Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 21, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | HALYARD HEALTH, INC. | ||
Entity Central Index Key | 1,606,498 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | FY | ||
Amendment Flag | false | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 1,515,823,183 | ||
Entity Common Stock, Shares Outstanding | 46,681,798 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Net Sales (including related party sales in 2014 of $78.7) | $ 1,592.3 | $ 1,574.4 | $ 1,672.1 |
Cost of products sold (including related party purchases in 2014 of $72.5) | 1,034.4 | 1,042.8 | 1,123.5 |
Gross Profit | 557.9 | 531.6 | 548.6 |
Research and development | 41.1 | 32.3 | 33.6 |
Selling and general expenses | 411.1 | 398.5 | 424.5 |
Goodwill impairment | 0 | 474 | 0 |
Other expense and (income), net | 18.3 | 4.5 | (3.8) |
Operating Profit (Loss) | 87.4 | (377.7) | 94.3 |
Interest income | 0.6 | 0.3 | 2.9 |
Interest expense | (32.7) | (33.1) | (6) |
Income (Loss) Before Income Taxes | 55.3 | (410.5) | 91.2 |
Income tax provision | (15.5) | (15.8) | (64.1) |
Net Income (Loss) | $ 39.8 | $ (426.3) | $ 27.1 |
Earnings (Loss) Per Share | |||
Basic (in dollars per share) | $ 0.85 | $ (9.15) | $ 0.58 |
Diluted (in dollars per share) | $ 0.85 | $ (9.15) | $ 0.58 |
Consolidated Income Statements
Consolidated Income Statements (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Net Sales | $ 1,672.1 |
Cost of products sold | 1,123.5 |
Affiliated entity | Kimberly Clark and Affiliates | |
Net Sales | 78.7 |
Cost of products sold | $ 72.5 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income (Loss) | $ 39.8 | $ (426.3) | $ 27.1 |
Other Comprehensive Income (Loss), Net of Tax | |||
Defined benefit plans | 0.6 | (1.3) | (0.4) |
Unrealized currency translation adjustments | (8.3) | (22.1) | (14) |
Cash flow hedges | 0.8 | (0.7) | 3.6 |
Total Other Comprehensive Loss, Net of Tax | (6.9) | (24.1) | (10.8) |
Comprehensive Income (Loss) | $ 32.9 | $ (450.4) | $ 16.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 113.7 | $ 129.5 |
Accounts receivable, net of allowances | 190.1 | 224.7 |
Inventories | 272.5 | 303.2 |
Prepaid and other current assets | 17.2 | 18.6 |
Total Current Assets | 593.5 | 676 |
Property, Plant and Equipment, net | 260.8 | 279.5 |
Goodwill | 1,029 | 945.2 |
Other Intangible Assets, net | 169.8 | 82.6 |
Deferred Tax Assets | 15.1 | 14.9 |
Other Assets | 3.6 | 2 |
TOTAL ASSETS | 2,071.8 | 2,000.2 |
Current Liabilities | ||
Trade accounts payable | 173.1 | 163.2 |
Accrued expenses | 151.3 | 152 |
Total Current Liabilities | 324.4 | 315.2 |
Long-Term Debt | 579 | 578.1 |
Deferred Tax Liabilities | 35.8 | 23.8 |
Other Long-Term Liabilities | 30.1 | 27.8 |
Total Liabilities | 969.3 | 944.9 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Preferred stock - $0.01 par value - authorized 20,000,000 shares, none issued | 0 | 0 |
Common stock - $0.01 par value - authorized 300,000,000 shares, 46,681,798 outstanding at December 31, 2016 and 46,614,947 outstanding at December 31, 2015 | 0.5 | 0.5 |
Additional paid-in capital | 1,533.2 | 1,518 |
Accumulated deficit | (379.2) | (419) |
Treasury stock | (1.9) | (1) |
Accumulated other comprehensive loss | (50.1) | (43.2) |
Total Stockholders’ Equity | 1,102.5 | 1,055.3 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 2,071.8 | $ 2,000.2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares outstanding (in shares) | 46,681,798 | 46,614,947 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock Issued | Additional Paid-in Capital | Kimberly-Clark’s Net Investment | Retained Earnings (Accumulated Deficit) | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Balance at beginning of period at Dec. 31, 2013 | $ 2,079.1 | $ 0 | $ 0 | $ 2,098.7 | $ 0 | $ 0 | $ (19.6) |
Balance (in shares) at Dec. 31, 2013 | 0 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 27.1 | 19.8 | 7.3 | ||||
Change in Kimberly-Clark’s investment, net | 73.2 | 61.9 | 11.3 | ||||
Spin-off cash distribution to Kimberly-Clark | (680) | (680) | |||||
Issuance of common stock and consummation of Spin-off | 0 | $ 0.5 | 1,499.9 | (1,500.4) | |||
Issuance of common stock and consummation of Spin-off (in shares) | 46,536 | ||||||
Stock-based compensation expense | 2.6 | 2.6 | |||||
Other comprehensive loss, net of tax | (10.8) | (10.8) | |||||
Balance at end of period at Dec. 31, 2014 | 1,491.2 | $ 0.5 | 1,502.5 | 0 | 7.3 | $ 0 | (19.1) |
Balance (in shares) at Dec. 31, 2014 | 46,536 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (426.3) | 0 | (426.3) | ||||
Issuance of common stock upon the exercise or redemption of share-based awards | 1.4 | 1.4 | |||||
Issuance of common stock upon the exercise or redemption of share-based awards (in shares) | 79 | ||||||
Stock-based compensation expense | 14.1 | 14.1 | |||||
Purchases of treasury stock | (1) | $ (1) | |||||
Purchases of treasury stock (in shares) | 21 | ||||||
Other comprehensive loss, net of tax | (24.1) | (24.1) | |||||
Balance at end of period at Dec. 31, 2015 | 1,055.3 | $ 0.5 | 1,518 | 0 | (419) | $ (1) | (43.2) |
Balance (in shares) at Dec. 31, 2015 | 46,615 | 21 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 39.8 | 39.8 | |||||
Issuance of common stock upon the exercise or redemption of share-based awards | $ 0.4 | 0.4 | |||||
Issuance of common stock upon the exercise or redemption of share-based awards (in shares) | 12 | 67 | |||||
Stock-based compensation expense | $ 14.8 | 14.8 | |||||
Purchases of treasury stock | (0.9) | $ (0.9) | |||||
Purchases of treasury stock (in shares) | 32 | ||||||
Other comprehensive loss, net of tax | (6.9) | (6.9) | |||||
Balance at end of period at Dec. 31, 2016 | $ 1,102.5 | $ 0.5 | $ 1,533.2 | $ 0 | $ (379.2) | $ (1.9) | $ (50.1) |
Balance (in shares) at Dec. 31, 2016 | 46,682 | 53 |
Consolidated Cash Flow Statemen
Consolidated Cash Flow Statements - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Activities | |||
Net income (loss) | $ 39.8 | $ (426.3) | $ 27.1 |
Depreciation and amortization | 65.2 | 65.4 | 85.4 |
Stock-based compensation | 14.8 | 14.1 | 7.9 |
Goodwill impairment | 0 | 474 | 0 |
Asset impairment | 0 | 0 | 41.9 |
Net losses (gains) on asset dispositions | 3.7 | (6.7) | 6.7 |
Changes in operating assets and liabilities, net of acquisition | |||
Accounts receivable | 8.4 | 9 | 15.1 |
Inventories, net of allowance | 41 | (20.2) | (2.9) |
Prepaid expenses and other assets | 1.7 | (6) | (4.8) |
Accounts payable | 6.5 | 14.7 | 4.5 |
Accrued expenses | 34 | (14.5) | 0.9 |
Deferred income taxes and other | (26.3) | (5.9) | (33.9) |
Cash Provided by Operating Activities | 188.8 | 97.6 | 147.9 |
Investing Activities | |||
Capital expenditures | (29.1) | (70.4) | (78.5) |
Acquisition of business, net of cash acquired | (175) | 0 | 0 |
Proceeds from dispositions of property | 3.2 | 7.8 | 7.8 |
Cash Used in Investing Activities | (200.9) | (62.6) | (70.7) |
Financing Activities | |||
Line of credit facility proceeds | 72 | 0 | 0 |
Line of credit facility repayments | (72) | 0 | 0 |
Debt proceeds | 0 | 0 | 638 |
Debt issuance costs | (0.9) | 0 | (11.8) |
Debt repayments | 0 | (51) | (13.8) |
Purchase of treasury stock | (0.9) | (1) | 0 |
Proceeds and excess tax benefits from the exercise of stock options | 0.4 | 1.4 | 0 |
Spin-off cash distribution to Kimberly-Clark | 0 | 0 | (680) |
Net transfers from Kimberly-Clark | 0 | 0 | 93.3 |
Other | 0 | 0 | 3.5 |
Cash (Used in) Provided by Financing Activities | (1.4) | (50.6) | 29.2 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (2.3) | (3.9) | (1.5) |
(Decrease) Increase in Cash and Cash Equivalents | (15.8) | (19.5) | 104.9 |
Cash and Cash Equivalents - Beginning of Year | 129.5 | 149 | 44.1 |
Cash and Cash Equivalents - End of Year | 113.7 | 129.5 | 149 |
Supplemental Cash Flow Disclosure: | |||
Cash paid for income taxes | 29.1 | 43.3 | 87.6 |
Cash paid for interest | 29.9 | 32.6 | 0 |
Supplemental Noncash Disclosure | |||
Capital expenditures included in accounts payable or accrued expenses | $ 5.8 | $ 5.6 | $ 21.5 |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Background and Basis of Presentation Halyard Health, Inc. is a medical technology company focused on eliminating pain, speeding recovery and preventing infection for healthcare providers and patients. We are committed to addressing some of today’s most important healthcare needs, such as reducing the use of opioids while helping patients move from surgery to recovery. We operate in two business segments: Medical Devices and Surgical and Infection Prevention (“S&IP”). References to “Halyard,” “Company,” “we,” “our” and “us” refer to Halyard Health, Inc. and its consolidated subsidiaries, and references to “Kimberly-Clark” mean Kimberly-Clark Corporation, a Delaware corporation, and its subsidiaries, unless the context otherwise requires. On October 31, 2014 , Kimberly-Clark distributed all of our capital stock to its shareholders and completed a previously announced spin-off of its healthcare division (the “Spin-off”). Halyard was incorporated as a Delaware corporation in February, 2014 in anticipation of that Spin-off and Kimberly-Clark transferred its Health Care business to us prior to the Spin-off. The consolidated financial statements as of and for the years ended December 31, 2016 and 2015 represent our financial position, results of operations and cash flows as an independent publicly-traded company. The consolidated financial statements for the year ended December 31, 2014 represent our results of operations and cash flows as an independent publicly-traded company beginning on November 1, 2014 , and a combined reporting entity comprising the financial position, results of operations and cash flows of Kimberly-Clark’s healthcare business prior to November 1, 2014 . The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). For periods prior to the Spin-off, cash transferred to and from Kimberly-Clark is presented as net transfers to or from Kimberly-Clark in the accompanying consolidated cash flow statements. Principles of Consolidation The consolidated financial statements include our net assets and results of our operations and cash flows as described above. All intercompany transactions and accounts within our consolidated businesses have been eliminated. Prior to November 1, 2014 , the consolidated statements of income, comprehensive income, stockholders’ equity and cash flows were prepared on a combined stand-alone basis derived from Kimberly-Clark’s consolidated financial statements and accounting records. All transactions between Kimberly-Clark and us were included in the combined financial statements and are reflected in the cash flow statement for the year ended December 31, 2014 as net transfers to or from Kimberly-Clark within financing activities. Use of Estimates We prepare our consolidated financial statements in accordance with GAAP, which requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Estimates are used in accounting for, among other things, distributor rebate accruals, future cash flows associated with impairment testing for goodwill and long-lived assets, loss contingencies, and deferred tax assets and potential income tax assessments. Actual results could differ from these estimates, and the effect of the change could be material to our financial statements. Changes in these estimates are recorded when known. Cash Equivalents Cash equivalents are short-term investments with an original maturity date of three months or less. We maintain cash balances and short-term investments in excess of insurable limits in a diversified group of major banks that are selected and monitored based on ratings by the major rating agencies in accordance with our treasury policy. Inventories and Distribution Costs Most U.S. inventories are valued at the lower of cost, using the Last-In, First-Out (“LIFO”) method, or market. The balance of the U.S. and non-U.S. inventories are valued at the lower of cost (determined on the First-In, First-Out (“FIFO”) or weighted-average cost methods) or market. Distribution costs are classified as cost of products sold. Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost and depreciated on the straight-line method. Buildings are depreciated over their estimated useful lives, primarily 40 years . Machinery and equipment are depreciated over their estimated useful lives, primarily ranging from 16 to 20 years . Leasehold improvements are depreciated over the assets’ estimated useful lives, or the remaining lease term, whichever is shorter. Purchases of computer software, including external costs and certain internal costs (including payroll and payroll-related costs of employees) directly associated with developing significant computer software applications for internal use, are capitalized. Computer software costs are amortized on the straight-line method over the estimated useful life of the software, which is generally three to five years . Depreciation expense is recorded in cost of products sold, research and development and selling and general expenses. Estimated useful lives are periodically reviewed, and when warranted, changes are made to them. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss would be indicated when estimated undiscounted future cash flows from the use and eventual disposition of an asset group, which are identifiable and largely independent of the cash flows of other asset groups, are less than the carrying amount of the asset group. Measurement of an impairment loss would be based on the excess of the carrying amount of the asset group over its fair value. Fair value is measured using discounted cash flows or independent appraisals, as appropriate. When property is sold or retired, the cost of the property and the related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss on the transaction is included in income. Goodwill and Other Intangible Assets Goodwill is tested for impairment annually and whenever events and circumstances indicate that impairment may have occurred. The evaluation of goodwill involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. We used a combination of income and market approaches to estimate the current fair value of our reporting units. The fair value determination utilized key assumptions regarding the growth of the business, each of which required management judgment, including estimated future sales volumes, selling prices and costs, changes in working capital and investments in property and equipment. These assumptions and estimates were based upon our historical experience and projections of future activity. In addition, the selection of the discount rate used to determine fair value was based upon a market participant’s view considering current market rates and our current cost of financing. There can be no assurance that the assumptions and estimates made for purposes of the annual goodwill impairment test will prove to be accurate. Volatility in the equity and debt markets, or increases in interest rates, could result in a higher discount rate. Changes in sales volumes, selling prices and costs of goods sold and increases in interest rates could cause changes in our forecasted cash flows. Unfavorable changes in any of the factors described above could result in a goodwill impairment charge in the future. We completed the required annual goodwill impairment testing as of July 1, 2016 , and the fair values for both our Medical Devices and S&IP reporting units were substantially in excess of their respective net asset carrying values. Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Estimated useful lives range from 7 to 30 years for trademarks, 7 to 17 years for patents and acquired technologies, and 2 to 16 years for other intangible assets. An impairment loss would be indicated when estimated undiscounted future cash flows from the use of the asset are less than its carrying amount. An impairment loss would be measured as the difference between the fair value (based on discounted future cash flows) and the carrying amount of the asset. Revenue Recognition and Accounts Receivable Sales revenue is recognized at the time of product shipment or delivery, depending on when title passes, to unaffiliated customers, and when all of the following have occurred: evidence of a sales arrangement is in place, pricing is fixed or determinable, and collection is reasonably assured. Sales are reported net of returns, rebates and freight allowed. Distributor rebates are estimated based on the historical cost difference between list prices and average end user contract prices and the quantity of products expected to be sold to specific end users. We maintain liabilities at the end of each period for the estimated rebate costs incurred but unpaid for these programs. Differences between estimated and actual rebate costs are normally not material and are recognized in earnings in the period such differences are determined. Taxes imposed by governmental authorities on our revenue-producing activities with customers, such as sales taxes and value-added taxes, are excluded from net sales. Net sales to one customer accounted for 11% , 18% and 19% , respectively, of net sales in 2016 , 2015 and 2014 . No other customer accounted for more than 10% of net sales in any of the periods presented herein. As of December 31, 2016 , we had one customer who individually accounted for more than 10% of our consolidated accounts receivable balance. There were no customers that individually accounted for 10% or more of our consolidated accounts receivable balance in 2015 . The allowances for doubtful accounts, sales discounts and returns were $2 million as of each year ended December 31, 2016 and 2015 , respectively. The provision for doubtful accounts was not material for the years ended December 31, 2016 , 2015 and 2014 . Foreign Currency Translation The income statements of foreign operations are translated into U.S. dollars at rates of exchange in effect each month. The balance sheets of these operations are translated at period-end exchange rates, and the differences from historical exchange rates are reflected as unrealized translation adjustments in other comprehensive income. Derivative Instruments and Hedging All derivative instruments are recorded as assets or liabilities on the balance sheet at fair value. Changes in the fair value of derivatives are either recorded in the income statement or other comprehensive income, as appropriate. The effective portion of the gain or loss on derivatives designated as cash flow hedges is included in other comprehensive income in the period that changes in fair value occur, and is reclassified to income in the same period that the hedged item affects income. Any ineffective portion of cash flow hedges is immediately recognized in income. Certain foreign-currency derivative instruments not designated as hedging instruments have been entered into to manage a portion of our foreign currency transactional exposures. The gain or loss on these derivatives is included in income in the period that changes in their fair values occur. Our policies allow the use of derivatives for risk management purposes and prohibit their use for speculation. Our policies also prohibit the use of any leveraged derivative instrument. Consistent with our policies, foreign currency derivative instruments are entered into with major financial institutions. At inception we formally designate certain derivatives as cash flow hedges and establish how the effectiveness of these hedges will be assessed and measured. This process links the derivatives to the transactions they are hedging. See Note 12 , “Derivative Financial Instruments,” for disclosures about derivative instruments and hedging activities. Research and Development Research and development expenses are expensed as incurred. Research and development expenses consist primarily of salaries and related expenses for personnel, product trial costs, outside laboratory and license fees, the costs of laboratory equipment and facilities and asset write-offs for equipment that does not reach success in product manufacturing certifications. Stock-Based Compensation We have a stock-based Equity Participation Plan and an Outside Directors’ Compensation Plan that provide for awards of stock options, stock appreciation rights, restricted stock (and in certain limited cases, unrestricted stock), restricted stock units, performance units and cash awards to eligible employees (including officers who are employees), directors, advisors and consultants. Stock-based compensation is initially measured at the fair value of the awards on the grant date and is recognized in the financial statements over the period the employees are required to provide services in exchange for the awards. The fair value of option awards is measured on the grant date using a Black-Scholes option-pricing model. The fair value of time-based and some performance-based restricted share awards is based on the Halyard stock price at the grant date and the assessed probability of meeting future performance targets. For performance-based restricted share units for which vesting is conditioned upon achieving a measure of total shareholder return, fair value is measured using a Monte Carlo simulation. Generally, new shares are issued to satisfy vested restricted stock units and exercises of stock options. See Note 10 , “Stock-Based Compensation.” Income Taxes We account for income taxes under the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. The provision for federal, state, and foreign income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes. Recording the provision for income taxes requires management to make significant judgments and estimates for matters whose ultimate resolution may not become known until the final resolution of an examination by the Internal Revenue Service (IRS) or state and foreign agencies. If it is more likely than not that some portion, or all, of a deferred tax asset will not be realized, a valuation allowance is recognized. Recording liabilities for uncertain tax positions involves judgment in evaluating our tax positions and developing the best estimate of the taxes ultimately expected to be paid. We include any related tax penalties and interest in income tax expense. Prior to the Spin-off, our income taxes were calculated on a separate tax return basis, although operations have been included in Kimberly-Clark’s U.S. federal, state and foreign tax returns. Our income tax results as presented were not necessarily indicative of future performance and did not necessarily reflect the results that we would have generated as an independent publicly-traded company for the periods presented. Employee Defined Benefit Plans We recognize the funded status of our defined benefit as an asset or a liability on our balance sheet. Actuarial gains or losses are a component of our other comprehensive income, which is then included in our accumulated other comprehensive income. Pension expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. We make assumptions (including the discount rate and expected rate of return on plan assets) in computing the pension expense and obligations. Recently Adopted Pronouncements In April 2015 , the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU provides guidance about whether a cloud computing arrangement includes a software license and the appropriate accounting for such arrangements. Notably, the guidance in this ASU already exists in the FASB Accounting Standards Codification (“ASC”) Subtopic 985-605, Software - Revenue Recognition, which is used by cloud service providers to determine whether an arrangement includes the sale or license of software. We adopted this ASU as of January 1, 2016 . Adoption of this ASU did not have a material effect on our financial position, results of operations or cash flows. In January 2015 , the FASB issued ASU No. 