Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________________ 
Form 10-Q
__________________________________________________________ 
ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017March 31, 2020
OR
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-37443
__________________________________________________________ 
Univar Solutions Inc.
(Exact name of registrant as specified in its charter)
__________________________________________________________ 
Delaware26-1251958
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

3075 Highland Parkway, Suite 200 Downers Grove, IllinoisIllinois60515
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (331) 777-6000
__________________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock ($0.01 par value)UNVRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý☒     No  ¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ý☒  Yes    ¨☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a 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 12b-2 of the Exchange Act. (Check one): 
Large accelerated filerý☒Accelerated filer¨☐
Non-accelerated filer¨☐Smaller reporting company¨☐
Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨☐    No  ý☒
At October 25, 2017, 140,847,141April 27, 2020, 168,900,947 shares of the registrant’s common stock, $0.01 par value, were outstanding.


Table of Contents
Univar Solutions Inc.
Form 10-Q
For the quarterly period ended September 30, 2017March 31, 2020
TABLE OF CONTENTS
 
Page
Item 1. Financial Statements (unaudited)
Condensed Consolidated Statements of Operations
1
Condensed Consolidated Statements of Comprehensive IncomeLoss
2
Condensed Consolidated Balance Sheets
3
Condensed Consolidated Statements of Cash Flows
4
Condensed Consolidated Statements of Changes in Stockholders'Stockholders’ Equity
5
Notes to Condensed Consolidated Statements
6
Note 1: Nature of operations
6
Note 2: Significant accounting policies
6
Note 3: Business combinations
7
Note 4: Discontinued operations and dispositions
8
Note 5: Revenue
8
Note 6: Other operating expenses, net
9
Note 7: Restructuring charges
9
Note 8: Other expense, net
11
Note 9: Employee benefit plans
11
Note 10: Income taxes
11
Note 11: Earnings per share
12
Note 12: Accumulated other comprehensive loss
13
Note 13: Debt
13
Note 14: Supplemental balance sheet information
15
Note 15: Fair value measurements
16
Note 16: Derivatives
16
Note 17: Commitments and contingencies
18
Note 18: Leasing
19
Note 19: Segments
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
22
Item 3. Quantitative and Qualitative Disclosures Aboutabout Market Risk
3833
Item 4. Controls and Procedures
3833
Item 1. Legal Proceedings
3933
Item 1A. Risk Factors
3933
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
3934
Item 3. Defaults Uponupon Senior Securities
3934
Item 4. Mine Safety Disclosures
3934
Item 5. Other Information
3934
Item 6. Exhibits
3935
4036




Table of Contents
PART I.
FINANCIAL INFORMATION


Item 1.Financial Statements

Item 1.Financial Statements
Univar Solutions Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
   Three months ended September 30, Nine months ended September 30,  Three months ended
March 31,
(in millions, except per share data) Note   2017
2016 2017 2016(in millions, except per share data)Note  20202019
Net sales $2,048.7

$1,999.7
 $6,294.5
 $6,261.2
Net sales$2,211.2  $2,160.0  
Cost of goods sold 1,593.9

1,561.6
 4,933.9
 4,947.4
Gross profit $454.8
 $438.1
 $1,360.6
 $1,313.8
Cost of goods sold (exclusive of depreciation)Cost of goods sold (exclusive of depreciation)1,678.6  1,663.6  
Operating expenses:        Operating expenses:
Outbound freight and handling 74.8

76.2
 217.7
 220.8
Outbound freight and handling91.5  82.9  
Warehousing, selling and administrative 228.0

216.0
 687.7
 664.8
Warehousing, selling and administrative279.5  253.4  
Other operating expenses, net 4 11.8

12.1
 55.8
 29.1
Other operating expenses, net64.1  164.8  
Depreciation 32.5

42.4
 102.5
 113.9
Depreciation41.7  33.2  
Amortization 16.8

22.5
 50.0
 67.8
Amortization15.8  14.4  
Impairment charges —
 133.9
 —
 133.9
Total operating expenses $363.9
 $503.1
 $1,113.7
 $1,230.3
Total operating expenses$432.6  $548.7  
Operating income (loss) $90.9
 $(65.0) $246.9
 $83.5
Operating income (loss) $100.0  $(52.3) 
Other (expense) income:        Other (expense) income:
Interest income 0.9

1.1
 2.6
 3.0
Interest income1.0  0.6  
Interest expense (39.3)
(40.6) (112.6) (123.5)Interest expense(29.1) (34.8) 
Loss on sale of businessLoss on sale of business4(8.6) —  
Loss on extinguishment of debt —

—
 (0.8) —
Loss on extinguishment of debt13(1.8) (0.7) 
Other expense, net 6 (7.1)
(3.1) (27.9) (10.8)Other expense, net  8(5.9) (6.1) 
Total other expense $(45.5) $(42.6) $(138.7) $(131.3)Total other expense  $(44.4) $(41.0) 
Income (loss) before income taxes 45.4
 (107.6) 108.2
 (47.8)Income (loss) before income taxes 55.6  (93.3) 
Income tax expense (benefit) 7 6.5

(44.6) 15.4
 (38.6)
Income tax benefit from continuing operations Income tax benefit from continuing operations  10(0.3) (23.3) 
Net income (loss) from continuing operationsNet income (loss) from continuing operations $55.9  $(70.0) 
Net income from discontinued operations Net income from discontinued operations  4$—  $6.1  
Net income (loss) $38.9

$(63.0) $92.8
 $(9.2)Net income (loss) $55.9  $(63.9) 
Income (loss) per common share:        Income (loss) per common share: 
Basic 8 $0.28

$(0.46) $0.66
 $(0.07)
Diluted 8 0.28

(0.46) 0.66
 (0.07)
Basic from continuing operationsBasic from continuing operations11$0.33  $(0.47) 
Basic from discontinued operationsBasic from discontinued operations11—  0.04  
Basic income (loss) per common shareBasic income (loss) per common share $0.33  $(0.43) 
Diluted from continuing operationsDiluted from continuing operations11$0.33  $(0.47) 
Diluted from discontinued operationsDiluted from discontinued operations11—  0.04  
Diluted income (loss) per common shareDiluted income (loss) per common share $0.33  $(0.43) 
Weighted average common shares outstanding:        Weighted average common shares outstanding:
Basic 8 140.4

137.7
 140.0
 137.7
Basic11168.8  149.2  
Diluted 8 141.4

137.7
 141.3
 137.7
Diluted11169.7  149.2  
 











The accompanying notes are an integral part of these condensed consolidated financial statements.

1
Table of Contents
Univar Solutions Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)Loss
(Unaudited)
  Three months ended
March 31,
(in millions)Note  20202019
Net income (loss) $55.9  $(63.9) 
Other comprehensive (loss) income, net of tax:
Impact due to adoption of ASU 2018-02 (1)
12—  (3.2) 
Foreign currency translation12(94.1) 8.2  
Derivative financial instruments12(16.1) (8.3) 
Total other comprehensive loss, net of tax  $(110.2) $(3.3) 
Comprehensive loss  $(54.3) $(67.2) 
(1)Adjusted due to the adoption of Accounting Standards Update (“ASU”) 2018-02 “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” on January 1, 2019.
    Three months ended
September 30,		 Nine months ended
September 30,
(in millions) Note   2017
2016 2017 2016
Net income (loss)   $38.9

$(63.0) $92.8
 $(9.2)
           
Other comprehensive income (loss), net of tax:          
Foreign currency translation 9 56.9

(20.3) 120.1
 46.4
Pension and other postretirement benefit adjustment 9 (0.1)
—
 (0.2) (3.0)
Derivative financial instruments 9 0.9
 —
 0.9
 —
Total other comprehensive income (loss), net of tax   $57.7
 $(20.3) $120.8
 $43.4
Comprehensive income (loss)   $96.6
 $(83.3) $213.6
 $34.2







































The accompanying notes are an integral part of these condensed consolidated financial statements.

2
Table of Contents
Univar Solutions Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions, except per share data)Note  March 31,
2020		December 31,
2019
Assets
Current assets:
Cash and cash equivalents$379.7  $330.3  
Trade accounts receivable, net of allowance for doubtful accounts of $17.4 and $12.9 at March 31, 2020 and December 31, 2019, respectively.141,383.8  1,160.1  
Inventories817.2  796.0  
Prepaid expenses and other current assets206.6  167.2  
Total current assets$2,787.3  $2,453.6  
Property, plant and equipment, net141,120.7  1,152.4  
Goodwill142,249.0  2,280.8  
Intangible assets, net14301.7  320.2  
Deferred tax assets19.2  21.3  
Other assets261.1  266.5  
Total assets$6,739.0  $6,494.8  
Liabilities and stockholders’ equity
Current liabilities:
Short-term financing13$1.1  $0.7  
Trade accounts payable1,027.2  895.0  
Current portion of long-term debt1326.9  25.0  
Accrued compensation95.9  103.6  
Other accrued expenses14439.8  425.1  
Total current liabilities$1,590.9  $1,449.4  
Long-term debt132,860.8  2,688.8  
Pension and other postretirement benefit liabilities286.6  295.6  
Deferred tax liabilities53.4  56.3  
Other long-term liabilities263.7  271.9  
Total liabilities$5,055.4  $4,762.0  
Stockholders’ equity:
Preferred stock, 200.0 million shares authorized at $0.01 par value with 0 shares issued or outstanding as of March 31, 2020 and December 31, 2019$—  $—  
Common stock, 2.0 billion shares authorized at $0.01 par value with 168.9 million and 168.7 million shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively1.7  1.7  
Additional paid-in capital2,974.0  2,968.9  
Accumulated deficit(802.6) (858.5) 
Accumulated other comprehensive loss12(489.5) (379.3) 
Total stockholders’ equity$1,683.6  $1,732.8  
Total liabilities and stockholders’ equity$6,739.0  $6,494.8  

(in millions, except per share data) Note   September 30,
2017		 December 31,
2016
Assets      
Current assets:      
Cash and cash equivalents   $293.9
 $336.4
Trade accounts receivable, net   1,205.3
 950.3
Inventories   792.3
 756.6
Prepaid expenses and other current assets   155.9
 134.8
Total current assets   $2,447.4
 $2,178.1
Property, plant and equipment, net 11 1,019.1
 1,019.5
Goodwill   1,825.9
 1,784.4
Intangible assets, net 11 308.2
 339.2
Deferred tax assets   22.8
 18.2
Other assets   66.7
 50.5
Total assets   $5,690.1
 $5,389.9
Liabilities and stockholders’ equity      
Current liabilities:      
Short-term financing 10 $15.4
 $25.3
Trade accounts payable   945.4
 852.3
Current portion of long-term debt 10 82.8
 109.0
Accrued compensation   97.5
 65.6
Other accrued expenses   224.9
 287.3
Total current liabilities   $1,366.0
 $1,339.5
Long-term debt 10 2,872.6
 2,845.0
Pension and other postretirement benefit liabilities   260.2
 268.6
Deferred tax liabilities   19.6
 17.2
Other long-term liabilities   107.4
 109.7
Total liabilities   $4,625.8
 $4,580.0
Stockholders’ equity:      
Preferred stock, 200.0 million shares authorized at $0.01 par value with no shares issued or outstanding as of September 30, 2017 and December 31, 2016   $—
 $—
Common stock, 2.0 billion shares authorized at $0.01 par value with 140.8 million and 138.8 million shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively   1.4
 1.4
Additional paid-in capital   2,293.1
 2,251.8
Accumulated deficit   (961.1) (1,053.4)
Accumulated other comprehensive loss 9 (269.1) (389.9)
Total stockholders’ equity   $1,064.3
 $809.9
Total liabilities and stockholders’ equity   $5,690.1
 $5,389.9










The accompanying notes are an integral part of these condensed consolidated financial statements.

3
Table of Contents
Univar Solutions Inc.

Condensed Consolidated Statements of Cash Flows
(Unaudited)
   Nine months ended
September 30,		  Three months ended
March 31,
(in millions) Note    2017 2016(in millions)Note   20202019
Operating activities:    Operating activities:
Net income (loss) $92.8
 $(9.2)Net income (loss) $55.9  $(63.9) 
Adjustments to reconcile net income to net cash provided by operating activities:    
Adjustments to reconcile net income (loss) to net cash used by operating activities:Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization 152.5
 181.7
Depreciation and amortization57.5  47.6  
Impairment charges —
 133.9
Amortization of deferred financing fees and debt discount 5.9
 6.0
Amortization of deferred financing fees and debt discount1.6  1.8  
Amortization of pension credit from accumulated other comprehensive loss 9 (0.2) (4.5)
Loss on sale of businessLoss on sale of business48.6  —  
(Gain) loss on sale of property, plant and equipment(Gain) loss on sale of property, plant and equipment(5.3) 0.1  
Loss on extinguishment of debt 0.8
 —
Loss on extinguishment of debt1.8  0.7  
Deferred income taxes (4.0) (57.2)Deferred income taxes(3.5) (28.2) 
Stock-based compensation expense 4 16.0
 7.1
Stock-based compensation expense5.7  6.0  
Other (0.2) (1.0)Other—  0.4  
Changes in operating assets and liabilities:    Changes in operating assets and liabilities:
Trade accounts receivable, net (198.3) (83.2)Trade accounts receivable, net(259.4) (86.6) 
Inventories 1.5
 60.2
Inventories(50.5) (42.9) 
Prepaid expenses and other current assets (15.4) 30.2
Prepaid expenses and other current assets(58.3) (4.2) 
Trade accounts payable 58.1
 40.8
Trade accounts payable165.3  37.3  
Pensions and other postretirement benefit liabilities (34.6) (30.8)Pensions and other postretirement benefit liabilities(5.3) (3.3) 
Other, net (42.3) (49.8)Other, net7.7  11.7  
Net cash provided by operating activities $32.6
 $224.2
Net cash used by operating activities Net cash used by operating activities  $(78.2) $(123.5) 
Investing activities:    Investing activities:
Purchases of property, plant and equipment $(58.0) $(65.9)Purchases of property, plant and equipment$(24.1) $(16.5) 
Purchases of businesses, net of cash acquired (24.4) (54.8)Purchases of businesses, net of cash acquired3—  (1,165.5) 
Proceeds from sale of property, plant and equipment 3.2
 4.1
Proceeds from sale of property, plant and equipment7.6  0.7  
(Payments)/proceeds from sale of business(Payments)/proceeds from sale of business4(8.2) 650.0  
Other (1.2) (1.6)Other(6.2) (1.3) 
Net cash used by investing activities $(80.4) $(118.2)Net cash used by investing activities  $(30.9) $(532.6) 
Financing activities:    Financing activities:
Proceeds from issuance of long-term debt 10 $2,234.0
 $(14.0)Proceeds from issuance of long-term debt13$—  $947.0  
Payments on long-term debt and capital lease obligations 10 (2,267.6) (26.6)
Payments on long-term debt and finance lease obligationsPayments on long-term debt and finance lease obligations13(180.6) (4.6) 
Net proceeds under revolving credit facilitiesNet proceeds under revolving credit facilities13345.9  394.4  
Short-term financing, net 10 (18.9) (11.0)Short-term financing, net136.3  (4.3) 
Financing fees paid (4.4) —
Taxes paid related to net share settlements of stock-based compensation awards (8.0) (0.2)Taxes paid related to net share settlements of stock-based compensation awards(1.3) (2.0) 
Stock option exercises 32.1
 4.7
Stock option exercises0.7  —  
Other 0.5
 0.5
Net cash used by financing activities $(32.3) $(46.6)
Net cash provided by financing activities Net cash provided by financing activities  $171.0  $1,330.5  
Effect of exchange rate changes on cash and cash equivalents $37.6
 $19.6
Effect of exchange rate changes on cash and cash equivalents$(12.5) $(8.0) 
Net (decrease) increase in cash and cash equivalents (42.5) 79.0
Net increase in cash and cash equivalents Net increase in cash and cash equivalents  49.4  666.4  
Cash and cash equivalents at beginning of period 336.4
 188.1
Cash and cash equivalents at beginning of period330.3  121.6  
Cash and cash equivalents at end of period $293.9
 $267.1
Cash and cash equivalents at end of period$379.7  $788.0  
Supplemental disclosure of cash flow information:    Supplemental disclosure of cash flow information:
Cash paid during the period for:Cash paid during the period for:
Income taxesIncome taxes$9.8  $9.9  
Interest, net of capitalized interestInterest, net of capitalized interest18.0  40.3  
Non-cash activities:    Non-cash activities:
Fair value of common stock issued for acquisition of businessFair value of common stock issued for acquisition of business3$—  $649.3  
Additions of property, plant and equipment included in trade accounts payable and other accrued expenses $7.3
 $2.7
Additions of property, plant and equipment included in trade accounts payable and other accrued expenses4.8  12.4  
Additions of property, plant and equipment under a capital lease obligation 17.0
 18.5
Additions of property, plant and equipment under a finance lease obligationAdditions of property, plant and equipment under a finance lease obligation18.0  1.8  
Additions of assets under an operating lease obligationAdditions of assets under an operating lease obligation17.5  2.9  


The accompanying notes are an integral part of these condensed consolidated financial statements.

4
Table of Contents
Univar Solutions Inc.
Condensed Consolidated Statements of Changes in Stockholders'Stockholders’ Equity
(Unaudited)
(in millions)Common
stock
(shares)		Common
stock		Additional
paid-in
capital		Accumulated
deficit		Accumulated
other
comprehensive
loss		Total
Balance, January 1, 2020168.7  $1.7  $2,968.9  $(858.5) $(379.3) $1,732.8  
Net income  —  —  —  55.9  —  55.9  
Foreign currency translation adjustment, net of tax ($4.7)—  —  —  —  (94.1) (94.1) 
Derivative financial instruments, net of tax $7.0—  —  —  —  (16.1) (16.1) 
Restricted stock units vested0.2  —  —  —  —  —  
Tax withholdings related to net share settlements of stock-based compensation awards(0.1) —  (1.3) —  —  (1.3) 
Stock option exercises0.1  —  0.7  —  —  0.7  
Stock-based compensation—  —  5.7  —  —  5.7  
Balance, March 31, 2020168.9  $1.7  $2,974.0  $(802.6) $(489.5) $1,683.6  
(in millions)
Common
stock
(shares)
 
Common
stock
 
Additional
paid-in
capital
 
Accumulated
deficit
 
Accumulated
other
comprehensive
loss
 Total
Balance, December 31, 2015138.0
 $1.4
 $2,224.7
 $(985.0) $(424.4) $816.7
Net loss—
 —
 —
 (68.4) —
 (68.4)
Foreign currency translation adjustment, net of tax $23.9—
 —
 —
 —
 36.3
 36.3
Pension and other postretirement benefits adjustment, net of tax $1.5—
 —
 —
 —
 (1.8) (1.8)
Stock option exercises0.8
 —
 16.9
 —
 —
 16.9
Stock-based compensation—
 —
 10.4
 —
 —
 10.4
Other—
—
—
 (0.2) —
 —
 (0.2)
Balance, December 31, 2016138.8
 $1.4
 $2,251.8
 $(1,053.4)
$(389.9) $809.9
Impact due to adoption of ASU, net of tax $0.2(1)
—
 —
 0.7
 (0.5) —
 0.2
Net income—
 —
 —
 92.8
 —
 92.8
Foreign currency translation adjustment, net of tax ($1.0)—
 —
 —
 —
 120.1
 120.1
Pension and other postretirement benefits adjustment, net of tax $0.0—
 —
 —
 —
 (0.2) (0.2)
Derivative financial instruments, net of tax ($0.5)—
 —
 —
 —
 0.9
 0.9
Restricted stock units vested0.7
 —
 —
 —
 —
 —
Tax withholdings related to net share settlements of stock-based compensation awards(0.3) —
 (8.0) —
 —
 (8.0)
Stock option exercises1.6
 —
 32.1
 —
 —
 32.1
Employee stock purchase plan(2)
—
 —
 0.5
 —
 —
 0.5
Stock-based compensation—
 —
 16.0
 —
 —
 16.0
Balance, September 30, 2017140.8
 $1.4
 $2,293.1
 $(961.1) $(269.1) $1,064.3

(in millions)Common
stock
(shares)		Common
stock		Additional
paid-in
capital		Accumulated
deficit		Accumulated
other
comprehensive
loss		Total
Balance, January 1, 2019141.7  $1.4  $2,325.0  $(761.5) $(373.2) $1,191.7  
Impact due to adoption of ASU (1)
—  —  —  3.2  (3.2) —  
Net loss  —  —  —  (63.9) —  (63.9) 
Foreign currency translation adjustment—  —  —  —  8.2  8.2  
Derivative financial instruments, net of tax $2.8—  —  —  —  (8.3) (8.3) 
Common stock issued for the Nexeo acquisition (2)
27.9  0.3  649.0  —  —  649.3  
Restricted stock units vested0.2  —  —  —  —  —  
Tax withholdings related to net share settlements of stock-based compensation awards(0.1) —  (2.0) —  —  (2.0) 
Stock-based compensation—  —  6.0  —  —  6.0  
Balance, March 31, 2019169.7  $1.7  $2,978.0  $(822.2) $(376.5) $1,781.0  
(1)Adjusted due to the adoption of ASU 2016-09 “Improvement to Employee Share-Based Payment Accounting” on January 1, 2017. Refer to “Note 2: Significant accounting policies” for more information.
(2)During November 2016, our Board of Directors approved the Univar Employee Stock Purchase Plan, or ESPP, authorizing the issuances of up to 2.0 million shares of the Company's common stock effective January 1, 2017. The total number of shares issued under the plan for the first offering period from January through June 2017 was approximately 18,000 shares.

(1)Adjusted due to the adoption of ASU 2018-02 “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” on January 1, 2019.

(2)Refer to “Note 3: Business combinations” for more information.


























The accompanying notes are an integral part of these condensed consolidated financial statements.

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Table of Contents
Univar Solutions Inc.
Notes to Condensed Consolidated Financial Statements
As of September 30, 2017 and
For the Three and Nine Month Periods Ended September 30, 2017 and 2016
(Unaudited)

1. Nature of operations
1.Nature of operations
Headquartered in Downers Grove, Illinois, Univar Solutions Inc. (“the Company” or “Univar”Univar Solutions,” “Company,” “we,” “our” and “us”) is a leading global chemicalschemical and ingredientsingredient distributor and provider of specialty chemicals.value-added services to customers across a wide range of industries. The Company’s operations are structured into four operating4 reportable segments that represent the geographic areas under which the Company manages its business:
•Univar Solutions USA (“USA”)
•Univar Canada (“Canada”)
UnivarSolutions Europe, the Middle East and Africa (“EMEA”)
Rest of World•Univar Solutions Canada (“Rest of World”Canada”)
Rest of World•Univar Solutions Latin America (“LATAM”)
LATAM includes certain developing businesses in Latin America (including Brazil and Mexico) and the Asia-Pacific region.

