges, including inventory write-offs.

The remaining estimated cash costs of between $ 750 million and $ 950 million are expected to be primarily related to severance and employee benefits expense, as well as other costs, including those related to contract terminations and decommissioning costs.

As part of the restructuring, the Company is optimizing its commercial capabilities and enabling functions, and closing, downsizing or divesting certain manufacturing facilities globally that are deemed to be no longer viable either due to surplus capacity, challenging market dynamics or a shift in its product portfolio toward more complex products.

For the committed restructuring actions, the Company expects to incur total pre-tax charges of up to approximately $ 1.4 billion.

Such charges are expected to include up to approximately $ 450 million of non-cash charges mainly related to accelerated depreciation and asset impairment charges, including inventory write-offs.

The remaining estimated cash costs of up to approximately $ 950 million are expected to be primarily related to severance and employee benefits expense, as well as other costs, including those related to contract terminations and other plant disposal costs.

In addition, management believes the potential annual savings related to these committed restructuring activities to be up to approximately $ 900 million once fully implemented, with most of these savings expected to improve operating cash flow.

The following table summarizes the restructuring charges and the reserve activity for the 2020 restructuring program:

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Balance at December 31, 2020 $ 262.6 $ 4.8 $ 267.4

396.1 496.1 892.2

Reimbursable restructuring charges 26.4 — 26.4

Cash payment ( 385.5 ) ( 151.7 ) ( 537.2 )

Utilization — ( 345.0 ) ( 345.0 )

Foreign currency translation ( 7.0 ) ( 0.1 ) ( 7.1 )

Balance at December 31, 2021 $ 292.6 $ 4.1 $ 296.7

As part of the Combination, the Company acquired reserve balances related to restructuring activities initiated by the Upjohn Business prior to the Combination, primarily related to accrued severance.

2016 Restructuring Program

Mylan previously announced a restructuring program representing a series of actions in certain locations that are anticipated to further streamline its operations globally.

We have incurred total restructuring related costs of approximately $ 733.0 million through December 31, 2020.

The 2016 Restructuring Program is substantially complete at December 31, 2020.

Mylan previously announced a restructuring program representing a series of actions in certain locations to further streamline its operations globally.

We incurred total restructuring related costs of approximately $ 733.0 million through December 31, 2020.

The 2016 Restructuring Program was substantially completed at December 31, 2020.

In April 2018, the FDA completed an inspection at Mylan’s plant in Morgantown, West Virginia and made observations through a Form 483.

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On December 11, 2020, the Company announced that it expects the Morgantown plant to be closed or divested as part of the 2020 Restructuring Program.

The Morgantown plant was closed during the third quarter of 2021.

The following table summarizes the restructuring charges and the reserve activity for the 2016 restructuring program from December 31, 2018 to December 31, 2020:

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$ 60.8 $ 11.8 $ 72.6

Charges 16.6 88.0 104.6

16.6 88.0 $ 104.6

Cash payment ( 48.9 ) ( 10.5 ) $ ( 59.4 )

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Balance at December 31, 2020:

$ 20.0 $ 2.8 $ 22.8

(1) For the year ended December 31, 2021, total restructuring charges for the 2020 Restructuring Program, in Developed Markets, Greater China, JANZ, Emerging Markets, and Corporate/Other were approximately $ 623.8 million, $ 5.8 million, $ 138.1 million, $ 94.1 million, and $ 30.4 million, respectively.

(2) For the year ended December 31, 2020, total restructuring charges, for both programs, in Developed Markets, Greater China, JANZ, and Emerging Markets were approximately $ 292.1 million, $ 18.4 million, $ 2.9 million, and $ 8.4 million, respectively.

For the year ended December 31, 2019, total restructuring charges in Developed Markets and JANZ were approximately $ 100.4 million and $ 4.2 million respectively.

At December 31, 2020 and 2019, accrued liabilities for restructuring and other cost reduction programs were primarily included in other current liabilities in the consolidated balance sheets.

Collaboration and Licensing Agreements

We periodically enter into collaboration and licensing agreements with other pharmaceutical companies for the development, manufacture, marketing and/or sale of pharmaceutical products.

Our significant collaboration agreements are primarily focused on the development, manufacturing, supply and commercialization of multiple, high-value generic biologic compounds, insulin analog products and respiratory products, among other complex products.

(3) For the year ended December 31, 2019, total restructuring charges for the 2016 Restructuring Program in Developed Markets and JANZ were approximately $ 100.4 million and $ 4.2 million, respectively.

At December 31, 2021 and 2020, accrued liabilities for restructuring and other cost reduction programs were primarily included in other current liabilities and other long-term obligations in the consolidated balance sheets.

Licensing and Other Partner Agreements

We periodically enter into licensing and other partner agreements with other pharmaceutical companies for the development, manufacture, marketing and/or sale of pharmaceutical products.

