PITTSBURGH, Nov. 8, 2021 /PRNewswire/ --
- Reports Third Quarter 2021 Financial Results: Total Revenues of
$4.54 billion; U.S. GAAP Net Earnings
of $312 million; Adjusted EBITDA of
$1.70 billion; U.S. GAAP Net Cash
Provided by Operating Activities of $1.09
billion; and Free Cash Flow of $965
million
- Raises 2021 Financial Guidance (1): Total Revenues
Guidance Range to $17.70 billion to
$17.90 billion, from $17.50 billion to $17.90
billion; Adjusted EBITDA Guidance Range to $6.30 billion to $6.50
billion, from $6.15 billion to
$6.45 billion; and Free Cash Flow
Guidance Range to $2.40 billion to
$2.60 billion, from $2.20 billion to $2.40
billion
- Returned $266 million to
shareholders year to date via dividend payments; Announces Board of
Directors Declares 3rd Quarterly Dividend of
Eleven Cents ($0.11) per Share
- Paid Down $1.9 billion of Debt in
First Three Quarters of 2021
- Announces Virtual Investor Event to Take Place January 7, 2022 to Discuss More Details of
Company's Two-Phased Strategic Roadmap
(1)
|
Viatris is not
providing forward-looking guidance for U.S. GAAP net earnings
(loss) 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 $2.90 billion and $3.10 billion.
Please see "Updated 2021 Financial Guidance" and "Non-GAAP
Financial Measures" for additional information.
|
Viatris Inc. (NASDAQ: VTRS) today reported strong results for
the third quarter of 2021, highlighted by robust 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 December 16, 2021 to shareholders of record at the
close of business on November 23, 2021.
Executive Comments
Viatris Chief Executive Officer Michael
Goettler said, "Nearly one year after launching our new
company, I could not be prouder of all that we have accomplished
together. Our continued strong operational performance for three
consecutive quarters has allowed us to continue to deliver on our
financial commitments and, based on the strength of our results, we
are again raising our full-year financial guidance for 2021.
Goettler continued, "We are near completion of a rigorous
bottoms-up strategic planning effort and look forward to sharing
these plans with the investment community at a virtual Investor
Event now scheduled for the morning of January 7, 2022. On that day we will provide
additional detail on our two-phased strategic roadmap,
including:
- "For the rest of phase one, that's 2022 and 2023, we will be
providing specific financial guidance, targets and metrics to
complete this phase. We will also be discussing the substantial
cash flows that will be generated over this period in order to
satisfy our phase one capital allocation priorities of
returning capital to shareholders and of repaying $6.5 billion of debt.
- "For phase two, 2024 and beyond, we will be providing an
overview of the catalysts that we expect will drive future growth
including laying out our capital allocation priorities for this
phase in order to maximize and further unlock shareholder value
during this period. We will also be giving specific details of our
own organic opportunities by discussing our own pipeline at length
and will be providing the inorganic business development priorities
that we will be focusing on through our Global Healthcare
Gateway®."
Viatris President Rajiv Malik
said, "We are excited to host our upcoming Investor Event and
provide a comprehensive review of the significant value and depth
of our own pipeline and clinical programs, including biosimilars,
complex generics and novel medicines that we have been building
strategically over many years. Once laid out, we believe it will be
recognized as one of Viatris' most underappreciated assets, which
we expect will enable us to continue to deliver value, especially
after synergies roll off at the end of 2023, while continuing to
bring access and address patient needs."
Viatris Chief Financial Officer Sanjeev
Narula said, "We are pleased with our ongoing strong
execution and operational momentum, which allow us to raise our
total revenues, adjusted EBITDA and free cash flow guidance ranges
for the year. We continue to deliver on our financial
commitments, including our ability to generate substantial cash
flows. During the quarter, we generated $965
million of free cash flow, driven by strong underlying
business performance and cash flow optimization initiatives, which
we believe will not only benefit us in 2022 and beyond, but also
create an even stronger balance sheet providing more financial
flexibility as we move forward."