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. ASU No. 2015-01 eliminates ASC Subtopic 225-20, Income Statement - Extraordinary and Unusual Items , which required that an entity separately classify, present, and disclose transactions and events that were determined to be both unusual and infrequent as extraordinary items. We adopted this ASU as of January 1, 2016 . Adoption of this ASU did not have a material effect on our financial position, results of operations or cash flows. In August 2014 , the FASB issued ASU 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, that will require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. In connection with each annual and interim period, management will assess if there is substantial doubt about an entity’s ability to continue as a going concern within one year after the issuance date. Substantial doubt exists if it is probable that the entity will be unable to meet its obligations within one year after the issuance date. The new standard defines substantial doubt and provides example indicators. Disclosure is required if conditions give rise to substantial doubt. However, management needs to assess if its plans will alleviate substantial doubt to determine the specific disclosures. We adopted this ASU as of December 31, 2016 . Adoption of this ASU did not have a material effect on our financial position, results of operations or cash flows. Recently Issued Pronouncements In January 2017 , the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, that replaces the existing two-step goodwill impairment test with a simplified one-step process. This ASU provides that goodwill impairment will be measured as the excess of the reporting unit’s carrying amount over its fair value and abandons the second step that requires the measurement of goodwill impairment by comparing the implied value of a reporting unit’s goodwill to the goodwill’s carrying amount. This ASU is to be adopted prospectively for goodwill impairment tests in fiscal years beginning after December 15, 2019 , with early adoption permitted for goodwill impairment tests performed on testing dates after January 1, 2017 . We plan to adopt this ASU beginning with our next annual goodwill impairment test as of July 1, 2017 . Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In January 2017 , the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which provides guidance in evaluating whether transactions involve the acquisition (or disposal) of assets or a business. A business has been defined as having three elements: inputs, processes and outputs. While an integrated set of assets and activities (a “set”) that is a business usually has outputs, outputs are not required to be present. Additionally, the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs. This ASU provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. It is expected that this ASU will reduce the number of transactions that are treated as business combinations. This ASU is to be adopted prospectively for annual periods, and interim periods within those annual periods beginning after December 15, 2017 . Adoption of the ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In August 2016 , the FASB issued ASU No. 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments. This ASU provides guidance on the presentation and classification of certain specific cash receipts and payments in the statement of cash flows and is intended to reduce diversity in practice. This ASU is effective for annual periods, and interim periods within those annual periods beginning after December 15, 2017 , but earlier adoption is permitted. This ASU is to be adopted using a retrospective transition method to each period presented. Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In March 2016 , the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of accounting for share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification on the statement of cash flows. Under this ASU, all excess tax benefits or deficiencies are recognized as income tax expense or benefit in the income statement and the pool of windfall tax benefits as a component of additional paid-in capital is eliminated. In regards to forfeitures, companies may make a one-time policy election to use an estimated forfeiture rate or account for forfeitures as they occur. The policy election regarding forfeitures applies only to instruments with service conditions; the requirement to estimate the probability of achieving performance conditions remains. For statutory tax withholding requirements, this ASU allows for net settlement up to the employer’s maximum statutory tax withholding requirement. Formerly, only the minimum statutory tax withholding requirement was allowed to be met through net settlement while retaining equity classification. This ASU is effective for annual periods, and interim periods within those annual periods beginning after December 15, 2016 . Earlier adoption is permitted in any interim or annual period for which financial statements have not yet been issued. The application of this ASU in regards to the accounting for income taxes, forfeitures and statutory tax withholding requirements should be applied using a modified retrospective application with a cumulative effect adjustment to additional paid-in capital as of the beginning of the period of adoption. The presentation of employee taxes paid on the statement of cash flows should be applied retrospectively. The adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In February 2016 , the FASB issued ASU No. 2016-02, Leases. This ASU requires the recognition of assets and liabilities for leases with lease terms of more than twelve months . The recognition, measurement and presentation of expenses and cash flows arising from a lease will depend primarily on its classification as a finance or an operating lease, with the classification criteria for distinguishing between the two being similar to the classification criteria for distinguishing between capital and operating leases under current GAAP. However, unlike current GAAP, recognition of finance and operating leases on the balance sheet is required, and additional disclosures are required to help financial statement users to better understand the amount, timing and uncertainty of cash flows arising from leases. This ASU requires modified retrospective application for existing leases. This ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 , however, earlier application is permitted. The adoption of this ASU will require us to recognize assets and liabilities for operating leases we have entered into for our principal executive offices as well as certain warehouse, manufacturing and distribution facilities globally. We have not yet determined the impact recognition of such assets and liabilities will have on our financial position, results of operations or cash flows. In January 2016 , the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Liabilities. This ASU requires equity investments, except those accounted for under the equity method or those that result in consolidation of the equity investee, to be measured at fair value with changes in fair value recognized in net income. However, equity investments without readily determinable fair values may be measured at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments in the same issuer. In addition, this ASU provides for a qualitative impairment assessment for equity investments that do not have readily determinable fair values. This ASU also clarifies that entities should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. This ASU should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The provisions related to equity investments that do not have readily determinable fair values should be applied prospectively to such equity investments that exist as of the date of adoption. This ASU will be effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017 . Early adoption of this ASU is permitted. The adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In May 2014 , the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which, along with subsequent amendments, provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most existing revenue recognition guidance. ASU 2014-09 provides for a principles-based, five-step approach to measure and recognize revenue from contracts with customers. ASU 2014-09 is effective for public entities for annual and interim periods beginning after December 15, 2017 . Early adoption for periods beginning after December 15, 2016 is permitted. The guidance permits two implementation approaches, one requiring retrospective application of the new ASU with restatement of prior years and one requiring prospective application of the new ASU with disclosure of results under old standards. While our review of the effect of this ASU is not yet complete, based on the results of our review to date, we do not expect a material effect on our financial position, results of operations or cash flows. We will continue our evaluation to include the disclosure requirements along with any changes, modifications or interpretations that may affect our current conclusion. We have not selected a transition method, but expect to do so in 2017 upon completion of further analysis. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Acquisition | Business Acquisition On May 2, 2016 , Halyard acquired all of the issued and outstanding capital stock of Medsystems Holdings, Inc. (“Medsystems”) a Delaware corporation, for a purchase price of $175 million , net of cash acquired (the “Acquisition”). The Acquisition was funded with a combination of cash on hand and our Revolving Credit Facility (See Note 6 , “Debt”). Medsystems owns and conducts its primary business through CORPAK Medsystems (Medsystems and CORPAK Medsystems hereinafter referred to as “Corpak”). Corpak’s innovative enteral access feeding solutions and portfolio of nasogastric feeding tubes complement our existing enteral feeding products and create a complete offering of enteral feeding solutions with our Medical Devices segment. In conjunction with the Acquisition, we identified intangible assets related to currently marketed products and in-process research and development (“IPR&D”) that we expect will yield economic benefits in the future. The identified intangible assets include technology, trademarks and customer relationships that were combined into composite intangible assets by product line in consideration of the following: • Our intent was to acquire the product portfolio and the related technology. • The trademarks will only be used to market the products associated with the existing technologies. Accordingly their remaining economic lives are similar. • The customer base was considered, but was not identified as a separate intangible asset because the cash flows are not separable from the related technology. • Low historical customer turnover rates supports longer lives for customer relationships which is consistent with the estimated remaining useful lives for the acquired technologies and trademarks. The allocation of the purchase price was as follows (in millions): Purchase Price Allocation Current assets acquired net of liabilities assumed $ 14.1 Property, plant and equipment 4.4 Identifiable intangible assets, excluding IPR&D 105.1 Identifiable IPR&D 5.7 Deferred tax liabilities (38.4 ) Goodwill 84.1 Total $ 175.0 Identifiable IPR&D includes a number of products that we expect to launch in 2017. Goodwill arising from the Acquisition is not fully tax deductible. The identifiable intangible assets, excluding IPR&D, include the following (in millions): Fair Value Weighted Average Useful Lives (Yrs) Portfolio of disposables $ 102.9 15 Enteral access technology 2.2 6 Total $ 105.1 Corpak’s results have been included in the accompanying consolidated income statement following the Acquisition on May 2, 2016 . Corpak’s revenue of $36 million for the period from May 2, 2016 to December 31, 2016 is included in “Net Sales” in the accompanying consolidated income statements. Net income directly attributable to Corpak was approximately $1 million for the period from May 2, 2016 to December 31, 2016 . Due to the integration of Corpak’s portfolio of products into our existing digestive health products in the Medical Devices segment, net income is not necessarily indicative of Corpak’s net income as a separate, stand-alone entity. The following unaudited pro forma information is presented in the table below for the years ended December 31, 2016 and 2015 as if the Acquisition had occurred on January 1, 2015 (in million, except per share amounts): Year Ended December 31, 2016 2015 Net sales $ 1,609.8 $ 1,628.6 Net income (loss) 43.0 (430.3 ) Earnings (loss) per share: Basic $ 0.92 $ (9.24 ) Diluted 0.91 (9.24 ) The pro forma financial information has been adjusted to include the effects of the Acquisition, including acquisition-related costs, amortization of acquired intangibles, incremental interest expense and related tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had the Acquisition taken place as of January 1, 2015 . Upon Acquisition, we initiated activities to integrate the operations of Corpak into our company. These activities include, but are not limited to, integration of corporate functions, information technology and alignment with our operations. For the year ended December 31, 2016 , we have incurred $13 million for the acquisition and integration activities described above, consisting primarily of severance and benefits, consulting, legal and other costs. These costs are included in “Cost of products sold” and “Selling and general expenses” in the accompanying consolidated income statements. Restructuring In June 2016 , we initiated a restructuring plan to close the Corpak corporate headquarters and operating facility in Buffalo Grove, Illinois and consolidate operations into our existing corporate and operational facilities by the third quarter of 2017 (the “Plan”). We expect to incur costs of $7 million related to this Plan, consisting primarily of severance and benefits, accelerated depreciation and lease termination costs. For the year ended December 31, 2016 , we have incurred $5 million of costs that are included in “Cost of products sold” and “Selling and general expenses” in the accompanying consolidated income statements. These costs include $4 million of severance and benefits accrued for employees impacted by the Plan. In the year ended December 31, 2016 , we have paid $1 million to affected employees and the remaining accrual for severance and employee benefits was $3 million as of December 31, 2016 . |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill We test goodwill for impairment annually (as of July 1) or more frequently whenever events or circumstances more likely than not indicate that the fair value of the reporting unit may be below its carrying amount. The fair value of our reporting units were estimated using a combination of income (discounted cash flow analysis) and market approaches. Both approaches are dependent upon several assumptions regarding future periods, including assumptions with respect to future sales growth, commodity costs and a terminal growth rate. A weighted average cost of capital (“WACC”) was used to discount future estimated cash flows to their present values. The WACC was based on externally observable data considering market participants’ cost of equity and debt, optimal capital structure and risk factors specific to our company. The market approach estimated the fair value of our business based on comparable publicly-traded companies in our industry. We completed the required annual goodwill impairment testing as of July 1, 2016 , and the fair values for both our Medical Devices and S&IP reporting units were substantially in excess of their respective net asset carrying values. The changes in the carrying amount of goodwill by business segment are as follows (in millions): Medical Devices S&IP Consolidated Goodwill Accumulated Goodwill, net Goodwill Accumulated Impairment Goodwill, net Goodwill, net Balance at December 31, 2014 $ 681.6 $ — $ 681.6 $ 744.5 $ — $ 744.5 $ 1,426.1 Goodwill impairment (a) — — — — (474.0 ) (474.0 ) (474.0 ) Currency translation adjustment (3.2 ) — (3.2 ) (3.7 ) — (3.7 ) (6.9 ) Balance at December 31, 2015 678.4 — 678.4 740.8 (474.0 ) 266.8 945.2 Goodwill acquired (b) 84.1 — 84.1 — — — 84.1 Currency translation adjustment (0.2 ) — (0.2 ) (0.1 ) — (0.1 ) (0.3 ) Balance at December 31, 2016 $ 762.3 $ — $ 762.3 $ 740.7 $ (474.0 ) $ 266.7 $ 1,029.0 _____________________________________________ (a) On completion of the annual goodwill impairment test as of July 1, 2015 , we recognized a $474 million impairment loss for our S&IP reporting unit for the year ended December 31, 2015 , which represented the amount by which the carrying value of the S&IP reporting unit’s goodwill exceeded its implied fair value. (b) We acquired $84 million of goodwill in conjunction with our acquisition of Corpak (see Note 2 , “Business Acquisition”). |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Accounts Receivable Accounts receivable consist of the following (in millions): As of December 31, 2016 2015 Accounts Receivable $ 191.6 $ 226.3 Allowances and doubtful accounts (1.5 ) (1.6 ) Accounts receivable, net $ 190.1 $ 224.7 Inventories Inventories at the lower of cost (determined on the LIFO/FIFO or weighted-average cost methods) or market consists of the following (in millions): As of December 31, 2016 2015 LIFO Non- LIFO Total LIFO Non- LIFO Total Raw Materials $ 45.8 $ 2.3 $ 48.1 $ 49.7 $ 1.1 $ 50.8 Work in process 50.6 0.3 50.9 46.1 0.1 46.2 Finished goods 130.8 40.5 171.3 165.8 46.3 212.1 Supplies and other — 12.8 12.8 0.1 11.6 11.7 227.2 55.9 283.1 261.7 59.1 320.8 Excess of FIFO or weighted-average cost over LIFO cost (10.6 ) — (10.6 ) (17.6 ) — (17.6 ) Total $ 216.6 $ 55.9 $ 272.5 $ 244.1 $ 59.1 $ 303.2 We may distribute products bearing the Kimberly-Clark brand through April 2017 under a royalty agreement that we have with Kimberly-Clark. As of December 31, 2016 , we had $18 million of inventory bearing the Kimberly-Clark brand. Based on management’s expectation regarding sales of Kimberly-Clark branded products, we have recorded an allowance of $10 million in cost of products sold for potential losses from inventory that we may not sell before the expiration of our royalty agreement with Kimberly-Clark. Property, Plant and Equipment Property, plant and equipment consists of the following (in millions): As of December 31, 2016 2015 Land $ 2.1 $ 2.1 Buildings and leasehold improvements 85.8 86.7 Machinery and equipment 499.8 492.8 Construction in progress 25.0 18.3 612.7 599.9 Less accumulated depreciation (351.9 ) (320.4 ) Total $ 260.8 $ 279.5 Property, plant and equipment includes $0.4 million and $1 million of capitalized interest in the years ended December 31, 2016 and 2015 , respectively. There were $6 million of capital expenditures in accounts payable as of each year ended December 31, 2016 and 2015 , respectively. As of December 31, 2016 and 2015 , we held $158 million and $173 million , respectively, of net property, plant and equipment in the United States. Depreciation expense was $43 million , $40 million and $53 million , respectively, in the years ended December 31, 2016 , 2015 and 2014 . Intangible Assets Intangible assets subject to amortization consist of the following (in millions): As of December 31, 2016 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 125.9 $ (93.8 ) $ 32.1 $ 126.6 $ (90.3 ) $ 36.3 Patents and acquired technologies 251.8 (131.1 ) 120.7 149.1 (117.3 ) 31.8 Other 55.1 (43.8 ) 11.3 55.1 (40.6 ) 14.5 Total $ 432.8 $ (268.7 ) $ 164.1 $ 330.8 $ (248.2 ) $ 82.6 As of December 31, 2016 , we had $6 million of indefinite-lived intangible assets that we acquired in connection with the Acquisition related to IPR&D projects that we expect to launch in 2017 . Amortization expense for intangible assets was $22 million , $26 million and $32 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. We estimate amortization expense for the next five years and beyond will be as follows (in millions): For the years ending December 31, 2017 $ 21.2 2018 19.0 2019 15.2 2020 13.0 2021 10.7 Thereafter 85.0 Total $ 164.1 Accrued Expenses Accrued expenses consist of the following (in millions): As of December 31, 2016 2015 Accrued rebates $ 55.7 $ 73.9 Accrued salaries and wages 57.1 34.5 Accrued taxes - income and other 7.2 15.3 Other 31.3 28.3 Total $ 151.3 $ 152.0 Other Long-Term Liabilities Other long-term liabilities consist of the following (in millions): As of December 31, 2016 2015 Taxes payable $ 3.4 $ 1.3 Accrued compensation benefits 9.7 9.5 Other 17.0 17.0 Total $ 30.1 $ 27.8 |
Fair Value Information
Fair Value Information | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Information | Fair Value Information The following fair value information is based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels in the hierarchy used to measure fair value are: Level 1: Unadjusted quoted prices in active markets accessible at the reporting date for identical assets and liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets. Quoted prices for identical or similar assets and liabilities in markets that are not considered active or financial instruments for which all significant inputs are observable, either directly or indirectly. Level 3: Prices or valuations that require inputs that are significant to the valuation and are unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The derivative liabilities for foreign exchange contracts as of December 31, 2016 and 2015 were $1 million and $2 million , respectively, and are included in the consolidated balance sheet in accrued expenses. These derivatives are classified as Level 2 of the fair value hierarchy. The fair values of derivatives used to manage foreign currency risk is based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates. Additional information on our use of derivative instruments is contained in Note 12 , “Derivative Financial Instruments.” The following table includes the fair value of our financial instruments for which disclosure of fair value is required (in millions): Fair Value Hierarchy Level December 31, 2016 December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets Cash and cash equivalents 1 $ 113.7 $ 113.7 $ 129.5 $ 129.5 Liabilities Senior unsecured notes 1 246.5 256.4 245.9 252.5 Debt 2 332.5 341.3 332.2 337.3 Cash equivalents are recorded at cost, which approximates fair value due to their short-term nature. The fair value of our senior unsecured notes is determined using observable market prices based on trading activity on a primary exchange. For the year ended December 31, 2016 , there were no transfers among Level 1, 2 or 3 fair value determinations. In the prior year, the senior unsecured notes transferred from Level 2 to Level 1 of the fair value hierarchy following registration of the notes. Transfers between levels occur when there are changes in the observability of inputs. Changes between levels are assumed to occur at the beginning of the year. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of December 31, 2016 and 2015 , our debt balances were as follows (in millions): Weighted- Average Interest Rate Maturities As of December 31, 2016 2015 Senior Secured Term Loan 3.98% 2021 $ 339.0 $ 339.0 Senior Unsecured Notes 6.25% 2022 250.0 250.0 Total long-term debt 589.0 589.0 Unamortized Debt Discounts and Issuance Costs Senior Secured Term Loan (6.5 ) (6.8 ) Senior Unsecured Notes (3.5 ) (4.1 ) Total Debt, net $ 579.0 $ 578.1 Senior Secured Term Loan and Revolving Credit Facility The senior secured term loan (the “Term Loan Facility”) is under a credit agreement that also includes a senior secured revolving credit facility allowing borrowings of up to $250 million , with a letter of credit sub-facility in an amount of $75 million and a swingline sub-facility in an amount of $25 million (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Senior Credit Facilities”). The Senior Credit Facilities are secured by substantially all of our assets located in the United States and a certain percentage of our foreign subsidiaries’ capital stock. Unamortized debt discount and issuance costs are being amortized to interest expense over the life of the Term Loan Facility using the interest method, resulting in an effective interest rate of 3.94% as of December 31, 2016 . In December 2016 , we executed an amendment to the Term Loan Facility (the “Amendment”), under which the margin, or “spread” that was charged over the available floating interest rates, as described below, was reduced by 0.5% . In conjunction with the amendment we paid fees of $1 million which are being amortized to interest expense over the remaining term of the Term Loan Facility using the interest method. Borrowings under the Term Loan Facility, as amended, bear interest, at our option, at either (i) a reserve-adjusted LIBOR rate, subject to a floor of 0.75% , plus 2.75% (formerly 3.25% prior to the Amendment), or (ii) a base rate, subject to a floor of 0.75% , (calculated as the greatest of (1) the prime rate, (2) the U.S. federal funds effective rate plus 0.50% or (3) the one month LIBOR Rate plus 1.00% ) plus 1.75% (formerly 2.25% prior to the Amendment). As of December 31, 2016 , the interest rate in effect for the Term Loan Facility was 3.50% . Borrowings under the Revolving Credit Facility will bear interest, at our option, at either (i) a reserve-adjusted LIBOR rate, plus a margin ranging between 1.75% to 2.50% per annum, depending on our consolidated total leverage ratio, or (ii) the base rate plus a margin ranging between 0.75% to 1.50% per annum, depending on our consolidated total leverage ratio. The unused portion of our Revolving Credit Facility will be subject to a commitment fee equal to (i) 0.25% per annum, when our consolidated total leverage ratio is less than 2.25 to 1.00 and (ii) 0.40% per annum, otherwise. As of December 31, 2016 , we had no borrowings and letters of credit of $4 million outstanding under the Revolving Credit Facility, leaving $246 million available for borrowing. The maturity date for the Revolving Credit Facility is October 31, 2019 . On May 2, 2016 , we borrowed $72 million under our Revolving Credit Facility to partially fund our acquisition of Medsystems. See Note 2, “Business Acquisition” for a description of this acquisition. By December 31, 2016 , we had repaid all of the borrowings on our Revolving Credit Facility. Senior Unsecured Notes The Senior Unsecured Notes (“Notes”) will mature on October 15, 2022 and interest accrues at a rate of 6.25% per annum and is payable semi-annually in arrears on April 15 and October 15 of each year. The Notes are guaranteed, jointly and severally, by each of our domestic subsidiaries that guarantees the Senior Credit Facilities. Unamortized debt discount and issuance costs are being amortized to interest expense over the life of the credit agreement using the interest method, resulting in an effective interest rate of 6.54% as of December 31, 2016 . Debt Covenants The senior secured term loan and the Notes are subject to similar covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to: • incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of our restricted subsidiaries, preferred stock; • pay dividends on, repurchase or make distributions in respect of our capital stock; • make certain investments or acquisitions; • sell, transfer or otherwise convey certain assets; • create liens; • enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; • consolidate, merge, sell or otherwise dispose of all or substantially all of our and our subsidiaries’ assets; • enter into transactions with affiliates; and • prepay certain kinds of indebtedness. Pursuant to the restrictive covenants that limit our ability to pay dividends, we have the ability to pay dividends, repurchase stock and make investments up to an “Available Amount,” as defined in the credit agreement governing the Senior Credit Facilities, provided that we are in compliance with all required covenants, there are no events of default and upon meeting certain financial ratios. As of December 31, 2016 , we were in compliance with all of our debt covenants. The $339 million owed under our Term Loan Facility will be due on October 31, 2021 , which is the Term Loan Facility’s maturity date. As of December 31, 2016 , there are no other scheduled principal payments due on our long-term debt in the next five years . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income taxes are calculated using the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Prior to the Spin-off, our income taxes were calculated on a separate tax return basis, although operations have been included in Kimberly-Clark’s U.S. federal, state and foreign tax returns. The provision for income taxes includes federal, state and foreign taxes currently payable and those deferred because of net operating losses and temporary differences between the consolidated financial statements and tax bases of assets and liabilities. The components of income (loss) before income taxes, and the provision (benefit) for income taxes are as follows (in millions): Year Ended December 31, 2016 2015 2014 Income before income taxes United States $ 24.2 $ (424.4 ) $ 91.8 Foreign 31.1 13.9 (0.6 ) Total 55.3 (410.5 ) 91.2 Income tax provision (benefit): Current: United States 29.8 13.0 71.2 State 4.4 2.7 5.5 Foreign 7.8 5.3 18.0 Total 42.0 21.0 94.7 Deferred: United States (27.3 ) (8.3 ) (9.8 ) State (2.9 ) (0.6 ) (1.4 ) Foreign 3.7 3.7 (19.4 ) Total (26.5 ) (5.2 ) (30.6 ) Total income tax provision $ 15.5 $ 15.8 $ 64.1 Major differences between the federal statutory rate and the effective tax rate are as follows: Year Ended December 31, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % Rate of state income taxes, net of federal tax benefit 0.2 (0.3 ) 3.0 Statutory rate other than U.S. statutory rate (6.9 ) 0.6 (0.3 ) Thailand repatriation related to the Spin-off — — 15.5 Thailand statutory rate change 7.3 — — Sec. 987 regulation change, federal and state impact (4.8 ) — — U.S. federal research and development credit (4.7 ) 0.6 — Goodwill — (40.4 ) — Non-deductible expenses related to the Spin-off — — 17.6 Change in valuation allowances — 0.1 2.1 Other, net 1.9 0.6 (2.6 ) Effective tax rate 28.0 % (3.8 )% 70.3 % The following is a summary of the significant components of the Company’s deferred tax assets and liabilities (in millions): As of December 31, 2016 2015 Deferred tax assets Intangibles, net $ — $ 15.3 Accrued liabilities 34.8 25.3 Stock-based compensation 8.7 4.8 Other 8.4 5.9 51.9 51.3 Valuation allowance (0.5 ) (0.5 ) Total deferred assets 51.4 50.8 Deferred tax liabilities Intangibles, net 17.7 — Inventories 13.4 19.8 Property, plant and equipment, net 40.0 39.4 Other 1.0 0.5 Total deferred tax liabilities 72.1 59.7 Net deferred tax liabilities $ 20.7 $ 8.9 Valuation allowances remained the same during the year ended December 31, 2016 with no impact to earnings. Valuation allowances at the end of 2016 and 2015 primarily relate to tax credits and income tax loss carryforwards. Realization of income tax loss carryforwards is dependent on generating sufficient taxable income prior to expiration of these carryforwards. Although realization is not assured, we believe it is more likely than not that all of the deferred tax assets, net of applicable valuation allowances, will be realized. The amount of the deferred tax assets considered realizable could be reduced or increased due to changes in the tax environment or if estimates of future taxable income change during the carryforward period. At December 31, 2016 , we have credit carryforwards for state income tax purposes of $3 million , all of which will expire in 2025 . At December 31, 2016 , certain foreign subsidiaries have net operating loss carryforwards for income tax purposes of $11 million , of which $7 million will expire in 2020 . The remaining net operating losses are available for carryforward indefinitely. At December 31, 2016 , U.S. income taxes and foreign withholding taxes have not been provided on $113 million of current and prior year undistributed earnings of subsidiaries operating outside the U.S. These earnings, which are considered to be invested indefinitely, would become subject to income tax if they were remitted as dividends, were lent to one of our U.S. entities or if we were to sell our stock in the subsidiaries. Determination of the amount of unrecognized deferred U.S. income tax liability on these unremitted earnings is not practical because of the complexities associated with this hypothetical calculation. We do not expect restrictions or taxes on repatriation of cash held outside of the United States to have a material adverse effect on our overall liquidity, financial condition or results of operations for the foreseeable future. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (in millions): As of December 31, 2016 2015 Beginning of year $ 1.5 $ 1.6 Gross increases for tax positions of prior years 1.5 0.5 Gross decreases for tax positions of prior years (0.2 ) — Decreases for settlements with taxing authorities (0.1 ) — Decreases for lapse of the applicable statute of limitations — (0.6 ) End of year $ 2.7 $ 1.5 The amount, if recognized, that would affect our effective tax rate as of December 31, 2016 and 2015 is $2 million and $1 million , respectively. We classify interest and penalties on uncertain tax benefits as income tax expense. At December 31, 2016 and 2015 , before any tax benefits, we had $1 million and $0.4 million , respectively, of accrued interest and penalties on unrecognized tax benefits. During the next twelve months , we do not expect the resolution of any tax audits which could potentially reduce unrecognized tax benefits by a material amount. In addition, no expiration of the statute of limitations for a tax year in which we have recorded uncertain tax benefits will occur in the next twelve months . Federal and state income tax returns are generally subject to examination for a period of three to five years after filing of the respective returns. The state effect of any changes to filed federal positions remains subject to examination by various states for a period of up to two years after formal notification to the states. We have various federal and state income tax return positions in the process of examination, administrative appeals or litigation. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Defined Contribution Plans Eligible employees participate in our defined contribution plans. Our 401(k) plan and supplemental plan provide for a matching contribution of a U.S. employee’s contributions and accruals, subject to predetermined limits. Halyard also has defined contribution pension plans for certain employees outside the U.S. in which eligible employees may participate. We recognized $9 million of expense for our matching contributions to the 401(k) plan in each of the years ended December 31, 2016 and 2015 , respectively, and $1 million of expense was recognized in the post Spin-off period from November 1, 2014 to December 31, 2014 . Our matching contributions to the 401(k) plan are recognized in cost of products sold, research and development and selling and general expenses in our consolidated income statements. Defined Benefit Plans Certain plans in our international operations are our direct obligation, and therefore, the related funded status has been recorded within our consolidated balance sheet. These plans are primarily unfunded and the aggregated projected benefit obligation was $8 million as of each year ended December 31, 2016 and 2015 , respectively. Net periodic pension cost for the years ended December 31, 2016 , 2015 and 2014 was $1 million , $3 million and $3 million , respectively. Over the next ten years, we expect gross benefit payments to be $2 million in total for the years 2017 through 2021 , and $4 million in total for the years 2022 through 2026 . Participation in Kimberly-Clark’s Benefit Plans Prior to the Spin-off, eligible employees participated in benefit plans sponsored by Kimberly-Clark including defined benefit pension plans, postretirement healthcare plans and defined contribution plans. During 2014 , prior to the Spin-off, expenses of $13 million for these plans were allocated to us. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The changes in the components of Accumulated Other Comprehensive Income (“AOCI”), net of tax, are as follows (in millions): Unrealized Translation Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income Balance, December 31, 2013 $ (16.1 ) $ (3.5 ) $ — $ (19.6 ) Change in Kimberly-Clark’s net investment 11.8 (0.6 ) 0.1 11.3 Other comprehensive (loss) income (14.0 ) 3.6 (0.4 ) (10.8 ) Balance, December 31, 2014 (18.3 ) (0.5 ) (0.3 ) (19.1 ) Other comprehensive (loss) income (22.1 ) (0.7 ) (1.3 ) (24.1 ) Balance, December 31, 2015 (40.4 ) (1.2 ) (1.6 ) (43.2 ) Other comprehensive (loss) income (8.3 ) 0.8 0.6 (6.9 ) Balance, December 31, 2016 $ (48.7 ) $ (0.4 ) $ (1.0 ) $ (50.1 ) The net changes in the components of AOCI, including the tax effect, are as follows (in millions): Year Ended December 31, 2016 2015 2014 Unrealized translation $ (8.3 ) $ (22.1 ) $ (14.0 ) Defined benefit pension plans 0.7 (1.9 ) (0.4 ) Tax effect (0.1 ) 0.6 — Defined benefit pension plans, net of tax 0.6 (1.3 ) (0.4 ) Cash flow hedges 1.0 (1.0 ) 4.3 Tax effect (0.2 ) 0.3 (0.7 ) Cash flow hedges, net of tax 0.8 (0.7 ) 3.6 Change in AOCI $ (6.9 ) $ (24.1 ) $ (10.8 ) |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Halyard Health, Inc. Equity Participation Plan and the Halyard Health, Inc. Outside Directors’ Compensation Plan (together, the “Plans”) provide for awards of stock options, stock appreciation rights, restricted stock (and in certain limited cases, unrestricted stock), restricted stock units, performance units and cash awards to eligible employees (including officers who are employees), directors, advisors and consultants of Halyard or its subsidiaries. A maximum of 4.9 million shares of Halyard common stock may be issued under the Plans, and there are 2.4 million shares remaining available for issuance as of December 31, 2016 . Aggregate stock-based compensation expense under the Plans was $15 million and $14 million for the years ended December 31, 2016 and 2015 , respectively, and $3 million for the post Spin-off period from November 1, 2014 through December 31, 2014 . Stock-based compensation expense is included in cost of sales, research and development expenses and selling and general expenses. Stock Options Stock options are granted at an exercise price equal to the fair market value of Halyard’s common stock on the date of grant. Stock options are generally subject to graded vesting whereby options vest 30% at the end of each of the first two 12-month periods following the grant and 40% at the end of the third 12-month period and have a term of 10 years . The fair value of stock option awards was determined using a Black-Scholes option-pricing model utilizing a range of assumptions related to volatility, risk-free interest rate, expected term and dividend yield. Expected volatility was based on historical weekly closing stock price volatility for a peer group of companies. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. The expected term was based on historical observed settlement behavior. The dividend yield was based on the expectation that no dividends are expected to be paid on our common stock. The weighted-average fair value of options granted in the years ended December 31, 2016 and 2015 and the period from the Spin-off date to December 31, 2014 was $7.70 , $15.15 and $10.01 , respectively, based on the following assumptions: Year Ended December 31, November 1, 2014 to 2016(a) 2015 Volatility 26% 25% to 34% 25% to 27% Risk-free rate 1.2% 0.7% to 1.9% 0.8% to 1.6% Expected term (Years) 5 2 to 7 3 to 5 Dividend Yield 0% 0% 0% ________________________________________ (a) In the year ended December 31, 2016 , all stock options granted had uniform terms and were awarded on the same grant date. Stock-based compensation expense related to stock options was $5 million , $6 million and $1 million for the years ended December 31, 2016 and 2015 , and the period from the Spin-off date through December 31, 2014 , respectively. A summary of stock option activity is presented below: Shares (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions) Outstanding at December 31, 2015 1,146 $ 40.70 Granted 458 29.48 Exercises (12 ) 33.48 Forfeitures (66 ) 39.95 Outstanding at December 31, 2016 1,526 $ 37.42 8.1 $ 4.4 Vested and exercisable at December 31, 2016 469 $ 36.52 7.0 $ 1.1 The following table summarizes information about options outstanding as of December 31, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Shares (in thousands) Weighted-Average Remaining Contractual Term (Years) Shares (in thousands) Weighted-Average Exercise Price $25.00 to $35.00 652 8.3 204 $ 31.67 $35.00 to $45.00 293 7.5 174 37.53 $45.00+ 581 8.2 91 45.53 1,526 8.1 469 $ 36.52 In the year ended December 31, 2016 , the intrinsic value of exercised options and the resulting excess tax benefit was not material. In the year ended December 31, 2015 , options with an aggregate intrinsic value of $0.4 million were exercised resulting in an excess tax benefit of $0.2 million which was recognized as a component of additional paid in capital in the accompanying consolidated balance sheet as of December 31, 2015 . There was no exercise activity for the period from the Spin-off date through December 31, 2014 . For stock options outstanding at December 31, 2016 , we expect to recognize an additional $6 million of expense over the remaining average service period of one year . Restricted Share Units Restricted shares, time-vested restricted share units and performance-based restricted share units granted to employees and directors are valued at the closing market price of our common stock on the grant date with vesting conditions determined upon approval of the award. Stock-based compensation expense related to restricted stock units was $6 million and $8 million for the years ended December 31, 2016 and 2015 , respectively, and $2 million for the period from the Spin-off date through December 31, 2014 . A summary of restricted share unit activity is presented below: Shares (in thousands) Weighted Average Fair Value Outstanding at December 31, 2015 519 $ 40.69 Granted 125 31.89 Vested (86 ) 38.08 Forfeited (30 ) 39.35 Outstanding at December 31, 2016 528 $ 39.12 For restricted share units outstanding at December 31, 2016 , we expect to recognize an additional $5 million of expense over the remaining average service period of one year . We also issue restricted share units for which vesting is conditioned on meeting a defined measure of total shareholder return (“TSR units”) over a restricted period of three years. Total shareholder return is measured as our stock price performance over the restricted period compared to defined group of peer companies. The expense recognition for TSR units differs from awards with service or performance conditions in that the expense is recognized over the restricted period regardless of whether the total shareholder return target is met or not, while expense for awards with service and performance conditions is recognized based on the number of awards expected to vest. The fair value of TSR units is determined using a Monte Carlo using a volatility assumption based on the average stock-price volatility for a peer group of companies over the restricted period. For awards granted in the year ended December 31, 2016 , the assumed volatility was 25% and the weighted average fair value per TSR unit was $38.64 . For the year ended December 31, 2016 , stock-based compensation expense related to TSR units was $5 million . A summary of TSR unit activity is presented below. Shares (in thousands) Weighted Average Fair Value Outstanding at December 31, 2015 — $ — Granted 230 38.64 Forfeited (6 ) 40.12 Outstanding at December 31, 2016 224 $ 38.60 For TSR units outstanding at December 31, 2016 , we expect to recognize an additional $4 million of expense over the weighted average remaining restricted period of two years . Expense under Kimberly-Clark Equity Incentive Plans Stock-based compensation expense allocated to us by Kimberly-Clark prior to the Spin-off under their incentive plans was $5 million through the Spin-off date in 2014 . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters We are subject to various legal proceedings, claims and governmental inspections, audits or investigations pertaining to issues such as contract disputes, product liability, tax matters, patents and trademarks, advertising, governmental regulations, employment and other matters, including the matters described below. Under the terms of the distribution agreement we entered into with Kimberly-Clark prior to the Spin-off, legal proceedings, claims and other liabilities that are primarily related to our business are our responsibility and we are obligated to indemnify and hold Kimberly-Clark harmless for such matters (“Indemnification Obligation”). For the years ended December 31, 2016 and 2015 , we have incurred $20 million and $17 million , respectively, related to these matters. The only exception to the Indemnification Obligation relates to the pain pump litigation referenced in this paragraph. We are one of several manufacturers of continuous infusion medical devices, such as our ON-Q PAINBUSTER pain pumps, that are involved in several different pending or threatened litigation matters from multiple plaintiffs alleging that use of the continuous infusion device to deliver anesthetics directly into a synovial joint after surgery resulted in postarthroscopic glenohumeral chondrolysis, or a disintegration of the cartilage covering the bones in the joint (typically, in the shoulder). Plaintiffs generally seek monetary damages and attorneys’ fees. While Kimberly-Clark is retaining the liabilities related to these matters, the distribution agreement between us and Kimberly-Clark provides that we will indemnify Kimberly-Clark for any such claims or causes of actions arising after the spin-off. We have an Indemnification Obligation for, and have assumed the defense of, the matter styled Bahamas Surgery Center, LLC v. Kimberly-Clark Corporation and Halyard Health, Inc., No. 2:14-cv-08390-DMG-SH (C.D. Cal.) ( “Bahamas” ), filed on October 29, 2014. In that case, the plaintiff brings a putative class action asserting claims for common law fraud (affirmative misrepresentation and fraudulent concealment) and violation of California’s Unfair Competition Law in connection with our marketing and sale of MicroCool surgical gowns. On June 1, 2016, the plaintiff moved for class certification of a California-only damages class and a California-only injunctive relief class. Although the plaintiff did not also move for certification of a nationwide class to determine liability, damages, or injunctive relief, it did move for certification of a nationwide “issue” class purporting to resolve certain issues allegedly “common” to members of that class. On July 8, 2016, we moved for summary judgment. On November 8, 2016, the court granted in part and denied in part the plaintiff’s motion for class certification. The court certified a California-only class for damages and injunctive relief arising from fraud by omission , but it rejected certification of a California-only class arising from affirmative fraud , and it also rejected certification of a nationwide “issue” class. The court also rejected the plaintiff’s request for “full restitution” damages, meaning the full value of the gowns. Instead, the court found any damages would be based on the difference between the purchase price of the gowns and what the purchase price would have been for gowns with no AAMI rating. On November 15, 2016, the court denied our motion for summary judgment. The parties remain engaged in discovery. The trial is scheduled to begin on March 28, 2017. We intend to continue our vigorous defense of the matter. In June 2015, we were served with a subpoena from the Department of Veterans Affairs Office of the Inspector General (“VA OIG”) seeking information related to the design, manufacture, testing, sale and promotion of MicroCool and other Company surgical gowns, and, in July 2015, we also became aware that the subpoena and an earlier VA OIG subpoena served on Kimberly-Clark requesting information about gown sales to the federal government are related to a United States Department of Justice (“DOJ”) investigation. In May 2016, we were also served with a subpoena from the Department of Justice seeking further information related to Company gowns. The Company is cooperating with the VA OIG’s request and the DOJ investigation. On October 12, 2016, after the DOJ submitted filings on behalf of itself and various States declining to intervene in two qui tam matters, both matters were unsealed. One of those matters is U.S. ex rel. Shahinian, et al. v. Kimberly-Clark Corporation, No. 2:14-cv-08313-JAK-JPR (C. D. Cal.) (“ Shahinian” ), filed on October 27, 2014. The other of those matters is U.S. ex rel. Edgett, et al. v. Kimberly-Clark Corporation, Halyard Health, Inc., et al, No. 3:15-cv-00434-B (N.D. Tex.) ( “Edgett” ), filed on February 9, 2015. Both cases allege, among other things, violations of both the federal and state False Claims Acts in connection with the marketing and sale of certain surgical gowns. On November 7, 2016, Dr. Shahinian served his complaint on Kimberly-Clark, and on February 6, 2017, he served an amended complaint on Kimberly-Clark. On January 9, 2017, Mr. Edgett served his complaint on both Kimberly-Clark and Halyard Health. We may have an Indemnification Obligation for the two matters under the distribution agreement with Kimberly-Clark. We intend to vigorously defend the cases. We were served with a complaint in a matter styled Jackson v. Halyard Health, Inc., Robert E. Abernathy, Steven E. Voskuil, et al., No. 1:16-cv-05093-LTS (S.D.N.Y.), filed on June 28, 2016. In that case, the plaintiff brings a putative class action against the Company, our Chief Executive Officer, our Chief Financial Officer and other defendants, asserting claims for violations of the Securities Exchange Act, Sections 10(b) and 20(a). The plaintiff alleges that the defendants made misrepresentations and failed to disclose certain information about the safety and effectiveness of our MicroCool gowns and thereby artificially inflated the Company’s stock prices during the respective class periods. The alleged class period for purchasers of Kimberly-Clark securities who subsequently received Halyard Health securities is February 25, 2013 to October 21, 2014, and