FORM

(212)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule of the Exchange Act:

Large Accelerated filer ☐                Accelerated filer ☐  ☒                Smaller reporting company ☐    

Indicate by check mark whether the registrant is a shell company (as defined in Rule of the Exchange Act).

(millions of dollars, except common share and per common share data)		Three Months Ended September 27, 2020				Three Months Ended September 29, 2019				Nine Months Ended September 27, 2020				Period From February 14, 2019 (Date of Incorporation) to September 29, 2019
Revenues		$	—			$	—			$	—			$	—
Operating expenses			—				—				—				—
Other (income)/deductions––net			221				—				222				—
Loss before benefit for taxes on income			(221	)			—				(222	)			—
Benefit for taxes on income			(52	)			—				(52	)			—
Net loss		$	(169	)		$	—			$	(170	)		$	—
Loss per common share––basic and diluted (a)		$	(1,689,743	)		$	—			$	(1,698,814	)		$	—
Weighted-average common shares––basic and diluted (a)			100				100				100				100

(millions of dollars)		Three Months Ended September 27, 2020				Three Months Ended September 29, 2019				Nine Months Ended September 27, 2020				Period From February 14, 2019 (Date of Incorporation) to September 29, 2019
Net loss		$	(169	)		$	—			$	(170	)		$	—
Other comprehensive income/(loss) before tax			—				—				—				—
Tax provision/(benefit) on other comprehensive income/(loss)			—				—				—				—
Other comprehensive income/(loss)			—				—				—				—
Comprehensive loss attributable to Upjohn Inc.		$	(169	)		$	—			$	(170	)		$	—

(millions of dollars, except common share and per common share data)				As of September 27, 2020						As of December 31, 2019
				(Unaudited)
Assets
Restricted short-term investments (a)				$	11,413					$	—
Other current assets					—						—
Total current assets					11,413						—
Total assets				$	11,413					$	—
Liabilities and Equity
Other current liabilities				$	79					$	—
Total current liabilities					79						—
Long-term debt					11,535						—
Total liabilities					11,614						—
Commitments and Contingencies
Common stock, $0.01 par value; 1,000 shares authorized; issued: 2020—100 shares; 2019—100 shares					—						—
Additional paid-in capital					(31	)					—
Due from shareholder					—						—
Retained earnings/ (deficit)					(170	)					—
Accumulated other comprehensive income/(loss)					—						—
Total Upjohn Inc. shareholder’s equity/(deficit)					(201	)					—
Total liabilities and equity				$	11,413					$	—

(a)	Represents proceeds from the Upjohn and Upjohn Finance B.V. debt issuances. For additional information, see Note 5B. Financial Instruments: Long-Term Debt .

		Common Stock
(millions of dollars, except common shares)		Shares				Par Value				Add’l Paid-In Capital				Due from Share- holder				Retained Earnings/ (Deficit)				Accum. Other Comp. Income/ (Loss)				Upjohn Inc. Shareholder’s Equity/ (Deficit)
Balance, June 28, 2020			100			$	—			$	—			$	—			$	(1	)		$	—			$	(1	)
Net loss																			(169	)							(169	)
Other comprehensive income/(loss), net of tax																							—				—
Net transfers –– Pfizer (a)											(31	)															(31	)
Balance, September 27, 2020			100			$	—			$	(31	)		$	—			$	(170	)		$	—			$	(201	)

		Common Stock
(millions of dollars, except common shares)		Shares				Par Value				Add’l Paid-In Capital				Due from Share- holder				Retained Earnings/ (Deficit)				Accum. Other Comp. Income/ (Loss)				Upjohn Inc. Shareholder’s Equity/ (Deficit)
Balance, June 30, 2019			100			$	—			$	—			$	—			$	—			$	—			$	—
Net loss																			—								—
Other comprehensive income/(loss), net of tax																							—				—
Net transfers––Pfizer											—																—
Balance, September 29, 2019			100			$	—			$	—			$	—			$	—			$	—			$	—