2. Significant accounting policies
2.
Significant accounting policies
Basis of presentation
The condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) as applicable to interim financial reporting. Unless otherwise indicated, all financial data presented in these condensed consolidated financial statements are expressed in US dollars. These condensed consolidated financial statements, in the Company’s opinion, include all adjustments consisting of normal recurring accruals necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, comprehensive income, cash flows and changes in stockholders’ equity. The results of operations for the periods presented are not necessarily indicative of the operating results that may be expected for the full year. TheseThe accompanying condensed consolidated financial statements should be read in conjunction withof Univar Solutions includes the Company’s Annual Report on Form 10-Kcombined results of all directly and indirectly controlled companies, which have been adjusted to account for the year ended December 31, 2016.
The condensed consolidated financial statements include the financial statementselimination of the Company and its subsidiaries. Subsidiaries are consolidated if the Company has a controlling financial interest, which may exist based on ownership of a majority of the voting interest, or based on the Company’s determination that it is the primary beneficiary of a variable interest entity (“VIE”) or if otherwise required by US GAAP. The Company did not have any material interests in VIEs during the periods presented in these condensed consolidated financial statements. All intercompany balances and transactionstransactions.
On our condensed consolidated statements of cash flows for the three months ended March 31, 2019, the amounts included in “net proceeds under revolving credit facilities,” which were previously included in “proceeds from issuance of long-term debt,” are eliminated in consolidation.now presented separately to conform to the current year presentation.
The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ materially from these estimates. These condensed consolidated financial statements and related footnotes are unaudited and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Recently issued and adopted accounting pronouncements
In March 2016,On January 1, 2020, the FASB issuedCompany adopted ASU 2016-09 “Compensation – Stock Compensation”2016-13 “Financial Instruments - Credit Losses” (Topic 718) – “Improvement326), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. The transition to Employee Share-Based Payment Accounting.” The core principal of the guidance is to simplify several aspects ofnew methodology did not have a significant financial impact and the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. The standard was effective for fiscal years beginning after December 15, 2016, including interim periods within such fiscal years. The guidance was applied using a modified retrospective method by means ofCompany did not recognize a cumulative-effect adjustment to equity asthe opening balance of accumulated deficit.
On January 1, 2020, the beginning ofCompany adopted ASU 2018-13 “Fair Value Measurement” (Topic 820), which modifies the perioddisclosure requirements for fair value measurements by removing, modifying and adding certain disclosures.
On January 1, 2020, the Company adopted ASU 2018-15 “Intangibles - Goodwill and Other - Internal-Use Software” (Subtopic 350-40), which aligns the requirements for capitalizing implementation costs incurred in which the guidance was adopted.a service contract hosting arrangement with those for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted the ASU as of January 1, 2017 which resulted in an increase of $0.5 million, net of tax of $0.2 million, in accumulated deficit and the offset of $0.7 million was recorded in additional paid-in capital within condensed consolidated balance sheet and statements of changes in stockholders' equity.
In October 2016, the FASB issued ASU 2016-17 “Consolidation” (Topic 810) - “Interests Held through Related Parties That Are under Common Control.” The core principle of thethis guidance is to provide amendments to the current consolidation guidance. The revised consolidation guidance modifies howon a reporting entity that is a single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. This guidance was effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company adopted the ASU as of January 1, 2017 and the ASU was applied

retrospectively to all relevant prior periods beginning with the fiscal year in which the amendments in ASU 2015-02 “Consolidation” (Topic 810) - “Amendments to the Consolidation Analysis” were applied. The adoption of this ASU had no material impact on the Company’s condensed consolidated financial statements.prospective basis.
Accounting pronouncements issued and not yet adopted
In May 2014,August 2018, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606)2018-14 “Compensation - Retirement Benefits - Defined Benefit Plans - General” (Subtopic 715-20), which supersedesamends the revenue recognitiondisclosure requirements in Accounting Standards Codification (“ASC”) 605, “Revenue Recognition.” This new revenue standard creates a single source of revenuerelated to defined benefit pension and other postretirement plans. The Company will adopt this guidance for all companies in all industrieseffective January 1, 2021 and is more principles-based thancurrently determining the current revenue guidance. The standard will be effective for public entities for interim and annual reporting periods beginning after December 15, 2017. The core principle of the guidance is that “an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In achieving this objective, an entity must perform five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations of the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. In addition, the standard requires additional new disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.
The Company has established a project team who has completed a review of revenue streams and customer contracts to identify and evaluate the potential impacts of the provisions of ASC 606. The project team is utilizing the conclusions reached regarding customer contracts and revenue streams to complete their analysis of the impact of the standard's requirements upon the Company’s operations and financial reporting. The Company has accumulated information that will be necessary for implementation disclosures and is assessing the impact the adoptionreflected in financial statement disclosures.
6
Table of ASU 2014-09 will have on its consolidated financial statements, related disclosures, and reporting processes. The Company is also in the process of identifying and drafting changes to processes and controls to meet the ASU's updated reporting and disclosure requirements and plans to update its assessment of the impact of the ASU through the date of adoption. Based on the analysis to date, the Company is revising its estimation processes related to arrangements that involve, among other items, revenue deferral where performance to date may have reached right to receive consideration. Identified changes may impact the timing of revenue recognition between quarters. The Company expects to adopt the new standard using the modified retrospective approach, under which the cumulative effect of initially applying the guidance is recognized as an adjustment to the opening balance of retained earnings in the first quarter of 2018 for contracts that are currently deferred but will be recognized as revenue as the Company will reach its right to consideration, and disclose all line items in the year of adoption as if they were prepared under the old revenue guidance.Contents
In March 2017,December 2019, the FASB issued ASU 2017-07 “Compensation - Retirement Benefits”2019-12 “Income Taxes” (Topic 715) - “Improving740) – “Simplifying the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.Accounting for Income Taxes.” The Company will adopt this guidance effective January 1, 2021 and is currently determining the impacts of the guidance on our consolidated financial statements.
In March 2020, the FASB issued ASU requires entities2020-04 “Reference Rate Reform” (Topic 848) – “Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides optional expedients and exceptions for applying US GAAP to disaggregatecontracts, hedging relationships, and other transactions affected by reference rate reform from currently referenced rates, such as LIBOR, to alternative rates.The ASU is effective beginning March 12, 2020 and the service cost component fromCompany may elect to apply the other componentsamendments prospectively through December 31, 2022.The Company is currently determining the impacts of the guidance on our consolidated financial statements.
3. Business combinations
2019 Acquisition
Acquisition of Nexeo Solutions
On February 28, 2019, the Company completed an acquisition of 100% of the equity interest of Nexeo Solutions, Inc. (“Nexeo”), a leading global chemicals and plastics distributor. The acquisition expands and strengthens Univar Solutions’ presence in North America and provides expanded opportunities to create the largest North American sales force in chemical and ingredients distribution and the broadest product offering.
The total purchase price of the acquisition was $1,814.8 million, composed of $1,201.0 million of cash paid (net of cash acquired of $46.8 million) and $613.8 million of newly issued shares of Univar Solutions common stock, which represented approximately 26.4 million shares, based on Univar Solutions’ closing stock price of $23.29 on February 27, 2019. The final 26.4 million shares issued include the cancellation of 1.5 million shares in connection with the appraisal litigation settlement during the second quarter of 2019.
As of March 31, 2020, the Company updated the purchase price allocation to reflect the final deferred income taxes adjustments. The adjustments to these balances resulted in a $7.0 million increase to goodwill. The accounting for this acquisition is complete as of March 31, 2020.
The final purchase price allocation and measurement period adjustments are shown below:
(in millions)As of December 31, 2019Measurement Period AdjustmentsFinal
March 31, 2020
Trade accounts receivable, net$296.3  $—  $296.3  
Inventories150.2  —  150.2  
Prepaid expenses and other current assets65.4  (1.2) 64.2  
Assets held for sale888.2  —  888.2  
Property, plant and equipment, net262.3  —  262.3  
Goodwill555.7  7.0  562.7  
Intangible assets, net138.7  —  138.7  
Other assets37.4  (0.4) 37.0  
Trade accounts payable(137.7) —  (137.7) 
Other accrued expenses(145.8) 1.3  (144.5) 
Liabilities held for sale(221.5) —  (221.5) 
Deferred tax liabilities(4.2) (6.7) (10.9) 
Other long-term liabilities(70.2) —  (70.2) 
Purchase consideration, net of cash$1,814.8  $—  $1,814.8  
Assets and liabilities held for sale are related to the Nexeo plastics distribution business (“Nexeo Plastics”). Nexeo Plastics was not aligned with the Company’s strategic objectives and, on March 29, 2019, the business was sold for total net periodic benefit costsproceeds of $664.3 million. Refer to “Note 4: Discontinued operations and present it with other current compensation costsdispositions” for related employeesfurther information.
The Company recorded $562.7 million of goodwill, consisting of $547.1 million in the income statement,USA segment, $3.8 million in Canada and present the other component elsewhere$11.8 million in the income statement and outsideLATAM. The goodwill is primarily attributable to expected synergies from combining operations. The Company expects approximately $76.0 million of income from operations if that subtotal is presented. The amendments in this update also allow only the service cost componentgoodwill to be eligibledeductible for capitalization when applicable. income tax purposes.
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The guidanceCompany assumed 50.0 million warrants, equivalent to 25.0 million Nexeo shares, with an estimated aggregate fair value of $26.0 million at the February 28, 2019 closing date. The warrants were converted into the right to receive, upon exercise, the merger consideration consisting of approximately 7.6 million shares of Univar Solutions common stock plus cash. The warrants have an exercise price of $27.80 and will expire on June 9, 2021. The warrants are recorded as other long-term liabilities within the condensed consolidated balance sheet. Refer to “Note 15: Fair value measurements” for more information.
4. Discontinued operations and dispositions
Discontinued operations
On March 29, 2019, the Company completed the sale of Nexeo Plastics to an affiliate of One Rock Capital Partners, LLC (“Buyer”) for total proceeds of $664.3 million (net of cash disposed of $2.4 million), including $26.7 million for a working capital adjustment. The Nexeo purchase price allocation is to be applied retrospectively for all periods presented. The standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within such fiscal years.inclusive of these working capital adjustments. Refer to “Note 3: Employee benefit plans”Business combinations” for our componentsmore information.
In connection with the transaction, the Company entered into a Transition Services Agreement (TSA), a Warehouse Service Agreement (WSA) and Real Property Agreements with the Buyer which are designed to ensure and facilitate an orderly transfer of net periodic benefit cost.
In May 2017,business operations and will terminate at various times, between six and twenty-four months and can be renewed with a maximum of 2 twelve-month periods. The income and expense for the FASB issued ASU 2017-09 “Compensation - Stock Compensation” (Topic 718) - “Scope of Modification Accounting.” The ASU provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The standardservices will be effective for fiscal years beginning after December 15, 2017, including interim periods within such fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance is to be applied prospectively. The Company is evaluating the impact of the ASU on its consolidated financial statements.
In August 2017, the FASB issued ASU 2017-12 “Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities.” The ASU better aligns hedge accounting with an entity’s risk management activities, simplifies the application of hedge accounting, and improves transparencyreported as to the scope and results of hedging programs. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. Early adoption is permitted in any interim period after issuance of the ASU. The guidance is to be applied using a modified retrospective approach to existing hedging relationships as of the adoption date. The amended presentation and disclosure guidance is required only prospectively. The Company is evaluating the impact of the ASU on its consolidated financial statements.


3.Employee benefit plans
The following table summarizes the components ofother operating expenses, net periodic benefit recognized in the condensed consolidated statements of operations:operations. The Real Property Agreements will have a maximum tenure of three years. These arrangements do not constitute significant continuing involvement in Nexeo Plastics. 
The following table summarizes the operating results of Nexeo Plastics for the period from March 1, 2019 to March 31, 2019, as presented in “Net income from discontinued operations” on the condensed consolidated statements of operations.
  Domestic - Defined Benefit Pension Plans
 
Three months ended
September 30,
Nine months ended
September 30,
(in millions)
2017
2016
2017
2016
Service cost $—
 $—
 $—
 $—
Interest cost
7.7

8.0

23.1
 24.0
Expected return on plan assets
(7.7)
(8.2)
(23.2) (24.4)
Net periodic benefit
$—

$(0.2)
$(0.1)
$(0.4)

  Foreign - Defined Benefit Pension Plans
  Three months ended
September 30,		 Nine months ended
September 30,
(in millions) 2017 2016 2017 2016
Service cost $0.6
 $0.6
 $1.8
 $1.9
Interest cost 4.1
 4.6
 12.0
 14.0
Expected return on plan assets (6.6) (7.1) (19.3) (22.0)
Prior service credits (0.2) —
 (0.2) —
Net periodic benefit $(2.1) $(1.9) $(5.7) $(6.1)

  Other Postretirement Benefits    
  Three months ended
September 30,		 Nine months ended
September 30,
(in millions) 2017 2016 2017 2016
Service cost $—
 $—
 $—
 $—
Interest cost —
 —
 0.1
 0.2
Prior service credits —
 —
 —
 (4.5)
Net periodic cost (benefit) $—
 $—
 $0.1
 $(4.3)

4.
(in millions)		Three months ended March 31, 2019
External sales$156.9 
Cost of goods sold (exclusive of depreciation)136.7 
Outbound freight and handling3.5 
Warehousing, selling and administrative7.9 
Other operating expenses net1.4 
Income from discontinued operations before income taxes $7.4 
Income tax expense from discontinued operations 1.3 
Net income from discontinued operations $6.1 
There were no significant non-cash operating activities from the Company’s discontinued operations related to Nexeo Plastics.
Dispositions
On December 31, 2019, the Company completed the sale of the Environmental Sciences business to affiliates of AEA Investors LP for total cash proceeds of $174.0 million (net of cash disposed of $0.7 million and $5.9 million of transaction expenses) plus a $5.0 million ($2.4 million present value) subordinated note receivable (the “Transaction”) and recorded a pre-tax gain on sale of $41.4 million. In the first quarter of 2020, we recorded a net working capital adjustment of $8.2 million, reducing the proceeds and the gain on sale recorded in the fourth quarter of 2019. The sale of the business did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements because the disposition did not represent a strategic shift, that has, or will have, a major effect on the Company's operations and financial results.
The following summarizes the income before income taxes attributable to the Environmental Sciences business:
(in millions)Three months ended March 31, 2019
Income before income taxes $2.2 

5. Revenue
The Company disaggregates revenues from contracts with customers by both geographic reportable segments and revenue contract types. Geographic reportable segmentation is pertinent to understanding Univar Solutions’ revenues, as it aligns to how the Company reviews the financial performance of its operations. Revenue contract types are differentiated by the type of good or service Univar Solutions offers customers, since the contractual terms necessary for revenue recognition are unique to each of the identified revenue contract types.
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The following tables disaggregate external customer net sales by major stream:
USAEMEACanadaLATAMConsolidated
(in millions)Three months ended March 31, 2020
Chemical Distribution$1,270.5  $459.9  $208.3  $105.3  $2,044.0  
Crop Sciences—  —  64.4  —  64.4  
Services87.0  0.4  13.1  2.3  102.8  
Total external customer net sales$1,357.5  $460.3  $285.8  $107.6  $2,211.2  

USAEMEACanadaLATAMConsolidated
(in millions)Three months ended March 31, 2019
Chemical Distribution$1,247.5  $483.4  $211.7  $92.6  $2,035.2  
Crop Sciences—  —  50.5  —  50.5  
Services59.7  0.3  11.6  2.7  74.3  
Total external customer net sales$1,307.2  $483.7  $273.8  $95.3  $2,160.0  
Deferred revenue
Deferred revenues are recognized as a contract liability when customers provide Univar Solutions with consideration prior to the Company satisfying a performance obligation. The following table provides information pertaining to the deferred revenue balance and account activity:
(in millions)
Deferred revenue as of January 1, 2020$65.5 
Deferred revenue as of March 31, 202043.0 
Revenue recognized that was included in the deferred revenue balance at the beginning of the period63.9 
The deferred revenue balances are all expected to have a duration of one year or less and are recorded within the other accrued expenses line item of the condensed consolidated balance sheets.
6. Other operating expenses, net
Other operating expenses, net consisted of the following activity:following:
 Three months ended
March 31,
(in millions)20202019
Acquisition and integration related expenses$17.5  $77.1  
Stock-based compensation expense5.7  6.0  
Restructuring charges2.5  0.1  
Other employee severance costs5.5  12.9  
Other facility closure costs1.9  —  
Saccharin legal settlement—  62.5  
Fair value adjustment for warrants(26.3) (4.4) 
(Gain) loss on sale of property, plant and equipment(5.3) 0.1  
Other2.6  10.5  
Total other operating expenses, net$4.1  $164.8  

7. Restructuring charges
  Three months ended
September 30,		 Nine months ended
September 30,
(in millions) 2017 2016 2017 2016
Acquisition and integration related expenses $1.3
 $1.2
 $2.0
 $5.5
Stock-based compensation expense 4.5
 3.6
 16.0
 7.1
Restructuring charges 0.9
 1.8
 4.4
 8.3
Business transformation costs 3.0
 3.0
 23.6
 3.0
Other employee termination costs 2.8
 0.1
 5.9
 0.1
Other (0.7) 2.4
 3.9
 5.1
Total other operating expenses, net $11.8
 $12.1
 $55.8
 $29.1



5.Restructuring charges
Restructuring charges relate to the implementation of several regional strategic initiatives aimed at streamlining the Company’s cost structure and improving its operations. These actions primarily resulted in workforce reductions lease termination costs and other facility rationalization costs. Restructuring charges are recorded in other operating expenses, net in the condensed consolidated statement of operations.
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2020 Restructuring
During 2020, management approved a plan to implement a new structure designed to streamline and accelerate the opportunities between the Canadian and United States operations. The reporting structure in Canada was condensed and realigned to report under the leadership in the United States for commercial, operations, human resources and finance. The actions associated with this program are expected to be completed by the end of the second quarter of 2020. As a result, we recorded the following charges:
(in millions)Three months ended March 31, 2020Anticipated total costs
Canada:
Employee termination costs$2.3  $3.4  
2018 Restructuring
During 2018, management approved a plan to consolidate departments. The actions associated with this program were substantially complete as of March 31, 2020, although cash payments will be made into the future. The following table presents cost information related to restructuring plansa summary of the financial impacts of that have not been completed as of September 30, 2017 and does not contain any estimates for plans that may be developed and implemented in future periods.plan:
(in millions) USA Canada EMEA ROW Other Total(in millions)Three months ended March 31, 2020Cumulative costsAnticipated total costs
Anticipated total costs            
USA:USA:
Employee termination costs $16.8
 $5.7
 $21.6
 $6.1
 $5.8
 $56.0
Employee termination costs$0.1  $5.6  $5.6  
Facility exit costs 22.9
 —
 3.8
 0.2
 —
 26.9
Other exit costs 1.7
 —
 6.8
 —
 0.8
 9.3
Other exit costs—  0.1  0.1  
Total $41.4
 $5.7
 $32.2
 $6.3
 $6.6
 $92.2
Total$0.1  $5.7  $5.7  
            
Incurred to date costs            
Inception of plans through September 30, 2017            
Other:Other:
Employee termination costs $16.8
 $5.7
 $21.6
 $6.1
 $5.8
 $56.0
Employee termination costs$0.1  $1.3  $1.3  
Facility exit costs 21.5
 —
 3.8
 0.2
 —
 25.5
Total:Total:
Employee termination costsEmployee termination costs$0.2  $6.9  $6.9  
Other exit costs 1.7
 —
 6.8
 —
 0.8
 9.3
Other exit costs—  0.1  0.1  
Total $40.0
 $5.7
 $32.2
 $6.3
 $6.6
 $90.8
Total$0.2  $7.0  $7.0  
            
Inception of plans through December 31, 2016            
Employee termination costs $16.8
 $5.2
 $21.6
 $4.4
 $5.8
 $53.8
Facility exit costs 19.6
 —
 3.5
 0.2
 —
 23.3
Other exit costs 1.7
 —
 6.8
 —
 0.8
 9.3
Total $38.1
 $5.2
 $31.9
 $4.6
 $6.6
 $86.4
The following table summarizes activity related to accrued liabilities associated with restructuring:
(in millions)January 1, 2020Charge to 
earnings		Cash
paid		Non-cash 
and other		March 31, 2020
Employee termination costs$3.7  $2.5  $(2.9) $(0.1) $3.2  
Facility exit costs1.9  —  (0.5) —  1.4  
Other exit costs0.2  —  —  —  0.2  
Total$5.8  $2.5  $(3.4) $(0.1) $4.8  
(in millions) January 1, 2017 
Charge to  
earnings
 
Cash    
paid
 
Non-cash    
and other
 September 30, 2017
Employee termination costs $6.9
 $1.7
 $(6.0) $0.3
 $2.9
Facility exit costs 13.2
 2.7
 (4.6) —
 11.3
Other exit costs —
 —
 —
 —
 —
Total $20.1
 $4.4
 $(10.6) $0.3
 $14.2


(in millions) January 1, 2016 
Charge to  
earnings
 
Cash    
paid
 
Non-cash    
and other
 December 31, 2016(in millions)January 1, 2019Charge to 
earnings		Cash 
paid		Non-cash 
and other		December 31, 2019
Employee termination costs $31.0
 $0.4
 $(24.5) $—
 $6.9
Employee termination costs$4.2  $2.5  $(3.0) $—  $3.7  
Facility exit costs 15.5
 6.0
 (8.3) —
 13.2
Facility exit costs5.0  0.1  (3.2) —  1.9  
Other exit costs 0.1
 0.1
 (0.2) —
 —
Other exit costs0.2  —  —  —  0.2  
Total $46.6
 $6.5
 $(33.0) $—
 $20.1
Total$9.4  $2.6  $(6.2) $—  $5.8  
Restructuring liabilities of $6.2$4.3 million and $10.1$5.3 million were classified as current in other accrued expenses in the condensed consolidated balance sheets as of September 30, 2017March 31, 2020 and December 31, 2016,2019, respectively. The long-term portion of restructuring liabilities of $8.0 million and $10.0$0.5 million were recorded in other long-term liabilities in the condensed consolidated balance sheets as of September 30, 2017March 31, 2020 and December 31, 2016, respectively,2019, and primarily consists of facility exit costs that are expected to be paid within the next fourfive years.
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The cost information above does not contain any estimates for programs that may be developed and implemented in future periods. While the Company believes the recorded restructuring liabilities are adequate, revisions to current estimates may be recorded in future periods based on new information as it becomes available.

6.Other expense, net
8. Other expense, net
Other expense, net consisted of the following gains (losses):following:
 Three months ended
March 31,
(in millions)20202019
Foreign currency transactions$(0.8) $(0.7) 
Foreign currency denominated loans revaluation0.2  5.2  
Undesignated foreign currency derivative instruments (1)
(2.0) (9.9) 
Undesignated swap contracts (1)
(4.8) 0.2  
Non-operating retirement benefits (2)
2.2  0.6  
Debt refinancing costs(0.1) —  
Other(0.6) (1.5) 
Total other expense  $(5.9) $(6.1) 
(1)Refer to “Note 16: Derivatives” for more information.
(2)Refer to “Note 9: Employee benefit plans” for more information.
9. Employee benefit plans
  Three months ended
September 30,		 Nine months ended
September 30,
(in millions) 2017
2016 2017 2016
Foreign currency transactions $(0.4)
$(0.3) $(4.3) $(2.7)
Foreign currency denominated loans revaluation (6.8)
(4.4) (15.2) (13.7)
Undesignated foreign currency derivative instruments (1)
 (0.6)
(0.2) 1.6
 0.8
  Undesignated interest rate swap contracts (1)
 1.8

2.0
 (3.0) 4.2
Debt amendment costs (2)
 —

—
 (4.2) —
Other (1.1)
(0.2) (2.8) 0.6
Total other expense, net $(7.1) $(3.1) $(27.9) $(10.8)
(1)Refer to “Note 13: Derivatives” for more information.
(2)Refer to “Note 10: Debt” for more information.