the alleged class period for purchasers of Halyard Health securities is October 21, 2014 to April 29, 2016. On February 16, 2017, we moved to dismiss the case. We intend to continue our vigorous defense of this matter. We were also served with a complaint in a matter styled Margaret C. Richardson Trustee of the Survivors Trust Dated 6/12/84 for the Benefit of the H&M Richardson Revocable Trust v. Robert E. Abernathy, Steven E. Voskuil, et al., No. 1:16-cv-06296 (S. D. N. Y.) ( “Richardson” ), filed on August 9, 2016. In that case, the plaintiff sues derivatively on behalf of Halyard Health, Inc., and alleges that the defendants breached their fiduciary duty, were unjustly enriched, and violated Section 14(A) of the Securities and Exchange Act in connection with Halyard Health, Inc.’s marketing and sale of MicroCool gowns. We were also served with a complaint in a matter styled Kai Chiu v. Robert E. Abernathy, Steven E. Voskuil, et al , No. 2:16-cv-08768 (C.D. Cal.), filed on November 23, 2016. In that case, the plaintiff sues derivatively on behalf of Halyard Health, Inc., and makes allegations and brings causes of action similar to those in Richardson , but the plaintiff also adds causes of action for abuse of control, gross mismanagement, and waste of corporate assets. We intend to vigorously defend these matters. We were also served with a complaint in the matter styled Medline Industries, Inc. v. Kimberly-Clark Corporation, Halyard Health, Inc., et al. , No. 2:16-cv-08571 (C. D. Cal.). In that case, the plaintiff makes allegations similar to those in Bahamas , Shahinian , and Edgett , and brings causes of action under federal and state false advertising laws and state unfair competition laws. We may have an Indemnification Obligation for this matter under the distribution agreement with Kimberly-Clark. We intend to vigorously defend it. We operate in an industry characterized by extensive patent litigation and competitors may claim that our products infringe upon their intellectual property. Resolution of patent litigation or other intellectual property claims is typically time consuming and costly and can result in significant damage awards and injunctions that could prevent the manufacture and sale of the affected products or require us to make significant royalty payments in order to continue selling the affected products. At any given time we may be involved as either a plaintiff or a defendant in a number of patent infringement actions, the outcomes of which may not be known for prolonged periods of time. As of December 31, 2016 and 2015, we have an accrued liability which management believes is adequate for the matters described herein. The accrued liability is included in “Accrued expenses” in the accompanying consolidated balance sheet. We maintain general and professional liability, product liability and other insurance in an amount that we believe is reasonably adequate to insulate us from material liability for claims. However, our insurance policies may not cover all of these matters and may not fully cover liabilities arising out of these matters. In addition, we may be obligated to indemnify our directors and officers against these matters. Although the results of litigation and claims cannot be predicted with certainty, we believe that the ultimate disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, individually or in the aggregate, on our financial condition, results of operations or liquidity. However the above matters, regardless of the outcome, could disrupt our business and result in substantial costs and diversion of management attention. We are subject to federal, state and local environmental protection laws and regulations with respect to our business operations and are operating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. None of our compliance obligations with environmental protection laws and regulations, individually or in the aggregate, is expected to have a material adverse effect on our business, financial condition, results of operations or liquidity. Operating Leases We have entered into operating leases for principal executive offices, located in Alpharetta, Georgia, as well as certain warehouse, manufacturing and distribution facilities. The future minimum obligations under operating leases having a non-cancelable term in excess of one year are as follows (in millions): Year Amount 2017 $ 16.9 2018 14.9 2019 12.3 2020 8.0 2021 7.3 Thereafter 41.1 Future minimum obligations $ 100.5 Rental expense under operating leases was $22 million , $22 million and $17 million in 2016 , 2015 and 2014 , respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We are exposed to financial risks, such as changes in foreign currency exchange rates, interest rates and commodity prices. We manage these risks, where appropriate, with the use of derivative instruments. We enter into derivative instruments to hedge a portion of forecasted cash flows denominated in Thai baht. The derivative instruments used to manage these exposures are designated and qualify as cash flow hedges. The foreign currency exposure on certain monetary assets and liabilities, primarily intercompany loans and accounts payable, is hedged with undesignated derivative instruments. Translation adjustments result from translating foreign entities’ financial statements into U.S. dollars from their functional currencies. The risk to any particular entity’s net assets is reduced to the extent that the entity is financed with local currency borrowing. Translation exposure, which results from changes in translation rates between functional currencies and the U.S. dollar, is not hedged. The derivative assets for foreign exchange contracts were not material as of December 31, 2016 and 2015 . The derivative liabilities for foreign exchange contracts as of December 31, 2016 and 2015 were $1 million and $2 million , respectively, and are included in the consolidated balance sheet in accrued expenses. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is initially recorded in AOCI, net of related income taxes, and recognized in earnings in the same period that the hedged exposure affects earnings. These gains or losses recognized to earnings were not significant in each of the three years ended December 31, 2016 , 2015 and 2014 . As of December 31, 2016 , the aggregate notional value of outstanding foreign exchange derivative contracts designated as cash flow hedges was approximately $33 million . Cash flow hedges resulted in no significant ineffectiveness in each of the three years ended December 31, 2016 , 2015 and 2014 . For each of the three years ended December 31, 2016 , 2015 and 2014 , no gains or losses were reclassified into earnings as a result of the discontinuance of cash flow hedges due to the original forecasted transaction no longer being probable of occurring. At December 31, 2016 , amounts to be reclassified from AOCI during the next year are not expected to be significant. The maximum maturity of cash flow hedges in place at December 31, 2016 is December 2017 . Gains or losses on undesignated foreign exchange hedging instruments are immediately recognized in other (income) and expense, net. These gains or losses have not been significant for each of the three years ended December 31, 2016 , 2015 and 2014 . The effect on earnings from the use of these non-designated derivatives is substantially neutralized by the transactional gains and losses recorded on the underlying assets and liabilities. At December 31, 2016 , the notional amount of these undesignated derivative instruments was approximately $2 million . |
Earnings Per Share ("EPS")
Earnings Per Share ("EPS") | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share (“EPS”) | Earnings Per Share (“EPS”) Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during each period. Diluted earnings per share is calculated by dividing net income by the number of common shares outstanding and the effect of all dilutive common stock equivalents outstanding during each period, as determined using the treasury stock method. The calculation of basic and diluted EPS for each of the three years ended December 31, 2016 , 2015 and 2014 is set forth in the following table (in millions, except per share amounts): Year Ended December 31, 2016 2015 2014 Net income (loss) $ 39.8 $ (426.3 ) $ 27.1 Weighted Average Shares Outstanding: Basic weighted average shares outstanding 46.6 46.6 46.5 Dilutive effect of stock options and restricted share unit awards 0.4 — — Diluted weighted average shares outstanding 47.0 46.6 46.5 Earnings (Loss) Per Share: Basic $ 0.85 $ (9.15 ) $ 0.58 Diluted $ 0.85 $ (9.15 ) $ 0.58 Restricted share units (“RSUs”) contain provisions allowing for the equivalent of any dividends paid on common stock during the restricted period to be reinvested into additional RSUs at the then fair market value of the common stock on the date dividends are paid. Such awards are to be included in the EPS calculation under the two-class method. Currently we do not anticipate any cash dividends for the foreseeable future and our outstanding RSU awards are not material in comparison to our weighted average shares outstanding. Accordingly, all EPS amounts reflect shares as if they were fully vested and the disclosures associated with the two-class method are not presented herein. For the year ended December 31, 2016 , 1.6 million of potentially dilutive stock options and restricted share unit awards were excluded from the computation of earnings per share as their effect would have been anti-dilutive. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information We are organized into two operating segments based on product groupings: Medical Devices and S&IP. These operating segments, which are also our reportable global business segments, were determined in accordance with how our executive managers develop and execute global strategies to drive growth and profitability. These strategies include global plans for branding and product positioning, technology, research and development programs, cost reductions including supply chain management, and capacity and capital investments for each of these businesses. The principal sources of revenue in each global business segment are described below: • Medical Devices provides a portfolio of innovative product offerings focused on pain management and respiratory and digestive health to improve patient outcomes and reduce the cost of care. These products include post-operative pain management solutions, minimally invasive interventional (or chronic) pain therapies, closed airway suction systems and enteral feeding tubes. • S&IP provides healthcare supplies and solutions that target the prevention and management of healthcare-associated infections. This segment has recognized brands across its portfolio of product offerings, including sterilization wrap, surgical drapes and gowns, facial protection, protective apparel and medical exam gloves. This business is also a global leader in education to prevent healthcare-associated infections. Information concerning operations by business segment is presented in the following table (in millions): Year Ended December 31, 2016 2015 2014 Net Sales Medical Devices $ 567.3 $ 509.5 $ 501.7 S&IP 1,012.1 1,030.2 1,139.3 Corporate and Other 12.9 34.7 31.1 Total Net Sales (a) 1,592.3 1,574.4 1,672.1 Operating Profit Medical Devices 123.8 107.8 104.6 S&IP 90.7 98.4 166.3 Corporate and Other (b)(c)(d) (108.8 ) (105.4 ) (180.4 ) Goodwill impairment — (474.0 ) — Other (expense) income, net (e)(f) (18.3 ) (4.5 ) 3.8 Total Operating Profit (Loss) 87.4 (377.7 ) 94.3 Interest income 0.6 0.3 2.9 Interest expense (32.7 ) (33.1 ) (6.0 ) Income (Loss) before Income Taxes $ 55.3 $ (410.5 ) $ 91.2 ______________________________ (a) Net sales in the United States to third parties totaled $1.1 billion in each of the last three years ended December 31, 2016 . (b) Corporate and Other for the year ended December 31, 2016 includes $65 million of general expenses, $22 million of post spin-related transition expenses, $18 million of acquisition, integration and restructuring expenses related to the Acquisition (see “Business Acquisition in Note 2 ) and $4 million of costs related to corporate sales. (c) Corporate and Other for the year ended December 31, 2015 includes $47 million of general expenses, $55 million of post spin-related transition expenses and $3 million of costs related to corporate sales. (d) Corporate and Other for the year ended December 31, 2014 includes $60 million associated with the disposal of one of our disposable glove facilities in Thailand. (e) Other (expense) income for the year ended December 31, 2016 includes $20 million related to legal expenses and litigation (see “Commitments and Contingencies” in Note 11 ). (f) Other (expense) income for the year ended December 31, 2015 includes $17 million related to litigation matters, as noted in (e) above, partially offset by a $12 million gain on the sale of an exam glove manufacturing facility in Thailand. Within the Medical Devices segment, our digestive health products accounted for more than 10% of total net sales in each of the years ended December 31, 2016 and 2015 . Surgical pain products also accounted for 10% or more of total net sales in the year ended December 31, 2015 . None of our products in the Medical Devices accounted for 10% or more of total net sales in 2014 . Within the S&IP segment, surgical drapes and gowns and medical exam gloves each accounted for more than 10% of total net sales in each of the years ended December 31, 2016 , 2015 and 2014 . Our sterilization products also accounted for more than 10% of total net sales in year ended December 31, 2014 . Depreciation, amortization and capital expenditures by segment are as follows (in millions): Year Ended December 31, 2016 2015 2014 Depreciation and Amortization Medical Devices $ 30.4 $ 30.8 $ 40.4 S&IP 24.6 23.3 41.4 Corporate and Other 10.2 11.3 3.6 Total Depreciation and Amortization $ 65.2 $ 65.4 $ 85.4 Capital Expenditures Medical Devices $ 17.7 $ 23.2 $ 19.1 S&IP 11.2 30.0 46.3 Corporate and Other 0.2 17.2 13.1 Total Capital Expenditures $ 29.1 $ 70.4 $ 78.5 Information concerning assets by business segment is presented in the following table (in millions): As of December 31, 2016 2015 Assets Medical Devices $ 1,197.2 $ 1,030.9 S&IP 714.4 766.5 Corporate and Other 160.2 202.8 Total Assets $ 2,071.8 $ 2,000.2 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Our consolidated financial statements include net sales to Kimberly-Clark subsidiaries and affiliates of $79 million through the Spin-off date in 2014 . Our consolidated financial statements include certain expenses of Kimberly-Clark which were allocated to us for certain administrative functions through the Spin-off date in 2014 . These allocations from Kimberly-Clark were approximately $22 million in “Cost of products sold,” $41 million in “Selling and general expenses” and $11 million in “Research and development.” During 2015 , we sold products to a company with which one of the members of our Board of Directors had a relationship. The sales transactions during the period of time that our Director was affiliated with that company were approximately $0.4 million . We determined that these sales transactions were made in the ordinary course of business. |
Supplemental Guarantor Financia
Supplemental Guarantor Financial Information | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Supplemental Guarantor Financial Information | Supplemental Guarantor Financial Information In October 2014 , Halyard Health, Inc. (referred to below as “Parent”) issued the Notes (described in Note 6 , “Debt”). The Notes are guaranteed, jointly and severally by each of our domestic subsidiaries that guarantees the Senior Credit Facilities (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The guarantees are full and unconditional, subject to certain customary release provisions as defined in the Indenture dated October 17, 2014 . Each Guarantor Subsidiary is directly or indirectly 100% -owned by Halyard Health, Inc. Each of the guarantees of the Notes is a general unsecured obligation of each Guarantor and ranks equally in right of payment with all existing and future indebtedness and all other obligations (except subordinated indebtedness) of each Guarantor. The following condensed consolidating balance sheets as of December 31, 2016 and 2015 and the condensed consolidating statements of income and cash flows for the years ended December 31, 2016 , 2015 and 2014 provide condensed consolidating financial information for Halyard Health, Inc. (“Parent”), the Guarantor Subsidiaries on a combined basis, the Non-Guarantor Subsidiaries on a combined basis and the Parent and its subsidiaries on a consolidating basis. The Parent and the Guarantor Subsidiaries use the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation. Eliminating entries in the following condensed consolidating financial information represent adjustments to (i) eliminate intercompany transactions between or among the Parent, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries and (ii) eliminate the investments in subsidiaries. HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 1,465.5 $ 436.0 $ (309.2 ) $ 1,592.3 Cost of products sold — 989.5 354.1 (309.2 ) 1,034.4 Gross Profit — 476.0 81.9 — 557.9 Research and development expenses — 40.7 0.4 — 41.1 Selling and general expenses 37.2 312.4 61.5 — 411.1 Other (income) expense, net (1.3 ) 36.3 (18.4 ) 1.7 18.3 Operating (Loss) Profit (35.9 ) 86.6 38.4 (1.7 ) 87.4 Interest income 0.3 0.1 2.5 (2.3 ) 0.6 Interest expense (33.1 ) (1.7 ) (0.2 ) 2.3 (32.7 ) (Loss) Income Before Income Taxes (68.7 ) 85.0 40.7 (1.7 ) 55.3 Income tax benefit (provision) 23.2 (23.9 ) (14.8 ) — (15.5 ) Equity in earnings of consolidated subsidiaries 85.3 22.3 — (107.6 ) — Net Income (Loss) 39.8 83.4 25.9 (109.3 ) 39.8 Total other comprehensive loss, net of tax (6.9 ) (6.3 ) (7.2 ) 13.5 (6.9 ) Comprehensive Income (Loss) $ 32.9 $ 77.1 $ 18.7 $ (95.8 ) $ 32.9 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 1,470.8 $ 452.2 $ (348.6 ) $ 1,574.4 Cost of products sold — 997.5 393.9 (348.6 ) 1,042.8 Gross Profit — 473.3 58.3 — 531.6 Research and development expenses — 32.3 — — 32.3 Selling and general expenses 30.6 309.2 58.7 — 398.5 Goodwill impairment — 455.0 19.0 — 474.0 Other (income) expense, net (2.7 ) 45.8 (38.6 ) — 4.5 Operating (Loss) Profit (27.9 ) (369.0 ) 19.2 — (377.7 ) Interest income 0.3 — 3.1 (3.1 ) 0.3 Interest expense (33.8 ) (2.1 ) (0.3 ) 3.1 (33.1 ) (Loss) Income Before Income Taxes (61.4 ) (371.1 ) 22.0 — (410.5 ) Income tax benefit (provision) 24.6 (29.2 ) (11.2 ) — (15.8 ) Equity in earnings of consolidated subsidiaries (389.5 ) 22.4 — 367.1 — Net (Loss) Income (426.3 ) (377.9 ) 10.8 367.1 (426.3 ) Total other comprehensive loss, net of tax — (0.1 ) (24.0 ) — (24.1 ) Comprehensive Loss $ (426.3 ) $ (378.0 ) $ (13.2 ) $ 367.1 $ (450.4 ) HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED COMBINED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated and Combined Net Sales $ — $ 1,455.0 $ 619.8 $ (402.7 ) $ 1,672.1 Cost of products sold — 979.6 546.6 (402.7 ) 1,123.5 Gross Profit — 475.4 73.2 — 548.6 Research and development expenses — 33.6 — — 33.6 Selling and general expenses 3.0 363.0 58.5 — 424.5 Other income, net 0.1 — (3.9 ) — (3.8 ) Operating (Loss) Profit (3.1 ) 78.8 18.6 — 94.3 Interest income — 2.6 0.3 — 2.9 Interest expense (5.2 ) (0.7 ) (0.1 ) — (6.0 ) (Loss) Income Before Income Taxes (8.3 ) 80.7 18.8 — 91.2 Income tax provision — (62.8 ) (1.3 ) — (64.1 ) Equity in earnings of consolidated subsidiaries (6.2 ) 13.8 — (7.6 ) — Net (Loss) Income (14.5 ) 31.7 17.5 (7.6 ) 27.1 Total other comprehensive loss, net of tax — (0.9 ) (9.9 ) — (10.8 ) Comprehensive (Loss) Income $ (14.5 ) $ 30.8 $ 7.6 $ (7.6 ) $ 16.3 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions) As of December 31, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets Cash and cash equivalents $ 54.2 $ 9.5 $ 50.0 $ — $ 113.7 Accounts receivable, net 3.1 552.5 241.5 (607.0 ) 190.1 Inventories — 231.1 41.4 — 272.5 Prepaid and other current assets 5.0 10.5 2.0 (0.3 ) 17.2 Total Current Assets 62.3 803.6 334.9 (607.3 ) 593.5 Property, Plant and Equipment, Net — 217.3 43.5 — 260.8 Investment in Consolidated Subsidiaries 2,029.5 328.7 — (2,358.2 ) — Goodwill — 993.8 35.2 — 1,029.0 Other Intangible Assets, net — 161.1 8.7 — 169.8 Other Assets 1.0 7.8 9.9 — 18.7 TOTAL ASSETS $ 2,092.8 $ 2,512.3 $ 432.2 $ (2,965.5 ) $ 2,071.8 LIABILITIES AND EQUITY Current Liabilities Trade accounts payable $ 398.3 $ 328.9 $ 47.8 $ (601.9 ) $ 173.1 Accrued expenses 11.1 113.8 31.8 (5.4 ) 151.3 Total Current Liabilities 409.4 442.7 79.6 (607.3 ) 324.4 Long-Term Debt 579.0 — — — 579.0 Other Long-Term Liabilities 1.9 54.4 9.6 — 65.9 Total Liabilities 990.3 497.1 89.2 (607.3 ) 969.3 Total Equity 1,102.5 2,015.2 343.0 (2,358.2 ) 1,102.5 TOTAL LIABILITIES AND EQUITY $ 2,092.8 $ 2,512.3 $ 432.2 $ (2,965.5 ) $ 2,071.8 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions) As of December 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets Cash and cash equivalents $ 92.3 $ — $ 39.7 $ (2.5 ) $ 129.5 Accounts receivable, net 3.0 440.8 221.7 (440.8 ) 224.7 Inventories — 258.4 44.8 — 303.2 Prepaid and other current assets 5.0 10.8 3.0 (0.2 ) 18.6 Total Current Assets 100.3 710.0 309.2 (443.5 ) 676.0 Property, Plant and Equipment, Net — 228.7 50.8 — 279.5 Investment in Consolidated Subsidiaries 1,750.8 277.7 — (2,028.5 ) — Goodwill — 918.6 26.6 — 945.2 Other Intangible Assets, net — 82.6 — — 82.6 Other Assets 1.4 0.3 15.2 — 16.9 TOTAL ASSETS $ 1,852.5 $ 2,217.9 $ 401.8 $ (2,472.0 ) $ 2,000.2 LIABILITIES AND EQUITY Current Liabilities Trade accounts payable $ 251.4 $ 309.4 $ 42.7 $ (440.3 ) $ 163.2 Accrued expenses 6.6 115.4 33.4 (3.4 ) 152.0 Total Current Liabilities 258.0 424.8 76.1 (443.7 ) 315.2 Long-Term Debt 578.1 — — — 578.1 Other Long-Term Liabilities 1.8 41.6 8.2 — 51.6 Total Liabilities 837.9 466.4 84.3 (443.7 ) 944.9 Total Equity 1,014.6 1,751.5 317.5 (2,028.3 ) 1,055.3 TOTAL LIABILITIES AND EQUITY $ 1,852.5 $ 2,217.9 $ 401.8 $ (2,472.0 ) $ 2,000.2 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash (Used in) Provided by Operating Activities $ (33.0 ) $ 207.7 $ 15.8 $ (1.7 ) $ 188.8 Investing Activities Capital expenditures — (22.7 ) (6.4 ) — (29.1 ) Acquisition of business, net of cash acquired (175.0 ) — — — (175.0 ) Proceeds from dispositions of property — 3.2 — — 3.2 Intercompany contributions 0.5 (177.9 ) 2.7 174.7 — Cash Used in Investing Activities (174.5 ) (197.4 ) (3.7 ) 174.7 (200.9 ) Financing Activities Intercompany contributions 170.8 — (0.3 ) (170.5 ) — Line of credit facility proceeds 72.0 — — — 72.0 Line of credit facility repayments (72.0 ) — — — (72.0 ) Debt issuance costs (0.9 ) — — — (0.9 ) Purchase of treasury stock (0.9 ) — — — (0.9 ) Proceeds and excess tax benefits from the exercise of stock options 0.4 — — — 0.4 Cash Provided by (Used in) Financing Activities 169.4 — (0.3 ) (170.5 ) (1.4 ) Effect of Exchange Rate on Cash and Cash Equivalents — (0.8 ) (1.5 ) — (2.3 ) (Decrease) Increase in Cash and Cash Equivalents (38.1 ) 9.5 10.3 2.5 (15.8 ) Cash and Cash Equivalents, Beginning of Period 92.3 — 39.7 (2.5 ) 129.5 Cash and Cash Equivalents, End of Period $ 54.2 $ 9.5 $ 50.0 $ — $ 113.7 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash (Used in) Provided by Operating Activities $ (44.7 ) $ 110.5 $ 34.3 $ (2.5 ) $ 97.6 Investing Activities Capital expenditures — (61.3 ) (9.1 ) — (70.4 ) Proceeds from property dispositions — — 7.8 — 7.8 Intercompany contributions 39.9 (53.1 ) 1.3 11.9 — Cash Provided by (Used in) Investing Activities 39.9 (114.4 ) — 11.9 (62.6 ) Financing Activities Intercompany contributions 46.5 — (34.6 ) (11.9 ) — Debt repayments (51.0 ) — — — (51.0 ) Purchase of treasury stock (1.0 ) — — — (1.0 ) Proceeds and excess tax benefits from the exercise of stock options 1.4 — — — 1.4 Cash Used in Financing Activities (4.1 ) — (34.6 ) (11.9 ) (50.6 ) Effect of Exchange Rate on Cash and Cash Equivalents — — (3.9 ) — (3.9 ) Decrease in Cash and Cash Equivalents (8.9 ) (3.9 ) (4.2 ) (2.5 ) (19.5 ) Cash and Cash Equivalents, Beginning of Period 101.2 3.9 43.9 — 149.0 Cash and Cash Equivalents, End of Period $ 92.3 $ — $ 39.7 $ (2.5 ) $ 129.5 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED COMBINED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated and Combined Operating Activities Cash Provided by Operating Activities $ — $ 41.9 $ 106.0 $ — $ 147.9 Investing Activities Capital expenditures — (70.8 ) (7.7 ) — (78.5 ) Deposit received on pending sale of assets — — 7.8 — 7.8 Cash (Used in) Provided by Investing Activities — (70.8 ) 0.1 — (70.7 ) Financing Activities Intercompany contributions 66.7 (48.4 ) (18.3 ) — — Debt proceeds 636.1 — 1.9 — 638.0 Debit issuance costs (11.8 ) — — — (11.8 ) Debt repayments — (2.9 ) (10.9 ) — (13.8 ) Spin-off cash distribution to Kimberly-Clark (680.0 ) — — — (680.0 ) Net transfers from (to) Kimberly-Clark 90.2 77.4 (74.3 ) — 93.3 Other — 3.5 — — 3.5 Cash Provided by (Used in) Financing Activities 101.2 29.6 (101.6 ) — 29.2 Effect of Exchange Rate on Cash and Cash Equivalents — 0.1 (1.6 ) — (1.5 ) Increase in Cash and Cash Equivalents 101.2 0.8 2.9 — 104.9 Cash and Cash Equivalents, Beginning of Period — 3.1 41.0 — 44.1 Cash and Cash Equivalents, End of Period $ 101.2 $ 3.9 $ 43.9 $ — $ 149.0 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation Halyard Health, Inc. is a medical technology company focused on eliminating pain, speeding recovery and preventing infection for healthcare providers and patients. We are committed to addressing some of today’s most important healthcare needs, such as reducing the use of opioids while helping patients move from surgery to recovery. We operate in two business segments: Medical Devices and Surgical and Infection Prevention (“S&IP”). References to “Halyard,” “Company,” “we,” “our” and “us” refer to Halyard Health, Inc. and its consolidated subsidiaries, and references to “Kimberly-Clark” mean Kimberly-Clark Corporation, a Delaware corporation, and its subsidiaries, unless the context otherwise requires. On October 31, 2014 , Kimberly-Clark distributed all of our capital stock to its shareholders and completed a previously announced spin-off of its healthcare division (the “Spin-off”). Halyard was incorporated as a Delaware corporation in February, 2014 in anticipation of that Spin-off and Kimberly-Clark transferred its Health Care business to us prior to the Spin-off. The consolidated financial statements as of and for the years ended December 31, 2016 and 2015 represent our financial position, results of operations and cash flows as an independent publicly-traded company. The consolidated financial statements for the year ended December 31, 2014 represent our results of operations and cash flows as an independent publicly-traded company beginning on November 1, 2014 , and a combined reporting entity comprising the financial position, results of operations and cash flows of Kimberly-Clark’s healthcare business prior to November 1, 2014 . The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). For periods prior to the Spin-off, cash transferred to and from Kimberly-Clark is presented as net transfers to or from Kimberly-Clark in the accompanying consolidated cash flow statements. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include our net assets and results of our operations and cash flows as described above. All intercompany transactions and accounts within our consolidated businesses have been eliminated. Prior to November 1, 2014 , the consolidated statements of income, comprehensive income, stockholders’ equity and cash flows were prepared on a combined stand-alone basis derived from Kimberly-Clark’s consolidated financial statements and accounting records. All transactions between Kimberly-Clark and us were included in the combined financial statements and are reflected in the cash flow statement for the year ended December 31, 2014 as net transfers to or from Kimberly-Clark within financing activities. |
