UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________to___________                 

Commission file number 001-39695

VIATRIS INC.

(Exact name of registrant as specified in its charter)

Delaware	83-4364296
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1000 Mylan Boulevard, Canonsburg, Pennsylvania 15317

(Address of principal executive offices)

(724) 514-1800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:	Trading Symbol(s)	Name of Each Exchange on Which Registered:
Common Stock, par value $0.01 per share	VTRS	The NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of shares of common stock outstanding, par value $0.01 per share, of the registrant as of August 3, 2022 was 1,212,580,940.

VIATRIS INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

For the Quarterly Period Ended

June 30, 2022

		Page
	PART I — FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations — Three and Six Months Ended June 30, 2022 and 2021	7
	Condensed Consolidated Statements of Comprehensive Loss — Three and Six Months Ended June 30, 2022 and 2021	8
	Condensed Consolidated Balance Sheets — June 30, 2022 and December 31, 2021	9
	Condensed Consolidated Statements of Equity — Three and Six Months Ended June 30, 2022 and 2021	10
	Condensed Consolidated Statements of Cash Flows — Six Months Ended June 30, 2022 and 2021	12
	Notes to Condensed Consolidated Financial Statements	13
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	69
ITEM 4.	Controls and Procedures	69
	PART II — OTHER INFORMATION
ITEM 1.	Legal Proceedings	70
ITEM 1A.	Risk Factors	70
ITEM 6.	Exhibits	70
SIGNATURES		71

2

Glossary of Defined Terms

Unless the context requires otherwise, references to “Viatris,” “the Company,” “we,” “us” or “our” in this Form 10-Q (defined below) refer to Viatris Inc. and its subsidiaries. We also have used several other terms in this Form 10-Q, most of which are explained or defined below. Some amounts in this Form 10-Q may not add due to rounding.

2003 LTIP	Mylan N.V. Amended and Restated 2003 Long-Term Incentive Plan
2021 Form 10-K	Viatris’ annual report on Form 10-K for the fiscal year ended December 31, 2021, as amended
Adjusted EBITDA	Non-GAAP financial measure that the Company believes is appropriate to provide information to investors - EBITDA (defined below) is further adjusted for share-based compensation expense, litigation settlements, and other contingencies, net, restructuring and other special items
ANDA	Abbreviated New Drug Application
AOCE	Accumulated other comprehensive earnings
APIs	Active pharmaceutical ingredients
ARV	Antiretroviral medicines
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
Biocon	Biocon Limited
Biocon Biologics	Biocon Biologics Limited, a majority owned subsidiary of Biocon
Biocon Biologics Transaction	The pending transaction between Viatris and Biocon Biologics pursuant to which Viatris will contribute its biosimilars portfolio to Biocon Biologics
Biocon Agreement	The transaction agreement between Viatris and Biocon Biologics, dated February 27, 2022, relating to the Biocon Biologics Transaction
Biogen	Biogen MA Inc. and Biogen International GmbH, collectively
Business Combination Agreement	Business Combination Agreement, dated as of July 29, 2019, as amended from time to time, among Viatris, Mylan, Pfizer and certain of their affiliates
CAT	Competition Appeals Tribunal
CJEU	European Court of Justice
clean energy investments	Used to define the three equity method investments the Company has in limited liability companies that own refined coal production plants whose activities qualify for income tax credits under Section 45 of the Code
CMA	Competition and Markets Authority
Code	The U.S. Internal Revenue Code of 1986, as amended
Combination	Refers to Mylan combining with Pfizer's Upjohn Business in a Reverse Morris Trust transaction to form Viatris on November 16, 2020
Commercial Paper Program	The $1.65 billion unsecured commercial paper program entered into as of November 16, 2020 by Viatris, as issuer, Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V., as guarantors, and certain dealers from time to time
Commission	European Commission
COVID-19	Novel coronavirus disease of 2019
CP Notes	Unsecured, short-term commercial paper notes issued pursuant to the Commercial Paper Program
DCGI	Drug Controller General of India