7.Income taxes
The Company’s tax provision for interim periods is determined using an estimatefollowing table summarizes the components of the annual effective tax rate, adjusted for discrete items, if any, that are taken into accountnet periodic (benefit) cost recognized in the relevant period. Each quarter, an estimatecondensed consolidated statements of the annual effective tax rateoperations:
Domestic - Defined Benefit Pension PlansForeign - Defined Benefit Pension Plans
 Three months ended
March 31,		Three months ended
March 31,
(in millions)2020201920202019
Service cost (1)
$—  $—  $0.5  $0.6  
Interest cost (2)
5.8  6.8  3.1  3.9  
Expected return on plan assets (2)
(7.1) (6.3) (4.0) (5.0) 
Net periodic (benefit) cost$(1.3) $0.5  $(0.4) $(0.5) 
(1)Service cost is updated should management revise its forecast of earnings based upon the Company’s operating results. If there is a changeincluded in the estimated effective annual tax rate, a cumulative adjustment is made. The quarterly tax provisionwarehouse, selling and forecast estimate of the annual effective tax rate may be subject to volatility due to several factors, including the complexityadministrative expenses.
(2)These amounts are included in forecasting jurisdictional earnings before tax, the rate of realization of forecasting earnings or losses by quarter, acquisitions, divestitures, foreign currency gains and losses, pension gains and losses, etc.other expense, net.
10. Income taxes
The income tax expense for the threebenefit and nine months ended September 30, 2017 was $6.5 million and $15.4 million, resulting in an effective tax rate of 14.3% and 14.2%, respectively. The Company’s effectiveincome tax rate for the three monthmonths ended March 31, 2020 and nine month periods ended September 30, 20172019 were as follows:
Three months ended March 31,
(dollars in millions)20202019
Income tax benefit$0.3  $23.3  
Effective income tax rate(0.5)%25.0 %
A discrete tax benefit of $9.0 million was lower thanincluded in the US federal statutory rate of 35.0%$0.3 million tax benefit, primarily dueattributable to the mixutilization of earnings in multiple jurisdictions, non-taxablepreviously disallowed US interest incomeexpense driven by the enactment of the Coronavirus Aid, Relief and the release of a valuation allowance on certain foreign tax attributes. Included in the $6.5 million and $15.4 million expense for the three and nine months ended September 30, 2017 was a $0.5 million and $4.0 million benefit, respectively, related to excess tax benefits from share-based compensation.
The income tax benefit for the three and nine months ended September 30, 2016 was $44.6 million and $38.6 million, resulting in an effective tax rate of 41.4% and 80.8%, respectively.Economic Security Act (“CARES Act”). The Company’s effective income tax rate for three months ended September 30, 2016without discrete items was 30.0%, higher than the US federal statutory rate of 35.0%21.0% primarily due to the miximpact of earningsthe higher tax rates in multipleforeign jurisdictions, non-taxable interestnon-deductible expenses and US state income andtaxes.
For the releaseprior year quarter, a discrete tax benefit of a valuation allowance on certain foreign$10.2 million, substantially attributable to the indirect effects of the Nexeo Plastics sale, was included in the $23.3 million tax attributes.benefit. The Company'sCompany’s effective income tax rate for the nine months ended September 30, 2016without discrete items was 42.6%, higher than the US federal statutory rate of 21.0%. This is primarily due to the miximpact of earningsthe Nexeo related
11
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acquisition and integration costs, along with state taxes, foreign rate differential, non-deductible compensation and other expenses, and an increase in multiple jurisdictions, non-taxable interest income and the release of a valuation allowance on certain foreignincome tax attributes.
Canadian General Anti-Avoidance Rule matters
In 2007, the outstanding shares of Univar N.V., the ultimate public company parent of the Univar group at that time, were acquired by investment fundsadvised by CVC. To facilitate the acquisition and leveraged financing of Univar N.V. by CVC, a restructuring of some of the companies in the Univar group,including its Canadian operating company, was completed (the “Restructuring”). In February 2013, the Canada Revenue Agency (“CRA”) issued a Notice ofAssessment, asserting the General Anti-Avoidance Rule (“GAAR”) against the Company’s subsidiary Univar Holdco Canada ULC (“Univar Holdco”) for withholding tax of $29.4 million (Canadian), relating to this Restructuring. Univar Holdco appealed the assessment, and the matter was litigated in the Tax Court of Canada in June 2015. On June 22, 2016, the Tax Court of Canada issued its judgment in favor of the CRA. The Company subsequently appealed the judgment and a trial in the Federal Court of Canada occurred on May 10, 2017. On October 13, 2017, the Federal Court of Appeals issued its judgment in favor of the Company, ruling the Canadian restructuring was not subject to the GAAR, reversing the lower court's ruling and remanding the matter to the Canadian Ministry of Finance for further action consistent with its decision. The Canadian Ministry of Finance has until December 12, 2017 to appeal the judgment to the Canadian Supreme Court. A $52.1 million (Canadian) Letter of Credit, covering the initial assessment of $29.4 million (Canadian) and interest of $22.7 million (Canadian), issued with respect to this assessment is currently outstanding.11. Earnings per share
In September 2014, also relating to the Restructuring, the CRA issued the 2008 and 2009 Notice of Reassessments for federal corporate income tax liabilities of $11.9 million (Canadian) and $11.0 million (Canadian), respectively, and a departure tax liability

of $9.0 million (Canadian). Likewise, in April 2015, the Company’s subsidiary received the 2008 and 2009 Alberta Notice of Reassessments of $6.0 million (Canadian) and $5.8 million (Canadian), respectively. These Reassessments reflect the additional tax liability and interest relating to those tax years should the CRA be successful in its assertion of the GAAR relating to the Restructuring described above. In accordance with the CRA's collection procedures, a $21.0 million (Canadian) Letter of Credit had been issued with respect to the federal assessment.
At September 30, 2017, the total Canadian federal and provincial tax liability assessed related to these matters, inclusive of interest of $42.9 million (Canadian), is $116.0 million (Canadian). The Company has not recorded any liabilities for these matters in its financial statements. The Company has notified the CRA of its intention to cancel both Letters of Credit previously provided on these matters in light of the favorable decision reached by the Canadian Federal Court of Appeal.

8.Earnings per share
The following table presents the basic and diluted earnings per share computations:
 Three months ended March 31,
(in millions, except per share data)20202019
Numerator:
Net income (loss) from continuing operations $55.9  $(70.0) 
Net income from discontinued operations  —  6.1  
Net income (loss) $55.9  $(63.9) 
Denominator:
Weighted average common shares outstanding – basic168.8  149.2  
Effect of dilutive securities: stock compensation plans0.9  —  
Weighted average common shares outstanding – diluted169.7  149.2  
Basic:
Basic income (loss) per common share from continuing operations $0.33  $(0.47) 
Basic income per common share from discontinued operations  —  0.04  
Basic income (loss) per common share $0.33  $(0.43) 
Diluted:
Diluted income (loss) per common share from continuing operations $0.33  $(0.47) 
Diluted income per common share from discontinued operations  —  0.04  
Diluted income (loss) per common share $0.33  $(0.43) 
The shares that were not included in the computation of diluted earnings per share for those periods because their inclusion would be anti-dilutive were as follows:
 Three months ended March 31,
(in millions, common shares)20202019
Stock options  3.9  2.8  
Restricted stock  1.2  0.7  
Warrants  7.6  0.8  

12
  Three months ended September 30, Nine months ended September 30,
(in millions, except per share data) 2017 2016 2017 2016
Basic:        
Net income (loss) $38.9
 $(63.0) $92.8
 $(9.2)
Less: earnings allocated to participating securities 0.1
 —
 0.2
 —
Earnings allocated to common shares outstanding $38.8
 $(63.0) $92.6
 $(9.2)
Weighted average common shares outstanding 140.4
 137.7
 140.0
 137.7
Basic income (loss) per common share $0.28
 $(0.46) $0.66
 $(0.07)
Diluted:        
Net income (loss) $38.9
 $(63.0) $92.8
 $(9.2)
Less: earnings allocated to participating securities —
 —
 —
 —
Earnings allocated to common shares outstanding $38.9
 $(63.0) $92.8
 $(9.2)
Weighted average common shares outstanding 140.4
 137.7
 140.0
 137.7
Effect of dilutive securities: stock compensation plans (1)
 1.0
 —
 1.3
 —
Weighted average common shares outstanding – diluted 141.4
 137.7
 141.3
 137.7
Diluted income (loss) per common share $0.28
 $(0.46) $0.66
 $(0.07)
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12. Accumulated other comprehensive loss
(1)Stock options to purchase 0.9 million and 3.2 million shares of common stock were outstanding during the three months ended September 30, 2017 and 2016, respectively, but were not included in the calculation of diluted income per share as the impact of these stock options would have been anti-dilutive. Stock options to purchase 0.8 million and 4.0 million shares of common stock were outstanding during the nine months ended September 30, 2017 and 2016, respectively, but were not included in the calculation of diluted income per share as the impact of these stock options would have been anti-dilutive.


9.Accumulated other comprehensive loss
The following tables present the changes in accumulated other comprehensive loss by component, net of tax:
(in millions)Cash flow hedgesDefined
benefit
pension items		Currency
translation
items		Total
Balance as of December 31, 2019$(15.4) $(1.0) $(362.9) $(379.3) 
Other comprehensive loss before reclassifications(11.1) —  (94.1) (105.2) 
Amounts reclassified from accumulated other comprehensive loss(5.0) —  —  (5.0) 
Net current period other comprehensive loss  $(16.1) $—  $(94.1) $(110.2) 
Balance as of March 31, 2020$(31.5) $(1.0) $(457.0) $(489.5) 
Balance as of December 31, 2018$8.9  $(1.1) $(381.0) $(373.2) 
Impact due to adoption of ASU 2018-02 (1)
1.5  —  (4.7) (3.2) 
Other comprehensive (loss) income before reclassifications(5.5) —  8.2  2.7  
Amounts reclassified from accumulated other comprehensive loss(2.8) —  —  (2.8) 
Net current period other comprehensive (loss) income$(6.8) $—  $3.5  $(3.3) 
Balance as of March 31, 2019$2.1  $(1.1) $(377.5) $(376.5) 
(in millions) Cash flow hedges 
Defined
benefit
pension items
 
Currency
translation
items
 Total
Balance as of December 31, 2016 $—
 $1.2
 $(391.1) $(389.9)
Other comprehensive income before reclassifications (0.3) —
 120.1
 119.8
        Amounts reclassified from accumulated other comprehensive loss 1.2
 (0.2) —
 1.0
Net current period other comprehensive (loss) income $0.9
 $(0.2) $120.1
 $120.8
Balance as of September 30, 2017 $0.9
 $1.0
 $(271.0) $(269.1)
         
Balance as of December 31, 2015 $—
 $3.0
 $(427.4) $(424.4)
Other comprehensive income before reclassifications —
 —
 46.4
 46.4
Amounts reclassified from accumulated other comprehensive loss —
 (3.0) —
 (3.0)
Net current period other comprehensive (loss) income $—
 $(3.0) $46.4
 $43.4
Balance as of September 30, 2016 $—
 $—
 $(381.0) $(381.0)
(1)Adjusted due to the adoption of ASU 2018-02 “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” on January 1, 2019.

The following is a summary of the amounts reclassified from accumulated other comprehensive loss to net income:
income (loss):
  Three months ended September 30,  
(in millions) 
2017 (1)
 
2016 (1)
 
Location of impact on
  statement of operations  
Amortization of defined benefit pension items:      
Prior service credits $(0.1) $—
 Warehousing, selling and administrative
Tax expense —
 —
 Income tax expense (benefit)
Net of tax $(0.1) $—
  
Cash flow hedges:      
Interest rate swap contracts $1.9
 $—
 Interest expense
Tax benefit (0.7) —
 Income tax expense (benefit)
Net of tax $1.2
 $—
  
Total reclassifications for the period $1.1
 $—
  
Three months ended March 31,Location of impact on
  statement of operations  
(in millions)
2020 (1)
2019 (1)
Cash flow hedges:
Interest rate swap contracts$0.9  $(3.8) Interest expense
Cross-currency swap contracts(8.1) —  Interest expense and other expense, net
Tax expense2.2  1.0  Income tax benefit
Total reclassifications for the period, net of tax$(5.0) $(2.8) 

  Nine months ended September 30,  
(in millions) 
2017 (1)
 
2016 (1)
 
Location of impact on
  statement of operations  
Amortization of defined benefit pension items:      
Prior service credits $(0.2) $(4.5) Warehousing, selling and administrative
Tax expense —
 1.5
 Income tax expense (benefit)
Net of tax $(0.2) $(3.0)  
Cash flow hedges:      
Interest rate swap contracts $1.9
 $—
 Interest expense
Tax benefit (0.7) —
 Income tax expense (benefit)
Net of tax $1.2
 $—
  
Total reclassifications for the period $1.0
 $(3.0)  
(1)(1)Amounts in parentheses indicate credits to net income in the condensed consolidated statement of operations.
Refer to “Note 3: Employee benefit plans” for additional information regarding the amortization of defined benefit pension items.

Foreign currency gains and losses relating to intercompany borrowings that are considered a part of the Company’s investment in a foreign subsidiary are reflected in accumulated other comprehensive loss. Total foreign currency gains and losses related to such intercompany borrowings were $4.3 million which include $4.0 million of previously deferred losses that were realized as foreign currency expensenet income (loss) in the three month period ended September 30, 2017 and $4.4 million in losses for the three month period ended September 30, 2016. Total foreign currency gains and losses related to such intercompany borrowings were $4.8 million and $24.4 million in losses for the nine month periods ended September 30, 2017 and 2016, respectively.condensed consolidated statement of operations.

13. Debt
10.Debt
Short-term financing
Short-term financing consisted of the following:

(in millions) September 30, 2017 December 31, 2016(in millions)March 31, 2020December 31, 2019
Amounts drawn under credit facilities $9.0
 $12.1
Amounts drawn under credit facilities$0.5  $0.5  
Bank overdrafts 6.4
 13.2
Bank overdrafts0.6  0.2  
Total short-term financing $15.4
 $25.3
Total short-term financing$1.1  $0.7  
As of September 30, 2017March 31, 2020 and December 31, 2016,2019, the Company had $206.1$152.1 million and $175.3$158.5 million in outstanding letters of credit, and guarantees, respectively.
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Long-term debt
Long-term debt consisted of the following:

(in millions) September 30, 2017 December 31, 2016(in millions)March 31, 2020December 31, 2019
Senior Term Loan Facilities:



Senior Term Loan Facilities:
Term B Loan Due 2022, variable interest rate of 3.99% and 4.25% at September 30, 2017 and December 31, 2016, respectively
$2,183.5

$2,024.4
Euro Tranche Term Loan Due 2022, variable interest rate of 4.25% at September 30, 2017 and December 31, 2016
95.5

259.9
Term B-3 Loan due 2024, variable interest rate of 3.70% and 4.05% at March 31, 2020 and December 31, 2019, respectivelyTerm B-3 Loan due 2024, variable interest rate of 3.70% and 4.05% at March 31, 2020 and December 31, 2019, respectively$1,264.1  $1,438.0  
Term B-5 Loan due 2026, variable interest rate of 3.45% and 3.80% at March 31, 2020 and December 31, 2019, respectivelyTerm B-5 Loan due 2026, variable interest rate of 3.45% and 3.80% at March 31, 2020 and December 31, 2019, respectively399.0  400.0  
Asset Backed Loan (ABL) Facilities:



Asset Backed Loan (ABL) Facilities:
North American ABL Facility Due 2020, variable interest rate of 3.29% and 4.25% at September 30, 2017 and December 31, 2016, respectively
202.5

152.0
North American ABL Term Loan Due 2018, variable interest rate of 4.08% and 3.75% at September 30, 2017 and December 31, 2016, respectively
33.3

83.3
North American ABL Facility due 2024, variable interest rate of 2.00% and 5.25% at March 31, 2020 and December 31, 2019, respectivelyNorth American ABL Facility due 2024, variable interest rate of 2.00% and 5.25% at March 31, 2020 and December 31, 2019, respectively478.4  200.0  
Canadian ABL Term Loan due 2022, variable interest rate of 3.33% and 4.31% at March 31, 2020 and December 31, 2019, respectivelyCanadian ABL Term Loan due 2022, variable interest rate of 3.33% and 4.31% at March 31, 2020 and December 31, 2019, respectively120.9  130.9  
Euro ABL Facility due 2023, variable interest rate of 1.75% at March 31, 2020Euro ABL Facility due 2023, variable interest rate of 1.75% at March 31, 202066.2  —  
Senior Unsecured Notes:



Senior Unsecured Notes:
Senior Unsecured Notes due 2023, fixed interest rate of 6.75% at September 30, 2017 and December 31, 2016
399.5

399.5
Capital lease obligations
65.2

63.4
Senior Unsecured Notes due 2027, fixed interest rate of 5.13% at March 31, 2020 and December 31, 2019Senior Unsecured Notes due 2027, fixed interest rate of 5.13% at March 31, 2020 and December 31, 2019500.0  500.0  
Finance lease obligationsFinance lease obligations82.4  71.2  
Total long-term debt before discount
$2,979.5

$2,982.5
Total long-term debt before discount$2,911.0  $2,740.1  
Less: unamortized debt issuance costs and discount on debt
(24.1)
(28.5)Less: unamortized debt issuance costs and discount on debt(23.3) (26.3) 
Total long-term debt
$2,955.4

$2,954.0
Total long-term debt$2,887.7  $2,713.8  
Less: current maturities
(82.8)
(109.0)Less: current maturities(26.9) (25.0) 
Total long-term debt, excluding current maturities
$2,872.6

$2,845.0
Total long-term debt, excluding current maturities$2,860.8  $2,688.8  

The weighted average interest rate on long-term debt was 4.62%3.72% and4.84% 4.25% as of September 30, 2017March 31, 2020 and December 31, 2016,2019, respectively.
On January 19, 2017, Univar USA Inc. entered into an amended Term B loan agreement which replaced7, 2020, using the existing US dollar denominated loans with new US dollar denominated loans in aggregate of $2.2 billion. The amendment also reduced the interest rate credit spread on the US dollar denominated loans by 50 basis points from 3.25% to 2.75% and removed the 1.00% LIBOR floor. The additional proceeds of $175.6 million received from the US dollar denominated loans were used to prepay a portionsale of the existing Euro denominatedEnvironmental Sciences business, the Company repaid $174.0 million of the Term B Loans.
B-3 Loan due 2024. As a result of this debt amendment, the Company recognized debt refinancing costs of $4.2 million in other expense, net in the condensed consolidated statements of operations during the nine months ended September 30, 2017. Refer to “Note 6: Other

expense, net” for further information. In addition,prepayment, the Company recognized a loss on extinguishment of debt of $0.8$1.8 million during the three months ended March 31, 2020.
Other Information
March 31, 2020December 31, 2019
(in millions)Carrying amountFair valueCarrying amountFair value
Fair value of debt$2,887.7  $2,683.7  $2,713.8  $2,770.7  
The fair values of debt were based on current market quotes for similar borrowings and credit risk adjusted for liquidity, margins and amortization, as necessary and are classified as level 2 in the nine months ended September 30, 2017.fair value hierarchy.

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14. Supplemental balance sheet information
Allowance for doubtful accounts
The allowance for doubtful accounts reflects the Company's current estimate of credit losses expected to be incurred over the life of the trade accounts receivables. Collectability of the trade accounts receivable balance is assessed on an ongoing basis and determined based on the delinquency of customer accounts, the financial condition of individual customers, past collections experience and future economic expectations. The change in the allowance for doubtful accounts is as follows:
11.(in millions)SupplementalThree months ended March 31, 2020
Beginning balance, sheet informationJanuary 1, 2020$12.9 
Provision for credit losses5.6 
Write-offs(0.5)
Recoveries0.2 
Foreign exchange(0.8)
Ending balance, March 31, 2020$17.4 
Property, plant and equipment, net
(in millions)March 31, 2020December 31, 2019
Property, plant and equipment, at cost$2,174.7  $2,190.3  
Less: accumulated depreciation(1,054.0) (1,037.9) 
Property, plant and equipment, net$1,120.7  $1,152.4  
(in millions) September 30, 2017 December 31, 2016
Property, plant and equipment, at cost $1,931.3
 $1,831.0
Less: accumulated depreciation (912.2) (811.5)
Property, plant and equipment, net $1,019.1
 $1,019.5
Goodwill
Capital lease assets, netThe following is a summary of the activity in goodwill by segment.
Included within property, plant and equipment, net are assets related to capital leases where the Company is the lessee. The below table summarizes the cost and accumulated depreciation related to these assets:
(in millions) September 30, 2017 December 31, 2016
Capital lease assets, at cost $87.8
 $76.5
Less: accumulated depreciation (24.5) (14.5)
Capital lease assets, net $63.3
 $62.0
(in millions)USAEMEACanadaLATAMTotal
Balance, January 1, 2020$1,802.3  $8.4  $441.1  $29.0  $2,280.8  
Purchase price adjustments7.0  —  —  —  7.0  
Other adjustments—  —  —  (0.5) (0.5) 
Foreign exchange—  (0.8) (33.6) (3.9) (38.3) 
Balance, March 31, 2020$1,809.3  $7.6  $407.5  $24.6  $2,249.0  
Intangible assets, net
The gross carrying amounts and accumulated amortization of the Company’s intangible assets were as follows:
 September 30, 2017 December 31, 2016 March 31, 2020December 31, 2019
(in millions) Gross 
Accumulated
Amortization
 Net Gross 
Accumulated
Amortization
 Net(in millions)GrossAccumulated
Amortization		NetGrossAccumulated
Amortization		Net
Intangible assets:            
Customer relationships $860.9
 $(569.5) $291.4
 $826.2
 $(514.3) $311.9
Customer relationships$967.7  $(680.0) $287.7  $986.4  $(680.8) $305.6  
Other 177.6
 (160.8) 16.8
 178.2
 (150.9) 27.3
Other179.4  (165.4) 14.0  182.0  (167.4) 14.6  
Total intangible assets $1,038.5
 $(730.3) $308.2
 $1,004.4
 $(665.2) $339.2
Total intangible assets$1,147.1  $(845.4) $301.7  $1,168.4  $(848.2) $320.2  
Other intangible assets consist of intellectual property (mostly trademarks and trade names, suppliernames), producer relationships and contracts, non-compete agreements and exclusive distribution rights.
The estimated annual amortization expense in each of the next five years is as follows:
(in millions) 
2020$57.0  
202150.1  
202245.0  
202341.1  
202431.9  
Other accrued expenses
As of September 30, 2017, there were no components within other accrued expenses that were greater than five percent of total current liabilities. As of DecemberMarch 31, 2016,2020, other accrued expenses that were greater than five percent of total current liabilities consisted of current tax liabilities of $91.4 million, comprised of income, VAT and local indirect taxes payable. As of December 31, 2019,
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other accrued expenses that were greater than five percent of total current liabilities consisted of current tax liabilities of $87.1 million and customer prepayments and deposits which were $84.6of $81.5 million.