Financial Summary
|
Three Months
Ended
|
|
September
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
|
$
|
4,520.5
|
|
|
$
|
2,948.1
|
|
|
53%
|
|
(4)%
|
|
(1)%
|
Developed
Markets
|
2,655.9
|
|
|
2,163.2
|
|
|
23%
|
|
(2)%
|
|
(2)%
|
Emerging
Markets
|
792.5
|
|
|
471.0
|
|
|
68%
|
|
(5)%
|
|
(5)%
|
JANZ
|
505.3
|
|
|
282.4
|
|
|
79%
|
|
(18)%
|
|
8%
|
Greater
China
|
566.8
|
|
|
31.5
|
|
|
nm
|
|
(2)%
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
Net Sales by Product
Category
|
|
|
|
|
|
|
|
|
|
Brands
|
$
|
2,803.1
|
|
|
$
|
1,241.4
|
|
|
126%
|
|
(4)%
|
|
1%
|
Complex Gx and
Biosimilars
|
332.0
|
|
|
352.3
|
|
|
(6)%
|
|
(6)%
|
|
(6)%
|
Generics
|
1,385.4
|
|
|
1,354.4
|
|
|
2%
|
|
(5)%
|
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Gross
Profit
|
$
|
1,574.1
|
|
|
$
|
1,158.5
|
|
|
36%
|
|
|
|
|
U.S. GAAP Gross
Margin
|
34.7
|
%
|
|
39.0
|
%
|
|
|
|
|
|
|
Adjusted Gross Profit
(4)
|
$
|
2,723.3
|
|
|
$
|
1,629.1
|
|
|
67%
|
|
|
|
|
Adjusted Gross Margin
(4)
|
60.0
|
%
|
|
54.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Net
Earnings
|
$
|
311.5
|
|
|
$
|
185.7
|
|
|
nm
|
|
|
|
|
Adjusted Net Earnings
(4)
|
$
|
1,199.1
|
|
|
$
|
679.7
|
|
|
76%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(4)
|
$
|
1,386.5
|
|
|
$
|
794.1
|
|
|
75%
|
|
|
|
|
Adjusted EBITDA
(4)
|
$
|
1,698.3
|
|
|
$
|
1,009.7
|
|
|
68%
|
|
(8)%
|
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP net cash
provided by operating activities
|
$
|
1,085.6
|
|
|
$
|
525.0
|
|
|
107%
|
|
|
|
|
Capital
expenditures
|
121.0
|
|
|
38.2
|
|
|
217%
|
|
|
|
|
Free cash flow
(4)
|
$
|
964.6
|
|
|
$
|
486.8
|
|
|
98%
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
September
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
|
$
|
13,482.3
|
|
|
$
|
8,232.2
|
|
|
64%
|
|
(4)%
|
|
—%
|
Developed
Markets
|
7,867.9
|
|
|
6,132.3
|
|
|
28%
|
|
(2)%
|
|
(2)%
|
Emerging
Markets
|
2,417.2
|
|
|
1,224.8
|
|
|
97%
|
|
1%
|
|
1%
|
JANZ
|
1,488.2
|
|
|
805.8
|
|
|
85%
|
|
(22)%
|
|
9%
|
Greater
China
|
1,709.0
|
|
|
69.3
|
|
|
nm
|
|
2%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
Net Sales by Product
Category
|
|
|
|
|
|
|
|
|
|
Brands
|
$
|
8,229.4
|
|
|
$
|
3,375.9
|
|
|
144%
|
|
(5)%
|
|
1%
|
Complex Gx and
Biosimilars
|
993.7
|
|
|
956.7
|
|
|
4%
|
|
2%
|
|
2%
|
Generics
|
4,259.2
|
|
|
3,899.6
|
|
|
9%
|
|
(2)%
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Gross
Profit
|
$
|
4,029.1
|
|
|
$
|
3,090.3
|
|
|
30%
|
|
|
|
|
U.S. GAAP Gross
Margin
|
29.7
|
%
|
|
37.1
|
%
|
|
|
|
|
|
|
Adjusted Gross Profit
(4)
|
$
|
8,040.4
|
|
|
$
|
4,492.3
|
|
|
79%
|
|
|
|
|
Adjusted Gross Margin
(4)
|
59.4
|
%
|
|
54.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Net (Loss)
Earnings
|
$
|
(1,005.3)
|
|
|
$
|
245.9
|
|
|
nm
|
|
|
|
|
Adjusted Net Earnings
(4)
|
$
|
3,496.1
|
|
|
$
|
1,721.2
|
|
|
103%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(4)
|
$
|
3,836.4
|
|
|
$
|
1,946.1
|
|
|
97%
|
|
|
|
|
Adjusted EBITDA
(4)
|
$
|
5,010.3
|
|
|
$
|
2,639.0
|
|
|
90%
|
|
(10)%
|
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP net cash
provided by operating activities
|
$
|
2,493.8
|
|
|
$
|
1,195.6
|
|
|
109%
|
|
|
|
|
Capital
expenditures
|
259.8
|
|
|
126.1
|
|
|
106%
|
|
|
|
|
Free cash flow
(4)
|
$
|
2,234.0
|
|
|
$
|
1,069.5
|
|
|
109%
|
|
|
|
|
___________
|
(1)
|
Q3 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 Q3 and YTD 2020
results and Combined LOE Adjusted Q3 and YTD 2020
results.
|
(4)
|
Non-GAAP financial
measures. See "Non-GAAP Financial Measures" for additional
information.
|
Third Quarter Highlights
- Third quarter 2021 net sales totaled $4.52 billion, down 4% on an operational basis
compared to combined adjusted Q3 2020 results, but down only 1% on
an operational basis compared to combined LOE adjusted Q3 2020
results, driven by solid performance across all four of our
segments—Developed Markets, Emerging Markets, JANZ, and
Greater China.
- Brands performed better than expectations, driven by products
such as Lipitor®, Influvac®, Viagra®, and EpiPen®.
- Complex generics and biosimilars performed in line with
expectations, with 14% sales growth in Biosimilars offset by
anticipated competition in select complex generics products.
