PITTSBURGH, Aug. 9, 2021 /PRNewswire/ --
- Reports Second Quarter 2021 Financial Results - Total Revenues
of $4.58 billion, U.S. GAAP Net Loss
of $279 million, Adjusted EBITDA of
$1.68 billion, U.S. GAAP Net Cash
Provided by Operating Activities of $559
million, Free Cash Flow of $470
million
- Updates 2021 Financial Guidance (1) - Raises Total Revenues
Guidance Range to $17.5 billion to
$17.9 billion from $17.2 billion to $17.8
billion, Raises Adjusted EBITDA Guidance Range to
$6.15 billion to $6.45 billion from $6.0
billion to $6.4 billion,
Raises Free Cash Flow Guidance Range to $2.2
billion to $2.4 billion from
$2.0 billion to $2.3 billion
- Announces Board of Directors Declares Quarterly Dividend of
Eleven Cents ($0.11) per Share
- Pays Down $1.15 billion of Debt
in First Half of 2021
- Receives Historic Approval for First Interchangeable Biosimilar
in the U.S. for Semglee® for the Treatment of Diabetes in July
(substitutable for the reference product, Lantus®)
(1)
|
Viatris is not
providing forward-looking guidance for U.S. GAAP net (loss)
earnings or a quantitative reconciliation of its 2021 adjusted
EBITDA guidance. U.S. GAAP net cash provided by operating
activities for 2021 is estimated to be between $2.80 billion and
$2.95 billion. Please see "Updated 2021 Financial Guidance" and
"Non-GAAP Financial Measures" for additional
information.
|
Viatris Inc. (NASDAQ: VTRS) today reported results for the
second quarter of 2021, highlighted by strong performance across
the entire business and substantial cash flow generation.
Viatris also announced that its Board of Directors declared a
quarterly dividend of eleven cents
($0.11) for each issued and
outstanding share of the company's common stock. The dividend is
payable on September 16, 2021 to stockholders of record at the
close of business on August 24, 2021.
Executive Comments
"We delivered another quarter of strong results," said Viatris
Chief Executive Officer Michael
Goettler. "We are executing at a high level across the
entire business, and we continue to leverage our scientific and
R&D capabilities to pave the way for patients' access to safe,
effective, and high-quality medicines. We have raised our financial
guidance for the year, and we have strong momentum going into the
second half of 2021. Therefore, at the end of the third quarter, we
will be open, once again, to reassess financial guidance."
"The historic approval for the first interchangeable
biosimilar in the U.S. we recently received is, perhaps, one
of the most significant milestones to date demonstrating the
success of our scientific capabilities," said Viatris President
Rajiv Malik. "We fully intend to
leverage these scientific capabilities to continue to add
high-value assets to our pipeline going forward, to break down
barriers to access, bring forth first-to-market products and blaze
new trails to increase access to complex treatments for
patients."
"This quarter continues to highlight our ability to generate
substantial cash flow which was above our expectations," said
Viatris Chief Financial Officer Sanjeev
Narula. "Our strong cash flow performance allowed us to
repay $1.15 billion of debt in the
first half of the year, while also paying our first quarterly
dividend. We anticipate significant increases in cash flow
generation in the coming years, driven by strong underlying
business performance, a reduction in one-time costs and continued
improvement in cash flow conversion."
Financial Summary
|
Three Months
Ended
|
|
June
30,
|
(Unaudited; in
millions, except %s)
|
2021
|
|
2020
|
|
Reported
Change(1)
|
|
Combined
Adjusted
Operational
Change(2)(3)
|
|
Combined
LOE
Adjusted
Operational
Change(2)(3)
|
Total Net
Sales
|
$
|
4,561.7
|
|
|
$
|
2,695.9
|
|
|
69%
|
|
—%
|
|
4%
|
Developed
Markets
|
2,640.4
|
|
|
1,982.7
|
|
|
33%
|
|
2%
|
|
2%
|
Emerging
Markets
|
870.0
|
|
|
410.3
|
|
|
112%
|
|
12%
|
|
12%
|
JANZ
|
501.0
|
|
|
280.2
|
|
|
79%
|
|
(22)%
|
|
6%
|
Greater
China
|
550.3
|
|
|
22.7
|
|
|
nm
|
|
(3)%
|
|
(3)%
|
|
|
|
|
|
|
|
|
|
|
Net Sales by Product
Category
|
|
|
|
|
|
|
|
|
|
Brands
|
$
|
2,701.7
|
|
|
$
|
1,073.0
|
|
|
152%
|
|
(3)%
|
|
3%
|
Complex Gx and
Biosimilars
|
332.8
|
|
|
351.1
|
|
|
(5)%
|
|
(8)%
|
|
(8)%
|
Generics
|
1,527.2
|
|
|
1,271.8
|
|
|
20%
|
|
8%
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Gross
Profit
|
$
|
1,327.7
|
|
|
$
|
1,025.7
|
|
|
29%
|
|
|
|
|
U.S. GAAP Gross
Margin
|
29.0
|
%
|
|
37.6
|
%
|
|
|
|
|
|
|
Adjusted Gross Profit
(4)
|
$
|
2,677.2
|
|
|
$
|
1,482.8
|
|
|
81%
|
|
|
|
|
Adjusted Gross Margin
(4)
|
58.5
|
%
|
|
54.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Net (Loss)
Earnings
|
$
|
(279.2)
|
|
|
$
|
39.4
|
|
|
nm
|
|
|
|
|
Adjusted Net Earnings
(4)
|
$
|
1,180.6
|
|
|
$
|
574.3
|
|
|
106%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(4)
|
$
|
1,281.8
|
|
|
$
|
569.1
|
|
|
125%
|
|
|
|
|
Adjusted EBITDA
(4)
|
$
|
1,675.4
|
|
|
$
|
878.6
|
|
|
91%
|
|
(8)%
|
|
(3)%
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP net cash
provided by operating activities
|
$
|
559.4
|
|
|
$
|
379.5
|
|
|
47%
|
|
|
|
|
Capital
expenditures
|
89.3
|
|
|
44.5
|
|
|
101%
|
|
|
|
|
Free cash flow
(4)
|
$
|
470.1
|
|
|
$
|
335.0
|
|
|
40%
|
|
|
|
|
|
Six Months
Ended
|
|
June
30,
|
(Unaudited; in
millions, except %s)
|
2021
|
|
2020
|
|
Reported
Change(1)
|
|
Combined
Adjusted
Operational
Change(2)(3)
|
|
Combined
LOE
Adjusted
Operational
Change(2)(3)
|
Total Net
Sales
|
$
|
8,961.8
|
|
|
$
|
5,284.1
|
|
|
70%
|
|
(3)%
|
|
1%
|
Developed
Markets
|
5,212.0
|
|
|
3,969.1
|
|
|
31%
|
|
(2)%
|
|
(2)%
|
Emerging
Markets
|
1,624.7
|
|
|
753.8
|
|
|
116%
|
|
3%
|
|
3%
|
JANZ
|
982.9
|
|
|
523.4
|
|
|
88%
|
|
(23)%
|
|
9%
|
Greater
China
|
1,142.2
|
|
|
37.8
|
|
|
nm
|
|
3%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
Net Sales by Product
Category
|
|
|
|
|
|
|
|
|
|
Brands
|
$
|
5,426.3
|
|
|
$
|
2,134.5
|
|
|
154%
|
|
(6)%
|
|
1%
|
Complex Gx and
Biosimilars
|
661.7
|
|
|
604.4
|
|
|
9%
|
|
7%
|
|
7%
|
Generics
|
2,873.8
|
|
|
2,545.2
|
|
|
13%
|
|
—%
|
|
—%
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Gross