3

Developed Markets segment	Viatris’ business segment that includes our operations primarily in the following markets: North America and Europe
Distribution	Pfizer's distribution to Pfizer stockholders all the issued and outstanding shares of Upjohn Inc.
DOJ	U.S. Department of Justice
DRIP	Dividend Reinvestment and Share Purchase Plan
EBITDA	Non-GAAP financial measure that the Company believes is appropriate to provide information to investors - U.S. GAAP net earnings (loss) adjusted for net contribution attributable to equity method investments, income tax provision (benefit), interest expense and depreciation and amortization
EDPA	U.S. District Court for the Eastern District of Pennsylvania
Emerging Markets segment	Viatris’ business segment that includes, but is not limited to, our operations primarily in the following markets: Parts of Asia, the Middle East, South and Central America, Africa, and Eastern Europe
ERP system	Enterprise resource planning system
EU	European Union
Exchange Act	Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board
FCA	Financial Conduct Authority in the U.K.
FDA	U.S. Food and Drug Administration
Form 10-Q	This quarterly report on Form 10-Q for the quarterly period ended June 30, 2022
Greater China segment	Viatris’ business segment that includes our operations primarily in the following markets: China, Taiwan and Hong Kong
Gx	Generic drugs
IPR	Inter Partes review
IRS	U.S. Internal Revenue Service
IRS Ruling	The private letter ruling issued by the IRS to Pfizer with respect to the Combination, dated as of March 17, 2020
IT	Information technology
JANZ segment	Viatris’ business segment that includes our operations in the following markets: Japan, Australia and New Zealand
LIBOR	London Interbank Offered Rate
Lilly	Eli Lilly and Company
maximum leverage ratio	The maximum consolidated leverage ratio financial covenant requiring maintenance of a maximum ratio of consolidated total indebtedness as of the end of any quarter to consolidated EBITDA for the trailing four quarters as defined in the related credit agreements from time to time
MDL	Multidistrict litigation
MPI	Mylan Pharmaceuticals Inc.
Mylan	Mylan N.V. and its subsidiaries
Mylan II	Mylan II B.V., a company incorporated under the laws of the Netherlands and an indirect wholly owned subsidiary of Viatris, in which legacy Mylan merged with and into
Mylan Inc. Euro Notes	The 2.125% Senior Notes due 2025 issued by Mylan Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan II B.V., Viatris Inc. and Utah Acquisition Sub Inc.

4

Mylan Inc. U.S. Dollar Notes	The 4.200% Senior Notes due 2023, 3.125% Senior Notes due 2023, 4.550% Senior Notes due 2028, 5.400% Senior Notes due 2043 and 5.200% Senior Notes due 2048 issued by Mylan Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan II B.V., Viatris Inc. and Utah Acquisition Sub Inc.
Mylan Securitization	Mylan Securitization LLC
NASDAQ	The NASDAQ Stock Market
NDA	New drug application
NHS	National Health Services
Note Securitization Facility	The note securitization facility entered into in July 2021 for borrowings up to $200 million and expiring in August 2022
OTC	Over-the-counter
Pfizer	Pfizer Inc.
Plan	Viatris Inc. 2020 Stock Incentive Plan
PMS	Pharmascience Inc.
PSUs	Performance awards
PTAB	U.S. Patent Trial and Appeal Board
R&D	Research and development
Receivables Facility	The $400 million accounts receivable entered into in August 2020 and expiring in April 2025
Registered Upjohn Notes	The 1.650% Senior Notes due 2025, 2.300% Senior Notes due 2027, 2.700% Senior Notes due 2030, 3.850% Senior Notes due 2040 and 4.000% Senior Notes due 2050 originally issued on October 29, 2021 registered with the SEC in exchange for the corresponding Unregistered Upjohn U.S. Dollar Notes in a similar aggregate principal amount and with terms substantially identical to the corresponding Unregistered Upjohn U.S. Dollar Notes and fully and unconditionally guaranteed by Mylan Inc., Mylan II and Utah Acquisition Sub Inc.
respiratory delivery platform	Pfizer’s proprietary dry powder inhaler delivery platform
restricted stock awards	The Company’s nonvested restricted stock and restricted stock unit awards, including PSUs
Revolving Facility	The $4.0 billion revolving facility dated as of July 1, 2021, by and among Viatris, certain lenders and issuing banks from time to time party thereto and Bank of America, N.A., as administrative agent
RICO	Racketeer Influenced and Corrupt Organizations Act
RSUs	The Company's unvested restricted stock unit awards
Sanofi	Sanofi-Aventis U.S., LLC
SARs	Stock Appreciation Rights
SDNY	U.S. District Court for the Southern District of New York
SEC	U.S. Securities and Exchange Commission
Securities Act	Securities Act of 1933, as amended
Senior U.S. Dollar Notes	The Upjohn U.S. Dollar Notes, the Utah U.S. Dollar Notes and the Mylan Inc. U.S. Dollar Notes, collectively
Separation	Pfizer's transfer to Upjohn of substantially all the assets and liabilities comprising the Upjohn Business
Separation and Distribution Agreement	Separation and Distribution Agreement between Viatris and Pfizer, dated as of July 29, 2019, as amended from time to time
SG&A	Selling, general and administrative expenses
SOFR	Secured overnight financial rate