		Common Stock
(millions of dollars, except common shares)		Shares				Par Value				Add’l Paid-In Capital				Due from Share- holder				Retained Earnings/ (Deficit)				Accum. Other Comp. Income/ (Loss)				Upjohn Inc. Shareholder’s Equity/ (Deficit)
Balance, January 1, 2020			100			$	—			$	—			$	—			$	—			$	—			$	—
Net loss																			(170	)							(170	)
Other comprehensive income/(loss), net of tax																							—				—
Net transfers––Pfizer (a)											(31	)															(31	)
Balance, September 27, 2020			100			$	—			$	(31	)		$	—			$	(170	)		$	—			$	(201	)

		Common Stock
(millions of dollars, except common shares)		Shares				Par Value				Add’l Paid-In Capital				Due from Share- holder				Retained Earnings/ (Deficit)				Accum. Other Comp. Income/ (Loss)				Upjohn Inc. Shareholder’s Equity/ (Deficit)
Initial capitalization, February 14, 2019 (date of incorporation)			100			$	—			$	—			$	—			$	—			$	—			$	—
Net loss																			—								—
Other comprehensive income/(loss), net of tax																							—				—
Net transfers––Pfizer											—																—
Balance, September 29, 2019			100			$	—			$	—			$	—			$	—			$	—			$	—

(a)	See Note 4. Tax Matters and Note 8. Related Party Transactions.

(millions of dollars)		Nine Months Ended September 27, 2020				Period From February 14, 2019 (Date of Incorporation) to September 29, 2019
Operating Activities
Net loss		$	(170	)		$	—
Adjustments to reconcile net loss to net cash provided by operating activities:							—
Amortization of bond discount and issuance costs			3				—
Currency remeasurement loss on euro notes			144
Benefit for taxes on income (a)			(52	)			—
Other changes in assets and liabilities			77				—
Net cash provided by operating activities (b)			1				—
Investing Activities
Net (purchases of)/proceeds from redemptions/sales of short-term investments (c)			(11,413	)			—
Net cash used in investing activities			(11,413	)			—
Financing Activities
Proceeds from issuance of long-term debt (c)			11,478				—
Long-term debt issuance costs paid (c)			(88	)			—
Financing activities with Pfizer (d)			21
Net cash provided by financing activities			11,412				—
Effect of exchange-rate changes on cash and cash equivalents			—				—
Net increase/(decrease) in cash and cash equivalents			—				—
Cash and cash equivalents, beginning			—				—
Cash and cash equivalents, end		$	—			$	—
Supplemental Cash Flow Information
Cash paid during the period for:
Income taxes		$	—			$	—
Interest			—				—

Note 1. Organization and Basis of Presentation

A. Organization

Upjohn Inc. (the “Company” or “Upjohn”), a Delaware corporation, was formed on February 14, 2019, and is currently a wholly-owned subsidiary of Pfizer Inc. (“Pfizer”). The Company has three wholly-owned subsidiaries: (i) Utah Acquisition Holdco Inc., a Delaware corporation formed on July 25, 2019; (ii) Utah Acquisition Sub Inc., a Delaware corporation formed on July 25, 2019; and (iii) Upjohn Finance B.V. (“Finco”), a Netherlands private limited liability company formed on May 8, 2020. The Company and its subsidiaries have not commenced operations, have no significant operating assets or liabilities and from February 14, 2019, its date of incorporation, through September 27, 2020 have not conducted any material activities other than those incidental to its formation and those undertaken in connection with the definitive agreement to combine the Company with Mylan N.V. (“Mylan”), such as the financing activities described in

Note 5B.

