Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 26, 2020 | Oct. 26, 2020 | |
Cover [Abstract] | ||
Entity Central Index Key | 0001000228 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-26 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 26, 2020 | |
Document Transition Report | false | |
Entity Registrant Name | HENRY SCHEIN, INC. | |
Entity File Number | 0-27078 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 11-3136595 | |
Entity Address, Address Line One | 135 Duryea Road | |
Entity Address, City or Town | Melville | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11747 | |
City Area Code | 631 | |
Local Phone Number | 843-5500 | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Trading Symbol | HSIC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 142,776,158 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 26, 2020 | Dec. 28, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 533,495 | $ 106,097 |
Accounts receivable, net of reserves of $86,371 and $60,002 | 1,407,676 | 1,246,246 |
Inventories, net | 1,463,434 | 1,428,799 |
Prepaid expenses and other | 464,645 | 445,360 |
Total current assets | 3,869,250 | 3,226,502 |
Property and equipment, net | 334,954 | 329,645 |
Operating lease right-of-use assets | 249,895 | 231,662 |
Goodwill | 2,488,962 | 2,462,495 |
Other intangibles, net | 510,395 | 572,878 |
Investments and other | 356,439 | 327,919 |
Total assets | 7,809,895 | 7,151,101 |
Current liabilities: | ||
Accounts payable | 1,006,958 | 880,266 |
Bank credit lines | 507,372 | 23,975 |
Current maturities of long-term debt | 110,015 | 109,849 |
Operating lease liabilities | 62,914 | 65,349 |
Accrued expenses: | ||
Payroll and related | 250,365 | 265,206 |
Taxes | 138,196 | 165,171 |
Other | 527,987 | 528,553 |
Total current liabilities | 2,603,807 | 2,038,369 |
Long-term debt | 515,357 | 622,908 |
Deferred income taxes | 32,408 | 64,989 |
Operating lease liabilities | 200,611 | 176,267 |
Other liabilities | 370,745 | 331,173 |
Total liabilities | 3,722,928 | 3,233,706 |
Redeemable noncontrolling interests | 294,700 | 287,258 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value, 1,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock, $.01 par value, 480,000,000 shares authorized, 142,456,318 outstanding on September 26, 2020 and 143,353,459 outstanding on December 28, 2019 | 1,425 | 1,434 |
Additional paid-in capital | 11,044 | 47,768 |
Retained earnings | 3,314,136 | 3,116,215 |
Accumulated other comprehensive income (loss) | (171,332) | (167,373) |
Total Henry Schein, Inc. stockholders' equity | 3,155,273 | 2,998,044 |
Noncontrolling interests | 636,994 | 632,093 |
Total stockholders' equity | 3,792,267 | 3,630,137 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ 7,809,895 | $ 7,151,101 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 26, 2020 | Dec. 28, 2019 |
Current assets: | ||
Accounts receivable, reserves (in dollars) | $ 86,371 | $ 60,002 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 480,000,000 | 480,000,000 |
Common stock, shares outstanding (in shares) | 142,456,318 | 143,353,459 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
CONSOLIDATED STATEMENTS OF INCOME | ||||
Net sales | $ 2,840,146 | $ 2,508,767 | $ 6,953,416 | $ 7,316,862 |
Cost of sales | 2,085,847 | 1,747,600 | 4,998,784 | 5,036,574 |
Gross profit | 754,299 | 761,167 | 1,954,632 | 2,280,288 |
Operating expenses: | ||||
Selling, general and administrative | 559,636 | 574,771 | 1,572,816 | 1,742,597 |
Restructuring costs (credits) | 6,992 | (802) | 27,713 | 15,764 |
Operating income | 187,671 | 187,198 | 354,103 | 521,927 |
Other income (expense): | ||||
Interest income | 2,294 | 3,943 | 7,481 | 12,368 |
Interest expense | (11,111) | (12,373) | (29,409) | (41,459) |
Other, net | (1,699) | (177) | (2,210) | (2,012) |
Income from continuing operations before taxes, equity in earnings of affiliates and noncontrolling interest | 177,155 | 178,591 | 329,965 | 490,824 |
Income taxes | (29,005) | (41,964) | (65,965) | (117,326) |
Equity in earnings of affiliates | 3,663 | 6,585 | 7,808 | 14,771 |
Net income from continuing operations | 151,813 | 143,212 | 271,808 | 388,269 |
Income (loss) from discontinued operations | (29) | 5,641 | 274 | (5,576) |
Net income | 151,784 | 148,853 | 272,082 | 382,693 |
Less: Net (income) loss attributable to noncontrolling interests | (10,087) | (8,296) | (10,921) | (18,187) |
Plus: Net loss attributable to noncontrolling interests from discontinued operations | 0 | 0 | 0 | 366 |
Net income attributable to Henry Schein, Inc. | 141,697 | 140,557 | 261,161 | 364,872 |
Continuing operations | 141,726 | 134,916 | 260,887 | 370,082 |
Discontinued operations | (29) | 5,641 | 274 | (5,210) |
Net income (loss) attributable to Henry Schein, Inc. | $ 141,697 | $ 140,557 | $ 261,161 | $ 364,872 |
Earnings per share from continuing operations attributable to Henry Schein, Inc.: | ||||
Basic (in dollars per share) | $ 1 | $ 0.92 | $ 1.83 | $ 2.49 |
Diluted (in dollars per share) | 0.99 | 0.91 | 1.82 | 2.47 |
Earnings (loss) per share from discontinued operations attributable to Henry Schein, Inc.: | ||||
Basic (in dollars per share) | 0 | 0.04 | 0 | (0.04) |
Diluted (in dollars per share) | 0 | 0.04 | 0 | (0.04) |
Earnings per share attributable to Henry Schein, Inc.: | ||||
Basic (in dollars per share) | 1 | 0.96 | 1.83 | 2.46 |
Diluted (in dollars per share) | $ 0.99 | $ 0.95 | $ 1.82 | $ 2.43 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 142,362 | 147,136 | 142,553 | 148,603 |
Diluted (in shares) | 143,091 | 148,575 | 143,308 | 149,920 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 151,784 | $ 148,853 | $ 272,082 | $ 382,693 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation gain (loss) | 37,588 | (60,635) | (17,316) | (43,926) |
Unrealized gain (loss) from foreign currency hedging activities | (7,697) | (1,263) | 2,457 | (1,586) |
Unrealized investment gain (loss) | 2 | 2 | (5) | 8 |
Pension adjustment gain (loss) | (338) | 400 | 161 | 832 |
Other comprehensive income (loss), net of tax | 29,555 | (61,496) | (14,703) | (44,672) |
Comprehensive income | 181,339 | 87,357 | 257,379 | 338,021 |
Comprehensive income attributable to noncontrolling interests: | ||||
Net income | (10,087) | (8,296) | (10,921) | (17,821) |
Foreign currency translation (gain) loss | (1,636) | 6,014 | 10,744 | 4,609 |
Comprehensive income attributable to noncontrolling interests | (11,723) | (2,282) | (177) | (13,212) |
Comprehensive income attributable to Henry Schein, Inc. | $ 169,616 | $ 85,075 | $ 257,202 | $ 324,809 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment [Member] | Common Stock [Member] | Common Stock [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings [Member] | Retained Earnings [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Other Comprehensive Income (Loss) [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | Noncontrolling Interests [Member] | Noncontrolling Interests [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] |
Beginning Balance at Dec. 29, 2018 | $ 3,541,788 | $ (274) | $ 1,514 | $ 0 | $ 0 | $ 0 | $ 3,208,589 | $ (274) | $ (248,771) | $ 0 | $ 580,456 | $ 0 |
Beginning Balance, shares (in shares) at Dec. 29, 2018 | 151,401,668 | |||||||||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | 372,441 | $ 0 | 0 | 364,872 | 0 | 7,569 | ||||||
Foreign currency translation gain (loss) (excluding loss attributable to Redeemable noncontrolling interests) | (39,606) | 0 | 0 | 0 | (39,317) | (289) | ||||||
Unrealized gain (loss) from foreign currency hedging activities, net of tax impact | (1,586) | 0 | 0 | 0 | (1,586) | 0 | ||||||
Unrealized investment gain (loss), net of tax impact | 8 | 0 | 0 | 0 | 8 | 0 | ||||||
Pension adjustment gain, net of tax impact | 832 | 0 | 0 | 0 | 832 | 0 | ||||||
Dividends paid | (299) | 0 | 0 | 0 | 0 | (299) | ||||||
Other adjustments | (3) | 0 | (3) | 0 | 0 | 0 | ||||||
Change in fair value of redeemable securities | 5,867 | 0 | 5,867 | 0 | 0 | 0 | ||||||
Initial noncontrolling interests and adjustments related to business acquisitions | 42,345 | 0 | 0 | 0 | 0 | 42,345 | ||||||
Adjustment for Animal Health Spin-off, Value | 1 | $ 1 | 0 | 0 | 0 | 0 | ||||||
Adjustment for Animal Health Spin-off, Shares | 87,629 | |||||||||||
Repurchase and retirement of common stock - Value | (325,000) | $ (52) | (51,312) | (273,636) | 0 | 0 | ||||||
Repurchase and retirement of common stock - Shares | (5,277,256) | |||||||||||
Stock issued upon exercise of stock options | 34 | $ 0 | 34 | 0 | 0 | 0 | ||||||
Stock issued upon exercise of stock options, shares | 2,526 | |||||||||||
Stock-based compensation (credit) expense - Value | (33,435) | $ (2) | (33,433) | 0 | 0 | 0 | ||||||
Stock-based compensation credit - Shares | 218,563 | |||||||||||
Shares withheld for payroll taxes - Value | (10,767) | $ (2) | (10,765) | 0 | 0 | 0 | ||||||
Shares withheld for payroll taxes - Shares | (178,266) | |||||||||||
Settlement of stock-based compensation awards, value | 303 | $ 0 | 303 | 0 | 0 | 0 | ||||||
Settlement of stock-based compensation awards, shares | 0 | |||||||||||
Share Sale related to Animal Health business | 361,090 | $ 0 | 361,090 | 0 | 0 | 0 | ||||||
Separation of Animal Health business | (521,299) | 0 | (71,549) | (543,158) | 93,408 | 0 | ||||||
Transfer of charges in excess of capital | 0 | 0 | (201,457) | 201,457 | 0 | 0 | ||||||
Ending Balance at Sep. 28, 2019 | 3,459,310 | $ 1,463 | 65,641 | 2,957,850 | (195,426) | 629,782 | ||||||
Ending Balance, shares (in shares) at Sep. 28, 2019 | 146,254,864 | |||||||||||
Beginning Balance at Jun. 29, 2019 | 3,446,214 | $ 1,478 | 65,356 | 2,900,387 | (139,944) | 618,937 | ||||||
Beginning Balance, shares (in shares) at Jun. 29, 2019 | 147,823,846 | |||||||||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | 144,748 | $ 0 | 0 | 140,557 | 0 | 4,191 | ||||||
Foreign currency translation gain (loss) (excluding loss attributable to Redeemable noncontrolling interests) | (54,887) | 0 | 0 | 0 | (54,621) | (266) | ||||||
Unrealized gain (loss) from foreign currency hedging activities, net of tax impact | (1,263) | 0 | 0 | 0 | (1,263) | 0 | ||||||
Unrealized investment gain (loss), net of tax impact | 2 | 0 | 0 | 0 | 2 | 0 | ||||||
Pension adjustment gain, net of tax impact | 400 | 0 | 0 | 0 | 400 | 0 | ||||||
Dividends paid | (84) | 0 | 0 | 0 | 0 | (84) | ||||||
Other adjustments | 1 | 0 | 1 | 0 | 0 | 0 | ||||||
Change in fair value of redeemable securities | 1,667 | 0 | 1,667 | 0 | 0 | 0 | ||||||
Initial noncontrolling interests and adjustments related to business acquisitions | 7,004 | 0 | 0 | 0 | 0 | 7,004 | ||||||
Repurchase and retirement of common stock - Value | (98,218) | $ (15) | (15,109) | (83,094) | 0 | 0 | ||||||
Repurchase and retirement of common stock - Shares | (1,571,909) | |||||||||||
Stock-based compensation (credit) expense - Value | 13,338 | $ 0 | 13,338 | 0 | 0 | 0 | ||||||
Stock-based compensation credit - Shares | 6,028 | |||||||||||
Shares withheld for payroll taxes - Value | (199) | $ 0 | (199) | 0 | 0 | 0 | ||||||
Shares withheld for payroll taxes - Shares | (3,101) | |||||||||||
Settlement of stock-based compensation awards, value | (85) | $ 0 | (85) | 0 | 0 | 0 | ||||||
Settlement of stock-based compensation awards, shares | 0 | |||||||||||
Separation of Animal Health business | 672 | $ 0 | 672 | 0 | 0 | 0 | ||||||
Ending Balance at Sep. 28, 2019 | 3,459,310 | $ 1,463 | 65,641 | 2,957,850 | (195,426) | 629,782 | ||||||
Ending Balance, shares (in shares) at Sep. 28, 2019 | 146,254,864 | |||||||||||
Beginning Balance at Dec. 28, 2019 | $ 3,630,137 | $ 1,434 | 47,768 | 3,116,215 | (167,373) | 632,093 | ||||||
Beginning Balance, shares (in shares) at Dec. 28, 2019 | 143,353,459 | 143,353,459 | ||||||||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | $ 264,829 | $ 0 | 0 | 261,161 | 0 | 3,668 | ||||||
Foreign currency translation gain (loss) (excluding loss attributable to Redeemable noncontrolling interests) | (6,317) | 0 | 0 | 0 | (6,572) | 255 | ||||||
Unrealized gain (loss) from foreign currency hedging activities, net of tax impact | 2,457 | 0 | 0 | 0 | 2,457 | 0 | ||||||
Unrealized investment gain (loss), net of tax impact | (5) | 0 | 0 | 0 | (5) | 0 | ||||||
Pension adjustment gain, net of tax impact | 161 | 0 | 0 | 0 | 161 | 0 | ||||||
Dividends paid | (816) | 0 | 0 | 0 | 0 | (816) | ||||||
Purchase of noncontrolling interests | (2,298) | 0 | (1,597) | 0 | 0 | (701) | ||||||
Change in fair value of redeemable securities | (5,141) | 0 | (5,141) | 0 | 0 | 0 | ||||||
Initial noncontrolling interests and adjustments related to business acquisitions | 2,495 | 0 | 0 | 0 | 0 | 2,495 | ||||||
Repurchase and retirement of common stock - Value | (73,789) | $ (12) | (10,949) | (62,828) | 0 | 0 | ||||||
Repurchase and retirement of common stock - Shares | (1,200,000) | |||||||||||
Stock-based compensation (credit) expense - Value | 6,648 | $ (5) | 6,653 | 0 | 0 | 0 | ||||||
Stock-based compensation credit - Shares | 535,556 | |||||||||||
Shares withheld for payroll taxes - Value | (14,199) | $ (2) | (14,197) | 0 | 0 | 0 | ||||||
Shares withheld for payroll taxes - Shares | (232,697) | |||||||||||
Settlement of stock-based compensation awards, value | 164 | $ 0 | 164 | 0 | 0 | 0 | ||||||
Settlement of stock-based compensation awards, shares | 0 | |||||||||||
Separation of Animal Health business | 1,649 | $ 0 | 1,649 | 0 | 0 | 0 | ||||||
Ending Balance at Sep. 26, 2020 | $ 3,792,267 | $ 1,425 | 11,044 | 3,314,136 | (171,332) | 636,994 | ||||||
Ending Balance, shares (in shares) at Sep. 26, 2020 | 142,456,318 | 142,456,318 | ||||||||||
Beginning Balance at Jun. 27, 2020 | $ 3,621,545 | $ (412) | $ 1,424 | $ 0 | 16,475 | $ 0 | 3,172,439 | $ (412) | (199,251) | $ 0 | 630,458 | $ 0 |
Beginning Balance, shares (in shares) at Jun. 27, 2020 | 142,438,127 | |||||||||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | 145,692 | $ 0 | 0 | 141,697 | 0 | 3,995 | ||||||
Foreign currency translation gain (loss) (excluding loss attributable to Redeemable noncontrolling interests) | 36,311 | 0 | 0 | 0 | 35,952 | 359 | ||||||
Unrealized gain (loss) from foreign currency hedging activities, net of tax impact | (7,697) | 0 | 0 | 0 | (7,697) | 0 | ||||||
Unrealized investment gain (loss), net of tax impact | 2 | 0 | 0 | 0 | 2 | 0 | ||||||
Pension adjustment gain, net of tax impact | (338) | 0 | 0 | 0 | (338) | 0 | ||||||
Dividends paid | (309) | 0 | 0 | 0 | 0 | (309) | ||||||
Change in fair value of redeemable securities | (10,724) | 0 | (10,724) | 0 | 0 | 0 | ||||||
Initial noncontrolling interests and adjustments related to business acquisitions | 2,491 | 0 | 0 | 0 | 0 | 2,491 | ||||||
Stock-based compensation (credit) expense - Value | 5,710 | $ 0 | 5,710 | 0 | 0 | 0 | ||||||
Stock-based compensation credit - Shares | 21,113 | |||||||||||
Shares withheld for payroll taxes - Value | (193) | $ 1 | (194) | 0 | 0 | 0 | ||||||
Shares withheld for payroll taxes - Shares | (2,922) | |||||||||||
Settlement of stock-based compensation awards, value | (223) | $ 0 | (223) | 0 | 0 | 0 | ||||||
Settlement of stock-based compensation awards, shares | 0 | |||||||||||
Ending Balance at Sep. 26, 2020 | $ 3,792,267 | $ 1,425 | $ 11,044 | $ 3,314,136 | $ (171,332) | $ 636,994 | ||||||
Ending Balance, shares (in shares) at Sep. 26, 2020 | 142,456,318 | 142,456,318 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Unrealized loss from foreign currency hedging activities, tax (benefit) | $ 2,793 | $ 422 | $ (553) | $ 451 |
Unrealized investment gain (loss), tax benefit (tax) | 0 | (1) | 1 | (2) |
Pension adjustment gain, tax benefit (tax) | 133 | (185) | (66) | (314) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net income attributable to Redeemable noncontrolling interests | 7,253 | |||
Foreign currency translation gain (loss) attributable to Redeemable noncontrolling interests | 1,277 | (5,748) | (10,999) | (4,912) |
Continuing Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net income attributable to Redeemable noncontrolling interests | $ 6,092 | $ 4,105 | $ 7,253 | 10,618 |
Discontinued Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net income attributable to Redeemable noncontrolling interests | 366 | |||
Foreign currency translation gain (loss) attributable to Redeemable noncontrolling interests | $ 592 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 26, 2020 | Sep. 28, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 272,082 | $ 382,693 |
Income (loss) from discontinued operations | 274 | (5,576) |
Income from continuing operations | 271,808 | 388,269 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 140,664 | 136,210 |
Stock-based compensation (credit) expense | (6,648) | 33,110 |
Provision for losses on trade and other accounts receivable | 34,590 | 7,576 |
Benefit from deferred income taxes | (48,193) | (3,468) |
Equity in earnings of affiliates | (7,808) | (14,771) |
Distributions from equity affiliates | 10,053 | 67,913 |
Changes in unrecognized tax benefits | (18,365) | 3,535 |
Other | 4,794 | (2,122) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (199,858) | (115,384) |
Inventories | (25,830) | 75,093 |
Other current assets | (51,746) | (70,348) |
Accounts payable and accrued expenses | 144,953 | 19,567 |
Net cash provided by operating activities from continuing operations | 248,414 | 525,180 |
Net cash provided by (used in) operating activities from discontinued operations | 648 | (163,653) |
Net cash provided by operating activities | 249,062 | 361,527 |
Cash flows from investing activities: | ||
Purchases of fixed assets | (37,799) | (48,956) |
Payments related to equity investments and business acquisitions, net of cash acquired | (52,208) | (657,093) |
Proceeds from sale of equity investment | 12,000 | 10,500 |
Proceeds from (repayments to) loan to affiliate | (1,451) | 16,448 |
Other | (14,498) | (12,248) |
Net cash used in investing activities from continuing operations | (93,956) | (691,349) |
Net cash used in investing activities from discontinued operations | 0 | (2,064) |
Net cash used in investing activities | (93,956) | (693,413) |
Cash flows from financing activities: | ||
Net change in bank borrowings | 484,139 | (843,846) |
Proceeds from issuance of long-term debt | 501,421 | 741 |
Principal payments for long-term debt | (610,457) | (10,252) |
Debt issuance costs | (3,683) | (391) |
Debt extinguishment costs | (401) | 0 |
Proceeds from issuance of stock upon exercise of stock options | 0 | 34 |
Payments for repurchases of common stock | (73,789) | (325,000) |
Payments for taxes related to shares withheld for employee taxes | (14,007) | (10,751) |
Distribution received related to Animal Health Spin-off | 0 | 1,120,000 |
Proceeds related to Animal Health Share Sale | 0 | 361,090 |
Proceeds from (distributions to) noncontrolling shareholders | (3,995) | 53,429 |
Acquisitions of noncontrolling interests in subsidiaries | (14,934) | (2,358) |
Proceeds from (payments to) Henry Schein Animal Health Business | 139 | (166,557) |
Net cash provided by financing activities from continuing operations | 264,433 | 176,139 |
Net cash provided by (used in) financing activities from discontinued operations | (648) | 144,633 |
Net cash provided by financing activities | 263,785 | 320,772 |
Effect of exchange rate changes on cash and cash equivalents- from continuing operations | 8,507 | 8,401 |
Effect of exchange rate changes on cash and cash equivalents- from discontinued operations | 0 | (2,240) |
Net change in cash and cash equivalents from continuing operations | 427,398 | 18,371 |
Net change in cash and cash equivalents from discontinued operations | 0 | (23,324) |
Net change in cash and cash equivalents | 427,398 | (4,953) |
Cash and cash equivalents, beginning of period | 106,097 | 56,885 |