Our significant licensing and other partner agreements are primarily focused on the development, manufacturing, supply and commercialization of multiple, high-value generic biologic compounds, insulin analog products and respiratory products, among other complex products.

Under these agreements, we have future potential milestone payments and co-development expenses payable to third parties as part of our licensing, development and co-development programs.

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These sales-based milestones or royalty or profit share obligations may be significant depending upon the level of commercial sales for each product.

Revance Collaboration Agreement

On February 28, 2018, the Company and Revance entered into the Revance Collaboration Agreement pursuant to which the Company and Revance is collaborating exclusively, on a world-wide basis (excluding Japan), to develop, manufacture and commercialize a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX®.

On August 22, 2019, the Company and Revance entered into an amendment (the “Amendment”) to the Revance Collaboration Agreement, pursuant to which Revance had agreed to extend the period of time for the Company to decide whether to continue the development and commercialization of a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX® beyond the initial development plan to prepare for and conduct the BIAM with

In accordance with the Amendment, the Company was required to notify Revance of its decision on or before the later of (i) April 30, 2020 or (ii) thirty calendar days from the date that Revance provides Mylan with certain deliverables.

On June 1, 2020, the Company and Revance announced a decision to continue the development program for a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX®.

As a result, during the year ended December 31, 2020, the Company recorded $30 million of R&D expense for a milestone payment that was due upon the decision to continue the program.

On January 8, 2016, the Company entered into an agreement with Momenta to develop, manufacture and commercialize up to six of Momenta’s current biosimilar candidates, including Momenta’s biosimilar candidate, ORENCIA® (abatacept) (“ORENCIA®”).

Mylan paid an up-front cash payment of $ 45 million to Momenta.

Under the terms of the agreement, the Company and Momenta are jointly responsible for product development and equally share in the costs and profits of the products with Mylan leading the worldwide commercialization efforts.

Under the terms of the agreement, Momenta was eligible to receive additional contingent milestone payments for the development of biosimilar candidates.

On February 28, 2018, the Company and Revance entered into an agreement with Revance pursuant to which the Company and Revance are collaborating exclusively, on a world-wide basis (excluding Japan), to develop, manufacture and commercialize a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX®.

Under the agreement, the Company is primarily responsible for (a) clinical development activities outside of North America (excluding Japan) (b) regulatory activities, and (c) commercialization for any approved product.

Revance is solely responsible for an initial portion of non-clinical development costs.

The remaining portion of any non-clinical development costs and clinical development costs for obtaining approval in the U.S.

and Europe is being shared equally between the parties, and the Company is responsible for all other clinical development costs and commercialization expenses.

During the year ended December 31, 2020, the Company recorded $ 30 million of R&D expense for a milestone payment that was due upon the decision to continue the development program.

On January 8, 2016, the Company entered into an agreement with Momenta to develop, manufacture and commercialize up to six of Momenta’s biosimilar candidates.

Under the terms of the agreement, the Company and Momenta were jointly responsible for product development and equally shared in the costs and profits of the products with Viatris leading the worldwide commercialization efforts.

In January 2019, the parties agreed to the termination of all collaboration activities, except for the continued development of M710, a proposed biosimilar to EYLEA®.

The Company remains committed to invest strategically in biosimilar programs through the evaluation of regulatory data and market dynamics.

The Company does not anticipate making any additional continuation payments to Momenta.

In accordance with ASC 730 , Research and Development and based upon the cost sharing provisions of the agreement, the Company accounted for the contingent milestone payments related to the Momenta collaboration as non-refundable advance payments for services to be used in future R&D activities, which were required to be capitalized until the related services have been performed.

More specifically, as costs were incurred within the scope of the collaboration, the Company recorded its share of the costs as R&D expense.

In addition to the upfront cash payment, during the years ended December 31, 2020, 2019, and 2018, the Company incurred R&D expense related to this collaboration of approximately $ 18.2 million, $ 14.1 million, and $ 13.4 million, respectively.

To the extent the contingent milestone payments made by the Company exceeded the liability incurred, a prepaid asset was reflected in the Company’s consolidated balance sheets.

To the extent the contingent milestone payments made by the Company were less than the expense incurred, the difference between the payment and the expense was recorded as a liability in the Company’s consolidated balance sheets.

At December 31, 2020, there was no significant recorded prepaid asset or accrued liability in the consolidated balance sheet.

On January 30, 2015, the Company entered into a development and commercialization collaboration with Theravance Biopharma, for the development and, subject to FDA approval, commercialization of Revefenacin (“TD-4208”).

Under the terms of the agreement, Mylan and Theravance Biopharma are co-developing nebulized TD-4208 for COPD and other respiratory diseases.

Theravance Biopharma led the U.S.

registrational development program and Mylan was responsible for the reimbursement of Theravance Biopharma’s development costs for that program up until the approval of the first NDA.

On November 9, 2018, Mylan announced that the FDA approved the NDA for YUPELRI TM (revefenacin) inhalation solution for the maintenance treatment of patients with COPD.