- Generics, which include diversified product forms such as
extended-release oral solids, injectables, transdermals and
topicals, performed in line with expectations, driven primarily by
favorability from partial COVID-19 recovery and related products,
offset by anticipated competition.
- The Company generated $158
million in new product revenues (as defined in "Certain Key
Terms" below) in the third quarter ($557
million for the year to date period), and is on track to
meet approximately $690 million in
new product revenues in 2021.
- The Company generated $965
million of free cash flow in the third quarter ($2.23 billion for the year to date period),
primarily driven by solid U.S. GAAP net cash provided by operating
activities of $1.09 billion in the
quarter ($2.49 billion for the year
to date period).
- Continued solid progress in advancing key pipeline programs for
biosimilars, complex products and complex injectables, including
preparing for the launch of Semglee® as the first interchangeable
biosimilar in the U.S.
Integration and Restructuring
- Workforce actions related to the Company's previously announced
global restructuring program continue.
- The Company remains on track to achieve approximately
$500 million of synergies this year
and to achieve at least $1 billion of
synergies by 2023.
Capital Allocation
- Viatris paid quarterly cash dividends of eleven cents ($0.11) per share on the Company's issued and
outstanding common stock on June 16,
2021 and September 16, 2021.
On November 5, 2021, the Company's
Board of Directors declared a quarterly cash dividend of
$0.11 per share on the Company's
issued and outstanding common stock, which will be payable on
December 16, 2021 to shareholders of
record as of the close of business on November 23, 2021.
- For the nine months ended September 30,
2021, the Company has repaid approximately $1.9 billion of debt, and remains on track to
repay $6.5 billion of debt by 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 continues to supply antiviral medicines, including
remdesivir and ambisome, and continues to work with government
authorities related to 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
earnings (loss) or a quantitative reconciliation of its 2021
adjusted EBITDA guidance to the most directly comparable U.S. GAAP
measure, U.S. GAAP net earnings (loss), 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 $2.90 billion
and $3.10 billion, with a midpoint of
approximately $3.00 billion.
Updated 2021 Financial Guidance
|
|
Updated
Guidance
|
|
Previous Guidance
(2)
|
(In
billions)
|
|
Range
|
|
Midpoint
|
|
Range
|
|
Midpoint
|
Total
Revenues
|
|
$17.7 -
$17.9
|
|
$17.8
|
|
$17.5 -
$17.9
|
|
$17.7
|
Adjusted EBITDA
(1)
|
|
$6.3 -
$6.5
|
|
$6.4
|
|
$6.15 -
$6.45
|
|
$6.3
|
Free Cash Flow
(1)
|
|
$2.4 -
$2.6
|
|
$2.5
|
|
$2.2 -
$2.4
|
|
$2.3
|
|
|
(1)
|
Non-GAAP financial
measures. See "Non-GAAP Financial Measures" for additional
information.
|
(2)
|
Previous guidance
provided on August 9, 2021.
|
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 third quarter ended
September 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 866.342.8591 or 203.518.9713 for
international callers (ID#: VTRSQ321). The "Viatris Q3 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 Q3 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 Q3 and YTD 2020 results refer to
Combined Adjusted Q3 and YTD 2020 results, adjusted for the impact
of loss of exclusivity ("LOE") of Lyrica and Celebrex in
Japan which occurred after Q3
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 within the last twelve months (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 nine months ended September 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 nine months ended September 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 38,000, 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 eleven
cents ($0.11) for each issued
and outstanding share of the company's common stock payable on
December 16, 2021 to shareholders of
record at the close of business on November
23, 2021; our continued strong operational performance for
three consecutive quarters has allowed us to continue to deliver on
our financial commitments and, based on the strength of our
results, we are again raising our full-year financial guidance for
2021; we are near completion of a rigorous bottoms-up strategic
planning effort and look forward to sharing these plans with the
investment community at a virtual Investor Event now scheduled for
the morning of January 7, 2022; that
on that day we will provide additional detail on our two-phased