Cash and cash equivalents, end of period | $ 533,495 | $ 75,256 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 26, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation Our consolidated financial statements include our accounts, as well as those of our wholly-owned and majority-owned subsidiaries. Certain prior period amounts have been reclassified to conform to the current period presentation. Our accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by U.S. GAAP for complete financial statements. We consolidate a Variable Interest Entity (“VIE”) where we hold a variable interest and are the primary beneficiary. The VIE is a trade accounts receivable securitization. We are the primary beneficiary because we have the power to direct activities that most significantly affect the economic performance and have the obligation to absorb the majority of the losses or benefits. The results of operations and financial position of this VIE are included in our consolidated financial statements. For the consolidated VIE, the trade accounts receivable transferred to the VIE are pledged as collateral to the related debt. The creditors have recourse to us for losses on these trade accounts receivable. At September 26, 2020 and December 28, 2019, trade accounts receivable that can only be used to settle obligations of this VIE were $ 0 million and $ 127 million, respectively, and the liabilities of the VIE where the creditors have recourse to us were $ 0 million and $ 100 million, respectively. The consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 28, 2019. On February 7, 2019 (the “Distribution Date”), we completed the separation (the “Separation”) and subsequent merger (“Merger”) of our animal health business (the “Henry Schein Animal Health Business”) with Direct Vet Marketing, Inc. (d/b/a Vets First Choice, “Vets First Choice”). All financial information within this Form 10-Q presents the Henry Schein Animal Health Business as a discontinued operation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the nine months ended September 26, 2020 are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 26, 2020. In March 2020, the World Health Organization declared the Novel Coronavirus Disease 2019 (“COVID-19”) a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of global financial markets. In response, many countries implemented business closures and restrictions, stay-at-home and social distancing ordinances and similar measures to combat the pandemic, which significantly impacted global business and dramatically reduced demand for dental products and certain medical products in the second quarter of 2020. Demand increased in the third quarter resulting in growth over the prior year driven by sales of personal protective equipment (PPE) and COVID-19 related products. Our consolidated financial statements reflect estimates and assumptions made by us that affect, among other things, our goodwill, long-lived asset and indefinite-lived intangible asset valuation; inventory valuation; equity investment valuation; assessment of the annual effective tax rate; valuation of deferred income taxes and income tax contingencies; the allowance for doubtful accounts; hedging activity; vendor rebates; measurement of compensation cost for certain share-based performance awards and cash bonus plans; and pension plan assumptions. Due to the significant uncertainty surrounding the future impact of COVID-19, our judgments regarding estimates and impairments could change in the future. In addition, the impact of COVID-19 had a material adverse effect on our business, results of operations and cash flows in the second quarter of 2020. In the latter half of the second quarter, dental and medical practices began to re-open worldwide, and continued to do so during the third quarter. However, patient volumes remain below pre-COVID-19 levels and certain regions in the U.S. and internationally are experiencing an increase in COVID-19 cases. As such, there is an ongoing risk that the COVID-19 pandemic may again have a material adverse effect on our business, results of operations and cash flows and may result in a material adverse effect on our financial condition and liquidity. However, the extent of the potential impact cannot be reasonably estimated at this time. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 26, 2020 | |
Discontinued Operations | |
Discontinued Operations | Note 2 – Discontinued Operations Animal Health Spin-off On the Distribution Date, we completed the Separation and subsequent Merger of the Henry Schein Animal Health Business with Vets First Choice. This was accomplished by a series of transactions among us, Vets First Choice, Covetrus, Inc. (f/k/a HS Spinco, Inc. “Covetrus”), a wholly owned subsidiary of ours prior to the Distribution Date, and HS Merger Sub, Inc., a wholly owned subsidiary of Covetrus (“Merger Sub”). In connection with the Separation, we contributed, assigned and transferred to Covetrus certain applicable assets, liabilities and capital stock or other ownership interests relating to the Henry Schein Animal Health Business. On the Distribution Date, we received a tax-free distribution of $ 1,120 million from Covetrus pursuant to certain debt financing incurred by Covetrus. On the Distribution Date and prior to the Animal Health Spin-off, Covetrus issued shares of Covetrus common stock to certain institutional accredited investors (the “Share Sale Investors”) for $ 361.1 million (the “Share Sale”). The proceeds of the Share Sale were paid to Covetrus and distributed to us. Subsequent to the Share Sale, we distributed, on a pro rata basis, all of the shares of the common stock of Covetrus held by us to our stockholders of record as of the close of business on January 17, 2019 (the “Animal Health Spin-off”). After the Share Sale and Animal Health Spin-off, Merger Sub consummated the Merger whereby it merged with and into Vets First Choice, with Vets First Choice surviving the Merger as a wholly owned subsidiary of Covetrus. Immediately following the consummation of the Merger, on a fully diluted basis, (i) approximately 63% of the shares of Covetrus common stock were (a) owned by our stockholders and the Share Sale Investors, and (b) held by certain employees of the Henry Schein Animal Health Business (in the form of certain equity awards), and (ii) approximately 37% of the shares of Covetrus common stock were (a) owned by stockholders of Vets First Choice immediately prior to the Merger, and (b) held by certain employees of Vets First Choice (in the form of certain equity awards). After the Separation and the Merger, we no longer beneficially owned any shares of Covetrus common stock and, following the Distribution Date, will not consolidate the financial results of Covetrus for the purpose of our financial reporting. Following the Separation and the Merger, Covetrus was an independent, publicly traded company on the Nasdaq Global Select Market. In connection with the completion of the Animal Health Spin-off, we entered into a transition services agreement with Covetrus under which we have agreed to provide certain transition services for up to twenty-four months in areas such as information technology, finance and accounting, human resources, supply chain, and real estate and facility services. As a result of the Separation, the financial position and results of operations of the Henry Schein Animal Health Business are presented as discontinued operations and have been excluded from continuing operations and segment results for all periods presented. The accompanying Notes to the Consolidated Financial Statements have been revised to reflect the effect of the Separation and all prior year balances have been revised accordingly to reflect continuing operations only. The historical statements of Comprehensive Income (Loss) and Shareholders' Equity have not been revised to reflect the Separation and instead reflect the Separation as an adjustment to the balances at September 28, 2019. Summarized financial information for our discontinued operations is as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Net sales $ - $ - $ - $ 319,522 Cost of goods sold - - - 260,097 Gross profit - - - 59,425 Selling, general and administrative 326 1,063 782 68,013 Operating loss ( 326) ( 1,063) ( 782) ( 8,588) Income tax benefit ( 297) ( 6,704) ( 1,056) ( 2,023) Income (loss) from discontinued operations ( 29) 5,641 274 ( 5,576) Net loss attributable to noncontrolling interests - - - 366 Net income (loss) from discontinued operations attributable to Henry Schein, Inc. ( 29) 5,641 274 ( 5,210) The operating loss from discontinued operations for the three and nine months ended September 26, 2020 was primarily attributable to costs directly related to the Animal Health Spin-off. See for additional information. The net income from discontinued operations for the nine months ended September 26, 2020 was primarily attributable to a tax refund received during Q2 2020 by a holding company previously part of our Animal Health legal structure. The September 28, 2019 financial information above represents activity of the discontinued operations during the quarter and year-to-date through the Distribution Date. The income from discontinued operations for the three months ended September 28, 2019 was primarily attributable to a change in estimate of the tax deductibility of transaction costs incurred that were directly related to the Animal Health Spin-off. The loss from discontinued operations for the nine months ended September 28, 2019 was primarily attributable to the inclusion of the transaction costs directly related to the Animal Health Spin-off. The following are the amounts of assets and liabilities that were transferred to Covetrus as of February 7, 2019 and December 29, 2018. February 7, December 29, 2019 2018 Cash and cash equivalents $ 6,815 $ 23,324 Accounts receivable, net 432,812 434,935 Inventories, net 536,637 555,230 Prepaid expenses and other 120,546 69,525 Total current assets of discontinued operations 1,096,810 1,083,014 Property and equipment, net 69,790 68,177 Operating lease right-of-use asset, net 57,012 - Goodwill 742,931 739,266 Other intangibles, net 205,793 208,213 Investments and other 120,518 118,003 Total long-term assets of discontinued operations 1,196,044 1,133,659 Total assets of discontinued operations $ 2,292,854 $ 2,216,673 Accounts payable $ 316,162 $ 441,453 Current maturities of long-term debt 657 675 Operating lease liabilities 18,951 - Accrued expenses: Payroll and related 36,847 36,888 Taxes 24,060 17,552 Other 80,400 81,039 Total current liabilities of discontinued operations 477,077 577,607 Long-term debt 1,176,105 23,529 Deferred income taxes 17,019 4,352 Operating lease liabilities 38,668 - Other liabilities 29,209 34,572 Total long-term liabilities of discontinued operations 1,261,001 62,453 Total liabilities of discontinued operations $ 1,738,078 $ 640,060 Redeemable noncontrolling interests $ 28,270 $ 92,432 |
Critical Accounting Policies, A
Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards | 9 Months Ended |
Sep. 26, 2020 | |
Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards | |
Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards | Note 3 – Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards Critical Accounting Policies There have been no material changes in our critical accounting policies during the nine months ended September 26, 2020, as compared to the critical accounting policies described in Item 8 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 28, 2019, except as follows: Accounting Pronouncements Adopted In January 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, “Intangibles-Goodwill and Other” (Topic 350) (“ASU 2017-04”). ASU 2017-04 eliminates step two from the goodwill impairment test, thereby eliminating the requirement to calculate the implied fair value of a reporting unit. ASU 2017-04 requires us to perform our annual goodwill impairment test by comparing the fair value of our reporting units to the carrying value of those units. If the carrying value exceeds the fair value, we will be required to recognize an impairment charge; however, the impairment charge should not exceed the amount of goodwill allocated to such reporting unit. Our adoption of ASU 2017-04 on December 29, 2019 did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. We adopted ASU 2016-13 using the modified-retrospective method and recorded an immaterial cumulative-effect adjustment to the opening balance of retained earnings. Based upon the level and makeup of our financial asset portfolio, including accounts receivable, past loan loss activity and current known activity regarding our outstanding loans, the adoption of ASU 2016-13 on December 29, 2019 resulted in a decrease of $ 0.4 million to retained earnings. Recently Issued Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2017-04 is effective for fiscal years beginning after December 15, 2020. We do not expect that the requirements of this ASU will have a material impact on our consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options” (Subtopic 470-20) and “Derivatives and Hedging— in Entity’s Own Equity” (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments. In addition to eliminating certain accounting models, this ASU includes improvements to the disclosures for convertible instruments and earnings-per-share (EPS) guidance and amends the guidance for the derivatives scope exception for contracts in an entity’s own equity. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021. We do not expect that the requirements of this ASU will have a material impact on our consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 26, 2020 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | Note 4 – Revenue from Contracts with Customers Revenue is recognized in accordance with policies disclosed in Item 8 of our Annual Report on Form 10-K for the year ended December 28, 2019. Disaggregation of Revenue The following table disaggregates our revenue by segment and geography: Three Months Ended Nine Months Ended September 26, 2020 September 26, 2020 North America International Global North America International Global Revenues: Health care distribution Dental $ 1,008,836 $ 641,017 $ 1,649,853 $ 2,413,154 $ 1,653,067 $ 4,066,221 Medical 1,002,741 24,405 1,027,146 2,377,357 68,287 2,445,644 Total health care distribution 2,011,577 665,422 2,676,999 4,790,511 1,721,354 6,511,865 Technology and value-added services 120,949 17,406 138,355 327,374 48,173 375,547 Total excluding Corporate TSA revenues (1) 2,132,526 682,828 2,815,354 5,117,885 1,769,527 6,887,412 Corporate TSA revenues (1) - 24,792 24,792 - 66,004 66,004 Total revenues $ 2,132,526 $ 707,620 $ 2,840,146 $ 5,117,885 $ 1,835,531 $ 6,953,416 Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 North America International Global North America International Global Revenues: Health care distribution Dental $ 951,792 $ 594,189 $ 1,545,981 $ 2,850,669 $ 1,843,042 $ 4,693,711 Medical 784,349 19,360 803,709 2,125,002 59,925 2,184,927 Total health care distribution 1,736,141 613,549 2,349,690 4,975,671 1,902,967 6,878,638 Technology and value-added services 120,199 17,135 137,334 327,709 50,274 377,983 Total excluding Corporate TSA revenues (1) 1,856,340 630,684 2,487,024 5,303,380 1,953,241 7,256,621 Corporate TSA revenues (1) 1,077 20,666 21,743 4,098 56,143 60,241 Total revenues $ 1,857,417 $ 651,350 $ 2,508,767 $ 5,307,478 $ 2,009,384 $ 7,316,862 (1) Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which has been substantially completed as of October 2020. At December 28, 2019, the current portion of contract liabilities of $ 70.8 million was reported in Accrued expenses: Other, and $ 6.2 million related to non-current contract liabilities were reported in Other liabilities. During the nine months ended September 26, 2020, we recognized in revenue $ 60.0 million of the amounts that were previously deferred at December 28, 2019. At September 26, 2020, the current and non-current portion of contract liabilities were $ 58.3 million and $ 6.8 million, respectively. |
Segment Data
Segment Data | 9 Months Ended |
Sep. 26, 2020 | |
Segment Data | |
Segment Data | Note 5 – Segment Data We conduct our business through two reportable segments: (i) health care distribution and (ii) technology and value-added services. These segments offer different products and services to the same customer base. The health care distribution reportable segment aggregates our global dental and medical operating segments. This segment distributes consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. Our global dental group serves office-based dental practitioners, dental laboratories, schools and other institutions. Our global medical group serves office-based medical practitioners, ambulatory surgery centers, other alternate-care settings and other institutions. Our global dental and medical groups serve practitioners in 31 countries worldwide. Our global technology and value-added services group provides software, technology and other value-added services to health care practitioners. Our technology group offerings include practice management software systems for dental and medical practitioners. Our value-added practice solutions include financial services on a non-recourse basis, e-services, practice technology, network and hardware services, as well as continuing education services for practitioners. The following tables present information about our reportable and operating segments: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Net Sales: Health care distribution (1) Dental $ 1,649,853 $ 1,545,981 $ 4,066,221 $ 4,693,711 Medical 1,027,146 803,709 2,445,644 2,184,927 Total health care distribution 2,676,999 2,349,690 6,511,865 6,878,638 Technology and value-added services (2) 138,355 137,334 375,547 377,983 Total excluding Corporate TSA revenue 2,815,354 2,487,024 6,887,412 7,256,621 Corporate TSA revenues (3) 24,792 21,743 66,004 60,241 Total $ 2,840,146 $ 2,508,767 $ 6,953,416 $ 7,316,862 (1) Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. (2) Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. (3) Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which has been substantially completed as of October 2020. Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Operating Income: Health care distribution $ 148,657 $ 149,495 $ 271,477 $ 428,934 Technology and value-added services 39,014 37,703 82,626 92,993 Total $ 187,671 $ 187,198 $ 354,103 $ 521,927 |
Debt
Debt | 9 Months Ended |
Sep. 26, 2020 | |
Debt | |
Debt | Note 6 – Debt Bank Credit Lines Bank credit lines consisted of the following: September 26, December 28, 2020 2019 Revolving credit agreement $ - $ - 364-day credit agreement 500,000 - Other short-term bank credit lines 7,372 23,975 Total $ 507,372 $ 23,975 The increase in the level of borrowings under our bank credit lines as of September 26, 2020 was attributable to potential cash requirements due to the impact of the COVID-19 pandemic. Revolving Credit Agreement On April 18, 2017, we entered into a $ 750 million revolving credit agreement (the “Credit Agreement”), which matures in April 2022 0.0 million and $ 0.0 million, respectively. As of September 26, 2020 and December 28, 2019, there were $ 9.5 million and $ 9.6 million of letters of credit, respectively, provided to third parties under the credit facility. On April 17, 2020, we amended the Credit Agreement to, among other things, (i) modify the financial covenant from being based on total leverage ratio to net leverage ratio, (ii) adjust the pricing grid to reflect the net leverage ratio calculation, and (iii) increase the maximum maintenance leverage ratio through March 31, 2021. 364-Day Credit Agreement On April 17, 2020, we entered into a new $ 700 million 364-day credit agreement, with JPMorgan Chase Bank, N.A. and U.S. Bank National Association as joint lead arrangers and joint bookrunners. This facility matures on April 16, 2021. As of September 26, 2020, the borrowings on this credit facility were $ 500 million. We have the ability to borrow the remaining $ 200 million on a revolving basis as needed, subject to the terms and conditions of the credit agreement. The interest rate for borrowings under this facility will fluctuate based on our net leverage ratio. At September 26, 2020, the interest rate on this facility was 2.81%. The proceeds from this facility can be used for working capital requirements and general corporate purposes, including, but not limited to, permitted refinancing of existing indebtedness. Other Short-Term Credit Lines As of September 26, 2020 and December 28, 2019, we had various other short-term bank credit lines available, of which $ 7.4 million and $ 24 million, respectively, were outstanding. At September 26, 2020 and December 28, 2019, borrowings under all of these credit lines had a weighted average interest rate of 2.82% and 3.45%, respectively. The decrease during the quarter ended September 26, 2020 in the weighted average interest rate under all of our credit lines was attributable to the Federal Reserve lowering borrowing rates during March 2020 in response to the COVID-19 pandemic. Long-term debt Long-term debt consisted of the following: September 26, December 28, 2020 2019 Private placement facilities $ 613,549 $ 621,274 U.S. trade accounts receivable securitization - 100,000 Note payable due in 2025 with an interest rate of 3.1% at September 26, 2020 1,438 - Various collateralized and uncollateralized loans payable with interest, in varying installments through 2023 at interest rates ranging from 2.62% to 4.22% at September 26, 2020 and ranging from 2.56% to 10.5% at December 28, 2019 4,273 6,089 Finance lease obligations (see Note 7) 6,112 5,394 Total 625,372 732,757 Less current maturities ( 110,015) ( 109,849) Total long-term debt $ 515,357 $ 622,908 Private Placement Facilities On September 15, 2017, we increased our available private placement facilities with three insurance companies to a total facility amount of $ 1 billion. On June 23, 2020, the expiration date for our private placement facilities was extended through June 23, 2023. These facilities are available on an uncommitted basis at fixed rate economic terms to be agreed upon at the time of issuance, from time to time through June 23, 2023. The facilities allow us to issue senior promissory notes to the lenders at a fixed rate based on an agreed upon spread over applicable treasury notes at the time of issuance. The term of each possible issuance will be selected by us and can range from five 15 years (with an average life no longer than 12 years). The proceeds of any issuances under the facilities will be used for general corporate purposes, including working capital and capital expenditures, to refinance existing indebtedness and/or to fund potential acquisitions. On June 29, 2018, we amended and restated the above private placement facilities to, among other things, (i) permit the consummation of the Animal Health Spin-off and (ii) provide for the issuance of notes in Euros, British Pounds and Australian Dollars, in addition to U.S. Dollars. The agreements provide, among other things, that we maintain certain maximum leverage ratios, and contain restrictions relating to subsidiary indebtedness, liens, affiliate transactions, disposal of assets and certain changes in ownership. These facilities contain make-whole provisions in the event that we pay off the facilities prior to the applicable due dates. On June 23, 2020, we amended the private placement facilities to, among other things, (i) temporarily modify the financial covenant from being based on total leverage ratio to net leverage ratio until March 31, 2021, (ii) increase the maximum maintenance leverage ratio through March 31, 2021, but with a 1.00% interest rate increase on the outstanding notes if the net leverage ratio exceeds 3.0x, which will remain in effect until we deliver financials for a four-quarter period ending on or after June 30, 2021 showing compliance with the total leverage ratio requirement, and (iii) make certain other changes conforming to the Credit Agreement, dated as of April 18, 2017. The components of our private placement facility borrowings as of September 26, 2020 are presented in the following table (in thousands): Amount of Borrowing Borrowing Date of Borrowing Outstanding Rate Due Date January 20, 2012 (1) $ 14,286 3.09 % January 20, 2022 January 20, 2012 50,000 3.45 January 20, 2024 December 24, 2012 50,000 3.00 December 24, 2024 June 2, 2014 100,000 3.19 June 2, 2021 June 16, 2017 100,000 3.42 June 16, 2027 September 15, 2017 100,000 3.52 September 15, 2029 January 2, 2018 100,000 3.32 January 2, 2028 September 2, 2020 (2) 100,000 2.35 September 3, 2030 Less: Deferred debt issuance costs ( 737) $ 613,549 (1) Annual repayments of approximately $ 7.1 million for this borrowing commenced on January 20, 2016. (2) On September 2, 2020, we refinanced our $ 100 million private placement borrowing at 3.79%, originally due on September 2, 2020, with a similar 10-year borrowing at 2.35% maturing on September 2, 2030. U.S. Trade Accounts Receivable Securitization We have a facility agreement with a bank, as agent, based on the securitization of our U.S. trade accounts receivable that is structured as an asset-backed securitization program with pricing committed for up to three years. Our current facility, which has a purchase limit of $ 350 million, was scheduled to expire on April 29, 2022. On June 22, 2020, the expiration date for this facility was extended to June 12, 2023. As of September 26, 2020 and December 28, 2019, the borrowings outstanding under this securitization facility were $ 0 million and $ 100 million, respectively. At September 26, 2020, the interest rate on borrowings under this facility was based on the asset-backed commercial paper rate of 0.22% plus 0.95%, for a combined rate of 1.17%. At December 28, 2019, the interest rate on borrowings under this facility was based on the asset-backed commercial paper rate of 1.90% plus 0.75%, for a combined rate of 2.65%. If our accounts receivable collection pattern changes due to customers either paying late or not making payments, our ability to borrow under this facility may be reduced. We are required to pay a commitment fee of 25 to 45 basis points depending upon program utilization. Borrowings under this facility are presented as a component of Long-term debt within our consolidated balance sheets. On June 22, 2020 we amended this facility to adjust certain covenant levels, in particular for the second and third quarters of 2020. |
