Document and entity information
Document and entity information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 30, 2019 | |
Document and Entity Information [Abstract] | ||
Document type | 10-Q | |
Document period end date | Sep. 30, 2019 | |
Amendment flag | false | |
Entity registrant name | Avantor, Inc. | |
Entity central index key | 0001722482 | |
Current fiscal year end date | --12-31 | |
Entity current reporting status | Yes | |
Entity filer category | Non-accelerated Filer | |
Entity shell company | false | |
Entity small business | false | |
Entity emerging growth company | false | |
Document fiscal year focus | 2019 | |
Document fiscal period focus | Q3 | |
Entity common stock, shares outstanding | 571,734,767 |
Unaudited condensed consolidate
Unaudited condensed consolidated balance sheets - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 173.9 | $ 184.7 |
Accounts receivable, net | 983.3 | 931.2 |
Inventory | 714.5 | 671.1 |
Other current assets | 147 | 112.6 |
Total current assets | 2,018.7 | 1,899.6 |
Property, plant and equipment, net of accumulated depreciation of $290.4 and $225.8 | 559.4 | 598.6 |
Goodwill | 2,736 | 2,784.7 |
Other assets | 200.8 | 63 |
Total assets | 9,763.1 | 9,911.6 |
Liabilities, redeemable equity and stockholders’ equity or deficit | ||
Current portion of debt | 41.4 | 142.4 |
Accounts payable | 556.3 | 557.4 |
Employee-related liabilities | 118.9 | 144.9 |
Accrued interest | 135.1 | 76.6 |
Other current liabilities | 227 | 174.9 |
Total current liabilities | 1,078.7 | 1,096.2 |
Debt, net of current portion | 5,088.7 | 6,782.3 |
Deferred income tax liabilities | 832.8 | 907.5 |
Other liabilities | 407.3 | 318 |
Total liabilities | 7,407.5 | 9,104 |
Commitments and contingencies, see note 10 | ||
Redeemable equity | 0 | 3,859.3 |
Mandatory convertible preferred stock including paid-in capital, 20.7 and zero shares outstanding | 1,003.7 | 0 |
Common stock including paid-in capital, 571.4 and 132.8 shares outstanding | 1,753.7 | (2,746.8) |
Accumulated deficit | (274.3) | (238.4) |
Accumulated other comprehensive loss | (127.5) | (66.5) |
Total stockholders’ equity (deficit) | 2,355.6 | (3,051.7) |
Total liabilities, redeemable equity and stockholders’ equity or deficit | 9,763.1 | 9,911.6 |
Series A preferred stock at redemption value, zero and 2.3 shares outstanding | ||
Liabilities, redeemable equity and stockholders’ equity or deficit | ||
Redeemable equity | 0 | 2,297.3 |
Junior convertible preferred stock, zero and 1.7 shares outstanding | ||
Liabilities, redeemable equity and stockholders’ equity or deficit | ||
Redeemable equity | 0 | 1,562 |
Customer relationships, net of accumulated amortization of $578.7 and $412.5 | ||
Assets | ||
Other intangible assets, net | 3,917 | 4,159.8 |
Other intangible assets, net of accumulated amortization of $203.2 and $146.7 | ||
Assets | ||
Other intangible assets, net | $ 331.2 | $ 405.9 |
Unaudited condensed consolida_2
Unaudited condensed consolidated balance sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Accumulated depreciation on property and equipment | $ 290.4 | $ 225.8 |
Common stock, shares outstanding | 571.4 | 132.8 |
Series A preferred stock at redemption value, zero and 2.3 shares outstanding | ||
Redeemable equity, shares outstanding | 0 | 2.3 |
Junior convertible preferred stock | ||
Redeemable equity, shares outstanding | 0 | 1.7 |
Mandatory convertible preferred stock | ||
Preferred stock, shares outstanding | 20.7 | 0 |
Customer relationships, net of accumulated amortization of $578.7 and $412.5 | ||
Accumulated amortization on intangible assets | $ 578.7 | $ 412.5 |
Other intangible assets, net of accumulated amortization of $203.2 and $146.7 | ||
Accumulated amortization on intangible assets | $ 203.2 | $ 146.7 |
Unaudited condensed consolida_3
Unaudited condensed consolidated statements of operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,503.8 | $ 1,494.2 | $ 4,516.3 | $ 4,390.4 |
Cost of sales | 1,029.8 | 1,015.5 | 3,076 | 3,003.4 |
Gross profit | 474 | 478.7 | 1,440.3 | 1,387 |
Selling, general and administrative expenses | 330.8 | 346.5 | 1,040.4 | 1,072.8 |