Profit
|
$
|
2,455.0
|
|
|
$
|
1,931.8
|
|
|
27%
|
|
|
|
|
U.S. GAAP Gross
Margin
|
27.3
|
%
|
|
36.1
|
%
|
|
|
|
|
|
|
Adjusted Gross Profit
(4)
|
$
|
5,317.1
|
|
|
$
|
2,863.2
|
|
|
86%
|
|
|
|
|
Adjusted Gross Margin
(4)
|
59.0
|
%
|
|
53.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Net (Loss)
Earnings
|
$
|
(1,316.8)
|
|
|
$
|
60.2
|
|
|
nm
|
|
|
|
|
Adjusted Net Earnings
(4)
|
$
|
2,297.0
|
|
|
$
|
1,041.5
|
|
|
121%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(4)
|
$
|
2,449.9
|
|
|
$
|
1,152.0
|
|
|
113%
|
|
|
|
|
Adjusted EBITDA
(4)
|
$
|
3,312.0
|
|
|
$
|
1,629.3
|
|
|
103%
|
|
(10)%
|
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP net cash
provided by operating activities
|
$
|
1,408.2
|
|
|
$
|
670.6
|
|
|
110%
|
|
|
|
|
Capital
expenditures
|
138.8
|
|
|
87.9
|
|
|
58%
|
|
|
|
|
Free cash flow
(4)
|
$
|
1,269.4
|
|
|
$
|
582.7
|
|
|
118%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Q2 2020 and YTD 2020
represent Mylan standalone results for the respective 2020 periods.
Mylan was the accounting acquiror in the combination of Mylan N.V.
with Pfizer Inc.'s Upjohn business and therefore the historical
financial statements of Mylan for periods prior to the combination
are considered to be the historical financial statements of
Viatris.
|
(2)
|
Represents
operational change for net sales. See "Certain Key Terms" in this
release for more information.
|
(3)
|
See "Certain Key
Terms" for more information about Combined Adjusted Q2 and YTD 2020
results and Combined LOE Adjusted Q2 and YTD 2020
results.
|
(4)
|
Non-GAAP financial
measures. See "Non-GAAP Financial Measures" for additional
information.
|
Second Quarter Highlights
- Second quarter 2021 net sales totaled $4.56 billion, flat compared to combined adjusted
Q2 2020 results, up 4% compared to combined LOE adjusted Q2 2020
results, driven by solid performance across all four of our
segments—Developed Markets, Emerging Markets, JANZ (Japan, Australia and New
Zealand), and Greater
China.
- Brands performed better than expectations, driven by products
such as Viagra®, Dymista® and the Thrombosis portfolio.
- Complex generics and biosimilars performed in line with
expectations, with 40% growth in Biosimilars offset by anticipated
competition in select Complex Gx products.
- Generics, which include diversified product forms such as
extended-release oral solids, injectables, transdermals and
topicals, performed better than expectations, driven primarily by
COVID-19 related products.
- The Company generated an additional $224
million in new product revenue (as defined in "Certain Key
Terms" below) in the second quarter ($397
million for the year to date period), and is on track to
meet $690 million in new product
revenue in 2021.
- The Company generated $470
million of free cash flow in the second quarter
($1.27 billion for the year to date
period), primarily driven by solid U.S. GAAP net cash provided by
operating activities of $559 million
in the quarter ($1.41 billion for the
year to date period).
- Continued solid progress in advancing key pipeline programs for
biosimilars, complex products and complex injectables, including
the approval of Semglee® as the first interchangeable biosimilar in
the U.S. in July.
Integration and Restructuring
- Workforce actions related to the Company's previously announced
global restructuring program are well underway.
- The Company remains on track to realize approximately
$500 million of cost synergies this
year and to achieve at least $1
billion of cost synergies by 2023.
Capital Allocation
- Viatris paid its inaugural quarterly cash dividend of
eleven cents ($0.11) per share on June
16, 2021. The Viatris Board of Directors declared a second
quarterly dividend of eleven cents
($0.11) per share payable on
September 16, 2021.
- For the six months ended June 30,
2021, the Company has repaid approximately $1.15 billion of debt and expects to repay
additional debt in the second half of 2021, which is in line with
the commitment to repay approximately $6.5
billion of debt through 2023, and remains fully committed to
maintaining its investment grade credit rating.
COVID-19 Response
- The Company continues to support the health and safety of
colleagues and their families around the world as a top
priority.
- Viatris has ramped up production of antiviral medicines, and
continues to work with government authorities in India to further reduce the cost of the
medicines and educate more than 20,000 healthcare professionals
about product usage.
- Viatris has a broad, diverse and resilient global manufacturing
and supply chain footprint. The Company is not dependent on any one
country or site. Even in India,
the Company's manufacturing footprint is spread over five different
states, which mitigates the risk of disruption in any given part of
the country.
Updated 2021 Financial Guidance
As a result of the underlying strength of the business, Viatris
is raising its financial guidance for 2021 as set forth below. The
Company is not providing forward-looking guidance for U.S. GAAP net
loss or a quantitative reconciliation of its 2021 adjusted EBITDA
guidance to the most directly comparable U.S. GAAP measure, U.S.
GAAP net (loss) earnings, because it is unable to predict with
reasonable certainty the ultimate outcome of certain significant
items, including integration and acquisition-related expenses,
restructuring expenses, asset impairments, litigation settlements
and other contingencies, such as changes to contingent
consideration and certain other gains or losses, as well as related
income tax accounting, because certain of these items have not
occurred, are out of the Company's control and/or cannot be
reasonably predicted without unreasonable effort. These items are
uncertain, depend on various factors, and could have a material
impact on U.S. GAAP reported results for the guidance period. U.S.
GAAP net cash provided by operating activities for 2021 is
estimated to be between $2.80 billion
and $2.95 billion, with a midpoint of
approximately $2.875 billion.