Leases
Leases | 9 Months Ended |
Sep. 26, 2020 | |
Leases | |
Leases | Note 7 – Leases Leases We have operating and finance leases for corporate offices, office space, distribution and other facilities, vehicles, and certain equipment. Our leases have remaining terms of less than one year to approximately 16 years, some of which may include options to extend the leases for up to 10 years . The components of lease expense were as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Operating lease cost: (1) (2) $ 21,343 $ 21,840 $ 65,413 $ 68,273 Finance lease cost: Amortization of right-of-use assets 434 290 1,148 798 Interest on lease liabilities 29 31 86 88 Total finance lease cost $ 463 $ 321 $ 1,234 $ 886 (1) Includes variable lease expenses. (2) Operating lease (credit) cost for three months and nine months ended September 26, 2020, includes amortization of right-of-use assets of $( 0.1) and $ 0.40 million, respectively, related to facility leases recorded in “Restructuring costs” within our consolidated statements of income. Supplemental balance sheet information related to leases is as follows: September 26, December 28, 2020 2019 Operating Leases: Operating lease right-of-use assets $ 249,895 $ 231,662 Current operating lease liabilities 62,914 65,349 Non-current operating lease liabilities 200,611 176,267 Total operating lease liabilities $ 263,525 $ 241,616 Finance Leases: Property and equipment, at cost $ 10,457 $ 10,268 Accumulated depreciation ( 4,030) ( 4,581) Property and equipment, net of accumulated depreciation $ 6,427 $ 5,687 Current maturities of long-term debt $ 2,348 $ 1,736 Long-term debt 3,764 3,658 Total finance lease liabilities $ 6,112 $ 5,394 Weighted Average Remaining Lease Term in Years: Operating leases 7.1 5.5 Finance leases 4.3 5.0 Weighted Average Discount Rate: Operating leases 3.0 % 3.4 % Finance leases 2.0 % 2.2 % Supplemental cash flow information related to leases is as follows: Nine Months Ended September 26, September 28, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 57,666 $ 60,275 Operating cash flows for finance leases 76 67 Financing cash flows for finance leases 1,515 862 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 66,082 $ 290,166 Finance leases 2,489 1,149 Maturities of lease liabilities are as follows: September 26, 2020 Operating Finance Leases Leases 2020 $ 18,423 $ 747 2021 65,955 2,272 2022 49,257 1,365 2023 32,363 495 2024 22,298 315 Thereafter 103,765 1,163 Total future lease payments 292,061 6,357 Less imputed interest ( 28,536) ( 245) Total $ 263,525 $ 6,112 As of September 26, 2020, we have additional operating leases with total lease payments of $ 12.7 million for buildings and vehicles that have not yet commenced. These operating leases will commence subsequent to September 26, 2020, with lease terms of 13 months to 10 years . |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 9 Months Ended |
Sep. 26, 2020 | |
Redeemable Noncontrolling Interests | |
Redeemable Noncontrolling Interests | Note 8 – Redeemable Noncontrolling Interests Some minority stockholders in certain of our subsidiaries have the right, at certain times, to require us to acquire their ownership interest in those entities at fair value. Accounting Standards Codification (“ASC”) Topic 480-10 is applicable for noncontrolling interests where we are or may be required to purchase all or a portion of the outstanding interest in a consolidated subsidiary from the noncontrolling interest holder under the terms of a put option contained in contractual agreements. The components of the change in the redeemable noncontrolling interests for the nine months ended September 26, 2020 and the year ended December 28, 2019 are presented in the following table: September 26, December 28, 2020 2019 Balance, beginning of period $ 287,258 $ 219,724 Decrease in redeemable noncontrolling interests due to redemptions ( 12,636) ( 2,270) Increase in redeemable noncontrolling interests due to business acquisitions 25,955 74,865 Net income attributable to redeemable noncontrolling interests 7,253 14,838 Dividends declared ( 7,272) ( 10,264) Effect of foreign currency translation loss attributable to redeemable noncontrolling interests ( 10,999) ( 2,335) Change in fair value of redeemable securities 5,141 ( 7,300) Balance, end of period $ 294,700 $ 287,258 |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Sep. 26, 2020 | |
Comprehensive Income | |
Comprehensive Income | Note 9 – Comprehensive Income Comprehensive income includes certain gains and losses that, under U.S. GAAP, are excluded from net income as such amounts are recorded directly as an adjustment to stockholders’ equity. The following table summarizes our Accumulated other comprehensive loss, net of applicable taxes as of: September 26, December 28, 2020 2019 Attributable to Redeemable noncontrolling interests: Foreign currency translation adjustment $ ( 31,337) $ ( 20,338) Attributable to noncontrolling interests: Foreign currency translation adjustment $ ( 276) $ ( 531) Attributable to Henry Schein, Inc.: Foreign currency translation adjustment $ ( 149,744) $ ( 143,172) Unrealized loss from foreign currency hedging activities ( 1,575) ( 4,032) Unrealized investment gain 1 6 Pension adjustment loss ( 20,014) ( 20,175) Accumulated other comprehensive loss $ ( 171,332) $ ( 167,373) Total Accumulated other comprehensive loss $ ( 202,945) $ ( 188,242) The following table summarizes the components of comprehensive income, net of applicable taxes as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Net income $ 151,784 $ 148,853 $ 272,082 $ 382,693 Foreign currency translation gain (loss) 37,588 ( 60,635) ( 17,316) ( 43,926) Tax effect - - - - Foreign currency translation gain (loss) 37,588 ( 60,635) ( 17,316) ( 43,926) Unrealized gain (loss) from foreign currency hedging activities ( 10,490) ( 1,685) 3,010 ( 2,037) Tax effect 2,793 422 ( 553) 451 Unrealized gain (loss) from foreign currency hedging activities ( 7,697) ( 1,263) 2,457 ( 1,586) Unrealized investment gain (loss) 2 3 ( 6) 10 Tax effect - ( 1) 1 ( 2) Unrealized investment gain (loss) 2 2 ( 5) 8 Pension adjustment gain (loss) ( 471) 585 227 1,146 Tax effect 133 ( 185) ( 66) ( 314) Pension adjustment gain (loss) ( 338) 400 161 832 Comprehensive income $ 181,339 $ 87,357 $ 257,379 $ 338,021 The change in the unrealized gain (loss) from foreign currency hedging activities during the three months and year ended September 26, 2020, compared to the comparable prior year period, was primarily attributable to a net investment hedge that was entered into during 2019. See for further information. Our financial statements are denominated in the U.S. Dollar currency. Fluctuations in the value of foreign currencies as compared to the U.S. Dollar may have a significant impact on our comprehensive income. The foreign currency translation gain (loss) during the nine months ended September 26, 2020 and nine months ended September 28, 2019 was primarily impacted by changes in foreign currency exchange rates of the Euro, British Pound, Brazilian Real, Australian Dollar and Canadian Dollar. The following table summarizes our total comprehensive income, net of applicable taxes, as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Comprehensive income attributable to Henry Schein, Inc. $ 169,616 $ 85,075 $ 257,202 $ 324,809 Comprehensive income attributable to noncontrolling interests 4,354 3,924 3,923 7,280 Comprehensive income (loss) attributable to Redeemable noncontrolling interests 7,369 ( 1,642) ( 3,746) 5,932 Comprehensive income $ 181,339 $ 87,357 $ 257,379 $ 338,021 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 26, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10 – Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for determining that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described as follows: • Level 1— Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. • Level 2— Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3— Inputs that are unobservable for the asset or liability. The following section describes the fair values of our financial instruments and the methodologies that we used to measure their fair values. Investments and notes receivable There are no quoted market prices available for investments in unconsolidated affiliates and notes receivable; however, we believe the carrying amounts are a reasonable estimate of fair value based on the interest rates in the applicable markets. Debt The fair value of our debt (including bank credit lines) is classified as Level 3 within the fair value hierarchy as of September 26, 2020 and December 28, 2019 was estimated at $ 1,132.7 million and $ 756.7 million, respectively. Factors that we considered when estimating the fair value of our debt include market conditions, such as interest rates and credit spreads. Derivative contracts Derivative contracts are valued using quoted market prices and significant other observable and unobservable inputs. We use derivative instruments to minimize our exposure to fluctuations in foreign currency exchange rates. Our derivative instruments primarily include foreign currency forward agreements related to certain intercompany loans, certain forecasted inventory purchase commitments with foreign suppliers, foreign currency forward contracts to hedge a portion of our euro-denominated foreign operations which are designated as net investment hedges and a total return swap for the purpose of economically hedging our unfunded non-qualified supplemental retirement plan and our deferred compensation plan. The fair values for the majority of our foreign currency derivative contracts are obtained by comparing our contract rate to a published forward price of the underlying market rates, which is based on market rates for comparable transactions and are classified within Level 2 of the fair value hierarchy. See Note 15-Derivatives and Hedging Activities for further information. Redeemable noncontrolling interests The values for Redeemable noncontrolling interests are classified within Level 3 of the fair value hierarchy and are based on recent transactions and/or implied multiples of earnings. See Note 8–Redeemable Noncontrolling Interests for additional information. The following table presents our assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of September 26, 2020 and December 28, 2019: September 26, 2020 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 32,107 $ - $ 32,107 Total assets $ - $ 32,107 $ - $ 32,107 Liabilities: Derivative contracts $ - $ 4,175 $ - $ 4,175 Total return swaps - 2,406 - 2,406 Total liabilities $ - $ 6,581 $ - $ 6,581 Redeemable noncontrolling interests $ - $ - $ 294,700 $ 294,700 December 28, 2019 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 567 $ - $ 567 Total assets $ - $ 567 $ - $ 567 Liabilities: Derivative contracts $ - $ 5,795 $ - $ 5,795 Total liabilities $ - $ 5,795 $ - $ 5,795 Redeemable noncontrolling interests $ - $ - $ 287,258 $ 287,258 |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 26, 2020 | |
Business Acquisitions | |
Business Acquisitions | Note 11 – Business Acquisitions Acquisitions The operating results of all acquisitions are reflected in our financial statements from their respective acquisition dates. We completed acquisitions during the nine months ended September 26, 2020 which were immaterial to our financial statements individually. In the aggregate, these transactions resulted in consideration of $ 47.1 million during the nine months ended September 26, 2020 related to business combinations, for net assets amounting to $ 16.9 million. As of September 26, 2020, we had recorded $ 29.1 million of identifiable intangibles, $ 34.7 million of goodwill and $ 24.2 million of non-controlling interest, related to these acquisitions. Some prior owners of acquired subsidiaries are eligible to receive additional purchase price cash consideration if certain financial targets are met. We have accrued liabilities for the estimated fair value of additional purchase price consideration at the time of the acquisition. Any adjustments to these accrual amounts are recorded in our consolidated statements of income. For the nine months ended September 26, 2020 and September 28, 2019, there were no material adjustments recorded in our consolidated statements of income relating to changes in estimated contingent purchase price liabilities. |
Plans of Restructuring
Plans of Restructuring | 9 Months Ended |
Sep. 26, 2020 | |
Restructuring and Related Activities [Abstract] | |
Plans of Restructuring | Note 12 – Plans of Restructuring On July 9, 2018, we committed to an initiative to rationalize our operations and provide expense efficiencies. These actions allowed us to execute on our plan to reduce our cost structure and fund new initiatives that drive growth under our 2018 to 2020 strategic plan. This initiative has resulted in the elimination of approximately 4% of our workforce and the closing of certain facilities. On November 20, 2019, we committed to a contemplated initiative, intended to mitigate stranded costs associated with the Animal Health Spin-off and to rationalize operations and to provide expense efficiencies. These activities were originally expected to be completed by the end of 2020. We are re-assessing that timeline in light of the current business environment brought on by the COVID-19 pandemic. During the three months ended September 26, 2020 and September 28, 2019, we recorded restructuring costs (credits) of $ 7.0 million and $( 0.8) million. During the nine months ended September 26, 2020 and September 28, 2019, we recorded restructuring costs of $ 27.7 million and $ 15.8 million. The restructuring costs for these periods included costs for severance benefits and facility exit costs. The costs associated with these restructurings are included in a separate line item, “Restructuring costs” within our consolidated statements of income. The following table shows the net amounts expensed and paid for restructuring costs that were incurred during the nine months ended September 26, 2020 and during our 2019 fiscal year and the remaining accrued balance of restructuring costs as of September 26, 2020, which is included in Accrued expenses: Other within our consolidated balance sheets: Facility Severance Closing Costs Costs Other Total Balance, December 29, 2018 $ 29,964 $ 1,603 $ 158 $ 31,725 Provision 13,741 937 27 14,705 Payments and other adjustments ( 30,794) ( 1,714) ( 112) ( 32,620) Balance, December 28, 2019 $ 12,911 $ 826 $ 73 $ 13,810 Provision 23,127 4,348 238 27,713 Payments and other adjustments ( 21,404) ( 4,609) ( 247) ( 26,260) Balance, September 26, 2020 $ 14,634 $ 565 $ 64 $ 15,263 The following table shows, by reportable segment, the net amounts expensed and paid for restructuring costs that were incurred during the nine months ended September 26, 2020 and during our 2019 fiscal year and the remaining accrued balance of restructuring costs as of September 26, 2020: Technology and Health Care Value-Added Distribution Services Total Balance, December 29, 2018 $ 30,291 $ 1,434 $ 31,725 Provision 13,935 770 14,705 Payments and other adjustments ( 30,853) ( 1,767) ( 32,620) Balance, December 28, 2019 $ 13,373 $ 437 $ 13,810 Provision 26,621 1,092 27,713 Payments and other adjustments ( 25,175) ( 1,085) ( 26,260) Balance, September 26, 2020 $ 14,819 $ 444 $ 15,263 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 26, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 13 – Earnings Per Share Basic earnings per share is computed by dividing net income attributable to Henry Schein, Inc. by the weighted-average number of common shares outstanding for the period. Our diluted earnings per share is computed similarly to basic earnings per share, except that it reflects the effect of common shares issuable for presently unvested restricted stock and restricted stock units, using the treasury stock method in periods in which they have a dilutive effect. A reconciliation of shares used in calculating earnings per basic and diluted share follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Basic 142,362 147,136 142,553 148,603 Effect of dilutive securities: Restricted stock and restricted stock units 729 1,439 755 1,317 Diluted 143,091 148,575 143,308 149,920 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 26, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14 – Income Taxes For the nine months ended September 26, 2020, our effective tax rate was 20.0% compared to 23.9% for the prior year period. The difference between our effective tax rate and the federal statutory tax rate for the nine months ended September 26, 2020, was primarily due to a U.S. federal income tax settlement reached during the third quarter, which lowered income tax expense by approximately $ 15.6 million, as well as state and foreign income taxes and interest. The difference between our effective tax rate and the federal statutory tax rate for the nine months ended September 28, 2019 primarily relates to state and foreign income taxes and interest expense. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act includes, but is not limited to, certain income tax provisions that modify the Section 163(j) limitation of business interest and Net Operating Loss (“NOL”) carryover and carryback rules. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income for years beginning in 2019 and 2020. The CARES Act eliminated the NOL income limitation for years beginning before 2021 and it extended the carryback period to five years for year losses incurred in 2018, 2019 and 2020. We have analyzed the income tax provisions of the CARES Act and have accounted for the impact in the nine months ended September 26, 2020, which did not have a material impact on our consolidated financial statements. There are certain other non-income tax benefits available to us under the CARES Act that require further clarification or interpretation that may affect our consolidated financial statements in the future. On July 20, 2020, the U.S Internal Revenue Service (the “IRS”) issued final regulations related to the 2017 Tax Cuts and Jobs Act (“Tax Act”). The final regulations concern the global intangible low-taxed income (“GILTI”) and subpart F income provisions of the Tax Act. To provide flexibility to taxpayers, the IRS is permitting the application of these final regulations to prior tax years, if the taxpayer elects to do so. We have analyzed the final regulations, which do not have a material impact to our consolidated financial statements. The total amount of unrecognized tax benefits, which are included in “Other liabilities” within our consolidated balance sheets, as of September 26, 2020 was approximately $ 90.5 million, of which $ 76.7 million would affect the effective tax rate if recognized. It is possible that the amount of unrecognized tax benefits will change in the next 12 months, which may result in a material impact on our consolidated statements of income. The tax years subject to examination by major tax jurisdictions include the years 2012 and forward by the IRS, as well as the years 2008 and forward for certain states and certain foreign jurisdictions. All tax returns audited by the IRS are officially closed through 2011. We are currently under audit for the years 2012 and 2013. In the quarter ended December 28, 2019, we reached a settlement with the U.S. Competent Authority to resolve certain transfer pricing issues related to 2012 and 2013. For all remaining outstanding issues for 2012 and 2013, we have provided all necessary documentation to the Appellate Division to date and we currently expect resolution in the fourth quarter of 2020. We do not believe the final resolution will have a material impact to our consolidated financial statements. During the quarter ended September 26, 2020 we finalized negotiations with the Advance Pricing Division and reached an agreement on an appropriate transfer pricing methodology for the years 2014-2025. The objective of this resolution is to mitigate future transfer pricing audit adjustments. The total amounts of interest and penalties are classified as a component of the provision for income taxes. The amount of tax interest expense (credit) was approximately $( 1.1) million for the nine months ended September 26, 2020, and $ 2.6 million for the nine months ended September 28, 2019. The total amount of accrued interest is included in “Other liabilities”, and was approximately $ 16.2 million as of September 26, 2020 and $ 18.0 million as of December 28, 2019. No penalties were accrued for the periods presented. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 26, 2020 | |
