What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-28 compared with 2023-02-27 · 555 added, 538 removed, 1526 unchanged (42% of the section changed)

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Goodwill – Viatris Inc.

Europe and JANZ Reporting Units – Refer to Note 9 to the financial statements.

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

Critical Audit Matter Description

The Company performed an interim and annual goodwill impairment test as of March 31, 2022 and April 1, 2022, respectively.

As of March 31, 2022 and April 1, 2022, the Company had $11.95 billion of consolidated goodwill, $4.95 billion and $0.78 billion of which was allocated to the Viatris Inc.

Europe and JANZ reporting units, respectively.

The Company performed an annual goodwill impairment test as of April 1, 2023.

As of April 1, 2023, the Company had approximately $10.6 billion of consolidated goodwill, $4.47 billion, $1.34 billion and $0.68 billion of which was allocated to its Europe, Emerging Markets 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 and JANZ reporting units .

The Company performed its valuation analysis, using an income-based approach, to determine the fair value of its Europe, Emerging Markets 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 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 $0.8 billion, or 5.3%, and $0.23 billion, or 7.4%, respectively, as of March 31, 2022 and April 1, 2022 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.

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

The fair values of the Europe, Emerging Markets and the JANZ reporting units

exceeded their carrying values by approximately $0.54 billion, or 3.9%, $0.51 billion, or 7.7%, and $0.15 billion, or 5.5%, respectively, as of April 1, 2023 and, therefore, no impairments were recognized.

Given that the Europe, Emerging Markets, 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 rates and terminal growth rates for the Europe and the JANZ reporting units included the following procedures, among others:

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, Emerging Markets, and the JANZ reporting units included the following procedures, 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 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 management’s ability to accurately forecast future revenues of the Europe, Emerging Markets, 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.

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How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Net Revenue Provisions – Sales Returns accrual included the following, among others:

Our audit procedures related to the Net Revenue Provisions – Sales Returns Accrual at MPI included the following, among others:

• We evaluated the Company’s methodology and assumptions in developing their sales returns accrual model, including assessing the completeness and accuracy of the underlying data used by management in their estimates.

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Accounts payable $ 1,938.2 $ 1,766.6

Short-term borrowings — 1,493.0

Income taxes payable 226.8 279.6

Current portion of long-term debt and other long-term obligations 1,943.4 1,259.1

Liabilities held for sale 275.1 —

Other current liabilities 3,393.9 3,440.9

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

shares issued and outstanding:

shares issued:

1,221,994,491 and 1,213,793,231 , respectively

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Accumulated other comprehensive loss ( 2,747.4 ) ( 2,761.2 )

20,719.2 21,072.3

Treasury stock — at cost

Common stock shares:

21,239,521 as of December 31, 2023

Total equity 20,467.4 21,072.3

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Interest expense 573.1 592.4 636.2

Other (income) expense, net ( 1,790.7 ) ( 5.8 ) 12.6

Other income, net ( 9.8 ) ( 1,790.7 ) ( 5.8 )

Earnings (loss) before income taxes 202.9 2,813.2 ( 664.4 )

Income tax provision (benefit) 734.6 604.7 ( 51.3 )

Income tax provision 148.2 734.6 604.7

Net earnings (loss) 54.7 2,078.6 ( 1,269.1 )

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Net earnings (loss) $ 54.7 $ 2,078.6 $ ( 1,269.1 )

Other comprehensive (loss) earnings, before tax:

Other comprehensive (loss), before tax:

Foreign currency translation adjustment 139.2 ( 1,583.5 ) ( 1,340.9 )

Change in unrecognized gain (loss) and prior service cost related to defined benefit plans 279.1 73.9 ( 14.0 )

Net unrecognized (loss) gain on derivatives in cash flow hedging relationships ( 36.9 ) 36.1 18.2

Net unrecognized gain (loss) on derivatives in net investment hedging relationships 460.1 456.8 ( 305.2 )

Net unrealized (loss) gain on marketable securities ( 2.8 ) ( 1.1 ) 0.6

Other comprehensive (loss) earnings, before tax ( 884.0 ) ( 775.2 ) 912.6

Income tax provision (benefit) 132.9 111.1 ( 26.6 )

Other comprehensive (loss) earnings, net of tax ( 1,016.9 ) ( 886.3 ) 939.2

Change in unrecognized (loss) gain and prior service cost related to defined benefit plans ( 18.7 ) 279.1 73.9

Net unrecognized gain (loss) on derivatives in cash flow hedging relationships 13.9 ( 36.9 ) 36.1

Net unrecognized (loss) gain on derivatives in net investment hedging relationships ( 178.5 ) 460.1 456.8

Net unrealized gain (loss) on available-for-sale fixed income securities 1.5 ( 2.8 ) ( 1.1 )

Other comprehensive loss, before tax ( 42.6 ) ( 884.0 ) ( 775.2 )

Income tax (benefit) provision ( 56.4 ) 132.9 111.1

Other comprehensive earnings (loss), net of tax 13.8 ( 1,016.9 ) ( 886.3 )

Comprehensive earnings (loss) $ 68.5 $ 1,061.7 $ ( 2,155.4 )

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Earnings Accumulated Other Comprehensive Loss Total

Common Stock (1)

Treasury Stock

Common Stock Treasury Stock

Shares Cost Shares Cost

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

Other comprehensive earnings, net of tax — — — — — — 939.2 939.2

Share-based compensation expense — — 79.2 — — — — 79.2

Issuance of restricted stock and stock options exercised, net 872,802 — 0.6 — — — — 0.6

Taxes related to the net share settlement of equity awards — — ( 6.3 ) — — — — ( 6.3 )

Exchange of Mylan N.V.

ordinary shares for Viatris Inc.

common stock ( 541,619,673 ) ( 6.1 ) 6.1 — — — — —

Issuance of common stock to Mylan N.V.

shareholders 541,619,673 5.2 ( 5.2 ) — — — — —

Issuance of common stock for the Combination 689,874,045 6.9 10,720.6 — — — — 10,727.5

Retirement of Mylan N.V.

treasury stock, net ( 24,598,074 ) — ( 999.7 ) — ( 24,598,074 ) 999.7 — —

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 )

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Issuance of restricted stock, net

2,611,819 — — — — — — —

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

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Balance at December 31, 2022 1,213,793,231 $ 12.1 $ 18,645.8 $ 5,175.6 — $ — $ ( 2,761.2 ) $ 21,072.3

Net earnings — $ — $ — $ 54.7 — $ — $ — $ 54.7

Other comprehensive earnings, net of tax — — — — — — 13.8 13.8

Share-based compensation expense — 180.7 — — — — 180.7

Issuance of restricted stock and stock options exercised, net 7,892,041 0.1 5.1 — — — — 5.2

Common stock repurchase — — — — 21,239,521 ( 251.8 ) — ( 251.8 )

Taxes related to the net share settlement of equity awards — — ( 26.1 ) — — — — ( 26.1 )

Issuance of common stock 309,219 — 3.1 — — — — 3.1

Cash dividends declared, $ 0.48 per common share

— — — ( 590.6 ) — — — ( 590.6 )

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

Other — — 6.1 — — — — 6.1

Balance at December 31, 2023 1,221,994,491 $ 12.2 $ 18,814.7 $ 4,639.7 21,239,521 $ ( 251.8 ) $ ( 2,747.4 ) $ 20,467.4

See Notes to Consolidated Financial Statements

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Loss from equity method investments — — 61.9

Gain on disposal of business ( 1,754.1 ) — —

Loss (gain) on disposal of business 239.9 ( 1,754.1 ) —

Share-based compensation expense 180.7 116.4 111.2

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Cash flows from investing activities:

Cash received (paid) for acquisitions, net of cash acquired — 277.0 415.8

Cash (paid) received for acquisitions, net of cash acquired ( 667.7 ) — 277.0

Capital expenditures ( 377.0 ) ( 406.0 ) ( 457.2 )

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Proceeds from the sale of marketable securities 26.3 29.9 29.8

Net cash provided by (used in) investing activities 1,520.5 ( 117.8 ) ( 301.1 )

Net cash (used in) provided by investing activities ( 764.1 ) 1,520.5 ( 117.8 )

Cash flows from financing activities:

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Change in short-term borrowings, net 0.3 ( 1,493.2 ) 392.1

Proceeds from exercise of stock options — — 0.6

Purchase of common stock ( 250.0 ) — —

Taxes paid related to net share settlement of equity awards ( 38.2 ) ( 17.3 ) ( 17.4 )

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Effect on cash of changes in exchange rates ( 2.5 ) ( 38.9 ) ( 30.9 )

Net increase (decrease) in cash, cash equivalents and restricted cash 556.3 ( 143.8 ) 358.8

Net (decrease) increase in cash, cash equivalents and restricted cash ( 268.9 ) 556.3 ( 143.8 )

Cash, cash equivalents and restricted cash — beginning of period 1,262.5 706.2 850.0

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Supplemental disclosures of cash flow information —

Non-cash transactions:

Common stock issued for the Combination $ — $ — $ 10,727.5

Cash paid during the period for:

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Nature of Operations

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, and complex generics, including biosimilars prior to the Biocon Biologics Transaction.

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

Viatris is a global healthcare company which we believe is uniquely positioned to bridge the traditional divide between generics and brands, combining the best of both to more holistically address healthcare needs globally.

With a mission to empower people worldwide to live healthier at every stage of life, Viatris provides access at scale, supplying high-quality medicines to patients around the world and touching all of life’s moments, from birth to the end of life, acute conditions to chronic diseases.

With our exceptionally extensive and diverse portfolio of medicines, a one-of-a-kind global supply chain designed to reach more people when and where they need them, and the scientific expertise to address some of the world's most enduring health challenges, access takes on deep meaning at Viatris.

As of December 31, 2023, Viatris’ portfolio comprised more than 1,400 approved molecules across a wide range of key therapeutic areas, including globally recognized iconic and key brands and generics, including complex products, and the Company operated approximately 40 manufacturing sites worldwide that produce oral solid doses, injectables, complex dosage forms and APIs.

We conduct our business through four segments:

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

Certain reclassifications were made to conform the prior period consolidated financial statements to the current period presentation.

Upfront and milestone-related charges in connection with collaboration and licensing arrangements made prior to regulatory approval of a development product that were previously presented in Research and Development are now presented in Acquired IPR&D in the consolidated statements of operations.

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.

Summary of Significant Accounting Policies

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dollar as our functional currency in Turkey, which historically utilized the Turkish lira as the functional currency.

Application of the guidance in ASC 830 did not have a material impact on our consolidated financial statements for the year ended December 31, 2022.

The impacted net sales for the year ended December 31, 2022 and total assets at December 31, 2022 represented less than 1 % of our consolidated net sales and total assets, respectively.

Application of the guidance in ASC 830 did not have a material impact on our consolidated financial statements for the years ended December 31, 2023 and 2022.

Cash and Cash Equivalents.

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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 (income) 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, with gains and losses included in Other (income) expense, net in the consolidated statements of operations.

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 income, 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, with gains and losses included in Other income, 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.

Debt securities are reviewed for impairment by assessing if the decline in market value of the investment below the carrying value is other than temporary.

Investments in equity securities with readily determinable fair values are recorded at fair value with changes in fair value recorded in Other (income) expense, net in the consolidated statements of operations.

Investments in equity securities without readily determinable fair values are recorded at cost minus any impairment, plus or minus changes in their estimated fair value resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Changes in the fair value of equity securities are recorded in Other income, net in the consolidated statements of operations .

Investments in equity securities with readily determinable fair values are recorded at fair value.

Investments in equity securities without readily determinable fair values for which the Company has elected to utilize the measurement alternative under ASC 321, Investments - Equity Securities are recorded at cost minus any impairment, plus or minus changes in their estimated fair value resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Investments in entities are accounted for using the equity method of accounting when the ability to exercise significant influence over the operating and financial decisions of the investee is maintained.

The share of net income or losses of equity method investments are included in Other (income) expense, net in the consolidated statements of operations.

The share of net income or losses of equity method investments are included in Other income, net in the consolidated statements of operations.

Investments in equity securities without readily determinable fair values and investments in equity accounted for using the equity method are assessed for potential impairment on a quarterly basis based on qualitative factors.

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Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

Purchases of developed products and licenses that are accounted for as asset acquisitions are capitalized as intangible assets and amortized over an estimated useful life.

Purchases of developed products and licenses that are accounted for as asset acquisitions, including milestone payments related to development compounds due upon receipt of regulatory approvals, are capitalized as intangible assets and amortized over an estimated useful life.

IPR&D assets acquired as part of an asset acquisition are expensed immediately if they have no alternative future uses.

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.

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Impairment is determined to exist when the fair value of IPR&D assets, which is based upon updated forecasts and commercial development plans, is less than the carrying value of the assets being tested.

Acquired IPR&D.

IPR&D assets acquired as part of an asset acquisition are expensed immediately if they have no alternative future uses and are recorded in Acquired IPR&D in the consolidated statements of operations.

Contingent Consideration.

Viatris records contingent consideration resulting from business acquisitions or divestitures at its estimated fair value on the acquisition date.

Viatris records contingent consideration liabilities resulting from business acquisitions or divestitures at its estimated fair value on the acquisition or divestiture date.

Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as adjustments to litigation settlements and other contingencies, net within the consolidated statements of operations.

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Accordingly, changes in the assumptions described above could have a material impact on the Company’s consolidated financial condition and results of operations.

Viatris records contingent consideration assets resulting from divestitures when the contingent consideration is resolved.

Impairment of Long-Lived Assets.

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Divestitures.

For businesses that are divested, the Company records the net gain or loss on the sale within Other (income) expense, net .

For divestitures of businesses, including divestitures of products that qualify as a business, the Company allocates the relative fair value of goodwill associated with the businesses in the determining the gain or loss on sale.

The Company records amounts received as part of TSAs within Other (income) expense, net .

For businesses that are divested, including divestitures of products that qualify as a business, the Company records the net gain or loss on the sale within Other income, net , and allocates the relative fair value of goodwill associated with the businesses in the determining the gain or loss on sale.

Any resulting goodwill impairment is recorded within SG&A.

The Company records amounts received as part of TSAs within Other income, net .

For divestitures of products that qualify as assets, the Company records the gain or loss on sale within SG&A.

Short-Term Borrowings.

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R&D expenses are charged to operations as incurred.

R&D expense consists of costs incurred in performing research and development activities, including but not limited to, compensation and benefits, facilities and overhead expense, clinical trial expense and fees paid to contract research organizations.

Acquired IPR&D.

Acquired IPR&D expense includes the initial cost of externally developed IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use.

Additionally, the related milestone payment obligations that are incurred prior to regulatory approval of the compound are recorded as acquired IPR&D expense when the event triggering the obligation to pay the milestone occurs.

Income Taxes.

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shareholders $ 0.05 $ 1.71 $ ( 1.05 )

The weighted average shares outstanding used in the computation of earnings per share for the year ended December 31, 2020 includes the effect of the 689.9 million shares issued for the closing of the Combination.

Additional stock awards and restricted ordinary shares were outstanding during the years ended December 31, 2022, 2021 and 2020 but were not included in the computation of diluted earnings per share for each respective period because the effect would be anti-dilutive.

Additional stock awards and Restricted Stock Awards were outstanding during the years ended December 31, 2023, 2022 and 2021 but were not included in the computation of diluted earnings per share for each respective period because the effect would be anti-dilutive.

Excluded shares also include certain share-based compensation awards and restricted shares whose performance conditions had not been fully met.

