Viatris IncVTRS

Viatris Inc Leases Disclosure

10-KFiled Feb 26, 20262 min read
Leases
The Company has operating leases of real estate, consisting primarily of administrative offices, manufacturing and distribution facilities, and R&D facilities. We also have operating leases of certain equipment, primarily automobiles, and certain limited supply arrangements.
We elected to apply the practical expedient to not separate lease and non-lease components for our leases except for those related to certain limited supply arrangements. We have also elected to apply the short-term lease recognition exemption which means we will not recognize ROU assets or lease liabilities for leases with an initial term of 12 months of less.
As of December 31, 2025, the Company recognized ROU assets of $271.3 million and total lease liabilities of $287.5 million. The Company’s ROU assets are recorded in other assets. The related lease liability balances are recorded in other current liabilities and other long-term obligations in the consolidated balance sheets. Refer to Note 6 Balance Sheet Components for additional information.
ROU assets and liabilities are recognized at the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use an applicable incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Options to extend or terminate the ROU assets are reviewed at lease inception and these options are accounted for when they are reasonably certain of being exercised.
Other information related to leases was as follows:
As of December 31, 2025
Remaining lease terms
1 year to 14 years
Weighted-average remaining lease term6 years
Weighted-average discount rate3.9 %

As of December 31, 2025, maturities of lease liabilities were as follows for each of the years ending December 31:
(In millions)
2026$95.4 
202782.5 
202839.2 
202925.4 
203015.0 
Thereafter60.7 
Total lease payments$318.2 
Less imputed interest30.7 
Total lease liability$287.5 
As of December 31, 2025, the Company did not have leases that had not yet commenced. For the years ended December 31, 2025, 2024 and 2023, the Company had operating lease expense of approximately $92.2 million, $89.8 million and $87.6 million, respectively. Operating lease costs are classified primarily as SG&A and cost of sales in the consolidated statements of operations.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 27, 2025
2023Feb 28, 2024
2022Feb 27, 2023
2021Feb 28, 2022

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesSegmentsDebtStock CompensationNew Standards