Derivative Instruments and Hedging Activities [Abstract] | |
Derivatives and Hedging Activities | Note 15 – Derivatives and Hedging Activities We are exposed to market risks as well as changes in foreign currency exchange rates as measured against the U.S. dollar and each other, and changes to the credit risk of the derivative counterparties. We attempt to minimize these risks by primarily using foreign currency forward contracts and by maintaining counter-party credit limits. These hedging activities provide only limited protection against currency exchange and credit risks. Factors that could influence the effectiveness of our hedging programs include currency markets and availability of hedging instruments and liquidity of the credit markets. All foreign currency forward contracts that we enter into are components of hedging programs and are entered into for the sole purpose of hedging an existing or anticipated currency exposure. We do not enter into such contracts for speculative purposes and we manage our credit risks by diversifying our counterparties, maintaining a strong balance sheet and having multiple sources of capital. During 2019 we entered into foreign currency forward contracts to hedge a portion of our euro-denominated foreign operations which are designated as net investment hedges. These net investment hedges offset the change in the U.S dollar value of our investment in certain euro-functional currency subsidiaries due to fluctuating foreign exchange rates. Accumulated other comprehensive loss within our consolidated balance sheets. Amounts excluded from the assessment of hedge effectiveness are included in interest expense within our consolidated statements of income. The aggregate notional value of this net investment hedge, which matures on November 16, 2023, is approximately € 200 million. During the three and nine months ended September 26, 2020 we recognized approximately $ 1.2 million and $ 3.6 million, respectively, of interest savings as a result of this net investment hedge. On March 20, 2020, we entered into a total return swap for the purpose of economic hedging our unfunded non-qualified supplemental retirement plan (“SERP”) and our deferred compensation plan (“DCP”). This swap will offset changes in our SERP and DCP liabilities. At the inception, the notional value of the investments in these plans was $ 43.4 million. At September 26, 2020, the notional value of the investments in these plans was $ 58.8 million. At September 26, 2020 the financing rate for this swap is based on LIBOR of 0.16% plus 0.38%, for a combined rate of 0.54%. From March 20, 2020, the effective date of the swap, to September 26, 2020, we have recorded a gain, within the selling, general and administrative line item in our consolidated statement of income, of approximately $ 3.8 million and $ 14.2 million, respectively, net of transaction costs, related to this undesignated swap for the three and nine months ended September 26, 2020. This gain was offset by the change in fair value adjustment in deferred compensation, resulting in a neutral impact to our results of operations. This swap is expected to be renewed on an annual basis. Fluctuations in the value of certain foreign currencies as compared to the U.S. dollar may positively or negatively affect our revenues, gross margins, operating expenses and retained earnings, all of which are expressed in U.S. dollars. Where we deem it prudent, we engage in hedging programs using primarily foreign currency forward contracts aimed at limiting the impact of foreign currency exchange rate fluctuations on earnings. We purchase short-term (i.e., generally 18 months or less) foreign currency forward contracts to protect against currency exchange risks associated with intercompany loans due from our international subsidiaries and the payment of merchandise purchases to our foreign suppliers. We do not hedge the translation of foreign currency profits into U.S. dollars, as we regard this as an accounting exposure, not an economic exposure. Our hedging activities have historically not had a material impact on our consolidated financial statements. Accordingly, additional disclosures related to derivatives and hedging activities required by ASC 815 have been omitted. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 26, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 16 – Stock-Based Compensation Our accompanying consolidated statements of income reflect pre-tax share-based compensation expense of $ 5.7 million ($ 4.1 million after-tax) and a credit of $ 6.6 million ($ 5.3 million after-tax) for the three and nine months ended September 26, 2020, respectively. For the three and nine months ended September 28, 2019 we recorded pre-tax share-based compensation expense of $ 13.3 million ($ 10.2 million after-tax) and $ 33.1 million ($ 25.2 million after-tax), respectively. The $ 6.6 million credit for share-based compensation during the nine months ended September 26, 2020 reflects our reduced estimate in expected achievement of performance-based targets resulting from the impact of COVID-19. Due to the significantly lower projected earnings in 2020, we are currently estimating that no performance shares granted under our 2018, 2019 or 2020 Long-Term Incentive Programs under our employee stock incentive plan will ultimately vest. Our accompanying consolidated statements of cash flows present our stock-based compensation expense (credit) as an adjustment to reconcile net income to net cash provided by operating activities for all periods presented. In the accompanying consolidated statements of cash flows, there were no benefits associated with tax deductions in excess of recognized compensation as a cash inflow from financing activities for the nine months ended September 26, 2020 and September 28, 2019, respectively. Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee directors. We measure stock-based compensation at the grant date, based on the estimated fair value of the award, and recognize the cost (net of estimated forfeitures) as compensation expense on a straight-line basis over the requisite service period. Our stock-based compensation expense is reflected in selling, general and administrative expenses in our consolidated statements of income. Stock-based awards are provided to certain employees and non-employee directors under the terms of our 2020 Stock Incentive Plan (formerly known as the 2013 Stock Incentive Plan), and our 2015 Non-Employee Director Stock Incentive Plan (together, the “Plans”). The Plans are administered by the Compensation Committee of the Board of Directors. Equity-based awards are granted solely in the form of restricted stock units, with the exception of providing stock options to employees pursuant to certain pre-existing contractual obligations. Grants of restricted stock units are stock-based awards granted to recipients with specified vesting provisions. In the case of restricted stock units, common stock is generally delivered on or following satisfaction of vesting conditions. We issue restricted stock units that vest solely based on the recipient’s continued service over time (primarily four year cliff vesting, except for grants made under the 2015 Non-Employee Director Stock Incentive Plan, which are primarily 12 month cliff vesting) and restricted stock units that vest based on our achieving specified performance measurements and the recipient’s continued service over time (primarily three year cliff vesting). With respect to time-based restricted stock units, we estimate the fair value on the date of grant based on our closing stock price. With respect to performance-based restricted stock units, the number of shares that ultimately vest and are received by the recipient is based upon our performance as measured against specified targets over a specified period, as determined by the Compensation Committee of the Board of Directors. Although there is no guarantee that performance targets will be achieved, we estimate the fair value of performance-based restricted stock units based on our closing stock price at time of grant. The Plans provide for adjustments to the performance-based restricted stock units targets for significant events, including, without limitation, acquisitions, divestitures, new business ventures, certain capital transactions (including share repurchases), restructuring costs, if any, certain litigation settlements or payments, if any, changes in tax rates in certain countries, changes in accounting principles or in applicable laws or regulations and foreign exchange fluctuations. Over the performance period, the number of shares of common stock that will ultimately vest and be issued and the related compensation expense is adjusted upward or downward based upon our estimation of achieving such performance targets. The ultimate number of shares delivered to recipients and the related compensation cost recognized as an expense will be based on our actual performance metrics as defined under the Plans. As a result of the Separation, the number of our unvested (as of the date of the Separation) equity-based awards from previous grants made under our Long-term Incentive Program under the Plans was increased by a factor of approximately 1.2633, along with a corresponding decrease Total unrecognized compensation cost related to unvested awards as of September 26, 2020 was $ 50.6 million, which is expected to be recognized over a weighted-average period of approximately 2.4 years. The following tables summarize the activity of our unvested restricted stock/units for the nine months ended September 26, 2020: Time-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,417 $ 58.72 Granted 379 60.02 Vested ( 297) 65.93 Forfeited ( 47) 59.87 Outstanding at end of period 1,452 $ 57.55 $ 58.79 Performance-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,459 $ 61.41 Granted ( 1,092) 55.89 Vested ( 326) 67.51 Forfeited ( 40) 57.84 Outstanding at end of period 1 $ 52.10 $ 58.79 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 26, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Note 17 – Supplemental Cash Flow Information Cash paid for interest and income taxes was: Nine Months Ended September 26, September 28, 2020 2019 Interest $ 29,551 $ 45,543 Income taxes 164,575 138,068 During the nine months ended September 26, 2020 and September 28, 2019, we had a $ 3.0 million and $( 2.0) million of non-cash net unrealized gain (loss) related to foreign currency hedging activities, respectively. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 26, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Note 18 – Legal Proceedings On August 31, 2012, Archer and White Sales, Inc. (“Archer”) filed a complaint against Henry Schein, Inc. as well as Danaher Corporation and its subsidiaries Instrumentarium Dental, Inc., Dental Equipment, LLC, Kavo Dental Technologies, LLC and Dental Imaging Technologies Corporation (collectively, the “Danaher Defendants”) in the U.S. District Court for the Eastern District of Texas, Civil Action No. 2:12-CV-00572-JRG, styled as an antitrust action under Section 1 of the Sherman Act, and the Texas Free Enterprise Antitrust Act. Archer alleges a conspiracy between Henry Schein, an unnamed company and the Danaher Defendants to terminate or limit Archer’s distribution rights. On August 1, 2017, Archer filed an amended complaint, adding Patterson Companies, Inc. (“Patterson”) and Benco Dental Supply Co. (“Benco”) as defendants, and alleging that Henry Schein, Patterson, Benco and Burkhart Dental Supply conspired to fix prices and refused to compete with each other for sales of dental equipment to dental professionals and agreed to enlist their common suppliers, the Danaher Defendants, to join a price-fixing conspiracy and boycott by reducing the distribution territory of, and eventually terminating, their price-cutting competing distributor Archer. Archer seeks damages in an amount to be proved at trial, to be trebled with interest and costs, including attorneys’ fees, jointly and severally, as well as injunctive relief. On October 30, 2017, Archer filed a second amended complaint, to add additional allegations that it believes support its claims. The named parties and causes of action are the same as the August 1, 2017 amended complaint. On October 1, 2012, we filed a motion for an order: (i) compelling Archer to arbitrate its claims against us; (2) staying all proceedings pending arbitration; and (3) joining the Danaher Defendants’ motion to arbitrate and stay. On May 28, 2013, the Magistrate Judge granted the motions to arbitrate and stayed proceedings pending arbitration. On June 10, 2013, Archer moved for reconsideration before the District Court judge. On December 7, 2016, the District Court Judge granted Archer’s motion for reconsideration and lifted the stay. Defendants appealed the District Court’s order. On December 21, 2017, the U.S. Court of Appeals for the Fifth Circuit affirmed the District Court’s order denying the motions to compel arbitration. On June 25, 2018, the Supreme Court of the United States granted defendants’ petition for writ of certiorari. On October 29, 2018, the Supreme Court heard oral arguments. On January 8, 2019, the Supreme Court issued its published decision vacating the judgment of the Fifth Circuit and remanding the case to the Fifth Circuit for further proceedings consistent with the Supreme Court’s opinion. On April 2, 2019, the District Court stayed the proceeding in the trial court pending resolution by the Fifth Circuit. The Fifth Circuit heard oral argument on May 1, 2019 on whether the case should be arbitrated. The Fifth Circuit issued its opinion on August 14, 2019 affirming the District Court’s order denying defendants’ motions to compel arbitration. Defendants filed a petition for rehearing en banc before the Fifth Circuit. The Fifth Circuit denied that petition. On October 1, 2019, the District Court set the case for trial on February 3, 2020, which was subsequently moved to January 29, 2020. On January 24, 2020 the Supreme Court granted our motion to stay the District Court proceedings, pending the disposition of our petition for writ of certiorari, which was filed on January 31, 2020. Archer conditionally cross petitioned for certiorari on an arbitration issue on March 2, 2020. On June 15, 2020, the Supreme Court granted our petition for writ of certiorari, and denied Archer’s conditional petition for certiorari, and thus the District Court proceedings remain stayed. The case is scheduled for argument before the Supreme Court in December 2020. Patterson and the Danaher Defendants settled with Archer and they have been dismissed from the case with prejudice. Benco is still a defendant and filed a notice of joinder in Henry Schein’s motion to compel arbitration with the District Court. We intend to defend ourselves vigorously against this action. On March 7, 2018, Joseph Salkowitz, individually and on behalf of all others similarly situated, filed a putative class action complaint for violation of the federal securities laws against Henry Schein, Inc., Stanley M. Bergman and Steven Paladino in the U.S. District Court for the Eastern District of New York, Case No. 1:18-cv-01428. The complaint sought to certify a class consisting of all persons and entities who, subject to certain exclusions, purchased Henry Schein securities from March 7, 2013 through February 12, 2018 (the “Class Period”). The complaint alleged, among other things, that the defendants had made materially false and misleading statements about Henry Schein’s business, operations and prospects during the Class Period, thereby causing the plaintiff and members of the purported class to pay artificially inflated prices for Henry Schein securities. Those alleged statements included matters relating to the issues in the In re Dental Supplies Antitrust Litigation, which Henry Schein settled and which the court dismissed in June 2019, and in the United States Federal Trade Commission (“FTC”) administrative proceeding, in which an administrative law judge ruled in Henry Schein’s favor in October 2019 after a trial, as described in our prior filings with the SEC. The complaint sought unspecified monetary damages and a jury trial. Pursuant to the provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), the court appointed lead plaintiff and lead counsel on June 22, 2018 and recaptioned the putative class action as In re Henry Schein, Inc. Securities Litigation, under the same case number. Lead plaintiff filed a consolidated class action complaint on September 14, 2018. The consolidated class action complaint asserted similar claims against the same defendants (plus Timothy Sullivan) on behalf of the same putative class of purchasers during the Class Period. It alleged that Henry Schein’s stock price had been inflated during that period because Henry Schein had misleadingly portrayed its dental-distribution business “as successfully producing excellent profits while operating in a highly competitive environment” even though, “in reality, [Henry Schein] had engaged for years in collusive and anticompetitive practices in order to maintain Schein’s margins, profits, and market share.” The complaint alleged that the stock price started to fall from August 8, 2017, when the company announced below-expected financial performance that allegedly “revealed that Schein’s poor results were a product of abandoning prior attempts to inflate sales volume and margins through anticompetitive collusion,” through February 13, 2018, after the FTC filed a complaint against Benco, Henry Schein and Patterson alleging that they violated U.S. antitrust laws. The complaint alleged violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 and Section 20(a) of the Exchange Act. On September 27, 2019, the court issued a decision partially granting and partially denying defendants’ motion to dismiss the securities action. The court dismissed all claims against Messrs. Bergman and Paladino as well as the Section 10(b) claim against Henry Schein to the extent that that claim relied on the Company’s financial results and margins to allege a material misstatement or omission. The court also dismissed the Section 10(b) claim against Henry Schein to the extent that it relied on the Company’s August 8, 2017 disclosure to allege loss causation. The court otherwise denied the motion as to Henry Schein and Mr. Sullivan. Henry Schein and Mr. Sullivan moved for partial reconsideration of the court’s decision. Pursuant to all parties’ request, the court temporarily took the motion off the calendar after it was fully briefed. The parties later agreed to resolve this matter in exchange for a cash payment of $ 35 million, which would be covered by the Company’s insurance and would have no earnings impact to the Company. The Court held a fairness hearing on the proposed settlement on September 16, 2020 and approved it later that day. The order and judgment approving the settlement have become final. On May 3, 2018, a purported class action complaint, Marion Diagnostic Center, LLC, et al. v. Becton, Dickinson, and Co., et al., Case No. 3:18-cv-010509, was filed in the U.S. District Court for the Southern District of Illinois against Becton, Dickinson, and Co. (“Becton”); Premier, Inc. (“Premier”), Vizient, Inc. (“Vizient”), Cardinal Health, Inc. (“Cardinal”), Owens & Minor Inc. (“O&M”), Henry Schein, Inc., and Unnamed Becton Distributor Co-Conspirators. The complaint alleged that the defendants entered into a vertical conspiracy to force health care providers into long-term exclusionary contracts that restrain trade in the nationwide markets for conventional and safety syringes and safety IV catheters and inflate the prices of certain Becton products to above-competitive levels. The named plaintiffs sought to represent three separate classes consisting of all health care providers that purchased (i) Becton’s conventional syringes, (ii) Becton’s safety syringes, or (iii) Becton’s safety catheters directly from Becton, Premier, Vizient, Cardinal, O&M or Henry Schein on or after May 3, 2014. The complaint asserted a single count under Section 1 of the Sherman Act, and sought equitable relief, treble damages, reasonable attorneys’ fees and costs and expenses, and