Such excluded shares and anti-dilutive awards represented 16.4 million, 11.8 million and 12.7 million shares for the years ended December 31, 2023, 2022 and 2021, 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.

The Company paid quarterly dividends of $ 0.12 per share on the Company’s issued and outstanding common stock on March 16, 2022, June 16, 2022, September 16, 2022 and December 16, 2022.

The Company paid quarterly cash dividends of $ 0.12 per share on the Company’s issued and outstanding common stock on March 17, 2023, June 16, 2023, September 15, 2023 and December 15, 2023.

On February 26, 2024, 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 18, 2024 to shareholders of record as of the close of business on March 11, 2024.

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.

The Company paid quarterly cash dividends of $ 0.12 per share on the Company’s issued and outstanding common stock on March 16, 2022, June 16, 2022, September 16, 2022 and December 16, 2022.

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 May 6, 2022, the Company announced that its Board of Directors had authorized a DRIP.

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The program does not have an expiration date.

During 2022, the Company did not repurchase any shares of common stock under the share repurchase program.

In January and February 2023, the Company repurchased approximately 21.2 million shares of common stock at a cost of approximately $ 250 million.

During the year ended December 31, 2023, the Company repurchased approximately 21.2 million shares of common stock at a cost of approximately $ 250 million.

In February 2024, the Company repurchased approximately 19.2 million shares of common stock at a cost of approximately $ 250 million.

The Company did not repurchase any shares of common stock under the share repurchase program in 2022.

The share repurchase program does not obligate the Company to acquire any particular amount of common stock.

The Company announced that on February 26, 2024, its Board of Directors authorized a $ 1.0 billion increase to the Company’s previously announced $ 1.0 billion share repurchase program.

As a result, the Company’s share repurchase program now authorizes the repurchase of up to $ 2.0 billion of the Company’s shares of common stock.

The Company had repurchased a total of $ 500 million in shares through February 28, 2024 under the program.

Share-Based Compensation.

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1) hedge the cash flows resulting from existing assets and liabilities and transactions expected to be entered into over the next 24 months in currencies other than the functional currency, 2) hedge the variability in interest expense on floating rate debt, 3) hedge the fair value of fixed-rate notes, 4) hedge against changes in interest rates that could impact future debt issuances, 5) hedge cash or share payments required on conversion of issued convertible notes, 6) hedge a net investment in a foreign operation, or 7) economically hedge the foreign currency exposure associated with the purchase price of non-U.S.

acquisitions.

acquisitions or divestitures.

Derivatives are recognized as assets or liabilities in the consolidated balance sheets at their fair value.

When the derivative instrument qualifies as a cash flow hedge, changes in the fair value are deferred through other comprehensive earnings.

If a derivative instrument qualifies as a fair value hedge, the changes in the fair value, as well as the offsetting changes in the fair value of the hedged items, are generally included in within the same line item on the consolidated statements of operations as the hedged item.

When such instruments do not qualify for hedge accounting the changes in fair value are recorded in the consolidated statements of operations within Other (income) expense, net .

If a derivative instrument qualifies as a fair value hedge, the changes in the fair value, as well as the offsetting changes in the fair value of the hedged items, are generally included in within the same line item in the consolidated statements of operations as the hedged item.

When such instruments do not qualify for hedge accounting the changes in fair value are recorded in the consolidated statements of operations within Other income, net .

Financial Instruments.

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Adoption of New Accounting Standards

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.

We adopted the ASU prospectively on January 1, 2022.

In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50), which requires entities to provide qualitative and quantitative disclosures about their supplier finance programs, including a rollforward of related obligations.

We adopted this ASU effective January 1, 2023, with the exception of the amendment on rollforward information, which will be adopted in our fiscal year beginning on January 1, 2024 as set forth in ASU 2022-04.

Refer to Note 6 Balance Sheet Components for additional information.

The adoption of ASU 2022-04 did not affect the Company’s financial condition, results of operations or cash flows as the guidance only requires additional disclosures.

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 , which requires entities (acquirers) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606.

We adopted this ASU effective January 1, 2023.

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

Accounting Standards Issued Not Yet Adopted

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 for a limited period of time adds ASC 848 to provide optional expedients and exceptions for applying U.S.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which for a limited period of time adds ASC 848 to provide optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

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

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.

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which includes amendments to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption is permitted.

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

In September 2022, the FASB issued Accounting Standards Update 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50), which requires entities to provide qualitative and quantitative disclosures about their supplier finance programs, including a rollforward of related obligations.

The ASU will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the rollforward requirement, which becomes effective for fiscal years beginning after December 15, 2023, with early adoption permitted.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires expanded income tax disclosures, including greater disaggregation of information in the effective tax rate reconciliation and of income taxes paid.

The amendments in ASU 2023-09 are effective for all public entities for fiscal years beginning after December 15, 2024, with early adoption is permitted.

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

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Brands 5,239.0 2,152.1 782.9 1,626.5 9,800.5

Complex Gx and Biosimilars 1,218.0 0.6 44.1 50.7 1,313.4

Generics 4,012.9 8.3 641.6 925.1 5,587.9

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Brands 5,160.4 2,190.7 922.6 1,615.9 9,889.6

Complex Gx and Biosimilars 1,241.6 0.2 46.5 53.8 1,342.1

Generics 4,608.5 10.5 709.8 999.7 6,328.5

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Brands 5,759.2 2,207.8 1,197.1 1,677.2 10,841.3

Complex Gx and Biosimilars 1,202.6 0.7 42.8 49.4 1,295.5

Generics 4,669.5 5.0 830.3 1,467.5 6,972.3

Total Viatris $ 10,428.7 $ 2,212.8 $ 2,027.4 $ 3,144.7 $ 17,813.6

(a) Amounts for the year ended December 31, 2022 include the unfavorable impact of foreign currency translations compared to the prior year period.

(b) Amounts for the year ended December 31, 2022 reflect a decrease of approximately $ 63.5 million related to the year over year impact of the sale of the biosimilars business in November 2022.

(a) Amounts include the impact of foreign currency translations compared to the prior year period.

(b) Amounts for the years ended December 31, 2022 and 2021 include approximately $ 601.1 million and $ 607.3 million, respectively, related to the biosimilars business which was contributed to Biocon Biologics in November 2022.

The Company has not recognized the results of the biosimilars business in its consolidated financial statements subsequent to November 29, 2022.

(c) As a result of the contribution of the biosimilars business to Biocon Biologics in November 2022, Complex Gx and Biosimilars , which were previously presented as a separate line item, are now included within Generics.

Reclassifications were made to prior periods to conform to the current period presentation.

The following table presents net sales on a consolidated basis for select key products for the years ended December 31, 2023, 2022, and 2021, respectively:

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Lyrica ® 556.5 623.8 728.5

Viagra ® 458.9 533.8

EpiPen® Auto-Injectors 442.2 378.0 391.7

Viagra ® 428.8 458.9 533.8

330.6 338.1 344.4

Creon ® 304.9 304.0 309.8

262.9 279.6 316.8

235.7 246.2 284.3

Xalabrands 193.2 195.1 226.0

Select Key Segment Products

Influvac ® $ 225.5 $ 299.3

Yupelri ® $ 220.8 $ 202.1 $ 161.9

Dymista ® 200.0 179.8 168.0

Influvac ® 192.4 225.5 299.3

Amitiza ® 157.0 167.9 201.5

2 unchanged sentences

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

(c) Amounts for the year ended December 31, 2022 include the unfavorable impact of foreign currency translations compared to the prior year period.

(d) Amounts for the year ended December 31, 2020 are not presented due to the significance of products acquired as part of the Combination.

(d) Refer to intellectual property matters included in Note 19 Litigation for additional information regarding Yupelri® and Amitiza®.

Variable Consideration and Accounts Receivable

10 unchanged sentences

Net sales $ 15,388.4 $ 16,218.1 $ 17,813.6

(a) Amounts for the years ended December 31, 2022 and 2021 include the biosimilars business which was contributed to Biocon Biologics in November 2022.

The Company has not recognized the results of the biosimilars business in its consolidated financial statements subsequent to November 29, 2022.

The following is a rollforward of the categories of variable consideration during 2023:

(In millions) Balance at December 31, 2021 Current Provision Related to Sales Made in the Current Period Balances Divested Checks/ Credits Issued to Third Parties Effects of Foreign Exchange Balance at December 31, 2022

(In millions) Balance at December 31, 2022 Current Provision Related to Sales Made in the Current Period Acquisitions, Divestitures, and Other

Checks/ Credits Issued to Third Parties Effects of Foreign Exchange Balance at December 31, 2023

Chargebacks $ 523.4 $ 5,457.9 $ ( 8.1 ) $ ( 5,443.6 ) $ 0.7 $ 530.3

26 unchanged sentences

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 $ 34.7 million and $ 29.6 million of accounts receivable as of December 31, 2022 and 2021 under these factoring arrangements, respectively.

We derecognized $ 30.8 million and $ 34.7 million of accounts receivable as of December 31, 2023 and 2022, respectively, under these factoring arrangements.

Additionally, in 2023, we entered into a similar arrangement for certain European countries.

As of December 31, 2023, we have assigned and derecognized approximately $ 415.7 million of Trade Receivables, Net which are now included in Other Receivables .

Acquisitions and Other Transactions

Oyster Point Acquisition

During the first quarter of 2023, the Company completed the acquisition of Oyster Point for approximately $ 425 million in cash, which includes $ 11 per share paid to Oyster Point stockholders through a tender offer and the repayment of the principal amount of certain debt of Oyster Point.

In addition to the upfront cash consideration, each Oyster Point stockholder received one non-tradeable contingent value right representing up to an additional $ 2 per share, or approximately $ 60 million in the aggregate, contingent upon Oyster Point achieving certain metrics based upon full year 2022 performance, which are expected to be determined by the end of the first quarter of 2023.

Oyster Point is a commercial-stage biopharmaceutical company focused on the discovery, development, and commercialization of first-in-class pharmaceutical therapies to treat ophthalmic diseases.

The Company expects to account for this transaction as a business combination.

The accounting impact of this acquisition and the results of the operations for Oyster Point will be included in our consolidated financial statements beginning in the first quarter of 2023.

Due to the proximity of the closing date of this acquisition to the date of this filing, the initial accounting for this acquisition is incomplete, pending identification and measurement of the assets acquired and liabilities assumed.

Famy Life Sciences Acquisition

On November 7, 2022, the Company entered into a definitive agreement to acquire the remaining equity shares of Famy Life Sciences, a private-owned research company with a complementary portfolio of ophthalmology therapies under development, for a consideration of $ 281 million.

The Company had previously entered into a Master Development Agreement with Famy Life Sciences on December 20, 2019 to grant the Company rights with respect to acquiring certain pharmaceutical products and had additionally acquired shares representing approximately 13.5 % equity interest in Famy Life Sciences for $ 25.0 million during the year ended December 31, 2020.

The investment was accounted for in accordance with ASC 321, Investments - Equity Securities .

The transaction to acquire the remaining equity shares of Famy Life Sciences closed during the first quarter of 2023.

The Company expects to recognize a gain of $ 18.9 million during the first quarter of 2023 as a result of remeasuring its pre-existing 13.5 % equity interest in Famy Life Sciences to fair value, which will be recognized as a component of Other (income) expense, net in the consolidated statements of operations.

The Company expects to account for this transaction as a business combination.

The accounting impact of this acquisition and the results of the operations for Famy Life Sciences will be included in our consolidated financial statements beginning in the first quarter of 2023.

Upjohn Business Combination Agreement

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 oral solid dose legacy brands, such as Lyrica®, Lipitor®, Celebrex® and Viagra®.

The Combination was completed on November 16, 2020.

Prior to the Combination and pursuant to a Separation and Distribution Agreement, Pfizer had, among other things, transferred to Viatris substantially all of the assets and liabilities comprising the Upjohn Business (the Separation) and, thereafter, Pfizer had distributed to Pfizer stockholders all of the issued and outstanding shares of Viatris (the Distribution).

When the Distribution and Combination were complete, Pfizer stockholders as of the record date of the Distribution owned 57 % of the outstanding shares of Viatris common stock and Mylan shareholders as of immediately before the Combination owned 43 % of the outstanding shares of Viatris common stock, in each case on a fully diluted basis.

Viatris also made a cash payment to Pfizer equal to $ 12 billion, which was funded with the proceeds of debt incurred by Upjohn prior to the Combination.

The transaction 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.

In accordance with ASC 805, Business Combinations , Mylan is considered the accounting acquirer of the Upjohn Business and Viatris applied purchase accounting to the acquired assets and assumed liabilities of the Upjohn Business as of November 16, 2020.

The debt incurred by Upjohn prior to the Combination was a liability assumed in purchase accounting.

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.

During the first quarter of 2023, the Company completed the acquisition of Oyster Point for approximately $ 427.4 million in cash, which included $ 11 per share paid to Oyster Point stockholders through a tender offer, payment for vested share-based awards, and the repayment of the Oyster Point debt.

Vested share-based awards to acquire Oyster Point common stock that were outstanding immediately prior to the closing of the acquisition were cancelled in exchange for the right to receive an amount in cash based upon a formula contained within the merger agreement.

The unvested share-based awards were converted into Viatris share-based awards based upon a formula contained within the merger agreement.

In accordance with U.S.

GAAP, the Company used the acquisition method of accounting to account for this transaction.

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.

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)

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

During the year ended December 31, 2023, the Company incurred acquisition related costs of approximately $ 22.8 million, which were recorded primarily in SG&A in the consolidated statement of operations.

During the year ended December 31, 2023, adjustments were made to the preliminary purchase price recorded at January 3, 2023, and are reflected as “Measurement Period Adjustments” in the table below.

GAAP purchase price was $ 392.7 million, net of cash acquired.

The allocation of the purchase price to the assets acquired and liabilities assumed for Oyster Point is as follows:

(In millions) Preliminary Purchase Price Allocation as of January 3, 2023 (a)

Measurement Period Adjustments (b)

Purchase Price Allocation as of December 31, 2023 (as adjusted)

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Current liabilities 37.0 — 37.0

Long-term debt, including current portion 13,076.2 — 13,076.2

Deferred tax liabilities 1,656.9 1.0 1,657.9

Other noncurrent liabilities 1.7 — 1.7

Net assets acquired (net of $34.7 of cash acquired) $ 392.7 $ — $ 392.7

$ 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 was 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.

The related depreciation is being expensed over a service life of five years for machinery and equipment and between 10 and 20 years for buildings.

The identified intangible assets of $ 18.04 billion are comprised of product rights and are being amortized over a weighted average useful life of 15 years.

(a) As previously reported in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2023.

(b) The measurement period adjustments were recorded in the fourth quarter of 2023 and are related to income taxes.

The Company recorded a step-up in the fair value of inventory of approximately $ 29.3 million, which was fully amortized during the year ended December 31, 2023 and is included in Cost of sales in the consolidated statement of operations.

The identified intangible assets of $ 334.0 million are comprised of product rights and licenses related to a commercial asset, Tyrvaya®, for the treatment of dry eye disease, that have an estimated useful life of 10 years.

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 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.

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

None of the goodwill recognized in this transaction is expected to be deductible for income tax purposes.

The Company recorded a fair value adjustment of approximately $ 759.4 million related to the long-term debt assumed as part of the acquisition.

The fair value of long-term debt as of the Combination date was determined by broker or dealer quotations, which is classified as Level 2 in the fair value hierarchy.

The total fair value adjustment is being amortized as a reduction to interest expense over the maturity dates of the related debt instruments.