Use of Estimates | Use of Estimates We prepare our consolidated financial statements in accordance with GAAP, which requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Estimates are used in accounting for, among other things, distributor rebate accruals, future cash flows associated with impairment testing for goodwill and long-lived assets, loss contingencies, and deferred tax assets and potential income tax assessments. Actual results could differ from these estimates, and the effect of the change could be material to our financial statements. Changes in these estimates are recorded when known. |
Cash Equivalents | Cash Equivalents Cash equivalents are short-term investments with an original maturity date of three months or less. We maintain cash balances and short-term investments in excess of insurable limits in a diversified group of major banks that are selected and monitored based on ratings by the major rating agencies in accordance with our treasury policy. |
Inventories and Distribution Costs | Inventories and Distribution Costs Most U.S. inventories are valued at the lower of cost, using the Last-In, First-Out (“LIFO”) method, or market. The balance of the U.S. and non-U.S. inventories are valued at the lower of cost (determined on the First-In, First-Out (“FIFO”) or weighted-average cost methods) or market. Distribution costs are classified as cost of products sold. |
Property, Plant and Equipment and Depreciation | Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost and depreciated on the straight-line method. Buildings are depreciated over their estimated useful lives, primarily 40 years . Machinery and equipment are depreciated over their estimated useful lives, primarily ranging from 16 to 20 years . Leasehold improvements are depreciated over the assets’ estimated useful lives, or the remaining lease term, whichever is shorter. Purchases of computer software, including external costs and certain internal costs (including payroll and payroll-related costs of employees) directly associated with developing significant computer software applications for internal use, are capitalized. Computer software costs are amortized on the straight-line method over the estimated useful life of the software, which is generally three to five years . Depreciation expense is recorded in cost of products sold, research and development and selling and general expenses. Estimated useful lives are periodically reviewed, and when warranted, changes are made to them. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss would be indicated when estimated undiscounted future cash flows from the use and eventual disposition of an asset group, which are identifiable and largely independent of the cash flows of other asset groups, are less than the carrying amount of the asset group. Measurement of an impairment loss would be based on the excess of the carrying amount of the asset group over its fair value. Fair value is measured using discounted cash flows or independent appraisals, as appropriate. When property is sold or retired, the cost of the property and the related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss on the transaction is included in income. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill is tested for impairment annually and whenever events and circumstances indicate that impairment may have occurred. The evaluation of goodwill involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. We used a combination of income and market approaches to estimate the current fair value of our reporting units. The fair value determination utilized key assumptions regarding the growth of the business, each of which required management judgment, including estimated future sales volumes, selling prices and costs, changes in working capital and investments in property and equipment. These assumptions and estimates were based upon our historical experience and projections of future activity. In addition, the selection of the discount rate used to determine fair value was based upon a market participant’s view considering current market rates and our current cost of financing. There can be no assurance that the assumptions and estimates made for purposes of the annual goodwill impairment test will prove to be accurate. Volatility in the equity and debt markets, or increases in interest rates, could result in a higher discount rate. Changes in sales volumes, selling prices and costs of goods sold and increases in interest rates could cause changes in our forecasted cash flows. Unfavorable changes in any of the factors described above could result in a goodwill impairment charge in the future. We completed the required annual goodwill impairment testing as of July 1, 2016 , and the fair values for both our Medical Devices and S&IP reporting units were substantially in excess of their respective net asset carrying values. Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Estimated useful lives range from 7 to 30 years for trademarks, 7 to 17 years for patents and acquired technologies, and 2 to 16 years for other intangible assets. An impairment loss would be indicated when estimated undiscounted future cash flows from the use of the asset are less than its carrying amount. An impairment loss would be measured as the difference between the fair value (based on discounted future cash flows) and the carrying amount of the asset. |
Revenue Recognition and Accounts Receivable | Revenue Recognition and Accounts Receivable Sales revenue is recognized at the time of product shipment or delivery, depending on when title passes, to unaffiliated customers, and when all of the following have occurred: evidence of a sales arrangement is in place, pricing is fixed or determinable, and collection is reasonably assured. Sales are reported net of returns, rebates and freight allowed. Distributor rebates are estimated based on the historical cost difference between list prices and average end user contract prices and the quantity of products expected to be sold to specific end users. We maintain liabilities at the end of each period for the estimated rebate costs incurred but unpaid for these programs. Differences between estimated and actual rebate costs are normally not material and are recognized in earnings in the period such differences are determined. Taxes imposed by governmental authorities on our revenue-producing activities with customers, such as sales taxes and value-added taxes, are excluded from net sales. |
Foreign Currency Translation | Foreign Currency Translation The income statements of foreign operations are translated into U.S. dollars at rates of exchange in effect each month. The balance sheets of these operations are translated at period-end exchange rates, and the differences from historical exchange rates are reflected as unrealized translation adjustments in other comprehensive income. |
Derivative Instruments and Hedging | Derivative Instruments and Hedging All derivative instruments are recorded as assets or liabilities on the balance sheet at fair value. Changes in the fair value of derivatives are either recorded in the income statement or other comprehensive income, as appropriate. The effective portion of the gain or loss on derivatives designated as cash flow hedges is included in other comprehensive income in the period that changes in fair value occur, and is reclassified to income in the same period that the hedged item affects income. Any ineffective portion of cash flow hedges is immediately recognized in income. Certain foreign-currency derivative instruments not designated as hedging instruments have been entered into to manage a portion of our foreign currency transactional exposures. The gain or loss on these derivatives is included in income in the period that changes in their fair values occur. Our policies allow the use of derivatives for risk management purposes and prohibit their use for speculation. Our policies also prohibit the use of any leveraged derivative instrument. Consistent with our policies, foreign currency derivative instruments are entered into with major financial institutions. At inception we formally designate certain derivatives as cash flow hedges and establish how the effectiveness of these hedges will be assessed and measured. This process links the derivatives to the transactions they are hedging. |
Research and Development | Research and Development Research and development expenses are expensed as incurred. Research and development expenses consist primarily of salaries and related expenses for personnel, product trial costs, outside laboratory and license fees, the costs of laboratory equipment and facilities and asset write-offs for equipment that does not reach success in product manufacturing certifications. |
Stock-Based Compensation | Stock-Based Compensation We have a stock-based Equity Participation Plan and an Outside Directors’ Compensation Plan that provide for awards of stock options, stock appreciation rights, restricted stock (and in certain limited cases, unrestricted stock), restricted stock units, performance units and cash awards to eligible employees (including officers who are employees), directors, advisors and consultants. Stock-based compensation is initially measured at the fair value of the awards on the grant date and is recognized in the financial statements over the period the employees are required to provide services in exchange for the awards. The fair value of option awards is measured on the grant date using a Black-Scholes option-pricing model. The fair value of time-based and some performance-based restricted share awards is based on the Halyard stock price at the grant date and the assessed probability of meeting future performance targets. For performance-based restricted share units for which vesting is conditioned upon achieving a measure of total shareholder return, fair value is measured using a Monte Carlo simulation. Generally, new shares are issued to satisfy vested restricted stock units and exercises of stock options. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. The provision for federal, state, and foreign income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes. Recording the provision for income taxes requires management to make significant judgments and estimates for matters whose ultimate resolution may not become known until the final resolution of an examination by the Internal Revenue Service (IRS) or state and foreign agencies. If it is more likely than not that some portion, or all, of a deferred tax asset will not be realized, a valuation allowance is recognized. Recording liabilities for uncertain tax positions involves judgment in evaluating our tax positions and developing the best estimate of the taxes ultimately expected to be paid. We include any related tax penalties and interest in income tax expense. Prior to the Spin-off, our income taxes were calculated on a separate tax return basis, although operations have been included in Kimberly-Clark’s U.S. federal, state and foreign tax returns. Our income tax results as presented were not necessarily indicative of future performance and did not necessarily reflect the results that we would have generated as an independent publicly-traded company for the periods presented. |
Employee Defined Benefit Plans | Employee Defined Benefit Plans We recognize the funded status of our defined benefit as an asset or a liability on our balance sheet. Actuarial gains or losses are a component of our other comprehensive income, which is then included in our accumulated other comprehensive income. Pension expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. We make assumptions (including the discount rate and expected rate of return on plan assets) in computing the pension expense and obligations. |
Recently Adopted Pronouncements and Recently Issued Pronouncements | Recently Adopted Pronouncements In April 2015 , the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This ASU provides guidance about whether a cloud computing arrangement includes a software license and the appropriate accounting for such arrangements. Notably, the guidance in this ASU already exists in the FASB Accounting Standards Codification (“ASC”) Subtopic 985-605, Software - Revenue Recognition, which is used by cloud service providers to determine whether an arrangement includes the sale or license of software. We adopted this ASU as of January 1, 2016 . Adoption of this ASU did not have a material effect on our financial position, results of operations or cash flows. In January 2015 , the FASB issued ASU No. 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. ASU No. 2015-01 eliminates ASC Subtopic 225-20, Income Statement - Extraordinary and Unusual Items , which required that an entity separately classify, present, and disclose transactions and events that were determined to be both unusual and infrequent as extraordinary items. We adopted this ASU as of January 1, 2016 . Adoption of this ASU did not have a material effect on our financial position, results of operations or cash flows. In August 2014 , the FASB issued ASU 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, that will require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. In connection with each annual and interim period, management will assess if there is substantial doubt about an entity’s ability to continue as a going concern within one year after the issuance date. Substantial doubt exists if it is probable that the entity will be unable to meet its obligations within one year after the issuance date. The new standard defines substantial doubt and provides example indicators. Disclosure is required if conditions give rise to substantial doubt. However, management needs to assess if its plans will alleviate substantial doubt to determine the specific disclosures. We adopted this ASU as of December 31, 2016 . Adoption of this ASU did not have a material effect on our financial position, results of operations or cash flows. Recently Issued Pronouncements In January 2017 , the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, that replaces the existing two-step goodwill impairment test with a simplified one-step process. This ASU provides that goodwill impairment will be measured as the excess of the reporting unit’s carrying amount over its fair value and abandons the second step that requires the measurement of goodwill impairment by comparing the implied value of a reporting unit’s goodwill to the goodwill’s carrying amount. This ASU is to be adopted prospectively for goodwill impairment tests in fiscal years beginning after December 15, 2019 , with early adoption permitted for goodwill impairment tests performed on testing dates after January 1, 2017 . We plan to adopt this ASU beginning with our next annual goodwill impairment test as of July 1, 2017 . Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In January 2017 , the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which provides guidance in evaluating whether transactions involve the acquisition (or disposal) of assets or a business. A business has been defined as having three elements: inputs, processes and outputs. While an integrated set of assets and activities (a “set”) that is a business usually has outputs, outputs are not required to be present. Additionally, the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs. This ASU provides a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. It is expected that this ASU will reduce the number of transactions that are treated as business combinations. This ASU is to be adopted prospectively for annual periods, and interim periods within those annual periods beginning after December 15, 2017 . Adoption of the ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In August 2016 , the FASB issued ASU No. 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments. This ASU provides guidance on the presentation and classification of certain specific cash receipts and payments in the statement of cash flows and is intended to reduce diversity in practice. This ASU is effective for annual periods, and interim periods within those annual periods beginning after December 15, 2017 , but earlier adoption is permitted. This ASU is to be adopted using a retrospective transition method to each period presented. Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In March 2016 , the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of accounting for share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification on the statement of cash flows. Under this ASU, all excess tax benefits or deficiencies are recognized as income tax expense or benefit in the income statement and the pool of windfall tax benefits as a component of additional paid-in capital is eliminated. In regards to forfeitures, companies may make a one-time policy election to use an estimated forfeiture rate or account for forfeitures as they occur. The policy election regarding forfeitures applies only to instruments with service conditions; the requirement to estimate the probability of achieving performance conditions remains. For statutory tax withholding requirements, this ASU allows for net settlement up to the employer’s maximum statutory tax withholding requirement. Formerly, only the minimum statutory tax withholding requirement was allowed to be met through net settlement while retaining equity classification. This ASU is effective for annual periods, and interim periods within those annual periods beginning after December 15, 2016 . Earlier adoption is permitted in any interim or annual period for which financial statements have not yet been issued. The application of this ASU in regards to the accounting for income taxes, forfeitures and statutory tax withholding requirements should be applied using a modified retrospective application with a cumulative effect adjustment to additional paid-in capital as of the beginning of the period of adoption. The presentation of employee taxes paid on the statement of cash flows should be applied retrospectively. The adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In February 2016 , the FASB issued ASU No. 2016-02, Leases. This ASU requires the recognition of assets and liabilities for leases with lease terms of more than twelve months . The recognition, measurement and presentation of expenses and cash flows arising from a lease will depend primarily on its classification as a finance or an operating lease, with the classification criteria for distinguishing between the two being similar to the classification criteria for distinguishing between capital and operating leases under current GAAP. However, unlike current GAAP, recognition of finance and operating leases on the balance sheet is required, and additional disclosures are required to help financial statement users to better understand the amount, timing and uncertainty of cash flows arising from leases. This ASU requires modified retrospective application for existing leases. This ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 , however, earlier application is permitted. The adoption of this ASU will require us to recognize assets and liabilities for operating leases we have entered into for our principal executive offices as well as certain warehouse, manufacturing and distribution facilities globally. We have not yet determined the impact recognition of such assets and liabilities will have on our financial position, results of operations or cash flows. In January 2016 , the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Liabilities. This ASU requires equity investments, except those accounted for under the equity method or those that result in consolidation of the equity investee, to be measured at fair value with changes in fair value recognized in net income. However, equity investments without readily determinable fair values may be measured at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments in the same issuer. In addition, this ASU provides for a qualitative impairment assessment for equity investments that do not have readily determinable fair values. This ASU also clarifies that entities should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. This ASU should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The provisions related to equity investments that do not have readily determinable fair values should be applied prospectively to such equity investments that exist as of the date of adoption. This ASU will be effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017 . Early adoption of this ASU is permitted. The adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In May 2014 , the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which, along with subsequent amendments, provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most existing revenue recognition guidance. ASU 2014-09 provides for a principles-based, five-step approach to measure and recognize revenue from contracts with customers. ASU 2014-09 is effective for public entities for annual and interim periods beginning after December 15, 2017 . Early adoption for periods beginning after December 15, 2016 is permitted. The guidance permits two implementation approaches, one requiring retrospective application of the new ASU with restatement of prior years and one requiring prospective application of the new ASU with disclosure of results under old standards. While our review of the effect of this ASU is not yet complete, based on the results of our review to date, we do not expect a material effect on our financial position, results of operations or cash flows. We will continue our evaluation to include the disclosure requirements along with any changes, modifications or interpretations that may affect our current conclusion. We have not selected a transition method, but expect to do so in 2017 upon completion of further analysis. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of purchase price allocation | The allocation of the purchase price was as follows (in millions): Purchase Price Allocation Current assets acquired net of liabilities assumed $ 14.1 Property, plant and equipment 4.4 Identifiable intangible assets, excluding IPR&D 105.1 Identifiable IPR&D 5.7 Deferred tax liabilities (38.4 ) Goodwill 84.1 Total $ 175.0 |