pre-judgment and post-judgment interest. On June 15, 2018, an amended complaint was filed asserting the same allegations against the same parties and adding McKesson Medical-Surgical, Inc. as a defendant. On November 30, 2018, the District Court granted defendants’ motion to dismiss and entered a final judgment, dismissing plaintiffs’ complaint with prejudice. On December 27, 2018, plaintiffs appealed the District Court’s decision to the Seventh Circuit Court of Appeals. The parties argued the appeal on September 27, 2019. On March 5, 2020, the Seventh Circuit Court of Appeals reversed the District Court’s decision. The Seventh Circuit held that plaintiffs failed to adequately allege the necessary conspiracy by the defendants, but should be provided an opportunity to amend their complaint. The Seventh Circuit vacated the District Court’s judgment, and remanded the case for further proceedings consistent with its opinion. Plaintiffs subsequently dropped Henry Schein as a defendant in their amended complaint. On May 29, 2018, an amended complaint was filed in the MultiDistrict Litigation (“MDL”) proceeding In Re National Prescription Opiate Litigation (MDL No. 2804; Case No. 17-md-2804) in an action entitled The County of Summit, Ohio et al. v. Purdue Pharma, L.P., et al., Civil Action No. 1:18-op-45090-DAP (“County of Summit Action”), in the U.S. District Court for the Northern District of Ohio, adding Henry Schein, Inc., Henry Schein Medical Systems, Inc. and others as defendants. Summit County alleged that manufacturers of prescription opioid drugs engaged in a false advertising campaign to expand the market for such drugs and their own market share and that the entities in the supply chain (including Henry Schein, Inc. and Henry Schein Medical Systems, Inc.) reaped financial rewards by refusing or otherwise failing to monitor appropriately and restrict the improper distribution of those drugs. On October 29, 2019, the Company was dismissed with prejudice from this lawsuit. Henry Schein, working with Summit County, donated $ 1 million to a foundation and paid $ 250,000 of Summit County’s expenses, as described in our prior filings with the SEC. In addition to the County of Summit Action, Henry Schein and/or one or more of its affiliated companies have been named as a defendant in multiple lawsuits (currently less than one-hundred and fifty ( 150)), which allege claims similar to those alleged in the County of Summit Action. These actions consist of some that have been consolidated within the MDL and are currently abated for discovery purposes, and others which remain pending in state courts and are proceeding independently and outside of the MDL. On October 9, 2020, the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida, Case No. CACE19018882, granted Henry Schein’s motion to dismiss the claims brought against it in the action filed by North Broward Hospital District et. al. The Florida court gave plaintiffs until October 29, 2020 to replead their claims against Henry Schein. The plaintiffs have asked the Florida court for an additional 20 days to replead their claims. An action filed by Tucson Medical Center et al. was previously scheduled for trial beginning on June 1, 2021 but the court has vacated that trial date. At this time, the only case set for trial is the action filed by West Virginia University Hospitals, Inc. et al., which is currently scheduled for a non-jury liability trial on Plaintiffs’ public nuisance claims on November 1, 2021. Of Henry Schein’s 2019 revenue of approximately $ 10 billion from continuing operations, sales of opioids represented less than one-tenth of 1 percent On September 30, 2019, the City of Hollywood Police Officers Retirement System, individually and on behalf of all others similarly situated, filed a putative class action complaint for violation of the federal securities laws against Henry Schein, Inc., Covetrus, Inc., and Benjamin Shaw and Christine Komola (Covetrus’s then Chief Executive Officer and Chief Financial Officer, respectively) in the U.S. District Court for the Eastern District of New York, Case No. 2:19-cv-05530-FB-RLM. The complaint seeks to certify a class consisting of all persons and entities who, subject to certain exclusions, purchased or otherwise acquired Covetrus common stock from February 8, 2019 through August 12, 2019. The case relates to the Animal Health Spin-off and Merger of the Henry Schein Animal Health Business with Vets First Choice in February 2019. The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 and asserts that defendants’ statements in the offering documents and after the transaction were materially false and misleading because they purportedly overstated Covetrus’s capabilities as to inventory management and supply-chain services, understated the costs of integrating the Henry Schein Animal Health Business and Vets First Choice, understated Covetrus’s separation costs from Henry Schein, and understated the impact on earnings from online competition and alternative distribution channels and from the loss of an allegedly large customer in North America just before the Separation and Merger. The complaint seeks unspecified monetary damages and a jury trial. Pursuant to the provisions of the PSLRA, the court appointed lead plaintiff and lead counsel on December 23, 2019. Lead plaintiff filed a Consolidated Class Action Complaint on February 21, 2020. Lead plaintiff added Steve Paladino, our Chief Financial Officer, as a defendant in the action. Lead plaintiff filed an Amended Consolidated Class Action Complaint on May 21, 2020, in which it added a claim that Mr. Paladino is a “control person” of Covetrus. We intend to defend ourselves vigorously against this action. On November 15, 2019, Frank Finazzo filed a putative shareholder derivative action on behalf of Henry Schein, Inc. against various present and former directors and officers of Henry Schein in the U.S. District Court for the Eastern District of New York, Case No. 1:19-cv-6485-LDH-JO. The named defendants in the action are Stanley M. Bergman, Steven Paladino, Timothy J. Sullivan, Barry J. Alperin, Lawrence S. Bacow, Gerald A. Benjamin, James P. Breslawski, Paul Brons, Shira Goodman, Joseph L. Herring, Donald J. Kabat, Kurt Kuehn, Philip A. Laskawy, Anne H. Margulies, Karyn Mashima, Norman S. Matthews, Mark E. Mlotek, Carol Raphael, E. Dianne Rekow, Bradley T. Sheares, and Louis W. Sullivan, with Henry Schein named as a nominal defendant. The Complaint asserts claims under the federal securities laws and state law relating to the allegations in the antitrust actions, the In re Henry Schein, Inc. Securities Litigation, and the City of Hollywood securities class action described above. The complaint seeks declaratory, injunctive, and monetary relief on behalf of Henry Schein. On January 6, 2020, counsel who filed the Finazzo case filed another, virtually identical putative shareholder derivative action on behalf of Henry Schein against the same defendants, asserting the same claims and seeking the same relief. That case, captioned Mark Sloan v. Stanley M. Bergman, et al., is also pending in the U.S. District Court for the Eastern District of New York, Case No. 1:20-cv-0076. On January 24, 2020, the court consolidated the Finazzo and Sloan cases under the new caption In re Henry Schein, Inc. Derivative Litigation, No. 1:19-cv-06485-LDH-JO, and appointed the counsel in these cases as co-lead counsel for the consolidated action. The parties agreed to a resolution of this matter subject to various conditions, including court approval. The contemplated settlement, if finally approved, would involve the adoption of certain procedures but would not involve the payment of any money except a fee to the plaintiffs’ attorneys that is immaterial. The Court preliminarily approved the proposed settlement on June 10, 2020, and scheduled a fairness hearing for September 22, 2020. On September 9, 2020, the Court issued an order referring the motion for final settlement approval and fairness hearing to a Magistrate Judge for a report and recommendation. On September 10, 2020, the Magistrate Judge issued an order adjourning the September 22, 2020 fairness hearing without setting a new date. The parties have consented to the cases being assigned to the Magistrate Judge for all purposes. From time to time, we may become a party to other legal proceedings, including, without limitation, product liability claims, employment matters, commercial disputes, governmental inquiries and investigations (which may in some cases involve our entering into settlement arrangements or consent decrees), and other matters arising out of the ordinary course of our business. While the results of any legal proceeding cannot be predicted with certainty, in our opinion none of these other pending matters are currently anticipated to have a material adverse effect on our consolidated financial position, liquidity or results of operations. As of September 26, 2020, we had accrued our best estimate of potential losses relating to claims that were probable to result in liability and for which we were able to reasonably estimate a loss. This accrued amount, as well as related expenses, was not material to our financial position, results of operations or cash flows. Our method for determining estimated losses considers currently available facts, presently enacted laws and regulations and other factors, including probable recoveries from third parties. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 26, 2020 | |
Related Party Transactions | |
Related Party Transactions | Note 19 – Related Party Transactions In connection with the completion of the Animal Health Spin-off during our fiscal year 2019, we entered into a transition services agreement with Covetrus under which we have agreed to provide certain transition services for up to 24 months in areas such as information technology, finance and accounting, human resources, supply chain, and real estate and facility services. 3.9 million and $ 12.7 million, respectively, of fees for these services. During the three and nine months ended September 28, 2019, we recorded approximately $ 4.7 million and $ 13.0 million, respectively, of fees for these services. Covetrus also purchases certain products from us pursuant to the transition services agreement. During the three and nine months ended September 26, 2020, net sales to Covetrus were approximately $ 24.8 million and $ 66.0 million, respectively. During the three and nine months ended September 28, 2019, net sales to Covetrus were approximately $ 21.8 million and $ 60.2 million, respectively. Sales to Covetrus under the transition services agreement have been substantially completed as of October 2020. At September 26, 2020 we had $ 4.2 million of receivables due from Covetrus and $ 0.4 million payable to Covetrus under this transition services agreement. In connection with the formation of Henry Schein One, LLC, our joint venture with Internet Brands, which was formed on July 1, 2018, we entered into a ten year royalty agreement with Internet Brands whereby we will pay Internet Brands approximately $ 31.0 million annually for the use of their intellectual property. 7.8 million and $ 23.4 million, respectively in connection with costs related to this royalty agreement. During the three and nine months ended September 28, 2019, we recorded $ 7.8 million and $ 23.4 million, respectively in connection with costs related to this royalty agreement. As of September 26, 2020 and December 28, 2019, Henry Schein One, LLC had a net receivable balance due from Internet Brands of $ 13.5 million and $ 9.8 million, respectively, comprised of amounts related to results of operations and the royalty agreement. During our normal course of business, we have interests in entities that we account for under the equity accounting method. During the three and nine months ended September 26, 2020, we recorded net sales of $ 10.0 million and $ 33.1 million, respectively, to such entities. During the three and nine months ended September 28, 2019, we recorded net sales of $ 28.6 million and $ 74.4 million, respectively, to such entities. During the three and nine months ended September 26, 2020, we purchased $ 2.9 million and $ 7.7 million, respectively, from such entities. During the three and nine months ended September 28, 2019, we purchased $ 3.2 million and $ 9.0 million, respectively, from such entities. At September 26, 2020 and December 28, 2019, we had in aggregate $ 34.3 million and $ 30.8 million, due from our equity affiliates, and $ 6.9 million and $ 4.9 million due to our equity affiliates, respectively. |
Critical Accounting Policies,_2
Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards (Policies) | 9 Months Ended |
Sep. 26, 2020 | |
Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards | |
Principles of Consolidation | Our consolidated financial statements include our accounts, as well as those of our wholly-owned and majority-owned subsidiaries. Certain prior period amounts have been reclassified to conform to the current period presentation. Our accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by U.S. GAAP for complete financial statements. We consolidate a Variable Interest Entity (“VIE”) where we hold a variable interest and are the primary beneficiary. The VIE is a trade accounts receivable securitization. We are the primary beneficiary because we have the power to direct activities that most significantly affect the economic performance and have the obligation to absorb the majority of the losses or benefits. The results of operations and financial position of this VIE are included in our consolidated financial statements. For the consolidated VIE, the trade accounts receivable transferred to the VIE are pledged as collateral to the related debt. The creditors have recourse to us for losses on these trade accounts receivable. At September 26, 2020 and December 28, 2019, trade accounts receivable that can only be used to settle obligations of this VIE were $ 0 million and $ 127 million, respectively, and the liabilities of the VIE where the creditors have recourse to us were $ 0 million and $ 100 million, respectively. The consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 28, 2019. |
Consolidated Variable Interest Entity | We consolidate a Variable Interest Entity (“VIE”) where we hold a variable interest and are the primary beneficiary. The VIE is a trade accounts receivable securitization. We are the primary beneficiary because we have the power to direct activities that most significantly affect the economic performance and have the obligation to absorb the majority of the losses or benefits. The results of operations and financial position of this VIE are included in our consolidated financial statements. For the consolidated VIE, the trade accounts receivable transferred to the VIE are pledged as collateral to the related debt. The creditors have recourse to us for losses on these trade accounts receivable. At September 26, 2020 and December 28, 2019, trade accounts receivable that can only be used to settle obligations of this VIE were $ 0 million and $ 127 million, respectively, and the liabilities of the VIE where the creditors have recourse to us were $ 0 million and $ 100 million, respectively. |
Accounting Pronouncements Adopted and Recently Issued Accounting Standards | In January 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, “Intangibles-Goodwill and Other” (Topic 350) (“ASU 2017-04”). ASU 2017-04 eliminates step two from the goodwill impairment test, thereby eliminating the requirement to calculate the implied fair value of a reporting unit. ASU 2017-04 requires us to perform our annual goodwill impairment test by comparing the fair value of our reporting units to the carrying value of those units. If the carrying value exceeds the fair value, we will be required to recognize an impairment charge; however, the impairment charge should not exceed the amount of goodwill allocated to such reporting unit. Our adoption of ASU 2017-04 on December 29, 2019 did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. We adopted ASU 2016-13 using the modified-retrospective method and recorded an immaterial cumulative-effect adjustment to the opening balance of retained earnings. Based upon the level and makeup of our financial asset portfolio, including accounts receivable, past loan loss activity and current known activity regarding our outstanding loans, the adoption of ASU 2016-13 on December 29, 2019 resulted in a decrease of $ 0.4 million to retained earnings. Recently Issued Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2017-04 is effective for fiscal years beginning after December 15, 2020. We do not expect that the requirements of this ASU will have a material impact on our consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options” (Subtopic 470-20) and “Derivatives and Hedging— in Entity’s Own Equity” (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments. In addition to eliminating certain accounting models, this ASU includes improvements to the disclosures for convertible instruments and earnings-per-share (EPS) guidance and amends the guidance for the derivatives scope exception for contracts in an entity’s own equity. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021. We do not expect that the requirements of this ASU will have a material impact on our consolidated financial statements. |
Income Taxes | On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act includes, but is not limited to, certain income tax provisions that modify the Section 163(j) limitation of business interest and Net Operating Loss (“NOL”) carryover and carryback rules. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income for years beginning in 2019 and 2020. The CARES Act eliminated the NOL income limitation for years beginning before 2021 and it extended the carryback period to five years for year losses incurred in 2018, 2019 and 2020. We have analyzed the income tax provisions of the CARES Act and have accounted for the impact in the nine months ended September 26, 2020, which did not have a material impact on our consolidated financial statements. There are certain other non-income tax benefits available to us under the CARES Act that require further clarification or interpretation that may affect our consolidated financial statements in the future. On July 20, 2020, the U.S Internal Revenue Service (the “IRS”) issued final regulations related to the 2017 Tax Cuts and Jobs Act (“Tax Act”). The final regulations concern the global intangible low-taxed income (“GILTI”) and subpart F income provisions of the Tax Act. To provide flexibility to taxpayers, the IRS is permitting the application of these final regulations to prior tax years, if the taxpayer elects to do so. We have analyzed the final regulations, which do not have a material impact to our consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Discontinued Operations | |
Summarized financial information for discontinued operations | Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Net sales $ - $ - $ - $ 319,522 Cost of goods sold - - - 260,097 Gross profit - - - 59,425 Selling, general and administrative 326 1,063 782 68,013 Operating loss ( 326) ( 1,063) ( 782) ( 8,588) Income tax benefit ( 297) ( 6,704) ( 1,056) ( 2,023) Income (loss) from discontinued operations ( 29) 5,641 274 ( 5,576) Net loss attributable to noncontrolling interests - - - 366 Net income (loss) from discontinued operations attributable to Henry Schein, Inc. ( 29) 5,641 274 ( 5,210) February 7, December 29, 2019 2018 Cash and cash equivalents $ 6,815 $ 23,324 Accounts receivable, net 432,812 434,935 Inventories, net 536,637 555,230 Prepaid expenses and other 120,546 69,525 Total current assets of discontinued operations 1,096,810 1,083,014 Property and equipment, net 69,790 68,177 Operating lease right-of-use asset, net 57,012 - Goodwill 742,931 739,266 Other intangibles, net 205,793 208,213 Investments and other 120,518 118,003 Total long-term assets of discontinued operations 1,196,044 1,133,659 Total assets of discontinued operations $ 2,292,854 $ 2,216,673 Accounts payable $ 316,162 $ 441,453 Current maturities of long-term debt 657 675 Operating lease liabilities 18,951 - Accrued expenses: Payroll and related 36,847 36,888 Taxes 24,060 17,552 Other 80,400 81,039 Total current liabilities of discontinued operations 477,077 577,607 Long-term debt 1,176,105 23,529 Deferred income taxes 17,019 4,352 Operating lease liabilities 38,668 - Other liabilities 29,209 34,572 Total long-term liabilities of discontinued operations 1,261,001 62,453 Total liabilities of discontinued operations $ 1,738,078 $ 640,060 Redeemable noncontrolling interests $ 28,270 $ 92,432 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Revenue from Contracts with Customers | |
Disaggregation of Revenue | Three Months Ended Nine Months Ended September 26, 2020 September 26, 2020 North America International Global North America International Global Revenues: Health care distribution Dental $ 1,008,836 $ 641,017 $ 1,649,853 $ 2,413,154 $ 1,653,067 $ 4,066,221 Medical 1,002,741 24,405 1,027,146 2,377,357 68,287 2,445,644 Total health care distribution 2,011,577 665,422 2,676,999 4,790,511 1,721,354 6,511,865 Technology and value-added services 120,949 17,406 138,355 327,374 48,173 375,547 Total excluding Corporate TSA revenues (1) 2,132,526 682,828 2,815,354 5,117,885 1,769,527 6,887,412 Corporate TSA revenues (1) - 24,792 24,792 - 66,004 66,004 Total revenues $ 2,132,526 $ 707,620 $ 2,840,146 $ 5,117,885 $ 1,835,531 $ 6,953,416 Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 North America International Global North America International Global Revenues: Health care distribution Dental $ 951,792 $ 594,189 $ 1,545,981 $ 2,850,669 $ 1,843,042 $ 4,693,711 Medical 784,349 19,360 803,709 2,125,002 59,925 2,184,927 Total health care distribution 1,736,141 613,549 2,349,690 4,975,671 1,902,967 6,878,638 Technology and value-added services 120,199 17,135 137,334 327,709 50,274 377,983 Total excluding Corporate TSA revenues (1) 1,856,340 630,684 2,487,024 5,303,380 1,953,241 7,256,621 Corporate TSA revenues (1) 1,077 20,666 21,743 4,098 56,143 60,241 Total revenues $ 1,857,417 $ 651,350 $ 2,508,767 $ 5,307,478 $ 2,009,384 $ 7,316,862 (1) Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which has been substantially completed as of October 2020. |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Segment Data | |