In October 2020, Momenta was acquired by Johnson & Johnson.

The parties continue to collaborate on the development of M710.

Theravance Biopharma

On January 30, 2015, the Company entered into a development and commercialization collaboration with Theravance Biopharma, for revefenacin.

On November 9, 2018, the Company announced that the FDA approved the NDA for YUPELRI® (revefenacin) inhalation solution for the maintenance treatment of patients with COPD.

YUPELRI®, a LAMA, is the first and only once-daily, nebulized bronchodilator approved for the treatment of COPD in the U.S.

The commercial launch of YUPELRI occurred in the fourth quarter of 2018.

Mylan is responsible for commercial manufacturing and commercialization.

Viatris is responsible for commercial manufacturing and commercialization.

Theravance Biopharma is co-promoting the product in the hospital channel under a profit-sharing arrangement.

On June 14, 2019, the Company and Theravance Biopharma entered into an amended development and commercialization agreement.

Under terms of the amended agreement, Theravance Biopharma has granted Mylan exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include Hong Kong SAR, the Macau SAR and Taiwan.

In 2019, the Company acquired exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include Hong Kong SAR, the Macau SAR and Taiwan.

Theravance Biopharma received an upfront payment of $ 18.5 million and will be eligible to receive additional potential development and sales milestones together with tiered royalties on net sales of nebulized revefenacin, if approved.

Mylan will be responsible for all aspects of development and commercialization in the partnered regions, including pre- and post-launch activities and product registration and all associated costs.

The upfront payment was expensed during the year ended December 31, 2019.

Viatris is responsible for all aspects of development and commercialization in the partnered regions, including pre- and post-launch activities and product registration and all associated costs.

The upfront payment was recorded as R&D expense during the year ended December 31, 2019.

Under the terms of the agreements, Theravance Biopharma is eligible to receive potential development and sales milestone payments totaling approximately $ 293 million in the aggregate.

As of December 31, 2020, Mylan has paid a total of $50.0 million in milestone payments to Theravance Biopharma.

As of December 31, 2021, the Company has paid a total of $ 50.0 million in milestone payments to Theravance Biopharma.

The Company has entered into exclusive collaborations with Biocon on the development, manufacturing, supply and commercialization of multiple, high value biosimilar compounds and three insulin analog products for the global marketplace.

Under the agreements with Biocon, Mylan has exclusive commercialization rights for the products under the collaborations in the U.S., Canada, Japan, Australia, New Zealand and in the EU and European Free Trade Association countries.

In December 2017, the FDA approved Mylan's Ogivri™ (trastuzumab-dkst), a biosimilar to Herceptin® (trastuzumab).

Under the agreements with Biocon, the Company has exclusive commercialization rights for the products under the collaborations in the U.S., Canada, Japan, Australia, New Zealand and in the EU and European Free Trade Association countries.

In December 2017, the FDA approved Ogivri ® (trastuzumab-dkst), a biosimilar to Herceptin® (trastuzumab).

Ogivri ® has been approved for all indications included in the label of the reference product, Herceptin, including for the treatment of HER2-overexpressing breast cancer and metastatic stomach cancer (gastric or gastroesophageal junction adenocarcinoma).

Ogivri was the first FDA-approved biosimilar to Herceptin and was the first biosimilar from Mylan and Biocon's joint portfolio approved in the U.S.

In December 2018, the Company received final approval from the Commission to market Ogivri in all 28 EU member states and the European Economic Area.

On December 2, 2019, Mylan and Biocon announced the U.S.

launch of Ogivri™ (trastuzumab-dkst), a biosimilar to Herceptin ® (trastuzumab).

On June 4, 2018, Mylan and Biocon announced that the FDA approved Mylan's Fulphila™ (pegfilgrastim-jmdb), a biosimilar to Neulasta ® (pegfilgrastim).

On December 2, 2019, the Company and Biocon announced the U.S.

launch of Ogivri ®

In June 2018, the Company and Biocon announced that the FDA approved Fulphila ® (pegfilgrastim-jmdb), a biosimilar to Neulasta ® (pegfilgrastim).

Fulphila ® has been approved to reduce the duration of febrile neutropenia (fever or other signs of infection with a low count of neutrophils, a type of white blood cells) in patients treated with chemotherapy in certain types of cancer.

The commercial launch of Fulphila ® occurred in 2018.

On August 31, 2020, Mylan and Biocon announced the U.S.

In August, 2020, the Company and Biocon announced the U.S.

launch of SEMGLEE® (insulin glargine injection) in vial and pre-filled pen presentations, approved to help control high blood sugar in adult and pediatric patients with type 1 diabetes and adults with type 2 diabetes.

On July 28, 2021, Viatris and Biocon announced that the FDA had approved SEMGLEE® (insulin glargine-yfgn) injection as the first interchangeable biosimilar product under the 351(k) regulatory pathway.

The interchangeable SEMGLEE® product, which allows substitution of SEMGLEE® for the reference product, Lantus®.