On February 13, 2020, the United States Securities and Exchange Commission (the “SEC”) declared effective the Registration Statement on Form

S-4,

as amended (the

“S-4

Registration Statement”) of the Company to register shares of its common stock, par value $0.01 per share,

that will be issued and distributed in connection with a series of agreements entered into by Pfizer, the Company, Mylan and certain of their affiliates to combine Pfizer’s global, primarily off-patent branded and generic established medicines business (the “Upjohn Business”) with Mylan in an all-stock Reverse Morris Trust transaction (the “Transaction”), creating a new global pharmaceutical company. On June 30, 2020, the SEC declared effective the Registration Statement on Form 10, which includes an information statement (the “Form 10 Registration Statement” and, together with the S-4 Registration Statement, the “Registration Statements”), relating to the planned Distribution (as defined below) by Pfizer, on a pro rata basis (based on the number of shares of Pfizer common stock held by holders of Pfizer common stock as of the record date), of all of the Company common stock held by Pfizer to Pfizer stockholders as of the record date. On August 6, 2020, the Company filed the final information statement, dated August 6, 2020 (the “Information Statement”), which is attached as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on August 6, 2020. 

On July 29, 2019, Pfizer announced it had entered into a definitive agreement to combine the Company with Mylan. Under the terms of the Transaction, Pfizer will contribute the Upjohn Business, a business unit of Pfizer, to the Company and distribute its ownership interest in the Company to Pfizer stockholders via either a spin-off or a split-off (the “Distribution”). Pfizer

intends to effect

the Distribution by way of a spin-off. Immediately after the Distribution, the Company and Mylan will engage in a strategic combination transaction in which Mylan shareholders will receive shares of the Company’s common stock (the “Combination”). Pfizer stockholders would own 

57% of the combined company and former Mylan shareholders would own 43% of the combined company on a fully diluted basis.

The Transaction is generally expected to be tax free to Pfizer and Pfizer stockholders. The name of the new company to be formed by the planned combination of the Upjohn Business and Mylan will be “Viatris.” The voting common stock of the Company will be listed for trading on the NASDAQ under the symbol “VTRS.” The Company will make a cash payment to Pfizer equal

 to $12 

billion as partial consideration for the contribution of the Upjohn Business from Pfizer to the Company. In October 2020, Pfizer and Mylan announced that the U.S. Federal Trade Commission (the “FTC”) accepted a proposed consent order, which concluded the FTC’s review of the proposed combination of Mylan and the Upjohn Business, and that the parties have now obtained all required antitrust clearances for the proposed Transaction. Also, in October 2020, Pfizer announced that it had set the close of business on November 13, 2020 as the record date for the proposed spin-off and that the Transaction is expected to close on November 16, 2020, subject to customary closing conditions.

B. Basis of Presentation

The Company prepared the accompanying condensed consolidated financial statements following the requirements of the SEC for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) can be condensed or omitted.

The financial information included in the Company’s condensed consolidated financial statements is its condensed consolidated balance sheet as of September 27, 2020, the related condensed consolidated statements of operations, comprehensive loss and equity for the three-month and nine-month periods ended September 27, 2020, the three-month period ended September 29, 2019, and the period from February 14, 2019 (date of incorporation) to September 29, 2019, and the related condensed consolidated statements of cash flows for the nine-month period ended September 27, 2020 and the period from February 14, 2019 (date of incorporation) to September 29, 2019.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year.

The Company is responsible for the unaudited financial statements included in this Quarterly Report on Form

10-Q.

The interim financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of results for the interim periods presented. The information included in this Quarterly Report on Form

10-Q

should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s 2019 Special Financial Report on Form

10-K.

Certain amounts in th

e

 condensed consolidated financial statements and associated notes may not add due to rounding.

Note 2. Significant Accounting Policies

A. Estimates and Assumptions

In preparing the condensed consolidated financial statements, the Company uses certain estimates and assumptions that affect reported amounts and disclosures. These estimates and underlying assumptions can impact all elements of the Company’s financial statements. For example, in the condensed consolidated statements of operations, estimates are used when allocating bond issuance costs in the form of amortization and determining provisions for taxes on income. In the condensed consolidated balance sheets, estimates are used in determining the valuation of assets, such as investments, which also impact the condensed consolidated statements of operations.