Business segment information | Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Net Sales: Health care distribution (1) Dental $ 1,649,853 $ 1,545,981 $ 4,066,221 $ 4,693,711 Medical 1,027,146 803,709 2,445,644 2,184,927 Total health care distribution 2,676,999 2,349,690 6,511,865 6,878,638 Technology and value-added services (2) 138,355 137,334 375,547 377,983 Total excluding Corporate TSA revenue 2,815,354 2,487,024 6,887,412 7,256,621 Corporate TSA revenues (3) 24,792 21,743 66,004 60,241 Total $ 2,840,146 $ 2,508,767 $ 6,953,416 $ 7,316,862 (1) Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. (2) Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. (3) Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which has been substantially completed as of October 2020. Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Operating Income: Health care distribution $ 148,657 $ 149,495 $ 271,477 $ 428,934 Technology and value-added services 39,014 37,703 82,626 92,993 Total $ 187,671 $ 187,198 $ 354,103 $ 521,927 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Debt | |
Bank credit lines | September 26, December 28, 2020 2019 Revolving credit agreement $ - $ - 364-day credit agreement 500,000 - Other short-term bank credit lines 7,372 23,975 Total $ 507,372 $ 23,975 |
Long-term debt | September 26, December 28, 2020 2019 Private placement facilities $ 613,549 $ 621,274 U.S. trade accounts receivable securitization - 100,000 Note payable due in 2025 with an interest rate of 3.1% at September 26, 2020 1,438 - Various collateralized and uncollateralized loans payable with interest, in varying installments through 2023 at interest rates ranging from 2.62% to 4.22% at September 26, 2020 and ranging from 2.56% to 10.5% at December 28, 2019 4,273 6,089 Finance lease obligations (see Note 7) 6,112 5,394 Total 625,372 732,757 Less current maturities ( 110,015) ( 109,849) Total long-term debt $ 515,357 $ 622,908 |
Private placement facilities | Amount of Borrowing Borrowing Date of Borrowing Outstanding Rate Due Date January 20, 2012 (1) $ 14,286 3.09 % January 20, 2022 January 20, 2012 50,000 3.45 January 20, 2024 December 24, 2012 50,000 3.00 December 24, 2024 June 2, 2014 100,000 3.19 June 2, 2021 June 16, 2017 100,000 3.42 June 16, 2027 September 15, 2017 100,000 3.52 September 15, 2029 January 2, 2018 100,000 3.32 January 2, 2028 September 2, 2020 (2) 100,000 2.35 September 3, 2030 Less: Deferred debt issuance costs ( 737) $ 613,549 (1) Annual repayments of approximately $ 7.1 million for this borrowing commenced on January 20, 2016. (2) On September 2, 2020, we refinanced our $ 100 million private placement borrowing at 3.79%, originally due on September 2, 2020, with a similar 10-year borrowing at 2.35% maturing on September 2, 2030. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Leases | |
Components of lease expense, supplemental balance sheet information, and supplemental cash flow | Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Operating lease cost: (1) (2) $ 21,343 $ 21,840 $ 65,413 $ 68,273 Finance lease cost: Amortization of right-of-use assets 434 290 1,148 798 Interest on lease liabilities 29 31 86 88 Total finance lease cost $ 463 $ 321 $ 1,234 $ 886 (1) Includes variable lease expenses. (2) Operating lease (credit) cost for three months and nine months ended September 26, 2020, includes amortization of right-of-use assets of $( 0.1) and $ 0.40 million, respectively, related to facility leases recorded in “Restructuring costs” within our consolidated statements of income. Supplemental balance sheet information related to leases is as follows: September 26, December 28, 2020 2019 Operating Leases: Operating lease right-of-use assets $ 249,895 $ 231,662 Current operating lease liabilities 62,914 65,349 Non-current operating lease liabilities 200,611 176,267 Total operating lease liabilities $ 263,525 $ 241,616 Finance Leases: Property and equipment, at cost $ 10,457 $ 10,268 Accumulated depreciation ( 4,030) ( 4,581) Property and equipment, net of accumulated depreciation $ 6,427 $ 5,687 Current maturities of long-term debt $ 2,348 $ 1,736 Long-term debt 3,764 3,658 Total finance lease liabilities $ 6,112 $ 5,394 Weighted Average Remaining Lease Term in Years: Operating leases 7.1 5.5 Finance leases 4.3 5.0 Weighted Average Discount Rate: Operating leases 3.0 % 3.4 % Finance leases 2.0 % 2.2 % Supplemental cash flow information related to leases is as follows: Nine Months Ended September 26, September 28, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 57,666 $ 60,275 Operating cash flows for finance leases 76 67 Financing cash flows for finance leases 1,515 862 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 66,082 $ 290,166 Finance leases 2,489 1,149 |
Maturities of operating lease liabilities | Maturities of lease liabilities are as follows: September 26, 2020 Operating Finance Leases Leases 2020 $ 18,423 $ 747 2021 65,955 2,272 2022 49,257 1,365 2023 32,363 495 2024 22,298 315 Thereafter 103,765 1,163 Total future lease payments 292,061 6,357 Less imputed interest ( 28,536) ( 245) Total $ 263,525 $ 6,112 |
Maturities of finance lease liabilities | Maturities of lease liabilities are as follows: September 26, 2020 Operating Finance Leases Leases 2020 $ 18,423 $ 747 2021 65,955 2,272 2022 49,257 1,365 2023 32,363 495 2024 22,298 315 Thereafter 103,765 1,163 Total future lease payments 292,061 6,357 Less imputed interest ( 28,536) ( 245) Total $ 263,525 $ 6,112 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Redeemable Noncontrolling Interests | |
Change in fair value of redeemable noncontrolling interests | September 26, December 28, 2020 2019 Balance, beginning of period $ 287,258 $ 219,724 Decrease in redeemable noncontrolling interests due to redemptions ( 12,636) ( 2,270) Increase in redeemable noncontrolling interests due to business acquisitions 25,955 74,865 Net income attributable to redeemable noncontrolling interests 7,253 14,838 Dividends declared ( 7,272) ( 10,264) Effect of foreign currency translation loss attributable to redeemable noncontrolling interests ( 10,999) ( 2,335) Change in fair value of redeemable securities 5,141 ( 7,300) Balance, end of period $ 294,700 $ 287,258 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Comprehensive Income | |
Accumulated other comprehensive income, net of applicable taxes | September 26, December 28, 2020 2019 Attributable to Redeemable noncontrolling interests: Foreign currency translation adjustment $ ( 31,337) $ ( 20,338) Attributable to noncontrolling interests: Foreign currency translation adjustment $ ( 276) $ ( 531) Attributable to Henry Schein, Inc.: Foreign currency translation adjustment $ ( 149,744) $ ( 143,172) Unrealized loss from foreign currency hedging activities ( 1,575) ( 4,032) Unrealized investment gain 1 6 Pension adjustment loss ( 20,014) ( 20,175) Accumulated other comprehensive loss $ ( 171,332) $ ( 167,373) Total Accumulated other comprehensive loss $ ( 202,945) $ ( 188,242) |
Components of comprehensive income, net of applicable taxes | Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Net income $ 151,784 $ 148,853 $ 272,082 $ 382,693 Foreign currency translation gain (loss) 37,588 ( 60,635) ( 17,316) ( 43,926) Tax effect - - - - Foreign currency translation gain (loss) 37,588 ( 60,635) ( 17,316) ( 43,926) Unrealized gain (loss) from foreign currency hedging activities ( 10,490) ( 1,685) 3,010 ( 2,037) Tax effect 2,793 422 ( 553) 451 Unrealized gain (loss) from foreign currency hedging activities ( 7,697) ( 1,263) 2,457 ( 1,586) Unrealized investment gain (loss) 2 3 ( 6) 10 Tax effect - ( 1) 1 ( 2) Unrealized investment gain (loss) 2 2 ( 5) 8 Pension adjustment gain (loss) ( 471) 585 227 1,146 Tax effect 133 ( 185) ( 66) ( 314) Pension adjustment gain (loss) ( 338) 400 161 832 Comprehensive income $ 181,339 $ 87,357 $ 257,379 $ 338,021 |
Total comprehensive income, net of applicable taxes | Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Comprehensive income attributable to Henry Schein, Inc. $ 169,616 $ 85,075 $ 257,202 $ 324,809 Comprehensive income attributable to noncontrolling interests 4,354 3,924 3,923 7,280 Comprehensive income (loss) attributable to Redeemable noncontrolling interests 7,369 ( 1,642) ( 3,746) 5,932 Comprehensive income $ 181,339 $ 87,357 $ 257,379 $ 338,021 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value - assets and liabilities measured and recognized on a recurring basis | September 26, 2020 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 32,107 $ - $ 32,107 Total assets $ - $ 32,107 $ - $ 32,107 Liabilities: Derivative contracts $ - $ 4,175 $ - $ 4,175 Total return swaps - 2,406 - 2,406 Total liabilities $ - $ 6,581 $ - $ 6,581 Redeemable noncontrolling interests $ - $ - $ 294,700 $ 294,700 December 28, 2019 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 567 $ - $ 567 Total assets $ - $ 567 $ - $ 567 Liabilities: Derivative contracts $ - $ 5,795 $ - $ 5,795 Total liabilities $ - $ 5,795 $ - $ 5,795 Redeemable noncontrolling interests $ - $ - $ 287,258 $ 287,258 |
Plans of Restructuring (Tables)
Plans of Restructuring (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve by type of cost | Facility Severance Closing Costs Costs Other Total Balance, December 29, 2018 $ 29,964 $ 1,603 $ 158 $ 31,725 Provision 13,741 937 27 14,705 Payments and other adjustments ( 30,794) ( 1,714) ( 112) ( 32,620) Balance, December 28, 2019 $ 12,911 $ 826 $ 73 $ 13,810 Provision 23,127 4,348 238 27,713 Payments and other adjustments ( 21,404) ( 4,609) ( 247) ( 26,260) Balance, September 26, 2020 $ 14,634 $ 565 $ 64 $ 15,263 |
Schedule of restructuring reserve by segment | Technology and Health Care Value-Added Distribution Services Total Balance, December 29, 2018 $ 30,291 $ 1,434 $ 31,725 Provision 13,935 770 14,705 Payments and other adjustments ( 30,853) ( 1,767) ( 32,620) Balance, December 28, 2019 $ 13,373 $ 437 $ 13,810 Provision 26,621 1,092 27,713 Payments and other adjustments ( 25,175) ( 1,085) ( 26,260) Balance, September 26, 2020 $ 14,819 $ 444 $ 15,263 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted shares used to calculate earnings per share | Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, 2020 2019 2020 2019 Basic 142,362 147,136 142,553 148,603 Effect of dilutive securities: Restricted stock and restricted stock units 729 1,439 755 1,317 Diluted 143,091 148,575 143,308 149,920 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Status of non-vested restricted shares/units | Time-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,417 $ 58.72 Granted 379 60.02 Vested ( 297) 65.93 Forfeited ( 47) 59.87 Outstanding at end of period 1,452 $ 57.55 $ 58.79 Performance-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,459 $ 61.41 Granted ( 1,092) 55.89 Vested ( 326) 67.51 Forfeited ( 40) 57.84 Outstanding at end of period 1 $ 52.10 $ 58.79 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 26, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash paid for interest and income taxes | Nine Months Ended September 26, September 28, 2020 2019 Interest $ 29,551 $ 45,543 Income taxes 164,575 138,068 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 26, 2020 | Dec. 28, 2019 | |
Assets | $ 7,809,895 | $ 7,151,101 |
Liabilities | $ 3,722,928 | 3,233,706 |
Discontinued Operation, Name | Henry Schein Animal Health Business | |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Variable Interest Entity, Terms of Arrangements | We consolidate a Variable Interest Entity (“VIE”) where we hold a variable interest and are the primary beneficiary. | |
Variable Interest Entity, Qualitative or Quantitative Information, Purpose of VIE | The VIE is a trade accounts receivable securitization. | |
Variable Interest Entity, Extent of or Lack of Recourse | The creditors have recourse to us for losses on these trade accounts receivable. | |
Variable Interest Entity, Carrying Amount, Assets and Liabilities, Qualitative Information | trade accounts receivable that can only be used to settle obligations of this VIE | |
Variable Interest Entity, Primary Beneficiary [Member] | Asset Pledged as Collateral [Member] | ||
Assets | $ 0 | 127,000 |
Variable Interest Entity, Primary Beneficiary [Member] | Recourse [Member] | ||
Liabilities | $ 0 | $ 100,000 |
Discontinued Operations - Summ
Discontinued Operations - Summarized financial information for our discontinued operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 28, 2019 | Feb. 07, 2019 | Dec. 29, 2018 | |
Summarized financial information for our discontinued operations | |||||||
Costs of goods sold | $ 2,085,847 | $ 1,747,600 | $ 4,998,784 | $ 5,036,574 | |||
Selling, general and administrative | 559,636 | 574,771 | 1,572,816 | 1,742,597 | |||
Income (loss) from discontinued operations | (29) | 5,641 | 274 | (5,576) | |||
Net (income) loss attributable to redeemable noncontrolling interests from discontinued operations | 0 | 0 | 0 | 366 | |||
Net loss from discontinued operations atrributable to Henry Schein, Inc. | (29) | 5,641 | 274 | (5,210) | |||
Assets transferred | |||||||
Operating lease right-of-use assets | 249,895 | 249,895 | $ 231,662 | ||||
Investments and other | 356,439 | 356,439 | 327,919 | ||||
Liabilities transferred | |||||||
Current maturities of long-term debt | 110,015 | 110,015 | 109,849 | ||||
Operating lease liabilities | 62,914 | 62,914 | 65,349 | ||||
Accrued expenses: | |||||||
Long-term debt | 515,357 | 515,357 | 622,908 | ||||
Operating lease liabilities | 200,611 | 200,611 | 176,267 | ||||
Redeemable noncontrolling interests | 294,700 | 294,700 | $ 287,258 | $ 219,724 | |||
Henry Schein Animal Health Business [Member] | |||||||
Summarized financial information for our discontinued operations | |||||||
Net sales | 0 | 0 | 0 | 319,522 | |||
Costs of goods sold | 0 | 0 | 0 | 260,097 | |||
Gross profit | 0 | 0 | 0 | 59,425 | |||
Selling, general and administrative | 326 | 1,063 | 782 | 68,013 | |||
Operating income (loss) | (326) | (1,063) | (782) | (8,588) | |||
Income tax benefit | (297) | (6,704) | (1,056) | (2,023) | |||
Income (loss) from discontinued operations | (29) | 5,641 | 274 | (5,576) | |||
Net (income) loss attributable to redeemable noncontrolling interests from discontinued operations | 0 | 0 | 0 | 366 | |||
Net loss from discontinued operations atrributable to Henry Schein, Inc. | $ (29) | $ 5,641 | $ 274 | $ (5,210) | |||
Assets transferred | |||||||
Cash and cash equivalents | $ 6,815 | 23,324 | |||||
Accounts receivable, net | 432,812 | 434,935 | |||||
Inventories, net | 536,637 | 555,230 | |||||
Prepaid expenses and other | 120,546 | 69,525 | |||||
Total current assets of discontinued operations | 1,096,810 | 1,083,014 | |||||
Property and equipment, net | 69,790 | 68,177 | |||||
Operating lease right-of-use assets | 57,012 | 0 | |||||
Goodwill | 742,931 | 739,266 | |||||
Other intangibles, net | 205,793 | 208,213 | |||||
Investments and other | 120,518 | 118,003 | |||||
Total long-term assets of discontinued operations | 1,196,044 | 1,133,659 | |||||
Total assets of discontinued operations | 2,292,854 | 2,216,673 | |||||
Liabilities transferred | |||||||
Accounts Payable | 316,162 | 441,453 | |||||
Current maturities of long-term debt | 657 | 675 | |||||
Operating lease liabilities | 18,951 | 0 | |||||
Accrued expenses: | |||||||
Payroll and related | 36,847 | 36,888 | |||||
Taxes | 24,060 | 17,552 | |||||
Other | 80,400 | 81,039 | |||||
Total current liabilities of discontinued operations | 477,077 | 577,607 | |||||
Long-term debt | 1,176,105 | 23,529 | |||||
Deferred income taxes | 17,019 | 4,352 | |||||
Operating lease liabilities | 38,668 | 0 | |||||
Other liabilities | 29,209 | 34,572 | |||||
Total long-term liabilities of discontinued operations | 1,261,001 | 62,453 | |||||
Total liabilities of discontinued operations | 1,738,078 | 640,060 | |||||
Redeemable noncontrolling interests | $ 28,270 | $ 92,432 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Thousands | Feb. 07, 2019 | Sep. 26, 2020 | Sep. 28, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Distribution received related to Animal Health Spin-off | $ 0 | $ 1,120,000 | |
Proceeds related to Animal Health Share Sale | $ 0 | $ 361,090 | |
Discontinued Operation, Name | Henry Schein Animal Health Business | ||
Henry Schein Animal Health Business [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Distribution received related to Animal Health Spin-off | $ 1,120,000 | ||
Proceeds related to Animal Health Share Sale | $ 361,100 | ||
Period Covered By Agreement | 24 months | ||
Deconsolidation, Nature of Continuing Involvement, Description | In connection with the completion of the Animal Health Spin-off, we entered into a transition services agreement with Covetrus under which we have agreed to provide certain transition services for up to twenty-four months in areas such as information technology, finance and accounting, human resources, supply chain, and real estate and facility services. | ||
Henry Schein Animal Health Business [Member] | Covetrus Inc [Member] | Henry Schein stockholders and the Share Sale Investors [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Parent | 63.00% | ||
Henry Schein Animal Health Business [Member] | Covetrus Inc [Member] | Vets First Corp [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Parent | 37.00% |
Critical Accounting Policies,_3
Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Sep. 26, 2020 | Jun. 27, 2020 | Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Dec. 29, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Stockholders' equity | $ 3,792,267 | $ 3,621,545 | $ 3,630,137 | $ 3,459,310 | $ 3,446,214 | $ 3,541,788 |
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Stockholders' equity | (412) | (274) | ||||
Retained Earnings [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Stockholders' equity | $ 3,314,136 | 3,172,439 | 3,116,215 | $ 2,957,850 | $ 2,900,387 | 3,208,589 |
Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Stockholders' equity | $ (412) | $ (274) | ||||
Accounting Standards Update 2017-04 [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Dec. 29, 2019 | |||||
Accounting Standards Update 2016-13 [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |||||
New Accounting Pronouncement or Change in Accounting Principle, Prior Period Not Restated [true false] | true | |||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Dec. 29, 2019 | |||||
Accounting Standards Update 2016-13 [Member] | Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Stockholders' equity | $ (400) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | ||
Disaggregation of Revenue [Abstract] | |||||
Net sales | $ 2,840,146 | $ 2,508,767 | $ 6,953,416 | $ 7,316,862 | |
Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 2,815,354 | 2,487,024 | 6,887,412 | 7,256,621 | |
Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [1] | 24,792 | 21,743 | 66,004 | 60,241 |
North America [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 2,132,526 | 1,857,417 | 5,117,885 | 5,307,478 | |
North America [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 2,132,526 | 1,856,340 | 5,117,885 | 5,303,380 | |
North America [Member] | Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 0 | 1,077 | 0 | 4,098 | |
International [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 707,620 | 651,350 | 1,835,531 | 2,009,384 | |
International [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 682,828 | 630,684 | 1,769,527 | 1,953,241 | |
International [Member] | Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 24,792 | 20,666 | 66,004 | 56,143 | |
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [2] | 2,676,999 | 2,349,690 | 6,511,865 | 6,878,638 |
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [2] | 2,676,999 | 2,349,690 | 6,511,865 | 6,878,638 |
Healthcare Distribution [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 2,011,577 | 1,736,141 | 4,790,511 | 4,975,671 | |
Healthcare Distribution [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 665,422 | 613,549 | 1,721,354 | 1,902,967 | |
Healthcare Distribution [Member] | Dental [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [2] | 1,649,853 | 1,545,981 | 4,066,221 | 4,693,711 |
Healthcare Distribution [Member] | Dental [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 1,008,836 | 951,792 | 2,413,154 | 2,850,669 | |
Healthcare Distribution [Member] | Dental [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 641,017 | 594,189 | 1,653,067 | 1,843,042 | |
Healthcare Distribution [Member] | Medical [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [2] | 1,027,146 | 803,709 | 2,445,644 | 2,184,927 |
Healthcare Distribution [Member] | Medical [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 1,002,741 | 784,349 | 2,377,357 | 2,125,002 | |
Healthcare Distribution [Member] | Medical [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 24,405 | 19,360 | 68,287 | 59,925 | |
Technology [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [3] | 138,355 | 137,334 | 375,547 | 377,983 |
Technology [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 120,949 | 120,199 | 327,374 | 327,709 | |
