Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Components of Income Tax Provision

The income tax provision (benefit) consisted of the following components:


	Year Ended December 31,
(In millions)	2020		2019		2018
U.S. Federal:
Current	$	(6.4)	$	118.1	$	(68.2)
Deferred	(277.0)		(165.5)		(112.9)
	(283.4)		(47.4)		(181.1)
U.S. State:
Current	(0.1)		21.1		6.8
Deferred	7.7		(13.6)		(12.3)
	7.6		7.5		(5.5)
Non-U.S.:
Current	168.7		191.0		271.6
Deferred	55.8		(13.5)		(139.1)
	224.5		177.5		132.5
Income tax (benefit) provision	$	(51.3)	$	137.6	$	(54.1)
Earnings before income taxes:

United States	(945.5)		(1,031.4)		(1,000.5)
Foreign - Other	224.3		1,185.8		1,298.9
Total earnings before income taxes	$	(721.2)	$	154.4	$	298.4

Schedule of Deferred Tax Assets and Liabilities

Temporary differences and carry-forwards that result in deferred tax assets and liabilities were as follows:


(In millions)	December 31, 2020		December 31, 2019
Deferred tax assets:
Employee benefits	$	273.0	$	182.5
Litigation reserves	43.5		14.7
Accounts receivable allowances	393.7		201.9
Inventory	1,187.9		80.1
Tax credit and loss carry-forwards	1,080.4		726.2
Operating lease assets (1)	66.5		62.8
Interest expense	67.9		162.7
Intangible assets	156.3		184.7
Other	396.0		121.6
	3,665.2		1,737.2
Less: Valuation allowance	(443.6)		(603.5)
Total deferred tax assets	3,221.6		1,133.7
Deferred tax liabilities:
Plant and equipment	50.2		87.4
Operating lease liabilities (1)	66.5		62.8
Intangible assets and goodwill	4,058.6		1,890.8
Other	22.1		17.1
Total deferred tax liabilities	4,197.4		2,058.1
Deferred tax liabilities, net	$	(975.8)	$	(924.4)

Statutory Tax Rate to Effective Tax Rate Reconciliation

Prior to the Combination, the applicable income tax rate to Mylan N.V. was the U.K. rate of 19%, and following the Combination, the statutory income tax rate applicable to Viatris Inc., is the U.S. rate of 21% for the year ended December 31, 2020. A reconciliation of the statutory tax rate to the effective tax rate is as follows:


	Year Ended December 31,
	2020		2019		2018
Statutory tax rate	21.0	%	19.0	%	19.0	%

United States Operations
Clean energy and research credits	12.8	%	(43.4)	%	(33.1)	%
U.S. rate differential	—	%	(3.1)	%	(5.4)	%

Impact of changes in legislation	(9.2)	%	—	%	(4.9)	%
State income taxes and credits	(1.6)	%	(4.1)	%	(9.2)	%
Valuation allowance	8.6	%	(118.5)	%	60.2	%
Tax settlements and resolution of certain tax positions	0.1	%	199.6	%	(22.5)	%
Global intangible low-taxed income	(3.6)	%	(8.6)	%	8.6	%
Waived deductions under IRC § 59A	(3.3)	%	64.5	%	—	%
Impact of the Combination	5.8	%	7.7	%	—	%
Other U.S. items	1.5	%	6.9	%	7.5	%
Other Foreign Operations
Luxembourg	(5.0)	%	(14.8)	%	(28.3)	%
Gibraltar	8.0	%	(38.8)	%	(19.2)	%
Ireland	8.2	%	(13.7)	%	(3.5)	%
France	(2.8)	%	15.2	%	6.2	%
Puerto Rico	(2.5)	%	—	%	—	%
Switzerland	2.0	%	—	%	—	%
Other	0.6	%	12.8	%	2.3	%
Deferred tax impact of tax law changes	(0.1)	%	36.7	%	(5.2)	%
Valuation allowance	16.1	%	(9.9)	%	(4.3)	%
Impact of the Combination	(42.2)	%	—	%	—	%
Withholding taxes	(1.6)	%	7.1	%	4.1	%
Tax settlements and resolution of certain tax positions	(3.9)	%	(27.6)	%	0.7	%
Other foreign items	(1.8)	%	2.1	%	8.9	%
Effective tax rate	7.1	%	89.1	%	(18.1)	%

Schedule of Unrecognized Tax Benefits

A reconciliation of the unrecognized tax benefits is as follows:


	Year Ended December 31,
(In millions)	2020		2019		2018
Unrecognized tax benefit — beginning of year	$	92.1	$	96.3	$	185.7
Additions for current year tax positions	13.4		—		—
Additions for prior year tax positions	35.7		154.9		20.0
Reductions for prior year tax positions	(5.2)		(11.7)		(5.8)
Settlements	(8.9)		(112.5)		(32.9)
Reductions due to expirations of statute of limitations	—		(34.9)		(70.7)
Addition due to acquisition	264.0		—		—
Unrecognized tax benefit — end of year	$	391.1	$	92.1	$	96.3