The operating results of the Upjohn Business have been included in the Company’s consolidated statements of operations since the acquisition date.

The total revenues of the Upjohn Business for the period from the acquisition date to December 31, 2020, were $ 866.5 million and net loss, net of tax, was approximately $ 360.9 million.

The goodwill of $ 6.7 million arising from the acquisition consisted largely of the value of the employee workforce and the expected value of products to be developed in the future.

All of the goodwill was assigned to the Developed Markets segment.

None of the goodwill recognized in this transaction is currently expected to be deductible for income tax purposes.

The operating results of Oyster Point have been included in the Company’s consolidated statements of operations since the acquisition date.

The total revenues of Oyster Point for the period from the acquisition date to December 31, 2023 were $ 41.7 million and net loss, net of tax, was approximately $ 163.1 million.

The net loss for the period includes the effect of the purchase accounting adjustments and acquisition related costs.

Unaudited Pro Forma Financial Results

The following table presents supplemental unaudited pro forma information for the Combination, as if it had occurred on January 1, 2019.

The unaudited pro forma results reflect certain adjustments related to past operating performance and acquisition accounting adjustments, such as increased depreciation and amortization expense based on the fair value of assets acquired, the impact of transaction costs and the related income tax effects.

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.

The following table presents supplemental unaudited pro forma information for the acquisition, as if it had occurred on January 1, 2022.

The unaudited pro forma results reflect certain adjustments related to past operating performance and acquisition accounting adjustments, such as increased amortization expense based on the fair value of assets acquired, the impact of transaction costs and the related income tax effects.

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 acquisition.

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

(Unaudited, in millions, except per share amounts) December 31, 2023 December 31, 2022

Total revenues $ 15,426.9 $ 16,283.4

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Earnings per share:

Basic $ 0.08 $ 1.57

Diluted $ 0.08 $ 1.57

2 unchanged sentences

Diluted 1,206.9 1,217.4

Other Transactions

In December 2020, Viatris and Pfizer terminated their strategic collaboration for generic drugs in Japan pursuant to an amendment and termination agreement.

Under the prior collaboration agreement, both parties contributed products, which Pfizer distributed to third-parties in the Japan market.

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 during the year ended December 31, 2020.

Famy Life Sciences Acquisition

On November 7, 2022, the Company entered into a definitive agreement to acquire the remaining equity shares of Famy Life Sciences, a privately-owned research company with a complementary portfolio of ophthalmology therapies under development, for consideration of $ 281 million.

The Company had previously entered into a Master Development Agreement with Famy Life Sciences on December 20, 2019 under which the Company obtained rights with respect to acquiring certain pharmaceutical products and a 13.5 % equity interest in Famy Life Sciences for $ 25.0 million.

The investment was accounted for in accordance with ASC 321, Investments - Equity Securities .

The transaction to acquire the remaining equity shares of Famy Life Sciences closed during the first quarter of 2023.

The Company recognized a gain of $ 18.9 million during the first quarter of 2023 as a result of remeasuring its pre-existing 13.5 % equity interest in Famy Life Sciences to fair value, which was recognized as a component of Other income, net in the consolidated statements of operations.

In accordance with U.S.

GAAP, the Company used the acquisition method of accounting to account for this transaction.

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

GAAP purchase price allocated to the transaction was $ 325.0 million, which consisted of $ 281 million of cash consideration paid for the remaining equity shares and $ 43.9 million for the fair value of the pre-existing 13.5 % equity interest.

During the year ended December 31, 2023, an adjustment was made to the preliminary purchase price recorded at January 3, 2023, and is reflected as “Measurement Period Adjustments” in the table below.

The allocation of the purchase price to the assets acquired and liabilities assumed for Famy Life Sciences is as follows:

(In millions) Preliminary Purchase Price Allocation as of January 3, 2023 (a)

Measurement Period Adjustments (b)

Purchase Price Allocation as of December 31, 2023 (as adjusted)

IPR&D $ 290.0 $ — $ 290.0

Goodwill 89.3 ( 0.1 ) 89.2

Total assets acquired $ 379.3 $ ( 0.1 ) $ 379.2

Current liabilities 2.2 — 2.2

Deferred tax liabilities 52.1 ( 0.1 ) 52.0

Net assets acquired (net of $0.2 of cash acquired) $ 325.0 $ — $ 325.0

(a) As previously reported in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2023.

(b) The measurement period adjustment was recorded in the fourth quarter of 2023 and is related to income taxes.

The amount allocated to IPR&D represents an estimate of the fair value of purchased in-process technology for research projects that, as of the closing date of the acquisition, had not reached technological feasibility and had no alternative future use.

The fair value of IPR&D of $ 290.0 million was based on the excess earnings method, which utilizes forecasts of expected cash inflows (including estimates for ongoing costs) and other contributory charges.

A discount rate of 23.9 % was utilized to discount net cash inflows to present values.

IPR&D is accounted for as an indefinite-lived intangible asset and will be subject to impairment testing until completion or abandonment of the projects.

Upon successful completion and launch of each product, the Company will make a determination of the estimated useful life of the individual asset.

The acquired IPR&D projects are in various stages of completion and the estimated costs to complete these projects total approximately $ 120 million, which are expected to be incurred through 2024.

There are risks and uncertainties associated with the timely and successful completion of the projects included in IPR&D, and no assurances can be given that the underlying assumptions used to estimate the fair value of IPR&D will not change or the timely completion of each project to commercial success will occur.

The goodwill of $ 89.2 million arising from the acquisition consisted largely of the value of the employee workforce and the expected value of products to be developed in the future.

All of the goodwill was assigned to the Developed Markets segment.

None of the goodwill recognized in this transaction is currently expected to be deductible for income tax purposes.

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 years ended December 31, 2023 and 2022.

Ophthalmology is one of the key therapeutic areas of focus that the Company announced in February 2022 when it announced plans for certain strategic actions.

With the combination of Viatris' global commercial footprint, R&D and regulatory capabilities and supply chain, along with Oyster Point's deep knowledge of the ophthalmology space from a clinical, medical, regulatory and commercial perspective—including Tyrvaya®—and Famy Life Sciences' Phase III-ready pipeline, the Company believes it has the foundation to create a leading global ophthalmology franchise, accelerating efforts to address the unmet needs of patients with ophthalmic disease and the eye care professionals who treat them.

On February 28, 2024, the Company announced that it will acquire the development programs and certain personnel related to selatogrel and cenerimod from Idorsia in exchange for an upfront payment to Idorsia of $ 350 million, potential development and regulatory milestone payments, and certain contingent payments of additional sales milestone payments and tiered sales royalties.

Viatris and Idorsia will both contribute to the development costs for both programs.

Viatris will have worldwide commercialization rights for both selatogrel and cenerimod (excluding, for cenerimod only, Japan, South Korea and certain countries in the Asia-Pacific region).

The agreements also provide Viatris a right of first refusal and a right of first negotiation for certain other assets in Idorsia’s pipeline.

The closing of the transaction is subject to certain closing conditions.

On October 1, 2023, the Company announced it received an offer for the divestiture of its OTC Business, and entered into definitive agreements to divest its women’s healthcare business and, separately, in another transaction, its rights to two women’s healthcare products in certain countries, its API business in India and commercialization rights in the Upjohn Distributor Markets.

The divestiture of the women’s healthcare business is primarily related to our oral and injectable contraceptives and does not include all of our women’s healthcare related products;

as an example, our Xulane® product in the U.S.

The transaction to divest the Company’s rights to two women’s healthcare products in certain countries (other than in the U.K., which remains subject to regulatory approval) closed in December 2023.

The divestitures of the commercialization rights in certain of the Upjohn Distributor Markets closed during 2023.

Additionally, we expect to consummate the divestiture of our women’s healthcare business and our API business in India by the end of the first quarter of 2024, and in January 2024, we exercised our option to accept the offer in the OTC Transaction and entered into a definitive transaction agreement with respect to such OTC Transaction.

We currently expect the OTC Transaction to close by mid-year 2024.

The transactions that have not yet closed remain subject to regulatory approvals, receipt of required consents and other closing conditions, including, in the case of the API business divestiture, a financing condition.

Under the terms of the agreements, Viatris expects to receive gross proceeds of up to approximately $ 2.17 billion for the OTC Business and up to approximately $ 1.4 billion for the remaining divestitures.

Upon closing of the divestitures of the women’s healthcare and API businesses, the Company expects to record gains for the differences between the expected consideration to be received and the carrying values of the businesses to be divested.

The OTC, API and women’s healthcare businesses are deemed businesses for U.S.

GAAP accounting purposes.

As such, the assets and liabilities include an allocation of goodwill.

The sale of the rights to two women’s healthcare products in certain countries was accounted for as an asset sale.

In conjunction with these transactions, Viatris and the respective buyers have entered or will enter into various agreements to

provide a framework for our relationship with the respective buyers after the closing of the divestitures, including TSAs, manufacturing and supply agreements, and distribution agreements, as necessary.

Women’s Healthcare

In the third quarter of 2023, Viatris executed an agreement to divest its women’s healthcare business, primarily related to oral and injectable contraceptives, to Insud Pharma, S.

L., a leading Spanish multinational pharmaceutical company.

The transaction includes two manufacturing facilities in India.

Viatris expects to consummate the divestiture of its women’s healthcare business by the end of the first quarter of 2024, subject to the satisfaction of certain closing conditions.

Assets and liabilities associated with the women’s healthcare business to be divested were classified as held for sale in the consolidated balance sheet as of December 31, 2023.

In the third quarter of 2023, Viatris also entered into a separate agreement to divest its rights to women’s healthcare products Duphaston® and Femoston® in certain countries to Theramex HQ UK Limited, a leading global specialty pharmaceutical company dedicated to women’s health.

The transaction (other than in the U.K., which remains subject to regulatory approval) closed in December 2023, and upon closing, the Company recognized a pre-tax gain on sale of approximately $ 156.2 million for the difference between the consideration received and the carrying value of the assets transferred.

The gain was recorded as a component of SG&A expense in the consolidated statement of operations during the year ended December 31, 2023.

On October 1, 2023, Viatris received an offer from Cooper Consumer Health SAS, a leading European OTC drug manufacturer and distributor, for Viatris to divest its OTC Business, including two manufacturing sites located in Merignac, France, and Confienza, Italy, and an R&D site in Monza, Italy.

In January 2024, Viatris exercised its option to accept the offer in the OTC Transaction and entered into a definitive transaction agreement with respect to such OTC Transaction.

The Company will retain rights for Viagra®, Dymista® (which, in certain limited markets, are sold as OTC products) and select OTC products in certain markets.

The OTC Business to be divested met the criteria to be classified as held for sale on October 1, 2023.

As such, the related assets and liabilities were classified as held for sale in the consolidated balance sheet as of December 31, 2023.

Upon classification as held for sale, we recognized a total charge of approximately $ 734.7 million, which was comprised of a goodwill impairment charge of approximately $ 580.1 million (recorded as a component of SG&A expense), and a charge of approximately $ 154.7 million to write down the disposal group to fair value, less cost to sell (recorded as a component of Other income, net ) in the consolidated statement of operations, during the year ended December 31, 2023.

On October 1, 2023, Viatris executed an agreement to divest its API business in India to an affiliate of IQuest Enterprises Private Limited, a privately held pharmaceutical company based in India.

The transaction includes three manufacturing sites and a R&D lab in Hyderabad, three manufacturing sites in Vizag and third-party API sales.

Viatris expects to consummate the divestiture of its API business in India by the end of the first quarter of 2024, subject to the satisfaction of certain closing conditions.

Viatris will retain some selective R&D capabilities in API.

The API business in India met the criteria to be classified as held for sale on October 1, 2023 and the related assets and liabilities were reclassified as held for sale in the consolidated balance sheet as of December 31, 2023.

Upjohn Distributor Markets

In the fourth quarter of 2022, the commercialization rights in the Upjohn Distributor Markets met the criteria to be classified as held for sale.

Upon classification as held for sale, the Company recognized a total charge of $ 374.2 million in 2022, which was comprised of a goodwill impairment charge of $ 117.0 million, other charges, principally inventory write-offs, of $ 84.3 million and a charge of approximately $ 172.9 million to write down the disposal group to fair value, less cost to sell.

During the year ended December 31, 2023, the Company recorded additional charges totaling $ 136.4 million, primarily consisting of losses on the disposals of $ 85.2 million, which were recorded as a component of Other Income, Net .

The majority of the divestitures of the commercialization rights in the Upjohn Distributor Markets closed during 2023 and the remaining transactions are expected to be completed during 2024.

If the remaining transactions are not completed, the distribution arrangements will expire in accordance with our agreement with Pfizer and the Company will wind down operations in these markets, which may result in additional asset write-offs and other costs being incurred.

Biocon Biologics Transaction

On February 27, 2022, Viatris entered into a definitive agreement with Biocon Biologics to contribute its biosimilars portfolio to Biocon Biologics.

The transaction subsequently closed on November 29, 2022, creating what Viatris expects to be a unique fully vertically integrated global biosimilars leader.

On November 29, 2022, Viatris completed a transaction to contribute its biosimilars portfolio to Biocon Biologics.

Under the terms of the Biocon Agreement, Viatris received $ 3 billion in consideration in the form of a $ 2 billion cash payment, adjusted as set forth in the Biocon Agreement, and approximately $ 1 billion of CCPS representing a stake of approximately 12.9 % (on a fully diluted basis) in Biocon Biologics.

During the year ended December 31, 2023, the Company recorded a loss of $ 21.1 million as a component of Other Income, Net , as a result of remeasuring the CCPS in Biocon Biologics to fair value.

The Company’s CCPS in Biocon Biologics are classified as equity securities and are included in Other Assets in the consolidated balance sheets.

The fair value is reassessed quarterly.

Refer to Note 9 Financial Instruments and Risk Management for further discussion.

Viatris also is entitled to $ 335 million of additional cash payments in 2024.

In addition, Viatris and Biocon Biologics have agreed to a closing working capital target of $ 250 million.

An amount of cash equal to all or a portion of the closing working capital target may become payable to Biocon Biologics in connection with certain events in the future, depending on the valuations attributable to such events.

In addition, Viatris and Biocon Biologics have agreed to a closing working capital target of $ 250 million, of which $ 220 million was paid during 2023.

The remaining amount may become payable to Biocon Biologics in connection with certain events in the future, depending on the valuations attributable to such events.

Refer to Note 6 Balance Sheet Components for additional information on assets and liabilities related to Biocon Biologics.

Viatris and Biocon Biologics also entered an agreement pursuant to which Viatris is providing commercialization and certain other transition services on behalf of Biocon Biologics, including billings, collections and the remittance of rebates, to ensure business continuity for patients, customers and colleagues.

The term of the transition services agreement is generally up to two years .

Under the transition services agreement, Viatris is entitled to be reimbursed for its costs (subject to certain caps) plus a markup.

Upon closing, the Company recognized a gain on sale of approximately $ 1.75 billion for the difference between the consideration received, including the fair value of the CCPS, and the carrying value of the biosimilars portfolio (including an allocation of goodwill).

The gain was recognized as a component of Other (income) expense, net in the consolidated statement of operations during the year ended December 31, 2022.

At the time of closing of the Biocon Biologics Transaction, Viatris and Biocon Biologics also entered an agreement pursuant to which Viatris was providing commercialization and certain other transition services on behalf of Biocon Biologics, including billings, collections and the remittance of rebates, to ensure business continuity for patients, customers and colleagues.

Biocon Biologics had substantially exited all transition services with Viatris as of December 31, 2023.

