Balance Sheet Components

12 Months Ended

Dec. 31, 2020

Selected balance sheet components consist of the following:

Cash and restricted cash


(In millions)	December 31, 2020		December 31, 2019		December 31, 2018
Cash and cash equivalents	$	844.4	$	475.6	$	388.1
Restricted cash, included in prepaid expenses and other current assets	5.6		15.5		1.2
Cash, cash equivalents and restricted cash	$	850.0	$	491.1	$	389.3

Accounts receivable, net


(In millions)	December 31, 2020		December 31, 2019
Trade receivables, net	$	3,891.3	$	2,640.1
Other receivables	952.5		418.7
Accounts receivable, net	$	4,843.8	$	3,058.8

Total allowances for doubtful accounts were $159.9 million and $72.8 million at December 31, 2020 and 2019, respectively. Viatris performs ongoing credit evaluations of its customers and generally does not require collateral. Approximately 12% and 21% of the accounts receivable balances represent amounts due from three customers at December 31, 2020 and December 31, 2019, respectively.

Accounts Receivable Factoring Arrangements

We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable. These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers. Our factoring agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest in the underlying accounts receivable once sold. We derecognized $153.0 million and $90.1 million of accounts receivable as of December 31, 2020 and 2019 under these factoring arrangements, respectively.

Inventories


(In millions)	December 31, 2020		December 31, 2019
Raw materials	$	958.4	$	886.8
Work in process	1,438.1		417.2
Finished goods	3,075.4		1,366.9
Inventories	$	5,471.9	$	2,670.9

Inventory reserves totaled $353.6 million and $268.9 million at December 31, 2020 and 2019, respectively. Included as a component of cost of sales is expense related to the net realizable value of inventories of $206.1 million, $399.2 million and $343.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Prepaid expenses and other current assets


(In millions)	December 31, 2020		December 31, 2019
Prepaid expenses	$	267.8	$	156.7

Available-for-sale fixed income securities	39.1		26.8
Fair value of financial instruments	118.6		43.3
Equity securities	45.8		39.0
Other current assets	1,236.1		286.2
Prepaid expenses and other current assets	$	1,707.4	$	552.0

Prepaid expenses consist primarily of prepaid rent, insurance and other individually insignificant items.

Property, plant and equipment, net


(In millions)	December 31, 2020		December 31, 2019
Machinery and equipment	$	3,235.0	$	2,523.7
Buildings and improvements	1,954.8		1,197.3
Construction in progress	376.3		277.3
Land and improvements	155.8		124.6
Gross property, plant and equipment	5,721.9		4,122.9
Accumulated depreciation	2,262.0		1,973.3
Property, plant and equipment, net	$	3,459.9	$	2,149.6

Capitalized software costs included in our consolidated balance sheets were $70.9 million and $85.8 million, net of accumulated depreciation, at December 31, 2020 and 2019, respectively. The Company periodically reviews the estimated useful lives of assets and makes adjustments when appropriate. Depreciation expense was approximately $289.7 million, $256.1 million and $279.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Other assets


(In millions)	December 31, 2020		December 31, 2019
Equity method investments, clean energy investments	$	47.9	$	92.2
Operating lease right-of-use assets	323.6		254.6

Other long-term assets	676.0		58.2
Other assets	$	1,047.5	$	405.0

Accounts payable


(In millions)	December 31, 2020		December 31, 2019
Trade accounts payable	$	1,345.7	$	1,061.9
Other payables	558.5		466.2
Accounts payable	$	1,904.2	$	1,528.1

Other current liabilities


(In millions)	December 31, 2020		December 31, 2019
Accrued sales allowances	$	1,211.8	$	796.5
Payroll and employee benefit liabilities	828.2		467.1
Legal and professional accruals, including litigation accruals	362.9		138.2
Contingent consideration	100.5		120.4
Restructuring	149.2		26.0
Equity method investments, clean energy investments	47.5		47.7
Accrued interest	90.9		59.1
Fair value of financial instruments	103.6		12.9
Operating lease liability	92.9		76.7
Other	1,973.2		575.3
Other current liabilities	$	4,960.7	$	2,319.9

Other long-term obligations


(In millions)	December 31, 2020		December 31, 2019
Employee benefit liabilities	$	1,020.4	$	408.9
Equity method investments, clean energy investments	—		57.2
Contingent consideration	123.1		130.3
Tax related items, including contingencies	469.5		109.6
Operating lease liability	229.5		175.7
Accrued Restructuring	134.8		—
Other	505.8		79.1
Other long-term obligations	$	2,483.1	$	960.8