Schedule of identifiable intangible assets | The identifiable intangible assets, excluding IPR&D, include the following (in millions): Fair Value Weighted Average Useful Lives (Yrs) Portfolio of disposables $ 102.9 15 Enteral access technology 2.2 6 Total $ 105.1 |
Schedule of pro forma information | The following unaudited pro forma information is presented in the table below for the years ended December 31, 2016 and 2015 as if the Acquisition had occurred on January 1, 2015 (in million, except per share amounts): Year Ended December 31, 2016 2015 Net sales $ 1,609.8 $ 1,628.6 Net income (loss) 43.0 (430.3 ) Earnings (loss) per share: Basic $ 0.92 $ (9.24 ) Diluted 0.91 (9.24 ) |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill by business segment | The changes in the carrying amount of goodwill by business segment are as follows (in millions): Medical Devices S&IP Consolidated Goodwill Accumulated Goodwill, net Goodwill Accumulated Impairment Goodwill, net Goodwill, net Balance at December 31, 2014 $ 681.6 $ — $ 681.6 $ 744.5 $ — $ 744.5 $ 1,426.1 Goodwill impairment (a) — — — — (474.0 ) (474.0 ) (474.0 ) Currency translation adjustment (3.2 ) — (3.2 ) (3.7 ) — (3.7 ) (6.9 ) Balance at December 31, 2015 678.4 — 678.4 740.8 (474.0 ) 266.8 945.2 Goodwill acquired (b) 84.1 — 84.1 — — — 84.1 Currency translation adjustment (0.2 ) — (0.2 ) (0.1 ) — (0.1 ) (0.3 ) Balance at December 31, 2016 $ 762.3 $ — $ 762.3 $ 740.7 $ (474.0 ) $ 266.7 $ 1,029.0 _____________________________________________ (a) On completion of the annual goodwill impairment test as of July 1, 2015 , we recognized a $474 million impairment loss for our S&IP reporting unit for the year ended December 31, 2015 , which represented the amount by which the carrying value of the S&IP reporting unit’s goodwill exceeded its implied fair value. (b) We acquired $84 million of goodwill in conjunction with our acquisition of Corpak (see Note 2 , “Business Acquisition”). |
Supplemental Balance Sheet In28
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of accounts receivable | Accounts receivable consist of the following (in millions): As of December 31, 2016 2015 Accounts Receivable $ 191.6 $ 226.3 Allowances and doubtful accounts (1.5 ) (1.6 ) Accounts receivable, net $ 190.1 $ 224.7 |
Schedule of inventories | Inventories at the lower of cost (determined on the LIFO/FIFO or weighted-average cost methods) or market consists of the following (in millions): As of December 31, 2016 2015 LIFO Non- LIFO Total LIFO Non- LIFO Total Raw Materials $ 45.8 $ 2.3 $ 48.1 $ 49.7 $ 1.1 $ 50.8 Work in process 50.6 0.3 50.9 46.1 0.1 46.2 Finished goods 130.8 40.5 171.3 165.8 46.3 212.1 Supplies and other — 12.8 12.8 0.1 11.6 11.7 227.2 55.9 283.1 261.7 59.1 320.8 Excess of FIFO or weighted-average cost over LIFO cost (10.6 ) — (10.6 ) (17.6 ) — (17.6 ) Total $ 216.6 $ 55.9 $ 272.5 $ 244.1 $ 59.1 $ 303.2 |
Schedule of property, plant and equipment | Property, plant and equipment consists of the following (in millions): As of December 31, 2016 2015 Land $ 2.1 $ 2.1 Buildings and leasehold improvements 85.8 86.7 Machinery and equipment 499.8 492.8 Construction in progress 25.0 18.3 612.7 599.9 Less accumulated depreciation (351.9 ) (320.4 ) Total $ 260.8 $ 279.5 |
Schedule of intangible assets subject to amortization | Intangible assets subject to amortization consist of the following (in millions): As of December 31, 2016 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 125.9 $ (93.8 ) $ 32.1 $ 126.6 $ (90.3 ) $ 36.3 Patents and acquired technologies 251.8 (131.1 ) 120.7 149.1 (117.3 ) 31.8 Other 55.1 (43.8 ) 11.3 55.1 (40.6 ) 14.5 Total $ 432.8 $ (268.7 ) $ 164.1 $ 330.8 $ (248.2 ) $ 82.6 |
Schedule of estimated amortization expense for the next five years and beyond | We estimate amortization expense for the next five years and beyond will be as follows (in millions): For the years ending December 31, 2017 $ 21.2 2018 19.0 2019 15.2 2020 13.0 2021 10.7 Thereafter 85.0 Total $ 164.1 |
Schedule of accrued expenses | Accrued expenses consist of the following (in millions): As of December 31, 2016 2015 Accrued rebates $ 55.7 $ 73.9 Accrued salaries and wages 57.1 34.5 Accrued taxes - income and other 7.2 15.3 Other 31.3 28.3 Total $ 151.3 $ 152.0 |
Schedule of other long-term liabilities | Other long-term liabilities consist of the following (in millions): As of December 31, 2016 2015 Taxes payable $ 3.4 $ 1.3 Accrued compensation benefits 9.7 9.5 Other 17.0 17.0 Total $ 30.1 $ 27.8 |
Fair Value Information (Tables)
Fair Value Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial instruments | The following table includes the fair value of our financial instruments for which disclosure of fair value is required (in millions): Fair Value Hierarchy Level December 31, 2016 December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets Cash and cash equivalents 1 $ 113.7 $ 113.7 $ 129.5 $ 129.5 Liabilities Senior unsecured notes 1 246.5 256.4 245.9 252.5 Debt 2 332.5 341.3 332.2 337.3 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of debt balances | As of December 31, 2016 and 2015 , our debt balances were as follows (in millions): Weighted- Average Interest Rate Maturities As of December 31, 2016 2015 Senior Secured Term Loan 3.98% 2021 $ 339.0 $ 339.0 Senior Unsecured Notes 6.25% 2022 250.0 250.0 Total long-term debt 589.0 589.0 Unamortized Debt Discounts and Issuance Costs Senior Secured Term Loan (6.5 ) (6.8 ) Senior Unsecured Notes (3.5 ) (4.1 ) Total Debt, net $ 579.0 $ 578.1 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of income (loss) before income taxes, and provision (benefit) for income taxes | The components of income (loss) before income taxes, and the provision (benefit) for income taxes are as follows (in millions): Year Ended December 31, 2016 2015 2014 Income before income taxes United States $ 24.2 $ (424.4 ) $ 91.8 Foreign 31.1 13.9 (0.6 ) Total 55.3 (410.5 ) 91.2 Income tax provision (benefit): Current: United States 29.8 13.0 71.2 State 4.4 2.7 5.5 Foreign 7.8 5.3 18.0 Total 42.0 21.0 94.7 Deferred: United States (27.3 ) (8.3 ) (9.8 ) State (2.9 ) (0.6 ) (1.4 ) Foreign 3.7 3.7 (19.4 ) Total (26.5 ) (5.2 ) (30.6 ) Total income tax provision $ 15.5 $ 15.8 $ 64.1 |
Major differences between federal statutory rate and effective tax rate | Major differences between the federal statutory rate and the effective tax rate are as follows: Year Ended December 31, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % Rate of state income taxes, net of federal tax benefit 0.2 (0.3 ) 3.0 Statutory rate other than U.S. statutory rate (6.9 ) 0.6 (0.3 ) Thailand repatriation related to the Spin-off — — 15.5 Thailand statutory rate change 7.3 — — Sec. 987 regulation change, federal and state impact (4.8 ) — — U.S. federal research and development credit (4.7 ) 0.6 — Goodwill — (40.4 ) — Non-deductible expenses related to the Spin-off — — 17.6 Change in valuation allowances — 0.1 2.1 Other, net 1.9 0.6 (2.6 ) Effective tax rate 28.0 % (3.8 )% 70.3 % |
Summary of significant components of deferred tax assets and liabilities | The following is a summary of the significant components of the Company’s deferred tax assets and liabilities (in millions): As of December 31, 2016 2015 Deferred tax assets Intangibles, net $ — $ 15.3 Accrued liabilities 34.8 25.3 Stock-based compensation 8.7 4.8 Other 8.4 5.9 51.9 51.3 Valuation allowance (0.5 ) (0.5 ) Total deferred assets 51.4 50.8 Deferred tax liabilities Intangibles, net 17.7 — Inventories 13.4 19.8 Property, plant and equipment, net 40.0 39.4 Other 1.0 0.5 Total deferred tax liabilities 72.1 59.7 Net deferred tax liabilities $ 20.7 $ 8.9 |
Reconciliation of beginning and ending amount of unrecognized tax benefit | A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (in millions): As of December 31, 2016 2015 Beginning of year $ 1.5 $ 1.6 Gross increases for tax positions of prior years 1.5 0.5 Gross decreases for tax positions of prior years (0.2 ) — Decreases for settlements with taxing authorities (0.1 ) — Decreases for lapse of the applicable statute of limitations — (0.6 ) End of year $ 2.7 $ 1.5 |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of changes in the components of accumulated other comprehensive income | The changes in the components of Accumulated Other Comprehensive Income (“AOCI”), net of tax, are as follows (in millions): Unrealized Translation Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income Balance, December 31, 2013 $ (16.1 ) $ (3.5 ) $ — $ (19.6 ) Change in Kimberly-Clark’s net investment 11.8 (0.6 ) 0.1 11.3 Other comprehensive (loss) income (14.0 ) 3.6 (0.4 ) (10.8 ) Balance, December 31, 2014 (18.3 ) (0.5 ) (0.3 ) (19.1 ) Other comprehensive (loss) income (22.1 ) (0.7 ) (1.3 ) (24.1 ) Balance, December 31, 2015 (40.4 ) (1.2 ) (1.6 ) (43.2 ) Other comprehensive (loss) income (8.3 ) 0.8 0.6 (6.9 ) Balance, December 31, 2016 $ (48.7 ) $ (0.4 ) $ (1.0 ) $ (50.1 ) The net changes in the components of AOCI, including the tax effect, are as follows (in millions): Year Ended December 31, 2016 2015 2014 Unrealized translation $ (8.3 ) $ (22.1 ) $ (14.0 ) Defined benefit pension plans 0.7 (1.9 ) (0.4 ) Tax effect (0.1 ) 0.6 — Defined benefit pension plans, net of tax 0.6 (1.3 ) (0.4 ) Cash flow hedges 1.0 (1.0 ) 4.3 Tax effect (0.2 ) 0.3 (0.7 ) Cash flow hedges, net of tax 0.8 (0.7 ) 3.6 Change in AOCI $ (6.9 ) $ (24.1 ) $ (10.8 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of assumptions used in weighted-average fair value of options granted | The weighted-average fair value of options granted in the years ended December 31, 2016 and 2015 and the period from the Spin-off date to December 31, 2014 was $7.70 , $15.15 and $10.01 , respectively, based on the following assumptions: Year Ended December 31, November 1, 2014 to 2016(a) 2015 Volatility 26% 25% to 34% 25% to 27% Risk-free rate 1.2% 0.7% to 1.9% 0.8% to 1.6% Expected term (Years) 5 2 to 7 3 to 5 Dividend Yield 0% 0% 0% ________________________________________ (a) In the year ended December 31, 2016 , all stock options granted had uniform terms and were awarded on the same grant date. |
Summary of stock option activity | A summary of stock option activity is presented below: Shares (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions) Outstanding at December 31, 2015 1,146 $ 40.70 Granted 458 29.48 Exercises (12 ) 33.48 Forfeitures (66 ) 39.95 Outstanding at December 31, 2016 1,526 $ 37.42 8.1 $ 4.4 Vested and exercisable at December 31, 2016 469 $ 36.52 7.0 $ 1.1 |
Schedule of options outstanding by exercise prices | The following table summarizes information about options outstanding as of December 31, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Shares (in thousands) Weighted-Average Remaining Contractual Term (Years) Shares (in thousands) Weighted-Average Exercise Price $25.00 to $35.00 652 8.3 204 $ 31.67 $35.00 to $45.00 293 7.5 174 37.53 $45.00+ 581 8.2 91 45.53 1,526 8.1 469 $ 36.52 |
Summary of restricted share unit activity | A summary of restricted share unit activity is presented below: Shares (in thousands) Weighted Average Fair Value Outstanding at December 31, 2015 519 $ 40.69 Granted 125 31.89 Vested (86 ) 38.08 Forfeited (30 ) 39.35 Outstanding at December 31, 2016 528 $ 39.12 |
Summary of total shareholders return unit activity | A summary of TSR unit activity is presented below. Shares (in thousands) Weighted Average Fair Value Outstanding at December 31, 2015 — $ — Granted 230 38.64 Forfeited (6 ) 40.12 Outstanding at December 31, 2016 224 $ 38.60 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum obligations under operating leases | The future minimum obligations under operating leases having a non-cancelable term in excess of one year are as follows (in millions): Year Amount 2017 $ 16.9 2018 14.9 2019 12.3 2020 8.0 2021 7.3 Thereafter 41.1 Future minimum obligations $ 100.5 |
Earnings Per Share ("EPS") (Tab
Earnings Per Share ("EPS") (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | The calculation of basic and diluted EPS for each of the three years ended December 31, 2016 , 2015 and 2014 is set forth in the following table (in millions, except per share amounts): Year Ended December 31, 2016 2015 2014 Net income (loss) $ 39.8 $ (426.3 ) $ 27.1 Weighted Average Shares Outstanding: Basic weighted average shares outstanding 46.6 46.6 46.5 Dilutive effect of stock options and restricted share unit awards 0.4 — — Diluted weighted average shares outstanding 47.0 46.6 46.5 Earnings (Loss) Per Share: Basic $ 0.85 $ (9.15 ) $ 0.58 Diluted $ 0.85 $ (9.15 ) $ 0.58 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Information concerning combined operations by business segment | Information concerning operations by business segment is presented in the following table (in millions): Year Ended December 31, 2016 2015 2014 Net Sales Medical Devices $ 567.3 $ 509.5 $ 501.7 S&IP 1,012.1 1,030.2 1,139.3 Corporate and Other 12.9 34.7 31.1 Total Net Sales (a) 1,592.3 1,574.4 1,672.1 Operating Profit Medical Devices 123.8 107.8 104.6 S&IP 90.7 98.4 166.3 Corporate and Other (b)(c)(d) (108.8 ) (105.4 ) (180.4 ) Goodwill impairment — (474.0 ) — Other (expense) income, net (e)(f) (18.3 ) (4.5 ) 3.8 Total Operating Profit (Loss) 87.4 (377.7 ) 94.3 Interest income 0.6 0.3 2.9 Interest expense (32.7 ) (33.1 ) (6.0 ) Income (Loss) before Income Taxes $ 55.3 $ (410.5 ) $ 91.2 ______________________________ (a) Net sales in the United States to third parties totaled $1.1 billion in each of the last three years ended December 31, 2016 . (b) Corporate and Other for the year ended December 31, 2016 includes $65 million of general expenses, $22 million of post spin-related transition expenses, $18 million of acquisition, integration and restructuring expenses related to the Acquisition (see “Business Acquisition in Note 2 ) and $4 million of costs related to corporate sales. (c) Corporate and Other for the year ended December 31, 2015 includes $47 million of general expenses, $55 million of post spin-related transition expenses and $3 million of costs related to corporate sales. (d) Corporate and Other for the year ended December 31, 2014 includes $60 million associated with the disposal of one of our disposable glove facilities in Thailand. (e) Other (expense) income for the year ended December 31, 2016 includes $20 million related to legal expenses and litigation (see “Commitments and Contingencies” in Note 11 ). (f) Other (expense) income for the year ended December 31, 2015 includes $17 million related to litigation matters, as noted in (e) above, partially offset by a $12 million gain on the sale of an exam glove manufacturing facility in Thailand. |
Depreciation, amortization and capital expenditures by segment | Depreciation, amortization and capital expenditures by segment are as follows (in millions): Year Ended December 31, 2016 2015 2014 Depreciation and Amortization Medical Devices $ 30.4 $ 30.8 $ 40.4 S&IP 24.6 23.3 41.4 Corporate and Other 10.2 11.3 3.6 Total Depreciation and Amortization $ 65.2 $ 65.4 $ 85.4 Capital Expenditures Medical Devices $ 17.7 $ 23.2 $ 19.1 S&IP 11.2 30.0 46.3 Corporate and Other 0.2 17.2 13.1 Total Capital Expenditures $ 29.1 $ 70.4 $ 78.5 |
Information concerning assets by business segment | Information concerning assets by business segment is presented in the following table (in millions): As of December 31, 2016 2015 Assets Medical Devices $ 1,197.2 $ 1,030.9 S&IP 714.4 766.5 Corporate and Other 160.2 202.8 Total Assets $ 2,071.8 $ 2,000.2 |
Supplemental Guarantor Financ37
Supplemental Guarantor Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Income and Comprehensive Income Statements | HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 1,465.5 $ 436.0 $ (309.2 ) $ 1,592.3 Cost of products sold — 989.5 354.1 (309.2 ) 1,034.4 Gross Profit — 476.0 81.9 — 557.9 Research and development expenses — 40.7 0.4 — 41.1 Selling and general expenses 37.2 312.4 61.5 — 411.1 Other (income) expense, net (1.3 ) 36.3 (18.4 ) 1.7 18.3 Operating (Loss) Profit (35.9 ) 86.6 38.4 (1.7 ) 87.4 Interest income 0.3 0.1 2.5 (2.3 ) 0.6 Interest expense (33.1 ) (1.7 ) (0.2 ) 2.3 (32.7 ) (Loss) Income Before Income Taxes (68.7 ) 85.0 40.7 (1.7 ) 55.3 Income tax benefit (provision) 23.2 (23.9 ) (14.8 ) — (15.5 ) Equity in earnings of consolidated subsidiaries 85.3 22.3 — (107.6 ) — Net Income (Loss) 39.8 83.4 25.9 (109.3 ) 39.8 Total other comprehensive loss, net of tax (6.9 ) (6.3 ) (7.2 ) 13.5 (6.9 ) Comprehensive Income (Loss) $ 32.9 $ 77.1 $ 18.7 $ (95.8 ) $ 32.9 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 1,470.8 $ 452.2 $ (348.6 ) $ 1,574.4 Cost of products sold — 997.5 393.9 (348.6 ) 1,042.8 Gross Profit — 473.3 58.3 — 531.6 Research and development expenses — 32.3 — — 32.3 Selling and general expenses 30.6 309.2 58.7 — 398.5 Goodwill impairment — 455.0 19.0 — 474.0 Other (income) expense, net (2.7 ) 45.8 (38.6 ) — 4.5 Operating (Loss) Profit (27.9 ) (369.0 ) 19.2 — (377.7 ) Interest income 0.3 — 3.1 (3.1 ) 0.3 Interest expense (33.8 ) (2.1 ) (0.3 ) 3.1 (33.1 ) (Loss) Income Before Income Taxes (61.4 ) (371.1 ) 22.0 — (410.5 ) Income tax benefit (provision) 24.6 (29.2 ) (11.2 ) — (15.8 ) Equity in earnings of consolidated subsidiaries (389.5 ) 22.4 — 367.1 — Net (Loss) Income (426.3 ) (377.9 ) 10.8 367.1 (426.3 ) Total other comprehensive loss, net of tax — (0.1 ) (24.0 ) — (24.1 ) Comprehensive Loss $ (426.3 ) $ (378.0 ) $ (13.2 ) $ 367.1 $ (450.4 ) HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED COMBINED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated and Combined Net Sales $ — $ 1,455.0 $ 619.8 $ (402.7 ) $ 1,672.1 Cost of products sold — 979.6 546.6 (402.7 ) 1,123.5 Gross Profit — 475.4 73.2 — 548.6 Research and development expenses — 33.6 — — 33.6 Selling and general expenses 3.0 363.0 58.5 — 424.5 Other income, net 0.1 — (3.9 ) — (3.8 ) Operating (Loss) Profit (3.1 ) 78.8 18.6 — 94.3 Interest income — 2.6 0.3 — 2.9 Interest expense (5.2 ) (0.7 ) (0.1 ) — (6.0 ) (Loss) Income Before Income Taxes (8.3 ) 80.7 18.8 — 91.2 Income tax provision — (62.8 ) (1.3 ) — (64.1 ) Equity in earnings of consolidated subsidiaries (6.2 ) 13.8 — (7.6 ) — Net (Loss) Income (14.5 ) 31.7 17.5 (7.6 ) 27.1 Total other comprehensive loss, net of tax — (0.9 ) (9.9 ) — (10.8 ) Comprehensive (Loss) Income $ (14.5 ) $ 30.8 $ 7.6 $ (7.6 ) $ 16.3 |
Condensed Consolidating Balance Sheets | HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions) As of December 31, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets Cash and cash equivalents $ 54.2 $ 9.5 $ 50.0 $ — $ 113.7 Accounts receivable, net 3.1 552.5 241.5 (607.0 ) 190.1 Inventories — 231.1 41.4 — 272.5 Prepaid and other current assets 5.0 10.5 2.0 (0.3 ) 17.2 Total Current Assets 62.3 803.6 334.9 (607.3 ) 593.5 Property, Plant and Equipment, Net — 217.3 43.5 — 260.8 Investment in Consolidated Subsidiaries 2,029.5 328.7 — (2,358.2 ) — Goodwill — 993.8 35.2 — 1,029.0 Other Intangible Assets, net — 161.1 8.7 — 169.8 Other Assets 1.0 7.8 9.9 — 18.7 TOTAL ASSETS $ 2,092.8 $ 2,512.3 $ 432.2 $ (2,965.5 ) $ 2,071.8 LIABILITIES AND EQUITY Current Liabilities Trade accounts payable $ 398.3 $ 328.9 $ 47.8 $ (601.9 ) $ 173.1 Accrued expenses 11.1 113.8 31.8 (5.4 ) 151.3 Total Current Liabilities 409.4 442.7 79.6 (607.3 ) 324.4 Long-Term Debt 579.0 — — — 579.0 Other Long-Term Liabilities 1.9 54.4 9.6 — 65.9 Total Liabilities 990.3 497.1 89.2 (607.3 ) 969.3 Total Equity 1,102.5 2,015.2 343.0 (2,358.2 ) 1,102.5 TOTAL LIABILITIES AND EQUITY $ 2,092.8 $ 2,512.3 $ 432.2 $ (2,965.5 ) $ 2,071.8 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions) As of December 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets Cash and cash equivalents $ 92.3 $ — $ 39.7 $ (2.5 ) $ 129.5 Accounts receivable, net 3.0 440.8 221.7 (440.8 ) 224.7 Inventories — 258.4 44.8 — 303.2 Prepaid and other current assets 5.0 10.8 3.0 (0.2 ) 18.6 Total Current Assets 100.3 710.0 309.2 (443.5 ) 676.0 Property, Plant and Equipment, Net — 228.7 50.8 — 279.5 Investment in Consolidated Subsidiaries 1,750.8 277.7 — (2,028.5 ) — Goodwill — 918.6 26.6 — 945.2 Other Intangible Assets, net — 82.6 — — 82.6 Other Assets 1.4 0.3 15.2 — 16.9 TOTAL ASSETS $ 1,852.5 $ 2,217.9 $ 401.8 $ (2,472.0 ) $ 2,000.2 LIABILITIES AND EQUITY Current Liabilities Trade accounts payable $ 251.4 $ 309.4 $ 42.7 $ (440.3 ) $ 163.2 Accrued expenses 6.6 115.4 33.4 (3.4 ) 152.0 Total Current Liabilities 258.0 424.8 76.1 (443.7 ) 315.2 Long-Term Debt 578.1 — — — 578.1 Other Long-Term Liabilities 1.8 41.6 8.2 — 51.6 Total Liabilities 837.9 466.4 84.3 (443.7 ) 944.9 Total Equity 1,014.6 1,751.5 317.5 (2,028.3 ) 1,055.3 TOTAL LIABILITIES AND EQUITY $ 1,852.5 $ 2,217.9 $ 401.8 $ (2,472.0 ) $ 2,000.2 |
Condensed Consolidating Statements of Cash Flows | HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash (Used in) Provided by Operating Activities $ (33.0 ) $ 207.7 $ 15.8 $ (1.7 ) $ 188.8 Investing Activities Capital expenditures — (22.7 ) (6.4 ) — (29.1 ) Acquisition of business, net of cash acquired (175.0 ) — — — (175.0 ) Proceeds from dispositions of property — 3.2 — — 3.2 Intercompany contributions 0.5 (177.9 ) 2.7 174.7 — Cash Used in Investing Activities (174.5 ) (197.4 ) (3.7 ) 174.7 (200.9 ) Financing Activities Intercompany contributions 170.8 — (0.3 ) (170.5 ) — Line of credit facility proceeds 72.0 — — — 72.0 Line of credit facility repayments (72.0 ) — — — (72.0 ) Debt issuance costs (0.9 ) — — — (0.9 ) Purchase of treasury stock (0.9 ) — — — (0.9 ) Proceeds and excess tax benefits from the exercise of stock options 0.4 — — — 0.4 Cash Provided by (Used in) Financing Activities 169.4 — (0.3 ) (170.5 ) (1.4 ) Effect of Exchange Rate on Cash and Cash Equivalents — (0.8 ) (1.5 ) — (2.3 ) (Decrease) Increase in Cash and Cash Equivalents (38.1 ) 9.5 10.3 2.5 (15.8 ) Cash and Cash Equivalents, Beginning of Period 92.3 — 39.7 (2.5 ) 129.5 Cash and Cash Equivalents, End of Period $ 54.2 $ 9.5 $ 50.0 $ — $ 113.7 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash (Used in) Provided by Operating Activities $ (44.7 ) $ 110.5 $ 34.3 $ (2.5 ) $ 97.6 Investing Activities Capital expenditures — (61.3 ) (9.1 ) — (70.4 ) Proceeds from property dispositions — — 7.8 — 7.8 Intercompany contributions 39.9 (53.1 ) 1.3 11.9 — Cash Provided by (Used in) Investing Activities 39.9 (114.4 ) — 11.9 (62.6 ) Financing Activities Intercompany contributions 46.5 — (34.6 ) (11.9 ) — Debt repayments (51.0 ) — — — (51.0 ) Purchase of treasury stock (1.0 ) — — — (1.0 ) Proceeds and excess tax benefits from the exercise of stock options 1.4 — — — 1.4 Cash Used in Financing Activities (4.1 ) — (34.6 ) (11.9 ) (50.6 ) Effect of Exchange Rate on Cash and Cash Equivalents — — (3.9 ) — (3.9 ) Decrease in Cash and Cash Equivalents (8.9 ) (3.9 ) (4.2 ) (2.5 ) (19.5 ) Cash and Cash Equivalents, Beginning of Period 101.2 3.9 43.9 — 149.0 Cash and Cash Equivalents, End of Period $ 92.3 $ — $ 39.7 $ (2.5 ) $ 129.5 HALYARD HEALTH, INC. AND SUBSIDIARIES CONDENSED COMBINED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated and Combined Operating Activities Cash Provided by Operating Activities $ — $ 41.9 $ 106.0 $ — $ 147.9 Investing Activities Capital expenditures — (70.8 ) (7.7 ) — (78.5 ) Deposit received on pending sale of assets — — 7.8 — 7.8 Cash (Used in) Provided by Investing Activities — (70.8 ) 0.1 — (70.7 ) Financing Activities Intercompany contributions 66.7 (48.4 ) (18.3 ) — — Debt proceeds 636.1 — 1.9 — 638.0 Debit issuance costs (11.8 ) — — — (11.8 ) Debt repayments — (2.9 ) (10.9 ) — (13.8 ) Spin-off cash distribution to Kimberly-Clark (680.0 ) — — — (680.0 ) Net transfers from (to) Kimberly-Clark 90.2 77.4 (74.3 ) — 93.3 Other — 3.5 — — 3.5 Cash Provided by (Used in) Financing Activities 101.2 29.6 (101.6 ) — 29.2 Effect of Exchange Rate on Cash and Cash Equivalents — 0.1 (1.6 ) — (1.5 ) Increase in Cash and Cash Equivalents 101.2 0.8 2.9 — 104.9 Cash and Cash Equivalents, Beginning of Period — 3.1 41.0 — 44.1 Cash and Cash Equivalents, End of Period $ 101.2 $ 3.9 $ 43.9 $ — $ 149.0 |
Accounting Policies - Backgrou
Accounting Policies - Background and Basis of Presentation (Details) | 12 Months Ended |
Dec. 31, 2016segment | |
Accounting Policies [Abstract] | |
Number of business segments | 2 |
Accounting Policies - Property
Accounting Policies - Property, Plant and Equipment and Depreciation (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 16 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Computer software costs | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer software costs | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Accounting Policies - Goodwill
