Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Components of Income Tax Provision

The income tax provision (benefit) consisted of the following components:


	Year Ended December 31,
(In millions)	2021		2020		2019
U.S. Federal:
Current	$	12.6	$	(6.4)	$	118.1
Deferred	(182.7)		(277.0)		(165.5)
	(170.1)		(283.4)		(47.4)
U.S. State:
Current	7.7		(0.1)		21.1
Deferred	(10.8)		7.7		(13.6)
	(3.1)		7.6		7.5
Non-U.S.:
Current	(91.3)		168.7		191.0
Deferred	869.2		55.8		(13.5)
	777.9		224.5		177.5
Income tax provision (benefit)	$	604.7	$	(51.3)	$	137.6
Earnings before income taxes:

United States	(1,982.5)		(945.5)		(1,031.4)
Foreign - Other	1,318.1		224.3		1,185.8
Total (loss) earnings before income taxes	$	(664.4)	$	(721.2)	$	154.4

Schedule of Deferred Tax Assets and Liabilities

Temporary differences and carry-forwards that result in deferred tax assets and liabilities were as follows:


(In millions)	December 31, 2021		December 31, 2020
Deferred tax assets:
Employee benefits	$	271.3	$	273.0
Litigation reserves	94.4		43.5
Accounts receivable allowances	425.9		393.7
Inventory	187.8		1,187.9
Tax credit and loss carry-forwards	1,256.0		1,080.4
Operating lease assets	63.6		66.5
Interest expense	111.6		67.9
Intangible assets	151.1		156.3
Other	327.8		396.0
	2,889.5		3,665.2
Less: Valuation allowance	(780.4)		(443.6)
Total deferred tax assets	2,109.1		3,221.6
Deferred tax liabilities:
Plant and equipment	19.6		50.2
Operating lease liabilities	63.6		66.5
Intangible assets and goodwill	3,468.3		4,058.6
Other	39.9		22.1
Total deferred tax liabilities	3,591.4		4,197.4
Deferred tax liabilities, net	$	(1,482.3)	$	(975.8)

Statutory Tax Rate to Effective Tax Rate Reconciliation

Prior to the Combination, the applicable income tax rate to Mylan was the U.K. rate of 19%, and following the Combination, the statutory income tax rate applicable to Viatris Inc. is the U.S. rate of 21% for the years ended December 31, 2021 and 2020. A reconciliation of the statutory tax rate to the effective tax rate is as follows:


	Year Ended December 31,
	2021		2020		2019
Statutory tax rate	21.0	%	21.0	%	19.0	%

United States Operations
Clean energy and research credits	9.8	%	12.8	%	(43.4)	%
U.S. rate differentials	—	%	—	%	(3.1)	%
Impact of changes in legislation	—	%	(9.2)	%	—	%
State income taxes and credits	(0.6)	%	(1.6)	%	(4.1)	%
Valuation allowance	(0.1)	%	8.6	%	(118.5)	%
Tax settlements and resolution of certain tax positions	0.1	%	0.1	%	199.6	%
Incremental US Tax on Foreign Earnings	(36.9)	%	(3.6)	%	(8.6)	%
Waived deductions under IRC § 59A	—	%	(3.3)	%	64.5	%
Impact of the Combination and Divestitures	(2.8)	%	5.8	%	7.7	%
Other U.S. items	(6.1)	%	1.5	%	6.9	%
Other Foreign Operations
Luxembourg	(6.7)	%	(5.0)	%	(14.8)	%
Gibraltar	9.4	%	8.0	%	(38.8)	%
Ireland	5.8	%	8.2	%	(13.7)	%
France	(1.1)	%	(2.8)	%	15.2	%
Puerto Rico	4.4	%	(2.5)	%	—	%
Switzerland	1.0	%	2.0	%	—	%
Singapore	28.8	%	1.0	%	—	%
Other	(10.2)	%	(0.4)	%	12.8	%
Deferred tax impact of tax law changes	7.0	%	(0.1)	%	36.7	%
Valuation allowance	(8.3)	%	16.1	%	(9.9)	%
Impact of the Combination and divestitures	(106.9)	%	(42.2)	%	—	%
Withholding taxes	(1.3)	%	(1.6)	%	7.1	%
Tax settlements and resolution of certain tax positions	0.8	%	(3.9)	%	(27.6)	%
Other foreign items	1.9	%	(1.8)	%	2.1	%
Effective tax rate	(91.0)	%	7.1	%	89.1	%

Schedule of Unrecognized Tax Benefits

A reconciliation of the unrecognized tax benefits is as follows:


	Year Ended December 31,
(In millions)	2021		2020		2019
Unrecognized tax benefit — beginning of year	$	391.1	$	92.1	$	96.3
Additions for current year tax positions	—		13.4		—
Additions for prior year tax positions	—		35.7		154.9
Reductions for prior year tax positions	(9.1)		(5.2)		(11.7)
Settlements	(47.3)		(8.9)		(112.5)
Reductions due to expirations of statute of limitations	(7.0)		—		(34.9)
(Reduction) addition due to acquisition	(4.8)		264.0		—
Unrecognized tax benefit — end of year	$	322.9	$	391.1	$	92.1