During the years ended December 31, 2023 and 2022, the Company recognized TSA income of approximately $ 168.0 million and $ 17.7 million, respectively, as a component of Other Income, Net .

Upon closing of the Biocon Biologics Transaction, the Company recognized a gain on sale of approximately $ 1.75 billion for the difference between the consideration received, including the fair value of the CCPS, and the carrying value of the biosimilars portfolio (including an allocation of goodwill).

The gain was recognized as a component of Other Income, Net in the consolidated statement of operations during the year ended December 31, 2022.

The Company has not recognized the results of the business in its consolidated financial statements subsequent to November 29, 2022.

For the period from January 1, 2022 to November 29, 2022, total revenues relating to the biosimilars portfolio which was subsequently contributed to Biocon Biologics were approximately $ 611.5 million.

The Company’s CCPS in Biocon Biologics are classified as equity securities and are included in Other assets in the consolidated balance sheet as of December 31, 2022.

Refer to Note 10 Financial Instruments and Risk Management for further discussion.

The Company had previously entered into an exclusive collaboration with Biocon on the development, manufacturing, supply and commercialization of multiple, high value biosimilar compounds and three insulin analog products for the global marketplace.

The collaboration was terminated upon closing of the Biocon Biologics Transaction.

Other Potential Divestitures

In November 2022, the Company provided an update on the strategic priorities announced in February 2022, including identifying the following businesses no longer considered core to its future strategy that the Company intends to divest:

• API (while retaining some selective development API capabilities);

• Women’s health care, primarily related to our oral and injectable contraceptives.

This does not include all of our women’s health care related products;

as an example, our Xulane® product in the U.S.

• Upjohn Distributor Markets.

In the fourth quarter of 2022, we determined that our Upjohn Distributor Markets should be classified as held for sale in the December 31, 2022 consolidated balance sheet.

Upon classification as held for sale, we recognized a total charge of $ 374.2 million.

This was comprised of a goodwill impairment charge of $ 117.0 million, other charges, principally inventory write-offs, of $ 84.3 million and a charge of approximately $ 172.9 million to write down the disposal group to fair value, less cost to sell.

Assets held for sale associated with the Upjohn Distributor Markets consisted of intangible assets of $ 230.3 million as of December 31, 2022.

If these transactions are not completed during 2023, the distribution arrangements will expire and the Company will wind down operations in these markets, which may result in additional asset write-offs and other costs being incurred.

These additional charges could be in excess of $ 300 million.

Assets and Liabilities Held for Sale

Assets and liabilities held for sale consisted of the following:

(In millions) December 31, 2023 December 31, 2022

Assets held for sale

Accounts receivable, net $ 112.1 $ —

Inventories 422.4 —

Prepaid expenses and other current assets 7.5 —

Property, plant and equipment, net 262.2 —

Intangible assets, net 1,946.0 230.3

Goodwill 188.0 —

Other assets 5.1 —

Valuation allowance on assets held for sale ( 157.3 ) —

Total assets held for sale $ 2,786.0 $ 230.3

Liabilities held for sale

Accounts payable $ 137.4 $ —

Other current liabilities 35.3 —

Deferred income tax liability 77.2 —

Other long-term obligations 25.2 —

Total liabilities held for sale $ 275.1 $ —

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

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Cash and cash equivalents $ 991.9 $ 1,259.9 $ 701.2

Restricted cash, included in other current and non-current assets 2.6 5.0 5.6

Restricted cash, included in prepaid and other current assets 1.7 2.6 5.0

Cash, cash equivalents and restricted cash $ 993.6 $ 1,262.5 $ 706.2

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Prepaid expenses $ 155.9 $ 194.6

Deferred consideration due from Biocon Biologics 321.2 —

Available-for-sale fixed income securities 37.0 35.3

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Equity securities 49.3 42.6

Deferred charge for taxes on intercompany profit 747.3 747.2

Income tax receivable 340.2 328.4

Other current assets 271.0 328.4

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Accounts payable $ 1,938.2 $ 1,766.6

The Company has certain voluntary supply chain finance programs with financial intermediaries which provide participating suppliers the option to be paid by the intermediary earlier than the original invoice due date.

The Company’s responsibility is limited to making payments on the terms originally negotiated with the suppliers, regardless of whether the intermediary pays the supplier in advance of the original due date.

The range of payment terms the Company negotiates with suppliers are consistent, regardless of whether a supplier participates in a supply chain finance program.

The total amounts due to financial intermediaries to settle supplier invoices under supply chain finance programs as of December 31, 2023 and 2022 were $ 65.1 million and $ 33.4 million, respectively.

These amounts are included within Accounts payable in the consolidated balance sheets.

Other current liabilities

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Other long-term obligations $ 1,516.9 $ 1,756.5

(1) Includes a total of $ 221.2 million due to Biocon Biologics.

(1) Balances as of December 31, 2023 and 2022 include a total of $ 15.8 million and $ 221.2 million, respectively, due to Biocon Biologics.

Refer to Note 9 Financial Instruments and Risk Management for additional information.

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Weighted-average discount rate 3.3 %

As of December 31, 2022, maturities of lease liabilities were as follows:

As of December 31, 2023, maturities of lease liabilities were as follows for each of the years ending December 31:

(In millions)

Year ending December 31,

Thereafter 39.5

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Total lease liability $ 248.4

As of December 31, 2022, the Company did not have any significant leases that have not yet commenced.

As of December 31, 2023, the Company had additional leases, primarily for administrative offices, that have not yet commenced totaling approximately $ 6.1 million.

For the years ended December 31, 2023, 2022 and 2021, the Company had operating lease expense of approximately $ 87.6 million, $ 90.9 million and $ 97.6 million, respectively.

Operating lease costs are classified primarily as SG&A and cost of sales in the consolidated statements of operations.

Equity Method Investments

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

During the years ended December 31, 2021 and 2020, 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 $ 5.7 million and $ 21.4 million, respectively, which was recognized as a component of Other (income) expense, net in the consolidated statements of operations.

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

(In millions) December 31, 2021

Other current liabilities 10.9

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

(In millions) December 31, 2021

Current assets $ 4.2

Noncurrent assets 0.5

Total assets 4.7

Current liabilities 2.8

Total liabilities 2.8

Net assets $ 1.9

Year Ended December 31,

(In millions) 2021 2020

Total revenues $ 326.7 $ 374.5

Gross loss ( 4.6 ) ( 4.6 )

Operating and non-operating expense 16.8 19.0

Net loss $ ( 21.4 ) $ ( 23.6 )

The Company’s net losses from its equity method investments included amortization expense related to the excess of the cost basis of the Company’s investment over the underlying assets of each individual investee.

For the years ended December 31, 2021 and 2020, the Company recognized net losses from equity method investments of $ 61.9 million, and $ 48.4 million, respectively, which were recognized as a component of Other (income) expense, net in the consolidated statements of operations.

The Company recognized the income tax credits and benefits from the clean energy investments as part of its provision for income taxes.

Goodwill and Intangible Assets

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(In millions) Developed Markets (1)

Greater China JANZ Emerging Markets (2)

Greater China JANZ (2)

Emerging Markets (3)

Balance at December 31, 2021 $ 8,723.4 $ 969.5 $ 776.3 $ 1,644.5 $ 12,113.7

Disposition (4)

( 743.9 ) ( 2.7 ) ( 32.6 ) ( 140.5 ) ( 919.7 )

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

Impairment — — — ( 117.0 ) ( 117.0 )

Foreign currency translation ( 518.0 ) ( 26.2 ) ( 54.7 ) ( 52.3 ) ( 651.2 )

Balance at December 31, 2022 $ 7,461.5 $ 940.6 $ 689.0 $ 1,334.7 $ 10,425.8

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

Disposition (3)

( 743.9 ) ( 2.7 ) ( 32.6 ) ( 140.5 ) ( 919.7 )

Acquisitions 95.9 — — — 95.9

Impairment (4)

( 544.0 ) — ( 30.0 ) ( 7.0 ) ( 581.0 )

Reclassification to assets held for sale ( 52.0 ) — — ( 137.0 ) ( 189.0 )

Foreign currency translation 146.0 ( 7.8 ) ( 13.3 ) ( 9.5 ) 115.4

Balance at December 31, 2023 $ 7,107.4 $ 932.8 $ 645.7 $ 1,181.2 $ 9,867.1

(1) Balances as of December 31, 2022, 2021 and 2020 include accumulated impairment losses of $ 385.0 million.

(2) Balance as of December 31, 2022 includes accumulated impairment loss of $ 117.0 million.

(3) Reflects goodwill relating to the biosimilars portfolio.

(1) Balance as of December 31, 2023 includes an accumulated impairment loss of $ 929.0 million.

Balances as of December 31, 2022 and 2021 include an accumulated impairment loss of $ 385.0 million.

(2) Balance as of December 31, 2023 includes an accumulated impairment loss of $ 30.0 million.

(3) Balance as of December 31, 2023 includes an accumulated impairment loss of $ 124.0 million.

Balance as of December 31, 2022 includes an accumulated impairment loss of $ 117.0 million.

(4) Reflects goodwill relating to the divestitures.

Refer to Note 5 Divestitures for additional information.

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 Biocon Biologics Transaction (refer to Note 5 Divestitures for additional information) and the decline in the Company’s share price during the first quarter of 2022, the Company performed an interim goodwill impairment test as of March 31, 2022.

The Company performed the annual goodwill impairment test as of April 1, 2023.

There were no significant changes from the interim goodwill test performed at March 31, 2022 and the results were consistent with the interim goodwill impairment test.

The Company performed both its interim and annual goodwill impairment tests on a quantitative basis for its five reporting units, North America, Europe, Emerging Markets, JANZ, and Greater China.

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

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

In estimating each reporting unit’s fair value, the Company performed an extensive valuation analysis, utilizing a discounted cash flow approach.

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.

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.

As of March 31, 2022 and April 1, 2022, the allocation of the Company’s total goodwill (prior to the reclassification of goodwill to assets held for sale) was as follows:

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

When compared to the prior year’s annual goodwill impairment test completed on April 1, 2022, the Company has experienced significant fluctuations in foreign exchange rates in certain international markets, combined with a significant increase in market interest rates.

These market factors have caused the discount rate utilized in all our reporting units to increase between 1.0 % to 4.5 %, resulting in a significant reduction in the calculated fair values at April 1, 2023 for all our reporting units.

Also, in conjunction with the Company’s annual strategic planning process which included determining long-term growth rate targets for our business, operational results during the forecast period were reduced and long-term growth rates were increased.

As a result of these changes, the calculated fair values of the North America, Greater China and Europe reporting units declined in excess of 10 % and the JANZ and Emerging Markets reporting units declined in excess of 15 % when compared to the prior year fair values.

As of April 1, 2023, the allocation of the Company’s total goodwill was as follows:

North America $ 3.15 billion, Europe $ 4.47 billion, Emerging Markets $ 1.34 billion, JANZ $ 0.68 billion and Greater China $ 0.94 billion.

As of March 31, 2022 and April 1, 2022, the Company determined that the fair value of the North America 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 $ 797 million or 5.3 % for both the interim and annual goodwill impairment tests.

As it relates to the income approach for the Europe reporting unit at March 31, 2022 and April 1, 2022, the Company forecasted cash flows for the next 10 years.

As of April 1, 2023, the Company determined that the fair value of the North America 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 $ 535 million or 3.9 % for the annual goodwill impairment test.

As it relates to the discounted cash flow approach for the Europe reporting unit at April 1, 2023, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately 2.4 %.

A terminal year value was calculated with a negative 1.0 % revenue growth rate applied.

A terminal year value was calculated with a 2.0 % revenue growth rate applied.

The discount rate utilized was 11.0 % and the estimated tax rate was 14.9 %.

Under the market-based approach, we utilized an estimated range of market multiples of 7.5 to 8.0 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 1.0 % or an increase in discount rate by 0.5 % 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 $ 231 million or 7.4 % for both the interim and annual goodwill impairment tests.

As it relates to the income approach for the JANZ reporting unit at March 31, 2022 and April 1, 2022, the Company forecasted cash flows for the next 10 years.

For the JANZ reporting unit, the estimated fair value exceeded its carrying value by approximately $ 145 million or 5.5 % for the annual goodwill impairment test.

As it relates to the discounted cash flow approach for the JANZ reporting unit at April 1, 2023, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately negative 2.0 %.

A terminal year value was calculated assuming no revenue growth rate.

A terminal year value was calculated with a 1.5 % revenue growth rate applied.

The discount rate utilized was 7.0 % and the estimated tax rate was 30.6 %.

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 0.5 % or an increase in discount rate by 0.5 % would result in an impairment charge for the JANZ reporting unit.

For the Emerging Markets reporting unit, the estimated fair value exceeded its carrying value by approximately $ 816 million or 10.3 % for both the interim and annual goodwill impairment tests.

As it relates to the income approach for the Emerging Markets reporting unit at March 31, 2022 and April 1, 2022, the Company forecasted cash flows for the next 10 years.

For the Emerging Markets reporting unit, the estimated fair value exceeded its carrying value by approximately $ 513 million or 7.7 % for the annual goodwill impairment test.

As it relates to the discounted cash flow approach for the Emerging Markets reporting unit at April 1, 2023, the Company forecasted cash flows for the next 10 years.

During the forecast period, the revenue compound annual growth rate was approximately 1.8 %.

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The discount rate utilized was 11.5 % and the estimated tax rate was 17.4 %.

Under the market-based approach, we utilized an estimated market multiple of 7.5 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 approximately 8.5 % or an increase in discount rate by 3.0 % would result in an impairment charge for the Emerging Markets reporting unit.

Subsequent to the completion of the interim goodwill impairment test and in conjunction with the Biocon Biologics Transaction, the Company allocated goodwill to its biosimilars portfolio using a relative fair value approach and reclassified the amount to assets held for sale.

If all other assumptions are held constant, a reduction in the terminal value growth rate by 2.5 % or an increase in discount rate by 1.0 % would result in an impairment charge for the Emerging Markets reporting unit.

In the third quarter of 2023, the Company allocated goodwill of $ 69 million to its women’s healthcare business using a relative fair value approach and reclassified the amount to Assets Held for Sale .

In the fourth quarter of 2023, the Company allocated goodwill of $ 120 million to its API business in India using a relative fair value approach and reclassified the amount to Assets Held for Sale .

In the fourth quarter of 2023, the OTC Business met the criteria to be classified as held for sale.

The Company allocated goodwill to its OTC Business using a relative fair value approach and recorded a goodwill impairment charge of $ 580.1 million in that quarter within the Europe (majority of the charge), JANZ and Emerging Markets reporting units, which was recorded within SG&A in the consolidated statement of operations.

The goodwill impairment charge was the result of the estimated proceeds less selling costs from the planned divestiture of the OTC Business being below the carrying value of the net assets of the disposal group.

In conjunction with the Biocon Biologics Transaction, the Company allocated goodwill to its biosimilars portfolio using a relative fair value approach and reclassified the amount to assets held for sale.

Upon closing of the Biocon Biologics Transaction on November 29, 2022, we derecognized goodwill of $ 919.7 million allocated to the biosimilars portfolio.

In the fourth quarter of 2022, we determined that our Upjohn Distributor Markets should be classified as held for sale in the December 31, 2022 consolidated balance sheet.

The Company allocated goodwill to its Upjohn Distributor Markets using a relative fair value approach and recorded a goodwill impairment charge of $ 117.0 million within the Emerging Markets reporting unit, which was recorded within SG&A in the consolidated statement of operations.