5

Stock awards	Stock options and SARs
Teva	Teva Pharmaceutical Industries Ltd.
TSA	Transition service agreements
U.K.	United Kingdom
U.S.	United States
U.S. GAAP	Accounting principles generally accepted in the U.S.
Unregistered Upjohn U.S. Dollar Notes	The 1.650% Senior Notes due 2025, 2.300% Senior Notes due 2027, 2.700% Senior Notes due 2030, 3.850% Senior Notes due 2040 and 4.000% Senior Notes due 2050 originally issued on June 22, 2020 by Upjohn Inc. (now Viatris Inc.) in a private offering exempt from the registration requirements of the Securities Act and fully and unconditionally guaranteed by Mylan Inc., Mylan II and Utah Acquisition Sub Inc.
Upjohn	Upjohn Inc., a wholly owned subsidiary of Pfizer prior to the Distribution, that combined with Mylan and was renamed Viatris Inc.
Upjohn Business	Pfizer’s off-patent branded and generic established medicines business that, in connection with the Combination, was separated from Pfizer and combined with Mylan to form Viatris
Upjohn U.S. Dollar Notes	Senior unsecured notes denominated in U.S. dollars and originally issued by Upjohn Inc. or Viatris Inc. pursuant to an indenture dated June 22, 2020 and fully and unconditionally guaranteed by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc.
Utah Acquisition Sub	Utah Acquisition Sub Inc., a Delaware corporation and an indirect wholly owned subsidiary of Viatris
Utah Euro Notes	The 2.250% Senior Notes due 2024 and 3.125% Senior Notes due 2028 issued by Utah Acquisition Sub Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc. and Mylan II B.V.
Utah U.S. Dollar Notes	The 3.950% Senior Notes due 2026 and 5.250% Senior Notes due 2046 issued by Utah Acquisition Sub Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc. and Mylan II B.V.
Viatris	Viatris Inc., formerly known as Upjohn Inc. prior to the completion of the Combination
YEN Term Loan Facility	The ¥40 billion term loan agreement dated as of July 1, 2021, by and among Viatris, MUFG Bank, Ltd. and Mizuho Bank, Ltd., as administrative agent

6

PART I — FINANCIAL INFORMATION

VIATRIS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited; in millions, except per share amounts)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenues:
Net sales	$	4,105.4	$	4,561.7	$	8,283.6	$	8,961.8
Other revenues	11.4		16.1		24.9		46.3
Total revenues	4,116.8		4,577.8		8,308.5		9,008.1
Cost of sales	2,413.5		3,250.1		4,834.0		6,553.1
Gross profit	1,703.3		1,327.7		3,474.5		2,455.0
Operating expenses:
Research and development	162.6		147.7		304.9		331.8
Selling, general and administrative	981.1		1,204.8		1,896.4		2,391.3
Litigation settlements and other contingencies, net	10.9		23.0		17.1		45.9
Total operating expenses	1,154.6		1,375.5		2,218.4		2,769.0
Earnings (loss) from operations	548.7		(47.8)		1,256.1		(314.0)
Interest expense	145.9		167.1		292.1		336.1
Other expense, net	13.5		4.2		47.2		10.3
Earnings (loss) before income taxes	389.3		(219.1)		916.8		(660.4)
Income tax provision	75.4		60.1		203.7		656.4
Net earnings (loss)	$	313.9	$	(279.2)	$	713.1	$	(1,316.8)
Earnings (loss) per share attributable to Viatris Inc. shareholders
Basic	$	0.26	$	(0.23)	$	0.59	$	(1.09)
Diluted	$	0.26	$	(0.23)	$	0.59	$	(1.09)
Weighted average shares outstanding:
Basic	1,212.3		1,208.8		1,211.4		1,208.2
Diluted	1,217.1		1,208.8		1,215.1		1,208.2