strategic roadmap; for the rest of phase one, that's 2022 and 2023,
we will be providing specific financial guidance, targets and
metrics to complete this phase; we will also be discussing the
substantial cash flows that will be generated over this period in
order to satisfy our Phase 1 capital allocation priorities of
returning capital to shareholders and of repaying $6.5 billion of debt; for phase two, 2024 and
beyond, we will be providing an overview of the catalysts that we
expect will drive future growth including laying out our capital
allocation priorities for this phase in order to maximize and
further unlock shareholder value during this period; we will also
be giving specific details of our own organic opportunities by
discussing our own pipeline at length and will be providing the
inorganic business development priorities that we will be focusing
on through our Global Healthcare Gateway®; that we are excited to
host our upcoming Investor Event and provide a comprehensive review
of the significant value and depth of our own pipeline and clinical
programs, including biosimilars, complex generics and novel
medicines that we have been building strategically over many years;
once laid out, we believe it will be recognized as one of Viatris'
most underappreciated assets, which we expect will enable us to
continue to deliver value, especially after synergies roll off at
the end of 2023, while continuing to bring access and address
patient needs; we continue to deliver on our financial commitments,
including our ability to generate substantial cash flows; during
the quarter, we generated $965
million of free cash flow, driven by strong underlying
business performance and cash flow optimization initiatives, which
we believe will not only benefit us in 2022 and beyond, but also
create an even stronger balance sheet providing more financial
flexibility as we move forward; the Company is on track to meet
approximately $690 million in new
product revenues in 2021; that there was continued solid progress
in advancing key pipeline programs for biosimilars, complex
products and complex injectables, including preparing for the
launch of Semglee® as the first interchangeable biosimilar in the
U.S.; workforce actions related to the Company's previously
announced global restructuring program continue; the Company
remains on track to achieve approximately $500 million of synergies this year and to
achieve at least $1 billion of
synergies by 2023; for the nine months ended September 30, 2021, the Company has repaid
approximately $1.9 billion of debt,
and remains on-track to repay $6.5
billion of debt by 2023, and remains fully committed to
maintaining its investment grade credit rating; Viatris continues
to supply antiviral medicines, including remdesivir and ambisome,
and continues to work with government authorities related to
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, commitments, confidence in
future results, 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
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
|
|
|
Net sales
|
$
|
4,520.5
|
|
|
$
|
2,948.1
|
|
|
$
|
13,482.3
|
|
|
$
|
8,232.2
|
|
Other
revenues
|
16.1
|
|
|
24.0
|
|
|
62.4
|
|
|
90.3
|
|
Total
revenues
|
4,536.6
|
|
|
2,972.1
|
|
|
13,544.7
|
|
|
8,322.5
|
|
Cost of
sales
|
2,962.5
|
|
|
1,813.6
|
|
|
9,515.6
|
|
|
5,232.2
|
|
Gross
profit
|
1,574.1
|
|
|
1,158.5
|
|
|
4,029.1
|
|
|
3,090.3
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
152.1
|
|
|
129.8
|
|
|
483.9
|
|
|
400.3
|
|
Selling, general and
administrative
|
1,055.0
|
|
|
658.4
|
|
|
3,446.3
|
|
|
1,983.2
|
|
Litigation settlements
and other contingencies, net
|
9.4
|
|
|
18.9
|
|
|
55.3
|
|
|
36.5
|
|
Total operating
expenses
|
1,216.5
|
|
|
807.1
|
|
|
3,985.5
|
|
|
2,420.0
|
|
Earnings from
operations
|
357.6
|
|
|
351.4
|
|
|
43.6
|
|
|
670.3
|
|
Interest
expense
|
151.9
|
|
|
117.3
|
|
|
488.0
|
|
|
353.4
|
|
Other expense
(income), net
|
5.8
|
|
|
(7.5)
|
|
|
16.1
|
|
|
24.6
|
|
Earnings (loss)
before income taxes
|
199.9
|
|
|
241.6
|
|
|
(460.5)
|
|
|
292.3
|
|
Income tax (benefit)
provision
|
(111.6)
|
|
|
55.9
|
|
|
544.8
|
|
|
46.4
|
|
Net earnings
(loss)
|
$
|
311.5
|
|
|
$
|
185.7
|
|
|
$
|
(1,005.3)
|
|
|
$
|
245.9
|
|
Earnings (loss) per
share attributable to Viatris Inc. shareholders
|
|
|
|
|
|
|
|
Basic
|
$
|
0.26
|
|
|
$
|
0.36
|
|
|
$
|
(0.83)
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.26
|
|
|
$
|
0.36
|
|
|
$
|
(0.83)
|
|
|
$
|
0.48
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
1,209.3
|
|
|
516.9
|
|
|
1,208.6
|
|
|
516.8
|
|
Diluted
|
1,212.6
|
|
|
517.7
|
|
