Delaware | 83-4364296 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
None | N/A |
Page | |||||
3 | |||||
Item 1. | |||||
Financial Statements | |||||
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5 | |||||
6 | |||||
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8 | |||||
9 | |||||
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Item 2. | |||||
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Item 3. | |||||
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Item 4. | |||||
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Item | |||||
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Item 1A. | |||||
19 | |||||
Item 2. | |||||
19 | |||||
Item 3. | |||||
20 | |||||
Item 4. | |||||
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Item 5. | |||||
20 | |||||
Item 6. | |||||
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21 |
(millions of dollars, except common share and per common share data) | Three Months Ended June 28, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 28, 2020 | Period From February 14, 2019 (Date of Incorporation) to June 30, 2019 | ||||||||||||
Revenues | $ | — | $ | — | $ | — | $ | — | ||||||||
Operating expenses | — | — | — | — | ||||||||||||
Other (income)/deductions—net | 1.2 | — | 1.2 | — | ||||||||||||
Loss before benefit for taxes on income | (1.2) | — | (1.2) | — | ||||||||||||
Benefit for taxes on income | (0.3) | — | (0.3) | — | ||||||||||||
Net loss | $ | (0.9) | $ | — | $ | (0.9) | $ | — | ||||||||
Loss per common share—basic and diluted (a) | $ | (9,071) | $ | — | $ | (9,071) | $ | — | ||||||||
Weighted-average common shares—basic and diluted (a) | 100 | 100 | 100 | 100 | ||||||||||||
(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 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
Operating expenses | 0 | 0 | 0 | 0 | ||||||||||||
Other (income)/deductions––net | 221 | 0 | 222 | 0 | ||||||||||||
Loss before benefit for taxes on income | (221 | ) | 0 | (222 | ) | 0 | ||||||||||
Benefit for taxes on income | (52 | ) | 0 | (52 | ) | 0 | ||||||||||
Net loss | $ | (169 | ) | $ | 0 | $ | (170 | ) | $ | 0 | ||||||
Loss per common share––basic and diluted (a) | $ | (1,689,743 | ) | $ | 0 | $ | (1,698,814 | ) | $ | 0 | ||||||
Weighted-average common shares––basic and diluted (a) | 100 | 100 | 100 | 100 | ||||||||||||
(a) | All common shares issued and outstanding were held by Pfizer Inc. (see Note 1A. Organization and Basis of Presentation: Organization Note 7. Equity). |
(millions of dollars) | Three Months Ended June 28, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 28, 2020 | Period From February 14, 2019 (Date of Incorporation) to June 30, 2019 | ||||||||||||
Net loss | $ | (0.9) | $ | — | $ | (0.9) | $ | — | ||||||||
Other comprehensive income/(loss) before tax | — | — | — | — | ||||||||||||
Tax provision/(benefit) on other comprehensive income/(loss) | — | — | — | — | ||||||||||||
Other comprehensive income/(loss) | — | — | — | — | ||||||||||||
Comprehensive loss attributable to Upjohn Inc. | $ | (0.9) | $ | — | $ | (0.9) | $ | — | ||||||||
(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 | ) | $ | 0 | $ | (170 | ) | $ | 0 | ||||||
Other comprehensive income/(loss) before tax | 0 | 0 | 0 | 0 | ||||||||||||
Tax provision/(benefit) on other comprehensive income/(loss) | 0 | 0 | 0 | 0 | ||||||||||||
Other comprehensive income/(loss) | 0 | 0 | 0 | 0 | ||||||||||||
Comprehensive loss attributable to Upjohn Inc. | $ | (169 | ) | $ | 0 | $ | (170 | ) | $ | 0 | ||||||
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(a) | ||||||||
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 | $ | 0 | $ | 0 | $ | 0 | $ | (1 | ) | $ | 0 | $ | (1 | ) | |||||||||||||
Net loss | (169 | ) | (169 | ) | ||||||||||||||||||||||||
Other comprehensive income/(loss), net of tax | 0 | 0 | ||||||||||||||||||||||||||
Net transfers –– (a) | (31 | ) | (31 | ) | ||||||||||||||||||||||||
Balance, September 27, 2020 | 100 | $ | 0 | $ | (31 | ) | $ | 0 | $ | (170 | ) | $ | 0 | $ | (201 | ) |
Common Stock | ||||||||||||||||||||||||||||
(millions of dollars, except common shares) | Shares | Par Value | Add’l Paid-In Capital | | Due from Share- holder | | Retained Earnings/ (Loss) | | Accum. Other Comp. Income/ (Loss) | | Upjohn Inc. Shareholder’s Equity/(Deficit) | | ||||||||||||||||