The commercial launch occurred in the fourth quarter of 2021.

The Company has exclusivity for 12 months from launch before the FDA can approve another biosimilar interchangeable to Lantus®.

In addition to profit sharing payments to Biocon for the commercialized products, the Company continues to provide development funding related to this collaboration.

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On February 22, 2018, the Company entered into a collaboration license and distribution agreement with FKB for the distribution of Hulio®, a biosimilar to AbbVie's Humira® (adalimumab).

Under the agreement, Mylan has exclusive commercialization rights for the product in the EU and the European Economic Area countries and FKB is responsible for development, manufacturing and supply of the product.

Under the agreement, the Company has exclusive commercialization rights for the product in the EU and the European Economic Area countries and FKB is responsible for development, manufacturing and supply of the product.

On September 20, 2018, the Company received final approval from the Commission to market Hulio® for all adalimumab indications in all 28 EU member states and the European Economic Area.

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On February 27, 2019, the Company amended its agreements with FKB for the commercialization of Hulio®.

Under the amended agreements, Mylan received the exclusive global commercialization rights for Hulio™ and FKB received an additional upfront payment of $ 33.0 million, of which $ 23.3 million was recorded as a component of R&D expense during the year ended December 31, 2019.

Under the amended agreements, the Company received the exclusive global commercialization rights for Hulio® and FKB received an additional upfront payment of $ 33.0 million, of which $ 23.3 million was recorded as a component of R&D expense during the year ended December 31, 2019.

In addition, FKB is eligible to receive additional commercial milestones and royalty payments under the amended agreements.

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The Company expects to provide funding for select programs through upfront payments and development milestones and the Company will have the right and obligation to acquire the products at fair market value upon regulatory approval or other regulatory trigger dates.

The Company made an initial upfront payment of $ 10.0 million which has been accounted for as a R&D expense during the year ended December 31, 2019.

The Company made an initial upfront payment of $ 10.0 million which was accounted for as R&D expense during the year ended December 31, 2019.

Additionally, under the terms of the agreement, the Company acquired $ 25.0 million worth of equity shares in the privately owned research company during the year ended December 31, 2020.

The investment is accounted for in accordance with ASC 321, Investments - Equity Securities .

During the year ended December 31, 2021, the Company entered into an agreement with this entity for the future development of an ophthalmic product.

The agreement included an upfront payment of $ 40.0 million which was accounted for as R&D expense.

We are actively pursuing, and are currently involved in, joint projects related to the development, distribution and marketing of both generic and branded products.

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While these arrangements help to reduce the financial risk for unsuccessful projects, fulfillment of specified milestones or the occurrence of other obligations may result in fluctuations in cash flows and R&D expense.

Biocon Biologics Agreement

On February 28, 2022, the Company entered into an agreement to contribute its biosimilars business to Biocon Biologics.

Under the terms of the Biocon Agreement, at closing Viatris will receive an up-front cash payment of $ 2.0 billion, $ 1.0 billion of convertible preferred equity and up to $ 335 million as additional cash payments that are expected to be paid in 2024.

Viatris will own a stake of at least 12.9 % of Biocon Biologics, on a fully-diluted basis, and will have certain priority rights with respect to certain liquidity events.

The companies will also enter into a two-year transition services agreement, subject to extension in certain circumstances, during which time Viatris will provide certain commercial and administrative services for an applicable service fee.

The transaction is expected to close in the second half of 2022 and is subject to customary closing conditions (including regulatory approvals).

The Company is involved in various disputes, governmental and/or regulatory inquiries, investigations and proceedings, tax proceedings and litigation matters, both in the U.S.

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EpiPen® Auto-Injector Litigation

The Company has been named as a defendant in putative indirect purchaser class actions relating to the pricing and/or marketing of the EpiPen® Auto-Injector.

The plaintiffs in these cases assert violations of various federal and state antitrust and consumer protection laws, RICO as well as common law claims.

Plaintiffs’ claims include purported challenges to the prices charged for the EpiPen® Auto-Injector and/or the marketing of the product in packages containing two auto-injectors, as well as allegedly anti-competitive conduct.

A former Mylan N.V.

officer and other non-Viatris affiliated companies are also defendants in some of the class actions.

The Company and a former Mylan N.V.

officer (collectively the “Mylan Defendants”) have been named as defendants in indirect purchaser class actions relating to the pricing and/or marketing of the EpiPen® Auto-Injector.

The plaintiffs in these cases asserted violations of various federal and state antitrust and consumer protection laws, RICO as well as common law claims.

Plaintiffs’ seek monetary damages, attorneys’ fees and costs.

These lawsuits were filed in the various federal and state courts and have either been dismissed or transferred into a MDL in the U.S.

District Court for the District of Kansas and have been consolidated.

The District Court certified an antitrust class that applies to 17 states and a RICO class.

Defendants’ motion for summary judgment as to the remaining claims asserted by plaintiffs is pending.