See Notes to Condensed Consolidated Financial Statements

7

VIATRIS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited; in millions)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net earnings (loss)	$	313.9	$	(279.2)	$	713.1	$	(1,316.8)
Other comprehensive (loss) earnings, before tax:
Foreign currency translation adjustment	(1,149.9)		160.7		(1,619.1)		(560.5)
Change in unrecognized gain (loss) and prior service cost related to defined benefit plans	0.5		72.5		(2.1)		73.3
Net unrecognized gain on derivatives in cash flow hedging relationships	17.6		12.4		17.8		15.7
Net unrecognized gain (loss) on derivatives in net investment hedging relationships	384.4		(77.4)		585.7		150.0
Net unrealized (loss) gain on marketable securities	(1.0)		0.2		(2.7)		(0.7)
Other comprehensive (loss) earnings, before tax	(748.4)		168.4		(1,020.4)		(322.2)
Income tax provision (benefit)	89.8		(12.2)		134.5		24.8
Other comprehensive (loss) earnings, net of tax	(838.2)		180.6		(1,154.9)		(347.0)
Comprehensive loss	$	(524.3)	$	(98.6)	$	(441.8)	$	(1,663.8)

See Notes to Condensed Consolidated Financial Statements

8

VIATRIS INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited in millions, except share and per share amounts)

	June 30, 2022		December 31, 2021
ASSETS
Assets
Current assets:
Cash and cash equivalents	$	664.7	$	701.2
Accounts receivable, net	3,736.2		4,266.4
Inventories	3,612.5		3,977.7
Prepaid expenses and other current assets	1,697.7		1,957.6
Assets held for sale	1,465.4		—
Total current assets	11,176.5		10,902.9
Property, plant and equipment, net	3,083.9		3,188.6
Intangible assets, net	24,101.1		26,134.2
Goodwill	10,523.0		12,113.7
Deferred income tax benefit	1,243.2		1,332.7
Other assets	997.4		1,170.7
Total assets	$	51,125.1	$	54,842.8
LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Accounts payable	$	1,670.1	$	1,657.4
Short-term borrowings	1,019.7		1,493.0
Income taxes payable	125.7		236.9
Current portion of long-term debt and other long-term obligations	768.2		1,877.5
Liabilities held for sale	285.1		—
Other current liabilities	3,812.4		4,619.6
Total current liabilities	7,681.2		9,884.4
Long-term debt	19,206.4		19,717.1
Deferred income tax liability	2,617.9		2,815.0
Other long-term obligations	1,814.2		1,933.6
Total liabilities	31,319.7		34,350.1
Equity
Viatris Inc. shareholders’ equity
Common stock: $0.01 par value, 3,000,000,000 shares authorized; shares issued and outstanding: 1,212,447,457 and 1,209,507,463, respectively	12.1		12.1
Additional paid-in capital	18,585.7		18,536.1
Retained earnings	4,106.8		3,688.8
Accumulated other comprehensive loss	(2,899.2)		(1,744.3)
Total equity	19,805.4		20,492.7
Total liabilities and equity	$	51,125.1	$	54,842.8

See Notes to Condensed Consolidated Financial Statements

9

VIATRIS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

(Unaudited; in millions, except share amounts)

				Additional Paid-In Capital		Retained Earnings					Accumulated Other Comprehensive Loss		Total Equity
	Common Stock							Treasury Stock
	Shares	Cost						Shares	Cost
Balance at March 31, 2022	1,212,323,483	$	12.1	$	18,555.1	$	3,941.5	—	$	—	$	(2,061.0)	$	20,447.7
Net earnings	—	—		—		313.9		—	—		—		313.9
Other comprehensive loss, net of tax	—	—		—		—		—	—		(838.2)		(838.2)
Issuance of restricted stock and stock options exercised, net	64,292	—		—		—		—	—		—		—
Taxes related to the net share settlement of equity awards	—	—		0.5		—		—	—		—		0.5
Share-based compensation expense	—	—		29.4		—		—	—		—		29.4
Issuance of common stock	59,682	—		0.7		—		—	—		—		0.7
Cash dividends declared, $0.12 per common share	—	—		—		(148.6)		—	—		—		(148.6)
Balance at June 30, 2022	1,212,447,457	$	12.1	$	18,585.7	$	4,106.8	—	$	—	$	(2,899.2)	$	19,805.4
				Additional Paid-In Capital		Retained Earnings					Accumulated Other Comprehensive Loss		Total Equity
	Common Stock							Treasury Stock
	Shares	Cost						Shares	Cost
Balance at December 31, 2021	1,209,507,463	$	12.1	$	18,536.1	$	3,688.8	—	$	—	$	(1,744.3)	$	20,492.7
Net earnings	—	—		—		713.1		—	—		—		713.1
Other comprehensive loss, net of tax	—	—		—		—		—	—		(1,154.9)		(1,154.9)
Issuance of restricted stock and stock options exercised, net	2,880,312	—		—		—		—	—		—		—
Taxes related to the net share settlement of equity awards	—	—		(8.8)		—		—	—		—		(8.8)
Share-based compensation expense	—	—		57.7		—		—	—		—		57.7
Issuance of common stock	59,682	—		0.7		—		—	—		—		0.7
Cash dividends declared, $0.24 per common share	—	—		—		(295.1)		—	—		—		(295.1)
Balance at June 30, 2022	1,212,447,457	$	12.1	$	18,585.7	$	4,106.8	—	$	—	$	(2,899.2)	$	19,805.4

