Restructuring

3 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

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. Viatris’ restructuring initiative incorporates and expands on the restructuring program announced by Mylan N.V. earlier in 2020 as part of its business transformation efforts. The Company expects to optimize its commercial capabilities and enabling functions, and close, downsize or divest up to 15 manufacturing facilities globally that are deemed to be no longer viable either due to surplus capacity, challenging market dynamics or a shift in its product portfolio toward more complex products. As a result, Viatris expects that up to 20% of its global workforce may be impacted upon completion of the restructuring initiative.

For the committed restructuring actions, the Company expects to incur total pre-tax charges ranging between $1.1 billion and $1.4 billion. Such charges are expected to include between $350 million and $450 million of non-cash charges mainly related to accelerated depreciation and asset impairment charges, including inventory write-offs. The remaining estimated cash costs of between $750 million and $950 million are expected to be primarily related to severance and employee benefits expense, as well as other costs, including those related to contract terminations and decommissioning costs.

Charges for restructuring and ongoing cost reduction initiatives are recorded in the period the Company commits to a restructuring or cost reduction plan, or executes specific actions contemplated by the plan and all criteria for liability recognition have been met.

The following table summarizes the restructuring charges and the reserve activity for the 2020 restructuring program from December 31, 2020 to March 31, 2021:


(In millions)	Employee Related Costs		Other Exit Costs		Total
Balance at December 31, 2020:	$	262.6	$	4.8	$	267.4
Charges (1)	161.6		152.0		313.6

Cash payment	(49.2)		(1.1)		(50.3)
Utilization	—		(151.0)		(151.0)
Foreign currency translation	(3.3)		0.1		(3.2)
Balance at March 31, 2021:	$	371.7	$	4.8	$	376.5

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(1) For the three months ended March 31, 2021, total restructuring charges in Developed Markets, Greater China, JANZ, and Emerging Markets were approximately $266.5 million, $5.3 million, $1.5 million, and $40.3 million, respectively.

At March 31, 2021 and December 31, 2020, accrued liabilities for restructuring and other cost reduction programs were primarily included in other current liabilities in the condensed consolidated balance sheets.