The Company’s estimates are often based on complex judgments and assumptions that it believes to be reasonable, but that can be inherently uncertain and unpredictable. If the Company’s estimates and assumptions are not representative of actual outcomes, its results could be materially impacted.

As future events and their effects cannot be determined with precision, the Company’s estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause the Company to change those estimates and assumptions. The Company is subject to risks and uncertainties that may cause actual results to differ from estimated amounts. The Company regularly evaluates its estimates and assumptions using historical experience and expectations about the future. The Company adjusts its estimates and assumptions when facts and circumstances indicate the need for change.

B. Fair Value

The Company is often required to measure certain assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, the Company uses fair value when accounting for and reporting of certain financial instruments, such as short-term investments. The Company estimates fair value using an exit price approach, which requires, among other things, that it determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of

non-financial

assets and, for liabilities, assuming that the risk of

non-performance

will be the same before and after the transfer.

When estimating fair value, depending on the nature and complexity of the asset or liability, the Company may use one or all of the following techniques:

 

•

Income approach, which is based on the present value of a future stream of net cash flows.

 

•

Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.

 

•

Cost approach, which is based on the cost to acquire or construct comparable assets, less an allowance for functional and/or economic obsolescence.

The Company’s fair value methodologies depend on the following types of inputs:

 

•

Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).

 

•

Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs).

 

•

Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).

A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see

Note 2A.

C. Foreign Currency Translation

The Company and Finco are U.S. dollar functional entities. The effects of converting

non-functional

currency monetary assets and liabilities into the functional currency are recorded in

Other (income)/deductions—net

, see

Note 3

.

D. Investments

The Company’s short-term investments are comprised of equity securities with readily determinable fair values, which include money market funds primarily invested in U.S. Treasury and government debt. Equity securities with readily determinable fair values are carried at fair value, with changes in fair value reported in

Other (income)/deductions—net.

Realized gains or losses on sales of investments are determined by using the specific identification cost method. The Company regularly evaluates its financial assets for impairment.

A single estimate of fair value and impairment reviews can involve a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with estimates and assumptions, see

Note 2A.

E. Tax

The Company did not generally file separate tax returns, as it was generally included in the tax grouping of other Pfizer entities within the respective entity’s tax jurisdiction. The income tax benefit included in these condensed consolidated financial statements has been calculated using the separate return basis, as if the Company filed a separate tax return.

Note 3. Other (Income)/Deductions—Net

 

The following table provides the components of Other (income)/deductions––net :
(millions of dollars)		Three Months Ended September 27, 2020				Three Months Ended September 29, 2019				Nine Months Ended September 27, 2020				Period From February 14, 2019 (Date of Incorporation) to September 29, 2019
Interest income (a)		$	(1	)		$	—			$	(2	)		$	—
Interest expense (b)			71				—				76				—
Net interest expense			70				—				75				—
Foreign exchange (gain)/loss, net (c)			148				—				144				—
Other, net (d)			3								3
Other (income)/deductions––net		$	221			$	—			$	222			$	—

 

(a)	Represents interest income earned on $11.4 billion of proceeds from the debt issuances completed in June 2020 (see Note 5B ) that are invested in money market funds and included in Restricted short-term investments (see Note 5A ) in the condensed consolidated balance sheet as of September 27, 2020.

(b)	Represents interest expense associated with the $11.4 billion of senior unsecured notes issued in June 2020, which includes the stated interest expense on the notes and amortization of bond discount and issuance costs (see Note 5B ).

(c)	Represents net currency exchange losses related to the remeasurement of Euro denominated senior unsecured notes issued in June 2020 (see Note 5B) .