See Notes to Condensed Consolidated Financial Statements

10

				Additional Paid-In Capital		Retained Earnings					Accumulated Other Comprehensive Loss		Total Equity
	Common Stock							Treasury Stock
	Shares	Cost						Shares	Cost
Balance at March 31, 2021	1,208,530,970	$	12.1	$	18,464.6	$	4,323.6	—	$	—	$	(1,385.6)	$	21,414.7
Net loss	—	—		—		(279.2)		—	—		—		(279.2)
Other comprehensive earnings, net of tax	—	—		—		—		—	—		180.6		180.6
Issuance of restricted stock and stock options exercised, net	681,368	—		—		—		—	—		—		—
Taxes related to the net share settlement of equity awards	—	—		(5.7)		—		—	—		—		(5.7)
Share-based compensation expense	—	—		31.0		—		—	—		—		31.0
Cash dividends declared, $0.11 per common share	—	—		—		(134.5)		—	—		—		(134.5)
Balance at June 30, 2021	1,209,212,338	$	12.1	$	18,489.9	$	3,909.9	—	$	—	$	(1,205.0)	$	21,206.9
				Additional Paid-In Capital		Retained Earnings					Accumulated Other Comprehensive Loss		Total Equity
	Common Stock							Treasury Stock
	Shares	Cost						Shares	Cost
Balance at December 31, 2020	1,206,895,644	$	12.1	$	18,438.8	$	5,361.2	—	$	—	$	(858.0)	$	22,954.1
Net loss	—	—		—		(1,316.8)		—	—		—		(1,316.8)
Other comprehensive loss, net of tax	—	—		—		—		—	—		(347.0)		(347.0)
Issuance of restricted stock and stock options exercised, net	2,316,694	—		—		—		—	—		—		—
Taxes related to the net share settlement of equity awards	—	—		(12.6)		—		—	—		—		(12.6)
Share-based compensation expense	—	—		63.7		—		—	—		—		63.7
Cash dividends declared, $0.11 per common share	—	—		—		(134.5)		—	—		—		(134.5)
Balance at June 30, 2021	1,209,212,338	$	12.1	$	18,489.9	$	3,909.9	—	$	—	$	(1,205.0)	$	21,206.9

See Notes to Condensed Consolidated Financial Statements

11

VIATRIS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited; in millions)

	Six Months Ended
	June 30,
	2022		2021
Cash flows from operating activities:
Net earnings (loss)	$	713.1	$	(1,316.8)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization	1,458.3		2,739.6
Share-based compensation expense	57.7		63.7
Deferred income tax (benefit) expense	(157.6)		581.6
Loss from equity method investments	—		34.6
Other non-cash items	3.8		203.5
Litigation settlements and other contingencies, net	10.0		42.4
Changes in operating assets and liabilities:
Accounts receivable	(142.3)		(114.7)
Inventories	(270.1)		(341.0)
Accounts payable	254.5		(53.5)
Income taxes	17.8		(337.7)
Other operating assets and liabilities, net	(4.2)		(93.5)
Net cash provided by operating activities	1,941.0		1,408.2
Cash flows from investing activities:
Cash received from acquisitions	—		277.0
Capital expenditures	(148.4)		(138.8)
Purchase of marketable securities	(13.2)		(19.5)
Proceeds from the sale of marketable securities	12.8		19.2
Payments for product rights and other, net	(13.0)		(17.3)
Proceeds from sale of assets and subsidiaries	—		83.4
Proceeds from sale of property, plant and equipment	12.8		15.5
Net cash (used in) provided by investing activities	(149.0)		219.5
Cash flows from financing activities:
Proceeds from issuance of long-term debt	795.4		900.1
Payments of long-term debt	(1,787.0)		(2,250.7)
Change in short-term borrowings, net	(473.5)		199.7
Taxes paid related to net share settlement of equity awards	(13.2)		(13.5)
Non-contingent payments for product rights	—		(456.0)
Contingent consideration payments	(18.9)		(28.6)
Payments of financing fees	(1.3)		(0.2)
Cash dividends paid	(290.6)		(133.0)
Issuance of common stock	0.7		—
Other items, net	(0.2)		(3.1)
Net cash used in financing activities	(1,788.6)		(1,785.3)
Effect on cash of changes in exchange rates	(40.2)		(13.3)
Net decrease in cash, cash equivalents and restricted cash	(36.8)		(170.9)
Cash, cash equivalents and restricted cash — beginning of period	706.2		850.0
Cash, cash equivalents and restricted cash — end of period	$	669.4	$	679.1