Updated 2021 Financial Guidance
|
|
Updated
Guidance
|
|
Previous
Guidance
|
(In
billions)
|
|
Range
|
|
Midpoint
|
|
Range
|
|
Midpoint
|
Total
Revenues
|
|
$17.5 -
$17.9
|
|
$17.7
|
|
$17.2 -
$17.8
|
|
$17.5
|
Adjusted EBITDA
(1)
|
|
$6.15 -
$6.45
|
|
$6.3
|
|
$6.0 -
$6.4
|
|
$6.2
|
Free Cash Flow
(1)
|
|
$2.2 -
$2.4
|
|
$2.3
|
|
$2.0 -
$2.3
|
|
$2.15
|
|
|
(1)
|
Non-GAAP financial
measures. See "Non-GAAP Financial Measures" for additional
information.
|
Conference Call and Earnings Materials
Viatris Inc. will host a conference call and live webcast, today
at 10:00 a.m. ET, to review the
Company's financial results for the second quarter ended
June 30, 2021. Investors and the
general public are invited to listen to a live webcast of the call
at investor.viatris.com or by calling 855.493.3607 or 346.354.0950 for
international callers (ID#: 9972248). The "Viatris Q2
Earnings Presentation", which will be referenced during the call,
can be found at investor.viatris.com. A replay of the webcast also
will be available on the website.
Certain Key Terms
The combined measures described herein are calculated as
indicated, are reflected as approximations and/or with rounding,
and do not reflect pro forma results in accordance with ASC 805 or
Article 11 of Regulation S-X. Such measures also do not reflect the
effect of any purchase accounting adjustments, including but not
limited to the elimination of intercompany sales and the fair value
of assets and liabilities. Viatris believes these combined 2020
measures provide useful information to understanding and assessing
our 2021 performance because they include both Mylan and Upjohn
business results, adjusted as set forth below, whereas historical
financial information of Viatris prior to November 16, 2020 only represents Mylan's
historical results as Mylan is considered the accounting acquiror
of the Upjohn business.
Combined Adjusted Q2 and YTD 2020 results refer to the sum
of Mylan's standalone results and the standalone carve-out results
from the Upjohn Business for the 2020 period presented, adjusted
for product divestitures in connection with the Combination and
sales to Pfizer for pharmaceutical products provided under its U.S.
healthcare plan.
Combined LOE Adjusted Q2 and YTD 2020 results refer to
Combined Adjusted Q2 and YTD 2020 results, adjusted for the impact
of loss of exclusivity ("LOE") of Lyrica and Celebrex in
Japan which occurred after Q2
2020.
New product sales, new product launches or new product
revenues refer to revenue from new products launched in 2021
and the carryover impact of new products, including business
development, launched since July 1,
2020 (e.g., acquisition of Aspen's thrombosis business in November 2020).
Operational change refers to constant currency percentage
change and is derived by translating net sales or revenues for the
current periods presented at prior year comparative period exchange
rates, and in doing so shows the percentage change from 2021
constant currency net sales or revenues to the corresponding amount
in the prior year.
Non-GAAP Financial Measures
This press release includes the presentation and discussion of
certain financial information that differs from what is reported
under accounting principles generally accepted in the United States ("U.S. GAAP"). These
non-GAAP financial measures, including, but not limited to,
adjusted gross profit, adjusted gross margins, adjusted net
earnings, EBITDA, adjusted EBITDA, free cash flow, adjusted R&D
and as a % of total revenues, adjusted SG&A and as a % of total
revenues, adjusted earnings from operations, adjusted interest
expense, adjusted other (income) expense, adjusted effective tax
rate, constant currency total revenues and constant currency net
sales are presented in order to supplement investors' and other
readers' understanding and assessment of the financial performance
of Viatris Inc. ("Viatris" or the "Company"). Free cash flow refers
to U.S. GAAP net cash provided by operating activities, less
capital expenditures. Management uses these measures internally for
forecasting, budgeting, measuring its operating performance, and
incentive-based awards. Primarily due to acquisitions and other
significant events which may impact comparability of our periodic
operating results, Viatris believes that an evaluation of its
ongoing operations (and comparisons of its current operations with
historical and future operations) would be difficult if the
disclosure of its financial results was limited to financial
measures prepared only in accordance with U.S. GAAP. We believe
that non-GAAP financial measures are useful supplemental
information for our investors and when considered together with our
U.S. GAAP financial measures and the reconciliation to the most
directly comparable U.S. GAAP financial measure, provide a more
complete understanding of the factors and trends affecting our
operations. The financial performance of the Company is measured by
senior management, in part, using adjusted metrics included herein,
along with other performance metrics. In addition, the Company
believes that including EBITDA and supplemental adjustments applied
in presenting adjusted EBITDA is appropriate to provide additional
information to investors to demonstrate the Company's ability to
comply with financial debt covenants and assess the Company's
ability to incur additional indebtedness. The Company also believes
that adjusted EBITDA better focuses management on the Company's
underlying operational results and true business performance and,
is used, in part, for management's incentive compensation. We also
report sales performance using the non-GAAP financial measures of
"constant currency", also referred to herein as "operational
change", total revenues and net sales. These measures provide
information on the change in total revenues and net sales assuming
that foreign currency exchange rates had not changed between the
prior and current period. The comparisons presented at constant
currency rates reflect comparative local currency sales at the
prior year's foreign exchange rates. We routinely evaluate our net
sales and total revenues performance at constant currency so that
sales results can be viewed without the impact of foreign currency
exchange rates, thereby facilitating a period-to-period comparison
of our operational activities and believe that this presentation
also provides useful information to investors for the same reason.
The "Summary of Total Revenues by Segment" table below compares net
sales on an actual and constant currency basis for each reportable
segment for the three and six months ended June 30, 2021 and
2020 as well as for total revenues. Also, set forth below, Viatris
has provided reconciliations of such non-GAAP financial measures to
the most directly comparable U.S. GAAP financial measures.
Investors and other readers are encouraged to review the related
U.S. GAAP financial measures and the reconciliations of the
non-GAAP measures to their most directly comparable U.S. GAAP
measures set forth below, and investors and other readers should
consider non-GAAP measures only as supplements to, not as
substitutes for or as superior measures to, the measures of
financial performance prepared in accordance with U.S. GAAP. For
additional information regarding the components and uses of
Non-GAAP financial measures refer to Management's Discussion and
Analysis of Financial Condition and Results of Operations--Use of
Non-GAAP Financial Measures section of Viatris' Quarterly Report on
Form 10-Q for the three and six months ended June 30,
2021.
About Viatris
Viatris Inc. (NASDAQ: VTRS) is a new kind of healthcare company,
empowering people worldwide to live healthier at every stage of
life. We provide access to medicines, advance sustainable
operations, develop innovative solutions and leverage our
collective expertise to connect more people to more products and
services through our one-of-a-kind Global Healthcare Gateway®.