The goodwill impairment charge was the result of the estimated proceeds less selling costs from the disposal of the Upjohn Distributor Markets being below the carrying value of the net assets of the disposal group.

Refer to Note 5 Divestitures for additional information.

In the fourth quarter of 2022, the commercialization rights in the Upjohn Distributor Markets met the criteria to be classified as held for sale.

The Company allocated goodwill to its commercialization rights in the Upjohn Distributor Markets using a relative fair value approach and recorded a goodwill impairment charge of $ 117.0 million in that quarter within the Emerging Markets reporting unit, which was recorded within SG&A in the consolidated statement of operations.

The goodwill impairment charge was the result of the estimated proceeds less selling costs from the disposal of the commercialization rights in the Upjohn Distributor Markets being below the carrying value of the net assets of the disposal group.

Refer to Note 5 Divestitures for additional information on these divestitures.

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

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(1) Represents amortizable intangible assets.

Other intangibles consist principally of customer lists and contractual rights.

Other intangible assets consist principally of customer lists and contractual rights.

During the year ended December 31, 2023, the Company reclassified intangible assets of approximately $ 1.93 billion relating to the remaining announced divestitures that have not been consummated as of December 31, 2023 to Assets Held for Sale.

Refer to Note 5 Divestitures for additional information.

During the year ended December 31, 2023, the Company recorded intangible assets of approximately $ 334.0 million as part of the Oyster Point acquisition, and IPR&D of approximately $ 290.0 million as part of the Famy Life Sciences acquisition.

Refer to Note 4 Acquisitions and Other Transactions for additional information.

Product rights and licenses are primarily comprised of the products marketed at the time of acquisition.

2 unchanged sentences

Brands $ 7,723.4 $ 5,206.8 $ 961.0 $ 2,855.9 $ 16,747.1

Complex Gx and Biosimilars 177.5 — 0.9 — 178.4

Generics 1,708.2 9.7 216.2 179.8 2,113.9

2 unchanged sentences

Brands $ 8,762.2 $ 5,632.3 $ 1,061.3 $ 3,122.5 $ 18,578.3

Complex Gx and Biosimilars 226.8 — 1.5 — 228.3

Generics 3,448.9 10.6 264.2 263.9 3,987.6

Total Product Rights and Licenses $ 12,211.1 $ 5,642.9 $ 1,325.5 $ 3,386.4 $ 22,565.9

(a) As a result of the contribution of the biosimilars business to Biocon Biologics in November 2022, Complex Gx and Biosimilars , which were previously presented as a separate line item, are now included within Generics .

Reclassifications were made to prior periods to conform to the current period presentation.

Amortization expense and intangible asset disposal & impairment charges (which are included as a component of amortization expense) are classified primarily within Cost of Sales in the consolidated statements of operations, and were as follows for the years ended December 31, 2023, 2022 and 2021:

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The assumptions inherent in the estimated future cash flows include, among other things, the impact of the current competitive environment and future market expectations.

A discount rate of 9.0 % was utilized in the valuations performed during the years ended December 31, 2021 and 2020.

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

In the fourth quarter of 2022, the Company recognized an intangible asset charge of approximately $ 172.9 million, which was recorded within Cost of Sales in the consolidated statement of operations, to write down the disposal group to fair value, less cost to sell, related to our Upjohn Distributor Markets, which was classified as held for sale.

The Company has approximately $ 230.3 million of intangible assets related to the Upjohn Distributor Markets that have been classified as held for sale in the December 31,2022 consolidated balance sheet.

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

During the years ended December 31, 2023, and 2022, the Company recognized intangible asset charges of approximately $ 32.0 million and $ 172.9 million, respectively, recorded within Cost of Sales in the consolidated statements of operations, to write down the disposal group to fair value, less cost to sell, related to our commercialization rights in the Upjohn Distributor Markets, which was classified as held for sal e.

Refer to Note 5 Divestitures for additional information.

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The fair value of IPR&D was calculated as the present value of the estimated future net cash flows using a market rate of return.

The assumptions inherent in the estimated

future cash flows include, among other things, the impact of changes to the development programs, the projected development and regulatory time frames and the current competitive environment.

The assumptions inherent in the estimated future cash flows include, among other things, the impact of changes to the development programs, the projected development and regulatory time frames and the current competitive environment.

Discount rates ranging between 10.0 % and 24.0 % were utilized in the valuations performed during the year ended December 31, 2023.

A discount rate of 10.5 % was utilized in the valuations performed during the year ended December 31, 2022.

Discount rates ranging between 7.0 % and 9.0 %, and 9.0 % and 11.0 % were utilized in the valuations performed during the years ended December 31, 2021 and 2020, respectively.

Discount rates ranging between 7.0 % and 9.0 % were utilized in the valuations performed during the year ended December 31, 2021.

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 .

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Notional Amount Designated as a Net Investment Hedge

(in millions) Principal Amount December 31,

(In millions)

Principal Amount December 31,

2023 December 31,

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1,250.0 1,250.0 1,250.0

1.908 % Euro Senior Notes due 2032

1,250.0 1,250.0 1,250.0

Foreign currency forward contracts 500.0 500.0 —

Euro Total € 5,600.0 € 5,600.0 € 5,100.0

1 unchanged sentence

Yen Total ¥ 40,000.0 ¥ 40,000.0 ¥ 40,000.0

(1) The Senior Notes were repaid at maturity during the second quarter of 2022.

At December 31, 2022, the principal amount of the Company’s outstanding Yen borrowings and the notional amount of the Yen borrowings designated as net investment hedge was $ 305.1 million.

At December 31, 2023, the principal amount of the Company’s outstanding Yen borrowings and the notional amount of the Yen borrowings designated as net investment hedges was $ 283.6 million.

During the third quarter of 2023, the Company executed fixed-rate cross-currency interest rate swaps with notional amounts totaling Japanese Yen 14.6 billion with settlement dates through 2026.

The transactions hedge a portion of the Company’s net investment in certain Yen-functional currency subsidiaries.

All changes in the fair value of this derivative instrument, which is designated as a net investment hedge, are marked-to-market using the current spot exchange rate as of the end of the period.

The portion of this change related to the excluded component will be amortized in interest expense over the life of the derivative while the remainder will be recorded in AOCE until the sale or substantial liquidation of the underlying net investments.

The semiannual net interest payment received related to the fixed-rate component of the cross-currency interest rate swaps will be reflected in operating cash flows.

During the fourth quarter of 2023, the Company executed foreign currency forward contracts with notional amounts totaling Euro 500 million with settlement dates in 2024.

The transactions hedge a portion of the Company’s net investment in certain Euro functional currency subsidiaries.

The contracts have been designated as a net investment hedge.

Interest Rate Risk Management

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Any ineffectiveness in a cash flow hedging relationship is recognized immediately in earnings in the consolidated statements of operations.

Fair Value Hedging Relationships

The Company's interest rate swaps designated as fair value hedges convert the fixed rate on a portion of the Company's fixed-rate senior notes to a variable rate.

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 Company’s fair value hedge was terminated during 2020.

Credit Risk Management

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The Company is not subject to any obligations to post collateral under derivative instrument contracts.

Certain derivative instrument contracts entered into by the

Company are governed by master agreements, which contain credit-risk-related contingent features that would allow the counterparties to terminate the contracts early and request immediate payment should the Company trigger an event of default on other specified borrowings.

Certain derivative instrument contracts entered into by the Company are governed by master agreements, which contain credit-risk-related contingent features that would allow the counterparties to terminate the contracts early and request immediate payment should the Company trigger an event of default on other specified borrowings.

The Company records all derivative instruments on a gross basis in the consolidated balance sheets.

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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,

Amount of Gains/(Losses) Recognized in Earnings

Year Ended December 31,

(In millions) Location of Gain/(Loss) 2023 2022 2021

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

Interest rate swaps Interest expense (3)

$ — $ — $ 22.1 $ — $ — $ —

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

— — ( 22.1 ) — — —

Derivative Financial Instruments in Cash Flow Hedging Relationships :

Foreign currency forward contracts Other (income) expense, net (4)

Derivative Financial Instruments in Net Investment Hedging Relationships:

Cross-currency interest rate swaps

Interest expense (2)

$ 1.8 $ — $ —

Derivative Financial Instruments Not Designated as Hedging Instruments:

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

Foreign currency option and forward contracts Other income, net (2)

$ 56.3 $ ( 82.1 ) $ 39.3

8 unchanged sentences

( 3.8 ) ( 3.5 ) ( 3.4 ) ( 4.8 ) ( 4.5 ) ( 4.3 )

Derivative Financial Instruments in Net Investment Hedging Relationships:

Cross-currency interest rate swaps

( 1.7 ) — — — — —

Foreign currency forward contracts

( 18.3 ) — — — — —

Non-derivative Financial Instruments in Net Investment Hedging Relationships:

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Total $ ( 99.6 ) $ 390.8 $ 479.0 $ 40.5 $ 84.7 $ 26.6

(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.

(1) At December 31, 2023, the Company expects that approximately $ 21.0 million of pre-tax net losses on cash flow hedges will be reclassified from AOCE into earnings during the next twelve months.

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

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

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

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Total liabilities at recurring fair value measurement $ — $ 124.6 $ 215.1 $ — $ 187.0 $ 375.0

For financial assets and liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including the LIBOR yield curve, foreign exchange forward prices, and bank price quotes.

For financial assets and liabilities that utilize Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including interest rate yield curves, foreign exchange forward prices and bank price quotes.

For the years ended December 31, 2023 and 2022, there were no transfers between Level 1 and 2 of the fair value hierarchy.

Below is a summary of valuation techniques for Level 1 and Level 2 financial assets and liabilities:

Below is a summary of valuation techniques for the Company’s financial assets and liabilities:

• Cash equivalents — valued at observable net asset value prices.

• Equity securities, exchange traded funds — valued at the active quoted market prices from broker or dealer quotations or transparent pricing sources at the reporting date.

Unrealized gains and losses attributable to changes in fair value are included in Other (income) expense, net , in the consolidated statements of operations.

Unrealized gains and losses attributable to changes in fair value are included in Other income, net , in the consolidated statements of operations.

• Equity securities, marketable securities — valued using quoted stock prices from public exchanges at the reporting date.

Unrealized gains and losses attributable to changes in fair value are included in Other (income) expense, net , in the consolidated statements of operations.

Unrealized gains and losses attributable to changes in fair value are included in Other income, net , in the consolidated statements of operations.

• CCPS in Biocon Biologics — valued using a Monte Carlo simulation model using Level 3 inputs.

The fair value of the CCPS is sensitive to changes in the forecasts of operating metrics and changes in volatility and discount rates.

The fair value of the CCPS is sensitive to changes in the forecasts of operating metrics, changes in volatility and discount rates, and share dilution.

The Company elected the fair value option for the CCPS under ASC 825.

The fair value is reassessed quarterly and any change in the fair value estimate is recorded in Other (income) expense, net , in the consolidated statements of operations for that period.

The fair value is reassessed quarterly and any change in the fair value estimate is recorded in Other income, net in the consolidated statements of operations for that period.

• Available-for-sale fixed income investments — valued at the quoted market prices from broker or dealer quotations or transparent pricing sources at the reporting date.

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

As of December 31, 2022, the Company has a contingent consideration liability of $ 132.0 million related to the Respiratory Delivery Platform and $ 221.2 million related to the Biocon Biologics Transaction.

The contingent consideration liability related to the Biocon Biologics Transaction represents the amount of the closing working capital target to which the parties have agreed that may become payable to Biocon Biologics in connection with certain events in the future, depending on the valuations attributable to such events.

As of December 31, 2023 and 2022, the Company had a contingent consideration liability of $ 177.6 million and $ 132.0 million, respectively, related to the Respiratory Delivery Platform, and $ 15.8 million and $ 221.2 million, respectively, related to the Biocon Biologics Transaction.

The measurement of these contingent consideration liabilities is calculated using unobservable Level 3 inputs based on the Company’s own assumptions primarily related to the probability and timing of future events and payments which are discounted using a market rate of return.

At December 31, 2022 and 2021, discount rates ranging from 6.4 % to 9.0 % were utilized in the valuations.

At December 31, 2023 and 2022, discount rates ranging from 6.4 % to 8.0 %, and 6.4 % to 9.0 %, respectively, were utilized in the valuations.

Significant changes in unobservable inputs could result in material changes to the contingent consideration liabilities.

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

Biocon Biologics Transaction — 220.0 220.0

Payments ( 64.1 ) — ( 64.1 )

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Payments ( 43.0 ) ( 220.0 ) ( 263.0 )

Biocon Biologics Transaction — 220.0 220.0

Reclassifications 54.7 ( 54.7 ) —

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Mature in five years and later 16.4

Short-Term Borrowings

The Company did not have any short-term borrowings as of December 31, 2022 and had $ 1.49 billion of short-term borrowings as of December 31, 2021.

(In millions) December 31, 2022 December 31, 2021

Commercial paper notes $ — $ 1,173.4

Receivables Facility — 318.5

Short-term borrowings $ — $ 1,493.0

The following provides an overview of the Company’s short-term credit facilities.

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In addition, the agreements governing the Receivables Facility and Note Securitization Facility contain various customary affirmative and negative covenants, and customary default and termination provisions with which the Company was compliant as of December 31, 2023.

As of December 31, 2022 and 2021, the Company had $ 474.9 million and $ 388.9 million, respectively, of accounts receivable balances sold to its subsidiary Mylan Securitization under the Receivables Facility.

As of December 31, 2023 and 2022, the Company had $ 564.5 million and $ 474.9 million, respectively, of accounts receivable balances sold to its subsidiary Mylan Securitization LLC under the Receivables Facility.

Long-Term Debt

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Current portion of long-term debt:

2022 Euro Senior Notes (a) ****

2023 Senior Notes (a) *

3.125 % — 750.6

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4.200 % — 499.8

2023 Senior Notes (c) *

3.125 % 750.6 —

2023 Senior Notes * 4.200 % 499.8 —

2024 Euro Senior Notes **** 1.023 % 831.5 —

2024 Euro Senior Notes ** 2.250 % 1,103.5 —

Other 0.4 0.7

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Non-current portion of long-term debt:

2023 Senior Notes (c) *

3.125 % — 766.1

2023 Senior Notes * 4.200 % — 499.6

2024 Euro Senior Notes ** 2.250 % — 1,069.8

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Long-term debt $ 16,188.1 $ 18,015.2

(a) The 2022 Euro Senior Notes were repaid at maturity in the second quarter of 2022.

(b) The 2022 Senior Notes were repaid at maturity in the second quarter of 2022.

(c) 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.

(a) 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 was amortized to interest expense over the remaining term of the notes, which were repaid at maturity in the first quarter of 2023.

(b) The 2023 Senior Notes were repaid at maturity in the fourth quarter of 2023.

* Instrument was issued by Mylan Inc.

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**** Instrument was issued by Upjohn Finance B.V.

Upjohn Senior Notes

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

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.

The Unregistered Upjohn U.S.

Dollar Notes were issued pursuant to an indenture dated June 22, 2020 in a private offering exempt from the registration requirements of the Securities.

In October 2021, substantially all of the then-outstanding $ 7.45 billion aggregate principal amount of Unregistered Upjohn U.S.

Dollar Notes were exchanged for Registered Upjohn Notes registered under the Securities Act in the same aggregate principal amount and with terms substantially identical in all material respects with the corresponding series of Unregistered Upjohn U.S.

Dollar Notes.

The Upjohn Euro Notes were issued pursuant to an indenture dated June 23, 2020 in a private offering exempt from the registration requirements of the Securities Act.