15. Fair value measurements

The following is a reconciliation of the fair value measurements that use significant unobservable inputs (Level 3):
















12.(in millions)Warrant Liability
Fair value measurementsas of December 31, 2019$33.0 
Fair value adjustments(26.3)
Fair value as of March 31, 2020$6.7 
Items measured atThe assumptions used in the Black-Scholes-Merton valuation model to measure the fair value of the warrants are:
Weighted Average
Unobservable InputsRangeAmountMethod
Warrant lifeN/A2 yearsExpected term
Expected volatility26.2 %to50.4%  36.79%Industry peer group
Risk-free interest rateN/A0.23%US Treasury rates
Fair value adjustments are recorded within other operating expenses, net in the condensed consolidated statement of operations.
16. Derivatives
Foreign currency derivatives
The Company uses forward currency contracts to hedge earnings from the effects of foreign exchange relating to certain of the Company’s intercompany and third-party receivables and payables denominated in a foreign currency. These derivative instruments are not formally designated as cash flow hedges by the Company and the terms of these instruments range from one to three months.
Interest rate swaps
The objective of the designated interest rate swap contracts is to offset the variability of cash flows in LIBOR indexed debt interest payments attributable to changes in the benchmark interest rate related to the Term B-3 Loan and a portion of debt outstanding under the North American ABL Facility. On March 17, 2020, the Company executed $250.0 million of interest rate swap contracts effective June 30, 2020 to replace swaps with maturities on June 30, 2020. The interest rate swap contracts have maturities at various dates through June 2024.
Cross currency swap contracts
Cross currency swap contracts are used to effectively convert the Term B-5 Loan’s principal amount of floating rate US dollar denominated debt, including interest payments, to fixed-rate Euro denominated debt maturing in November 2024. As of March 31, 2020, approximately 95% of the cross currency swaps are designated as a recurring basiscash flow hedge.
The Company uses both undesignated interest rate swap contracts and cross currency swaps to manage interest rate variability and mitigate foreign exchange exposure.
Notional amounts and fair value of derivative instruments
The following table presents the notional amounts of the Company’s outstanding derivative instruments by type:
(in millions)March 31, 2020December 31, 2019
Derivatives designated as hedging instruments:
Interest rate swap contracts$1,050.0  $1,050.0  
Cross currency swap contracts381.0  381.0  
Derivatives not designated as hedging instruments:
Interest rate swap contracts200.0  200.0  
Foreign currency derivatives116.6  141.4  
Cross currency swap contracts19.0  19.0  
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Table of Contents
The following are the pre-tax effects of derivative instruments on the condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2020 and 2019:
Statement of Operations ClassificationAmount of gain (loss) reclassified from other comprehensive loss into income (effective and ineffective portion)Amount to be reclassified to consolidated statement of operations within the next 12 months
Three months ended March 31,
(in millions)20202019
Derivatives in cash flow hedging relationships: 
Interest rate swap contractsInterest expense$(0.9) $3.8  $(16.3) 
Cross currency swap contractsInterest expense1.9  —  2.6  
Other expense, net6.2  —  —  
Refer to “Note 8: Other expense, net” for the gains and losses related to derivatives not designated as hedging instruments.
The following table presents the Company’s gross assets and liabilities measured on a recurring basis:basis and classified as level 2 within the fair value hierarchy:
  Level 2 Level 3
(in millions) September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016
Financial current assets:        
Forward currency contracts $0.3
 $0.5
 $—
 $—
Financial noncurrent assets:        
Interest rate swap contracts 4.8
 9.8
 —
 —
Financial current liabilities:        
Forward currency contracts 0.2
 0.3
 —
 —
Interest rate swap contracts 3.4
 5.6
 —
 —
Contingent consideration —
 —
 0.4
 1.6
Financial noncurrent liabilities:        
Contingent consideration —
 —
 1.7
 5.9
Derivative AssetsDerivative Liabilities
(in millions)Balance Sheet LocationMarch 31, 2020December 31, 2019Balance Sheet LocationMarch 31, 2020December 31, 2019
Designated Derivatives:
Cross currency swap contractsPrepaid expenses and other current assets$2.6  $7.2  Other long-term liabilities  $2.7  $12.1  
Interest rate swap contractsPrepaid expenses and other current assets—  —  Other accrued expenses  16.3  6.4  
Interest rate swap contractsOther assets—  —  Other long-term liabilities  25.5  14.0  
Total derivatives in hedging relationships$2.6  $7.2  $44.5  $32.5  
Undesignated Derivatives:
Foreign currency contractsPrepaid expenses and other current assets$1.6  $0.5  Other accrued expenses  $2.2  $1.0  
Cross currency swap contractsPrepaid expenses and other current assets0.1  0.4  Other long-term liabilities  0.1  0.6  
Interest rate swap contractsPrepaid expenses and other current assets—  —  Other accrued expenses  3.3  1.0  
Interest rate swap contractsOther assets—  —  Other long-term liabilities  4.3  1.9  
Total derivatives not designated as hedging instruments$1.7  $0.9  $9.9  $4.5  
Total derivativesTotal assets$4.3  $8.1  Total liabilities  $54.4  $37.0  
The net amounts by legal entity related to forward currency contracts included in prepaid and other current assets were $0.2$1.2 million and $0.5$0.2 million as of September 30, 2017March 31, 2020 and December 31, 2016,2019, respectively. The net amounts related to foreignforward currency contracts included in other accrued expenses were $0.1$1.8 million and $0.3$0.7 million as of September 30, 2017March 31, 2020 and December 31, 2016,2019, respectively.
The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. The fair value of interest rate swaps is determined by estimating the net present value of amounts to be paid under the agreement offset by the net present value of the expected cash inflows based on market rates and associated yield curves. Based on these valuation methodologies, these derivative contracts are classified as levelLevel 2 in the fair value hierarchy.
The fair value
17
Table of the contingent consideration is based on a real options approach, which takes into account management’s best estimate of the acquired business performance, as well as achievement risk. Based on the valuation methodology, contingent consideration is classified as level 3 in the fair value hierarchy.
The following table is a reconciliation of the fair value measurements that use significant unobservable inputs (Level 3), which consists of contingent consideration related to prior acquisitions.
Contents
(in millions) 
Contingent
  consideration  
Fair value as of December 31, 2016 $7.5
Fair value adjustments (3.0)
Acquisitions 1.7
Payments (3.2)
Gain on settlement (0.9)
Fair value as of September 30, 2017 $2.1
The change in the fair value17. Commitments and payments related to the contingent consideration are recorded in the other, net line item of the operating activities within the condensed consolidated statement of cash flows.contingencies
Financial instruments not carried at fair value
The estimated fair value of financial instruments not carried at fair value in the condensed consolidated balance sheets were as follows:
  September 30, 2017 December 31, 2016
(in millions) 
Carrying    
Amount
 
Fair
Value    
 
Carrying    
Amount
 Fair
Value    
Financial liabilities:        
Long-term debt including current portion (Level 2) $2,955.4
 $3,016.7
 $2,954.0
 $3,019.1

The fair values of the long-term debt, including the current portions, were based on current market quotes for similar borrowings and credit risk adjusted for liquidity, margins and amortization, as necessary.
Fair value of other financial instruments
The carrying value of cash and cash equivalents, trade accounts receivable, net, trade accounts payable and short-term financing included in the condensed consolidated balance sheets approximate fair value due to their short-term nature.

13.Derivatives
Interest rate swaps
The objective of the interest rate swap contracts is to offset the variability of cash flows in LIBOR indexed debt interest payments attributable to changes in the aforementioned benchmark interest rate related to the Term B Loan due 2022.
At September 30, 2017, the Company had interest rate swap contracts with a total notional amount of $2.0 billion whereby a fixed rate of interest (weighted-average of 1.70%) is paid and a variable rate of interest (three-month LIBOR) is received as calculated on the notional amount. The interest rate swap contracts will expire on June 30, 2020. The initial interest rate swap contracts that were replaced with the contracts currently outstanding initially included a LIBOR floor of 1.00%. The LIBOR floor was removed on February 1, 2017, as part of the amendment to the interest rate swap contracts. The contracts were amended as a result of the amendment to the Term B Loan agreement with US dollar denominated tranche on January 19, 2017. Refer to “Note 10: Debt” for additional information. As a result of the interest rate swap contracts amendment, the Company had realized a gain of $1.4 million in other expense, net in the condensed consolidated statement of operations.
As of July 6, 2017, the Company designated the interest rate swaps as a cash flow hedge in an effort to reduce the mark-to-market volatility recognized within the condensed consolidated statement of operations. As of September 30, 2017, the interest rate swaps held by the Company continue to qualify for hedge accounting. Prior to the hedge accounting designation, changes in fair value of the interest rate swap contracts were recognized directly in other expense, net in the condensed consolidated statement of operations. Refer to “Note 6: Other expense, net” for additional information. In accordance with ASC 815 - Derivative and Hedging, the Company recognizes the effective portion of the gain or loss on the derivative as a component of other comprehensive income, which is reclassified into earnings in the same period or periods the underlying transaction impacts earnings. Derivative gains and losses due to hedge ineffectiveness are recognized in current period earnings.
Net unrealized losses on our interest rate swap contracts totaling $1.9 million were reclassified to interest expense in the condensed consolidated statement of operations during the three and nine months ended September 30, 2017. As of September 30, 2017, we estimate that $3.4 million of derivative losses included in accumulated other comprehensive loss will be reclassified into the condensed consolidated statement of operations within the next 12 months. The activity related to our cash flow hedges is included in “Note 9: Accumulated other comprehensive loss.”
The fair value of interest rate swaps is recorded either in prepaids and other current assets, other assets, other accrued expenses or other long-term liabilities in the condensed consolidated balance sheets. As of September 30, 2017 and December 31, 2016, a current liability of $3.4 million and $5.6 million was included in other accrued expenses, respectively. As of September 30, 2017 and December 31, 2016, a noncurrent asset of $4.8 million and $9.8 million was included in other assets, respectively.
The Company had interest rate swap contracts with a total notional amount of $1.0 billion which expired during June 2017.
Interest rate caps
The Company had interest rate caps with a notional amount of $800.0 million which expired during June 2017. As of June 30, 2017, the interest rate cap premiums had been fully amortized through interest expense within the condensed consolidated statements of operations. At September 30, 2017, the Company had no interest rate caps outstanding.
Foreign currency derivatives
The Company uses forward currency contracts to hedge earnings from the effects of foreign exchange relating to certain of the Company’s monetary assets and liabilities denominated in a foreign currency. These derivative instruments are not formally designated as hedges by the Company and the terms of these instruments range from one to three months. Forward currency contracts are recorded at fair value in either prepaid expenses and other current assets or other accrued expenses in the condensed consolidated balance sheet, reflecting their short-term nature. The fair value adjustments and gains and losses are included in other expense, net within the condensed consolidated statements of operations. Refer to “Note 6: Other expense, net” for more information. The total notional amount of undesignated forward currency contracts were $97.7 million and $111.0 million as of September 30, 2017 and December 31, 2016, respectively.
Cash flows associated with derivative financial instruments are recognized in the operating section of the condensed consolidated statement of cash flows.

14.Business combinations
Acquisition of Tagma Brasil
On September 21, 2017, the Company completed an acquisition of 100% of the equity interest in Tagma Brasil Ltda. (“Tagma”), a leading Brazilian provider of customized formulation and packaging services for crop protection chemicals that include herbicides, insecticides, fungicides and surfactants. This acquisition expands Univar's agriculture business in one of the world's fastest-growing agricultural markets.
Other acquisitions
On September 29, 2017, the Company completed a definitive asset purchase agreement with PVS Minibulk, Inc. (“PVS”), a provider of Minibulk services for inorganic chemicals in California, Oregon, and Washington. This acquisition expands and strengthens Univar's MiniBulk business in the West Coast market as the Company has the opportunity to service PVS customers and integrate them into the Univar business.
The purchase price of these acquisitions was $23.9 million (net of cash acquired of $0.2 million). The purchase price allocation includes goodwill of $6.5 million and intangibles of $8.1 million. The operating results subsequent to the acquisition dates did not have a significant impact on the consolidated financial statement of the Company. The initial accounting for these acquisitions has only been preliminarily determined, and is subject to final working capital adjustments and valuations of intangible assets and property, plant and equipment.
As of March 31, 2017, the purchase price allocation for the Bodine and Nexus Ag 2016 acquisitions were finalized. Purchase price adjustments on prior acquisitions resulted in additional cash payments of $0.5 million during the three months ended March 31, 2017.

15.Commitments and contingencies
Litigation
In the ordinary course of business, the Company is subject to pending or threatened claims, lawsuits, regulatory matters and administrative proceedings from time to time. Where appropriate the Company has recorded provisions in the condensed consolidated financial statements for these matters. The liabilities for injuries to persons or property are in some instances covered by liability insurance, subject to various deductibles and self-insured retentions.
The Company is not aware of any claims, lawsuits, regulatory matters or administrative proceedings, pending or threatened, that are likely to have a material effect on its overall financial position, results of operations, or cash flows. However, the Company cannot predict the outcome of any present or future claims or litigation or the potential for future claims or litigation.litigation and adverse developments could negatively impact earnings or cash flows in a particular future period.
The Company is subject to liabilities from claims alleging personal injury from exposure to asbestos. The claims result primarily from an indemnification obligation related to Univar Solutions USA Inc.’s (“Univar”) 1986 purchase of McKesson Chemical Company from McKesson Corporation (“McKesson”). Once certain conditions have been met, Univar will have the ability to pursue insurance coverage, if any, that may be available under McKesson's historical insurance coverage to offset the impact of any fees, settlements, or judgments that Univar is also a defendant in a small numberobligated to pay because of asbestos claims.its obligation to defend and indemnify McKesson. As of September 30, 2017,March 31, 2020, there were fewer than 290150 asbestos-related claimscases for which Univar has the Company has liability for defenseobligation to defend and indemnity pursuantindemnify; however, this number tends to the indemnification obligation. The volume of such cases has decreased in recent quarters.fluctuate up and down over time. Historically, the vast majority of the claims against both McKesson and Univarthese asbestos cases have been dismissed without payment or with a nominal payment. The Company does incur costs in defending these claims. While the Company is unable to predict the outcome of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any of these matters will have a material effect on its overall financial position, results of operations or cash flows. However, the Company cannot predict the outcome of any present or future claims or litigation and adverse developments could negatively impact earnings or cash flows in a particular future period.
Environmental
The Company is subject to various federal, state and local environmental laws and regulations that require environmental assessment or remediation efforts (collectively “environmental remediation work”) and from time to time becomes aware of compliance matters regarding possible or alleged violations of these laws or regulations. For example, over the years, the Company has been identified as a “potentially responsible party” (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act and/or similar state laws that impose liability for costs relating to environmental remediation work at various sites. As a PRP, the Company may be required to pay a share of the costs of investigation and cleanup of certain sites. The Company is currently engaged in environmental remediation work at approximately 129 locations, some that are now or were previously Company-owned/occupied and some that were never Company-owned/occupied (“non-owned sites”).
The Company’s environmental remediation work at some sites is being conducted pursuant to governmental proceedings or investigations. At other sites, the Company, with appropriate state or federal agency oversight and approval, is conducting the environmental remediation work voluntarily. The Company is currently undergoing remediation efforts or is in the process of active review of the need for potential remediation efforts at approximately 106107 current or formerly Company-owned/occupied sites. In addition, the Company may be liable as a PRP for a share of the clean-up of approximately 2322 non-owned sites. These non-owned sites are typically (a) locations of independent waste disposal or recycling operations with alleged or confirmed contaminated soil and/or groundwater to which the Company may have shipped waste products or drums for re-conditioning, or (b) contaminated

non-owned sites near historical sites owned or operated by the Company or its predecessors from which contamination is alleged to have arisen.
In determining the appropriate level of environmental reserves, the Company considers several factors such as information obtained from investigatory studies; changes in the scope of remediation; the interpretation, application and enforcement of laws and regulations; changes in the costs of remediation programs; the development of alternative cleanup technologies and methods; and the relative level of the Company’s involvement at various sites for which the Company is allegedly associated. The level of annual expenditures for remedial, monitoring and investigatory activities will change in the future as major components of planned remediation activities are completed and the scope, timing and costs of existing activities are changed. Project lives, and therefore cash flows, range from 2 to 30 years, depending on the specific site and type of remediation project.
Although the Company believes that its reserves are adequate for environmental contingencies, it is possible, due to the uncertainties noted above; that additional reserves could be required in the future that could have a material effect on the overall financial position, results of operations, or cash flows in a particular period. This additional loss or range of losses cannot be recorded at this time, as it is not reasonably estimable.
18
Table of Contents
Changes in total environmental liabilities are as follows:
(in millions)Three months ended March 31, 2020
Environmental liabilities at December 31, 2019$78.7 
Revised obligation estimates8.2 
Environmental payments(4.0)
Foreign exchange(0.1)
Environmental liabilities at March 31, 2020$82.8 

(in millions)Balance Sheet LocationMarch 31, 2020December 31, 2019
Current environmental liabilitiesOther accrued expenses$23.9  $25.0  
Long-term environmental liabilitiesOther long-term liabilities$58.9  $53.7  

18. Leasing
  Nine months ended September 30,
(in millions) 2017 2016
Environmental liabilities at beginning of period $95.8
 $113.2
Revised obligation estimates 11.4
 9.2
Environmental payments (14.1) (15.4)
Foreign exchange 0.3
 (0.2)
Environmental liabilities at end of period $93.4
 $106.8
Environmental liabilities of $31.0 million and $30.2 million were classified as current in other accrued expenses in the condensed consolidated balance sheets as of September 30, 2017 and December 31, 2016, respectively. The long-term portion of environmental liabilities is recorded in other long-term liabilities in the condensed consolidated balance sheets.
Customs and International Trade Laws
In April 2012, the US Department of Justice (“DOJ”) issued a civil investigative demand to the Company in connection with an investigation into the Company’s compliance with applicable customs and international trade laws and regulations relating to the importation of saccharin from 2002 through 2012. The Company also became aware in 2010leases certain warehouses and distribution centers, office space, transportation equipment, and other machinery and equipment.
(in millions)Balance Sheet LocationMarch 31, 2020December 31, 2019
Assets
Operating lease assetsOther assets$159.1  $157.3  
Finance lease assetsProperty, plant and equipment, net80.5  69.5  
Total lease assets$239.6  $226.8  
Liabilities
Current liabilities:
Current portion of operating lease liabilitiesOther accrued expenses$45.3  $47.4  
Current portion of finance lease liabilitiesCurrent portion of long-term debt22.9  20.9  
Noncurrent liabilities:
Operating lease liabilitiesOther long-term liabilities121.6  114.5  
Finance lease liabilitiesLong-term debt59.5  50.3  
Total lease liabilities$249.3  $233.1  
Lease cost
(in millions)Three months ended March 31, 2020Three months ended March 31, 2019
Statement of Operations ClassificationOperating LeasesFinance LeasesTotalOperating LeasesFinance LeasesTotal
Cost of goods sold (exclusive of depreciation)$4.3  $—  $4.3  $3.7  $—  $3.7  
Outbound freight and handling1.3  —  1.3  1.8  —  1.8  
Warehousing, selling and administrative8.1  —  8.1  7.4  —  7.4  
Depreciation—  6.2  6.2  —  4.6  4.6  
Interest expense—  0.7  0.7  —  0.6  0.6  
Total gross lease component cost$13.7  $6.9  $20.6  $12.9  $5.2  $18.1  
Variable lease costs0.2  0.2  
Short-term lease costs7.5  2.6  
Total gross lease costs$28.3  $20.9  
Sublease income0.6  1.0  
Total net lease cost$27.7  $19.9  
19
Table of an investigation being conducted by US CustomsContents
Maturity of lease liabilities
(in millions)Operating LeasesFinance LeasesTotal
2020$37.4  $19.7  $57.1  
202141.7  22.3  64.0  
202233.5  18.7  52.2  
202323.1  9.5  32.6  
202414.6  6.8  21.4  
2025 and After38.0  11.2  49.2  
Total lease payments$188.3  $88.2  $276.5  
Less: interest21.4  8.6  
Present value of lease liabilities, excluding guaranteed residual values$166.9  $79.6  
Plus: present value of guaranteed residual values—  2.8  
Present value of lease liabilities$166.9  $82.4  

Lease term and Border Patrol (“CBP”) into the Company’s importation of saccharin. Finally, the Company learned that a civil plaintiff had sued the Company and two other defendants in a Qui Tam proceeding, such filing having been made under seal in 2012, and this plaintiff had requested that the DOJ intervene in its lawsuit.discount rate
The US government, through the DOJ, declined to intervene in the Qui Tam proceeding in November 2013 and, as a result, the DOJ’s inquiry related to the Qui Tam lawsuit and its initial investigation demand are now finished. On February 26, 2014, the Qui Tam plaintiff also voluntarily dismissed its lawsuit against the Company.
March 31, 2020December 31, 2019
Weighted-average remaining lease term (years)
Operating leases5.55.0
Finance leases4.64.0
Weighted-average discount rate
Operating leases4.80 %4.95 %
Finance leases4.06 %4.33 %
CBP, however, continued its investigation on the importation of saccharin by the Company’s subsidiary, Univar USA Inc. On July 21, 2014, CBP sent the Company a “Pre-Penalty Notice” indicating the imposition of a penalty against Univar USA Inc. in the amount of approximately $84.0 million. Univar USA Inc. responded to CBP that the proposed penalty was not justified. On October 1, 2014, the CBP issued a penalty notice to Univar USA Inc. for $84.0 million and has reaffirmed this penalty notice. On August 6, 2015, the DOJ filed a complaint on CBP’s behalf against Univar USA Inc. in the Court of International Trade seeking approximately $84.0 million in allegedly unpaid duties, penalties, interest, costs and attorneys’ fees. The Company continues to defend this matter vigorously. Discovery has largely concluded and motions to exclude certain evidence as well as for summary judgment to resolve the dispute in whole or in part have been filed. Univar USA Inc. has not recorded a liability related to this investigation as the Company believes a loss is not probable. Although the Company believes its position is strong it cannot guarantee the outcome of this or other litigation.Other information

Three months ended March 31,
(in millions)20202019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$13.4  $13.5  
Operating cash flows from finance leases0.9  0.5  
Financing cash flows from finance leases6.1  4.7  

16.
19. Segments
Management monitors the operating results of its operatingreportable segments separately for the purpose of making decisions about resource allocation and performance assessment. Management evaluates performance on the basis of Adjusted EBITDA. Adjusted EBITDA is defined as consolidated net income (loss), plus the sum of: net income from discontinued operations, interest expense, net of interest income; income tax expense; depreciation; amortization; impairment charges;loss on extinguishment of debt; other operating expenses, net;net (see “Note 6: Other operating expenses, net”); and other expense, net.

net (see “Note 8: Other expense, net”).
Transfer prices between operatingreportable segments are set on an arms-length basis in a similar manner to transactions with third parties. Corporate operating expenses that directly benefit segments have been allocated to the operatingreportable segments. Allocable operating expenses are identified through a review process by management. These costs are allocated to the operatingreportable segments on a basis that reasonably approximates the use of services. This is typically measured on a weighted distribution of margin, asset, headcount or time spent.
20
Table of Contents
Financial information for the Company’s reportable segments is as follows:
(in millions)USAEMEACanadaLATAM
Other/
Eliminations (1)
Consolidated
Three months ended March 31, 2020
External customers$1,357.5  $460.3  $285.8  $107.6  $—  $2,211.2  
Inter-segment25.7  0.8  0.8  —  (27.3) —  
Total net sales$1,383.2  $461.1  $286.6  $107.6  $(27.3) $2,211.2  
Adjusted EBITDA$96.6  $40.3  $27.3  $8.3  $(10.9) $161.6  
Long-lived assets (2)
$855.1  $175.2  $182.0  $27.9  $39.6  $1,279.8  

(in millions)USAEMEACanadaLATAM
Other/
Eliminations (1)
Consolidated
Three months ended March 31, 2019
External customers$1,307.2  $483.7  $273.8  $95.3  $—  $2,160.0  
Inter-segment24.9  1.0  1.1  —  (27.0) —  
Total net sales$1,332.1  $484.7  $274.9  $95.3  $(27.0) $2,160.0  
Adjusted EBITDA$97.1  $42.1  $21.7  $5.7  $(6.5) $160.1  
Long-lived assets (2)
$917.7  $187.2  $182.8  $33.8  $32.1  $1,353.6  
(1)Other/Eliminations represents the elimination of inter-segmentintersegment transactions as well as unallocated corporate costs consisting of costs specifically related to parent company operations that do not directly benefit segments, either individually or collectively.
Financial information(2)Long-lived assets consist of property, plant and equipment, net and operating lease assets.
The following is a reconciliation of net income (loss) to Adjusted EBITDA for the Company’s segments is as follows:three months ended March 31, 2020 and 2019, respectively:
 Three months ended March 31,
(in millions)20202019
Net income (loss)$55.9  $(63.9) 
Net income from discontinued operations—  (6.1) 
Depreciation41.7  33.2  
Amortization15.8  14.4  
Interest expense, net28.1  34.2  
Income tax benefit(0.3) (23.3) 
Other operating expenses, net4.1  164.8  
Other expense, net5.9  6.1  
Loss on sale of business8.6  —  
Loss on extinguishment of debt1.8  0.7  
Adjusted EBITDA  $161.6  $160.1  

21
(in millions)
USA
Canada
EMEA
Rest of
World
Other/
Eliminations (1)

Consolidated
 
Three Months Ended September 30, 2017
Net sales:











External customers
$1,185.0

$299.9

$456.9

$106.9

$—
 $2,048.7
Inter-segment
25.9

2.5

1.1

—

(29.5) —
Total net sales
$1,210.9

$302.4

$458.0

$106.9

$(29.5) $2,048.7
Cost of goods sold
937.5

246.2

355.1

84.6

(29.5) 1,593.9
Gross profit
$273.4

$56.2

$102.9

$22.3

$—
 $454.8
Outbound freight and handling
50.3

9.1

13.8

1.6

—
 74.8
Warehousing, selling and administrative
132.4

21.5

55.9

11.4

6.8
 228.0
Adjusted EBITDA
$90.7

$25.6

$33.2

$9.3

$(6.8) $152.0
Other operating expenses, net
          11.8
Depreciation
          32.5
Amortization
          16.8
Interest expense, net
          38.4
Other expense, net
          7.1
Income tax expense
          6.5
Net income
          $38.9
Total assets
$3,634.0
 $2,006.9
 $905.2
 $251.7
 $(1,107.7) $5,690.1