These lawsuits were filed in various federal and state courts and have either been dismissed or transferred into a MDL in the U.S.

District Court for the District of Kansas and have been consolidated or centralized.

The District Court initially certified an antitrust class that applied to 17 states and a RICO class.

On June 23, 2021, the Court granted – in substantial part – the Mylan Defendants’ motion for summary judgment by dismissing certain antitrust claims and the RICO claims, which included RICO claims asserted against the former Mylan N.V.

Plaintiffs’ motions for reconsideration and to certify an interlocutory appeal of the summary judgment decision with respect to the RICO claims were denied.

On July 8, 2021, the Mylan Defendants filed a motion to decertify the class action with respect to the remaining antitrust theory, which concerns a patent settlement between Pfizer and Teva and other alleged actions regarding the launch of Teva’s generic epinephrine auto-injector.

The motion to decertify was granted in part, decertifying portions of the class action asserting claims under the laws of certain states and dismissing one named plaintiff, and was denied in all other respects.

The Mylan Defendants had filed a motion for reconsideration of this decision, which was pending.

In February 2022, the parties reached an agreement to fully resolve this matter for $ 264 million.

The settlement is subject to court approval and contains an express provision disclaiming and denying any wrongdoing or liability by the Mylan Defendants.

During the year ended December 31, 2021, the Company recognized an accrual of approximately $ 264.0 million related to this litigation.

On February 14, 2020, the Company, together with other non-Viatris affiliated companies, were named as defendants in a putative direct purchaser class action filed in the U.S.

District Court for the District of Kansas relating to the pricing and/or marketing of the EpiPen® Auto-Injector.

The plaintiff in this case asserts federal antitrust claims which are based on allegations that are similar to those in the putative indirect purchaser class actions discussed above.

On November 3, 2020, the plaintiff filed a second amended complaint that is substantially similar to the allegations in the amended complaint.

On September 21, 2021, after Plaintiffs’ then operative complaint was dismissed with an option to file a limited amended complaint, Plaintiffs filed an amended complaint asserting federal antitrust claims which are based on allegations that are similar to those in the putative indirect purchaser class actions discussed above.

Plaintiffs’ seek monetary damages, declaratory relief, attorneys’ fees and costs.

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Sanofi’s appeal is pending.

The Company has a total accrual of approximately $ 10.0 million related to this matter at December 31, 2020 which is included in other current liabilities in the condensed consolidated balance sheets.

The Company has a total accrual of approximately $ 274.0 million related to these matters at December 31, 2021, which is included in other current liabilities in the consolidated balance sheets.

Although it is reasonably possible that the Company may incur additional losses from these matters, any amount cannot be reasonably estimated at this time.

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Some of the lawsuits also name as defendants the Company’s President, including allegations against him with respect to a single drug product, and one of the Company’s sales employees, including allegations against him with respect to certain generic drugs.

The lawsuits have been consolidated in an MDL proceeding in the Eastern District of Pennsylvania (“EDPA”).

The vast majority of the lawsuits have been consolidated in an MDL proceeding in the Eastern District of Pennsylvania (“EDPA”).

Plaintiffs generally seek monetary damages, restitution, declaratory and injunctive relief, attorneys’ fees and costs.

The Court has ordered certain plaintiffs’ complaints regarding two single-drug product cases to proceed as bellwethers.

The Company is named in those plaintiffs’ complaints that regard one of the two individual drug products.

Attorneys General Litigation

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This lawsuit has been transferred to the aforementioned MDL proceeding in the EDPA.

On June 10, 2020, attorneys general of forty-six states, certain territories and the District of Columbia filed a new complaint in the United States District Court for the District of Connecticut against drug manufacturers, including the Company, and individual defendants (none from the Company), alleging anticompetitive conduct with respect to additional generic drugs.

The complaint seeks declaratory and injunctive relief, disgorgement, attorneys’ fees and costs, and certain states seek monetary damages, civil penalties, and restitution.

This lawsuit has been transferred to the aforementioned MDL proceeding in the EDPA.

On June 10, 2020, certain attorneys general filed a new complaint in the United States District Court for the District of Connecticut against drug manufacturers, including the Company, and individual defendants (none from the Company), alleging anticompetitive conduct with respect to additional generic drugs.

On September 9, 2021, the complaint was amended, adding an additional state as a plaintiff.

The operative complaint is brought by attorneys general of forty-seven states, certain territories and the District of Columbia.

The amended complaint seeks declaratory and injunctive relief, disgorgement, attorneys’ fees and costs, and certain states seek monetary damages, civil penalties, and restitution.

This lawsuit has been transferred to the aforementioned MDL proceeding in the EDPA and has been ordered to proceed as a bellwether.

Securities Related Litigation

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and Mylan Inc.

(collectively “Mylan”), certain of Mylan’s former directors and officers, and certain of the Company’s current directors and officers (collectively, for purposes of this paragraph, the “defendants”) in the SDNY on behalf of certain purchasers of securities of Mylan on the NASDAQ.