Balance, March 29, 2020 | 100 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Net loss | (0.9) | (0.9) | ||||||||||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | — | ||||||||||||||||||||||||||
Net transfer—Pfizer (a) | (0.3) | (0.3) | ||||||||||||||||||||||||||
Balance, June 28, 2020 | 100 | $ | — | $ | (0.3) | $ | — | $ | (0.9) | $ | — | $ | (1.2) | |||||||||||||||
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Common Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(millions of dollars, except common shares) | Shares | Par Value | Add’l Paid-In Capital | | Due from Share- holder | | Retained Earnings/ (Loss) | | Accum. Other Comp. Income/ (Loss) | | Upjohn Inc. Shareholder’s Equity/(Deficit) | | 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 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | 100 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||
Net loss | (0.9) | (0.9) | (170 | ) | (170 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | — | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net transfer—Pfizer (a) | (0.3) | (0.3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net transfers––Pfizer (a) | (31 | ) | (31 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 28, 2020 | 100 | $ | — | $ | (0.3) | $ | — | (0.9) | $ | — | $ | (1.2) | ||||||||||||||||||||||||||||||||||||||||||||
Balance, September 27, 2020 | 100 | $ | 0 | $ | (31 | ) | $ | 0 | $ | (170 | ) | $ | 0 | $ | (201 | ) |
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(a) | See Note 4. Tax Matters 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 | ) | $ | 0 | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | — | |||||||
Amortization of bond discount and issuance costs | 3 | 0 | ||||||
Currency remeasurement loss on euro notes | 144 | |||||||
Benefit for taxes on income (a) | (52 | ) | 0 | |||||
Other changes in assets and liabilities | 77 | 0 | ||||||
Net cash provided by operating activities (b) | 1 | 0 | ||||||
Investing Activities | ||||||||
Net (purchases of)/proceeds from redemptions/sales of short-term investments (c) | (11,413 | ) | 0 | |||||
Net cash used in investing activities | (11,413 | ) | 0 | |||||
Financing Activities | ||||||||
Proceeds from issuance of long-term debt (c) | 11,478 | 0 | ||||||
Long-term debt issuance costs paid (c) | (88 | ) | 0 | |||||
Financing activities with Pfizer (d) | 21 | |||||||
Net cash provided by financing activities | 11,412 | 0 | ||||||
Effect of exchange-rate changes on cash and cash equivalents | 0 | 0 | ||||||
Net increase/(decrease) in cash and cash equivalents | 0 | 0 | ||||||
Cash and cash equivalents, beginning | 0 | 0 | ||||||
Cash and cash equivalents, end | $ | 0 | $ | 0 | ||||
Supplemental Cash Flow Information | ||||||||
Cash paid during the period for: | ||||||||
Income taxes | $ | 0 | $ | 0 | ||||
Interest | 0 | 0 |
(a) | See Note 4. Tax Matters Note 8. Related Party Transactions. |
(b) | Represents interest income received on short term investments. |
(c) | Represents billion of proceeds from the long-term debt issuances in the second quarter of 2020, which are included in Restricted short-term investments in the condensed consolidated balance sheet. For additional information, seeNotes 5A. Financial Instruments: Fair Value Measurements and5B. Financial Instruments: Long-Term Debt. |
(d) | See Note 8. Related Party Transactions. |
Cost approach, which is based on the cost to acquire or construct comparable assets, less an allowance for functional and/or economic obsolescence. |
Unobservable inputs that reflect estimates and assumptions (Level 3 inputs). |
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 | $ | — | ||||||||
(millions of dollars) | Three Months Ended June 28, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 28, 2020 | Period From February 14, 2019 (Date of Incorporation) to June 30, 2019 | ||||||||||||
Interest income (a) | $ | (0.2) | $ | — | $ | (0.2) | $ | — | ||||||||
Interest expense (b) | 5.3 | — | 5.3 | — | ||||||||||||
Net interest expense | 5.1 | — | 5.1 | — | ||||||||||||
Foreign exchange (gain)/loss, net (c) | (3.9) | — | (3.9) | — | ||||||||||||
Other (income)/deductions––net | $ | 1.2 | $ | — | $ | 1.2 | $ | — | ||||||||