Formed in November 2020, Viatris
brings together scientific, manufacturing and distribution
expertise with proven regulatory, medical and commercial
capabilities to deliver high-quality medicines to patients in more
than 165 countries and territories. Viatris' portfolio comprises
more than 1,400 approved molecules across a wide range of
therapeutic areas, spanning both non-communicable and infectious
diseases, including globally recognized brands, complex generic and
branded medicines, a growing portfolio of biosimilars and a variety
of over-the-counter consumer products. With a global workforce of
over 40,000, Viatris is headquartered in the U.S., with global
centers in Pittsburgh,
Shanghai and Hyderabad, India. Learn more at viatris.com and investor.viatris.com, and connect with us on Twitter at
@ViatrisInc, LinkedIn and YouTube.
Forward-looking Statements
This release contains "forward-looking statements". These
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may include, without limitation, 2021
guidance; quarterly dividend of $0.11
per share payable on September 16,
2021 to stockholders of record at the close of business on
August 24, 2021; we are executing at
a high level across the entire business, and we continue to
leverage our scientific and R&D capabilities to pave the way
for patients' access to safe, effective, and high-quality
medicines; we have raised our financial guidance for the year, and
we have strong momentum going into the second half of 2021; at the
end of the third quarter, we will be open, once again, to reassess
financial guidance; the historic approval for the first
interchangeable biosimilar in the U.S. we recently received is,
perhaps, one of the most significant milestones to date
demonstrating the success of our scientific capabilities; we fully
intend to leverage these scientific capabilities to continue to add
high-value assets to our pipeline going forward, to break down
barriers to access, bring forth first-to-market products and blaze
new trails to increase access to complex treatments for patients;
this quarter continues to highlight our ability to generate
substantial cash flow which was above our expectations; we
anticipate significant increases in cash flow generation in the
coming years, driven by strong underlying business performance, a
reduction in one-time costs and continued improvement in cash flow
conversion; workforce actions related to the Company's previously
announced global restructuring program are well underway; the
Company remains on track to realize approximately $500 million of cost synergies this year and to
achieve at least $1 billion of cost
synergies by 2023; for the six months ended June 30, 2021, the Company has repaid
approximately $1.15 billion of debt
and expects to repay additional debt in the second half of 2021,
which is in line with the commitment to repay approximately
$6.5 billion of debt through 2023,
and remains fully committed to maintaining its investment grade
credit rating; Viatris has ramped up production of antiviral
medicines, and continues to work with government authorities in
India to further reduce the cost
of the medicines and educate more than 20,000 healthcare
professionals about product usage; Viatris has a broad, diverse and
resilient global manufacturing and supply chain footprint; the
Company is not dependent on any one country or site; even in
India, the Company's manufacturing
footprint is spread over five different states, which mitigates the
risk of disruption in any given part of the country; and statements
about the transaction pursuant to which Mylan N.V. ("Mylan")
combined with Pfizer Inc.'s Upjohn business (the "Upjohn Business")
in a Reverse Morris Trust transaction (the "Combination") and
Upjohn Inc. became the parent entity of the combined Upjohn
Business and Mylan business and was renamed "Viatris Inc.", the
benefits and synergies of the Combination or our global
restructuring program, future opportunities for the Company and its
products and any other statements regarding the Company's future
operations, financial or operating results, capital allocation,
dividend policy and payments, debt ratio and covenants, anticipated
business levels, future earnings, planned activities, anticipated
growth, market opportunities, strategies, competitions, efforts to
create, enhance or otherwise unlock the value of our unique global
platform, and other expectations and targets for future periods.
Forward-looking statements may often be identified by the use of
words such as "will", "may", "could", "should", "would", "project",
"believe", "anticipate", "expect", "plan", "estimate", "forecast",
"potential", "pipeline", "intend", "continue", "target", "seek" and
variations of these words or comparable words. Because
forward-looking statements inherently involve risks and
uncertainties, actual future results may differ materially from
those expressed or implied by such forward-looking statements.
Factors that could cause or contribute to such differences include,
but are not limited to: the integration of Mylan and the Upjohn
Business or the implementation of the Company's global
restructuring program being more difficult, time consuming or
costly than expected; the possibility that the Company may be
unable to achieve expected benefits, synergies and operating
efficiencies in connection with the Combination or its global
restructuring program within the expected timeframe or at all; the
possibility that the Company may be unable to successfully
integrate Mylan and the Upjohn Business or implement its global
restructuring program; operational or financial difficulties or
losses associated with the Company's reliance on agreements with
Pfizer in connection with the Combination, including with respect
to transition services; the possibility that the Company may be
unable to achieve all intended benefits of its strategic
initiatives; the potential impact of public health outbreaks,
epidemics and pandemics, including the ongoing challenges and
uncertainties posed by the COVID-19 pandemic; the Company's failure
to achieve expected or targeted future financial and operating
performance and results; actions and decisions of healthcare and
pharmaceutical regulators; changes in relevant laws and
regulations, including but not limited to changes in tax,
healthcare and pharmaceutical laws and regulations globally
(including the impact of potential tax reform in the U.S.); the
ability to attract and retain key personnel; the Company's
liquidity, capital resources and ability to obtain financing; any
regulatory, legal or other impediments to the Company's ability to
bring new products to market, including but not limited to "at-risk
launches"; success of clinical trials and the Company's or its
partners' ability to execute on new product opportunities and
develop, manufacture and commercialize products; any changes in or
difficulties with the Company's manufacturing facilities, including
with respect to inspections, remediation and restructuring
activities, supply chain or inventory or the ability to meet
anticipated demand; the scope, timing and outcome of any ongoing
legal proceedings, including government inquiries or
investigations, and the impact of any such proceedings on the
Company; any significant breach of data security or data privacy or
disruptions to our information technology systems; risks associated
with having significant operations globally; the ability to protect
intellectual property and preserve intellectual property rights;
changes in third-party relationships; the effect of any changes in
the Company's or its partners' customer and supplier relationships
and customer purchasing patterns, including customer loss and
business disruption being greater than expected following the
Combination; the impacts of competition, including decreases in
sales or revenues as a result of the loss of market exclusivity for
certain products; changes in the economic and financial conditions
of the Company or its partners; uncertainties regarding future
demand, pricing and reimbursement for the Company's products;
uncertainties and matters beyond the control of management,
including but not limited to general political and economic
conditions and global exchange rates; and inherent uncertainties
involved in the estimates and judgments used in the preparation of
financial statements, and the providing of estimates of financial
measures, in accordance with U.S. GAAP and related standards or on
an adjusted basis. For more detailed information on the risks and
uncertainties associated with Viatris, see the risks described in
Part I, Item 1A in the 2020 Form 10-K, and our other filings with
the SEC. You can access Viatris' filings with the SEC through the
SEC website at www.sec.gov or through our website, and Viatris
strongly encourages you to do so. Viatris routinely posts
information that may be important to investors on our website at
investor.viatris.com, and we use this website address as a means of
disclosing material information to the public in a broad,
non-exclusionary manner for purposes of the SEC's Regulation Fair
Disclosure (Reg FD). The contents of our website are not
incorporated into this release or our other filings with the SEC.