(collectively “Mylan”), certain of Mylan’s former directors and officers, and certain of the Company’s current directors and officers (collectively, for purposes of this paragraph, the “defendants”) in the United States District Court for the Southern District of New York (“SDNY”) on behalf of certain purchasers of securities of Mylan on the NASDAQ.

The complaints alleged that defendants made false or misleading statements and omissions of purportedly material fact, in violation of federal securities laws, in connection with disclosures relating to the classification of their EpiPen® Auto-Injector as a non-innovator drug for purposes of the Medicaid Drug Rebate Program.

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Plaintiffs seek damages and costs and expenses, including attorneys’ fees and expert costs.

A decision on Defendants’ motion for summary judgment seeking to dismiss the case in its entirety and Plaintiffs’ cross-motion for partial summary judgment as to portions of certain claims is pending.

On April 30, 2017, a similar lawsuit was filed in the Tel Aviv District Court (Economic Division) in Israel, which has been stayed pending a decision in the SDNY class action litigation.

On February 14, 2020, the Abu Dhabi Investment Authority filed a complaint against Mylan in the SDNY asserting allegations pertaining to EpiPen® Auto-Injector and certain generic drugs under the federal securities laws that overlap with those asserted in the third amended complaint identified above.

The Abu Dhabi Investment Authority’s complaint seeks monetary damages as well as the plaintiff’s fees and costs.

On February 26, 2019, MYL Litigation Recovery I LLC (“MYL Plaintiff”) (an assignee of entities that purportedly purchased stock of Mylan N.V.) filed an additional complaint in the SDNY against Mylan, certain of Mylan’s former officers and directors, and an officer of the Company asserting allegations pertaining to EpiPen® Auto-Injector under the federal securities laws that overlap in part with those asserted in the third amended complaint identified above.

MYL Plaintiff’s complaint seeks monetary damages as well as the plaintiff’s costs.

On May 6, 2020, MYL Plaintiff filed an amended complaint including additional allegations in connection with purportedly anticompetitive conduct with respect to EpiPen® Auto-Injector.

MYL Plaintiff subsequently filed a summons on October 30, 2020, naming Mylan, certain of Mylan’s former officers and directors, and certain of the Company’s current officers, directors, and employees in New York State Court, County of New York, claiming investment losses suffered as a result of purportedly false and misleading statements in connection with allegedly anticompetitive conduct concerning generic pharmaceuticals.

Plaintiff is seeking monetary and punitive damages, attorneys’ fees and costs.

The Abu Dhabi Investment Authority’s complaint seeks monetary damages as well as the plaintiff’s fees and costs.

The parties have resolved both matters filed by MYL Plaintiff and they have been dismissed with prejudice.

On June 26, 2020, a putative class action complaint was filed by the Public Employees Retirement System of Mississippi, which was subsequently amended on November 13, 2020, against Mylan N.V., certain of Mylan N.V.’s former directors and officers, and an officer and director of the Company (collectively for the purposes of this paragraph, the “defendants”) in the U.S.

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Plaintiffs seek compensatory damages, costs and expenses and attorneys’ fees.

On October 28, 2021, the Company and certain of its officers and directors were named as defendants in a putative class action lawsuit filed in the Court of Common Pleas of Allegheny County, Pennsylvania on behalf of former Mylan shareholders who received Company common stock in connection with the Combination.

A non-Viatris affiliated company and persons were also named as defendants.

The complaint alleges violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 for purportedly failing to disclose or misrepresenting material information in the registration statement and related prospectus issued in connection with the Combination.

Plaintiffs seek monetary damages, reasonable costs and expenses, and certain other equitable and injunctive relief.

The Company, along with other manufacturers, distributors, pharmacies, pharmacy benefit managers, and individual healthcare providers is a defendant in more than 1,000 cases in the United States and Canada filed by various plaintiffs, including counties, cities and other local governmental entities, asserting civil claims related to sales, marketing and/or distribution practices with respect to prescription opioid products.

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The Company paid approximately $ 21.7 million related to this matter during the fourth quarter of 2014.

The decision was affirmed

on appeal by the General Court of the EU and is now on appeal to the CJEU.

The decision was affirmed on appeal by the General Court of the EU and is now on appeal to the CJEU.

The Company has received a notice from an organization representing health insurers in the Netherlands stating an intention to commence follow-on litigation and asserting monetary damages.

On June 19, 2013, the Commission issued a decision finding that the Company as well as several other companies, had violated EU competition rules relating to the product Citalopram and fined the Company approximately € 7.8 million, jointly and severally with Merck KGaA.

The decision was affirmed on appeal by the General Court of the EU and is now on appeal to the CJEU.

applied and was granted permission to intervene in this proceeding.

The decision was affirmed on appeal by the General Court of the EU and the CJEU.

The Commission’s matter as to the Company is now closed.