Accounting Policies - Goodwill and Other Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Trademarks | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 7 years |
Trademarks | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 30 years |
Patents and acquired technologies | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 7 years |
Patents and acquired technologies | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 17 years |
Other intangible assets | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 2 years |
Other intangible assets | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 16 years |
Accounting Policies - Revenue
Accounting Policies - Revenue Recognition and Accounts Receivable (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)customer | Dec. 31, 2015USD ($)customer | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowances and doubtful accounts | $ | $ (1.5) | $ (1.6) | |
Net sales | Customer concentration risk | Largest customer | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of major customers | 1 | ||
Percentage of total net sales | 11.00% | 18.00% | 19.00% |
Accounts receivable | Customer concentration risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of major customers | 1 | 0 |
Business Acquisition - Additio
Business Acquisition - Additional Information (Details) - Medsystems Holdings, Inc. - USD ($) $ in Millions | May 02, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||
Consideration transferred | $ 175 | |
Revenue of acquiree | $ 36 | |
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | $ 1 |
Business Acquisition - Purchas
Business Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Millions | Dec. 31, 2016 | May 02, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,029 | $ 945.2 | $ 1,426.1 | |
Medsystems Holdings, Inc. | ||||
Business Acquisition [Line Items] | ||||
Current assets acquired net of liabilities assumed | $ 14.1 | |||
Property, plant and equipment | 4.4 | |||
Identifiable intangible assets, excluding IPR&D | 105.1 | |||
Deferred tax liabilities | (38.4) | |||
Goodwill | 84.1 | |||
Total | 175 | |||
Medsystems Holdings, Inc. | IPR&D | ||||
Business Acquisition [Line Items] | ||||
Identifiable IPR&D | $ 5.7 |
Business Acquisition - Schedul
Business Acquisition - Schedule of Acquired Finite-Lived Intangible Assets (Details) - Medsystems Holdings, Inc. $ in Millions | May 02, 2016USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 105.1 |
Portfolio of disposables | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 102.9 |
Weighted Average Useful Lives (Yrs) | 15 years |
Enteral access technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 2.2 |
Weighted Average Useful Lives (Yrs) | 6 years |
Business Acquisition - Pro For
Business Acquisition - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
Net sales | $ 1,609.8 | $ 1,628.6 |
Net income (loss) | $ 43 | $ (430.3) |
Earnings (loss) per share: | ||
Basic (in dollars per share) | $ 0.92 | $ (9.24) |
Diluted (in dollars per share) | $ 0.91 | $ (9.24) |
Business Acquisition - Restruc
Business Acquisition - Restructuring (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Jun. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 5 | |
Expected costs | $ 7 | |
Restructuring reserve | 3 | |
Medsystems Holdings, Inc. | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 13 | |
Medsystems Holdings, Inc. | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 4 | |
Payments for restructuring | $ 1 |
Goodwill - Schedule of Goodwil
Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Millions | May 02, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill [Roll Forward] | ||||
Balance at beginning of period, Goodwill, net | $ 945.2 | $ 1,426.1 | ||
Goodwill impairment | 0 | (474) | $ 0 | |
Goodwill acquired | 84.1 | |||
Currency translation adjustment | (0.3) | (6.9) | ||
Balance at end of period, Goodwill, net | 1,029 | 945.2 | 1,426.1 | |
Medsystems Holdings, Inc. | ||||
Goodwill [Roll Forward] | ||||
Balance at end of period, Goodwill, net | $ 84.1 | |||
S&IP | ||||
Goodwill [Roll Forward] | ||||
Balance at beginning of period, Goodwill, gross | 740.8 | 744.5 | ||
Balance at beginning of period, Accumulated Impairment | (474) | 0 | ||
Balance at beginning of period, Goodwill, net | 266.8 | 744.5 | ||
Goodwill impairment | (474) | |||
Goodwill acquired | 0 | |||
Currency translation adjustment | (0.1) | (3.7) | ||
Balance at end of period, Goodwill, gross | 740.7 | 740.8 | 744.5 | |
Balance at end of period, Accumulated Impairment | (474) | (474) | 0 | |
Balance at end of period, Goodwill, net | 266.7 | 266.8 | 744.5 | |
Medical Devices | ||||
Goodwill [Roll Forward] | ||||
Balance at beginning of period, Goodwill, gross | 678.4 | 681.6 | ||
Balance at beginning of period, Accumulated Impairment | 0 | 0 | ||
Balance at beginning of period, Goodwill, net | 678.4 | 681.6 | ||
Goodwill impairment | 0 | |||
Goodwill acquired | 84.1 | |||
Currency translation adjustment | (0.2) | (3.2) | ||
Balance at end of period, Goodwill, gross | 762.3 | 678.4 | 681.6 | |
Balance at end of period, Accumulated Impairment | 0 | 0 | 0 | |
Balance at end of period, Goodwill, net | $ 762.3 | $ 678.4 | $ 681.6 | |
Medical Devices | Medsystems Holdings, Inc. | ||||
Goodwill [Roll Forward] | ||||
Goodwill acquired | $ 84 |
Supplemental Balance Sheet In48
Supplemental Balance Sheet Information - Accounts receivable (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts Receivable | $ 191.6 | $ 226.3 |
Allowances and doubtful accounts | (1.5) | (1.6) |
Accounts receivable, net | $ 190.1 | $ 224.7 |
Supplemental Balance Sheet In49
Supplemental Balance Sheet Information - Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
LIFO | ||
Raw Materials | $ 45.8 | $ 49.7 |
Work in process | 50.6 | 46.1 |
Finished goods | 130.8 | 165.8 |
Supplies and other | 0 | 0.1 |
Inventories, gross | 227.2 | 261.7 |
Excess of FIFO or weighted-average cost over LIFO cost | (10.6) | (17.6) |
Inventories, net | 216.6 | 244.1 |
Non- LIFO | ||
Raw Materials | 2.3 | 1.1 |
Work in process | 0.3 | 0.1 |
Finished goods | 40.5 | 46.3 |
Supplies and other | 12.8 | 11.6 |
Inventories, gross | 55.9 | 59.1 |
Inventories, net | 55.9 | 59.1 |
Total | ||
Raw Materials | 48.1 | 50.8 |
Work in process | 50.9 | 46.2 |
Finished goods | 171.3 | 212.1 |
Supplies and other | 12.8 | 11.7 |
Inventories, gross | 283.1 | 320.8 |
Excess of FIFO or weighted-average cost over LIFO cost | (10.6) | (17.6) |
Inventories, net | 272.5 | 303.2 |
Inventory [Line Items] | ||
Inventories | 272.5 | $ 303.2 |
Kimberly-Clark branded products | ||
Total | ||
Inventories, net | 18 | |
Inventory [Line Items] | ||
Inventories | 18 | |
Allowance for potential losses | $ 10 |
Supplemental Balance Sheet In50
Supplemental Balance Sheet Information - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 612.7 | $ 599.9 | |
Less accumulated depreciation | (351.9) | (320.4) | |
Property, plant and equipment, net | 260.8 | 279.5 | |
Capitalized interest | 0.4 | 1 | |
Capital expenditures in accounts payable | 5.8 | 5.6 | $ 21.5 |
Net property, plant and equipment | 260.8 | 279.5 | |
Depreciation expense | 43 | 40 | $ 53 |
United States | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, net | 158 | 173 | |
Net property, plant and equipment | 158 | 173 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 2.1 | 2.1 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 85.8 | 86.7 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 499.8 | 492.8 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 25 | $ 18.3 |
Supplemental Balance Sheet In51
Supplemental Balance Sheet Information - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 432.8 | $ 330.8 |
Accumulated Amortization | (268.7) | (248.2) |
Net Carrying Amount | 164.1 | 82.6 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 125.9 | 126.6 |
Accumulated Amortization | (93.8) | (90.3) |
Net Carrying Amount | 32.1 | 36.3 |
Patents and acquired technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 251.8 | 149.1 |
Accumulated Amortization | (131.1) | (117.3) |
Net Carrying Amount | 120.7 | 31.8 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 55.1 | 55.1 |
Accumulated Amortization | (43.8) | (40.6) |
Net Carrying Amount | 11.3 | $ 14.5 |
Medsystems Holdings, Inc. | IPR&D | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable IPR&D | $ 6 |
Supplemental Balance Sheet In52
Supplemental Balance Sheet Information - Schedule of Estimated Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Amortization expense | $ 22 | $ 26 | $ 32 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2,017 | 21.2 | ||
2,018 | 19 | ||
2,019 | 15.2 | ||
2,020 | 13 | ||
2,021 | 10.7 | ||
Thereafter | 85 | ||
Net Carrying Amount | $ 164.1 | $ 82.6 |
Supplemental Balance Sheet In53
Supplemental Balance Sheet Information - Accrued Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued rebates | $ 55.7 | $ 73.9 |
Accrued salaries and wages | 57.1 | 34.5 |
Accrued taxes - income and other | 7.2 | 15.3 |
Other | 31.3 | 28.3 |
Total | $ 151.3 | $ 152 |
Supplemental Balance Sheet In54
Supplemental Balance Sheet Information - Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Taxes payable | $ 3.4 | $ 1.3 |
Accrued compensation benefits | 9.7 | 9.5 |
Other | 17 | 17 |
Total | $ 30.1 | $ 27.8 |
Fair Value Information (Details
Fair Value Information (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Liabilities | ||
Debt | $ 589 | $ 589 |
Level 1 | Carrying Amount | ||
Assets | ||
Cash and cash equivalents | 113.7 | 129.5 |
Liabilities | ||
Debt | 246.5 | 245.9 |
Level 1 | Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 113.7 | 129.5 |
Liabilities | ||
Debt | 256.4 | 252.5 |
Level 2 | Carrying Amount | ||
Liabilities | ||
Debt | 332.5 | 332.2 |
Level 2 | Estimated Fair Value | ||
Liabilities | ||
Debt | 341.3 | 337.3 |
Foreign exchange contracts | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liability | $ 1 | $ 2 |
Debt - Schedule of Debt Balanc
Debt - Schedule of Debt Balances (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Debt | $ 589 | $ 589 |
Total Debt, net | $ 579 | 578.1 |
Senior Secured Term Loan | 3.98% Senior Secured Term Loan | ||
Debt Instrument [Line Items] | ||
Weighted- Average Interest Rate | 3.98% | |
Debt | $ 339 | 339 |
Unamortized Debt Discounts and Issuance Costs | $ (6.5) | (6.8) |
Senior Unsecured Notes | 6.25% Senior Notes | ||
Debt Instrument [Line Items] | ||
Weighted- Average Interest Rate | 6.25% | |
Debt | $ 250 | 250 |
Unamortized Debt Discounts and Issuance Costs | $ (3.5) | $ (4.1) |
Debt - Senior Secured Term Loa
Debt - Senior Secured Term Loan and Revolving Credit Facility (Details) - USD ($) | May 02, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Nov. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||||||
Debt issuance cost | $ 900,000 | $ 0 | $ 11,800,000 | ||||
Line of credit facility proceeds | $ 72,000,000 | 72,000,000 | 0 | 0 | |||
Line of credit facility repayments | $ 72,000,000 | 72,000,000 | $ 0 | $ 0 | |||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||
2,017 | $ 0 | 0 | 0 | ||||
2,018 | 0 | 0 | 0 | ||||
2,019 | 0 | 0 | 0 | ||||
2,020 | $ 0 | $ 0 | $ 0 | ||||
Secured line of credit | Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 3.94% | 3.94% | 3.94% | ||||
Senior secured term loan | 3.98% Senior Secured Term Loan | |||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||||||
2,025 | $ 339,000,000 | $ 339,000,000 | $ 339,000,000 | ||||
Senior secured term loan | Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 3.50% | 3.50% | 3.50% | ||||
Reduction to margin or spread on variable rate | 0.50% | ||||||
Debt issuance cost | $ 1,000,000 | ||||||
Revolving credit facility | Secured line of credit | Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | $ 250,000,000 | $ 250,000,000 | $ 250,000,000 | ||||
Unused capacity, commitment fee percentage | 0.40% | ||||||
Consolidated total leverage ratio (less than) | 2.25 | 2.25 | 2.25 | ||||
Revolving credit facility | Secured line of credit | Term loan facility | Leverage Ratio, less than 2.25 | |||||||
Debt Instrument [Line Items] | |||||||
Unused capacity, commitment fee percentage | 0.25% | ||||||
Revolving credit facility | Secured line of credit | Term loan facility | Base rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.75% | ||||||
Revolving credit facility | Secured line of credit | Term loan facility | Base rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.50% | ||||||
Revolving credit facility | Secured line of credit | Term loan facility | LIBOR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.75% | ||||||
Revolving credit facility | Secured line of credit | Term loan facility | LIBOR | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.50% | ||||||
Revolving credit facility | Senior secured term loan | Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Amount outstanding | $ 0 | $ 0 | $ 0 | ||||
Amount available for borrowing | 246,000,000 | 246,000,000 | 246,000,000 | ||||
Letter of credit | Secured line of credit | Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | 75,000,000 | 75,000,000 | 75,000,000 | ||||
Letter of credit | Senior secured term loan | Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Amount outstanding | 4,000,000 | 4,000,000 | 4,000,000 | ||||
Swingline sub-facility | Secured line of credit | Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | $ 25,000,000 | $ 25,000,000 | $ 25,000,000 | ||||
Option 1 | Senior secured term loan | Term loan facility | Base rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate floor | 0.75% | 0.75% | 0.75% | ||||
Option 1 | Senior secured term loan | Term loan facility | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.75% | 3.25% | |||||
Option 2 | Senior secured term loan | Term loan facility | Base rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.75% | 2.25% | |||||
Option 2 | Senior secured term loan | Term loan facility | U.S. federal funds effective rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
Option 2 | Senior secured term loan | Term loan facility | One month LIBOR Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.00% |
Debt - Senior Unsecured Notes
Debt - Senior Unsecured Notes (Details) - Senior Unsecured Notes - 6.25% Senior Notes | Dec. 31, 2016 |
Debt Instrument [Line Items] | |
Weighted average interest rate | 6.25% |
Effective interest rate | 6.54% |
Debt - Debt Covenants (Details
Debt - Debt Covenants (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Debt | $ 589 | $ 589 |
Senior secured term loan | 3.98% Senior Secured Term Loan | ||
Debt Instrument [Line Items] | ||
Debt | $ 339 | $ 339 |
Income Taxes - Provision for I
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income before income taxes | |||
United States | $ 24.2 | $ (424.4) | $ 91.8 |
Foreign | 31.1 | 13.9 | (0.6) |
Income (Loss) Before Income Taxes | 55.3 | (410.5) | 91.2 |
Current: | |||
United States | 29.8 | 13 | 71.2 |
State | 4.4 | 2.7 | 5.5 |
Foreign | 7.8 | 5.3 | 18 |
Total | 42 | 21 | 94.7 |
Deferred: | |||
United States | (27.3) | (8.3) | (9.8) |
State | (2.9) | (0.6) | (1.4) |
Foreign | 3.7 | 3.7 | (19.4) |
Total | (26.5) | (5.2) | (30.6) |
Total income tax provision | $ 15.5 | $ 15.8 | $ 64.1 |
Income Taxes - Reconciliation
Income Taxes - Reconciliation of Federal Statutory Rate and Effective Rate (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
Rate of state income taxes, net of federal tax benefit | 0.20% | (0.30%) | 3.00% |
Statutory rate other than U.S. statutory rate | (6.90%) | 0.60% | (0.30%) |
Thailand repatriation related to the Spin-off | 0.00% | 0.00% | 15.50% |
Thailand statutory rate change | 7.30% | 0.00% | 0.00% |
Sec. 987 regulation change, federal and state impact | (0.048) | 0 | 0 |
U.S. federal research and development credit | (4.70%) | 0.60% | (0.00%) |
Goodwill | 0.00% | (40.40%) | 0.00% |
Non-deductible expenses related to the Spin-off | 0.00% | 0.00% | 17.60% |
Change in valuation allowances | 0.00% | 0.10% | 2.10% |
Other, net | 1.90% | 0.60% | (2.60%) |
Effective tax rate | 28.00% | (3.80%) | 70.30% |
Income Taxes - Components of D
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets | ||
Intangibles, net | $ 0 | $ 15.3 |
Accrued liabilities | 34.8 | 25.3 |
Stock-based compensation | 8.7 | 4.8 |
Other | 8.4 | 5.9 |
Deferred tax assets, gross | 51.9 | 51.3 |
Valuation allowance | (0.5) | (0.5) |
Total deferred assets | 51.4 | 50.8 |
Deferred tax liabilities | ||
Intangibles, net | 17.7 | 0 |
Inventories | 13.4 | 19.8 |
Property, plant and equipment, net | 40 | 39.4 |
Other | 1 | 0.5 |
Total deferred tax liabilities | 72.1 | 59.7 |
Net deferred tax liabilities | $ 20.7 | $ 8.9 |
Income Taxes - Additional Info
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Credit carryforwards | $ 3 | |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 11 | |
Current and prior year undistributed earnings of subsidiaries operating outside the U.S | 113 | |
Amount that would affect effective tax rate | 2 | $ 1 |
Accrued interest and penalties on unrecognized tax benefits | 1 | $ 0.4 |
Expiring tax credit carryforwards | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 7 |
Income Taxes - Reconciliatio64
Income Taxes - Reconciliation of Unrecognized Tax Benefit (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning of year | $ 1.5 | $ 1.6 |
Gross increases for tax positions of prior years | 1.5 | 0.5 |
Gross decreases for tax positions of prior years | (0.2) | 0 |
Decreases for settlements with taxing authorities | (0.1) | 0 |
Decreases for lapse of the applicable statute of limitations | 0 | (0.6) |
End of year | $ 2.7 | $ 1.5 |
Employee Benefit Plans - Defin
Employee Benefit Plans - Defined Contribution Plans (Details) - USD ($) $ in Millions | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plans | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Contributions made | $ 1 | $ 9 | $ 9 |
Employee Benefit Plans - Def66
Employee Benefit Plans - Defined Benefit Plans (Details) - USD ($) $ in Millions | 10 Months Ended | 12 Months Ended | ||
Oct. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Allocated expenses | $ 13 | |||
International Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Aggregated projected benefit obligation | $ 8 | $ 8 | ||
Net periodic pension cost | 1 | $ 3 | $ 3 | |
Expected gross benefit payments for the years 2017 through 2021 | 2 | |||
Gross benefit payments for the years 2022 through 2026 | $ 4 |
Accumulated Other Comprehensi67
Accumulated Other Comprehensive Income - Changes in Components of Accumulated Other Comprehensive Income, net of tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 1,055.3 | $ 1,491.2 | $ 2,079.1 |
Change in Kimberly-Clark’s investment, net | 73.2 | ||
Other comprehensive (loss) income | (6.9) | (24.1) | (10.8) |
Balance at end of period | 1,102.5 | 1,055.3 | 1,491.2 |
Unrealized Translation | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (40.4) | (18.3) | (16.1) |
Change in Kimberly-Clark’s investment, net | 11.8 | ||
Other comprehensive (loss) income | (8.3) | (22.1) | (14) |
Balance at end of period | (48.7) | (40.4) | (18.3) |
Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (1.2) | (0.5) | (3.5) |
Change in Kimberly-Clark’s investment, net | (0.6) | ||
Other comprehensive (loss) income | 0.8 | (0.7) | 3.6 |
Balance at end of period | (0.4) | (1.2) | (0.5) |
Defined Benefit Pension Plans | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (1.6) | (0.3) | 0 |
Change in Kimberly-Clark’s investment, net | 0.1 | ||
Other comprehensive (loss) income | 0.6 | (1.3) | (0.4) |
Balance at end of period | (1) | (1.6) | (0.3) |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (43.2) | (19.1) | (19.6) |
Change in Kimberly-Clark’s investment, net | 11.3 | ||
Other comprehensive (loss) income | (6.9) | (24.1) | (10.8) |
Balance at end of period | $ (50.1) | $ (43.2) | $ (19.1) |
Accumulated Other Comprehensi68
Accumulated Other Comprehensive Income - Net Changes in Components of AOCI, Including Tax Effect (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | |||
Unrealized translation | $ (8.3) | $ (22.1) | $ (14) |
Defined benefit pension plans | 0.7 | (1.9) | (0.4) |
Tax effect | (0.1) | 0.6 | 0 |
Defined benefit pension plans, net of tax | 0.6 | (1.3) | (0.4) |
Cash flow hedges | 1 | (1) | 4.3 |
Tax effect | (0.2) | 0.3 | (0.7) |
Cash flow hedges, net of tax | 0.8 | (0.7) | 3.6 |
Total Other Comprehensive Loss, Net of Tax | $ (6.9) | $ (24.1) | $ (10.8) |
Stock-Based Compensation - Add
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Oct. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 4,900,000 | |||
Shares remaining available for issuance (in shares) | 2,400,000 | |||
Share-based compensation expense | $ 3 | $ 15 | $ 14 | |
Intrinsic value of options | 0 | 0 | 0.4 | |
Excess tax benefit of options exercised | $ 0 | $ 0 | 0.2 | |
Stock option exercise activity | 0 | 12,000 | ||
Kimberly-Clark Equity Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 5 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1 | $ 5 | $ 6 | |
Expiration period | 10 years | |||
Weighted-average fair value of options granted (in dollars per share) | $ 10.01 | $ 7.70 | $ 15.15 | |
Costs not yet recognized | $ 6 | |||
Costs not yet recognized, period for recognition | 1 year | |||
Volatility | 26.00% | |||
Stock Options | First 12-month period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 30.00% | |||
Stock Options | Second 12-month period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 30.00% | |||
Stock Options | Third 12-month period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 40.00% | |||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 2 | $ 6 | $ 8 | |
Costs not yet recognized | $ 5 | |||
Costs not yet recognized, period for recognition | 1 year | |||
Granted (in dollars per share) | $ 31.89 | |||
Total shareholder return restricted share units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 5 | |||
Costs not yet recognized | $ 4 | |||
Costs not yet recognized, period for recognition | 2 years | |||
Vesting period | 3 years | |||
Volatility | 25.00% | |||
Granted (in dollars per share) | $ 38.64 |
Stock-Based Compensation - Ass
Stock-Based Compensation - Assumptions (Details) - Stock Options | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 26.00% | ||
Risk-free rate | 1.20% | ||
Expected term (Years) | 5 years | ||
Dividend Yield (as a percent) | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 25.00% | 25.00% | |
Risk-free rate | 0.80% | 0.70% | |
Expected term (Years) | 3 years | 2 years | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 27.00% | 34.00% | |
Risk-free rate | 1.60% | 1.90% | |
Expected term (Years) | 5 years | 7 years |
Stock-Based Compensation - Sto
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Dec. 31, 2016 | |
Shares | ||
Outstanding at beginning of period (in shares) | 1,146,000 | |
Granted (in shares) | 458,000 | |
Exercises (in shares) | 0 | (12,000) |
Forfeitures (in shares) | (66,000) | |
Outstanding at end of period (in shares) | 1,526,000 | |
Vested and exercisable (in shares) | 469,000 | |
Weighted- Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 40.70 | |
Granted (in dollars per share) | 29.48 | |
Exercises (in dollars per share) | 33.48 | |
Forfeitures (in dollars per share) | 39.95 | |
Outstanding at end of period (in dollars per share) | 37.42 | |
Vested and exercisable (in dollars per share) | $ 36.52 | |
Weighted-Average Remaining Contractual Term and Aggregate Intrinsic Value | ||
Outstanding, Weighted-Average Remaining Contractual Term | 8 years 1 month | |
Outstanding, Aggregate Intrinsic Value | $ 4.4 | |
Vested and exercisable, Weighted-Average Remaining Contractual Term | 7 years | |
Vested and exercisable, Aggregate Intrinsic Value | $ 1.1 |
Stock-Based Compensation - Opt
Stock-Based Compensation - Options Outstanding, by Exercise Price Range (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options Outstanding (in shares) | shares | 1,526 |
Weighted-Average Remaining Contractual Term (Years) | 8 years 1 month |
Options Exercisable (in shares) | shares | 469 |
Weighted Average Exercise Price (in dollars per share) | $ 36.52 |
$25.00 to $35.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (in dollars per share) | 25 |
Range of Exercise Prices, maximum (in dollars per share) | $ 35 |
Options Outstanding (in shares) | shares | 652 |
Weighted-Average Remaining Contractual Term (Years) | 8 years 3 months 20 days |
Options Exercisable (in shares) | shares | 204 |
Weighted Average Exercise Price (in dollars per share) | $ 31.67 |
$35.00 to $45.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (in dollars per share) | 35 |
Range of Exercise Prices, maximum (in dollars per share) | $ 45 |
Options Outstanding (in shares) | shares | 293 |
Weighted-Average Remaining Contractual Term (Years) | 7 years 6 months |