(d)	Primarily represents fees associated with financing arrangements (see Note 5B ).

Note 4. Tax Matters

The Company recorded an

income

tax benefit of approximately $52 million in the three months and nine months ended September 27, 2020, which reflects the jurisdictional mix of income and associated tax rates related to the debt issuances completed in June 2020 (see

Note 2E

and

Note 5B

). This amount is included in

Net transfers––Pfizer

in the condensed consolidated statements of equity to reflect the benefit Pfizer will receive from the losses generated by the Company.

Note 5. Financial Instruments

A. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The following table presents the financial assets measured at fair value using a market approach on a recurring basis
by balance sheet categories and fair value hierarchy level as defined in

Note 2B:

		September 27, 2020								December 31, 2019
(millions of dollars)		Total				Level 2				Total				Level 2
Financial assets measured at fair value on a recurring basis:
Short-term investments
Classified as equity securities with readily determinable fair values:
Money market funds (a)		$	11,413			$	11,413			$	—			$	—
Total short-term investments		$	11,413			$	11,413			$	—			$	—

 

(a)

As of September 27, 2020, $11.4  billion of proceeds from the debt issuances completed in June 2020 (see Note 5B ) are invested in money market funds and are included in Restricted short-term investments in the condensed consolidated balance sheet, pursuant to the terms of the transaction agreements. The money market funds are primarily invested in U.S. Treasury and government debt with readily determinable fair values (see Note 3 and Note 6 ).

 

revolving credit agreement to fund in full the Cash Distribution and related transaction fees and expenses. The Company intends to use any remaining balance of net proceeds from these financing transactions after the Cash Distribution for general corporate purposes.

The commitments under the Company’s senior unsecured $12 billion bridge facility were fully terminated upon completion of the Upjohn Debt Transactions on June 23, 2020.

The U.S. dollar notes are senior unsecured obligations of the Company. The euro notes are senior unsecured obligations of Finco. The U.S. dollar notes and euro notes are initially guaranteed on a senior unsecured basis by Pfizer. The guarantee by Pfizer will be automatically and unconditionally terminated and released without the consent of the holders of the notes upon the consummation of the Distribution. The Company has guaranteed the notes issued by Finco, and the Company will remain a guarantor of such notes following the Distribution. Following the Distribution and the Combination, the Company and Finco, as applicable, will remain the obligor with respect to such notes. Upon the consummation of the Combination, the Mylan entities (which will be subsidiaries of the Company following the Combination) that are issuers or guarantors of the outstanding senior unsecured notes issued by Mylan or Mylan Inc. will become guarantors of the U.S. dollar notes and euro notes, substantially concurrent with the Company’s becoming a guarantor of the existing Mylan notes.

 

The following table provides the components of the Company’s senior unsecured long-term debt, including the weighted-average annual stated interest rate by maturity:
(millions of dollars)		As of September 27, 2020
Notes due 2022 (0.981%)		$	1,872
Notes due 2024 (1.023%)			872
Notes due 2025 (1.650%)			750
Notes due 2027  (1.767%)			1,739
Notes due 2030 (2.700%)			1,450
Notes due 2032 (1.908%)			1,454
Notes due 2040 (3.850%)			1,500
Notes due 2050 (4.000%)			2,000
Total long-term debt, principal amount			11,638
Net unamortized discounts and debt issuance costs			(103	)
Total long-term debt, carried at historical proceeds, as adjusted		$	11,535

Note 6. Other Assets and Liabilities

As of September 27, 2020,

Other current assets

of approximately $0.3 million consist of an accrued interest receivable of

 $0.3 

million for income earned on the

$11.4 

billion of proceeds from the debt issuances completed in June 2020 (see

Note 5B

) that are invested in money market funds and included in

Restricted short-term investments

(see

Note 5A

) in the condensed consolidated balance sheet as of September 27, 2020. 