The Company has received notices from European NHS and health insurers stating an intention to commence follow-on litigation and asserting monetary damages.

The NHS England and Wales has instituted litigation against all parties to the Commission’s decision, including the Company.

This litigation has been stayed pending the CJEU’s decision.

The Company has also sought indemnification from Merck KGaA with respect to the € 7.8 million portion of the fine for which Merck KGaA and the Company were held jointly and severally liable.

Merck KGaA has counterclaimed against the Company seeking the same indemnification.

The Company sought indemnification from Merck KGaA with respect to the € 7.8 million portion of the fine for which Merck KGaA and the Company were held jointly and severally liable.

Merck KGaA counterclaimed against the Company seeking the same indemnification.

In June 2018, the Frankfurt Regional Court issued a judgment ordering the Company to indemnify Merck KGaA with respect to the amount for which the parties were held jointly and severally liable.

The Company has appealed this decision.

The proceedings have been stayed pending the CJEU appeal decision.

The parties have resolved this matter.

The Company has accrued approximately € 11.4 million as of December 31, 2021 related to this matter.

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competition rules.

With respect to Merck KGaA and the Company, the CMA issued a penalty of approximately £ 5.8 million, for which Merck KGaA is liable for the entire amount;

and of that amount the Company is jointly and severally liable for approximately $ 2.7 million.

The matter is currently on appeal to the CAT.

In connection with the appeal, the CJEU ruled on certain questions of law referred to it by the CAT.

The CMA issued a penalty to Merck KGaA of approximately £ 5.8 million, for which the Company is jointly and severally liable for approximately £ 2.7 million.

On appeal, the Competition Appeals Tribunal affirmed the CMA’s decision but reduced the penalty to Merck KGaA to approximately £ 3.9 million, and reduced the amount for which the Company is jointly and severally liable to approximately £ 2.05 million.

The CMA’s matter as to the Company is now closed.

The Company has also received a notice from the NHS England and Wales stating an intention to commence follow-on litigation and asserting monetary damages.

The Company has accrued approximately £ 2.7 million and £ 10.1 million as of December 31, 2019 and December 31, 2020, respectively, related to this matter.

It is reasonably possible that we will incur additional losses above the amount accrued but we cannot estimate a range of such reasonably possible losses at this time.

The Company has accrued approximately £ 8.8 million as of December 31, 2021 related to this matter.

It is reasonably possible that the Company will incur additional losses above the amount accrued but we cannot estimate a range of such reasonably possible losses at this time.

There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts accrued.

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The Company, along with numerous other manufacturers, retailers, and others, are parties to litigation relating to alleged trace amounts of nitrosamine impurities in certain products, including valsartan and ranitidine.

The vast majority of these lawsuits in the United States are pending in two MDLs, namely an MDL pending in the United States District Court for the District of New Jersey concerning valsartan and an MDL pending in the United States District Court for the Southern District of Florida concerning raniditine.

The lawsuits against the Company in the MDLs include putative class actions seeking the refund of the purchase price and other economic and punitive damages allegedly sustained by consumers and end payors as well as individuals seeking compensatory and punitive damages for personal injuries allegedly caused by ingestion of the medications.

Similar lawsuits pertaining to valsartan have been filed in Canada and other countries.

Similar lawsuits pertaining to valsartan have been filed in other countries.

The Company has also received claims and inquiries related to these products, as well as requests to indemnify purchasers of the Company’s API and/ or finished dose forms of these products.

The original master complaints concerning ranitidine were dismissed on December 31, 2020.

The Company has not been named as a defendant in the amended master complaints, though it is still named in certain short form personal injury complaints.

The end-payor plaintiffs in the ranitidine matter have filed an appeal to the U.S.

The Company was not named as a defendant in the amended master complaints, though it was still named in certain short form personal injury complaints.

The end-payor plaintiffs and certain of the plaintiffs named in the short form personal injury complaints in the ranitidine matter have filed appeals to the U.S.

Court of Appeals for the Eleventh Circuit.

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On January 27, 2021, the California Court granted Pfizer’s motion to exclude the opinions of plaintiffs’ only general causation expert in connection with his opinions involving the three lowest doses of Lipitor (10, 20 and 40 mg).

The Company’s motion for summary judgment in connection with the 10, 20, and 40 mg plaintiffs was granted, resulting in their dismissal.

On November 3, 2021, the Court granted the Company’s motion seeking the dismissal of the remaining cases involving the highest dose of Lipitor (80 mg).

Since April 2016, an MDL has been pending in the U.S.

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Plaintiffs seek compensatory and punitive damages.

The cases are in various stages, from the initial pleading stage to discovery, and some at the bellwether case selection phase.

The parties have resolved this matter.

Intellectual Property

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On March 9, 2020, the District Court issued an opinion after trial finding all asserted claims of the ‘844 patent not infringed and invalid for lack of written description.

Sanofi’s appeal is pending.

On September 10, 2018, Mylan Pharmaceuticals Inc.