|
1,208.6
|
|
|
517.3
|
|
Viatris Inc. and
Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited; in
millions)
|
|
|
September
30, 2021
|
|
December
31, 2020
|
ASSETS
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
756.6
|
|
|
$
|
844.4
|
|
Accounts receivable,
net
|
4,345.5
|
|
|
4,843.8
|
|
Inventories
|
4,081.9
|
|
|
5,471.9
|
|
Prepaid expenses and
other current assets
|
2,124.4
|
|
|
1,707.4
|
|
Total current
assets
|
11,308.4
|
|
|
12,867.5
|
|
Intangible assets,
net
|
26,987.0
|
|
|
29,683.2
|
|
Goodwill
|
12,169.5
|
|
|
12,347.0
|
|
Other non-current
assets
|
5,605.5
|
|
|
6,655.3
|
|
Total
assets
|
$
|
56,070.4
|
|
|
$
|
61,553.0
|
|
LIABILITIES AND
EQUITY
|
Liabilities
|
|
|
|
Current portion of
long-term debt and other long-term
obligations
|
$
|
1,908.1
|
|
|
$
|
2,308.5
|
|
Other current
liabilities
|
8,195.8
|
|
|
8,254.4
|
|
Long-term
debt
|
19,854.3
|
|
|
22,429.2
|
|
Other non-current
liabilities
|
4,970.9
|
|
|
5,606.8
|
|
Total
liabilities
|
34,929.1
|
|
|
38,598.9
|
|
Shareholders'
equity
|
21,141.3
|
|
|
22,954.1
|
|
Total liabilities and
equity
|
$
|
56,070.4
|
|
|
$
|
61,553.0
|
|
Viatris Inc. and
Subsidiaries
|
Select Key Product
Net Sales, on a Consolidated Basis
|
Three and Nine
Months Ended September 30, 2021
|
(Unaudited)
|
|
|
|
|
(In
millions)
|
Three months
ended
September 30, 2021
|
|
Nine months
ended
September 30, 2021
|
Select Key Global
Products
|
|
|
|
Lipitor ®
|
$
|
410.0
|
|
|
$
|
1,272.9
|
|
Norvasc ®
|
198.4
|
|
|
635.9
|
|
Lyrica ®
|
175.6
|
|
|
555.9
|
|
Viagra ®
|
138.0
|
|
|
412.4
|
|
EpiPen®
Auto-Injectors
|
129.5
|
|
|
337.3
|
|
Celebrex ®
|
86.0
|
|
|
257.3
|
|
Creon ®
|
81.1
|
|
|
231.7
|
|
Effexor ®
|
79.5
|
|
|
239.6
|
|
Zoloft ®
|
61.3
|
|
|
208.8
|
|
Xalabrands
|
55.8
|
|
|
172.0
|
|
|
|
|
|
Select Key Segment
Products
|
|
|
|
Influvac ®
|
$
|
161.2
|
|
|
$
|
165.3
|
|
Amitiza ®
|
49.5
|
|
|
147.5
|
|
Xanax ®
|
47.6
|
|
|
141.5
|
|
Yupelri ®
|
39.4
|
|
|
118.1
|
|
Dymista ®
|
35.0
|
|
|
129.9
|
|
____________
|
(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 Earnings (Loss) to
Adjusted Net Earnings
Below is a reconciliation of U.S. GAAP net earnings (loss) to
adjusted net earnings for the three and nine months ended
September 30, 2021 compared to the prior year
period:
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(In
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP net
earnings (loss)
|
$
|
311.5
|
|
|
$
|
185.7
|
|
|
$
|
(1,005.3)
|
|
|
$
|
245.9
|
|
Purchase accounting
related amortization (primarily included in cost of sales)
(a)
|
919.9
|
|
|
368.5
|
|
|
3,344.7
|
|
|
1,072.5
|
|
Litigation
settlements and other contingencies, net
|
9.4
|
|
|
18.9
|
|
|
55.3
|
|
|
36.5
|
|
Interest expense
(primarily amortization of premiums and discounts on long term
debt)
|
(13.6)
|
|
|
5.3
|
|
|
(40.3)
|
|
|
16.6
|
|
Clean energy
investments pre-tax loss
|
17.6
|
|
|
2.9
|
|
|
52.2
|
|
|
37.4
|
|
Acquisition related
costs (primarily included in SG&A) (b)
|
41.5
|
|
|
72.3
|
|
|
149.7
|
|
|
218.2
|
|
Restructuring related
costs (c)
|
169.8
|
|
|
14.5
|
|
|
741.6
|
|
|
47.0
|
|
Share-based
compensation expense
|
25.0
|
|
|
15.1
|
|
|
88.7
|
|
|
49.8
|
|
Other special items
included in:
|
|
|
|
|
|
|
|
Cost of sales
(d)
|
72.7
|
|
|
83.6
|
|
|
257.1
|
|
|
299.3
|
|
Research and
development expense (e)
|
3.7
|
|
|
3.7
|
|
|
12.1
|
|
|
45.8
|
|
Selling, general and
administrative expense
|
9.9
|
|
|
7.5
|
|
|
39.4
|
|
|
12.9
|
|
Other expense,
net
|
(2.3)
|
|
|
—
|
|
|
(2.3)
|
|
|
(16.4)
|
|
Tax effect of the
above items and other income tax related items
(f)
|
(366.0)
|
|
|
(98.3)
|
|
|
(196.8)
|
|
|
(344.3)
|
|
Adjusted net
earnings
|
$
|
1,199.1
|
|
|
$
|
679.7
|
|
|
$
|
3,496.1
|
|
|
$
|
1,721.2
|
|
____________
|
Significant items
include the following:
|
|
(a)
|
For the three and
nine months ended September 30, 2021, includes amortization of
the purchase accounting inventory fair value adjustment related to
the Combination totaling approximately $238.5 million and
$1.19 billion, respectively.
|
|
(b)
|
Acquisition related
costs consist primarily of transaction costs including legal and
consulting fees and integration activities.
|
|
(c)
|
For the three months
ended September 30, 2021, charges of approximately $151.3
million are included in cost of sales, approximately $(4.7) million
are included in R&D, and approximately $23.1 million are
included in SG&A. For the nine months ended September 30,
2021, charges of approximately $399.5 million are included in cost
of sales, approximately $11.9 million are included in R&D, and
approximately $330.1 million are included in SG&A.