Viatris undertakes no obligation to update any statements herein
for revisions or changes after the date of this release other than
as required by law.
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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
|
|
|
Net sales
|
$
|
4,561.7
|
|
|
$
|
2,695.9
|
|
|
$
|
8,961.8
|
|
|
$
|
5,284.1
|
|
Other
revenues
|
16.1
|
|
|
35.3
|
|
|
46.3
|
|
|
66.3
|
|
Total
revenues
|
4,577.8
|
|
|
2,731.2
|
|
|
9,008.1
|
|
|
5,350.4
|
|
Cost of
sales
|
3,250.1
|
|
|
1,705.5
|
|
|
6,553.1
|
|
|
3,418.6
|
|
Gross
profit
|
1,327.7
|
|
|
1,025.7
|
|
|
2,455.0
|
|
|
1,931.8
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
147.7
|
|
|
156.3
|
|
|
331.8
|
|
|
270.5
|
|
Selling, general and
administrative
|
1,204.8
|
|
|
719.4
|
|
|
2,391.3
|
|
|
1,324.8
|
|
Litigation settlements
and other contingencies, net
|
23.0
|
|
|
15.8
|
|
|
45.9
|
|
|
17.6
|
|
Total operating
expenses
|
1,375.5
|
|
|
891.5
|
|
|
2,769.0
|
|
|
1,612.9
|
|
(Loss) earnings from
operations
|
(47.8)
|
|
|
134.2
|
|
|
(314.0)
|
|
|
318.9
|
|
Interest
expense
|
167.1
|
|
|
116.2
|
|
|
336.1
|
|
|
236.1
|
|
Other expense
(income), net
|
4.2
|
|
|
(2.0)
|
|
|
10.3
|
|
|
32.1
|
|
(Loss) earnings
before income taxes
|
(219.1)
|
|
|
20.0
|
|
|
(660.4)
|
|
|
50.7
|
|
Income tax provision
(benefit)
|
60.1
|
|
|
(19.4)
|
|
|
656.4
|
|
|
(9.5)
|
|
Net (loss)
earnings
|
$
|
(279.2)
|
|
|
$
|
39.4
|
|
|
$
|
(1,316.8)
|
|
|
$
|
60.2
|
|
(Loss) earnings per
share attributable to Viatris Inc. shareholders
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.23)
|
|
|
$
|
0.08
|
|
|
$
|
(1.09)
|
|
|
$
|
0.12
|
|
Diluted
|
$
|
(0.23)
|
|
|
$
|
0.08
|
|
|
$
|
(1.09)
|
|
|
$
|
0.12
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
1,208.8
|
|
|
516.9
|
|
|
1,208.2
|
|
|
516.7
|
|
Diluted
|
1,208.8
|
|
|
517.2
|
|
|
1,208.2
|
|
|
517.1
|
|
Viatris Inc. and
Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited; in
millions)
|
|
|
June 30,
2021
|
|
December 31,
2020
|
ASSETS
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
673.9
|
|
|
$
|
844.4
|
|
Accounts receivable,
net
|
4,478.7
|
|
|
4,843.8
|
|
Inventories
|
4,487.6
|
|
|
5,471.9
|
|
Prepaid expenses and
other current assets
|
2,109.6
|
|
|
1,707.4
|
|
Total current
assets
|
11,749.8
|
|
|
12,867.5
|
|
Intangible assets,
net
|
27,863.7
|
|
|
29,683.2
|
|
Goodwill
|
11,990.4
|
|
|
12,347.0
|
|
Other non-current
assets
|
6,380.2
|
|
|
6,655.3
|
|
Total
assets
|
$
|
57,984.1
|
|
|
$
|
61,553.0
|
|
LIABILITIES AND
EQUITY
|
Liabilities
|
|
|
|
Current portion of
long-term debt and other long-term obligations
|
$
|
2,184.4
|
|
|
$
|
2,308.5
|
|
Other current
liabilities
|
7,948.2
|
|
|
8,254.4
|
|
Long-term
debt
|
20,917.0
|
|
|
22,429.2
|
|
Other non-current
liabilities
|
5,727.6
|
|
|
5,606.8
|
|
Total
liabilities
|
36,777.2
|
|
|
38,598.9
|
|
Shareholders'
equity
|
21,206.9
|
|
|
22,954.1
|
|
Total liabilities and
equity
|
$
|
57,984.1
|
|
|
$
|
61,553.0
|
|
Viatris
Inc.
|
Select Key Product
Net Sales, on a Consolidated Basis
|
Three and Six
Months Ended June 30, 2021
|
(Unaudited)
|
|
|
|
|
(In
millions)
|
Three months
ended June 30,
2021
|
|
Six months
ended June 30,
2021
|
Select Key Global
Products
|
|
|
|
Lipitor ®
|
$
|
398.3
|
|
|
$
|
862.9
|
|
Norvasc ®
|
209.8
|
|
|
437.5
|
|
Lyrica ®
|
192.5
|
|
|
380.3
|
|
Viagra ®
|
134.8
|
|
|
274.4
|
|
EpiPen®
Auto-Injectors
|
104.1
|
|
|
207.8
|
|
Effexor ®
|
83.5
|
|
|
160.1
|
|
Celebrex ®
|
82.3
|
|
|
171.3
|
|
Creon ®
|
80.7
|
|
|
150.6
|
|
Zoloft ®
|
70.9
|
|
|
147.5
|
|
Xalabrands
|
58.3
|
|
|
116.2
|
|
|
|
|
|
Select Key Segment
Products
|
|
|
|
Dymista ®
|
$
|
54.6
|
|
|
$
|
94.9
|
|
Amitiza ®
|
52.1
|
|
|
98.0
|
|
Xanax ®
|
48.8
|
|
|
93.9
|
|
Yupelri ®
|
41.8
|
|
|
78.7
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The Company does not
disclose net sales for any products considered competitively
sensitive.
|
(b)
|
Products disclosed
may change in future periods, including as a result of seasonality,
competition or new product introductions.