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On April 2, 2020 and May 29, 2020, the PTAB issued final written decisions in the IPR proceedings finding all challenged claims unpatentable except for two claims of the ‘008 patent for which Sanofi granted the Company a covenant not to sue as described above.

Sanofi’s appeal of all IPR decisions is pending.

On appeal, the Federal Circuit affirmed the PTAB’s decisions finding the challenged patents unpatentable, including the ‘844 patent, and dismissed Sanofi’s appeal of the District Court decision as moot.

On March 26, 2021, the PTAB issued a final written decision in an IPR proceeding in which MPI challenged an additional Sanofi device patent (U.S.

Patent Number RE47,614) and found all challenged claims unpatentable.

Sanofi’s appeal is pending.

On June 11, 2020, the FDA approved the SEMGLEE ® vial and pen products, which MPI began selling on August 31, 2020.

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After a trial involving only the ’514 patent on June 18, 2020, the District Court issued a judgment finding all claims of the ’514 patent invalid for lack of adequate written description.

Biogen’s appeal is pending.

On appeal, the Federal Circuit affirmed the District Court’s judgment.

Biogen has filed a petition for rehearing.

On July 13, 2018, MPI filed an IPR petition challenging the ’514 patent based only on obviousness.

On February 5, 2020, the PTAB issued a final written decision finding the claims not obvious.

MPI’s appeal is pending.

MPI’s appeal was denied as moot in light of the above-described Federal Circuit decision affirming the District Court’s invalidity judgment.

On August 17, 2020, the FDA approved MPI’s dimethyl fumarate delayed-release capsules, which MPI began selling on August 18, 2020.

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Reddy’s Laboratories filed a claim for monetary damages, interest, and costs in May 2020, followed by the Scottish Ministers and fourteen Scottish Health Boards (together, NHS Scotland) in July 2020.

In September 2020, Teva, Sandoz, Ranbaxy, Actavis, and the Secretary of State for Health and Social Care, together with 32 other NHS entities (together, NHS England, Wales, and Northern Ireland) filed their claims.

In September 2020, Teva, Sandoz, Ranbaxy, Actavis, and the Secretary of State for Health and Social Care, together with 32 other NHS entities (together, NHS England, Wales, Scotland and Northern Ireland) filed their claims.

T he claims filed by Sandoz, Teva, Actavis, and Ranbaxy have been resolved.

Lyrica - Canada

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(“PMS”) commenced an action against Pfizer Canada Inc., Warner-Lambert Company and Warner-Lambert Company LLC (the Pfizer Canada Defendants) seeking damages in connection with an earlier unsuccessful patent litigation brought by the Pfizer Canada Defendants involving pregabalin.

PMS claims lost profit damages from November 30, 2010, the date it received tentative regulatory approval for its pregabalin product, to February 13, 2013, the date Pfizer’s patent case against PMS was dismissed.

A trial is scheduled for April 2021.

PMS claimed lost profit damages from November 30, 2010, the date it received tentative regulatory approval for its pregabalin product, to February 13, 2013, the date Pfizer’s patent case against PMS was dismissed.

The parties have resolved the matter.

Other Litigation

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The Company has approximately $ 8.4 million accrued related to these various other legal proceedings at December 31, 2021.

Supplementary Financial Information

Quarterly Financial Data

(Unaudited, in millions, except per share data)

Year Ended December 31, 2020

Three-Month Period Ended

March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020

Total revenues $ 2,619.2 $ 2,731.2 $ 2,972.1 $ 3,623.5

Gross profit 906.1 1,025.7 1,158.5 706.4

Net earnings (loss) 20.8 39.4 185.7 (915.8)

Earnings per share (1) :

Basic $ 0.04 $ 0.08 $ 0.36 $ (1.07)

Diluted $ 0.04 $ 0.08 $ 0.36 $ (1.07)

Share prices (2) :

High $ 22.85 $ 18.78 $ 17.00 $ 18.74

Low $ 13.26 $ 13.74 $ 14.21 $ 14.30

Year Ended December 31, 2019

Three-Month Period Ended

March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019

Total revenues $ 2,495.5 $ 2,851.5 $ 2,961.7 $ 3,191.8

Gross profit 805.2 932.6 1,072.4 1,087.4

Net (loss) earnings (25.0) (168.5) 189.8 20.5

Earnings per share (1) :

Basic $ (0.05) $ (0.33) $ 0.37 $ 0.04

Diluted $ (0.05) $ (0.33) $ 0.37 $ 0.04

Share prices (2) :

High $ 32.10 $ 28.47 $ 22.53 $ 20.10

Low $ 26.01 $ 16.80 $ 17.61 $ 17.01

(1) The sum of earnings per share for the quarters may not equal earnings per share for the total year due to changes in the average number of shares outstanding.

(2) Closing prices are as reported on NASDAQ and refer to Mylan for periods prior to November 16, 2020 and the Company thereafter.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data