Table of Contents
(in millions)
USA
Canada
EMEA
Rest of
World
Other/
Eliminations (1)

Consolidated
 
Three Months Ended September 30, 2016
Net sales:











External customers
$1,222.1
 $260.8
 $412.5
 $104.3
 $—
 $1,999.7
Inter-segment
21.2
 2.1
 1.1
 —
 (24.4) —
Total net sales
$1,243.3
 $262.9
 $413.6
 $104.3
 $(24.4) $1,999.7
Cost of goods sold
974.0
 207.3
 320.8
 83.9
 (24.4) 1,561.6
Gross profit
$269.3
 $55.6
 $92.8
 $20.4
 $—
 $438.1
Outbound freight and handling
52.3
 9.0
 13.1
 1.8
 —
 76.2
Warehousing, selling and administrative
126.9
 20.6
 51.2
 11.7
 5.6
 216.0
Adjusted EBITDA
$90.1
 $26.0
 $28.5
 $6.9
 $(5.6) $145.9
Other operating expenses, net
          12.1
Depreciation
          42.4
Amortization
          22.5
Impairment charges           133.9
Interest expense, net
          39.5
Other expense, net
          3.1
Income tax benefit
          (44.6)
Net loss










$(63.0)
Total assets
$3,824.4
 $1,824.3
 $971.9
 $232.5
 $(1,256.2) $5,596.9


(in millions) USA Canada EMEA 
Rest of
World
 
Other/
Eliminations (1)
 Consolidated
  Nine Months Ended September 30, 2017
Net sales:            
External customers $3,527.0
 $1,099.6
 $1,360.3
 $307.6
 $—
 $6,294.5
Inter-segment 92.1
 6.6
 3.6
 0.3
 (102.6) —
Total net sales $3,619.1
 $1,106.2
 $1,363.9
 $307.9
 $(102.6) $6,294.5
Cost of goods sold 2,807.1
 926.7
 1,054.5
 248.2
 (102.6) 4,933.9
Gross profit $812.0
 $179.5
 $309.4
 $59.7
 $—
 $1,360.6
Outbound freight and handling 144.4
 27.5
 41.0
 4.8
 —
 217.7
Warehousing, selling and administrative 403.2
 64.8
 163.0
 34.0
 22.7
 687.7
Adjusted EBITDA $264.4
 $87.2
 $105.4
 $20.9
 $(22.7) $455.2
Other operating expenses, net           55.8
Depreciation           102.5
Amortization           50.0
Interest expense, net           110.0
Loss on extinguishment of debt           0.8
Other expense, net           27.9
Income tax expense           15.4
Net income           $92.8
Total assets $3,634.0
 $2,006.9
 $905.2
 $251.7
 $(1,107.7) $5,690.1


(in millions) USA Canada EMEA 
Rest of
World
 
Other/
Eliminations (1)
 Consolidated
  Nine Months Ended September 30, 2016
Net sales:            
External customers $3,622.4
 $1,018.9
 $1,309.8
 $310.1
 $—
 $6,261.2
Inter-segment 73.1
 6.1
 3.5
 —
 (82.7) —
Total net sales $3,695.5
 $1,025.0
 $1,313.3
 $310.1
 $(82.7) $6,261.2
Cost of goods sold 2,900.2
 858.2
 1,021.2
 250.5
 (82.7) 4,947.4
Gross profit $795.3
 $166.8
 $292.1
 $59.6
 $—
 $1,313.8
Outbound freight and handling 148.2
 25.2
 41.9
 5.5
 —
 220.8
Warehousing, selling and administrative 393.0
 62.4
 160.4
 35.1
 13.9
 664.8
Adjusted EBITDA $254.1
 $79.2
 $89.8
 $19.0
 $(13.9) $428.2
Other operating expenses, net           29.1
Depreciation           113.9
Amortization           67.8
Impairment charges           133.9
Interest expense, net           120.5
Other expense, net           10.8
Income tax benefit           (38.6)
Net loss           $(9.2)
Total assets $3,824.4
 $1,824.3
 $971.9
 $232.5
 $(1,256.2) $5,596.9
(1)Other/Eliminations represents the elimination of intersegment transactions as well as unallocated corporate costs consisting of costs specifically related to parent company operations that do not directly benefit segments, either individually or collectively.


Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is based on financial data derived from the financial statements prepared in accordance with the United States (“US”) generally accepted accounting principles (“GAAP”) and certain other financial data that is prepared using non-GAAP financial measures. For a reconciliation of each non-GAAP financial measure to its most comparable GAAP measure, see “Analysis of Segment Results” within this Item and “Note 19: Segments” to our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q. Refer to “Non-GAAP Financial Measures” within this Item for more information about our use of Non-GAAP financial measures.
Our MD&A is provided in addition to the accompanying condensed consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flow.
Overview
Univar Solutions Inc. is a leading global chemical and ingredient distributor and provider of value-added services to customers across a wide range of industries. We purchase chemicals from thousands of chemical producers worldwide and warehouse, repackage, blend, dilute, transport and sell those chemicals to more than 100,000 customer locations across approximately 130 countries.
Our operations are structured into four operatingreportable segments that represent the geographic areas under which we operate and manage our business. These segments are Univar Solutions USA (“USA”), Univar Canada (“Canada”), UnivarSolutions Europe and the Middle East and Africa (“EMEA”), Univar Solutions Canada (“Canada”) and Rest of WorldUnivar Solutions Latin America (“Rest of World”LATAM”), which includes developing businesses in Latin America (including Brazil and Mexico) and the Asia-Pacific region.
We monitorRecent Developments and Items Impacting Comparability
On February 28, 2019, we completed the acquisition of 100% of the equity interest of Nexeo, a leading global chemicals and plastics distributor. The acquisition expands and strengthens Univar Solutions’ presence in North America and provides expanded opportunities to create the largest North American sales force in chemical and ingredients distribution and the broadest product offering.
On December 31, 2019, we sold our Environmental Sciences business. The sale of the business did not meet the criteria to be classified as a discontinued operations in the Company’s financial statements, as such, the results prior to the disposition date are presented within the comparative 2019 results.
Market Conditions
We are monitoring the potential impact of the novel coronavirus (COVID-19) pandemic to our global business. Its full financial impact is unknown at this time and will depend on the duration of government restrictions, including travel restrictions, quarantines, shelter in place orders and shutdowns, and the duration of the economic slowdown and nature and timing of a recovery. Our top priority is the safety and health of employees, customers, and suppliers. We have activated a global, cross-functional response team, which is closely monitoring the situation and implementing additional safety measures to help ensure the well-being of Univar Solutions’ employees, customers and suppliers, minimize disruptions and provide for the safe and reliable supply of Univar Solutions’ chemicals and ingredients. The Company has implemented recommended policies and practices to protect our workforce so they can safely and effectively carry out their essential work. Employees who are able to work remotely are doing so. The Company is following guidelines from global health experts and has taken additional precautionary steps to protect our employees going to work in our distribution centers.
As of the date of this filing, the Company’s global distribution centers are operational and supplying products that help preserve essential businesses and infrastructure. This includes providing products and services that are essential for maintaining clean drinking water, waste water treatment, home, industrial and health care facility sanitization, and that are used in the manufacturing of food and pharmaceuticals.
We are actively monitoring key product availability, remaining up to date with the current status of our primary modes of transportation and staying up to date with current port operating segments separatelystatuses. We continue to stay connected with our customers to understand impacts on their operations, including whether operations remain open with no change or reduced operations or if operations have closed and whether closure is temporary or permanent. We have historically organized our product portfolio offering into 14 global end markets. We have now combined those end markets into the following: General Industrial, Consumer Solutions, Industrial Specialties, Refining & Chemical Processing and Services and Other Markets. The primary impacts of the pandemic and the current economic events on our end markets are as follows (percentages represent 2019 Consolidated Net Sales by End Market):
General Industrial (29%) – stable demand in agriculture and forestry, with downward pressure in certain industrial sectors
22
Table of Contents
Consumer Solutions (25%) – healthy performance of business in pharmaceuticals, household cleaning and food ingredients, with downward pressure in beauty and personal care
Industrial Specialties (23%) – affected by decline in demand for paints and lubricants into construction and automotive end markets
Refining & Chemical Processing (12%) – demand significantly down due to reduced travel and economic activity
Services and Other Markets (11%) – ongoing risk in waste services with exposure to automotive and aerospace
The Company is taking steps to maintain sufficient cash and additional credit availability in recognition of the purposesincreased risk and uncertainty related to the COVID-19 pandemic and challenging macroeconomic headwinds. See “Liquidity and Capital Resources” in Item 2 of making decisions about resource allocationthis Quarterly Report on Form 10-Q for a discussion on our liquidity. In anticipation of ongoing challenges, the Company is carefully managing its working capital and performance assessment. We evaluate performance on the basis of Adjusted EBITDA, which we define as our consolidated net income, plus the sum of interest expense, net of interest income, income tax expense, depreciation, amortization, loss on extinguishment of debt, otherrealizing and planning for cost reductions to maintain financial health while continuing to help serve supplier and customer needs. Cash outflows related to operating expenses net (which primarily consists of acquisitionare being reduced by lowering travel and integration related expenses, employee stock-based compensation expense, restructuring charges, business optimization,event costs, overtime and other unusual or non-recurring expenses) and other expense, net (which consists of gains and losses on foreign currency transactions and undesignated derivative instruments, debt refinancing costs, and other nonoperating activity). We believe that Adjusted EBITDA is an important indicator of operating performance because:
we report Adjusted EBITDA to our lenders as required under the covenants of our credit agreements;
Adjusted EBITDA excludes the effects of income taxes,temporary labor, as well as implementing hiring freezes, eliminating certain salaried workforce positions and annual merit increases, temporary furloughs to match changes in demand in certain locations anddeferring certain capital project spending. We will continue to monitor customer activity and match our workforce with demand to the effectsextent possible.
On March 27, 2020, the CARES Act was signed into law and it provides for certain tax law changes, which impact the Company and are discussed in “Note 10: Income taxes” in Item 1 of financingthis Quarterly Report on Form 10-Q.
The current business environment and investing activitiesquickly evolving market conditions require significant management judgment to interpret and quantify the potential impact on our assumptions about future operating cash flows. To the extent changes in the current business environment impact our ability to achieve levels of forecasted operating results and cash flows, if our stock price were to trade below book value per share for an extended period of time and/or should other events occur indicating the carrying value of our assets might be impaired, we may be required to recognize impairment losses on goodwill, intangible and tangible assets.
See “Risk Factors” in Item 1A of this Quarterly Report on Form 10-Q for further information of the possible impact of the COVID-19 pandemic on our business.
Constant Currency
Currency impacts on consolidated and segment results have been derived by eliminatingtranslating current period financial results in local currency using the effects of interest, depreciation and amortization expenses;
we use Adjusted EBITDA in setting performance incentive targets;
we consider gains (losses) onaverage exchange rate for the acquisition, disposal and impairment of assets as resulting from investing decisions rather than ongoing operations; and
other significant items, while periodically affecting our results, may vary significantly fromprior period to period and have a disproportionate effect in a given period, which affects comparability of our results.
the financial information is being compared. We set transfer prices between operating segments on an arms-length basis in a similar manner to transactions with third parties. We allocate corporate operating expenses that directly benefit our operating segmentsbelieve providing information on a constant currency basis that reasonably approximates our estimates of the use of these services.
Other/Eliminations represents the elimination of inter-segment transactions as well as unallocated corporate costs consisting of costs specifically related to parent company operations that do not directly benefit segments, either individually or collectively. In the analysis ofprovides valuable supplemental information regarding our results of operations, consistent with how we discuss operating segment results for the current reporting period followingevaluate our consolidated resultsperformance.
23
Table of operations period-to-period comparison.Contents
The following is management’s discussion and analysis of the financial condition and results of operations for the three and nine months ended September 30, 2017 as compared to the corresponding period in the prior year. This discussion should be read in conjunction with the condensed consolidated financial statements, including the related notes, set forth in this report under “Financial Statements” and our Annual Report on Form 10-K for the year ended December 31, 2016.

Results of Operations
The following tables set forth, for the periods indicated, certain statements of operations data first on the basis of reported data and then as a percentage of total net sales for the relevant period.
 Three Months EndedFavorable
(unfavorable)		% Change
(in millions)March 31, 2020March 31, 2019
Net sales$2,211.2  $2,160.0  $51.2  2.4 %
Cost of goods sold (exclusive of depreciation)1,678.6  1,663.6  (15.0) 0.9 %
Operating expenses:
Outbound freight and handling91.5  82.9  (8.6) 10.4 %
Warehousing, selling and administrative279.5  253.4  (26.1) 10.3 %
Other operating expenses, net4.1  164.8  160.7  (97.5)%
Depreciation41.7  33.2  (8.5) 25.6 %
Amortization15.8  14.4  (1.4) 9.7 %
Total operating expenses$432.6  $548.7  $116.1  (21.2)%
Operating income (loss)$100.0  $(52.3) $152.3  N/M  
Other (expense) income:
Interest income1.0  0.6  0.4  66.7 %
Interest expense(29.1) (34.8) 5.7  (16.4)%
Loss on sale of business  (8.6) —  (8.6) 100.0 %
Loss on extinguishment of debt  (1.8) (0.7) (1.1) 157.1 %
Other expense, net  (5.9) (6.1) 0.2  (3.3)%
Total other expense  $(44.4) $(41.0) $(3.4) 8.3 %
Income (loss) before income taxes 55.6  (93.3) 148.9  N/M  
Income tax benefit  (0.3) (23.3) (23.0) (98.7)%
Net income (loss) from continuing operations $55.9  $(70.0) $125.9  N/M  
Net income from discontinued operations  $—  $6.1  $(6.1) (100.0)%
Net income (loss) $55.9  $(63.9) $119.8  N/M  








Three Months Ended September 30, 2017 Compared to Three Months Ended September 30, 2016
  Three Months Ended 
Favorable
(unfavorable)
 % Change 
Impact of
currency (1)
(in millions) September 30, 2017 September 30, 2016 
Net sales $2,048.7
 100.0 % $1,999.7
 100.0 % $49.0
 2.5 % 1.7 %
Cost of goods sold 1,593.9
 77.8 % 1,561.6
 78.1 % (32.3) 2.1 % (1.7)%
Gross profit $454.8
 22.2 % $438.1
 21.9 % $16.7
 3.8 % 1.6 %
Operating expenses:              
Outbound freight and handling 74.8
 3.7 % 76.2
 3.8 % 1.4
 (1.8)% (1.4)%
Warehousing, selling and administrative 228.0
 11.1 % 216.0
 10.8 % (12.0) 5.6 % (1.6)%
Other operating expenses, net 11.8
 0.6 % 12.1
 0.6 % 0.3
 (2.5)% (2.5)%
Depreciation 32.5
 1.6 % 42.4
 2.1 % 9.9
 (23.3)% (0.9)%
Amortization 16.8
 0.8 % 22.5
 1.1 % 5.7
 (25.3)% (0.4)%
Impairment charges —
 — % 133.9
 6.7 % 133.9
 (100.0)% — %
Total operating expenses $363.9
 17.8 % $503.1
 25.2 % $139.2
 (27.7)% (1.1)%
Operating income (loss) $90.9
 4.4 % $(65.0) (3.3)% $155.9
 N/M
 2.8 %
Other (expense) income:              
Interest income 0.9
 — % 1.1
 0.1 % (0.2) (18.2)% 9.1 %
Interest expense (39.3) (1.9)% (40.6) (2.0)% 1.3
 (3.2)% — %
Other expense, net (7.1) (0.3)% (3.1) (0.2)% (4.0) (129.0)% (9.7)%
Total other expense $(45.5) (2.2)% $(42.6) (2.1)% $(2.9) 6.8 % (0.5)%
Income (loss) before income taxes 45.4
 2.2 % (107.6) (5.4)% 153.0
 N/M
 1.5 %
Income tax expense (benefit) 6.5
 0.3 % (44.6) (2.2)% (51.1) N/M
 (0.7)%
Net income (loss) $38.9
 1.9 % $(63.0) (3.2)% $101.9
 N/M
 2.1 %
(1)Foreign currency translation is included in the percentage change. Unfavorable impacts from foreign currency translation are designated with parentheses.
Net sales
Net sales percentage change due to:        
Acquisitions— %
Reported sales volumes(8.4)%
Sales pricing and product mix9.2 %
Foreign currency translation1.7 %
Total2.5 %
Net sales were $2,048.7$2,211.2 million for the three months ended September 30, 2017,March 31, 2020, an increase of $49.0$51.2 million, or 2.5%2.4%, from the three months ended September 30, 2016.March 31, 2019. Net sales increased from the February 2019 Nexeo acquisition in USA, Canada and LATAM and demand for our products in certain essential end markets. The decrease in net sales from reported sales volumesincrease was driven by the USA, EMEA, and Rest of World segments, partially offset by higher sales volumeslower demand in the Canada segment. The decrease in reported sales volumes is partly due toglobal industrial end markets, the impact from hurricanes in the USA segmentEnvironmental Sciences divestiture and one less selling day in the three months ended September 30, 2017. The increase in net sales from changes in sales pricing and product mix was driven by all of our segments. Foreign currency translation increased net sales, due to the US dollar weakening against the British pound, euro, Canadian dollar, Mexican peso, and the Brazilian real. Refer to the “Segment results”price deflation for the three months ended September 30, 2017 discussionMarch 31, 2020 compared to the three months ended March 31, 2019. Refer to the “Analysis of Segment Results” for the three months ended March 31, 2020 for additional information.





Gross profit
Gross profit percentage change due to:        
Acquisitions0.1 %
Reported sales volumes(8.4)%
Sales pricing, product costs and other adjustments10.5 %
Foreign currency translation1.6 %
Total3.8 %
Gross profit (exclusive of depreciation)
Gross profit (exclusive of depreciation) increased $16.7$36.2 million, or 3.8%7.3%, to $454.8$532.6 million for the three months ended September 30, 2017.March 31, 2020. The increase in gross profit from acquisitions(exclusive of depreciation) was driven byattributable to the September 2017 TagmaFebruary 2019 Nexeo acquisition in the Rest of World segment. The decreaseUSA, Canada and LATAM segments and favorable changes in gross profit from reported sales volumes was driven by the USA,product and end market mix in EMEA, Canada and Rest of World segments, partially offset by higher sales volumes in the Canada segment.LATAM segments. The increase in gross profit from changes in sales pricing, product costs and other adjustments was driven by USA, EMEA, and Rest of World segments, partially offset by lower gross profitsales volumes in USA due to soft demand across most end markets. Refer to the Canada segment. Gross margin, which we define as gross profit divided by net sales, increased to 22.2%“Analysis of Segment Results” for the three months ended September 30, 2017 from 21.9% for the three months ended September 30, 2016 primarily due to favorable product mix, market changes, and focused margin management efforts. Foreign currency translation increased gross profit due to the weakening of the US dollar against the British pound, euro, Canadian dollar, Mexican peso, and the Brazilian real. Refer to the “Segment results” for the three months ended September 30, 2017 discussionMarch 31, 2020 for additional information.
Outbound freight and handling
Outbound freight and handling expenses decreased $1.4increased $8.6 million, or 1.8%10.4%, to $74.8$91.5 million for the three months ended September 30, 2017. Foreign currency translation increased outbound freight and handling expense by $1.1 million, or 1.4%.March 31, 2020 primarily due to the February 2019 Nexeo acquisition. On a constant currency basis, outbound freight and handling expenses decreased $2.5increased $9.4 million, or 3.2%, primarily due to lower reported sales volumes offset by higher delivery costs resulting from changes in product mix, market capacity constraints, and higher fuel costs.11.3%. Refer to the “Segment results”“Analysis of Segment Results” for the three months ended September 30, 2017 discussionMarch 31, 2020 for additional information.
Warehousing, selling and administrative
Warehousing, selling and administrative expenses increased $12.0$26.1 million, or 5.6%10.3%, to $228.0$279.5 million for the three months ended September 30, 2017. ForeignMarch 31, 2020. On a constant currency translation increasedbasis, warehousing, selling and administrative expenses by $3.5increased $29.4 million, or 1.6%. On a constant currency basis, the $8.5 million increase is primarily due11.6% attributable to higher personnel costs primarily related to annual salary increases and inflation, incremental expenses from the February 2019 Nexeo acquisition, higher environmental remediation, legal fees and bad debt charges. These
24
Table of $10.3 million driven by higher variable compensation expense,Contents
costs were partially offset by $1.3 million in lower legal fees and $0.9 million in lower lease expense. The remaining $0.4 million increase related to several insignificant components.cost containment efforts across all of our segments. Refer to the “Segment results”“Analysis of Segment Results” for the three months ended September 30, 2017 discussionMarch 31, 2020 for additional information.
Other operating expenses, net
Other operating expenses, net decreased $0.3$160.7 million from $12.1$164.8 million for the three months ended September 30, 2016March 31, 2019 to $11.8$4.1 million for the three months ended September 30, 2017.March 31, 2020. The decrease was primarily due to the absence of the saccharin legal settlement, lower acquisition and integration related to $0.9 millionexpenses, lower employee severance costs and the quarterly fair value adjustment on warrants assumed in lower restructuring charges and a benefit fromconnection with the release of a contingent payment reserve. The decrease was partially offset by $0.9 million of higher stock-based compensation. The Company also experienced higher other employee termination costs in the USA segment. The remaining $0.3 million decrease related to several insignificant components. Foreign currency translation increased other operating expenses, net by $0.3 million, or 2.5%.February 2019 Nexeo acquisition. Refer to “Note 4:6: Other operating expenses, net” and “Note 5: Restructuring charges” in Item 1 of this Quarterly Report on Form 10-Q for additional information. 
Depreciation and amortization
Depreciation expense decreased $9.9increased $8.5 million, or 23.3%25.6%, to $32.5$41.7 million for the three months ended September 30, 2017. Foreign currency translation increased depreciation expense by $0.4 million, or 0.9%. On a constant currency basis, the $10.3 million decrease wasMarch 31, 2020 primarily relateddue to the second quarter 2016 reassessment of useful lives of certain internally developed software which were fully depreciated by May 2017.February 2019 Nexeo acquisition.
Amortization expense decreased $5.7increased $1.4 million, or 25.3%9.7%, to $16.8$15.8 million for the three months ended September 30, 2017. Foreign currency translation increased amortization expense by $0.1 million, or 0.4%. On a constant currency basis, the decrease of $5.8 million wasMarch 31, 2020 primarily driven by the third quarter 2016 impairment charge which reduced the intangible asset base along with lower expense related to intangibles reaching the end of their useful life.


Impairment charges
There were no impairment charges in the three months ended September 30, 2017. Impairment charges of $133.9 million were recorded in the three months ended September 30, 2016 of which $133.6 million was dueattributable to the impairment of intangible assets and fixed assets related to the upstream oil and gas customers in the USA segment. The Company also recorded a non-cash, long-lived asset impairment charge of $0.3 million related to assets held-for-sale.February 2019 Nexeo acquisition.
Interest expense
Interest expense decreased $1.3$5.7 million, or 3.2%16.4%, to $39.3$29.1 million for the three months ended September 30, 2017 primarilyMarch 31, 2020 due to lower average outstanding borrowings as well as lower interest ratesrates. Refer to “Note 13: Debt” in Item 1 of this Quarterly Report on Form 10-Q for additional information.
Loss on sale of business
A loss of $8.6 million was recorded in the three months ended March 31, 2020 primarily related to the January 2017 debt amendmentworking capital adjustment on the sale of the Senior Term B loan agreement.Environmental Sciences business, which was completed on December 31, 2019. Refer to "Note 4: Discontinued operations and dispositions" in Item 1 of this Quarterly Report on Form 10-Q for additional information.
Other expense, net
Other expense, net increased $4.0decreased $0.2 million, or 129.0%3.3%, to $7.1$5.9 million for the three months ended September 30, 2017.March 31, 2020. The increasedecrease was primarily driven byrelated to gains on undesignated foreign currency derivative instruments as well as the increase of $2.4 million in foreign currency denominated loan revaluation losses. The remaining $1.6 million change is related to several insignificant components.non-operating pension income. Refer to “Note 6:8: Other expense, net” in Item 1 of this Quarterly Report on Form 10-Q for additional information.
Income tax expense
Income tax expense increased $51.1 million from a $44.6 million benefit for the three months ended September 30, 2016 to a $6.5 million expense for the three months ended September 30, 2017. The $51.1 million increase in income tax expense was primarily a result of a decrease in earnings in the third quarter of 2016 resulting from a one-time $133.9 million impairment charge and an increase in earnings in the third quarter of 2017 over the third quarter of 2016 of $19.1 million. As compared to the $52.2 million of discrete benefit recorded for the three months of 2016, $0.1 million of discrete expense was recorded for the three month period ended September 30, 2017.



















