CSL Ltd Annual Report 2021

Note 1: Segment Information and Business Combinations continued 2 The comparative balances for intangible assets have been restated to reflect the finalisation of the Vitaeris’ acquisition accounting (refer to Note 1b). Inter-segment sales Inter-segment sales are carried out on an arm’s length basis and reflect current market prices. Geographical areas of operation The Group operates predominantly in Australia, the USA, Germany, the United Kingdom, Switzerland and China. The rest of the Group’s operations are spread across many countries and are collectively disclosed as ‘Rest of World’. Geographic areas Australia US$m United States US$m Germany US$m UK US$m Switzerland US$m China US$m Rest of World US$m Total US$m 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 (restated) 2 2021 2020 (restated) 2 External operating revenue 859.1 752.4 4,983.5 4,598.2 854.1 825.9 579.5 478.2 307.0 285.8 650.9 215.2 2,075.9 1,995.1 10,310.0 9,150.8 PPE, ROU and intangible assets 1,435.4 1,063.9 3,543.8 3,011.2 1,087.7 936.8 417.3 362.2 2,792.9 2,298.1 483.9 477.0 444.7 447.2 10,205.7 8,596.4 Note 1b: Business Combination There were no acquisitions in the year ending 30 June 2021. Vitaeris acquisition On 8 June 2020 CSL acquired 100% of the share capital of Vitaeris Inc. for an upfront payment of $20m and a series of contingent payments subject to the achievement of development milestones. Vitaeris has developed Clazakizumab, a potential treatment of chronic active antibody-mediated rejection, the leading cause of long-term rejection in kidney transplant recipients. CSL had entered into a strategic collaboration with Vitaeris in 2017, one of the main drivers behind the acquisition was to be in a position to exercise greater control over the R&D program than was possible under the collaboration. During the year ending 30 June 2021, the purchase price accounting for the acquisition of Vitaeris was finalised. The acquisition was provisionally accounted for at 30 June 2020. Details of the purchase consideration, and finalised fair values of the net assets acquired and goodwill at the date of acquisition were as follows: Asset Class US$m Cash 2.2 Trade and other receivables 0.1 Prepaid expenses 3.0 Intellectual property 305.8 Goodwill 85.6 Trade and other payables (8.8) Other liabilities (3.5) Deferred tax liabilities (85.6) Fair Value of Net Assets Acquired 298.8 Consideration paid 20.0 Contingent consideration recognised as liability at the date of acquisition 278.8 Upon finalisation of the purchase price accounting, the probabilities and expected timing applied to the contingent payments have been adjusted to reflect a final view of the likelihood and timing of payments based on facts in existence at date of acquisition. This has had the impact of increasing both the fair value of contingent consideration and the value of the intellectual property by $117.8m to $278.8m and $305.8m respectively from the provisionally accounted position as at 30 June 2020. The liability recognised at the date of acquisition has been calculated by reference to our judgement of the expected probability and timing of the contingent consideration, based upon level 3 inputs under the fair value hierarchy, which is then discounted to a present value using an appropriate discount rate. The liability is included in the other non-current liabilities. Goodwill is recorded solely as a consequence of the recognition of deferred tax liabilities in respect of intellectual property acquired, which has increased by $33.0m to $85.6m following the finalisation of acquisition accounting for Vitaeris. The comparative balances for intangible assets (Note 7), deferred tax liabilities (Note 3) and other non-current liabilities (Note 15b) have been restated to reflect the finalisation of the accounting for the acquisition of Vitaeris. CSL Limited Annual Report 2020/21 113