Technology [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | $ 17,406 | $ 17,135 | $ 48,173 | $ 50,274 | |
[1] | Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which has been substantially completed as of October 2020. | ||||
[2] | Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. | ||||
[3] | Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 26, 2020 | Dec. 28, 2019 | |
Revenue from Contracts with Customers | ||
Contract with Customer, Liability, Current | $ 58.3 | $ 70.8 |
Contract with Customer, Liability, Noncurrent | 6.8 | $ 6.2 |
Contract with Customer, Liability, Revenue Recognized | $ 60 |
Segment Data (Details)
Segment Data (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020USD ($)segments | Sep. 28, 2019USD ($) | Sep. 26, 2020USD ($)segments | Sep. 28, 2019USD ($) | ||
Segment Data | |||||
Number of reportable segments | segments | 2 | ||||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 2,840,146 | $ 2,508,767 | $ 6,953,416 | $ 7,316,862 | |
Operating income | 187,671 | 187,198 | 354,103 | 521,927 | |
Total excluding Corporate TSA revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 2,815,354 | 2,487,024 | 6,887,412 | 7,256,621 | |
Corporate TSA revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [1] | $ 24,792 | 21,743 | $ 66,004 | 60,241 |
Healthcare Distribution [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Number of countries served globally | segments | 31 | 31 | |||
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [2] | $ 2,676,999 | 2,349,690 | $ 6,511,865 | 6,878,638 |
Operating income | [2] | 148,657 | 149,495 | 271,477 | 428,934 |
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [2] | 2,676,999 | 2,349,690 | 6,511,865 | 6,878,638 |
Healthcare Distribution [Member] | Dental [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [2] | 1,649,853 | 1,545,981 | 4,066,221 | 4,693,711 |
Healthcare Distribution [Member] | Medical [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [2] | 1,027,146 | 803,709 | 2,445,644 | 2,184,927 |
Technology and Value-Added Services [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [3] | 138,355 | 137,334 | 375,547 | 377,983 |
Operating income | $ 39,014 | $ 37,703 | $ 82,626 | $ 92,993 | |
[1] | Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which has been substantially completed as of October 2020. | ||||
[2] | Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. | ||||
[3] | Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. |
Debt - Bank credit lines (Detai
Debt - Bank credit lines (Details) - USD ($) $ in Thousands | Sep. 26, 2020 | Dec. 28, 2019 |
Line of Credit Facility [Line Items] | ||
Bank Credit lines | $ 507,372 | $ 23,975 |
Revolving Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank Credit lines | 0 | 0 |
364-day credit agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank Credit lines | 500,000 | 0 |
Other short-term bank credit lines [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank Credit lines | $ 7,372 | $ 23,975 |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreement, 364-Day Credit Agreement and Other Short-Term Credit Lines Narrative (Details) - USD ($) | Apr. 17, 2020 | Apr. 18, 2017 | Sep. 26, 2020 | Dec. 28, 2019 |
Line of Credit Facility [Line Items] | ||||
Bank credit lines | $ 507,372,000 | $ 23,975,000 | ||
Revolving Credit Agreement [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Bank credit lines | 0 | 0 | ||
Revolving credit facility maturing in April 2022 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Initiation Date | Apr. 18, 2017 | |||
Revolving credit facility borrowing capacity | $ 750,000,000 | |||
Revolving credit facility expiration date | Apr. 30, 2022 | |||
Bank credit lines | 0 | 0 | ||
Outstanding letters of credit provided to third parties | 9,500,000 | 9,600,000 | ||
Other short-term bank credit lines [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Bank credit lines | $ 7,372,000 | $ 23,975,000 | ||
Weighted average interest rate on borrowings under credit lines at period end (in hundredths) | 2.82% | 3.45% | ||
364-day credit agreement [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Initiation Date | Apr. 17, 2020 | |||
Revolving credit facility borrowing capacity | $ 700,000,000 | |||
Revolving credit facility expiration date | Apr. 16, 2021 | |||
Bank credit lines | $ 500,000,000 | $ 0 | ||
Weighted average interest rate on borrowings under credit lines at period end (in hundredths) | 2.81% | |||
Line of Credit Facility, Expiration Period | 364 days | |||
Line of Credit Facility, Current Borrowing Capacity | $ 500,000,000 | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 200,000,000 | |||
Line of Credit Facility, Description | The interest rate for borrowings under this facility will fluctuate based on our net leverage ratio. At September 26, 2020, the interest rate on this facility was 2.81%. The proceeds from this facility can be used for working capital requirements and general corporate purposes, including, but not limited to, permitted refinancing of existing indebtedness. |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 26, 2020 | Dec. 28, 2019 | |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 625,372 | $ 732,757 |
Less current maturities | (110,015) | (109,849) |
Long-term debt | 515,357 | 622,908 |
Finance lease obligations (See Note 7) | 6,112 | 5,394 |
Private placement facilities [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 613,549 | 621,274 |
U.S. trade accounts receivable securitization [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 0 | 100,000 |
Note payable due in 2025 with an interest rate of 3.1% at September 26, 2020 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 1,438 | 0 |
Borrowing Rate | 3.10% | |
Debt Instrument, Maturity Date, Description | 2025 | |
Various collateralized and uncollateralized loans payable with interest in varying installments through 2025 at interest rates ranging from 2.62% to 4.22% at September 26, 2020 and ranging from 2.56% to 10.5% at December 28, 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 4,273 | $ 6,089 |
Debt Instrument, Maturity Date, Description | 2023 | |
Various collateralized and uncollateralized loans payable with interest in varying installments through 2025 at interest rates ranging from 2.62% to 4.22% at September 26, 2020 and ranging from 2.56% to 10.5% at December 28, 2019 [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing Rate | 2.62% | 2.56% |
Various collateralized and uncollateralized loans payable with interest in varying installments through 2025 at interest rates ranging from 2.62% to 4.22% at September 26, 2020 and ranging from 2.56% to 10.5% at December 28, 2019 [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing Rate | 4.22% | 10.50% |
Debt - Private Placement Facili
Debt - Private Placement Facilities - Narrative (Details) - Private placement facilities [Member] $ in Millions | Sep. 02, 2020USD ($) | Jun. 23, 2020 | Jun. 23, 2020 | Sep. 26, 2020 | Sep. 15, 2017USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt instrument maximum borrowing capacity | $ 1,000 | |||||
Debt instrument, maturity date | Jun. 23, 2023 | |||||
Debt Instrument, Covenant Description | On June 23, 2020, we amended the private placement facilities to, among other things, (i) temporarily modify the financial covenant from being based on total leverage ratio to net leverage ratio until March 31, 2021, (ii) increase the maximum maintenance leverage ratio through March 31, 2021, but with a 1.00% interest rate increase on the outstanding notes if the net leverage ratio exceeds 3.0x, which will remain in effect until we deliver financials for afour-quarter period ending on or after June 30, 2021 showing compliance with the total leverage ratio requirement, and (iii) make certain other changes conforming to the Credit Agreement, dated as of April 18, 2017. | |||||
Debt Instrument, Interest Rate, Increase (Decrease) | 1.00% | |||||
Re-financed Debt | ||||||
Re-financed Debt, Converted Instrument, Issuance Date, Month and Year | 2020-09 | |||||
Re-financed debt, Original Debt, Type of Debt | private placement borrowing | |||||
Re-financed debt, Original debt, amount | $ 100 | |||||
Re-financed debt, Original Debt, Interest Rate of Debt | 3.79% | |||||
Re-financed debt, Original Debt, Maturity date | Sep. 2, 2020 | |||||
Re-financed debt, Converted Instrument, Type | similar 10-year borrowing | |||||
Re-financed debt, Converted Instrument, Amount | $ 100 | |||||
Re-financed debt, Converted Instrument, Maturity date | Sep. 2, 2030 | |||||
Re-financed debt, Converted Instrument, Rate | 2.35% | |||||
Private placement facilities maturing in September 2030 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, maturity date | [1] | Sep. 3, 2030 | ||||
Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term of issuances under private placement facilities | 5 years | |||||
Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term of issuances under private placement facilities | 15 years | |||||
Average term of issuances under private placement facilities | 12 years | |||||
Ratio of Indebtedness to Net Capital | 3 | |||||
[1] | (2) On September 2, 2020, we refinanced our $ 100 million private placement borrowing at 3.79%, originally due on September 2, 2020, with a similar 10-year borrowing at 2.35% maturing on September 2, 2030. |
Debt - Private Placement Borrow
Debt - Private Placement Borrowings (Details) - USD ($) $ in Thousands | Jun. 23, 2020 | Jan. 20, 2016 | Sep. 26, 2020 | Dec. 28, 2019 | |
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 625,372 | $ 732,757 | |||
Private placement facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Less: Deferred debt issuance costs | (737) | ||||
Total long-term debt | $ 613,549 | $ 621,274 | |||
Debt Instrument, Maturity Date | Jun. 23, 2023 | ||||
Private placement facilities [Member] | Private placement facilities maturing in January 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Issuance Date | [1] | Jan. 20, 2012 | |||
Long-term Debt, Gross | [1] | $ 14,286 | |||
Borrowing Rate | [1] | 3.09% | |||
Debt Instrument, Maturity Date | [1] | Jan. 20, 2022 | |||
Private placement facility, frequency of periodic payment | Annual | ||||
Private placement facility annual payment | $ 7,100 | ||||
Debt Instrument, Date of First Required Payment | Jan. 20, 2016 | ||||
Private placement facilities [Member] | Private placement facilities maturing in January 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Issuance Date | Jan. 20, 2012 | ||||
Long-term Debt, Gross | $ 50,000 | ||||
Borrowing Rate | 3.45% | ||||
Debt Instrument, Maturity Date | Jan. 20, 2024 | ||||
Private placement facilities [Member] | Private placement facilities maturing in December 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Issuance Date | Dec. 24, 2012 | ||||
Long-term Debt, Gross | $ 50,000 | ||||
Borrowing Rate | 3.00% | ||||
Debt Instrument, Maturity Date | Dec. 24, 2024 | ||||
Private placement facilities [Member] | Private placement facilities maturing in June 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Issuance Date | Jun. 2, 2014 | ||||
Long-term Debt, Gross | $ 100,000 | ||||
Borrowing Rate | 3.19% | ||||
Debt Instrument, Maturity Date | Jun. 2, 2021 | ||||
Private placement facilities [Member] | Private Placement facilities maturing in June 2027 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Issuance Date | Jun. 16, 2017 | ||||
Long-term Debt, Gross | $ 100,000 | ||||
Borrowing Rate | 3.42% | ||||
Debt Instrument, Maturity Date | Jun. 16, 2027 | ||||
Private placement facilities [Member] | Private Placement facilities maturing in September 2029 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Issuance Date | Sep. 15, 2017 | ||||
Long-term Debt, Gross | $ 100,000 | ||||
Borrowing Rate | 3.52% | ||||
Debt Instrument, Maturity Date | Sep. 15, 2029 | ||||
Private placement facilities [Member] | Private Placement facilities maturing in January 2028 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Issuance Date | Jan. 2, 2018 | ||||
Long-term Debt, Gross | $ 100,000 | ||||
Borrowing Rate | 3.32% | ||||
Debt Instrument, Maturity Date | Jan. 2, 2028 | ||||
Private placement facilities [Member] | Private placement facilities maturing in September 2030 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Issuance Date | [2] | Sep. 2, 2020 | |||
Long-term Debt, Gross | [2] | $ 100,000 | |||
Borrowing Rate | [2] | 2.35% | |||
Debt Instrument, Maturity Date | [2] | Sep. 3, 2030 | |||
[1] | (1) Annual repayments of approximately $ 7.1 million for this borrowing commenced on January 20, 2016. | ||||
[2] | (2) On September 2, 2020, we refinanced our $ 100 million private placement borrowing at 3.79%, originally due on September 2, 2020, with a similar 10-year borrowing at 2.35% maturing on September 2, 2030. |
Debt - U.S. Trade Accounts Rece
Debt - U.S. Trade Accounts Receivable Securitization - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 26, 2020 | Dec. 28, 2019 | |
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 625,372 | $ 732,757 |
U.S. trade accounts receivable securitization [Member] | ||
Debt Instrument [Line Items] | ||
Pricing commitment period | 3 years | |
Debt Instrument, Maturity Date | Apr. 29, 2022 | |
Debt instrument maximum borrowing capacity | $ 350,000 | |
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 0 | $ 100,000 |
Commitment fee for facility usage - facility limit greater than or equal to fifty percent usage (as a percent) | 0.45% | |
Commitment fee for facility usage - facility limit less than fifty percent usage (as a percent) | 0.25% | |
U.S. trade accounts receivable securitization [Member] | Extended Maturity [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Jun. 12, 2023 | |
U.S. trade accounts receivable securitization [Member] | Average Asset Backed Commercial Paper Rate [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate at period end | 1.17% | 2.65% |
Debt instrument, variable rate basis at period end | 0.22% | 1.90% |
Debt instrument, basis spread on variable rate | 0.95% | 0.75% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 26, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Description | We have operating and finance leases for corporate offices, office space, distribution and other facilities, vehicles, and certain equipment. |
Lessee, Operating Lease, Lease Not yet Commenced, Description | buildings and vehicles |
Operating lease assets, Lease not yet commenced | $ 12.7 |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee operating and finance lease, remaining lease term | 1 year |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 13 months |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee operating and finance lease, remaining lease term | 16 years |
Lessee, Operating Lease, Option to Extend | may include options to extend the leases for up to 10 years |
Lessee, Finance Lease, Option to Extend | may include options to extend the leases for up to 10 years |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 10 years |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | ||
Leases | |||||
Operating lease cost | [1],[2] | $ 21,343 | $ 21,840 | $ 65,413 | $ 68,273 |
Finance lease cost: | |||||
Amortization of right-of-use assets | 434 | 290 | 1,148 | 798 | |
Interest on lease liabilities | 29 | 31 | 86 | 88 | |
Finance lease cost | 463 | $ 321 | 1,234 | $ 886 | |
Restructuring costs [member] | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating Lease, Right-of-Use Asset, Amortization Expense including Operating lease credits | $ 100 | $ (400) | |||
[1] | Includes variable lease expenses. | ||||
[2] | Operating lease (credit) cost for three months and nine months ended September 26, 2020, includes amortization of right-of-use assets of $( 0.1) and $ 0.40 million, respectively, related to facility leases recorded in “Restructuring costs” within our consolidated statements of income. |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Sep. 26, 2020 | Dec. 28, 2019 |
Operating Leases | ||
Operating lease right-of-use assets | $ 249,895 | $ 231,662 |
Current operating lease liabilities | 62,914 | 65,349 |
Operating lease liabilities | 200,611 | 176,267 |
Total operating lease liabilities | 263,525 | 241,616 |
Lessee, Finance Lease, Description [Abstract] | ||
Property and equipment, at cost | 10,457 | 10,268 |
Accumulated depreciation | (4,030) | (4,581) |
Finance Leases | 6,427 | 5,687 |
Finance Lease, Liability, Current | 2,348 | 1,736 |
Finance Lease, Liability, Noncurrent | 3,764 | 3,658 |
Total finance lease liabilities | $ 6,112 | $ 5,394 |
Operating Lease, Weighted Average Remaining Lease Term, in years | 7 years 1 month 6 days | 5 years 6 months |
Finance Lease, Weighted Average Remaining Lease Term, in years | 4 years 3 months 18 days | 5 years |
Operating Lease, Weighted Average Discount Rate, Percent | 3.00% | 3.40% |
Finance Lease, Weighted Average Discount Rate, Percent | 2.00% | 2.20% |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 26, 2020 | Sep. 28, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows for operating leases | $ 57,666 | $ 60,275 |
Operating cash flows for finance leases | 76 | 67 |
Financing cash flows for finance leases | 1,515 | 862 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 66,082 | 290,166 |
Finance leases | $ 2,489 | $ 1,149 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Thousands | Sep. 26, 2020USD ($) |
Operating Leases | |
2020 | $ 18,423 |
2021 | 65,955 |
2022 | 49,257 |
2023 | 32,363 |
2024 | 22,298 |
Thereafter | 103,765 |
Total future lease payments | 292,061 |
Finance Leases | |
2020 | 747 |
2021 | 2,272 |
2022 | 1,365 |
2023 | 495 |
2024 | 315 |
Thereafter | 1,163 |
Total future lease payments | $ 6,357 |
Leases - Present value of lease
Leases - Present value of lease liabilities (Details) - USD ($) $ in Thousands | Sep. 26, 2020 | Dec. 28, 2019 |
Present value of lease liabilities - Operating Leases | ||
Total future lease payments | $ 292,061 | |
Less imputed interest | (28,536) | |
Total operating lease liabilities | 263,525 | $ 241,616 |
Present value of lease liabilities - Finance Leases | ||
Total future lease payments | 6,357 | |
Less imputed interest | (245) | |
Total finance lease liabilities | $ 6,112 | $ 5,394 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 28, 2019 | |
Components of the change in the redeemable noncontrolling interests [Abstract] | |||||
Balance, beginning of period | $ 287,258 | $ 219,724 | $ 219,724 | ||
Decrease in redeemable noncontrolling interests due to redemptions | (12,636) | (2,270) | |||
Increase in redeemable noncontrolling interests due to business acquisitions | 25,955 | 74,865 | |||
Net income attributable to Redeemable noncontrolling interests | 7,253 | 14,838 | |||
Dividends declared | (7,272) | (10,264) | |||
Effect of foreign currency translation loss attributable to redeemable noncontrolling interests | $ 1,277 | $ (5,748) | (10,999) | $ (4,912) | (2,335) |
Change in fair value of redeemable securities | 5,141 | (7,300) | |||
Balance, end of period | $ 294,700 | $ 294,700 | $ 287,258 |
Comprehensive Income - Accumula
Comprehensive Income - Accumulated Other Comprehensive Income and Comprehensive Income Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 28, 2019 | |
Attributable to Redeemable noncontrolling interests: | |||||
Foreign currency translation adjustment | $ (31,337) | $ (31,337) | $ (20,338) | ||
Attributable to noncontrolling interests: | |||||
Foreign currency translation adjustment | (276) | (276) | (531) | ||
Attributable to Henry Schein, Inc.: | |||||
Foreign currency translation adjustment | (149,744) | (149,744) | (143,172) | ||
Unrealized gain (loss) from foreign currency hedging activities | (1,575) | (1,575) | (4,032) | ||
Unrealized investment gain (loss) | 1 | 1 | 6 | ||
Pension adjustment gain (loss) | (20,014) | (20,014) | (20,175) | ||
Accumulated other comprehensive income (loss) | (171,332) | (171,332) | (167,373) | ||
Total Accumulated other comprehensive income (loss) | (202,945) | (202,945) | $ (188,242) | ||
Components of comprehensive income [Abstract] | |||||
Net income | 151,784 | $ 148,853 | 272,082 | $ 382,693 | |
Foreign currency translation gain (loss) | 37,588 | (60,635) | (17,316) | (43,926) | |
Tax effect | 0 | 0 | 0 | 0 | |
Foreign currency translation gain (loss) | 37,588 | (60,635) | (17,316) | (43,926) | |
Unrealized gain (loss) from foreign currency hedging | (10,490) | (1,685) | 3,010 | (2,037) | |
Tax effect | 2,793 | 422 | (553) | 451 | |
Unrealized gain (loss) from foreign currency hedging | (7,697) | (1,263) | 2,457 | (1,586) | |
Unrealized investment gain (loss) | 2 | 3 | (6) | 10 | |
Tax effect | 0 | (1) | 1 | (2) | |
Unrealized investment gain (loss) | 2 | 2 | (5) | 8 | |
Pension adjustment gain (loss) | (471) | 585 | 227 | 1,146 | |
Tax effect | (133) | 185 | 66 | 314 | |
Pension adjustment gain (loss) | (338) | 400 | 161 | 832 | |
Comprehensive income | $ 181,339 | $ 87,357 | $ 257,379 | $ 338,021 |
Comprehensive Income - Total Co
Comprehensive Income - Total Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Comprehensive Income Net Of Applicable Taxes [Abstract] | ||||
Comprehensive income attributable to Henry Schein, Inc. | $ 169,616 | $ 85,075 | $ 257,202 | $ 324,809 |
Comprehensive income (loss) attributable to noncontrolling interests | 4,354 | 3,924 | 3,923 | 7,280 |
Comprehensive income (loss) attributable to Redeemable noncontrolling interests | 7,369 | (1,642) | (3,746) | 5,932 |
Comprehensive income | $ 181,339 | $ 87,357 | $ 257,379 | $ 338,021 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | $ 294,700 | $ 287,258 | $ 219,724 |
Fair value, measurements, recurring [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 32,107 | 567 | |
Total assets | 32,107 | 567 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 4,175 | 5,795 | |