|
Viatris Inc. and
Subsidiaries
|
Reconciliation of
Non-GAAP Financial Measures
|
(Unaudited)
|
|
Reconciliation
of U.S. GAAP Net (Loss) Earnings to Adjusted Net
Earnings
|
|
Below is a
reconciliation of U.S. GAAP net (loss) earnings to adjusted net
earnings for the three and six months
ended June 30, 2021 compared to the prior year period:
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(In
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP net (loss)
earnings
|
$
|
(279.2)
|
|
|
$
|
39.4
|
|
|
$
|
(1,316.8)
|
|
|
$
|
60.2
|
|
Purchase accounting
related amortization (primarily included in cost of sales)
(a)
|
1,169.8
|
|
|
351.8
|
|
|
2,424.8
|
|
|
704.0
|
|
Litigation
settlements and other contingencies, net
|
23.0
|
|
|
15.8
|
|
|
45.9
|
|
|
17.6
|
|
Interest expense
(primarily amortization of premiums and discounts on long term
debt)
|
(13.4)
|
|
|
5.5
|
|
|
(26.7)
|
|
|
11.3
|
|
Clean energy
investments pre-tax loss
|
16.7
|
|
|
17.2
|
|
|
34.6
|
|
|
34.5
|
|
Acquisition related
costs (primarily included in SG&A) (b)
|
48.4
|
|
|
122.7
|
|
|
108.2
|
|
|
145.9
|
|
Restructuring related
costs (c)
|
254.7
|
|
|
23.6
|
|
|
570.1
|
|
|
32.5
|
|
Share-based
compensation expense
|
31.0
|
|
|
15.3
|
|
|
63.7
|
|
|
34.7
|
|
Other special items
included in:
|
|
|
|
|
|
|
|
Cost of sales
(d)
|
99.4
|
|
|
99.5
|
|
|
186.1
|
|
|
215.7
|
|
Research and
development expense (e)
|
(6.3)
|
|
|
40.4
|
|
|
8.4
|
|
|
42.1
|
|
Selling, general and
administrative expense
|
10.2
|
|
|
9.1
|
|
|
29.5
|
|
|
5.4
|
|
Other expense,
net
|
—
|
|
|
(16.1)
|
|
|
—
|
|
|
(16.4)
|
|
Tax effect of the
above items and other income tax related items
(f)
|
(173.7)
|
|
|
(149.9)
|
|
|
169.2
|
|
|
(246.0)
|
|
Adjusted net
earnings
|
$
|
1,180.6
|
|
|
$
|
574.3
|
|
|
$
|
2,297.0
|
|
|
$
|
1,041.5
|
|
|
|
|
|
|
|
|
|
|
Significant items
include the following:
|
(a)
|
For the three and six
months ended June 30, 2021 includes amortization of the
purchase accounting inventory fair value adjustment related to the
Combination totaling approximately $477.3 million and
$953.7 million, respectively.
|
(b)
|
Acquisition related
costs consist primarily of transaction costs including legal and
consulting fees and integration activities.
|
(c)
|
For the three months
ended June 30, 2021 charges of approximately $78.7 million are
included in cost of sales, approximately $10.2 million are included
in R&D, and approximately $165.8 million are included in
SG&A. For the six months ended June 30, 2021 charges of
approximately $246.5 million are included in cost of sales,
approximately $16.6 million are included in R&D, and
approximately $307.0 million are included in SG&A.
|
(d)
|
Costs incurred during
the three and six months ended June 30, 2021 includes
incremental manufacturing variances and site remediation activities
as a result of the activities at the Company's Morgantown plant of
approximately $44.1 million and $89.1 million,
respectively. Costs incurred during the three and six months ended
June 30, 2020 primarily relate to incremental manufacturing
variances and site remediation activities as a result of the
activities at the Company's Morgantown plant of approximately
$63.0 million and $121.8 million, respectively. In
addition, the three and six months ended June 30, 2020
includes incremental manufacturing variances incurred as a result
of the COVID-19 pandemic of approximately $15.0 million and
$22.0 million, respectively. Also, the six months ended
June 30, 2020 includes $25.0 million related to a special
bonus for plant employees as a result of the COVID-19
pandemic.
|
(e)
|
Adjustments primarily
relate to non-refundable payments related to development
agreements.
|
(f)
|
Adjusted for changes
for uncertain tax positions and for certain impacts of the
Combination.
|
Reconciliation
of U.S. GAAP Net (Loss) Earnings to EBITDA and Adjusted
EBITDA
|
|
Below is a
reconciliation of U.S. GAAP net (loss) earnings to EBITDA and
adjusted EBITDA for the three and six months ended June 30,
2021 compared to the prior year period:
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
(In
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP net (loss)
earnings
|
$
|
(279.2)
|
|
|
$
|
39.4
|
|
|
$
|
(1,316.8)
|
|
|
$
|
60.2
|
|
Add
adjustments:
|
|
|
|
|
|
|
|
Net contribution
attributable to equity method investments
|
16.7
|
|
|
17.2
|
|
|
34.6
|
|
|
34.5
|
|
Income tax provision
(benefit)
|
60.1
|
|
|
(19.4)
|
|
|
656.4
|
|
|
(9.5)
|
|
Interest expense
(a)
|
167.1
|
|
|
116.2
|
|
|
336.1
|
|
|
236.1
|
|
Depreciation and
amortization (b)
|
1,317.1
|
|
|
415.7
|
|
|
2,739.6
|
|
|
830.7
|
|
EBITDA
|
$
|
1,281.8
|
|
|
$
|
569.1
|
|
|
$
|
2,449.9
|
|
|
$
|
1,152.0
|
|
Add
adjustments:
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
31.0
|
|
|
15.3
|
|
|
63.7
|
|
|
34.7
|
|
Litigation settlements
and other contingencies, net
|
23.0
|
|
|
15.8
|
|
|
45.9
|
|
|
17.6
|
|
Restructuring,
acquisition related and other special items
(c)
|
339.6
|
|
|
278.4
|
|
|
752.5
|
|
|
425.0
|
|
Adjusted
EBITDA
|
$
|
1,675.4
|
|
|
$
|
878.6
|
|
|
$
|
3,312.0
|
|
|
$
|
1,629.3
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes amortization
of premiums and discounts on long-term debt.
|
(b)
|
Includes purchase
accounting related amortization.
|
(c)
|
See items detailed in
the Reconciliation of U.S. GAAP Net (Loss) Earnings to Adjusted Net
Earnings.