Segment results
Our Adjusted EBITDA by operating segment and in aggregate is summarized in the following tables:
(in millions) USA Canada     EMEA     
Rest of
World    
 
Other/
Eliminations (1) 
 Consolidated    
  Three months ended September 30, 2017
Net sales:        
External customers $1,185.0
 $299.9
 $456.9
 $106.9
 $—
 $2,048.7
Inter-segment 25.9
 2.5
 1.1
 —
 (29.5) —
Total net sales $1,210.9
 $302.4
 $458.0
 $106.9
 $(29.5) $2,048.7
Cost of goods sold 937.5
 246.2
 355.1
 84.6
 (29.5) 1,593.9
Gross profit $273.4
 $56.2
 $102.9
 $22.3
 $—
 $454.8
Outbound freight and handling 50.3
 9.1
 13.8
 1.6
 —
 74.8
Warehousing, selling and administrative 132.4
 21.5
 55.9
 11.4
 6.8
 228.0
Adjusted EBITDA $90.7
 $25.6
 $33.2
 $9.3
 $(6.8) $152.0
Other operating expenses, net       11.8
Depreciation       32.5
Amortization       16.8
Interest expense, net       38.4
Other expense, net       7.1
Income tax expense       6.5
Net income       $38.9
(in millions) USA Canada EMEA Rest of
World		 
Other/
Eliminations (1) 
 Consolidated    
  Three months ended September 30, 2016
Net sales:        
External customers $1,222.1
 $260.8
 $412.5
 $104.3
 $—
 $1,999.7
Inter-segment 21.2
 2.1
 1.1
 —
 (24.4) —
Total net sales $1,243.3
 $262.9
 $413.6
 $104.3
 $(24.4) $1,999.7
Cost of goods sold 974.0
 207.3
 320.8
 83.9
 (24.4) 1,561.6
Gross profit $269.3
 $55.6
 $92.8
 $20.4
 $—
 $438.1
Outbound freight and handling 52.3
 9.0
 13.1
 1.8
 —
 76.2
Warehousing, selling and administrative 126.9
 20.6
 51.2
 11.7
 5.6
 216.0
Adjusted EBITDA $90.1
 $26.0
 $28.5
 $6.9
 $(5.6) $145.9
Other operating expenses, net       12.1
Depreciation       42.4
Amortization       22.5
Impairment charges       133.9
Interest expense, net       39.5
Other expense, net       3.1
Income tax benefit       (44.6)
Net loss       $(63.0)
(1)Other/Eliminations represents the elimination of intersegment transactions as well as unallocated corporate costs consisting of costs specifically related to parent company operations that do not directly benefit segments, either individually or collectively.


USA.
Net sales percentage change due to: Gross profit percentage change due to:
Reported sales volumes (9.4)% Reported sales volumes (9.4)%
Sales pricing and product mix 6.4 % Sales pricing, product costs and other adjustments 10.9 %
Total (3.0)% Total 1.5 %
External sales in the USA segment were $1,185.0 million, a decrease of $37.1 million, or 3.0%, for the three months ended September 30, 2017 due to lower sales volumes, partially offset by higher average selling prices resulting from the Company's efforts to improve its sales force effectiveness and margin management initiatives. The decrease in reported sales volumes is partly due to one less selling day and lost business to customers who were unable to operate as a result of Hurricane Harvey and Irma. Gross profit increased $4.1 million, or 1.5%, to $273.4 million for the three months ended September 30, 2017. Gross profit increased due to sales pricing, product costs and other adjustments primarily due to higher average selling prices and changes in product mix to higher margin products. Gross margin increased from 22.0% for the three months ended September 30, 2016 to 23.1% during the three months ended September 30, 2017 primarily due to the factors impacting gross profit discussed above.
Outbound freight and handling expenses decreased $2.0 million, or 3.8%, to $50.3 million for the three months ended September 30, 2017 primarily due to lower shipment volumes, partially offset by higher delivery costs resulting from a combination of market capacity constraints and higher fuel costs. Operating expenses increased $5.5 million, or 4.3%, to $132.4 million for the three months ended September 30, 2017 primarily due to increased personnel expenses including higher variable compensation expense of $5.6 million. The remaining $0.1 million offsetting decrease related to several insignificant components. Operating expenses as a percentage of external sales increased from 10.4% for the three months ended September 30, 2016 to 11.2% for the three months ended September 30, 2017.
Adjusted EBITDA increased by $0.6 million, or 0.7%, to $90.7 million for the three months ended September 30, 2017. Adjusted EBITDA margin increased from 7.4% in the three months ended September 30, 2016 to 7.7% for the three months ended September 30, 2017 primarily as a result of higher gross margin, partially offset by increased operating expenses as a percentage of sales.
Canada.
Net sales percentage change due to: Gross profit percentage change due to:
Reported sales volumes 4.2% Reported sales volumes 4.2 %
Sales pricing and product mix 5.4% Sales pricing, product costs and other adjustments (7.4)%
Foreign currency translation 5.4% Foreign currency translation 4.3 %
Total 15.0% Total 1.1 %
External sales in the Canada segment were $299.9 million, an increase of $39.1 million, or 15.0%, for the three months ended September 30, 2017. Foreign currency translation increased external sales dollars as the US dollar weakened against the Canadian dollar when comparing the three months ended September 30, 2017 to the three months ended September 30, 2016. On a constant currency basis, external sales dollars increased $24.9 million, or 9.6%. The increase in external net sales was driven by higher average selling prices in the industrial end market, partially offset by lower average selling prices in the agricultural business. The increase in external net sales is also driven by higher reported sales volumes across all regions. Gross profit increased $0.6 million, or 1.1%, to $56.2 million in the three months ended September 30, 2017. Gross profit increased due to foreign currency translation and higher volumes, partially offset by lower sales pricing, product costs and other adjustments primarily due to changes in product mix in the agricultural business and lower supplier rebates during the three months ended September 30, 2017. Gross margin decreased from 21.3% for the three months ended September 30, 2016 to 18.7% for the three months ended September 30, 2017 primarily due to the factors impacting gross profit discussed above.
Outbound freight and handling expenses increased $0.1 million, or 1.1%, to $9.1 million for the three months ended September 30, 2017 primarily due to higher reported sales volumes, partially offset by lower delivery costs. Operating expenses increased by $0.9 million, or 4.4%, to $21.5 million for the three months ended September 30, 2017, and decreased as a percentage of external sales from 7.9% for the three months ended September 30, 2016 to 7.2% for the three months ended September 30, 2017. Foreign currency translation increased operating expenses by $0.9 million, or 4.4%. On a constant currency basis, operating expenses remained flat when comparing the three months ended September 30, 2017 to the three months ended September 30, 2016.

Adjusted EBITDA decreased by $0.4 million, or 1.5%, to $25.6 million for the three months ended September 30, 2017. Foreign currency translation increased Adjusted EBITDA by $1.1 million, or 4.3%. On a constant currency basis, Adjusted EBITDA decreased $1.5 million, or 5.8%, primarily due to the decrease in gross profit due to sales pricing, product costs and other adjustments offset by volumes as discussed above. Adjusted EBITDA margin decreased from 10.0% for the three months ended September 30, 2016 to 8.5% for the three months ended September 30, 2017 primarily as a result of lower gross margin, partially offset by lower outbound freight and handling expenses and operating expenses as a percentage of sales.
EMEA.
Net sales percentage change due to: Gross profit percentage change due to:
Reported sales volumes (9.4)% Reported sales volumes (9.4)%
Sales pricing and product mix 16.7 % Sales pricing, product costs and other adjustments 16.1 %
Foreign currency translation 3.5 % Foreign currency translation 4.2 %
Total 10.8 % Total 10.9 %
External sales in the EMEA segment were $456.9 million, an increase of $44.4 million, or 10.8%, for the three months ended September 30, 2017, primarily due to higher average selling prices driven by mix improvement, and margin management initiatives, partially offset by lower volumes partly due to one less selling day for the three months ended September 30, 2017 compared to the three months ended September 30, 2016. Foreign currency translation increased external sales dollars resulting from the US dollar weakening against the British pound and the euro, when comparing the three months ended September 30, 2017 to the three months ended September 30, 2016. Gross profit increased $10.1 million, or 10.9%, to $102.9 million in the three months ended September 30, 2017. Gross profit increased due to changes in sales pricing, product costs and other adjustments primarily due to increased sales of higher margin pharmaceutical finished goods as well as the continued impact of favorable product and end market mix. Gross margin remained flat at 22.5% when comparing the three months ended September 30, 2017 to the three months ended September 30, 2016.
Outbound freight and handling expenses increased $0.7 million, or 5.3%, to $13.8 million, primarily due to higher delivery costs per ton due to lower bulk volume sales. Operating expenses increased $4.7 million, or 9.2%, to $55.9 million for the three months ended September 30, 2017, and decreased as a percentage of external sales from 12.4% for the three months ended September 30, 2016 to 12.2% for the three months ended September 30, 2017. Foreign currency translation increased operating expenses by $2.1 million, or 4.1%. On a constant currency basis, operating expenses increased $2.6 million, or 5.1%, which was primarily due to higher personnel costs of $1.9 million, largely due to higher variable compensation expense, and $1.1 million in higher environmental remediation expense. The remaining $0.4 million offsetting decrease related to several insignificant components.
Adjusted EBITDA increased by $4.7 million, or 16.5%, to $33.2 million for the three months ended September 30, 2017. Foreign currency translation increased Adjusted EBITDA by $1.1 million, or 3.9%. On a constant currency basis, Adjusted EBITDA increased $3.6 million, or 12.6%. Adjusted EBITDA growth in the quarter can be attributed to improved sales force execution and margin management initiatives together with increased sales of pharmaceutical finished goods. For the three months ended September 30, 2017, the pharmaceutical finished goods product line represented approximately 30% of Adjusted EBITDA in the EMEA segment. Adjusted EBITDA margin increased from 6.9% for the three months ended September 30, 2016 to 7.3% for the three months ended September 30, 2017 primarily due to lower outbound freight and handling expenses and operating expenses as a percentage of sales.
Rest of World.
Net sales percentage change due to: Gross profit percentage change due to:
Acquisitions 0.8 % Acquisitions 2.4 %
Reported sales volumes (21.1)% Reported sales volumes (21.1)%
Sales pricing and product mix 18.1 % Sales pricing, product costs and other adjustments 23.6 %
Foreign currency translation 4.7 % Foreign currency translation 4.4 %
Total 2.5 % Total 9.3 %
External sales in the Rest of World segment were $106.9 million, an increase of $2.6 million, or 2.5%, for the three months ended September 30, 2017. Foreign currency translation increased external sales dollars when comparing the three months ended September 30, 2017 to the three months ended September 30, 2016 primarily due to the US dollar weakening against the Brazilian

real and the Mexican peso. The increase in external net sales from acquisitions was due to the September 2017 Tagma acquisition. The decrease in external net sales from reported sales volumes was due to weak industrial demand and in particular lower demand in upstream oil and gas products and solvents in Mexico. The increase in external net sales from changes in sales pricing and product mix was primarily due to favorable product mix and higher average selling prices as chemical prices increased due to product shortages where supply was impacted by hurricanes. Gross profit increased $1.9 million, or 9.3%, to $22.3 million for the three months ended September 30, 2017 due to higher average selling prices due to the impact from hurricanes, offset by lower volumes across the region. The increase in gross profit from acquisitions was due to the September 2017 Tagma acquisition. Gross margin increased from 19.6% for the three months ended September 30, 2016 to 20.9% for the three months ended September 30, 2017 primarily due to the factors discussed above.
Outbound freight and handling expenses decreased $0.2 million, or 11.1%, to $1.6 million for the three months ended September 30, 2017, primarily due to delivery cost efficiencies resulting from changes in product mix and lower volumes. Operating expenses decreased $0.3 million, or 2.6%, to $11.4 million for the three months ended September 30, 2017 and decreased as a percentage of external sales from 11.2% when comparing the three months ended September 30, 2016 to 10.7% for the three months ended September 30, 2017. Foreign currency translation increased operating expenses by $0.5 million, or 4.3%. On a constant currency basis, operating expenses decreased $0.8 million, or 6.8%, due to several insignificant components.
Adjusted EBITDA increased by $2.4 million, or 34.8%, to $9.3 million for the three months ended September 30, 2017. Foreign currency translation increased Adjusted EBITDA by $0.5 million, or 7.3%. On a constant currency basis, Adjusted EBITDA increased $1.9 million, or 27.5%, primarily due to increased gross profit. Adjusted EBITDA margin increased from 6.6% for the three months ended September 30, 2016 to 8.7% for the three months ended September 30, 2017 primarily due to higher average selling prices driven by the hurricanes and lower outbound freight and handling expenses and operating expenses as a percentage of sales.
Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016
  Nine Months Ended 
Favorable
(unfavorable)
 % Change 
Impact of
currency (1)
(in millions) September 30, 2017 September 30, 2016 
Net sales $6,294.5
 100.0 % $6,261.2
 100.0 % $33.3
 0.5 % (0.2)%
Cost of goods sold 4,933.9
 78.4 % 4,947.4
 79.0 % 13.5
 (0.3)% 0.3 %
Gross profit $1,360.6
 21.6 % $1,313.8
 21.0 % $46.8
 3.6 % (0.2)%
Operating expenses:              
Outbound freight and handling 217.7
 3.5 % 220.8
 3.5 % 3.1
 (1.4)% — %
Warehousing, selling and administrative 687.7
 10.9 % 664.8
 10.6 % (22.9) 3.4 % (3.1)%
Other operating expenses, net 55.8
 0.9 % 29.1
 0.5 % (26.7) 91.8 % (0.3)%
Depreciation 102.5
 1.6 % 113.9
 1.8 % 11.4
 (10.0)% 0.1 %
Amortization 50.0
 0.8 % 67.8
 1.1 % 17.8
 (26.3)% — %
Impairment charges —
 — % 133.9
 2.1 % 133.9
 (100.0)% — %
Total operating expenses $1,113.7
 17.7 % $1,230.3
 19.6 % $116.6
 (9.5)% — %
Operating income $246.9
 3.9 % $83.5
 1.3 % $163.4
 195.7 % (2.8)%
Other (expense) income:              
Interest income 2.6
 — % 3.0
 — % (0.4) (13.3)% — %
Interest expense (112.6) (1.8)% (123.5) (2.0)% 10.9
 (8.8)% 0.2 %
Loss on extinguishment of debt (0.8) — % —
 — % (0.8) 100.0 % — %
Other expense, net (27.9) (0.4)% (10.8) (0.2)% (17.1) 158.3 % 13.9 %
Total other expense $(138.7) (2.2)% $(131.3) (2.1)% $(7.4) 5.6 % 1.4 %
Income (loss) before income taxes 108.2
 1.7 % (47.8) (0.8)% 156.0
 N/M
 (1.0)%
Income tax expense (benefit) 15.4
 0.2 % (38.6) (0.6)% (54.0) N/M
 0.5 %
Net income (loss) $92.8
 1.5 % $(9.2) (0.1)% $102.0
 N/M
 (3.3)%
(1)Foreign currency translation is included in the percentage change. Unfavorable impacts from foreign currency translation are designated with parentheses.


Net sales
Net sales percentage change due to:        
Acquisitions0.1 %
Reported sales volumes(5.9)%
Sales pricing and product mix6.5 %
Foreign currency translation(0.2)%
Total0.5 %
Net sales were $6,294.5 million for the nine months ended September 30, 2017, an increase of $33.3 million, or 0.5%, from the nine months ended September 30, 2016. The increase in net sales from acquisitions was driven by the September 2017 Tagma acquisition in the Rest of World segment, the March 2016 Nexus Ag acquisition in Canada, and the March 2016 Bodine acquisition in the USA. The decrease in net sales from reported sales volumes was driven by the USA, EMEA, and Rest of World segments, partially offset by higher sales volumes in the Canada segment. The increase in net sales from changes in sales pricing and product mix was driven by the USA, EMEA, and Rest of World segments, partially offset by a decrease in the Canada segment. Foreign currency translation decreased net sales, due to the US dollar strengthening against the British pound, euro, and Mexican peso, partially offset by the weakening of the US dollar against the Canadian dollar and the Brazilian real. Refer to the “Segment results” for the nine months ended September 30, 2017 discussion for additional information.
Gross profit
Gross profit percentage change due to:        
Acquisitions0.2 %
Reported sales volumes(5.9)%
Sales pricing, product costs and other adjustments9.5 %
Foreign currency translation(0.2)%
Total3.6 %
Gross profit increased $46.8 million, or 3.6%, to $1,360.6 million for the nine months ended September 30, 2017. The increase in gross profit from acquisitions was driven by the September 2017 Tagma acquisition in the Rest of World segment, the March 2016 Bodine acquisition in the USA, and the March 2016 Nexus Ag acquisition in Canada. The decrease in gross profit from reported sales volumes was driven by the USA, EMEA, and Rest of World segments, partially offset by higher sales volumes in the Canada segment. The increase in gross profit from changes in sales pricing, product costs and other adjustments was driven by the USA, EMEA, and Rest of World segments, partially offset by a decrease in the Canada segment. Gross margin, which we define as gross profit divided by net sales, increased to 21.6% for the nine months ended September 30, 2017 from 21.0% for the nine months ended September 30, 2016 primarily due to favorable product mix and focused margin management efforts. Foreign currency translation decreased gross profit due to the strengthening of the US dollar against the British pound, euro, and Mexican peso, partially offset by the weakening of the US dollar against the Canadian dollar and the Brazilian real. Refer to the “Segment results” for the nine months ended September 30, 2017 discussion for additional information.
Outbound freight and handling
Outbound freight and handling expenses decreased $3.1 million, or 1.4%, to $217.7 million for the nine months ended September 30, 2017. Foreign currency translation increased outbound freight and handling expense by $0.1 million. On a constant currency basis, outbound freight and handling expenses decreased $3.2 million primarily due to lower reported sales volumes offset by higher delivery costs resulting from changes in product mix, market capacity constraints, and increasing fuel prices. Refer to the “Segment results” for the nine months ended September 30, 2017 discussion for additional information.
Warehousing, selling and administrative
Warehousing, selling and administrative expenses increased $22.9 million, or 3.4%, to $687.7 million for the nine months ended September 30, 2017. Foreign currency translation increased warehousing, selling and administrative expenses by $0.2 million, or 3.1%. On a constant currency basis, the $22.7 million increase is primarily due to higher personnel costs of $31.8 million primarily driven by higher variable compensation expense, including the absence of $4.5 million in prior service credits recognized in 2016 related to the US retiree health care plan, partially offset by $3.2 million in lower lease expense, and $1.5 million in lower legal expenses. The remaining $4.4 million decrease related to several insignificant components. Refer to the “Segment results” for the nine months ended September 30, 2017 discussion for additional information.

Other operating expenses, net
Other operating expenses, net increased $26.7 million from $29.1 million for the nine months ended September 30, 2016 to $55.8 million for the nine months ended September 30, 2017. The increase was primarily related to the increase of $20.6 million of costs incurred to support the transformation of the US business, $8.9 million of higher stock-based compensation, and $5.8 million of higher other employee termination costs. The increase was partially offset by $3.9 million in lower restructuring charges and $3.5 million in lower acquisition and integration related expenses. The remaining $1.2 million decrease related to several insignificant components. Foreign currency translation increased other operating expenses, net by $0.1 million, or 0.3%. Refer to “Note 4: Other operating expenses, net” and “Note 5: Restructuring charges” in Item 1 of this Quarterly Report on Form 10-Q for additional information. 
Depreciation and amortization
Depreciation expense decreased $11.4 million, or 10.0%, to $102.5 million for the nine months ended September 30, 2017. Foreign currency translation decreased depreciation expense by $0.1 million, or 0.1%. On a constant currency basis, the $11.3 million decrease was primarily due to assets reaching the end of their useful lives and due to the second quarter 2016 reassessment of useful lives of certain internally developed software which were fully depreciated by May 2017.
Amortization expense decreased $17.8 million, or 26.3%, to $50.0 million for the nine months ended September 30, 2017. Foreign currency translation had no impact on amortization expense. The decrease of $17.8 million was primarily driven by the third quarter 2016 impairment charge which reduced the intangible asset base along with lower expense related to intangibles reaching the end of their useful life.
Impairment charges
There were no impairment charges in the nine months ended September 30, 2017. Impairment charges of $133.9 million were recorded in the nine months ended September 30, 2016 of which $133.6 million was due to the impairment of intangible assets and fixed assets related to the upstream oil and gas customers in the USA segment. The Company also recorded a non-cash, long-lived asset impairment charge of $0.3 million related to assets held-for-sale.
Interest expense
Interest expense decreased $10.9 million, or 8.8%, to $112.6 million for the nine months ended September 30, 2017 primarily due to lower average outstanding borrowings, as well as lower interest rates related to the January 2017 debt amendment of the Senior Term B loan agreement.
Loss on extinguishment of debt
Loss on extinguishment of debt of $1.8 million during the three months ended March 31, 2020 was driven by the partial prepayment of the Term B-3 Loan due 2024. The prior year period included $0.8a $0.7 million loss for the ninethree months ended September 30, 2017March 31, 2019 due to the write off of unamortized debt discount and debt issuance costs related to the January 2017 debtFebruary 2019 amendment of the Senior Term B loan agreement.
Other expense, net
Other expense, net increased $17.1 million from $10.8 million for the nine months ended September 30, 2016 to $27.9 million for the nine months ended September 30, 2017. The increase was primarily due to the $7.2 million change in mark-to-market for interest rate swaps from a loss of $3.0 million in the nine months ended September 30, 2017 compared to a gain of $4.2 million in the nine months ended September 30, 2016. The increase was also driven by $4.2 million in fees related to the January 2017 debt amendment of the Senior Term B loan agreement. Also contributing to the increase were $1.6 million in higher foreign currency transactions and $1.5 million in higher foreign currency denominated loan revaluation losses. The remaining $2.6 million increase is related to several insignificant components.ABL Facility. Refer to “Note 6: Other expense, net”"Note 13: Debt" in Item 1 of this Quarterly Report on Form 10-Q for additional information.
Income tax expensebenefit
Income tax expense increased $54.0benefit was $0.3 million from a $38.6 million benefit for the ninethree months ended September 30, 2016March 31, 2020, resulting in an effective income tax rate of (0.5)%. A discrete tax benefit of $9.0 million was included in the $0.3 million tax benefit, primarily attributable to the utilization of previously disallowed US interest expense as a $15.4result of the CARES Act. The Company’s effective income tax rate without discrete items was 30.0%, higher than the US federal statutory rate of 21.0% primarily due to the impact of the higher tax rates in foreign jurisdictions, non-deductible expenses and US state income taxes.
Income tax benefit was $23.3 million expense for the ninethree months ended September 30, 2017. The $54.0 million increaseMarch 31, 2019, resulting in an effective income tax expenserate of 25.0%. A discrete tax benefit of $10.2 million, substantially attributable to the indirect effects of the Nexeo plastics sale, was primarily the result of a decrease in earningsincluded in the third quarter$23.3 million tax benefit. The Company’s effective income tax rate without discrete items was 42.6%, higher than the US federal statutory rate of 2016 resulting from a one-time $133.9 million impairment charge21.0%. This is primarily due to the impact of the Nexeo related acquisition and integration costs, along with state taxes, foreign rate differential, non-deductible compensation and other expenses, and an increase in earnings in the third quartervaluation allowance on certain income tax attributes.
Results of 2017 overReportable Business Segments
The Company’s operations are structured into four reportable segments that represent the third quartergeographic areas under which we operate and manage our business. Management believes Adjusted EBITDA is an important measure of 2016 of $22.1 million. As compared tooperating performance, which is used as the $53.1 million of discrete benefitprimary basis for the nine monthschief operating decision maker to evaluate the performance of 2016, $3.7 millioneach of discrete benefit was recordedour reportable segments. We believe certain other financial measures that are not calculated in accordance with US GAAP provide relevant and meaningful information concerning the ongoing operating results of the Company. These financial measures include gross profit (exclusive of depreciation) and gross margin. Such non-GAAP financial measures are used from
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Table of Contents
time to time herein but should not be viewed as a substitute for the nine month period ended September 30, 2017GAAP measures of which a $4.0 million benefit is relatedperformance. See “Note 19: Segments” to excess tax benefits from share-based compensation.our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q and “Analysis of Segment Results” within this Item for additional information.