As of September 27, 2020,

Other current liabilities

of approximately

 $79 

million consist of amounts due for accrued interest payable of approximately

$74 

million, and accrued expenses associated with financing arrangements (see

Note 5B

) of approximately 

$5 

million.

Note 7. Equity

As of September 27, 2020 and December 31, 2019, the Company is authorized to issue 1,000 shares of common stock, par value $0.01 per share. As of September 27, 2020 and December 31, 2019, there were 100 shares of common stock, par value of $0.01 per share, of the Company issued and outstanding. All such issued and outstanding shares of common stock were held by Pfizer.

Due from shareholder

includes a receivable from Pfizer totaling one U.S. dollar in connection with the issuance of the Company’s common stock.

Note 8. Related Party Transactions

Included in

Net transfers––Pfizer

in the condensed consolidated statements of equity are transactions between Upjohn and Pfizer and include (i) an income tax benefit of approximately

 $52 

million in the three months and nine months ended September 27, 2020, reflecting the benefit Pfizer will receive from the losses generated by the Company; and (ii) cash payments made by Pfizer on behalf of Upjohn of approximately

 $21 

million in the three months and nine months ended September 27, 2020 related to financing arrangements (see

Note 5B

). The cash payments made by Pfizer on behalf of Upjohn are reflected in the condensed consolidated statements of cash flows in

Financing activities with Pfizer

in the financing activities section. 

Upjohn Inc. (the “Company” or “Upjohn”), a Delaware corporation, was formed on February 14, 2019, and is currently a wholly-owned subsidiary of Pfizer Inc. (“Pfizer”). On February 13, 2020, the United States Securities and Exchange Commission (the “SEC”) declared effective the Registration Statement on Form as amended (the Registration Statement”) of the Company to register shares of its common stock, par value $0.01 per share, that will be issued and distributed in connection with a series of agreements entered into by Pfizer, the Company, Mylan N.V. (“Mylan”) and certain of their affiliates to combine Pfizer’s global, primarily branded and generic established medicines business (the “Upjohn Business”) with Mylan in an Reverse Morris Trust transaction (the “Transaction”), creating a new global pharmaceutical company. On June 30, 2020, the SEC declared effective the Registration Statement on Form 10, which includes an information statement (the “Form 10 Registration Statement” and, together with the Registration Statement, the “Registration Statements”), relating to the planned Distribution (as defined below). On August 6, 2020, the Company filed the final information statement, dated August 6, 2020 (the “Information Statement”), which is attached as Exhibit 99.1 to the Company’s Current Report on Form filed on August 6, 2020.

On July 29, 2019, Pfizer, Upjohn, Mylan and certain of their affiliates entered into a series of agreements to combine the Upjohn Business with Mylan in an Reverse Morris Trust transaction, creating a new global pharmaceutical company. Under the terms of the Transaction, Pfizer will contribute the Upjohn Business to the Company and distribute its ownership interest in Upjohn to Pfizer stockholders via either a or a (the “Distribution”) and, immediately thereafter, Upjohn will be combined with Mylan (the “Combination”). Pfizer intends to effect the Distribution by way of a Pfizer stockholders would own 57% of the combined company and former Mylan shareholders would own 43% of the combined company on a fully diluted basis. The Transaction is generally expected to be tax free to Pfizer and Pfizer stockholders. The Company will make a cash payment to Pfizer equal to $12 billion as partial consideration for the contribution of the Upjohn Business from Pfizer to the Company (the “Cash Distribution”). The Transaction was approved by Mylan shareholders in June 2020. In connection with the Transaction, in June 2020, Upjohn and Upjohn Finance B.V. (“Finco”) completed privately placed debt offerings of $7.45 billion and €3.60 billion aggregate principal amount of senior unsecured notes, respectively (the “Upjohn Debt Transactions”), and entered into other financing arrangements. See the “Analysis of Financial Condition, Liquidity and Capital Resources” section below for more information about the completed financing activities. For more information regarding the Transaction, see the Registration Statements. In October 2020, Pfizer and Mylan announced that the U.S. Federal Trade Commission (the “FTC”) accepted a proposed consent order, which concluded the FTC’s review of the proposed combination of Mylan and the Upjohn Business, and that the parties have now obtained all required antitrust clearances for the proposed Transaction. Also, in October 2020, Pfizer announced that it had set the close of business on November 13, 2020 as the record date for the proposed spin-off and that the Transaction is expected to close on November 16, 2020, subject to customary closing conditions.