Viatris and Upjohn Finance B.V.

dollar functional entities.

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

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

The YEN Term Loan Facility and the 2021 Revolving Facility will mature in July 2026 and contain customary affirmative covenants for facilities of this type, including 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 a financial covenant, which set the Maximum Leverage Ratio as of the end of any quarter 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, and other 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.

Up to $ 1.65 billion of the 2021 Revolving Facility will be available to repay outstanding borrowings under our Commercial Paper Program if necessary.

The YEN Term Loan Facility and the Revolving Facility will mature in July 2026 and contain customary affirmative covenants for facilities of this type, including 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 a financial covenant, which set the Maximum Leverage Ratio as of the end of any quarter at 3.75 to 1.00 for the quarter ended March 31, 2023 and each quarter ending thereafter, except in circumstances as defined in the related credit agreement, and other 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.

Up to $ 1.65 billion of the Revolving Facility may be used to support borrowings under our Commercial Paper Program.

Effective April 28, 2023, we executed an amendment to the Revolving Facility to convert the benchmark interest rate from LIBOR to an adjusted SOFR, with no change in the applicable interest rate margins.

At December 31, 2023 and 2022, the aggregate fair value of the Company’s outstanding notes was approximately $ 15.25 billion and $ 15.36 billion, respectively.

The fair values of the outstanding notes were valued at quoted market prices from broker or dealer quotations and were classified as Level 2 in the fair value hierarchy.

Mandatory minimum repayments remaining on the notional amount of outstanding long-term debt at December 31, 2022 were as follows for each of the periods ending December 31:

Mandatory minimum repayments remaining on the notional amount of outstanding long-term debt at December 31, 2023 were as follows for each of the years ending December 31:

(In millions) Total

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Accumulated other comprehensive loss:

Net unrealized (loss) on marketable securities, net of tax $ ( 2.3 ) $ —

Net unrealized loss on available-for-sale fixed income securities, net of tax $ ( 1.2 ) $ ( 2.3 )

Net unrecognized gain and prior service cost related to defined benefit plans, net of tax 271.4 268.5

Net unrecognized (loss)/gain on derivatives in cash flow hedging relationships, net of tax ( 18.5 ) 9.2

Net unrecognized loss on derivatives in cash flow hedging relationships, net of tax ( 8.0 ) ( 18.5 )

Net unrecognized gain on derivatives in net investment hedging relationships, net of tax 237.1 377.0

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Year Ended December 31, 2023

Gains and Losses on Derivatives in Cash Flow Hedging Relationships Gains and Losses on Net Investment Hedges Gains and Losses on Marketable Securities Defined Pension Plan Items Foreign Currency Translation Adjustment Totals

Gains and Losses on Derivatives in Cash Flow Hedging Relationships Gains and Losses on Net Investment Hedges Gains and Losses on Available-For-Sale Fixed Income Securities Defined Pension Plan Items Foreign Currency Translation Adjustment Totals

(In millions) Foreign Currency Forward Contracts Interest Rate Swaps Total

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Loss on interest rate swaps classified as cash flow hedges, included in interest expense 4.8 4.8 4.8

Gain on divestiture of defined pension plan, included in SG&A ( 3.0 ) ( 3.0 )

Amortization of prior service costs included in SG&A ( 0.3 ) ( 0.3 )

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Net other comprehensive earnings (loss), before tax 13.9 ( 178.5 ) 1.5 ( 18.7 ) 139.2 ( 42.6 )

Income tax provision ( 9.2 ) 99.8 ( 0.5 ) 42.8 — 132.9

Income tax provision (benefit) 3.4 ( 38.6 ) 0.4 ( 21.6 ) — ( 56.4 )

Balance at December 31, 2023, net of tax $ ( 8.0 ) $ 237.1 $ ( 1.2 ) $ 271.4 $ ( 3,246.7 ) $ ( 2,747.4 )

Year Ended December 31, 2022

(In millions) Foreign Currency Forward Contracts Interest Rate Swaps Total

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Net other comprehensive earnings (loss), before tax ( 36.9 ) 460.1 ( 2.8 ) 279.1 ( 1,583.5 ) ( 884.0 )

Income tax provision 8.9 86.5 0.1 15.6 — 111.1

Income tax (benefit) provision ( 9.2 ) 99.8 ( 0.5 ) 42.8 — 132.9

Balance at December 31, 2022, net of tax $ ( 18.5 ) $ 377.0 $ ( 2.3 ) $ 268.5 $ ( 3,385.9 ) $ ( 2,761.2 )

Year Ended December 31, 2021

(In millions) Foreign Currency Forward Contracts Interest Rate Swaps Total

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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( 152.3 ) 308.8 777.9

Income tax provision (benefit) $ 734.6 $ 604.7 $ ( 51.3 )

Earnings before income taxes:

Income tax provision $ 148.2 $ 734.6 $ 604.7

Earnings (loss) before income taxes:

United States ( 951.5 ) 794.8 ( 1,982.5 )

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Withholding taxes 7.4 % 1.5 % ( 1.3 ) %

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

Deferred tax impact of internal restructuring ( 74.0 ) % — % — %

Other items 19.5 % 1.5 % ( 4.2 ) %

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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.

Prior to the Combination, Mylan was a U.K.

tax resident, with its Corporate seat in the Netherlands.

As of the date of the Combination, Viatris is domiciled in the U.S., and the applicable income tax rate to Viatris is the U.S.

statutory federal income tax rate of 21.0 %.

The effective tax rate reconciliations of the years ended December 31, 2021 and December 31, 2020 have been recast to reflect this change.

The Company realizes benefits from lower tax rates in Singapore and Puerto Rico due to manufacturing and other incentives.

During the year ended December 31, 2022, a Puerto Rico net operating loss, which was recorded in conjunction with the Combination, expired unutilized resulting in a $ 274.4 million write-off of deferred tax asset and corresponding valuation allowance.

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As of December 31, 2023, the Company had the following carryforwards and attributes:

federal net operating loss carryforwards of $ 4.6 million.

federal net operating loss carryforwards of $ 281.9 million, which were recorded in connection with the Oyster Point acquisition.

While the utilization of these carryforwards is subject to Section 382 of the Code, the Company does not anticipate that this limitation will impair our ability to utilize the carryovers.

state income tax loss carryforwards of approximately $ 3.40 billion, which are largely offset by a valuation allowance.

net operating loss carryforwards of approximately $ 1.01 billion, of which $ 810.8 million can be carried forward indefinitely, with the remaining $ 195.1 million expiring in years 2023 through 2042.

• Foreign deductible attributes of $ 37.3 million that can be carried forward indefinitely, which are offset by a full valuation allowance.

net operating loss carryforwards of approximately $ 879.4 million, of which $ 718.1 million can be carried forward indefinitely, with the remaining $ 161.3 million expiring in years 2024 through 2043.

and foreign credit carryovers of $ 208.5 million, expiring in various amounts through 2043.

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While state loss carryforwards may be limited by Section 382 of the Code, the carryforwards are largely offset by a valuation allowance.

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

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.

Legislative Updates

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) into law, which includes a new corporate alternative minimum tax (“CAMT”) and an excise tax of 1% on the fair market value of net stock repurchases.

Both provisions are effective for years after December 31, 2022.

The Company reflected the applicable estimated excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability in Other current liabilities on our consolidated balance sheet as of December 31, 2023.

The share repurchase and authorization amounts disclosed in this Form 10-K exclude the excise tax.

The Company does not anticipate being subject to the 15% CAMT tax in 2023 based on enacted law and regulatory guidance;

however, our CAMT status for 2023 could change in the future, depending on new regulations or regulatory guidance issued by the U.S.

Department of the Treasury.

In addition, many countries are actively considering or have proposed or enacted changes to their tax laws based on the Pillar Two Global Anti-Base Erosion Rules (“Pillar Two Rules”) proposed by the OECD.

The Pillar Two Rules impose a global minimum tax of 15%, and under these rules, we may be required to pay a “top-up” tax to the extent our effective tax rate in any given country is below 15%.

We will continue to monitor the implementation of the Pillar Two Rules in the countries in which we operate.

The earliest effective date of the Pillar Two Rules in any adopting country is January 1, 2024, with many countries postponing implementation to January 1, 2025 or later, if at all.

We are currently evaluating the potential impact on our consolidated financial statements and related disclosures.

Tax Examinations

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The years 2015 through 2021 are open years under examination.

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.

The years 2012, 2013 and 2014 had 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.

Several international audits are 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.

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In Australia, the tax authorities have issued notices of assessments to the Company for the years ended December 2009 to December 2020, 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 for the years ended December 2009 to December 2020 and we have commenced litigation in the Australian Federal Court challenging those decisions.

The tax authorities denied our objections to the assessments for the years ended December 2009 to December

2020 and we have commenced litigation in the Australian Federal Court challenging those decisions.

A trial took place in October 2023 and a decision is awaited.

The Company made a partial payment of $ 56.0 million in 2021 and $ 5.2 million in 2022 in order to stay potential interest and penalties resulting from this litigation.

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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.

Some of these issues were resolved through the Company entering into an agreement with the tax authorities in March 2023 in respect of the pricing of its international transactions.

The Company recorded tax expense of approximately $ 22.3 million during the year ended December 31, 2023, due to the terms of this agreement.

The remaining issues are in the audit phase or are being challenged in the Indian tax courts.

The Company has recorded a net reserve for uncertain tax positions of $ 287.1 million and $ 298.1 million, including interest and penalties, in connection with its international audits at December 31, 2023 and 2022, respectively.

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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.

The IRS’ appeal was denied by the U.S.

Court of Appeals for the Third Circuit and this matter is now closed.

Accounting for Uncertainty in Income Taxes

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Related accrued interest and penalties included in the consolidated balance sheets were $ 115.7 million and $ 106.4 million as of December 31, 2023 and 2022, respectively.

For the years ended December 31, 2022, 2021 and 2020, the Company recognized $ 21.1 million of tax expense, $ 18.5 million of tax expense, and $ 6.0 million of tax benefits, respectively, related to interest and penalties on uncertain tax positions.

For the years ended December 31, 2023, 2022 and 2021, the Company recognized $ 15.4 million, $ 21.1 million, and $ 18.5 million of tax expense, 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 ( 13.0 ) ( 1.9 ) ( 7.0 )

(Reduction) addition due to acquisition ( 27.3 ) ( 4.8 ) 264.0

Reduction due to acquisition — ( 27.3 ) ( 4.8 )

Impact of foreign currency translation ( 7.2 ) — —

Unrecognized tax benefit — end of year $ 272.8 $ 296.7 $ 322.9

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

The 2020 Incentive Plan and 2003 LTIP include (i) 72,500,000 shares of Common Stock authorized for grant pursuant to the 2020 Incentive Plan, which may include dividend payments payable in Common Stock on unvested shares granted under awards, (ii) 6,757,640 shares of Common Stock to be issued pursuant to the exercise of outstanding stock options granted to participants under the 2003 LTIP and assumed by Viatris in connection with the Combination and (iii) 13,535,627 shares of Common Stock subject to outstanding equity-based awards, other than stock options, assumed by Viatris in connection with the Combination, or that otherwise remain available for issuance under the 2003 LTIP.

The 2020 Incentive Plan and 2003 LTIP include (i) 72,500,000 shares of Viatris’ common stock authorized for grant pursuant to the 2020 Incentive Plan, which may include dividend payments payable in common stock on unvested shares granted under awards, (ii) 6,757,640 shares of common stock to be issued pursuant to the exercise of outstanding stock options granted to participants under the 2003 LTIP and assumed by Viatris in connection with the Combination and (iii) 13,535,627 shares of common stock subject to outstanding equity-based awards, other than stock options, assumed by Viatris in connection with the Combination, or that otherwise remain available for issuance under the 2003 LTIP.

Under the 2020 Incentive Plan and 2003 LTIP, shares are reserved for issuance to key employees, consultants, independent contractors and non-employee directors of the Company through a variety of incentive awards, including:

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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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Outstanding at December 31, 2022 4,449,642 $ 38.53

Granted 283,361 7.68

Exercised ( 26,457 ) 5.65

Forfeited ( 547,213 ) 32.63

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As of December 31, 2023, stock awards outstanding, stock awards vested and expected to vest and stock awards exercisable had average remaining contractual terms of 3.7 years, 3.7 years and 3.5 years, respectively.

Also, at December 31, 2022, stock awards outstanding, stock awards vested and expected to vest and stock awards exercisable had no aggregate intrinsic value.

Also, at December 31, 2023, stock awards outstanding, stock awards vested and expected to vest and stock awards exercisable had aggregate intrinsic values of $ 0.6 million, $ 0.6 million, and $ 0.3 million, respectively.

A rollforward of the changes in the Company’s nonvested Restricted Stock Awards (restricted stock and restricted stock unit awards, including PSUs) from December 31, 2022 to December 31, 2023 is presented below:

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Of the 20,402,621 Restricted Stock Awards granted during the year ended December 31, 2023, 14,104,207 vest ratably in three years or less and are not subject to market or performance conditions.

Of the remaining Restricted Stock Awards

granted, 290,173 are not subject to market conditions and will cliff vest within a three -year period, and 5,118,664 are subject to market or performance conditions and will cliff vest in three years or less.

Of the remaining Restricted Stock Awards granted, 299,207 are not subject to market conditions and will cliff vest within a three-year period, and 5,999,207 are subject to market or performance conditions and will cliff vest in three years or less.

As of December 31, 2023, the Company had $ 181.0 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 1.5 years.

The total intrinsic value of Restricted Stock Awards released during the years ended December 31, 2022 and 2021 was $ 51.8 million and $ 78.1 million, respectively.

With respect to options granted under the 2020 Incentive Plan and 2003 LTIP, the fair value of each option grant was estimated at the date of grant using the Black-Scholes option pricing model.

Black-Scholes utilizes assumptions related to volatility, the risk-free interest rate, the dividend yield and employee exercise behavior.

Expected volatilities utilized in the model are based mainly on the implied volatility of the Company’s stock price and other factors.

The risk-free interest rate is derived from the U.S.

Treasury yield curve in effect at the time of grant.

The model incorporates exercise and post-vesting forfeiture assumptions based on an analysis of historical data.

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

There were no options granted during the years ended December 31, 2022 or 2021.

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

Year Ended December 31,

Volatility 46.7 %

Risk-free interest rate 1.0 %

Expected term (years) 6.5

Forfeiture rate 5.5 %

Weighted average grant date fair value per option $ 8.07

Dividend yield — %

The total intrinsic value of Restricted Stock Awards released and stock options exercised during the years ended December 31, 2023 and 2022 was $ 169.2 million and $ 51.8 million, respectively.

Employee Benefit Plans

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(In millions) 2023 2022 2023 2022

Unrecognized actuarial (gain) loss $ ( 293.6 ) $ ( 59.9 ) $ ( 22.0 ) $ 21.7

Unrecognized actuarial net gain $ ( 268.1 ) $ ( 293.6 ) $ ( 43.4 ) $ ( 22.0 )

Unrecognized prior service cost (credit) 19.7 4.0 ( 3.0 ) ( 3.7 )

Total $ ( 248.4 ) $ ( 289.6 ) $ ( 46.4 ) $ ( 25.7 )

The unrecognized net actuarial (gains) 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.

The unrecognized net actuarial gains 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.

The amortization period is the average remaining service period that active employees are expected to receive benefits, unless a plan is mostly inactive in which case the amortization period is the average remaining life expectancy of the plan participants.