Analysis of Segment Results
Segment resultsUSA
Our Adjusted EBITDA by operating segment and in aggregate is summarized in the following tables:
Three months ended March 31,Favorable (unfavorable)% Change
(in millions)20202019
Net sales:
External customers$1,357.5  $1,307.2  $50.3  3.8 %
Inter-segment25.7  24.9  0.8  3.2 %
Total net sales$1,383.2  $1,332.1  $51.1  3.8 %
Cost of goods sold (exclusive of depreciation)1,051.8  1,024.8  (27.0) 2.6 %
Outbound freight and handling63.1  55.6  (7.5) 13.5 %
Warehouse, selling and administrative171.7  154.6  (17.1) 11.1 %
Adjusted EBITDA$96.6  $97.1  $(0.5) (0.5)%

(in millions) USA Canada     EMEA     
Rest of
World    
 
Other/
Eliminations (1)   
 Consolidated    
  Nine months ended September 30, 2017
Net sales:        
External customers $3,527.0
 $1,099.6
 $1,360.3
 $307.6
 $—
 $6,294.5
Inter-segment 92.1
 6.6
 3.6
 0.3
 (102.6) —
Total net sales $3,619.1
 $1,106.2
 $1,363.9
 $307.9
 $(102.6) $6,294.5
Cost of goods sold 2,807.1
 926.7
 1,054.5
 248.2
 (102.6) 4,933.9
Gross profit $812.0
 $179.5
 $309.4
 $59.7
 $—
 $1,360.6
Outbound freight and handling 144.4
 27.5
 41.0
 4.8
 —
 217.7
Warehousing, selling and administrative 403.2
 64.8
 163.0
 34.0
 22.7
 687.7
Adjusted EBITDA $264.4
 $87.2
 $105.4
 $20.9
 $(22.7) $455.2
Other operating expenses, net       55.8
Depreciation       102.5
Amortization       50.0
Interest expense, net       110.0
Loss on extinguishment of debt       0.8
Other expense, net       27.9
Income tax expense       15.4
Net income       $92.8
(in millions) USA Canada EMEA Rest of
World		 
Other/
Eliminations (1) 
 Consolidated    
  Nine Months Ended September 30, 2016
Net sales:        
External customers $3,622.4
 $1,018.9
 $1,309.8
 $310.1
 $—
 $6,261.2
Inter-segment 73.1
 6.1
 3.5
 —
 (82.7) —
Total net sales $3,695.5
 $1,025.0
 $1,313.3
 $310.1
 $(82.7) $6,261.2
Cost of goods sold 2,900.2
 858.2
 1,021.2
 250.5
 (82.7) 4,947.4
Gross profit $795.3
 $166.8
 $292.1
 $59.6
 $—
 $1,313.8
Outbound freight and handling 148.2
 25.2
 41.9
 5.5
 —
 220.8
Warehousing, selling and administrative 393.0
 62.4
 160.4
 35.1
 13.9
 664.8
Adjusted EBITDA $254.1
 $79.2
 $89.8
 $19.0
 $(13.9) $428.2
Other operating expenses, net       29.1
Depreciation       113.9
Amortization       67.8
Impairment charges       133.9
Interest expense, net       120.5
Other expense, net       10.8
Income tax benefit       (38.6)
Net loss       $(9.2)
(1)Other/Eliminations represents the elimination of intersegment transactions as well as unallocated corporate costs consisting of costs specifically related to parent company operations that do not directly benefit segments, either individually or collectively.


USA.
Net sales percentage change due to: Gross profit percentage change due to:
Acquisitions 0.1 % Acquisitions 0.1 %
Reported sales volumes (7.5)% Reported sales volumes (7.5)%
Sales pricing and product mix 4.8 % Sales pricing, product costs and other adjustments 9.5 %
Total (2.6)% Total 2.1 %
Three months ended March 31,Favorable (unfavorable)% Change
(in millions)20202019
Gross profit (exclusive of depreciation):
Net sales$1,383.2  $1,332.1  $51.1  3.8 %
Cost of goods sold (exclusive of depreciation)1,051.8  1,024.8  (27.0) 2.6 %
Gross profit (exclusive of depreciation)$331.4  $307.3  $24.1  7.8 %
External sales in the USA segment were $3,527.0 million, a decrease of $95.4 million, or 2.6%, for the nine months ended September 30, 2017 due to lower sales volumes, partially offset by higher average selling prices resulting from the Company's efforts to improve its sales force effectiveness and favorable changes in product mix. The increase in external net sales from acquisitions was due to the March 2016 Bodine acquisition. Gross profit increased $16.7 million, or 2.1%, to $812.0 million for the nine months ended September 30, 2017. Gross profit increased due to sales pricing, product costs and other adjustments primarily due to higher average selling prices and changes in product mix to higher margin products. The increase in gross profit from acquisitions was due to the March 2016 Bodine acquisition. Gross margin increased from 22.0% for the nine months ended September 30, 2016 to 23.0% during the nine months ended September 30, 2017 primarily due to the factors impacting gross profit discussed above.
Outbound freight and handling expenses decreased $3.8 million, or 2.6%, to $144.4 million for the nine months ended September 30, 2017 primarily due to lower shipment volumes, partially offset by higher delivery costs resulting from market capacity constraints and increasing fuel prices. Operating expenses increased $10.2 million, or 2.6%, to $403.2 million for the nine months ended September 30, 2017 of which $18.2 million is attributable to higher personnel costs primarily driven by higher variable compensation expense, including the absence of $4.5 million in prior service credits recognized in 2016 related to the US retiree health care plan, partially offset by $3.4 million of lower lease expenses, $2.1 million in lower bad debt charges, and $1.4 million in lower legal expenses. The remaining $1.1 million decrease related to several insignificant components. Operating expenses as a percentage of external sales increased from 10.8% for the nine months ended September 30, 2016 to 11.4% for the nine months ended September 30, 2017.
Adjusted EBITDA increased by $10.3 million, or 4.1%, to $264.4 million for the nine months ended September 30, 2017. Adjusted EBITDA margin increased from 7.0% in the nine months ended September 30, 2016 to 7.5% for the nine months ended September 30, 2017 primarily as a result of higher gross margin, partially offset by increased operating expenses as a percentage of sales.
Canada.
Net sales percentage change due to: Gross profit percentage change due to:
Acquisitions 0.4 % Acquisitions 0.4 %
Reported sales volumes 6.9 % Reported sales volumes 6.9 %
Sales pricing and product mix (0.5)% Sales pricing, product costs and other adjustments (0.9)%
Foreign currency translation 1.1 % Foreign currency translation 1.2 %
Total 7.9 % Total 7.6 %
External sales in the Canada segment were $1,099.6$1,357.5 million, an increase of $80.7$50.3 million, or 7.9%3.8%, for the ninethree months ended September 30, 2017. Foreign currency translation increased external sales dollars as the US dollar weakened against the Canadian dollar when comparing the nine months ended September 30, 2017 to the nine months ended September 30, 2016. On a constant currency basis, external sales dollars increased $69.0 million, or 6.8%. The increase in external net sales from acquisitions was due to the March 2016 Nexus Ag acquisition.31, 2020. The increase in external net sales was drivenprimarily related to the February 2019 Nexeo acquisition and demand for our products in certain essential end markets, partially offset by higher reported sales volumes across all regions.the Environmental Sciences divestiture, lower energy and industrial end market demand and price deflation on certain products.
Gross profit (exclusive of depreciation) increased $24.1 million, or 7.8%, to $331.4 million for the three months ended March 31, 2020. Gross margin increased from 23.5% for the three months ended March 31, 2019 to 24.4% for the three months ended March 31, 2020. The decrease in external net sales fromincreases were primarily related to favorable changes in sales pricing and product mix was primarily driven by a change in market and product mix, offsetting strong pricing gains achieved in Western Canada. Gross profit increased $12.7 million, or 7.6%, to $179.5 million in the nine months ended September 30, 2017. The increase in gross profit from acquisitions was due to the March 2016 Nexus Ag acquisition. Gross profit decreased from sales pricing, product costs,February 2019 Nexeo acquisition and other adjustments due to change in market and product mix,margin management efforts, partially offset by margin management efforts during the nine months ended September 30, 2017. Gross margin decreased from 16.4% for the nine months ended September 30, 2016 to 16.3% for the nine months ended September 30, 2017 primarilylower sales volumes due to the factors impacting gross profit discussed above.

soft demand across most end markets.
Outbound freight and handling expenses increased $2.3$7.5 million, or 9.1%13.5%, to $27.5$63.1 million for the ninethree months ended September 30, 2017March 31, 2020, primarily due to higher reported sales volumesthe February 2019 Nexeo acquisition.
Warehousing, selling and higher delivery costs resulting from changes in product mix. Operatingadministrative expenses increased by $2.4$17.1 million, or 3.8%11.1%, to $64.8$171.7 million for the ninethree months ended September 30, 2017, but decreased asMarch 31, 2020, primarily due to incremental expenses from the February 2019 Nexeo acquisition, higher environmental remediation, legal fees and bad debt charges, partially offset by cost containment efforts. As a percentage of external sales, warehousing, selling and administrative expenses increased from 6.1%11.8% for the ninethree months ended September 30, 2016March 31, 2019 to 5.9%12.6% for the ninethree months ended September 30, 2017. Foreign currency translation increased operating expenses by 1.3%, or $0.8 million. On a constant currency basis, operating expenses increased $1.6 million, or 2.6%, primarily due to increased personnel expenses of $2.0 million driven by higher salary and variable compensation expense. The remaining $0.4 million offsetting decrease related to several insignificant components.March 31, 2020.
Adjusted EBITDA increaseddecreased by $8.0$0.5 million, or 10.1%0.5%, to $87.2$96.6 million for the ninethree months ended September 30, 2017. Foreign currency translation increased Adjusted EBITDA by $0.9 million, or 1.1%. On a constant currency basis, Adjusted EBITDA increased $7.1 million, or 9.0%, primarily due to increased gross profit. Adjusted EBITDA margin increased from 7.8% for the nine months ended September 30, 2016 to 7.9% for the nine months ended September 30, 2017March 31, 2020 primarily as a result of lower operatingdemand for chemicals and ingredients in most end markets. Adjusted EBITDA margin decreased from 7.4% in the three months ended March 31, 2019 to 7.1% for the three months ended March 31, 2020, primarily as a result of increased warehousing, selling and administrative costs and outbound freight and handling expenses as a percentage of sales, partially offset by lowerhigher gross margin.
EMEA.
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Net sales percentage change due to: Gross profit percentage change due to:
Reported sales volumes (5.9)% Reported sales volumes (5.9)%
Sales pricing and product mix 12.1 % Sales pricing, product costs and other adjustments 13.7 %
Foreign currency translation (2.3)% Foreign currency translation (1.9)%
Total 3.9 % Total 5.9 %
EMEA
Three months ended March 31,Favorable (unfavorable)% Change
(in millions)20202019
Net sales:
External customers$460.3  $483.7  $(23.4) (4.8)%
Inter-segment0.8  1.0  (0.2) (20.0)%
Total net sales$461.1  $484.7  $(23.6) (4.9)%
Cost of goods sold (exclusive of depreciation)345.1  368.5  23.4  (6.4)%
Outbound freight and handling15.5  15.6  0.1  (0.6)%
Warehouse, selling and administrative60.2  58.5  (1.7) 2.9 %
Adjusted EBITDA$40.3  $42.1  $(1.8) (4.3)%

Three months ended March 31,Favorable (unfavorable)% Change
(in millions)20202019
Gross profit (exclusive of depreciation):
Net sales$461.1  $484.7  $(23.6) (4.9)%
Cost of goods sold (exclusive of depreciation)345.1  368.5  23.4  (6.4)%
Gross profit (exclusive of depreciation)$116.0  $116.2  $(0.2) (0.2)%
External sales in the EMEA segment were $1,360.3$460.3 million, an increasea decrease of $50.5$23.4 million, or 3.9%4.8%, for the ninethree months ended September 30, 2017,March 31, 2020. On a constant currency basis, external net sales decreased $8.4 million, or 1.7%, primarily due to higher average selling prices driven by mix improvement, margin management initiatives,lower volumes in most end markets, partially offset by lower volumes. Foreign currency translation decreased external sales dollars as the US dollar strengthened against the British pound and euro, when comparing the nine months ended September 30, 2017 to the nine months ended September 30, 2016. strong demand for our products in certain essential end markets.
Gross profit increased $17.3(exclusive of depreciation) decreased $0.2 million, or 5.9%0.2%, to $309.4$116.0 million in the ninethree months ended September 30, 2017. GrossMarch 31, 2020.On a constant currency basis, gross profit (exclusive of depreciation) increased due$3.5 million, or 3.0%, attributable to higher sales volumes and favorable changes in sales pricing, product costs and other adjustments primarily due to increased sales of higher margin pharmaceutical finished goods as well as the continued impact of favorable product and end market mix. Gross margin increased from 22.3%24.0% for the ninethree months ended September 30, 2016March 31, 2019 to 22.7%25.2% for the ninethree months ended September 30, 2017March 31, 2020 primarily due to the factors discussed above.change in product mix andmargin management initiatives.
Outbound freight and handling expenses decreased $0.9$0.1 million, or 2.1%0.6%, to $41.0$15.5 million, primarily due to lower reporteddriven by the favorable changes in product mix, partially offset by higher sales volumes. Operating
Warehousing, selling and administrative expenses increased $2.6$1.7 million, or 1.6%2.9%, to $163.0$60.2 million for the ninethree months ended September 30, 2017,March 31, 2020. On a constant currency basis, warehousing, selling and decreased asadministrative expenses increased $3.6 million, or 6.2%, which was attributable to higher bad debt charges, one-time excise tax charges and full year effect of higher personnel costs due to inflation and investments for growth. As a percentage of external sales, warehousing, selling and administrative expenses increased from 12.2%12.1% for the ninethree months ended September 30, 2016March 31, 2019 to 12.0%13.1% for the ninethree months ended September 30, 2017. Foreign currency translationMarch 31, 2020.
Adjusted EBITDA decreased operating expenses by $1.3$1.8 million, or 0.8%.4.3%, to $40.3 million for the three months ended March 31, 2020. On a constant currency basis, operating expenses increased $3.9Adjusted EBITDA decreased $0.4 million, or 2.4%1.0%, which was drivenattributable to increased market pressures in the pharmaceutical finished goods product line and higher warehousing, selling and administrative costs, partially offset by the positive impact from demand for our products in certain essential end markets. Adjusted EBITDA margin increased slightly from 8.7% for the three months ended March 31, 2019 to 8.8% for the three months ended March 31, 2020.
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Canada
Three months ended March 31,Favorable (unfavorable)% Change
(in millions)20202019
Net sales:
External customers$285.8  $273.8  $12.0  4.4 %
Inter-segment0.8  1.1  (0.3) (27.3)%
Total net sales$286.6  $274.9  $11.7  4.3 %
Cost of goods sold (exclusive of depreciation)225.0  221.4  (3.6) 1.6 %
Outbound freight and handling10.5  9.7  (0.8) 8.2 %
Warehouse, selling and administrative23.8  22.1  (1.7) 7.7 %
Adjusted EBITDA$27.3  $21.7  $5.6  25.8 %

Three months ended March 31,Favorable (unfavorable)% Change
(in millions)20202019
Gross profit (exclusive of depreciation):
Net sales$286.6  $274.9  $11.7  4.3 %
Cost of goods sold (exclusive of depreciation)225.0  221.4  (3.6) 1.6 %
Gross profit (exclusive of depreciation)$61.6  $53.5  $8.1  15.1 %
External sales in the Canada segment were $285.8 million, an increase of $12.0 million, or 4.4%, for the three months ended March 31, 2020. On a constant currency basis, external net sales increased $15.0 million, or 5.5%, primarily related to the February 2019 Nexeo acquisition along with contributions from the agriculture market and higher personnel costs of $4.5 million primarily due to higher variable compensation expense, higher environmental remediation expense of $1.9 million, and $1.2 milliondemand for our products in higher bad debt charges.certain essential end markets. The increase was partially offset by lower demand from Canada’s energy sector, the Environmental Sciences divestiture and price deflation.
Gross profit (exclusive of depreciation) increased $8.1 million, or 15.1%, to $61.6 million for the three months ended March 31, 2020.On a decreaseconstant currency basis, gross profit (exclusive of depreciation) increased $8.8 million, or 16.4%, primarily due to favorable changes in product and market mix as well as contributions from the February 2019 Nexeo acquisition. Gross margin increased from 19.5% for the three months ended March 31, 2019 to 21.6% for the three months ended March 31, 2020 as a result of higher margins on certain commodity chemicals.
Outbound freight and handling expenses increased $0.8 million, in lease expenses. The remaining offsetting $2.9or 8.2%, to $10.5 million decrease relatedfor the three months ended March 31, 2020, primarily due to several other insignificant components.higher sales volumes and incremental costs from the February 2019 Nexeo acquisition.
Warehousing, selling and administrative expenses increased by $1.7 million, or 7.7%, to $23.8 million for the three months ended March 31, 2020. On a constant currency basis, warehousing, selling and administrative expenses increased $2.0 million, or 9.0%, primarily due higher bad debt charges as well as incremental expenses from the February 2019 Nexeo acquisition. As a percentage of external sales, warehousing, selling and administrative expenses increased from 8.1% for the three months ended March 31, 2019 to 8.3% for the three months ended March 31, 2020.
Adjusted EBITDA increased by $15.6$5.6 million, or 17.4%25.8%, to $105.4$27.3 million for the ninethree months ended September 30, 2017. Foreign currency translation decreased Adjusted EBITDA by $4.0 million, or 4.4%.March 31, 2020. On a constant currency basis, Adjusted EBITDA increased $19.6$5.9 million, or 21.8%27.2%. Adjusted EBITDA growth for the nine months ended September 30, 2017 can be attributed to increased gross profit due to improved sales force execution and margin management initiatives together with increased sales of pharmaceutical finished goods compared to the nine months ended September 30, 2016. For the nine months ended September 30, 2017, the pharmaceutical finished goods product line represented approximately 30% of Adjusted EBITDA in the EMEA segment. Adjusted EBITDA margin increased from 6.9%7.9% for the ninethree months ended September 30, 2016March 31, 2019 to 7.7%9.6% for the ninethree months ended September 30, 2017March 31, 2020, primarily due toas a result of higher gross margin and lower outbound freight and handling expenses and operating expenses as a percentagemargin.
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Table of sales.





Rest of World.
Contents
Net sales percentage change due to: Gross profit percentage change due to:
Acquisitions 0.3 % Acquisitions 0.8 %
Reported sales volumes (14.2)% Reported sales volumes (14.2)%
Sales pricing and product mix 12.0 % Sales pricing, product costs and other adjustments 10.9 %
Foreign currency translation 1.1 % Foreign currency translation 2.7 %
Total (0.8)% Total 0.2 %
LATAM
Three months ended March 31,Favorable (unfavorable)% Change
(in millions)20202019
Net sales:
External customers$107.6  $95.3  $12.3  12.9 %
Total net sales$107.6  $95.3  $12.3  12.9 %
Cost of goods sold (exclusive of depreciation)84.0  75.9  (8.1) 10.7 %
Outbound freight and handling2.4  2.0  (0.4) 20.0 %
Warehouse, selling and administrative12.9  11.7  (1.2) 10.3 %
Adjusted EBITDA$8.3  $5.7  $2.6  45.6 %

Three months ended March 31,Favorable (unfavorable)% Change
(in millions)20202019
Gross profit (exclusive of depreciation):
Net sales$107.6  $95.3  $12.3  12.9 %
Cost of goods sold (exclusive of depreciation)84.0  75.9  (8.1) 10.7 %
Gross profit (exclusive of depreciation)$23.6  $19.4  $4.2  21.6 %
External sales in the Rest of WorldLATAM segment were $307.6$107.6 million, a decreasean increase of $2.5$12.3 million, or 0.8%12.9%, for the ninethree months ended September 30, 2017. ForeignMarch 31, 2020. On a constant currency translationbasis, external net sales increased external sales dollars when comparing the nine months ended September 30, 2017 to the nine months ended September 30, 2016$20.8 million, or 21.8%, primarily due to the US dollar weakening againstFebruary 2019 Nexeo acquisition, higher demand for our products in certain essential end markets and from contributions from the Brazilian realagriculture sector.
Gross profit (exclusive of depreciation) increased $4.2 million, or 21.6%, partially offset byto $23.6 million for the US dollar strengthening against the Mexican peso. The increase in external net sales from acquisitions was due to the September 2017 Tagma acquisition. The decrease in external net sales from reported sales volumes was due to weak industrial demand and in particular lower demand in upstream oil and gas products and solvents in Mexico. The increase in external net sales from changes in sales pricing and product mix was primarily three months ended March 31, 2020. On a constant currency basis, gross profit (exclusive of depreciation) increased $6.5 million, or 33.5%, due to favorable changes in product and end market mix and higher average selling prices resultingcontributions from the Company's efforts to improve its sales force effectiveness and higher chemical prices due to product shortages in the areas impacted by hurricanes. Gross profit increased $0.1 million, or 0.2%, to $59.7 million for the nine months ended September 30, 2017. The increase in gross profit from acquisitions was due to the September 2017 TagmaFebruary 2019 Nexeo acquisition. Gross profit increased from sales pricing, product costs and other adjustments primarily due to favorable product mix and higher average selling prices resulting from product shortages stemming from the recent hurricanes as well as the Company's efforts to improve its sales force effectiveness, offset by lower volumes across the region for the nine months ended September 30, 2017. Gross margin increased from 19.2%20.4% for the ninethree months ended September 30, 2016March 31, 2019 to 19.4%21.9% for the ninethree months ended September 30, 2017 primarily due to the factors discussed above.March 31, 2020.
Outbound freight and handling expenses decreased $0.7increased $0.4 million, or 12.7%20.0%, to $4.8$2.4 million for the ninethree months ended September 30, 2017,March 31, 2020 compared to March 31, 2019 primarily due to delivery cost efficiencies resultinghigher sales volumes and incremental expenses from changes in product mixthe February 2019 Nexeo acquisition.
Warehousing, selling and lower volumes. Operatingadministrative expenses decreased $1.1increased $1.2 million, or 3.1%10.3%, to $34.0$12.9 million for the ninethree months ended September 30, 2017March 31, 2020. On a constant currency basis, warehousing, selling and decreased asadministrative expenses increased $2.5 million, or 21.4%, primarily due to higher variable compensation costs and incremental expenses from the February 2019 Nexeo acquisition. As a percentage of external sales, warehousing, selling and administrative expenses decreased from 11.3%12.3% for the ninethree months ended September 30, 2016March 31, 2019 to 11.1%12.0% for the ninethree months ended September 30, 2017. Foreign currency translation increased operating expenses by $0.9 million, or 2.6%. On constant currency basis, operating expenses decreased $2.0 million, or 5.7%, which was primarily related to lower personnel expenses of $0.5 million due to reduced headcount. The remaining $1.5 million decrease related to several insignificant components.March 31, 2020.
Adjusted EBITDA increased by $1.9$2.6 million, or 10.0%45.6%, to $20.9$8.3 million for the ninethree months ended September 30, 2017. Foreign currency translation increased Adjusted EBITDA by $0.8 million, or 4.2%.March 31, 2020. On a constant currency basis, Adjusted EBITDA increased $1.1$3.4 million, or 5.8%59.6%, primarily due to increased gross profit (exclusive of depreciation) due to higher demand for our products in certain essential end markets and benefit from reductions in outbound freight and handling expenses and operating expenses.the Brazilian agriculture sector. Adjusted EBITDA margin increased from 6.1%6.0% for the ninethree months ended September 30, 2016March 31, 2019 to 6.8%7.7% for the ninethree months ended September 30, 2017 primarily due to higher average selling prices driven by the hurricanes and lower outbound freight and handling expenses and operating expenses as a percentageMarch 31, 2020.
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Table of sales.Contents
Liquidity and Capital Resources
OurThe Company’s primary sourcesources of liquidity isare cash generated from ourits operations as well asand borrowings under our committed North American and European credit facilities.facilities (“facilities”). As of September 30, 2017, we had $667.7March 31, 2020, liquidity for the Company was $834.8 million availablecomprised of $379.7 million of cash and cash equivalents and $455.1 million of availability under the facilities. These facilities are guaranteed by certain significant subsidiaries and secured by such parties’ eligible trade receivables and inventory with the maximum borrowing capacity under these credit facilities of $1.5 billion and €200 million, respectively. Significant reductions in the Company’s trade receivables and inventory would reduce our availability to access liquidity under these facilities. The Company has no active financial maintenance covenants in its credit facilities.agreements, however, there is a springing fixed charge coverage ratio (“FCCR”) under the revolving credit facilities of 1.0x, applicable only if availability is less than or equal to 10% of the borrowing capacity. If the FCCR was applicable, the calculation would have been 4.3x as of March 31, 2020.
We are in compliance with our covenants. OurThe Company’s primary liquidity and capital resource needs are to service ourits debt and to finance operating expenses, working capital, capital expenditures, other liabilities, costs of integration and cost of acquisitions. We believe that funds provided by these sources will be adequate to meet the liquidity and capital resource needs for at least the next 12 months under current operating conditions. We will continuegeneral corporate purposes. The Company has no significant debt maturities until 2024. Management continues to balance ourits focus on sales and earnings growth with continuing efforts in cost control and working capital management. In anticipation of ongoing, challenging macroeconomic headwinds, including the impact of the COVID-19 pandemic, the Company is carefully managing its working capital and implementing operating cost reductions to maintain our financial health while continuing to help serve supplier and customer needs.