|
|
(d)
|
Costs incurred during
the three and nine months ended September 30, 2021 include
incremental manufacturing variances and site remediation activities
as a result of the activities at the Company's Morgantown plant of
approximately $18.2 million and $107.3 million,
respectively, and at other plants in the 2020 restructuring program
of approximately $41.0 million and $103.6 million,
respectively. Costs incurred during the three and nine months ended
September 30, 2020 include incremental manufacturing variances
and site remediation activities as a result of the activities at
the Company's Morgantown plant of approximately $57.8 million
and $179.6 million, respectively. In addition, the three and
nine months ended September 30, 2020 includes incremental
manufacturing variances incurred as a result of the COVID-19
pandemic of approximately $8.0 million and $32.0 million,
respectively. Also, the nine months ended September 30, 2020
includes $27.0 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 Earnings (Loss) to EBITDA
and Adjusted EBITDA
Below is a reconciliation of U.S. GAAP net earnings (loss) to
EBITDA and adjusted EBITDA for the three and nine months ended
September 30, 2021 compared to the prior year period:
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
(In
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP net
earnings (loss)
|
$
|
311.5
|
|
|
$
|
185.7
|
|
|
$
|
(1,005.3)
|
|
|
$
|
245.9
|
|
Add
adjustments:
|
|
|
|
|
|
|
|
Net contribution
attributable to equity method investments
|
17.6
|
|
|
2.9
|
|
|
52.2
|
|
|
37.4
|
|
Income tax (benefit)
provision
|
(111.6)
|
|
|
55.9
|
|
|
544.8
|
|
|
46.4
|
|
Interest expense
(a)
|
151.9
|
|
|
117.3
|
|
|
488.0
|
|
|
353.4
|
|
Depreciation and
amortization (b)
|
1,017.1
|
|
|
432.3
|
|
|
3,756.7
|
|
|
1,263.0
|
|
EBITDA
|
$
|
1,386.5
|
|
|
$
|
794.1
|
|
|
$
|
3,836.4
|
|
|
$
|
1,946.1
|
|
Add
adjustments:
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
25.0
|
|
|
15.1
|
|
|
88.7
|
|
|
49.8
|
|
Litigation settlements
and other contingencies, net
|
9.4
|
|
|
18.9
|
|
|
55.3
|
|
|
36.5
|
|
Restructuring,
acquisition related and other special items
(c)
|
277.4
|
|
|
181.6
|
|
|
1,029.9
|
|
|
606.6
|
|
Adjusted
EBITDA
|
$
|
1,698.3
|
|
|
$
|
1,009.7
|
|
|
$
|
5,010.3
|
|
|
$
|
2,639.0
|
|
____________
|
(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 Earnings (Loss) to Adjusted Net
Earnings.
|
Summary of Total
Revenues by Segment
|
|
|
Three Months
Ended
|
|
September
30,
|
(In millions,
except %s)
|
2021
|
|
2020
|
|
%
Change
|
|
2021
Currency
Impact (1)
|
|
2021
Constant
Currency
Revenues
|
|
Constant
Currency %
Change (2)
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
Developed
Markets
|
$
|
2,655.9
|
|
|
$
|
2,163.2
|
|
|
23
|
%
|
|
$
|
(17.3)
|
|
|
$
|
2,638.4
|
|
|
22
|
%
|
Greater
China
|
566.8
|
|
|
31.5
|
|
|
nm
|
|
|
(0.3)
|
|
|
566.6
|
|
|
nm
|
|
JANZ
|
505.3
|
|
|
282.4
|
|
|
79
|
%
|
|
2.5
|
|
|
507.9
|
|
|
80
|
%
|
Emerging
Markets
|
792.5
|
|
|
471.0
|
|
|
68
|
%
|
|
(6.2)
|
|
|
786.3
|
|
|
67
|
%
|
Total net
sales
|
4,520.5
|
|
|
2,948.1
|
|
|
53
|
%
|
|
(21.3)
|
|
|
4,499.2
|
|
|
53
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues
(3)
|
16.1
|
|
|
24.0
|
|
|
(33)
|
%
|
|
—
|
|
|
16.1
|
|
|
(33)
|
%
|
Consolidated total
revenues (4)
|
$
|
4,536.6
|
|
|
$
|
2,972.1
|
|
|
53
|
%
|
|
$
|
(21.3)
|
|
|
$
|
4,515.3
|
|
|
52
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
September
30,
|
(In millions,
except %s)
|
2021
|
|
2020
|
|
%
Change
|
|
2021
Currency
Impact (1)
|
|
2021
Constant
Currency
Revenues
|
|
Constant
Currency %
Change (2)
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
Developed
Markets
|
$
|
7,867.9
|
|
|
$
|
6,132.3
|
|
|
28
|
%
|
|
$
|
(226.4)
|
|
|
$
|
7,641.4
|
|
|
25
|
%
|
Greater
China
|
1,709.0
|
|
|
69.3
|
|
|
nm
|
|
|
(0.6)
|
|
|
1,708.4
|
|
|
nm
|
|
JANZ
|
1,488.2
|
|
|
805.8
|
|
|
85
|
%
|
|
(34.3)
|
|
|
1,453.9
|
|
|
80
|
%
|
Emerging
Markets
|
2,417.2
|
|
|
1,224.8
|
|
|
97
|
%
|
|
(30.8)
|
|
|
2,386.4
|
|
|
95
|
%
|
Total net
sales
|
13,482.3
|
|
|
8,232.2
|
|
|
64
|
%
|
|
(292.1)
|
|
|
13,190.1
|
|
|
60
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues
(3)
|
62.4
|
|
|
90.3
|
|
|
(31)
|
%
|
|
(1.3)
|
|
|
61.1
|
|
|
(32)
|
%
|
Consolidated total
revenues (4)
|
$
|
13,544.7
|
|
|
$
|
8,322.5
|
|
|
63
|
%
|
|
$
|
(293.4)
|
|
|
$
|
13,251.2
|
|
|
59
|
%
|
____________
|
(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 September 30, 2021, other revenues in Developed Markets,
JANZ, and Emerging Markets were approximately $12.2 million, $0.3
million, and $3.6 million, respectively. For the nine months ended
September 30, 2021, other revenues in Developed Markets,
JANZ, and Emerging Markets were approximately $46.7 million, $1.3
million, and $14.4 million, respectively.