|
Summary of Total
Revenues by Segment
|
|
|
Three Months
Ended
|
|
June
30,
|
(In
millions)
|
2021
|
|
2020
|
|
%
Change
|
|
2021
Currency
Impact (1)
|
|
2021
Constant
Currency
Revenues
|
|
Constant
Currency
% Change (2)
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
Developed
Markets
|
$
|
2,640.4
|
|
|
$
|
1,982.7
|
|
|
33
|
%
|
|
$
|
(112.1)
|
|
|
$
|
2,528.3
|
|
|
28
|
%
|
Greater
China
|
550.3
|
|
|
22.7
|
|
|
nm
|
|
(0.5)
|
|
|
549.8
|
|
|
nm
|
JANZ
|
501.0
|
|
|
280.2
|
|
|
79
|
%
|
|
(14.9)
|
|
|
486.1
|
|
|
73
|
%
|
Emerging
Markets
|
870.0
|
|
|
410.3
|
|
|
112
|
%
|
|
(24.3)
|
|
|
845.7
|
|
|
106
|
%
|
Total net
sales
|
4,561.7
|
|
|
2,695.9
|
|
|
69
|
%
|
|
(151.8)
|
|
|
4,409.9
|
|
|
64
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues
(3)
|
16.1
|
|
|
35.3
|
|
|
(54)
|
%
|
|
(0.8)
|
|
|
15.3
|
|
|
(57)
|
%
|
Consolidated total
revenues (4)
|
$
|
4,577.8
|
|
|
$
|
2,731.2
|
|
|
68
|
%
|
|
$
|
(152.6)
|
|
|
$
|
4,425.2
|
|
|
62
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
June
30,
|
(In
millions)
|
2021
|
|
2020
|
|
%
Change
|
|
2021
Currency
Impact (1)
|
|
2021
Constant
Currency
Revenues
|
|
Constant
Currency
% Change (2)
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
Developed
Markets
|
$
|
5,212.0
|
|
|
$
|
3,969.1
|
|
|
31
|
%
|
|
$
|
(209.1)
|
|
|
$
|
5,002.9
|
|
|
26
|
%
|
Greater
China
|
1,142.2
|
|
|
37.8
|
|
|
nm
|
|
(0.3)
|
|
|
1,141.9
|
|
|
nm
|
JANZ
|
982.9
|
|
|
523.4
|
|
|
88
|
%
|
|
(36.9)
|
|
|
946.0
|
|
|
81
|
%
|
Emerging
Markets
|
1,624.7
|
|
|
753.8
|
|
|
116
|
%
|
|
(24.6)
|
|
|
1,600.1
|
|
|
112
|
%
|
Total net
sales
|
8,961.8
|
|
|
5,284.1
|
|
|
70
|
%
|
|
(270.9)
|
|
|
8,690.9
|
|
|
64
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues
(3)
|
46.3
|
|
|
66.3
|
|
|
(30)
|
%
|
|
(1.2)
|
|
|
45.1
|
|
|
(32)
|
%
|
Consolidated total
revenues (4)
|
$
|
9,008.1
|
|
|
$
|
5,350.4
|
|
|
68
|
%
|
|
$
|
(272.1)
|
|
|
$
|
8,736.0
|
|
|
63
|
%
|
|
|
|
|
|
|
|
|
|
(1)
|
Currency impact is
shown as unfavorable (favorable).
|
(2)
|
The constant currency
percentage change is derived by translating net sales or revenues
for the current period at prior year comparative period exchange
rates, and in doing so shows the percentage change from 2021
constant currency net sales or revenues to the corresponding amount
in the prior year.
|
(3)
|
For the three months
ended June 30, 2021, other revenues in Developed Markets, Greater
China, JANZ, and Emerging Markets were approximately $12.2 million,
$(1.4) million, $0.6 million, and $4.7 million, respectively. For
the six months ended June 30, 2021, other revenues in
Developed Markets, JANZ, and Emerging Markets were approximately
$34.5 million, $1.0 million, and $10.8 million,
respectively.
|
(4)
|
Amounts exclude
intersegment revenue that eliminates on a consolidated
basis.
|
Reconciliation of
Income Statement Line Items
|
|
(Unaudited; in
millions)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP cost of
sales
|
$
|
3,250.1
|
|
|
$
|
1,705.5
|
|
|
$
|
6,553.1
|
|
|
$
|
3,418.6
|
|
Deduct:
|
|
|
|
|
|
|
|
Purchase accounting
related amortization
|
(1,169.8)
|
|
|
(351.8)
|
|
|
(2,424.8)
|
|
|
(704.0)
|
|
Acquisition related
items
|
(1.0)
|
|
|
(1.3)
|
|
|
(3.5)
|
|
|
(2.1)
|
|
Restructuring related
costs
|
(78.7)
|
|
|
(4.1)
|
|
|
(246.5)
|
|
|
(8.9)
|
|
Share-based
compensation expense
|
(0.6)
|
|
|
(0.4)
|
|
|
(1.2)
|
|
|
(0.7)
|
|
Other special
items
|
(99.4)
|
|
|
(99.5)
|
|
|
(186.1)
|
|
|
(215.7)
|
|
Adjusted cost of
sales
|
$
|
1,900.6
|
|
|
$
|
1,248.4
|
|
|
$
|
3,691.0
|
|
|
$
|
2,487.2
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit
(a)
|
$
|
2,677.2
|
|
|
$
|
1,482.8
|
|
|
$
|
5,317.1
|
|
|
$
|
2,863.2
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin
(a)
|
58
|
%
|
|
54
|
%
|
|
59
|
%
|
|
54
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP
R&D
|
$
|
147.7
|
|
|
$
|
156.3
|
|
|
$
|
331.8
|
|
|
$
|
270.5
|
|
Add /
(Deduct):
|
|
|
|
|
|
|
|
Acquisition related
costs
|
(0.2)
|
|
|
(0.2)
|
|
|
(0.3)
|
|
|
(0.2)
|
|
Restructuring and
related costs
|
(10.2)
|
|
|
(0.2)
|
|
|
(16.6)
|
|
|
(0.4)
|
|
Share-based
compensation expense
|
(0.8)
|
|
|
(0.7)
|
|
|
(1.9)
|
|
|
(1.1)
|
|
Other special
items
|
6.3
|
|
|
(40.4)
|
|
|
(8.4)
|
|
|
(42.1)
|
|
Adjusted
R&D
|
$
|
142.8
|
|
|
$
|
114.8
|
|
|
$
|
304.6
|
|
|
$
|
226.7
|
|
|
|
|
|
|
|
|
|
Adjusted R&D as %
of total revenues
|
3
|
%
|
|
4
|
%
|
|
3
|
%
|
|
4
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP
SG&A
|
$
|
1,204.8
|
|
|
$
|
719.4
|
|
|
$
|
2,391.3
|
|
|
$
|
1,324.8
|
|
Deduct:
|
|
|
|
|
|
|
|
Acquisition related
costs
|
(47.2)
|
|
|
(121.4)
|
|
|
(104.4)
|
|
|
(143.6)
|
|
Restructuring and
related costs
|
(165.8)
|
|
|
(19.4)
|
|
|
(307.0)
|
|
|
(23.3)
|
|
Share-based
compensation expense
|
(29.5)
|
|