The Company's access to debt capital markets has historically provided the Company with sources of liquidity. We do not anticipate having difficulty in obtaining financing from those markets in the future with our history of favorable results in the debt capital markets and strong relationships with global financial institutions. However, the COVID-19 pandemic has caused disruption in the capital markets and could make financing more difficult and/or expensive to obtain in the short term. Additionally, our ability to continue to access the debt capital markets with favorable interest rates and other terms will depend, to a significant degree, on maintaining our current ratings assigned by the credit rating agencies.

On January 7, 2020, using the proceeds from the sale of the Environmental Sciences business, the Company repaid $174.0 million of the Term B-3 Loan due 2024. Refer to “Note 13: Debt” in Item 1 of this Quarterly Report on Form 10-Q for additional information.

We expect our 2020 capital expenditures for maintenance, safety and cost improvements and investments in our digital capabilities to be approximately $95 million to $115 million, reduced from the our previous expectation of $120 million to $130 million.


We believe funds provided by our primary sources of liquidity will be adequate to meet our liquidity, debt repayment obligations and capital resource needs for at least the next 12 months under current operating conditions.
Cash Flows
The following table presents a summary of our cash flow activity for the periods set forth below:flows:
 Nine months ended Three months ended March 31,
(in millions) September 30, 2017 September 30, 2016(in millions)20202019
Net cash provided by operating activities $32.6
 $224.2
Net cash used by operating activities Net cash used by operating activities  $(78.2) $(123.5) 
Net cash used by investing activities (80.4) (118.2)Net cash used by investing activities  (30.9) (532.6) 
Net cash used by financing activities (32.3) (46.6)
Net cash provided by financing activities Net cash provided by financing activities  171.0  1,330.5  
Effect of exchange rate changes on cash and cash equivalents 37.6
 19.6
Effect of exchange rate changes on cash and cash equivalents(12.5) (8.0) 
Net (decrease) increase in cash and cash equivalents $(42.5) $79.0
Net increase in cash and cash equivalents Net increase in cash and cash equivalents  $49.4  $666.4  
Cash ProvidedUsed by Operating Activities
Cash providedused by operating activities decreased $191.6$45.3 million from $224.2to $78.2 million for the ninethree months ended September 30, 2016 to $32.6March 31, 2020 from $123.5 million for the ninethree months ended September 30, 2017.
Cash provided by operating activities increased $6.8 millionMarch 31, 2019, primarily due to an increasechanges in net income, exclusive of non-cash items. Netitems partially offset by changes in prepaid expenses and other current assets and trade working capital. The change in net income, exclusive of non-cash items, was $263.6provided net cash inflows of $157.8 million and 256.8from cash inflows of $122.3 million for the ninethree months ended September 30, 2017March 31, 2020 and September 30, 2016, respectively.cash outflows of $35.5 million for the three months ended March 31, 2019. Refer to “Results of Operations” above for additional information.
The change in trade working capital;capital, which includes trade accounts receivable, net, inventories, and trade accounts payable; resulted in an increased usepayable, was a cash outflow of cash of $156.5 million. Trade$52.4 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. Cash outflows from trade accounts receivable, net, used cash of $198.3 million and $83.2 million for the nine months ended September 30, 2017 and September 30, 2016, respectively. The increase in current year cash outflows is dueattributable to higher sales and the timing of customer payments compared to the prior nine months ended September year-
30 2016. Inventories provided
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over-year. Inventory cash of $1.5 million and $60.2 million for the nine months ended September 30, 2017 and September 30, 2016, respectively.outflows on a year-over-year basis were insignificant. The current year cash inflows are lower than prior year due to higher inventories as a result of drought conditions that led to a soft agriculture season. Trade accounts payable provided cash inflows of $58.1 million and $40.8 million for the nine months ended September 30, 2017 and September 30, 2016, respectively. Theyear-over-year cash inflows related to trade accounts payable are primarily due to higher purchases.
Prepaid expenses and other current assets contributed $45.6 millionattributable to the increased usetiming of cash. During the nine months ended September 30, 2017, prepaid expenses and other current assets used $15.4 million of cash, primarily due to increases in prepaid expenses, sales taxes, and several other insignificant components. Prepaid expenses and other current assets provided cash of $30.2 million during the nine months ended September 30, 2016, which was primarily due to the receipt of cash related to rebates, income tax receivables, and several other insignificant components.
The change in pensions and other postretirement benefit liabilities used cash of $3.8 million, which consisted of cash outflows of $34.6 million and $30.8 million for the nine months ended September 30, 2017 and September 30, 2016, respectively.vendor payments.
The remaining cash inflow associated with operating activities of $7.5 million is related tooutflows primarily represent payment timing differences for other net. During the nine months ended September 30, 2017assets and September 30, 2016, other, net used $42.3 million and $49.8 million of cash, respectively, primarily due to the settlement of customer prepayment obligations. During the nine months ended September 30, 2017 the increased cash usage in other, net was partially offset by cash inflows related to increased reserves for variable compensation.liabilities.
Cash Used by Investing Activities
Cash used by investing activities decreased $37.8$501.7 million from $118.2to $30.9 million for the ninethree months ended September 30, 2016 to $80.4March 31, 2020 from $532.6 million for the ninethree months ended September 30, 2017.March 31, 2019. The decrease is primarily related to lower cash outflowsthe acquisition of the Nexeo business in 2019, net of the proceeds received for purchasesthe sale and disposition of businesses,Nexeo Plastics. Refer to “Note 3: Business combinations” and “Note 4: Discontinued operations and dispositions” in Item 1 of $30.4 million. In 2016, the cash outflowsthis Quarterly Report on Form 10-Q for additional information related to the BodineCompany's acquisitions and Nexus Ag acquisitions were $54.8 million. In 2017, the cash outflows related to the Tagma Brasil acquisition and certain assets of PVS were $24.4 million. Another factor contributing to the decrease in cash used by investing activities was a reduction of spending related to capital expenditures of $7.9 million.
The remaining decrease in cash used by investing activities of $0.5 million did not contain any significant activity.dispositions.
Cash UsedProvided by Financing Activities
Cash usedprovided by financing activities decreased $14.3$1,159.5 million from $46.6to $171.0 million for the ninethree months ended September 30, 2016 to $32.3March 31, 2020 from $1,330.5 million for the ninethree months ended September 30, 2017.

AnMarch 31, 2019. The decrease in financing cash flows is primarily due to the prior year increase in debt used to finance the February 2019 Nexeo acquisition. The cash provided by financing activities of $11.6 millionflow decrease was duealso attributable to a net change in the cash used by the ABL facilities of $2.4 million and $14.0 million for the nine months ended September 30, 2017 and September 30, 2016, respectively. The change in the outstanding ABL facilities is due to changes in borrowings related to working capital funding requirements. Partially offsetting the increase in cash provided by financing activities are $2.3 million of cash outflows due to repayments of term debt; inclusivecurrent year early payment of the Term B Loan, Euro Tranche Term Loan, and Senior Unsecured Note. The January 19, 2017 agreement to amend the Senior Term B loan resulted in a net cash outflow of $4.4 million of financing fees.B-3 Loan. Refer to “Note 10:13: Debt” in Item 1 of this Quarterly Report on Form 10-Q for additional information. Increased payments related to capital leases resulted
Off-Balance Sheet Arrangements
There were no material changes in increased cash usage due to financing activitiesthe Company’s off-balance sheet arrangements since the filing of $2.3 million.
Cash provided by financing activities also increased by $27.4 million due to a net increase in stock option exercises of $32.1 million and $4.7 millionthe Company’s Annual Report on Form 10-K for the nine monthsyear ended September 30, 2017 and September 30, 2016, respectively. Partially offsetting the increase in cash due to the exercise of stock options was cash used for taxes paid related to net share settlements of stock-based compensation awards of $7.8 million, which was inclusive of cash used of $8.0 million and $0.2 million for the nine months ended September 30, 2017 and September 30, 2016, respectively.
The change in short-term financing, net resulted in an increased usage of cash related to financing activities of $7.9 million due to increased repayments. Short-term financing, net used cash of $18.9 million and $11.0 million for the nine months ended September 30, 2017 and September 30, 2016, respectively.December 31, 2019.
Contractual Obligations and Commitments
There were no material changes in ourthe Company’s contractual obligations and commitments since the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2019.
Critical Accounting Estimates
There were no material changes in ourthe Company’s critical accounting estimates since the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2019.
Recently Issued and Adopted Accounting Pronouncements
See “Note 2: Significant accounting policies” in the notes to the condensed consolidated financial statements.
Accounting Pronouncements Issued But Not Yet Adopted
See “Note 2: Significant accounting policies” in the notes to the condensed consolidated financial statements.
Forward Looking Statements and Information
ThisCertain parts of this Quarterly Report on Form 10-Q containscontain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-lookingForward-looking statements can be identifiedare generally accompanied by the use of forward-looking termswords such as “believes,” “expects,” “may,” “will,” “should,” “could,” “seeks,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms. TheseAll forward-looking statements include all matters that are not historical facts. They appearmade in a number of places throughout this Quarterly Report on Form 10-Q are qualified by these cautionary statements.
Any forward-looking statements represent our views only as of the date of this report and include statements regardingshould not be relied upon as representing our intentions, beliefs or current expectations concerning, amongviews as of any subsequent date, and we undertake no obligation, other things, our results of operations, financial condition, macro-economic conditions, liquidity, prospects, business trends, currency trends, competition, markets, growth strategies and the industries in which we operate and including, without limitation, statements relating to our estimated or anticipated financial performance or results. Forward-looking statements are subject to known and unknown risks and uncertainties, many of whichthan as may be beyond our control.required by law, to update any forward-looking statement. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industries in which we operateperformance may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even ifForward-looking statements include, but are not limited to, statements about:
•the impact of the COVID-19 pandemic on our results of operations, financial condition and operating results;
•our ability to solve customer technical challenges and accelerate product development cycles;
•demand for new products that meet regulatory and customer sustainability standards and preferences and our ability to provide such products and systems to maintain our competitive position;
•our ability to sell specialty products at higher profit;
•the cyclicality of our Agricultural business;
•the continuation of the trend of outsourcing of chemical distribution by chemical manufacturers;
•significant factors that may adversely affect us and our industry;
•the outcome and effect of ongoing and future legal proceedings;
•market conditions and outlook;
•our liquidity outlook and the developmentfunding thereof, and cash requirements and adequacy of resources to fund them;
•future contributions to our pension plans and cash payments for postretirement benefits; and
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•the impact of ongoing tax guidance and interpretations.
Potential factors that could affect such forward-looking statements include, among others:
•the ultimate geographic spread of the industries in which we operate are consistent withCOVID-19 pandemic, the forward-looking statements contained in this Quarterly Reportduration and severity of the COVID-19 pandemic, actions that may be taken by governmental authorities to address or otherwise mitigate the impact of the COVID-19 pandemic, the potential negative impacts of COVID-19 on Form 10-Q, thosethe global economy and our customers and suppliers, and the overall impact of the COVID-19 pandemic on our business, results or developments may not be indicative of results, conditions or developments in subsequent periods. A number of important factors could cause actual results to differ materially from those contained in or implied by the forward-looking statements, including those reflected in forward-looking statements relating to our operations and business and the risks and uncertainties discussedfinancial condition;
•other fluctuations in “Risk Factors.” Factors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include:
general economic conditions, particularly fluctuations in industrial production and the demands of our customers;
disruptions•significant changes in the supplybusiness strategies of chemicals we distributeproducers or in the operations of our customers’ or producers' operations;customers;
termination or change•increased competitive pressures, including as a result of contracts or relationships with customers or producers on short notice;competitor consolidation;
•significant changes in the pricepricing, demand and availability of chemicals, or a decline in the demand for chemicals;

our ability to pass through cost increases to our customers;
our ability to meet customer demand for a product;
•trends in oil and gas demand and prices;
•our indebtedness, the restrictions imposed by our debt instruments, and our ability to execute strategic investments, including pursuing acquisitions and/or dispositions, and successfully integrating and operating acquired companies;obtain additional financing;
challenges associated with international operations, including securing producers and personnel, import/export requirements, compliance with foreign•the broad spectrum of laws and international businessregulations that we are subject to, including extensive environmental, health and safety laws and changes in economicregulations;
•an inability to integrate the business and systems of companies we acquire or political conditions;to realize the anticipated benefits of such acquisitions;
our ability to effectively implement our strategies or achieve our•potential business goals;
exposure to interest ratedisruptions and currency fluctuations;
competitive pressures in the chemical distribution industry;
consolidation of our competitors;
our ability to implement and efficiently operate the systems needed to manage our operations;
the risks associated with security threats,breaches, including cybersecurity threats;incidents;
•an inability to generate sufficient working capital;
•increases in transportation and fuel costs and changes in our relationship with third party carriers;providers;
the risks associated with hazardous materials and related activities;
•accidents, safety failures, environmental damage, product quality and liability issues and recalls;
•major or systemic delivery failures involving our distribution network or the products we carry or adverse health effects or other harm related to the materials we blend, manage, handle, store, sell or transport;carry;
evolving laws and regulations relating to hydraulic fracturing and risks associated with chemicals used in hydraulic fracturing;
losses due to potential product liability claims and recalls and asbestos claims;
compliance with extensive environmental, health and safety laws, including laws relating to our environmental services businesses and the investigation and remediation of contamination, that could require material expenditures or changes in our operations;
general regulatory and tax requirements;
operational risks for which we may not be adequately insured;
•ongoing litigation and other legal and regulatory actions and risks, including asbestos claims;risks;
potential impairment of goodwill;
inability to generate sufficient working capital;
loss of key personnel;
labor disruptions and other costs•challenges associated with the unionized portion of our workforce;international operations;
•exposure to interest rate and currency fluctuations;
•negative developments affecting our pension plans and multi-employer pensions;
•labor disruptions associated with the impactunionized portion of labeling regulations;our workforce; and
our substantial indebtedness•the other factors described in the Company's filings with the Securities and the restrictions imposed by our debt instruments and indenture.Exchange Commission.
You should read this Quarterly Report on Form 10-Q, including the uncertainties and factors discussed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 20162019 completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements made in this Quarterly Report on Form 10-Q are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise and changes in future operating results over time or otherwise.
Comparisons of results between current and prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Non-GAAP Financial Measures
We monitor the results of our reportable segments separately for the purposes of making decisions about resource allocation and performance assessment. We evaluate performance using Adjusted EBITDA. We define Adjusted EBITDA as consolidated net income (loss), plus the sum of net income from discontinued operations, net interest expense, income tax expense, depreciation, amortization, loss on extinguishment of debt, other operating expenses, net (see “Note 6: Other operating expenses, net” in Item 1 of this Quarterly Report on Form 10-Q for additional information) and other expense, net (see “Note 8: Other expense, net” in Item 1 of this Quarterly Report on Form 10-Q for additional information). For a reconciliation of the non-GAAP financial measures to its most comparable GAAP measure, see “Analysis of Segment Results” within this Item and for a reconciliation of net income (loss) to Adjusted EBITDA, the most comparable measure calculated in accordance with GAAP, see “Note 19: Segments” to our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q.
We believe that non-GAAP financial measures provide relevant and meaningful information concerning the ongoing operating results of the Company. These financial measures include gross profit (exclusive of depreciation), gross margin and Adjusted EBITDA margin. We define these financial measures as follows:
•Gross profit (exclusive of depreciation): net sales less cost of goods sold (exclusive of depreciation);
•Gross margin: gross profit (exclusive of depreciation) divided by external net sales; and
•Adjusted EBITDA margin: Adjusted EBITDA divided by external net sales.
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Management believes Adjusted EBITDA, Adjusted EBITDA margin, gross profit (exclusive of depreciation) and gross margin are important measures in assessing operating performance. The non-GAAP financial measures are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help investors’ ability to analyze underlying trends in the Company’s business, evaluate its performance relative to other companies in its industry and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company’s core operating results. Additionally, the Company uses Adjusted EBITDA in setting performance incentive targets to align management compensation measurement with operational performance. Adjusted EBITDA, Adjusted EBITDA margin, gross profit (exclusive of depreciation) and gross margin are not measures calculated in accordance with GAAP and should not be considered a substitute for net income or any other measure of financial performance presented in accordance with GAAP. Additionally, other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 3.  Quantitative and Qualitative Disclosures about Market Risk
There were no material changes from the “Quantitative and Qualitative Disclosure about Market Risk” disclosed in Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2019.
Item 4.Controls and Procedures
Item 4.  Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of ourthe Company’s management, including ourthe principal executive officer and principal financial officer, wethe Company conducted an evaluation as of September 30, 2017March 31, 2020 of the effectiveness of the design and operation of ourits disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act

of 1934, as amended. Based on this evaluation, ourthe principal executive officer and principal financial officer concluded that ourthe Company’s disclosure controls and procedures were effective as of September 30, 2017.March 31, 2020.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2017March 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II.
OTHER INFORMATION
Item 1.  Legal Proceedings
Information pertaining to legal proceedings can be found in Note 1417 to the interim condensed consolidated financial statements included in Part I, Financial Statements of this report.
Item 1A.  Risk Factors
There have been no material changes fromIn addition to the other information set forth in this report, readers should carefully consider the factors discussed in Item 1A. “Risk Factors” disclosed in Part I, Item 1A of the Company’sour Annual Report on Form 10-K for the year ended December 31, 2016.2019, which could materially affect our business, financial condition, results of operations, or cash flows. Except for the new risk factor appearing below, there have been no material changes in the risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2019.
The coronavirus (COVID-19) pandemic could adversely impact our business, financial condition and results of operations.
The novel coronavirus identified in China in late 2019 has spread globally and has resulted in authorities implementing numerous measures to try to contain the virus, including travel restrictions, quarantines, shelter in place orders, and shutdowns. These measures have adversely impacted and may further adversely impact our workforce and operations and those of, our customers, vendors and suppliers by, among other things, causing facility closures, production delays and capacity limitations; disrupting our supply chain and reducing the availability of products; straining our supply chain as a result of increased product demand; disrupting the transport of products from our supply chain to us and from us to our customers and causing delays; restricting our operations and sales, marketing and distribution efforts; and delaying the implementation of our strategic plans and initiatives. To the extent that the Company and its customers, vendors and suppliers continue to be impacted by the COVID-19 pandemic, this could materially interrupt the Company’s business operations and have a material adverse effect on our financial condition and results of operations.
In addition, the COVID-19 pandemic has caused us to modify our business practices (including restricting employee travel, changing employee work locations, and canceling of physical participation in meetings, events and conferences) and we may take further actions as may be required by government authorities or that we determine are in the best interests of our
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employees, customers, vendors and suppliers. Our operations and our ability to perform critical functions may be disrupted if a significant number of employees are ill, quarantined or otherwise limited in their ability to work remotely, such as in the event of a natural disaster, power outage, connectivity issue, or other event that impacts our employees’ ability to work remotely. The increase in remote working may also result in increased cyber security and fraud risks.
The potential duration and impact of the pandemic on the global economy and on our business are difficult to predict and cannot be estimated with any degree of certainty, but the pandemic has significantly increased economic and demand uncertainty and caused significant disruptions to global financial markets. It is likely that the COVID-19 pandemic will continue to cause a sustained economic slowdown which could lead to a global recession. Risks related to a slowdown or recession are described in our risk factor titled “We are affected by general economic conditions, particularly fluctuations in industrial production and consumption, and an economic downturn could adversely affect our operations and financial results.” under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019. The impact of the COVID-19 pandemic may also exacerbate other risks discussed under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, any of which could have a material adverse effect on our business, financial condition and results of operations.
The COVID-19 pandemic is unprecedented and continuously evolving. The degree to which the pandemic impacts our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the severity, duration and spread of the COVID-19 pandemic and the actions to contain or otherwise mitigate the impact of the COVID-19 pandemic and how quickly and to what extent normal economic and operating conditions can resume. We might not be able to predict or respond to all impacts on a timely basis to prevent near- or long-term adverse impact to our results.
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3.   Defaults Uponupon Senior Securities
None.
Item 4.   Mine Safety Disclosures
None.
Item 5.   Other Information
None.
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Item 6.   Exhibits
Exhibit NumberExhibit Description
Univar Solutions Inc. 2020 Omnibus Incentive Plan, incorporated by reference to Exhibit NumberExhibit Description4.5 to the Registration Statement on Form S-8 of the Company, filed on May 7, 2020.
Employment Agreement, dated as of November 1, 2017, by and between Univar Inc., and David Jukes
31.1*
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.1*101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
_______________________
†Identifies each management compensation plan or arrangement.arrangement
*Filed herewith
**Furnished herewith


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Univar Solutions Inc.
(Registrant)
Univar Inc.
(Registrant)
By:		/s/ David C. Jukes
By:/s/ Stephen D. Newlin
Stephen D. Newlin
David C. Jukes
President and Chief Executive Officer
Date: November 3, 2017May 11, 2020
 
By:/s/ Carl J. LukachNicholas W. Alexos
Carl J. Lukach
Nicholas W. Alexos
Executive Vice President and Chief Financial Officer
Date: November 3, 2017May 11, 2020



By:/s/ Jeanette A. Press
Jeanette A. Press
Vice President, Corporate Controller and Principal Accounting Officer
Date: May 11, 2020

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