Total return swaps | 2,406 | ||
Total liabilities | 6,581 | 5,795 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 294,700 | 287,258 | |
Fair value, measurements, recurring [Member] | Level 1 [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 0 | 0 | |
Total assets | 0 | 0 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 0 | 0 | |
Total return swaps | 0 | ||
Total liabilities | 0 | 0 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 0 | 0 | |
Fair value, measurements, recurring [Member] | Level 2 [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 32,107 | 567 | |
Total assets | 32,107 | 567 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 4,175 | 5,795 | |
Total return swaps | 2,406 | ||
Total liabilities | 6,581 | 5,795 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 0 | 0 | |
Fair value, measurements, recurring [Member] | Level 3 [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 0 | 0 | |
Total assets | 0 | 0 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 0 | 0 | |
Total return swaps | 0 | ||
Total liabilities | 0 | 0 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 294,700 | 287,258 | |
Fair value, measurements, recurring [Member] | Level 3 [Member] | Estimate of Fair Value Measurement [Member] | |||
Debt Instrument, Fair Value Disclosure [Abstract] | |||
Fair value of debt (including bank credit lines) | $ 1,132,700 | $ 756,700 |
Business Acquisitions- Narrativ
Business Acquisitions- Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 26, 2020 | Dec. 28, 2019 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 2,488,962 | $ 2,462,495 |
Series Of Individually Immaterial Business Acquisitions [Member] | ||
Business Acquisition [Line Items] | ||
Consideration paid for acquisitions | 47,100 | |
Net assets related to acquisitions | 16,900 | |
Identifiable intangibles related to acquisitions | 29,100 | |
Goodwill | 34,700 | |
Noncontrolling Interest related to acquisitions | $ 24,200 |
Plans of Restructuring - Narrat
Plans of Restructuring - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 28, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs (credits) | $ 6,992 | $ (802) | $ 27,713 | $ 15,764 | $ 14,705 |
Strategic Plan, 2018 to 2020 [Member] | Scenario, Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring And Related Cost Expected Percentage Of Workforce Eliminated | 4.00% | 4.00% |
Plans of Restructuring - Restru
Plans of Restructuring - Restructuring Reserve Roll Forward by Expense and Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 28, 2019 | |
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | $ 13,810 | $ 31,725 | $ 31,725 | ||
Provision | $ 6,992 | $ (802) | 27,713 | 15,764 | 14,705 |
Payments and other adjustments | (26,260) | (32,620) | |||
Restructuring Reserve, ending balance | 15,263 | 15,263 | 13,810 | ||
Healthcare Distribution [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 13,373 | 30,291 | 30,291 | ||
Provision | 26,621 | 13,935 | |||
Payments and other adjustments | (25,175) | (30,853) | |||
Restructuring Reserve, ending balance | 14,819 | 14,819 | 13,373 | ||
Technology [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 437 | 1,434 | 1,434 | ||
Provision | 1,092 | 770 | |||
Payments and other adjustments | (1,085) | (1,767) | |||
Restructuring Reserve, ending balance | 444 | 444 | 437 | ||
Employee Severance [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 12,911 | 29,964 | 29,964 | ||
Provision | 23,127 | 13,741 | |||
Payments and other adjustments | (21,404) | (30,794) | |||
Restructuring Reserve, ending balance | 14,634 | 14,634 | 12,911 | ||
Facility Closing [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 826 | 1,603 | 1,603 | ||
Provision | 4,348 | 937 | |||
Payments and other adjustments | (4,609) | (1,714) | |||
Restructuring Reserve, ending balance | 565 | 565 | 826 | ||
Other [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 73 | $ 158 | 158 | ||
Provision | 238 | 27 | |||
Payments and other adjustments | (247) | (112) | |||
Restructuring Reserve, ending balance | $ 64 | $ 64 | $ 73 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 142,362 | 147,136 | 142,553 | 148,603 |
Effect of dilutive securities: | ||||
Restricted stock and restricted stock units | 729 | 1,439 | 755 | 1,317 |
Diluted (in shares) | 143,091 | 148,575 | 143,308 | 149,920 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate (in hundredths) | 20.00% | 23.90% | |
Unrecognized tax benefits | $ 90,500,000 | ||
Unrecognized tax benefits that would affect the effective tax rate if recognized | $ 76,700,000 | ||
Other Information Pertaining to Income Taxes | The tax years subject to examination by major tax jurisdictions include the years 2012 and forward by the IRS, as well as the years 2008 and forward for certain states and certain foreign jurisdictions. All tax returns audited by the IRS are officially closed through 2011. We are currently under audit for the years 2012 and 2013. In the quarter ended December 28, 2019, we reached a settlement with the U.S. Competent Authority to resolve certain transfer pricing issues related to 2012 and 2013. For all remaining outstanding issues for 2012 and 2013, we have provided all necessary documentation to the Appellate Division to date and we currently expect resolution in the fourth quarter of 2020. We do not believe the final resolution will have a material impact to our consolidated financial statements. During the quarter ended September 26, 2020 we finalized negotiations with the Advance Pricing Division and reached an agreement on an appropriate transfer pricing methodology for the years 2014-2025. The objective of this resolution is to mitigate future transfer pricing audit adjustments. | ||
Total interest | $ 16,200,000 | $ 18,000,000 | |
Total penalties | 0 | $ 0 | |
Internal Revenue Service (IRS) [Member] | |||
Income Tax Examination [Line Items] | |||
Effective Income Tax Rate Reconciliation, Tax Settlement, Amount | 15,600,000 | ||
Unrecognized Tax Benefits, Interest on Income Taxes Expense | $ (1,100,000) | $ 2,600,000 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020USD ($) | Sep. 26, 2020USD ($) | Sep. 26, 2020EUR (€) | Sep. 26, 2020USD ($) | Mar. 20, 2020USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Maximum duration of foreign currency forward contracts | 18 months | ||||
Forward Contracts [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Objectives for Using Net Investment Hedging Instruments | we entered into foreign currency forward contracts to hedge a portion of our euro-denominated foreign operations which are designated as net investment hedges. These net investment hedges offset the change in the U.S dollar value of our investment in certain euro-functional currency subsidiaries due to fluctuating foreign exchange rates. | ||||
Derivative, Type of Instrument | foreign currency forward contracts | ||||
Description of Net Investments Hedged | These net investment hedges offset the change in the U.S dollar value of our investment in certain euro-functional currency subsidiaries due to fluctuating foreign exchange rates. | ||||
Description of Location of Gain (Loss) on Net Investment Hedges in Financial Statements | Accumulated other comprehensive loss | ||||
Total Return Swap [Member] | Not Designated as Hedging Instrument [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative, Notional Amount | $ 58.8 | $ 43.4 | |||
Derivative, Inception Date | Mar. 20, 2020 | ||||
Derivative, Description of Objective | we entered into a total return swap for the purpose of economic hedging our unfunded non-qualified supplemental retirement plan (“SERP”) and our deferred compensation plan (“DCP”). This swap will offset changes in our SERP and DCP liabilities. | ||||
Derivative, Variable Interest Rate | 0.54% | 0.54% | |||
Derivative, Gain on Derivative | $ 3.8 | $ 14.2 | |||
Total Return Swap [Member] | London Interbank Offered Rate (LIBOR) Swap Rate [Member] | Not Designated as Hedging Instrument [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative, Variable Interest Rate | 0.16% | 0.16% | |||
Total Return Swap [Member] | Base Rate [Member] | Not Designated as Hedging Instrument [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative, Basis Spread on Variable Rate | 0.38% | 0.38% | |||
Net Investment Hedging [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative, Maturity Date | Nov. 16, 2023 | ||||
Derivative, Notional Amount | € | € 200 | ||||
Amount of Ineffectiveness on Net Investment Hedges | $ 1.2 | $ 3.6 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 26, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||
Pre-tax share-based compensation (Credit) expense | $ (5,700,000) | $ (13,300,000) | $ 6,600,000 | $ (33,100,000) | |
After-tax share-based compensation (credit) expense | (4,100,000) | $ (10,200,000) | 5,300,000 | (25,200,000) | |
Excess Tax Benefit from Share-based Compensation, Financing Activities | 0 | $ 0 | |||
Total unrecognized compensation cost related to non-vested awards | $ 50,600,000 | $ 50,600,000 | |||
Weighted-average period of recognition for unrecognized compensation costs on nonvested awards (in years) | 2 years 4 months 24 days | ||||
Restricted Stock And Restricted Stock Unit Awards [Member] | Long-term Incentive Program [Member] | Henry Schein Animal Health Business [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Period Increase (Decrease) | 1.2633 | ||||
Decrease in price per share | $ 1.2633 | ||||
Time Based Restricted Stock Restricted Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vested (in shares) | 297,000 | ||||
Time Based Restricted Stock Restricted Units [Member] | 2020 Stock Incentive Plan, as amended [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | ||||
Time Based Restricted Stock Restricted Units [Member] | 2015 Non-Employee Director Stock Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 12 months | ||||
Performance Based Restricted Stock Restricted Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vested (in shares) | 326,000 | ||||
Performance Based Restricted Stock Restricted Units [Member] | Long-term Incentive Program [Member] | Forecast [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vested (in shares) | 0 | ||||
Performance Based Restricted Stock Restricted Units [Member] | 2015 Non-Employee Director Stock Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years |
Stock-Based Compensation - Unve
Stock-Based Compensation - Unvested Resticted Stock/Units Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 26, 2020$ / sharesshares | |
Time Based Restricted Stock Restricted Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance outstanding (in shares) | shares | 1,417 |
Granted (in shares) | shares | 379 |
Vested (in shares) | shares | (297) |
Forfeited (in shares) | shares | (47) |
Ending balance outstanding (in shares) | shares | 1,452 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance outstanding (in dollars per share) | $ 58.72 |
Granted (in dollars per share) | 60.02 |
Vested (in dollars per share) | 65.93 |
Forfeited (in dollars per share) | 59.87 |
Ending balance outstanding (in dollars per share) | 57.55 |
Intrinsic value (in dollars per share) | $ 58.79 |
Performance Based Restricted Stock Restricted Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance outstanding (in shares) | shares | 1,459 |
Granted (in Shares) | shares | (1,092) |
Vested (in shares) | shares | (326) |
Forfeited (in shares) | shares | (40) |
Ending balance outstanding (in shares) | shares | 1 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance outstanding (in dollars per share) | $ 61.41 |
Granted (in dollars per share) | 55.89 |
Vested (in dollars per share) | 67.51 |
Forfeited (in dollars per share) | 57.84 |
Ending balance outstanding (in dollars per share) | 52.10 |
Intrinsic value (in dollars per share) | $ 58.79 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||||
Interest | $ 29,551 | $ 45,543 | ||
Income taxes | 164,575 | 138,068 | ||
Unrealized gain (loss) from foreign currency hedging activities | $ 10,490 | $ 1,685 | $ (3,010) | $ 2,037 |
Legal Proceedings - Narrative (
Legal Proceedings - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 26, 2020USD ($)claims | Sep. 28, 2019USD ($) | Sep. 26, 2020USD ($)claims | Sep. 28, 2019USD ($) | Dec. 28, 2019USD ($) | |
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Revenues | $ 2,840,146,000 | $ 2,508,767,000 | $ 6,953,416,000 | $ 7,316,862,000 | |
Loss Contingency, Management's Assessment and Process | As of September 26, 2020, we had accrued our best estimate of potential losses relating to claims that were probable to result in liability and for which we were able to reasonably estimate a loss. This accrued amount, as well as related expenses, was not material to our financial position, results of operations or cash flows. Our method for determining estimated losses considers currently available facts, presently enacted laws and regulations and other factors, including probable recoveries from third parties. | ||||
Archer and White Sales, Inc. v. collectively, the Danaher Defendants [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | August 31, 2012 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc. as well as Danaher Corporation and its subsidiaries Instrumentarium Dental, Inc., Dental Equipment, LLC, Kavo Dental Technologies, LLC and Dental Imaging Technologies Corporation (collectively, the “Danaher Defendants”) | ||||
Loss Contingency, Name of Plaintiff | Archer and White Sales, Inc. | ||||
Loss Contingency, Allegations | Archer alleges a conspiracy between Henry Schein, an unnamed company and the Danaher Defendants to terminate or limit Archer’s distribution rights. | ||||
Archer filed amended complaint adding Patterson Compnies Inc. and Benco Dental Supply Co. as Defendants [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | August 1, 2017 | ||||
Loss Contingency, Name of Defendant | adding Patterson Companies, Inc. (“Patterson”) and Benco Dental Supply Co. (“Benco”) | ||||
Loss Contingency, Name of Plaintiff | Archer | ||||
Loss Contingency, Allegations | alleging that Henry Schein, Patterson, Benco and Burkhart Dental Supply conspired to fix prices and refused to compete with each other for sales of dental equipment to dental professionals and agreed to enlist their common suppliers, the Danaher Defendants, to join a price-fixing conspiracy and boycott by reducing the distribution territory of, and eventually terminating, their price-cutting competing distributor Archer. | ||||
Archer filed second amended complaint under seal [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | October 30, 2017 | ||||
Loss Contingency, Name of Plaintiff | Archer | ||||
Loss Contingency, Allegations | add additional allegations that it believes support its claims. The named parties and causes of action are the same as the August 1, 2017 amended complaint. | ||||
Salkowitz v. Henry Schein, Inc. et al [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | March 7, 2018 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Stanley M. Bergman and Steven Paladino | ||||
Loss Contingency, Name of Plaintiff | Joseph Salkowitz, individually and on behalf of all others similarly situated | ||||
Litigation Settlement, Amount Awarded to Other Party | $ 35,000,000 | ||||
Marion Diagnostic Center, LLC v. Dickinson, and Co., 3:18-cv-01509 (S.D. Ill) [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | May 3, 2018 | ||||
Loss Contingency, Name of Defendant | Becton, Dickinson, and Co. (“Becton”); Premier, Inc. (“Premier”), Vizient, Inc. (“Vizient”), Cardinal Health, Inc. (“Cardinal”), Owens & Minor Inc. (“O&M”), Henry Schein, Inc., and Unnamed Becton Distributor Co-Conspirators. | ||||
Loss Contingency, Name of Plaintiff | Marion Diagnostic Center, LLC, et al. | ||||
Loss Contingency, Allegations | The complaint alleged that the defendants entered into a vertical conspiracy to force health care providers into long-term exclusionary contracts that restrain trade in the nationwide markets for conventional and safety syringes and safety IV catheters and inflate the prices of certain Becton products to above-competitive levels. | ||||
The County of Summit, Ohio et al. v. Purdue Pharma, L.P., et al [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | May 29, 2018 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Henry Schein Medical Systems, Inc. and others as defendants. | ||||
Loss Contingency, Name of Plaintiff | The County of Summit, Ohio et al. | ||||
Loss Contingency, Allegations | Summit County alleged that manufacturers of prescription opioid drugs engaged in a false advertising campaign to expand the market for such drugs and their own market share and that the entities in the supply chain (including Henry Schein, Inc. and Henry Schein Medical Systems, Inc.) reaped financial rewards by refusing or otherwise failing to monitor appropriately and restrict the improper distribution of those drugs. | ||||
Loss Contingency, Settlement Agreement, Terms | On October 29, 2019, the Company was dismissed with prejudice from this lawsuit. Henry Schein, working with Summit County, donated $1 million to a foundation and paid $250,000 of Summit County’s expenses, as described in our prior filings with the SEC. | ||||
Donation amount to Pain Management Education Foundation | $ 1,000,000 | ||||
Litigation Settlement, Amount Awarded to Other Party | $ 250,000 | ||||
Actions consolidated in the MultiDistrict Litigation [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Name of Defendant | Henry Schein and/or one or more of its affiliated companies | ||||
Loss Contingency, Allegations | allege claims similar to those alleged in the County of Summit Action | ||||
Actions consolidated in the MultiDistrict Litigation [Member] | Maximum [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Pending Claims, Number | claims | 150 | 150 | |||
Maximum sales of opioids in North America during the year, percentage | 0.10% | ||||
Actions consolidated in the MultiDistrict Litigation [Member] | Continuing Operations [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Revenues | $ 10,000,000,000 | ||||
City of Hollywood Police Officers Retirement System V. Henry Schein, Inc., Covetrus, Inc., and Benjamin Shaw and Christine Komola [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | September 30, 2019 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Covetrus, Inc., and Benjamin Shaw and Christine Komola (Covetrus’s then Chief Executive Officer and Chief Financial Officer, respectively) | ||||
Loss Contingency, Name of Plaintiff | Hollywood Police Officers Retirement System, individually and on behalf of all others similarly situated | ||||
Loss Contingency, Allegations | The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 and asserts that defendants’ statements in the offering documents and after the transaction were materially false and misleading | ||||
Frank Finazzo against various present and former directors and officers of Henry Schein [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | November 15, 2019 | ||||
Loss Contingency, Name of Defendant | The named defendants in the action are Stanley M. Bergman, Steven Paladino, Timothy J. Sullivan, Barry J. Alperin, Lawrence S. Bacow, Gerald A. Benjamin, James P. Breslawski, Paul Brons, Shira Goodman, Joseph L. Herring, Donald J. Kabat, Kurt Kuehn, Philip A. Laskawy, Anne H. Margulies, Karyn Mashima, Norman S. Matthews, Mark E. Mlotek, Carol Raphael, E. Dianne Rekow, Bradley T. Sheares, and Louis W. Sullivan, with Henry Schein named as a nominal defendant. | ||||
Loss Contingency, Name of Plaintiff | Frank Finazzo |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2020 | Sep. 28, 2019 | Sep. 26, 2020 | Sep. 28, 2019 | Dec. 28, 2019 | |
Covetrus Inc [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Description of Transaction | In connection with the completion of the Animal Health Spin-off during our fiscal year 2019, we entered into a transition services agreement with Covetrus under which we have agreed to provide certain transition services for up to 24 months in areas such as information technology, finance and accounting, human resources, supply chain, and real estate and facility services. | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 3.9 | $ 4.7 | $ 12.7 | $ 13 | |
Revenue from Related Parties | 24.8 | 21.8 | 66 | 60.2 | |
Due from Related Parties | 4.2 | 4.2 | |||
Due to Related Parties | 0.4 | $ 0.4 | |||
Covetrus Inc [Member] | Maximum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Period Covered By Agreement | 24 months | ||||
Internet Brands Inc [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Description of Transaction | In connection with the formation of Henry Schein One, LLC, our joint venture with Internet Brands, which was formed on July 1, 2018, we entered into a ten year royalty agreement with Internet Brands whereby we will pay Internet Brands approximately $31.0 million annually for the use of their intellectual property. | ||||
Period Covered By Agreement | 10 years | ||||
Related Party Transaction, Amounts of Transaction | 7.8 | 7.8 | $ 23.4 | 23.4 | |
Related Party Transaction, Due from (to) Related Party | $ 13.5 | 13.5 | $ 9.8 | ||
Internet Brands Inc [Member] | Scenario, Plan [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Amounts of Transaction | 31 | ||||
Equity Method Investee [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Description of Transaction | During our normal course of business, we have interests in entities that we account for under the equity accounting method. | ||||
Related Party Transaction, Purchases from Related Party | $ 2.9 | 3.2 | 7.7 | 9 | |
Revenue from Related Parties | 10 | $ 28.6 | 33.1 | $ 74.4 | |
Due from Related Parties | 34.3 | 34.3 | 30.8 | ||
Due to Related Parties | $ 6.9 | $ 6.9 | $ 4.9 |