to fund in full the Cash Distribution and related transaction fees and expenses. The Company intends to use any remaining balance of net proceeds from these financing transactions after the Cash Distribution for general corporate purposes. In the interim, the $11.4 billion of proceeds of the Upjohn Debt Transactions are classified as in the condensed consolidated balance sheet as of September 27, 2020, pursuant to the terms of the transaction agreements. The euro notes are exposed to changes in foreign exchange rates and there are no derivatives in place to mitigate that risk. The proceeds of the euro notes were converted to U.S. dollars at the time of issuance.

For additional information regarding the Upjohn Debt Transactions and other financing arrangements of the Company, see Notes to Condensed Consolidated Financial Statements––.

This report and other written or oral statements that the Company makes from time to time contain forward-looking statements. Such forward-looking statements involve substantial risks and uncertainties. The Company has tried, wherever possible, to identify such statements by using words such as “will,” “may,” “could,” “should,” “would,” “likely,” “ongoing,” “anticipate,” “estimate,” “expect,” “project,” “potential,” “intend,” “continue,” “plan,” “believe,” “assume,” “target,” “forecast,” “guidance,” “goal,” “objective,” “aim,” “seek” and other words and terms of similar meaning or by using future dates in connection with any discussion of, among other things, the Company’s anticipated operating and financial performance, business plans and prospects, expectations for its products, sales efforts, expenses, interest rates, foreign exchange rates, the outcome of contingencies, such as legal proceedings, government regulation, the ability to successfully capitalize on growth opportunities or prospects, manufacturing and product supply and the Company’s expectations regarding the impact of a novel disease caused by a strain of coronavirus on its business and operations. In particular, these include statements relating to future actions, including, among others, the expected timing, benefits, charges and/or costs in connection with the pending combination of the Upjohn Business with Mylan to create a new global pharmaceutical company, Viatris, and the Company’s anticipated liquidity position, the anticipated costs and savings from certain initiatives, and the expected payments to the unfunded pension and postretirement plans and expected funding obligations.

You should read and consider the risk factors associated with the Upjohn Business because these risk factors may affect the operations and financial results of the new combined company and the Company’s common stock following the closing of the Transaction. A description of the risks and uncertainties for the Upjohn Business, Mylan and the combined company may be found in the “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” sections of the Form Registration Statement, which was declared effective on February 13, 2020, the Form 10 Registration Statement, which was declared effective on June 30, 2020, and the Information Statement, all of which are on file with the SEC. Additional discussion regarding certain risks and uncertainties described above is included under the heading entitled “Risk Factors” in Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form The Company notes these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

During the period covered by this report, the Company did not conduct any material operating activities and therefore did not incur any significant interest rate risk, foreign currency exchange rate risk, commodity price risk or other relevant market risks except that the Company’s senior unsecured euro-denominated notes are exposed to changes in foreign exchange rates and there are currently no derivatives in place to mitigate that risk. Borrowings under the Upjohn Debt Transactions are on a long-term, fixed-rate basis. The Company’s restricted short-term investments consist of high-quality, highly liquid money market funds primarily invested in U.S. Treasury and government debt. For information about the financing arrangements undertaken in connection with the definitive agreement to combine the Company with Mylan, see “Analysis of Financial Condition, Liquidity and Capital Resources” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of its principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules and under the Exchange Act). Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be disclosed in the Company’s periodic reports filed with the SEC.

