01—Abstract
Summary
Summary of the 10-K/A filed April 29, 2022. Cited figures are marked; the original filing is the authoritative source.
This Form 10-K/A amends Viatris Inc.'s annual report to provide Part III information (directors, executive officers, executive compensation, security ownership, related transactions, and accounting fees).
It states that Viatris reported a U.S. GAAP net loss of $1.3 billiona for 2021, alongside net cash provided by operating activities of $3.0 billion, adjusted EBITDA of $6.4 billion, and free cash flow of $2.6 billion. The filing describes 2021 as the first year of the company's post-Combination compensation program and says it paid down $2.1 billion of debt and achieved over $500 million in cost synergies. The filing highlights three strategic priorities announced in February 2022: unlocking trapped value and simplifying the business, including the pending Biocon Biologics Transaction; building a more durable, higher-margin portfolio; and enhancing financial flexibility.
Shareholder-return actions cited include a 9% dividend increase paid in March 2022 and authorization of a share repurchase program of up to $1 billionb. On governance, the Board has 13 directors, 9 of whom are independent, with Robert J. Coury serving as Executive Chairman and Mark W.
Parrish as Lead Independent Director. The filing reports that Vanguard held 10.81%c and BlackRock held 7.14% of common stock as of April 25, 2022, and it notes that 2021 PRSU payouts would be automatically reduced by 30% at the stock price on that date.
02—Key points
Key Highlights
- 2021 U.S. GAAP net loss of $1.3 billion; net cash provided by operating activities of $3.0 billion; adjusted EBITDA of $6.4 billion; free cash flow of $2.6 billion
- Paid down $2.1 billion of debt in 2021 and achieved over $500 million in cost synergies
- February 2022 strategic priorities include the Biocon Biologics Transaction, portfolio simplification, and enhanced financial flexibility
- Authorized a share repurchase program of up to $1 billion and announced a 9% dividend increase payable in March 2022
- Board of 13 directors, with 9 independent; Robert J. Coury is Executive Chairman and Mark W. Parrish is Lead Independent Director
- CEO Michael Goettler's 2021 total compensation was $14,669,592; the filing reports a CEO-to-median-employee pay ratio of 398:1
- Vanguard (10.81%) and BlackRock (7.14%) are the only reported holders above 5% of common stock as of April 25, 2022
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2021, Viatris lost $0.07.
- Revenue$17.81B100.0%
- Cost of revenue−$12.24B68.7%
- Gross profit$5.58B31.3%
- Operating costs−$5.61B31.5%
- Operating income−$34.0M0.2%
- Interest, other & tax−$1.24B6.9%
- Net income−$1.27B7.1%
04—Financials
Financial Highlights
Figures from 10-K/AFY2021filed April 29, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $17.81B$11.82B | +50.7% |
| Cost of Revenue | $12.31B$8.15B | +51.1% |
| Gross Profit | $5.58B$3.80B | +46.9% |
| R&D Expenses | $751.10M$555.10M | +35.3% |
| SG&A Expenses | $4.53B$3.34B | +35.4% |
| Operating Expenses | $5.61B$4.01B | +40.0% |
| Operating Income | -$34.00M-$210.80M | +83.9% |
| Interest Expense | $636.20M$497.80M | +27.8% |
| Net Income | -$1.27B-$669.90M | −89.4% |
| EPS (Basic) | $-1.05$-1.11 | +5.4% |
| EPS (Diluted) | $-1.05$-1.11 | +5.4% |
| Shares Outstanding (Basic) | 1.21B601.20M | +101.1% |
| Shares Outstanding (Diluted) | 1.21B601.20M | +101.1% |
05—Questions
Frequently Asked Questions
How did Viatris perform financially in 2021 according to this filing?
The filing reports a U.S. GAAP net loss of $1.3 billion for 2021, with net cash provided by operating activities of $3.0 billion, adjusted EBITDA of $6.4 billion, and free cash flow of $2.6 billion. It states that the company met or exceeded its initial February 2021 guidance for total revenues, adjusted EBITDA, and free cash flow.
What is the Biocon Biologics Transaction?
The filing describes it as a transaction announced in February 2022 that Viatris expects will create a uniquely positioned, vertically integrated global biosimilars leader. Upon closing, it is expected to provide Viatris with immediate, enhanced financial flexibility and accelerate its financial commitments.
How is the company returning capital to shareholders?
The filing cites a 9% increase in the dividend paid in March 2022 compared with the prior year and a share repurchase program authorized for up to $1 billion. It says the company expects share buybacks to be an important benchmark in future capital allocation decisions.
How is executive pay linked to performance?
The filing states that approximately 70% of 2021 NEO target total compensation was long-term incentive compensation and that about 60% of target compensation was subject to performance conditions. Annual incentives are tied to adjusted EBITDA, free cash flow, and global regulatory submissions, and PRSUs use a relative TSR modifier that could reduce payouts by 30% at the April 25, 2022 stock price.
06—Continue