|
(4)
|
Amounts exclude
intersegment revenue that eliminates on a consolidated
basis.
|
Reconciliation of
Income Statement Line Items
|
(Unaudited; in
millions, except %s)
|
|
|
Three Months
Ended
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP cost of
sales
|
$
|
2,962.5
|
|
|
$
|
1,813.6
|
|
|
$
|
9,515.6
|
|
|
$
|
5,232.2
|
|
Deduct:
|
|
|
|
|
|
|
|
Purchase accounting
related amortization
|
(919.9)
|
|
|
(368.5)
|
|
|
(3,344.7)
|
|
|
(1,072.5)
|
|
Acquisition related
items
|
(4.5)
|
|
|
(9.4)
|
|
|
(8.0)
|
|
|
(11.5)
|
|
Restructuring related
costs
|
(151.3)
|
|
|
(8.7)
|
|
|
(399.5)
|
|
|
(17.6)
|
|
Share-based
compensation expense
|
(0.8)
|
|
|
(0.4)
|
|
|
(2.0)
|
|
|
(1.1)
|
|
Other special
items
|
(72.7)
|
|
|
(83.6)
|
|
|
(257.1)
|
|
|
(299.3)
|
|
Adjusted cost of
sales
|
$
|
1,813.3
|
|
|
$
|
1,343.0
|
|
|
$
|
5,504.3
|
|
|
$
|
3,830.2
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit
(a)
|
$
|
2,723.3
|
|
|
$
|
1,629.1
|
|
|
$
|
8,040.4
|
|
|
$
|
4,492.3
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin
(a)
|
60
|
%
|
|
55
|
%
|
|
59
|
%
|
|
54
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP
R&D
|
$
|
152.1
|
|
|
$
|
129.8
|
|
|
$
|
483.9
|
|
|
$
|
400.3
|
|
Add /
(Deduct):
|
|
|
|
|
|
|
|
Acquisition related
costs
|
(0.8)
|
|
|
(0.1)
|
|
|
(1.1)
|
|
|
(0.3)
|
|
Restructuring and
related costs
|
4.7
|
|
|
0.1
|
|
|
(11.9)
|
|
|
(0.3)
|
|
Share-based
compensation expense
|
(1.5)
|
|
|
(0.5)
|
|
|
(3.4)
|
|
|
(1.6)
|
|
Other special
items
|
(3.7)
|
|
|
(3.7)
|
|
|
(12.1)
|
|
|
(45.8)
|
|
Adjusted
R&D
|
$
|
150.8
|
|
|
$
|
125.6
|
|
|
$
|
455.4
|
|
|
$
|
352.3
|
|
|
|
|
|
|
|
|
|
Adjusted R&D as %
of total revenues
|
3
|
%
|
|
4
|
%
|
|
3
|
%
|
|
4
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP
SG&A
|
$
|
1,055.0
|
|
|
$
|
658.4
|
|
|
$
|
3,446.3
|
|
|
$
|
1,983.2
|
|
Deduct:
|
|
|
|
|
|
|
|
Acquisition related
costs
|
(36.2)
|
|
|
(62.9)
|
|
|
(140.6)
|
|
|
(206.5)
|
|
Restructuring and
related costs
|
(23.1)
|
|
|
(5.7)
|
|
|
(330.1)
|
|
|
(29.0)
|
|
Share-based
compensation expense
|
(22.7)
|
|
|
(14.2)
|
|
|
(83.2)
|
|
|
(47.1)
|
|
Other special items
and reclassifications
|
(9.9)
|
|
|
(7.5)
|
|
|
(39.4)
|
|
|
(12.9)
|
|
Adjusted
SG&A
|
$
|
963.1
|
|
|
$
|
568.1
|
|
|
$
|
2,853.0
|
|
|
$
|
1,687.7
|
|
|
|
|
|
|
|
|
|
Adjusted SG&A as
% of total revenues
|
21
|
%
|
|
19
|
%
|
|
21
|
%
|
|
20
|
%
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP total
operating expenses
|
$
|
1,216.5
|
|
|
$
|
807.1
|
|
|
$
|
3,985.5
|
|
|
$
|
2,420.0
|
|
Deduct:
|
|
|
|
|
|
|
|
Litigation settlements
and other contingencies, net
|
(9.4)
|
|
|
(18.9)
|
|
|
(55.3)
|
|
|
(36.5)
|
|
R&D
adjustments
|
(1.3)
|
|
|
(4.2)
|
|
|
(28.5)
|
|
|
(48.0)
|
|
SG&A
adjustments
|
(91.9)
|
|
|
(90.3)
|
|
|
(593.3)
|
|
|
(295.5)
|
|
Adjusted total