See Notes to Condensed Consolidated Financial Statements

12

VIATRIS INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.General

The accompanying unaudited condensed consolidated financial statements (“interim financial statements”) of Viatris Inc. and subsidiaries were prepared in accordance with U.S. GAAP and the rules and regulations of the SEC for reporting on Form 10-Q; therefore, as permitted under these rules, certain footnotes and other financial information included in audited financial statements were condensed or omitted. The interim financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the interim results of operations, comprehensive earnings, financial position, equity and cash flows for the periods presented.

These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto in Viatris’ 2021 Form 10-K. The December 31, 2021 condensed consolidated balance sheet was derived from audited financial statements.

Turkey Highly Inflationary - Under ASC 830, Foreign Currency Matters (“ASC 830”), a highly inflationary economy is one that has cumulative inflation of approximately 100% or more over a three-year period. Effective April 1, 2022, we classified Turkey as highly inflationary. In accordance with ASC 830, starting with the second quarter of 2022, we began to utilize the U.S. dollar as our functional currency in Turkey, which historically utilized the Turkish lira as the functional currency. The impact of applying the guidance in ASC 830 did not have a material impact on our results of operations, comprehensive earnings, financial position, equity and cash flows for the three months ended June 30, 2022. The impacted net sales for the three months ended June 30, 2022 and total assets at June 30, 2022 represented less than 1% of our consolidated net sales and total assets, respectively.

The interim results of operations and comprehensive earnings for the three and six months ended June 30, 2022, and cash flows for the six months ended June 30, 2022, are not necessarily indicative of the results to be expected for the full fiscal year or any other future period.

2.Revenue Recognition and Accounts Receivable

The Company recognizes revenues in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company recognizes net revenue for product sales when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenues are recorded net of provisions for variable consideration, including discounts, rebates, governmental rebate programs, price adjustments, returns, chargebacks, promotional programs and other sales allowances. Accruals for these provisions are presented in the condensed consolidated financial statements as reductions in determining net sales and as a contra asset in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash).

Our net sales may be impacted by wholesaler and distributor inventory levels of our products, which can fluctuate throughout the year due to the seasonality of certain products, pricing, the timing of product demand, purchasing decisions and other factors. Such fluctuations may impact the comparability of our net sales between periods.

Consideration received from licenses of intellectual property is recorded as other revenues. Royalty or profit share amounts, which are based on sales of licensed products or technology, are recorded when the customer’s subsequent sales or usages occur. Such consideration is included in other revenues in the condensed consolidated statements of operations.

13

VIATRIS INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

The following table presents the Company’s net sales by product category for each of our reportable segments for the three and six months ended June 30, 2022 and 2021, respectively:

(In millions)	Three Months Ended June 30, 2022
Product Category	Developed Markets		Greater China		JANZ		Emerging Markets		Total
Brands	$	1,305.4	$	546.3	$	243.1	$	388.3	$	2,483.1
Complex Gx and Biosimilars	327.0		0.3		12.1		15.4		354.8
Generics	846.7		1.7		171.9		247.2		1,267.5
Total	$	2,479.1	$	548.3	$	427.1	$	650.9	$	4,105.4

(In millions)	Six Months Ended June 30, 2022
Product Category	Developed Markets		Greater China		JANZ		Emerging Markets		Total
Brands	$	2,604.1	$	1,116.0	$	492.1	$	825.0	$	5,037.2
Complex Gx and Biosimilars	691.1		0.3		22.4		31.8		745.6
Generics	1,660.0		5.1		336.4		499.3		2,500.8
Total	$	4,955.2	$	1,121.4