(a) | Represents interest income earned on $11.4 billion of proceeds from the debt issuances completed in June 2020 (see Note 5B Restricted short-term investments Note 5A in the condensed consolidated balance sheet as of |
(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) | Representsnet currency exchange Note 5B) |
(d) | Primarily represents fees associated with financing arrangements (see Note 5B ). |
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 | $ | — | $ | — | ||||||||
June 28, 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) | $ | 11,411.6 | $ | 11,411.6 | $ | — | $ | — | ||||||||
Total short-term investments | $ | 11,411.6 | $ | 11,411.6 | $ | — | $ | — | ||||||||
(a) | As of billion of proceeds from the debt issuances completed in June 2020 (see Note 5B Restricted short-term investments Note 3 andNote 6 ). |
The following table presents the financial liabilities not measured at fair value on a recurring basis, including the carrying values and estimated fair values using a market approach: | ||||||||||||||||||||||||
September 27, 2020 | December 31, 2019 | |||||||||||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||||||||||||
(millions of dollars) | Total | Level 2 | Total | Level 2 | ||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||||
Long-term debt | $ | 11,535 | $ | 13,244 | $ | 13,244 | $ | — | $ | — | $ | — |
June 28, 2020 | December 31, 2019 | |||||||||||||||||||||||
(millions of dollars) | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||||||||||
Total | Level 2 | Total | Level 2 | |||||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||||
Long-term debt | $ | 11,385.2 | $ | 12,848.2 | $ | 12,848.2 | $ | — | $ | — | $ | — | ||||||||||||
| Currency | June 28, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | The notes may be redeemed by the Company at any time, in whole, or in part, at varying redemption prices plus accrued and unpaid interest. The weighted-average effective interest rates at issuance were 2.95% for the 7.45 billion notes and 1.37% for the 3.60 billion notes. If the Transaction does not close on or prior to February 1, 2021, or if, prior to such date, Upjohn Inc. and Mylan notify the trustee for the U.S. dollar notes or |
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 | ||
(millions of dollars) | As of June 28, 2020 | |||
Notes due 2022 (0.984%) | $ | 1,841.6 | ||
Notes due 2024 (1.023%) | 841.6 | |||
Notes due 2025 (1.650%) | 750.0 | |||
Notes due 2027 (1.775%) | 1,703.8 | |||
Notes due 2030 (2.700%) | 1,450.0 | |||
Notes due 2032 (1.908%) | 1,402.6 | |||
Notes due 2040 (3.850%) | 1,500.0 | |||
Notes due 2050 (4.000%) | 2,000.0 | |||
Total long-term debt, principal amount | 11,489.5 | |||
Net unamortized discounts and debt issuance costs | (104.3 | ) | ||
Total long-term debt, carried at historical proceeds, as adjusted | $ | 11,385.2 | ||
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(a) | As of ––Note 5B. Financial Instruments: Long-Term Debt Restricted short-term investments ––Note 3. Other (Income)/Deductions––net Note 5B. Financial Instruments: Long-Term Debt |
Years | Years | |||||||||||||||||||||||||||||||||||||||||||||||
(millions of dollars) | Total | 2020 | 2021 | 2022-2023 | 2024-2025 | Thereafter | Total | 2020 | 2021 | 2022-2023 | 2024-2025 | Thereafter | ||||||||||||||||||||||||||||||||||||
Long-term debt (a) | $ | 11,385.2 | $ | — | $ | — | $ | 1,835.2 | $ | 1,581.2 | $ | 7,968.8 | $ | 11,535 | $ | — | $ | — | $ | 1,865 | $ | 1,611 | $ | 8,059 | ||||||||||||||||||||||||
Interest payments on long-term debt obligations (b) | 4,597.6 | 108.9 | 296.9 | 514.9 | 464.4 | 3,212.5 | 4,598 | 109 | 297 | 515 | 464 | 3,212 | ||||||||||||||||||||||||||||||||||||
(a) | Long-term debt consists of senior unsecured notes, carried at historical proceeds, as adjusted (see Notes to Condensed Consolidated Financial Statements— Note 5B. Financial Instruments: Long-Term Debt |
(b) | The Company’s calculations of expected interest payments incorporate only current period assumptions for interest rates and foreign currency translation rates (see Notes to Condensed Consolidated Financial Statements— Note 5B. Financial Instruments: Long-Term Debt |
* | of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request. |
Upjohn Inc. | ||||||||
Dated: | By: | /s/ MICHAEL GOETTLER | ||||||
Michael Goettler President (Principal Executive Officer) |