operating expenses
|
$
|
1,113.9
|
|
|
$
|
693.7
|
|
|
$
|
3,308.4
|
|
|
$
|
2,040.0
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
from operations (b)
|
$
|
1,609.4
|
|
|
$
|
935.4
|
|
|
$
|
4,732.0
|
|
|
$
|
2,452.3
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP interest
expense
|
$
|
151.9
|
|
|
$
|
117.3
|
|
|
$
|
488.0
|
|
|
$
|
353.4
|
|
Add /
(Deduct):
|
|
|
|
|
|
|
|
Interest expense
related to clean energy investments
|
(0.1)
|
|
|
(0.9)
|
|
|
(0.4)
|
|
|
(3.0)
|
|
Accretion of
contingent consideration liability
|
(2.3)
|
|
|
(3.0)
|
|
|
(7.3)
|
|
|
(9.4)
|
|
Amortization of
premiums and discounts on long-term debt
|
17.1
|
|
|
—
|
|
|
51.6
|
|
|
—
|
|
Other special
items
|
(1.2)
|
|
|
(1.4)
|
|
|
(3.6)
|
|
|
(4.2)
|
|
Adjusted interest
expense
|
$
|
165.4
|
|
|
$
|
112.0
|
|
|
$
|
528.3
|
|
|
$
|
336.8
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP other
expense (income), net
|
$
|
5.8
|
|
|
$
|
(7.5)
|
|
|
$
|
16.1
|
|
|
$
|
24.6
|
|
Add /
(Deduct):
|
|
|
|
|
|
|
|
Clean energy
investments pre-tax loss (c)
|
(17.6)
|
|
|
(2.9)
|
|
|
(52.2)
|
|
|
(37.4)
|
|
Other items
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|
16.4
|
|
Adjusted other
(income) expense
|
$
|
(9.5)
|
|
|
$
|
(10.4)
|
|
|
$
|
(33.8)
|
|
|
$
|
3.6
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
U.S. GAAP earnings
(loss) before income taxes
|
$
|
199.9
|
|
|
$
|
241.6
|
|
|
$
|
(460.5)
|
|
|
$
|
292.3
|
|
Total pre-tax
non-GAAP adjustments
|
1,253.6
|
|
|
592.4
|
|
|
4,698.1
|
|
|
1,819.6
|
|
Adjusted earnings
before income taxes
|
$
|
1,453.5
|
|
|
$
|
834.0
|
|
|
$
|
4,237.6
|
|
|
$
|
2,111.9
|
|
|
|
|
|
|
|
|
|
U.S. GAAP income
tax (benefit) provision
|
$
|
(111.6)
|
|
|
$
|
55.9
|
|
|
$
|
544.8
|
|
|
$
|
46.4
|
|
Adjusted tax
expense
|
366.0
|
|
|
98.4
|
|
|
196.8
|
|
|
344.3
|
|
Adjusted income tax
provision
|
$
|
254.4
|
|
|
$
|
154.3
|
|
|
$
|
741.6
|
|
|
$
|
390.7
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
17.5
|
%
|
|
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
|
$2,900 -
$3,100
|
|
|
Less: Capital
Expenditures
|
$(450) -
$(550)
|
|
|
Free Cash
Flow
|
$2,400 -
$2,600
|
Combined Adjusted EBITDA - Three and nine months ended
September 30, 2020
(In
millions)
|
Three months
ended
September 30, 2020
|
|
Nine months
ended
September 30, 2020
|
Upjohn - U.S. GAAP
Income before taxes
|
$
|
533.8
|
|
|
$
|
2,350.2
|
|
Interest
expense
|
112.5
|
|
|
223.6
|
|
Depreciation and
amortization
|
81.7
|
|
|
237.5
|
|
Upjohn
EBITDA
|
$
|
728.0
|
|
|
$
|
2,811.3
|
|
|
|
|
|
Other
adjustments
|
102.5
|
|
|
(5.3)
|
|
Upjohn Adjusted
EBITDA
|
$
|
830.5
|
|
|
$
|
2,806.0
|
|
Add: Mylan Adjusted
EBITDA
|
1,009.7
|
|
|
2,639.0
|
|
Combined Adjusted
EBITDA
|
$
|
1,840.2
|
|
|
$
|
5,445.0
|
|
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SOURCE Viatris Inc.