Unrecognized prior service cost is amortized over the future service periods of those employees who are active at the dates of the plan amendments and who are expected to receive benefits.

Unrecognized prior service cost (credit) is amortized over the future service periods of those employees who are active at the dates of the plan amendments and who are expected to receive benefits.

If all or almost all of a plan's participants are inactive, unrecognized prior service cost is amortized over the remaining life expectancy of those participants.

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(In millions) Pension Benefits Other Postretirement Benefits

Unrecognized actuarial (gain) loss $ ( 236.9 ) $ ( 43.4 )

Amortization of actuarial gain/(loss) 3.5 ( 0.3 )

Unrecognized prior service credit (cost) ( 1.4 ) ( 0.5 )

Amortization of prior service costs ( 0.9 ) 0.5

Unrecognized actuarial loss (gain) $ 8.3 $ ( 22.8 )

Amortization of actuarial gain 20.5 1.4

Unrecognized prior service cost 16.3 —

Amortization of prior service (credit) cost ( 1.0 ) 0.7

Impact of foreign currency translation ( 2.9 ) —

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Plan curtailment, settlement and termination ( 3.8 ) 2.3 ( 16.5 ) — ( 3.9 ) —

Amortization of prior service costs 0.9 0.9 — ( 0.6 ) — —

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

Amortization of prior service cost (credit) 2.1 0.9 0.9 ( 0.7 ) ( 0.6 ) —

Recognized net actuarial (gains) losses ( 18.3 ) ( 0.2 ) 1.3 ( 1.4 ) 0.3 0.2

Net periodic benefit cost $ 7.6 $ 7.8 $ ( 10.2 ) $ 6.9 $ 2.9 $ 6.2

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Participant contributions 0.5 3.3 4.1 4.5

Acquisitions 2.8 4.0 — —

(Divestitures) acquisitions ( 8.8 ) 2.8 — —

Plan settlements and terminations 8.6 ( 82.0 ) — ( 4.5 )

Actuarial (gains) losses ( 439.4 ) ( 26.1 ) ( 43.3 ) 16.2

Actuarial losses (gains) 40.8 ( 439.4 ) ( 22.8 ) ( 43.3 )

Benefits paid ( 74.0 ) ( 54.1 ) ( 15.2 ) ( 14.7 )

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Participant contributions 0.5 3.3 4.1 4.5

Acquisitions — ( 2.1 ) — —

Divestitures ( 12.1 ) — — —

Plan settlements ( 7.1 ) ( 85.9 ) — —

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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 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.

The Company’s domestic defined contribution plans consist primarily of a Profit Sharing 401(k) Plan and other 401(k) retirement plans.

Profit sharing contributions are made at the discretion of the Company.

The Company’s non-domestic plans vary in form depending on local legal requirements.

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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 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.

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 401(k) 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.

In addition, under the Income Deferral Plan, eligible participants may be granted employee deferral awards, which awards will be subject to the terms and conditions (including vesting) as determined by the plan administrator at the time such awards are granted.

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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, including biosimilars prior to the Biocon Biologics Transaction, and generic products to people in markets everywhere.

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 and generic products, including complex products, to people in markets everywhere.

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

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◦ Intangible asset amortization expense and impairments of goodwill and long-lived assets;

◦ R&D expense;

◦ R&D and Acquired IPR&D expense;

◦ Net charges or net gains for litigation settlements and other contingencies;

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and (iii) other significant items, which are substantive and/or unusual, and in some cases recurring, items (such as restructuring) that are evaluated on an individual basis by management and that either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.

Such special items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for asset impairments and disposals of assets or businesses, including costs related to our planned divestitures and the Biocon Biologics Transaction, and, as applicable, any associated transition activities.

Such special items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for asset impairments and disposals of assets or businesses, including costs related to the Announced Divestitures and the Biocon Biologics Transaction, and, as applicable, any associated transition activities.

◦ Corporate and other unallocated costs associated with platform functions (such as digital, facilities, legal, finance, human resources, insurance, public affairs and procurement), patient advocacy activities and certain compensation and other corporate costs (such as interest income and expense, and gains and losses on investments, as well as overhead expenses associated with our manufacturing, which include manufacturing variances associated with production) and operations that are not directly assessed to an operating segment as business unit (segment) management does not manage these costs.

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Additionally, the Company has split-dollar life insurance agreements with certain retired executives.

In conjunction with the Combination, Viatris entered into a TSA with Pfizer pursuant to which each party provides certain limited transition services to the other party generally for an initial period of 24 months from the closing date of the Combination.

In conjunction with the Combination, Viatris entered into a TSA with Pfizer pursuant to which each party provided certain limited transition services to the other party.

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.

During the years ended December 31, 2022 and 2021, the Company incurred $ 54.5 million and $ 30.4 million, respectively, related to this provision of the TSA, and approximately $ 138.0 million during the period beginning on the closing date of the Combination and ended December 31, 2022.

We expect to incur future costs related to the completion of the services.

As of December 31, 2022, the Company has exited substantially all transition services with Pfizer.

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.

During the years ended December 31, 2023, 2022 and 2021, the Company incurred $ 5.5 million, $ 54.5 million, and $ 30.4 million, respectively, related to this provision of the TSA, and approximately $ 143.5 million during the period beginning on the closing date of the Combination and ended December 31, 2023.

As of December 31, 2022, the Company had exited substantially all transition services with Pfizer.

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 conjunction with the Biocon Biologics Transaction, Viatris and Biocon Biologics also entered an agreement pursuant to which Viatris is providing commercialization and certain other transition services on behalf of Biocon Biologics, including billings, collections and the remittance of rebates, to ensure business continuity for patients, customers and colleagues.

Biocon Biologics had substantially exited all transition services with Viatris as of December 31, 2023.

In connection with the Announced Divestitures, Viatris has agreed, at the closing of the respective transactions, to enter into transition services and manufacturing and supply agreements pursuant to which the Company will provide services to the respective purchasers, substantially the same as we currently provide to the related businesses, generally for a period of up to 12 months, subject to potential extensions in certain circumstances.

In addition, in connection with the OTC Transaction and the divestiture of our women’s healthcare business, we have agreed, at the closing of the respective transactions, to enter into distribution agreements for certain markets for a limited period of time.

In connection with our API business divestiture, we have agreed to enter into a manufacturing and supply agreement pursuant to which we will purchase a significant amount of API from the purchaser in that transaction.

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 and ensure that the organization is optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers, and other stakeholders.

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.

During 2020, Viatris announced a significant global restructuring program in order to achieve synergies and ensure that the organization was optimally structured and efficiently resourced to deliver sustainable value to patients, shareholders, customers, and other stakeholders.

As part of the restructuring, the Company optimized its commercial capabilities and enabling functions, and closed, downsized or divested certain manufacturing facilities globally that were 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.

The actions under the 2020 restructuring program were substantially completed during 2023.

Since the initiation of the 2020 restructuring program, the Company has incurred total pre-tax charges of approximately $ 1.4 billion through December 31, 2023.

Such charges included approximately $ 450 million of non-cash charges mainly related to accelerated depreciation and asset impairment charges, including inventory write-offs, and cash costs of approximately $ 950 million, primarily related to severance and employee benefits expense, as well as other costs, including those related to contract terminations and other plant disposal costs.

The following table summarizes the restructuring charges and the reserve activity for the restructuring program:

(In millions) Employee Related Costs Other Exit Costs Total

$ 195.6 $ 75.7 $ 271.3

Acquired in the Combination 91.7 0.3 92.0

Cash payment ( 25.1 ) ( 0.4 ) ( 25.5 )

Utilization — ( 70.8 ) ( 70.8 )

Foreign currency translation 0.4 — 0.4

Balance at December 31, 2020 $ 262.6 $ 4.8 $ 267.4

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Balance at December 31, 2022 $ 155.6 $ 1.9 $ 157.5

2016 Restructuring Program

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.

In the fourth quarter of 2018, Mylan received a warning letter related to the previously disclosed observations at the plant.

The issues raised in the warning letter were addressed within the context of the Mylan’s comprehensive restructuring and remediation activities.

On May 11, 2020, Mylan received the close-out of the warning letter.

On December 11, 2020, the Company announced that the Morgantown plant will 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, 2019 to December 31, 2020:

(In millions) Employee Related Costs Other Exit Costs Total

Balance at December 31, 2019:

17.6 107.6 125.2

9.9 40.6 50.5

Cash payment ( 77.8 ) ( 10.3 ) ( 88.1 )

Utilization (4)

( 4.0 ) ( 99.2 ) ( 103.2 )

Foreign currency translation 0.8 — 0.8

Balance at December 31, 2023 $ 92.2 $ — $ 92.2

$ 20.0 $ 2.8 $ 22.8

(1) For the year ended December 31, 2022, total restructuring charges for the 2020 restructuring program, in Developed Markets, Greater China, JANZ, Emerging Markets, and Corporate/Other were approximately $ 74.6 million, $ 2.5 million, $ 0.9 million, $ 8.2 million, and $ 0.3 million, respectively.

(2) 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.

(3) 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.

(1) For the year ended December 31, 2023, total restructuring charges in Developed Markets, Greater China, JANZ, Emerging Markets, and Corporate/Other were approximately $ 80.3 million, $ 0.4 million, $ 29.5 million, $ 13.9 million, and $ 1.1 million, respectively.

(2) For the year ended December 31, 2022, total restructuring charges in Developed Markets, Greater China, JANZ, Emerging Markets, and Corporate/Other were approximately $ 74.6 million, $ 2.5 million, $ 0.9 million, $ 8.2 million, and $ 0.3 million, respectively.

(3) For the year ended December 31, 2021, total restructuring charges in Developed Markets, Greater China, JANZ, Emerging Markets, and Corporate/Other were approximately $ 623.8 million, $ 5.8 million, $ 138.1 million, and $ 94.1 million and $ 30.4 million, respectively.

(4) For the year ended December 31, 2023, other exit costs included expense of $ 71.6 million relating to plant divestitures.

At December 31, 2023 and 2022, 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.

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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.

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®.

In 2018, the Company entered into an exclusive license and commercialization agreement with Mapi for the development and commercialization on a world-wide basis of GA Depot.

Under the terms of the license and commercialization agreement, as of December 31, 2023, Mapi is eligible to receive regulatory approval and commercial launch milestone payments of up to $ 90.0 million.

Additionally, upon commercial launch of GA Depot, Mapi is eligible to receive royalties and sales-based milestones.

In December 2023, the Company entered into a letter agreement, as amended, with Mapi for the development and commercialization of certain additional products, which is subject to finalization pending the execution of a definitive agreement, which is expected in the first half of 2024.

The Company made an initial upfront payment of $ 75.0 million which was accounted for as Acquired IPR&D expense in the consolidated statements of operations during the year ended December 31, 2023.

The Company holds investments in preferred shares of Mapi that are accounted for at cost, less impairment, if any, adjusted for observable price changes, in accordance with ASC 321, Investments – Equity Securities .

During the year ended December 31, 2023, the Company made an additional investment of $ 30.0 million in preferred shares of Mapi.

The preferred shares are convertible on a one-to-one basis into Mapi ordinary shares at Viatris’ option.

The Company recognized a gain of $ 45.6 million during the year ended December 31, 2023 as a result of remeasuring our pre-existing equity interest in Mapi, which was recorded as a component of Other Income, Net in the consolidated statements of operations.

The Company has determined that Mapi represents a variable interest entity (“VIE”), but has concluded that Viatris is not the primary beneficiary of Mapi as we do not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance.

Accordingly, we have not consolidated Mapi’s results of operations and financial position into our consolidated financial statements.

As of December 31, 2023 and 2022, our consolidated balance sheets included, within Other Assets , $ 132.1 million and $ 56.4 million, respectively, related to our equity investments in Mapi, which included cumulative unrealized gains of $ 62.1 million and $ 16.5 million, respectively, and within Prepaid Expenses and Other Current Assets , $ 52.5 million and $ 42.5 million, respectively, related to advances, including for initial orders of commercial launch supply of GA Depot under our supply agreement with Mapi.

Our maximum exposure to loss as a result of our involvement with Mapi is limited to the carrying value of the investments and advances.

The Company and Revance have entered into an agreement 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.

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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 Acquired IPR&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®.

In October 2020, Momenta was acquired by Johnson & Johnson.

M710 was divested as part of the Biocon Biologics Transaction.

Theravance Biopharma

On January 30, 2015, the Company entered into a development and commercialization collaboration with Theravance Biopharma, for revefenacin.

The Company has 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.

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Theravance Biopharma is co-promoting the product in the hospital channel under a profit-sharing arrangement.

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.

The Company has also acquired exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include Hong Kong SAR, the Macau SAR and Taiwan, for an upfront payment of $ 18.5 million and additional potential development and sales milestones together with tiered royalties on net sales of nebulized revefenacin, if approved.

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.

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As of December 31, 2023, the Company has paid a total of $ 50.0 million in milestone payments to Theravance Biopharma.

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, 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 February 27, 2019, the Company amended its agreements with FKB for the commercialization of Hulio®.

Under the amended agreements, the Company received the exclusive global commercialization rights for Hulio®.

In addition, FKB is eligible to receive additional commercial milestones and royalty payments under the amended agreements.

On July 9, 2020, the Company announced that the FDA approved Hulio® (adalimumab-fkjp), a biosimilar to AbbVie's Humira® (adalimumab), for the treatment of rheumatoid arthritis, juvenile idiopathic arthritis (4 years and older), psoriatic arthritis, ankylosing spondylitis, adult Crohn's disease, ulcerative colitis and plaque psoriasis, in both prefilled syringe and auto-injector presentations.

Hulio® was divested as part of the Biocon Biologics Transaction.

The collaboration was terminated upon closing of the Biocon Biologics Transaction.

Other Development Agreements

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EpiPen® Auto-Injector Litigation

The Company and a former Mylan N.V.

officer (collectively the “Mylan Defendants”) were 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’ sought monetary damages, attorneys’ fees and costs.

These lawsuits were filed in various federal and state courts and were either dismissed or transferred into a MDL in the U.S.

District Court for the District of Kansas and were consolidated or centralized.

An antitrust class consisting of certain states was ultimately certified.

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.

In February 2022, the parties reached an agreement to fully resolve this matter for $ 264 million, which was accrued for during the year ended December 31, 2021.

During the first quarter of 2022, $ 5.0 million of the settlement was paid and the remaining amount of the settlement was paid in July 2022.

The settlement was approved by the Court on July 11, 2022 and contains an express provision disclaiming and denying any wrongdoing or liability by the Mylan Defendants.

This matter is resolved.

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.

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Plaintiffs’ seek monetary damages, declaratory relief, attorneys’ fees and costs.

A trial is currently scheduled to begin in March 2026.

Beginning in March 2020, the Company, together with other non-Viatris affiliated companies, were named as defendants in putative direct purchaser class actions filed in the U.S.

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Plaintiffs’ seek monetary damages, attorneys’ fees and costs.

A class certification motion is pending.

On April 24, 2017, Sanofi Aventis U.S., LLC (“Sanofi”) filed a lawsuit against the Company in the U.S.

District Court for the District of New Jersey.

This lawsuit has been transferred into the aforementioned MDL and alleges exclusive dealing and anti-competitive marketing practices in violation of the antitrust laws in connection with the sale and marketing of the EpiPen® Auto-Injector.

Sanofi seeks monetary damages, declaratory relief, attorneys’ fees and costs.

This lawsuit was transferred into a MDL in the U.S.