Options Exercisable (in shares) | shares | 174 |
Weighted Average Exercise Price (in dollars per share) | $ 37.53 |
$ 45 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (in dollars per share) | $ 45 |
Options Outstanding (in shares) | shares | 581 |
Weighted-Average Remaining Contractual Term (Years) | 8 years 2 months 12 days |
Options Exercisable (in shares) | shares | 91 |
Weighted Average Exercise Price (in dollars per share) | $ 45.53 |
Stock-Based Compensation - Res
Stock-Based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units shares in Thousands | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 519 |
Granted (in shares) | shares | 125 |
Vested (in shares) | shares | (86) |
Forfeited (in shares) | shares | (30) |
Outstanding at end of period (in shares) | shares | 528 |
Weighted Average Fair Value | |
Outstanding at beginning of the period (in dollars per share) | $ / shares | $ 40.69 |
Granted (in dollars per share) | $ / shares | 31.89 |
Vested (in dollars per share) | $ / shares | 38.08 |
Forfeited (in dollars per share) | $ / shares | 39.35 |
Outstanding at beginning of the period (in dollars per share) | $ / shares | $ 39.12 |
Stock-Based Compensation - TSR
Stock-Based Compensation - TSR Unit Activity (Details) - Total shareholder return restricted share units shares in Thousands | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 230 |
Forfeited (in shares) | shares | (6) |
Outstanding at end of period (in shares) | shares | 224 |
Weighted Average Fair Value | |
Outstanding at beginning of the period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 38.64 |
Forfeited (in dollars per share) | $ / shares | 40.12 |
Outstanding at beginning of the period (in dollars per share) | $ / shares | $ 38.60 |
Commitments and Contingencies
Commitments and Contingencies - Additional Information (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 12, 2016matter | |
Loss Contingencies [Line Items] | ||||
Rental expense under operating leases | $ 22 | $ 22 | $ 17 | |
Shahinian Edgett | ||||
Loss Contingencies [Line Items] | ||||
Number of qui tam matters | matter | 2 | |||
Reconciling items | ||||
Loss Contingencies [Line Items] | ||||
Incurred legal expense accrual | $ 20 | $ 17 |
Commitments and Contingencies76
Commitments and Contingencies - Future Minimum Obligations Under Operating Leases (Details) $ in Millions | Dec. 31, 2016USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,017 | $ 16.9 |
2,018 | 14.9 |
2,019 | 12.3 |
2,020 | 8 |
2,021 | 7.3 |
Thereafter | 41.1 |
Future minimum obligations | $ 100.5 |
Derivative Financial Instrume77
Derivative Financial Instruments - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Designated as hedging instrument | |||
Derivative [Line Items] | |||
Gains (losses) on designated hedging instruments | $ 0 | $ 0 | $ 0 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 |
Amounts to be reclassified into net income in next twelve months | 0 | ||
Undesignated hedging instruments | |||
Derivative [Line Items] | |||
Gains (losses) on undesignated hedging instruments | 0 | 0 | 0 |
Cash flow hedges | Designated as hedging instrument | |||
Derivative [Line Items] | |||
Designated hedge ineffectiveness | 0 | 0 | $ 0 |
Foreign exchange contracts | Undesignated hedging instruments | |||
Derivative [Line Items] | |||
Aggregate notional amount | 2,000,000 | ||
Foreign exchange contracts | Cash flow hedges | Designated as hedging instrument | |||
Derivative [Line Items] | |||
Aggregate notional amount | 33,000,000 | ||
Level 2 | Foreign exchange contracts | |||
Derivative [Line Items] | |||
Derivative liability | 1,000,000 | 2,000,000 | |
Derivative asset | $ 0 | $ 0 |
Earnings Per Share ("EPS") - C
Earnings Per Share ("EPS") - Calculation of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||
Net income (loss) | $ 39.8 | $ (426.3) | $ 27.1 |
Weighted Average Shares Outstanding: | |||
Basic weighted average shares outstanding (in shares) | 46.6 | 46.6 | 46.5 |
Dilutive effect of stock options and restricted share unit awards (in shares) | 0.4 | 0 | 0 |
Diluted weighted average shares outstanding (in shares) | 47 | 46.6 | 46.5 |
Earnings (Loss) Per Share: | |||
Basic (in dollars per share) | $ 0.85 | $ (9.15) | $ 0.58 |
Diluted (in dollars per share) | $ 0.85 | $ (9.15) | $ 0.58 |
Dilutive securities excluded from computation of earnings per share (in shares) | 1.6 |
Business Segment Information -
Business Segment Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2016segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Business Segment Information 80
Business Segment Information - Combined Operations by Business Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Net Sales | $ 1,592.3 | $ 1,574.4 | $ 1,672.1 |
Operating Profit (Loss) | 87.4 | (377.7) | 94.3 |
Goodwill impairment | 0 | (474) | 0 |
Other (expense) income, net | (18.3) | (4.5) | 3.8 |
Interest income | 0.6 | 0.3 | 2.9 |
Interest expense | (32.7) | (33.1) | (6) |
Income (Loss) Before Income Taxes | 55.3 | (410.5) | 91.2 |
Net sales | 1,592.3 | 1,574.4 | 1,672.1 |
General expenses | 411.1 | 398.5 | 424.5 |
Gross profit | 557.9 | 531.6 | 548.6 |
Medical Devices | |||
Segment Reporting Information [Line Items] | |||
Goodwill impairment | 0 | ||
S&IP | |||
Segment Reporting Information [Line Items] | |||
Goodwill impairment | (474) | ||
Operating segments | Medical Devices | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 567.3 | 509.5 | 501.7 |
Operating Profit (Loss) | 123.8 | 107.8 | 104.6 |
Net sales | 567.3 | 509.5 | 501.7 |
Operating segments | S&IP | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 1,012.1 | 1,030.2 | 1,139.3 |
Operating Profit (Loss) | 90.7 | 98.4 | 166.3 |
Net sales | 1,012.1 | 1,030.2 | 1,139.3 |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 12.9 | 34.7 | 31.1 |
Operating Profit (Loss) | (108.8) | (105.4) | (180.4) |
Net sales | 12.9 | 34.7 | 31.1 |
General expenses | 65 | 47 | |
Gross profit | (4) | (3) | |
Reconciling items | |||
Segment Reporting Information [Line Items] | |||
Goodwill impairment | 0 | (474) | 0 |
Other (expense) income, net | (18.3) | (4.5) | 3.8 |
Legal expense and settlement accrual | 20 | 17 | |
United States | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 1,100 | 1,100 | 1,100 |
Net sales | 1,100 | 1,100 | 1,100 |
Spin-off | Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Restructuring charges | 22 | 55 | |
Disposable glove facilities, Thailand | Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Restructuring charges | $ 60 | ||
Disposable glove facilities, Thailand | Reconciling items | |||
Segment Reporting Information [Line Items] | |||
Gain on sale of facility | $ 12 | ||
Medsystems Holdings, Inc. | Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Restructuring charges | $ 18 |
Business Segment Information 81
Business Segment Information - Depreciation, Amortization and Capital Expenditures by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Depreciation and Amortization | $ 65.2 | $ 65.4 | $ 85.4 |
Capital Expenditures | 29.1 | 70.4 | 78.5 |
Operating segments | Medical Devices | |||
Segment Reporting Information [Line Items] | |||
Depreciation and Amortization | 30.4 | 30.8 | 40.4 |
Capital Expenditures | 17.7 | 23.2 | 19.1 |
Operating segments | S&IP | |||
Segment Reporting Information [Line Items] | |||
Depreciation and Amortization | 24.6 | 23.3 | 41.4 |
Capital Expenditures | 11.2 | 30 | 46.3 |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Depreciation and Amortization | 10.2 | 11.3 | 3.6 |
Capital Expenditures | $ 0.2 | $ 17.2 | $ 13.1 |
Business Segment Information 82
Business Segment Information - Assets by Business Segment (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 2,071.8 | $ 2,000.2 |
Operating segments | Medical Devices | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 1,197.2 | 1,030.9 |
Operating segments | S&IP | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 714.4 | 766.5 |
Corporate and Other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 160.2 | $ 202.8 |
Related Party Transactions - A
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 10 Months Ended | 12 Months Ended | ||
Oct. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||||
Net sales | $ 1,592.3 | $ 1,574.4 | $ 1,672.1 | |
Sale transactions with affiliated company | $ 0.4 | |||
Affiliated entity | Kimberly Clark and Affiliates | ||||
Related Party Transaction [Line Items] | ||||
Net sales | $ 79 | $ 78.7 | ||
Affiliated entity | Kimberly Clark and Affiliates | Cost of products sold | ||||
Related Party Transaction [Line Items] | ||||
Allocated expenses | 22 | |||
Affiliated entity | Kimberly Clark and Affiliates | Selling and general expenses | ||||
Related Party Transaction [Line Items] | ||||
Allocated expenses | 41 | |||
Affiliated entity | Kimberly Clark and Affiliates | Research expenses | ||||
Related Party Transaction [Line Items] | ||||
Allocated expenses | $ 11 |
Supplemental Guarantor Financ84
Supplemental Guarantor Financial Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Ownership percentage | 100.00% |
Supplemental Guarantor Financ85
Supplemental Guarantor Financial Information - Condensed Consolidating Income and Comprehensive Income Statements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | $ 1,592.3 | $ 1,574.4 | $ 1,672.1 |
Cost of products sold | 1,034.4 | 1,042.8 | 1,123.5 |
Gross Profit | 557.9 | 531.6 | 548.6 |
Research and development expenses | 41.1 | 32.3 | 33.6 |
Selling and general expenses | 411.1 | 398.5 | 424.5 |
Goodwill impairment | 0 | 474 | 0 |
Other expense and (income), net | 18.3 | 4.5 | (3.8) |
Operating Profit (Loss) | 87.4 | (377.7) | 94.3 |
Interest income | 0.6 | 0.3 | 2.9 |
Interest expense | (32.7) | (33.1) | (6) |
Income (Loss) Before Income Taxes | 55.3 | (410.5) | 91.2 |
Income tax benefit (provision) | (15.5) | (15.8) | (64.1) |
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 |
Net Income (Loss) | 39.8 | (426.3) | 27.1 |
Total other comprehensive loss, net of tax | (6.9) | (24.1) | (10.8) |
Comprehensive Income (Loss) | 32.9 | (450.4) | 16.3 |
Eliminations | |||
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | (309.2) | (348.6) | (402.7) |
Cost of products sold | (309.2) | (348.6) | (402.7) |
Gross Profit | 0 | 0 | 0 |
Research and development expenses | 0 | 0 | 0 |
Selling and general expenses | 0 | 0 | 0 |
Goodwill impairment | 0 | ||
Other expense and (income), net | 1.7 | 0 | 0 |
Operating Profit (Loss) | (1.7) | 0 | 0 |
Interest income | (2.3) | (3.1) | 0 |
Interest expense | 2.3 | 3.1 | 0 |
Income (Loss) Before Income Taxes | (1.7) | 0 | 0 |
Income tax benefit (provision) | 0 | 0 | 0 |
Equity in earnings of consolidated subsidiaries | (107.6) | 367.1 | (7.6) |
Net Income (Loss) | (109.3) | 367.1 | (7.6) |
Total other comprehensive loss, net of tax | 13.5 | 0 | 0 |
Comprehensive Income (Loss) | (95.8) | 367.1 | (7.6) |
Parent | Reportable legal entities | |||
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | 0 | 0 | 0 |
Cost of products sold | 0 | 0 | 0 |
Gross Profit | 0 | 0 | 0 |
Research and development expenses | 0 | 0 | 0 |
Selling and general expenses | 37.2 | 30.6 | 3 |
Goodwill impairment | 0 | ||
Other expense and (income), net | (1.3) | (2.7) | 0.1 |
Operating Profit (Loss) | (35.9) | (27.9) | (3.1) |
Interest income | 0.3 | 0.3 | 0 |
Interest expense | (33.1) | (33.8) | (5.2) |
Income (Loss) Before Income Taxes | (68.7) | (61.4) | (8.3) |
Income tax benefit (provision) | 23.2 | 24.6 | 0 |
Equity in earnings of consolidated subsidiaries | 85.3 | (389.5) | (6.2) |
Net Income (Loss) | 39.8 | (426.3) | (14.5) |
Total other comprehensive loss, net of tax | (6.9) | 0 | 0 |
Comprehensive Income (Loss) | 32.9 | (426.3) | (14.5) |
Guarantor Subsidiaries | Reportable legal entities | |||
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | 1,465.5 | 1,470.8 | 1,455 |
Cost of products sold | 989.5 | 997.5 | 979.6 |
Gross Profit | 476 | 473.3 | 475.4 |
Research and development expenses | 40.7 | 32.3 | 33.6 |
Selling and general expenses | 312.4 | 309.2 | 363 |
Goodwill impairment | 455 | ||
Other expense and (income), net | 36.3 | 45.8 | 0 |
Operating Profit (Loss) | 86.6 | (369) | 78.8 |
Interest income | 0.1 | 0 | 2.6 |
Interest expense | (1.7) | (2.1) | (0.7) |
Income (Loss) Before Income Taxes | 85 | (371.1) | 80.7 |
Income tax benefit (provision) | (23.9) | (29.2) | (62.8) |
Equity in earnings of consolidated subsidiaries | 22.3 | 22.4 | 13.8 |
Net Income (Loss) | 83.4 | (377.9) | 31.7 |
Total other comprehensive loss, net of tax | (6.3) | (0.1) | (0.9) |
Comprehensive Income (Loss) | 77.1 | (378) | 30.8 |
Non-Guarantor Subsidiaries | Reportable legal entities | |||
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | 436 | 452.2 | 619.8 |
Cost of products sold | 354.1 | 393.9 | 546.6 |
Gross Profit | 81.9 | 58.3 | 73.2 |
Research and development expenses | 0.4 | 0 | 0 |
Selling and general expenses | 61.5 | 58.7 | 58.5 |
Goodwill impairment | 19 | ||
Other expense and (income), net | (18.4) | (38.6) | (3.9) |
Operating Profit (Loss) | 38.4 | 19.2 | 18.6 |
Interest income | 2.5 | 3.1 | 0.3 |
Interest expense | (0.2) | (0.3) | (0.1) |
Income (Loss) Before Income Taxes | 40.7 | 22 | 18.8 |
Income tax benefit (provision) | (14.8) | (11.2) | (1.3) |
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 |
Net Income (Loss) | 25.9 | 10.8 | 17.5 |
Total other comprehensive loss, net of tax | (7.2) | (24) | (9.9) |
Comprehensive Income (Loss) | $ 18.7 | $ (13.2) | $ 7.6 |
Supplemental Guarantor Financ86
Supplemental Guarantor Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets | ||||
Cash and cash equivalents | $ 113.7 | $ 129.5 | $ 149 | $ 44.1 |
Accounts receivable, net | 190.1 | 224.7 | ||
Inventories | 272.5 | 303.2 | ||
Prepaid and other current assets | 17.2 | 18.6 | ||
Total Current Assets | 593.5 | 676 | ||
Property, Plant and Equipment, Net | 260.8 | 279.5 | ||
Investment in Consolidated Subsidiaries | 0 | 0 | ||
Goodwill | 1,029 | 945.2 | 1,426.1 | |
Other Intangible Assets, net | 169.8 | 82.6 | ||
Other Assets | 18.7 | 16.9 | ||
TOTAL ASSETS | 2,071.8 | 2,000.2 | ||
Current Liabilities | ||||
Trade accounts payable | 173.1 | 163.2 | ||
Accrued expenses | 151.3 | 152 | ||
Total Current Liabilities | 324.4 | 315.2 | ||
Long-Term Debt | 579 | 578.1 | ||
Other Long-Term Liabilities | 65.9 | 51.6 | ||
Total Liabilities | 969.3 | 944.9 | ||
Total Equity | 1,102.5 | 1,055.3 | 1,491.2 | 2,079.1 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 2,071.8 | 2,000.2 | ||
Eliminations | ||||
Current Assets | ||||
Cash and cash equivalents | 0 | (2.5) | 0 | 0 |
Accounts receivable, net | (607) | (440.8) | ||
Inventories | 0 | 0 | ||
Prepaid and other current assets | (0.3) | (0.2) | ||
Total Current Assets | (607.3) | (443.5) | ||
Property, Plant and Equipment, Net | 0 | 0 | ||
Investment in Consolidated Subsidiaries | (2,358.2) | (2,028.5) | ||
Goodwill | 0 | 0 | ||
Other Intangible Assets, net | 0 | 0 | ||
Other Assets | 0 | 0 | ||
TOTAL ASSETS | (2,965.5) | (2,472) | ||
Current Liabilities | ||||
Trade accounts payable | (601.9) | (440.3) | ||
Accrued expenses | (5.4) | (3.4) | ||
Total Current Liabilities | (607.3) | (443.7) | ||
Long-Term Debt | 0 | 0 | ||
Other Long-Term Liabilities | 0 | 0 | ||
Total Liabilities | (607.3) | (443.7) | ||
Total Equity | (2,358.2) | (2,028.3) | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | (2,965.5) | (2,472) | ||
Parent | Reportable legal entities | ||||
Current Assets | ||||
Cash and cash equivalents | 54.2 | 92.3 | 101.2 | 0 |
Accounts receivable, net | 3.1 | 3 | ||
Inventories | 0 | 0 | ||
Prepaid and other current assets | 5 | 5 | ||
Total Current Assets | 62.3 | 100.3 | ||
Property, Plant and Equipment, Net | 0 | 0 | ||
Investment in Consolidated Subsidiaries | 2,029.5 | 1,750.8 | ||
Goodwill | 0 | 0 | ||
Other Intangible Assets, net | 0 | 0 | ||
Other Assets | 1 | 1.4 | ||
TOTAL ASSETS | 2,092.8 | 1,852.5 | ||
Current Liabilities | ||||
Trade accounts payable | 398.3 | 251.4 | ||
Accrued expenses | 11.1 | 6.6 | ||
Total Current Liabilities | 409.4 | 258 | ||
Long-Term Debt | 579 | 578.1 | ||
Other Long-Term Liabilities | 1.9 | 1.8 | ||
Total Liabilities | 990.3 | 837.9 | ||
Total Equity | 1,102.5 | 1,014.6 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 2,092.8 | 1,852.5 | ||
Guarantor Subsidiaries | Reportable legal entities | ||||
Current Assets | ||||
Cash and cash equivalents | 9.5 | 0 | 3.9 | 3.1 |
Accounts receivable, net | 552.5 | 440.8 | ||
Inventories | 231.1 | 258.4 | ||
Prepaid and other current assets | 10.5 | 10.8 | ||
Total Current Assets | 803.6 | 710 | ||
Property, Plant and Equipment, Net | 217.3 | 228.7 | ||
Investment in Consolidated Subsidiaries | 328.7 | 277.7 | ||
Goodwill | 993.8 | 918.6 | ||
Other Intangible Assets, net | 161.1 | 82.6 | ||
Other Assets | 7.8 | 0.3 | ||
TOTAL ASSETS | 2,512.3 | 2,217.9 | ||
Current Liabilities | ||||
Trade accounts payable | 328.9 | 309.4 | ||
Accrued expenses | 113.8 | 115.4 | ||
Total Current Liabilities | 442.7 | 424.8 | ||
Long-Term Debt | 0 | 0 | ||
Other Long-Term Liabilities | 54.4 | 41.6 | ||
Total Liabilities | 497.1 | 466.4 | ||
Total Equity | 2,015.2 | 1,751.5 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 2,512.3 | 2,217.9 | ||
Non-Guarantor Subsidiaries | Reportable legal entities | ||||
Current Assets | ||||
Cash and cash equivalents | 50 | 39.7 | $ 43.9 | $ 41 |
Accounts receivable, net | 241.5 | 221.7 | ||
Inventories | 41.4 | 44.8 | ||
Prepaid and other current assets | 2 | 3 | ||
Total Current Assets | 334.9 | 309.2 | ||
Property, Plant and Equipment, Net | 43.5 | 50.8 | ||
Investment in Consolidated Subsidiaries | 0 | 0 | ||
Goodwill | 35.2 | 26.6 | ||
Other Intangible Assets, net | 8.7 | 0 | ||
Other Assets | 9.9 | 15.2 | ||
TOTAL ASSETS | 432.2 | 401.8 | ||
Current Liabilities | ||||
Trade accounts payable | 47.8 | 42.7 | ||
Accrued expenses | 31.8 | 33.4 | ||
Total Current Liabilities | 79.6 | 76.1 | ||
Long-Term Debt | 0 | 0 | ||
Other Long-Term Liabilities | 9.6 | 8.2 | ||
Total Liabilities | 89.2 | 84.3 | ||
Total Equity | 343 | 317.5 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 432.2 | $ 401.8 |
Supplemental Guarantor Financ87
Supplemental Guarantor Financial Information - Condensed Consolidating Statements of Cash Flow (Details) - USD ($) $ in Millions | May 02, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Operating Activities | |||||
Cash (Used in) Provided by Operating Activities | $ 188.8 | $ 97.6 | $ 147.9 | ||
Investing Activities | |||||
Capital expenditures | (29.1) | (70.4) | (78.5) | ||
Acquisition of business, net of cash acquired | (175) | 0 | 0 | ||
Proceeds from dispositions of property | 3.2 | 7.8 | 7.8 | ||
Intercompany contributions | 0 | 0 | |||
Cash Used in Investing Activities | (200.9) | (62.6) | (70.7) | ||
Financing Activities | |||||
Intercompany contributions | 0 | 0 | 0 | ||
Line of credit facility proceeds | $ 72 | 72 | 0 | 0 | |
Line of credit facility repayments | $ (72) | (72) | 0 | 0 | |
Debt repayments | 0 | (51) | (13.8) | ||
Debt proceeds | 0 | 0 | 638 | ||
Debt issuance costs | (0.9) | 0 | (11.8) | ||
Purchase of treasury stock | (0.9) | (1) | 0 | ||
Spin-off cash distribution to Kimberly-Clark | 0 | 0 | (680) | ||
Net transfers from Kimberly-Clark | 0 | 0 | 93.3 | ||
Proceeds and excess tax benefits from the exercise of stock options | 0.4 | 1.4 | 0 | ||
Other | 0 | 0 | 3.5 | ||
Cash (Used in) Provided by Financing Activities | (1.4) | (50.6) | 29.2 | ||
Effect of Exchange Rate on Cash and Cash Equivalents | (2.3) | (3.9) | (1.5) | ||
(Decrease) Increase in Cash and Cash Equivalents | (15.8) | (19.5) | 104.9 | ||
Cash and Cash Equivalents - Beginning of Year | 129.5 | 149 | 44.1 | ||
Cash and Cash Equivalents - End of Year | 113.7 | 113.7 | 129.5 | 149 | |
Eliminations | |||||
Operating Activities | |||||
Cash (Used in) Provided by Operating Activities | (1.7) | (2.5) | 0 | ||
Investing Activities | |||||
Capital expenditures | 0 | 0 | 0 | ||
Acquisition of business, net of cash acquired | 0 | ||||
Proceeds from dispositions of property | 0 | 0 | 0 | ||
Intercompany contributions | 174.7 | 11.9 | |||
Cash Used in Investing Activities | 174.7 | 11.9 | 0 | ||
Financing Activities | |||||
Intercompany contributions | (170.5) | (11.9) | 0 | ||
Line of credit facility proceeds | 0 | ||||
Line of credit facility repayments | 0 | ||||
Debt repayments | 0 | 0 | |||
Debt proceeds | 0 | ||||
Debt issuance costs | 0 | 0 | |||
Purchase of treasury stock | 0 | 0 | |||
Spin-off cash distribution to Kimberly-Clark | 0 | ||||
Net transfers from Kimberly-Clark | 0 | ||||
Proceeds and excess tax benefits from the exercise of stock options | 0 | 0 | |||
Other | 0 | ||||
Cash (Used in) Provided by Financing Activities | (170.5) | (11.9) | 0 | ||
Effect of Exchange Rate on Cash and Cash Equivalents | 0 | 0 | 0 | ||
(Decrease) Increase in Cash and Cash Equivalents | 2.5 | (2.5) | 0 | ||
Cash and Cash Equivalents - Beginning of Year | (2.5) | 0 | 0 | ||
Cash and Cash Equivalents - End of Year | 0 | 0 | (2.5) | 0 | |
Parent | Reportable legal entities | |||||
Operating Activities | |||||
Cash (Used in) Provided by Operating Activities | (33) | (44.7) | 0 | ||
Investing Activities | |||||
Capital expenditures | 0 | 0 | 0 | ||
Acquisition of business, net of cash acquired | (175) | ||||
Proceeds from dispositions of property | 0 | 0 | 0 | ||
Intercompany contributions | 0.5 | 39.9 | |||
Cash Used in Investing Activities | (174.5) | 39.9 | 0 | ||
Financing Activities | |||||
Intercompany contributions | 170.8 | 46.5 | 66.7 | ||
Line of credit facility proceeds | 72 | ||||
Line of credit facility repayments | (72) | ||||
Debt repayments | (51) | 0 | |||
Debt proceeds | 636.1 | ||||
Debt issuance costs | (0.9) | (11.8) | |||
Purchase of treasury stock | (0.9) | (1) | |||
Spin-off cash distribution to Kimberly-Clark | (680) | ||||
Net transfers from Kimberly-Clark | 90.2 | ||||
Proceeds and excess tax benefits from the exercise of stock options | 0.4 | 1.4 | |||
Other | 0 | ||||
Cash (Used in) Provided by Financing Activities | 169.4 | (4.1) | 101.2 | ||
Effect of Exchange Rate on Cash and Cash Equivalents | 0 | 0 | 0 | ||
(Decrease) Increase in Cash and Cash Equivalents | (38.1) | (8.9) | 101.2 | ||
Cash and Cash Equivalents - Beginning of Year | 92.3 | 101.2 | 0 | ||
Cash and Cash Equivalents - End of Year | 54.2 | 54.2 | 92.3 | 101.2 | |
Guarantor Subsidiaries | Reportable legal entities | |||||
Operating Activities | |||||
Cash (Used in) Provided by Operating Activities | 207.7 | 110.5 | 41.9 | ||
Investing Activities | |||||
Capital expenditures | (22.7) | (61.3) | (70.8) | ||
Acquisition of business, net of cash acquired | 0 | ||||
Proceeds from dispositions of property | 3.2 | 0 | 0 | ||
Intercompany contributions | (177.9) | (53.1) | |||
Cash Used in Investing Activities | (197.4) | (114.4) | (70.8) | ||
Financing Activities | |||||
Intercompany contributions | 0 | 0 | (48.4) | ||
Line of credit facility proceeds | 0 | ||||
Line of credit facility repayments | 0 | ||||
Debt repayments | 0 | (2.9) | |||
Debt proceeds | 0 | ||||
Debt issuance costs | 0 | 0 | |||
Purchase of treasury stock | 0 | 0 | |||
Spin-off cash distribution to Kimberly-Clark | 0 | ||||
Net transfers from Kimberly-Clark | 77.4 | ||||
Proceeds and excess tax benefits from the exercise of stock options | 0 | 0 | |||
Other | 3.5 | ||||
Cash (Used in) Provided by Financing Activities | 0 | 0 | 29.6 | ||
Effect of Exchange Rate on Cash and Cash Equivalents | (0.8) | 0 | 0.1 | ||
(Decrease) Increase in Cash and Cash Equivalents | 9.5 | (3.9) | 0.8 | ||
Cash and Cash Equivalents - Beginning of Year | 0 | 3.9 | 3.1 | ||
Cash and Cash Equivalents - End of Year | 9.5 | 9.5 | 0 | 3.9 | |
Non-Guarantor Subsidiaries | Reportable legal entities | |||||
Operating Activities | |||||
Cash (Used in) Provided by Operating Activities | 15.8 | 34.3 | 106 | ||
Investing Activities | |||||
Capital expenditures | (6.4) | (9.1) | (7.7) | ||
Acquisition of business, net of cash acquired | 0 | ||||
Proceeds from dispositions of property | 0 | 7.8 | 7.8 | ||
Intercompany contributions | 2.7 | 1.3 | |||
Cash Used in Investing Activities | (3.7) | 0 | 0.1 | ||
Financing Activities | |||||
Intercompany contributions | (0.3) | (34.6) | (18.3) | ||
Line of credit facility proceeds | 0 | ||||
Line of credit facility repayments | 0 | ||||
Debt repayments | 0 | (10.9) | |||
Debt proceeds | 1.9 | ||||
Debt issuance costs | 0 | 0 | |||
Purchase of treasury stock | 0 | 0 | |||
Spin-off cash distribution to Kimberly-Clark | 0 | ||||
Net transfers from Kimberly-Clark | (74.3) | ||||
Proceeds and excess tax benefits from the exercise of stock options | 0 | 0 | |||
Other | 0 | ||||
Cash (Used in) Provided by Financing Activities | (0.3) | (34.6) | (101.6) | ||
Effect of Exchange Rate on Cash and Cash Equivalents | (1.5) | (3.9) | (1.6) | ||
(Decrease) Increase in Cash and Cash Equivalents | 10.3 | (4.2) | 2.9 | ||
Cash and Cash Equivalents - Beginning of Year | 39.7 | 43.9 | 41 | ||
Cash and Cash Equivalents - End of Year | $ 50 | $ 50 | $ 39.7 | $ 43.9 |