Restructuring

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

2020 Restructuring Program

During 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. The remaining actions under the 2020 restructuring program are expected to be substantially completed in 2023.

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.

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, 2022 to September 30, 2023:

(In millions)	Employee Related Costs		Other Exit Costs		Total
Balance at December 31, 2022:	$	155.6	$	1.9	$	157.5
Charges (1)	2.8		6.9		9.7
Cash payment	(24.5)		(3.1)		(27.6)
Utilization	—		(3.8)		(3.8)
Foreign currency translation	0.3		—		0.3
Balance at March 31, 2023:	$	134.2	$	1.9	$	136.1
Charges (1)	1.4		72.6		74.0
Cash payment	(22.5)		(1.6)		(24.1)
Utilization (2)	(4.4)		(72.9)		(77.3)
Foreign currency translation	—		—		—
Balance at June 30, 2023:	$	108.7	$	—	$	108.7
Charges (1)	1.9		13.0		14.9
Cash payment	(14.8)		(3.6)		(18.4)
Utilization	3.1		(9.4)		(6.3)
Foreign currency translation	(0.6)		—		(0.6)
Balance at September 30, 2023:	$	98.3	$	—	$	98.3

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(1)     For the three months ended September 30, 2023, total restructuring charges in Developed Markets, Emerging Markets, Greater China, JANZ, and Corporate/Other were approximately $13.0 million, $3.5 million, $0.2 million, $(2.0) million, and $0.2 million, respectively.

For the nine months ended September 30, 2023, total restructuring charges in Developed Markets, Emerging Markets, Greater China, JANZ, and Corporate/Other were approximately $62.4 million, $6.8 million, $(0.4) million, $29.3 million, and $0.5 million, respectively.

(2)     During the second quarter of 2023, other exit costs included expense of $71.6 million relating to plant divestitures.

At September 30, 2023 and December 31, 2022, accrued liabilities for restructuring and other cost reduction programs were primarily included in other current liabilities and other long-term obligations in the condensed consolidated balance sheets.