During the Company’s most recent fiscal quarter, there has not been any change in its internal control over financial reporting (as such term is defined in Rules and under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

During the period covered by this report, the Company did not conduct any material activities other than those related to its formation and the matters contemplated by the Transaction. You should also read and consider the risk factors associated with the Upjohn Business because these risk factors may affect the operations and financial results of the new combined company and the Company’s common stock following the closing of the Transaction. The Company refers to the “Forward-Looking Information and Factors That May Affect Future Results” section of the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form and to the description of the risks and uncertainties for the Upjohn Business, Mylan and the combined company that may be found in the “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” sections of the Registration Statement, which was declared effective on February 13, 2020, the Form 10 Registration Statement, which was declared effective on June 30, 2020, and the Information Statement, all of which are on file with the SEC.

In December 2019, illnesses associated with a novel disease caused by a strain of coronavirus were reported and the virus has since caused widespread and significant disruptions to daily life and economies across geographies. The World Health Organization has classified the outbreak as a pandemic.

The pandemic presents a number of risks and challenges for the Company and the Upjohn Business, including, among others, potential challenges in connection with the anticipated combination of the Upjohn Business with Mylan. For the Upjohn Business that is to be contributed to the Company under the terms of the Transaction, its business, operations, financial condition and results have been and may continue to be impacted by the pandemic to varying degrees. The pandemic’s impact on the Upjohn Business and its operations and financial condition and results was less severe at its peak than originally anticipated, but is recovering at a somewhat slower pace than originally expected. The pandemic continues to present a number of risks and challenges for the Upjohn Business, including, among others, impacts due to travel limitations, social distancing and government-mandated work-from-home or orders; potential manufacturing disruptions and delays and supply chain interruptions, including challenges related to reliance on third-party suppliers; decreased product demand, including due to reduced numbers of meetings with prescribers and patient visits with physicians, resulting in fewer new prescriptions or refills of existing prescriptions; further reduced product demand as a result of increased unemployment; challenges presented by reallocating human capital, manufacturing and other resources to assist in responding to the pandemic without disruption to the Upjohn Business’s operations; costs associated with the pandemic, including protocols intended to reduce the risk of transmission; potential interruptions or delays in the operations of certain regulatory authorities; potential increased cyber incidents such as phishing, social engineering and malware attacks; and other challenges presented by disruptions to our normal operations in response to the pandemic, as well as uncertainties regarding the duration and severity of the pandemic and its impacts and government or regulatory actions to contain the virus or control the supply of medicines. Further, the pandemic, and the volatile global economic conditions stemming from the pandemic, could precipitate or amplify the other risks that are identified in the “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” sections of the Company’s Registration Statement, Form 10 Registration Statement and Information Statement.

The Company is continuing to monitor the latest developments regarding the pandemic on the Upjohn Business and its operations, financial condition and results, and the Upjohn Business has made certain assumptions regarding the pandemic for purposes of its operational planning and financial projections, including assumptions regarding the duration and severity of the pandemic and the global macroeconomic impact of the pandemic.

Despite careful tracking and planning, however, the Company is unable to accurately predict the extent of the impact of the pandemic on the Upjohn Business and its operations, financial condition and results due to the uncertainty of future developments. In particular, the Company believes the ultimate impact on the Upjohn Business’s business, operations and financial condition and results will be affected by the speed and extent of the continued spread of the coronavirus globally, the duration of the pandemic, new information that may emerge concerning the severity and incidence of the safety, efficacy and availability of a vaccine and treatments for the global macroeconomic impact of the pandemic and governmental or regulatory actions to contain the virus or control supply of medicines. The pandemic may also affect the Upjohn Business’s business, operations or financial condition and results in a manner that is not presently known to the Upjohn Business or that the Upjohn Business currently does not consider to present significant risks.