District Court for the District of Kansas and alleged exclusive dealing and anti-competitive marketing practices in violation of the antitrust laws in connection with the sale and marketing of the EpiPen® Auto-Injector.

Sanofi sought monetary damages, declaratory relief, attorneys’ fees and costs.

The Court granted the Company’s motion for summary judgment and dismissed Sanofi’s claims.

Sanofi’s appeal was denied.

Sanofi has filed a petition seeking review by the U.S.

Supreme Court.

Sanofi’s petition seeking review by the U.S.

Supreme Court was also denied and concludes this matter.

The Company has a total accrual of approximately $ 5.5 million related to these matters at December 31, 2023, which is included in other current liabilities in the consolidated balance sheets.

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On May 10, 2018, the Company received a civil investigative demand from the Civil Division of the DOJ seeking information relating to the pricing and sale of its generic drug products.

We are fully cooperating with these investigations, which we believe are related to a broader industry-wide investigation of the generic pharmaceutical industry.

We have fully cooperated with these investigations, which we believe are related to a broader industry-wide investigation of the generic pharmaceutical industry.

We have not had contact from DOJ concerning the above-described subpoenas or civil investigative demand in several years.

Civil Litigation

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The EDPA 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.

The Company is named in those plaintiffs’ complaints that regard one of the two individual drug products and class certification motions are pending in that matter.

Attorneys General Litigation

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This lawsuit has been transferred to the aforementioned MDL proceeding in the EDPA.

The operative complaint includes attorneys general of forty-six states, the District of Columbia and the Commonwealth of Puerto Rico.

The operative complaint includes attorneys general of forty-four states, the District of Columbia and the Commonwealth of Puerto Rico.

The Company is alleged to have engaged in anticompetitive conduct with respect to four generic drug products.

The amended complaint also includes claims asserted by attorneys general of thirty-six states and the Commonwealth of Puerto Rico against certain individuals, including the Company’s President, with respect to a single drug product.

The amended complaint also includes claims asserted by attorneys general of thirty-four states and the Commonwealth of Puerto Rico against certain individuals, including the Company’s President, with respect to a single drug product.

The amended complaint seeks declaratory and injunctive relief, disgorgement, attorneys’ fees and costs, and certain states seek monetary damages, civil penalties, restitution, and other equitable monetary relief.

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On May 10, 2019, certain attorneys general filed a new complaint in the United States District Court for the District of Connecticut against various drug manufacturers and individuals, including the Company and one of its sales employees, alleging anticompetitive conduct with respect to additional generic drugs.

On November 1, 2019, the complaint was amended, adding additional states as plaintiffs.

The operative complaint is brought by attorneys general of forty-seven states, certain territories and the District of Columbia.

The amended complaint also includes claims asserted by attorneys general of forty-two states and certain territories against several individuals, including a Company sales employee.

On November 1, 2019, the complaint was amended,

adding additional states as plaintiffs.

The operative complaint is brought by attorneys general of forty-five states, certain territories and the District of Columbia.

The amended complaint also includes claims asserted by attorneys general of forty states and certain territories against several individuals, including a Company sales employee.

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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-six states, certain territories and the District of Columbia.

The operative complaint is brought by attorneys general of forty-four states, certain territories and the District of Columbia.

The states’ claim for disgorgement and restitution under federal law in this case has been dismissed.

This lawsuit has been transferred to the aforementioned MDL proceeding in the EDPA and has been ordered to proceed as a bellwether.

On January 31, 2024, the United States Judicial Panel on Multidistrict Litigation (“JPML”) granted the Attorneys Generals’ motion to remand the aforementioned complaints to the U.S.

District Court for the District of Connecticut.

The order is currently stayed while Defendants challenge remand.

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 United States District Court for the Southern District of New York (“SDNY”) on behalf of certain purchasers of securities of Mylan on the NASDAQ.

(collectively, for the purposes of this paragraph, “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 (“SDNY Class Action Litigation”).

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 March 30, 2023, the Court dismissed all of Plaintiffs’ claims by granting Defendants’ motion for summary judgment and denying Plaintiffs’ cross-motion for partial summary judgment.

Plaintiffs’ appeal to the U.S.

Court of Appeals for the Second Circuit is pending.

On April 30, 2017, a similar lawsuit was filed in the Tel Aviv District Court (Economic Division) in Israel (“Israel Litigation”), which had been stayed pending a decision in the SDNY Class Action Litigation.

The Israel Litigation was dismissed by the Court due to lack of activity and may be refiled.

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 (“ADIA Litigation”) that overlap with those asserted in the SDNY Class Action Litigation.

The complaint filed in the ADIA Litigation seeks monetary damages as well as the plaintiff’s fees and costs.

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.

District Court for the Western District of Pennsylvania on behalf of certain purchasers of securities of Mylan N.V.

The amended complaint alleges 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 Morgantown manufacturing plant and inspections at the plant by the FDA.

District Court for the Western District of Pennsylvania (“WDPA”) on behalf of certain purchasers of securities of Mylan N.V.

(“WDPA Mylan N.V.

Class Action Litigation”).

The amended complaint alleges 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 Nashik and Morgantown manufacturing plants and inspections at the plants by the FDA.

Plaintiff seeks certification of a class of purchasers of Mylan N.V.

securities between February 16, 2016 and May 7, 2019.

On May 18, 2023, the Court dismissed 45 of the 46 challenged statements.

The complaint seeks monetary damages, as well as the plaintiff’s fees and costs.

On February 15, 2021, a complaint was filed by Skandia Mutual Life Ins.

Co., Lansforsakringar AB, KBC Asset Management N.V., and GIC Private Limited, against the Company, certain of Mylan N.V.’s former directors and officers, a current director and officer of the Company, and current employees of the Company.

The Complaint asserts claims which are based on allegations that are similar to those in the SDNY and the Western District of Pennsylvania complaints identified above.

On February 15, 2021, a complaint was filed in the SDNY by Skandia Mutual Life Ins.

The Complaint filed in the Skandia Litigation asserts claims which are based on allegations that are similar to those in the SDNY Class Action Litigation and WDPA Mylan N.V.

Class Action Litigation.

Plaintiffs seek compensatory damages, costs and expenses and attorneys’ fees.

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Plaintiffs seek monetary damages, reasonable costs and expenses, and certain other equitable and injunctive relief.

A settlement has been reached to fully resolve this matter, subject to court approval.

Beginning in May 2023, putative class action complaints were filed against the Company and certain of the Company’s current and former officers, directors, and employees in the WDPA on behalf of certain purchasers of securities of the Company.

These actions have been consolidated and, on October 23, 2023, a consolidated amended putative class action complaint was filed in the WDPA against the Company, a current officer and director, and a former officer and director (“WDPA Viatris Class Action Litigation”).

The operative complaint alleges that defendants made false or misleading statements and omissions of material fact, in violation of federal securities laws, in connection with disclosures relating to the Company’s projected financial performance and biosimilars business.

Plaintiffs seek certification of a class of purchasers of Company securities between March 1, 2021 and February 25, 2022.

Plaintiffs seek monetary damages, reasonable costs and expenses, and certain other relief.

Beginning in August 2023, stockholder derivative actions purportedly on behalf of Viatris were filed in the WDPA against certain of the Company’s current and former officers, directors, and employees alleging that defendants failed to ensure that the Company was making truthful and accurate statements in connection with the disclosures alleged in the WDPA Viatris Class Action Litigation.

Viatris is named as a nominal defendant in these derivative actions.

Certain of the complaints also assert claims for corporate waste and unjust enrichment.

Plaintiffs seek various forms of relief, including damages, disgorgement, restitution, costs and fees.

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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On January 13, 2023, the Company received a civil subpoena from the Attorney General of the State of New York seeking information relating to opioids manufactured, marketed, or sold by the Company and related subject matter.

The Company is fully cooperating with this subpoena request.

A similar subpoena was received in January 2024 from the Attorney General of the State of Alaska.

The Company is fully cooperating with these subpoena requests.

The Company has accrued $ 77.5 million in connection with the possible resolution of certain of these matters at December 31, 2023, 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.

In addition, the Company expects to incur additional legal and other professional service expenses associated with such matters in future periods and will recognize these expenses as services are received.

The Company believes that the ultimate amount paid for these services and claims could have a material effect on the Company's business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price in future periods.

Meda Sweden Commercial Dispute

On August 30, 2021, Ocular AS and other related entities (“Claimants”) initiated an arbitration in Sweden against Meda OTC AB and Meda AB (collectively, “Meda” or the “Company”) alleging breach of a 2013 sale and purchase agreement between Claimants and Meda concerning commercialization of a dental hygiene product.

Claimants are seeking approximately $ 155 million in purported damages, plus interest and costs.

The Company believes that it acted lawfully and vigorously contested all aspects of Claimants’ case – including their asserted damages – at an arbitration hearing that took place in February 2023.

On August 30, 2021, Ocular AS and other related entities (“Claimants”) initiated an arbitration in Sweden against Meda OTC AB and Meda AB (collectively, “Meda”) alleging breach of a 2013 sale and purchase agreement between Claimants and Meda concerning commercialization of a dental hygiene product.

Claimants sought approximately $ 155 million in purported damages, plus interest and costs.

In May 2023, the arbitration panel ruled in Claimants’ favor and Meda resolved the matter for approximately $ 21.8 million, which was expensed and paid in 2023.

In 2013, the European Commission issued a decision finding that Lundbeck and several generic companies, including Generics [U.K.] Limited (“GUK”), had violated EU competition rules relating to various settlement agreements entered into in 2002 for citalopram.

After various appeals, the European Commission’s decision was upheld in March 2021.

On March 28, 2023, bodies of the national health authorities in England & Wales served a claim in the U.K.

Competition Appeals Tribunal against parties to the citalopram investigation, including GUK, seeking monetary damages, plus interest, purportedly arising from the settlement agreements.

GUK, beginning in approximately 2018, has received notices from other health service authorities and insurers asserting an intention to file similar claims.

Pursuant to an indemnification agreement, Merck KGaA and GUK have agreed to equally share any damages claimed against Merck KGaA and/or GUK alleged to have been caused by the conduct which is the subject of the European Commission decision.

The Company has accrued approximately € 11.5 million as of December 31, 2023 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.

There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts accrued.

Product Liability

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Similar lawsuits pertaining to valsartan have been filed in other countries.

Third party payor, consumer and medical monitoring classes were certified in the valsartan MDL and a Rule 23(f) petition to appeal the certification decision is pending.

Third party payor, consumer and medical monitoring classes were certified in the valsartan MDL and a Rule 23(f) petition to appeal the certification decision was denied.

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 end-payor plaintiff immediately appealed to the U.S.

The end-payor plaintiff immediately appealed

Court of Appeals for the Eleventh Circuit, which affirmed the dismissal.

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Court of Appeals for the Fourth Circuit.

The state court proceedings remain pending in various jurisdictions, including in California, Missouri, and New York.

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.

District Court for the Northern District of California , in which plaintiffs allege that they developed melanoma and/or the exacerbation of melanoma purportedly as a result of the ingestion of Viagra.

Additional cases filed against Eli Lilly and Company (“Lilly”) with respect to Cialis have also been consolidated in the MDL.

Plaintiffs seek compensatory and punitive damages.

In January 2020, the District Court granted Pfizer’s and Lilly’s motion to exclude all of plaintiffs’ general causation opinions.

As a result, in April 2020, the District Court entered summary judgment in favor of defendants and dismissed all of plaintiffs’ claims.

The parties have settled this matter.

The state court proceedings remain pending in Missouri and New York.

Prior state court proceedings in California have now been terminated after the California Court previously granted motions (i) 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);

(ii) for summary judgment in connection with the 10, 20, and 40 mg plaintiffs;

and (iii) seeking the dismissal of the remaining cases involving the highest dose of Lipitor (80 mg).

Intellectual Property

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An adverse decision in any of these matters could have an adverse effect that is material to our business, financial condition, results of operations, cash flows, ability to pay dividends and/or stock price.

The Company has accrued approximately $ 107.9 million as of December 31, 2022 for its intellectual property matters.

It is reasonably possible that we will incur additional losses and fees above the amount accrued but we cannot estimate a range of such reasonably possible losses or legal fees related to these claims at this time.

There are no assurances, however, that settlements reached and/or adverse judgments received, if any, will not exceed amounts accrued.

Dimethyl Fumarate

On June 30, 2017, Biogen MA Inc.

and Biogen International GmbH (collectively, “Biogen”) sued MPI in the U.S.

District Court for the Northern District of West Virginia asserting that MPI’s abbreviated new drug application for dimethyl fumarate delayed-release capsules containing 120 mg and 240 mg of dimethyl fumarate (generic for Tecfidera ® ) infringed six U.S.

patents that Biogen had listed in the Orange Book:

6,509,376, 7,320,999, 7,619,001, 7,803,840, 8,759,393, and 8,399,514.

All patents except for the ‘514 expired during the litigation and were dismissed from the case.

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.

On appeal, the Federal Circuit affirmed the District Court’s judgment.

Biogen’s petition for rehearing was denied.

Biogen’s petition seeking review by the U.S.

Supreme Court was also denied.

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 of the PTAB decision is moot in light of the U.S.

Supreme Court denying review of the Federal Circuit’s affirmance of the District Court’s invalidity judgment.

These matters are resolved.

On August 17, 2020, the FDA approved MPI’s dimethyl fumarate delayed-release capsules, which MPI began selling on August 18, 2020.

The Company has approximately $ 5.1 million accrued related to its intellectual property matters at December 31, 2023.

It is reasonably possible that we may incur additional losses and fees but we cannot estimate a range of such reasonably possible losses or legal fees related to these claims at this time.

Lyrica - United Kingdom

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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.

All of the claims except for those filed by Dr.

Reddy’s Laboratories and NHS Scotland have been resolved.

A trial on the remaining claims has been set for November 2023.

All of the claims have been resolved.

Beginning in January 2023, certain generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Yupelri® with associated Paragraph IV certifications.

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District Court for the Middle District of North Carolina, asserting infringement of the patents by the generic companies.

The actions filed in Delaware and North Carolina have been dismissed and the actions will proceed in New Jersey.

The Company has entered into settlement agreements with Teva, Accord, Orbicular, and Lupin granting licenses to commercialize their generic versions of Yupelri® in April 2039 or earlier depending on certain circumstances.

Three ANDA filers remain in the litigation.

In June 2023, a generic company notified Oyster Point that it had filed an ANDA with the FDA seeking approval to market a generic version of Tyrvaya® with associated Paragraph IV certifications.

The generic company asserts the invalidity and/or non-infringement of six Orange Book listed patents that all have expiration dates in October 2035.

In July 2023, Oyster Point brought a patent infringement action against the generic filer in the U.S.

District Court of the District of New Jersey asserting infringement by the generic company.

In September 2023, Sawai Pharmaceutical Co.

(“Sawai”) filed challenges with the Japanese Patent Office (“JPO”) asserting invalidity of patent term extensions for the JPP ‘4332353 patent (the ‘353 patent) relevant to Amitiza®, which the Company commercializes in Japan as a licensee of the relevant patents, including the ‘353 patent.

Towa Pharmaceutical Co.

also filed a challenge to the ‘353 patent term extension in January 2024.

Separately, in December 2023, Sawai filed an invalidity action with the JPO against the ‘353 patent itself.

With the granted extensions, the ‘353 patent has expiration dates for the Company’s 24µg and 12µg strengths of April 2025 and April 2027, respectively.

For the 12µg strength, other licensed patents with patent term extension dates – including one with an expiration of December 2028 – have not been challenged.

Other Litigation

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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