|
(14.3)
|
|
|
(60.5)
|
|
|
(32.9)
|
|
Other special items
and reclassifications
|
(10.2)
|
|
|
(9.1)
|
|
|
(29.5)
|
|
|
(5.4)
|
|
Adjusted
SG&A
|
$
|
952.1
|
|
|
$
|
555.2
|
|
|
$
|
1,889.9
|
|
|
$
|
1,119.6
|
|
|
|
|
|
|
|
|
|
Adjusted SG&A as
% of total revenues
|
21
|
%
|
|
20
|
%
|
|
21
|
%
|
|
21
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP total
operating expenses
|
$
|
1,375.5
|
|
|
$
|
891.5
|
|
|
$
|
2,769.0
|
|
|
$
|
1,612.9
|
|
Deduct:
|
|
|
|
|
|
|
|
Litigation settlements
and other contingencies, net
|
(23.0)
|
|
|
(15.8)
|
|
|
(45.9)
|
|
|
(17.6)
|
|
R&D
adjustments
|
(4.9)
|
|
|
(41.5)
|
|
|
(27.2)
|
|
|
(43.8)
|
|
SG&A
adjustments
|
(252.7)
|
|
|
(164.2)
|
|
|
(501.4)
|
|
|
(205.2)
|
|
Adjusted total
operating expenses
|
$
|
1,094.9
|
|
|
$
|
670.0
|
|
|
$
|
2,194.5
|
|
|
$
|
1,346.3
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
from operations (b)
|
$
|
1,582.3
|
|
|
$
|
812.8
|
|
|
$
|
3,122.6
|
|
|
$
|
1,516.9
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP interest
expense
|
$
|
167.1
|
|
|
$
|
116.2
|
|
|
$
|
336.1
|
|
|
$
|
236.1
|
|
Add /
(Deduct):
|
|
|
|
|
|
|
|
Interest expense
related to clean energy investments
|
(0.3)
|
|
|
(1.0)
|
|
|
(0.3)
|
|
|
(2.1)
|
|
Accretion of
contingent consideration liability
|
—
|
|
|
(3.1)
|
|
|
—
|
|
|
(6.4)
|
|
Amortization of
premiums and discounts on long-term debt
|
16.5
|
|
|
—
|
|
|
32.5
|
|
|
—
|
|
Other special
items
|
(2.7)
|
|
|
(1.4)
|
|
|
(5.4)
|
|
|
(2.8)
|
|
Adjusted interest
expense
|
$
|
180.6
|
|
|
$
|
110.7
|
|
|
$
|
362.9
|
|
|
$
|
224.8
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP other
expense (income), net
|
$
|
4.2
|
|
|
$
|
(2.0)
|
|
|
$
|
10.3
|
|
|
$
|
32.1
|
|
Add /
(Deduct):
|
|
|
|
|
|
|
|
Clean energy
investments pre-tax loss (c)
|
(16.7)
|
|
|
(17.2)
|
|
|
(34.6)
|
|
|
(34.5)
|
|
Other items
|
—
|
|
|
16.1
|
|
|
—
|
|
|
16.4
|
|
Adjusted other
(income) expense
|
$
|
(12.5)
|
|
|
$
|
(3.1)
|
|
|
$
|
(24.3)
|
|
|
$
|
14.0
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP (loss)
earnings before income taxes
|
$
|
(219.1)
|
|
|
$
|
20.0
|
|
|
$
|
(660.4)
|
|
|
$
|
50.7
|
|
Total pre-tax
non-GAAP adjustments
|
1,633.4
|
|
|
684.7
|
|
|
3,444.5
|
|
|
1,227.2
|
|
Adjusted earnings
before income taxes
|
$
|
1,414.3
|
|
|
$
|
704.7
|
|
|
$
|
2,784.1
|
|
|
$
|
1,277.9
|
|
|
|
|
|
|
|
|
|
U.S. GAAP income
tax provision (benefit)
|
$
|
60.1
|
|
|
$
|
(19.4)
|
|
|
$
|
656.4
|
|
|
$
|
(9.5)
|
|
Adjusted tax expense
(benefit)
|
173.7
|
|
|
149.8
|
|
|
(169.2)
|
|
|
245.9
|
|
Adjusted income tax
provision
|
$
|
233.8
|
|
|
$
|
130.4
|
|
|
$
|
487.2
|
|
|
$
|
236.4
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
16.5
|
%
|
|
18.5
|
%
|
|
17.5
|
%
|
|
18.5
|
%
|
|
|
|
|
|
|
|
|
|
(a)
|
U.S. GAAP gross
profit is calculated as total revenues less U.S. GAAP cost of
sales. U.S. GAAP gross margin is calculated as U.S. GAAP gross
profit divided by total revenues. Adjusted gross profit is
calculated as total revenues less adjusted cost of sales. Adjusted
gross margin is calculated as adjusted gross profit divided by
total revenues.
|
(b)
|
U.S. GAAP earnings
from operations is calculated as U.S. GAAP gross profit less U.S.
GAAP total operating expenses. Adjusted earnings from operations is
calculated as adjusted gross profit less adjusted total operating
expenses.
|
(c)
|
Adjustment represents
exclusion of activity related to Mylan's clean energy investments,
the activities of which qualify for income tax credits under
section 45 of the U.S. Internal Revenue Code of 1986, as
amended.
|
Reconciliation of
Estimated 2021 GAAP Net Cash Provided by Operating Activities to
Free Cash Flow
|
|
(Unaudited; in
millions)
|
|
A reconciliation of
the estimated 2021 GAAP Net Cash provided by Operating Activities
to Free Cash Flow is presented below:
|
|
Estimated GAAP Net
Cash provided by Operating Activities
|
$2,800 -
$2,950
|
|
|
Less: Capital
Expenditures
|
$(500) -
$(650)
|
|
|
Free Cash
Flow
|
$2,200 -
$2,400
|
Combined Adjusted
EBITDA - Three and six months ended June 30,
2020
|
|
|
|
|
(In
millions)
|
Three Month
Ended June 30,
2020
|
|
Six Months
Ended June 30,
2020
|
Upjohn - U.S. GAAP
Income before taxes
|
$
|
931.1
|
|
|
$
|
1,816.4
|
|
Interest
expense
|
57.4
|
|
|
111.1
|
|
Depreciation and
amortization
|
79.0
|
|
|
155.8
|
|
Upjohn
EBITDA
|
$
|
1,067.5
|
|
|
$
|
2,083.3
|
|
|
|
|
|
Other
adjustments
|
(168.6)
|
|
|
(107.8)
|
|
Upjohn Adjusted
EBITDA
|
$
|
898.9
|
|
|
$
|
1,975.5
|
|
Add: Mylan Adjusted
EBITDA
|
878.6
|
|
|
1,629.3
|
|
Combined Adjusted
EBITDA
|
$
|
1,777.5
|
|
|
$
|
3,604.8
|
|
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multimedia:https://www.prnewswire.com/news-releases/viatris-reports-strong-second-quarter-results-301350803.html
SOURCE Viatris Inc.