Operating income | 143.2 | 132.2 | 399.9 | 314.2 |
Interest expense | (98.3) | (130.2) | (342) | (388.7) |
Loss on extinguishment of debt | 0 | 0 | (70.2) | 0 |
Other (expense) income, net | (7.6) | (0.9) | 2.9 | 7 |
Income (loss) before income taxes | 37.3 | 1.1 | (9.4) | (67.5) |
Income tax (expense) benefit | (15.2) | 33.4 | (23.4) | 33.9 |
Net income (loss) | 22.1 | 34.5 | (32.8) | (33.6) |
Accumulation of yield on preferred stock | (16.4) | (68.9) | (136.4) | (198.4) |
Accretion of make whole premium on series A preferred stock | 0 | 0 | (220.4) | 0 |
Net income (loss) available to common stockholders | $ 5.7 | $ (34.4) | $ (389.6) | $ (232) |
Earnings (loss) per share, basic and diluted | $ 0.01 | $ (0.26) | $ (1.13) | $ (1.75) |
Weighted average shares outstanding: | ||||
Basic | 570 | 132.8 | 343.7 | 132.7 |
Diluted | 580.7 | 132.8 | 343.7 | 132.7 |
Unaudited condensed consolida_4
Unaudited condensed consolidated statements of comprehensive income or loss - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 22.1 | $ 34.5 | $ (32.8) | $ (33.6) |
Other comprehensive income (loss): | ||||
Foreign currency translation — unrealized loss | (62.7) | (0.8) | (59.3) | (59.1) |
Derivative instruments: | ||||
Unrealized gain (loss) | 1 | (0.2) | (0.5) | 1.2 |
Reclassification of gain into earnings | (0.9) | (0.6) | (1.2) | (1.2) |
Defined benefit plans: | ||||
Unrealized (loss) gain | (0.1) | 0 | (0.1) | 0.1 |
Reclassification of gain into earnings | (0.2) | (0.2) | (0.5) | (0.5) |
Other comprehensive loss before income taxes | (62.9) | (1.8) | (61.6) | (59.5) |
Income tax benefit | 0.1 | 0.2 | 0.6 | 0 |
Other comprehensive loss | (62.8) | (1.6) | (61) | (59.5) |
Comprehensive (loss) income | $ (40.7) | $ 32.9 | $ (93.8) | $ (93.1) |
Unaudited condensed consolida_5
Unaudited condensed consolidated statements of redeemable equity - USD ($) $ in Millions | Total | Series A preferred stock | Junior convertible preferred stock |
Beginning balance, redeemable equity at Dec. 31, 2017 | $ 3,589.8 | $ 2,027.8 | $ 1,562 |
Increase (decrease) to redeemable equity | |||
Accumulation of yield | 198.4 | 198.4 | |
Ending balance, redeemable equity at Sep. 30, 2018 | 3,788.2 | 2,226.2 | 1,562 |
Beginning balance, redeemable equity at Jun. 30, 2018 | 3,719.3 | 2,157.3 | 1,562 |
Increase (decrease) to redeemable equity | |||
Accumulation of yield | 68.9 | 68.9 | |
Ending balance, redeemable equity at Sep. 30, 2018 | 3,788.2 | 2,226.2 | 1,562 |
Beginning balance, redeemable equity at Dec. 31, 2018 | 3,859.3 | 2,297.3 | 1,562 |
Increase (decrease) to redeemable equity | |||
Accumulation of yield | 113.2 | 113.2 | |
Accretion of make whole premium | 220.4 | 220.4 | |
Redemptions | 2,630.9 | 2,630.9 | |
Conversions | 1,562 | 1,562 | |
Ending balance, redeemable equity at Sep. 30, 2019 | 0 | 0 | 0 |
Beginning balance, redeemable equity at Jun. 30, 2019 | 0 | 0 | 0 |
Increase (decrease) to redeemable equity | |||
Accumulation of yield | 0 | 0 | |
Ending balance, redeemable equity at Sep. 30, 2019 | $ 0 | $ 0 | $ 0 |
Unaudited condensed consolida_6
Unaudited condensed consolidated statements of stockholders' equity or deficit - USD ($) $ in Millions | Total | Common stock including paid-in capital | Accumulated deficit | AOCI | Mandatory convertible preferred stock |
Cumulative effect of adopting new accounting standard, see note 1 | $ 4.8 | $ 4.8 | |||
Beginning balance, stockholders' equity at Dec. 31, 2017 | (2,620.2) | $ (2,490.3) | (156.3) | $ 26.4 | $ 0 |
Increase (decrease) to stockholders' equity | |||||
Comprehensive income (loss) | (93.1) | (33.6) | (59.5) | ||
Share-based compensation expense | 10.3 | 10.3 | |||
Accumulation of yield | (198.4) | (198.4) | |||
Ending balance, stockholders' equity at Sep. 30, 2018 | (2,896.6) | (2,678.4) | (185.1) | (33.1) | 0 |
Beginning balance, stockholders' equity at Jun. 30, 2018 | (2,864.7) | (2,613.6) | (219.6) | (31.5) | 0 |
Increase (decrease) to stockholders' equity | |||||
Comprehensive income (loss) | 32.9 | 34.5 | (1.6) | ||
Share-based compensation expense | 4.1 | 4.1 | |||
Accumulation of yield | (68.9) | (68.9) | |||
Ending balance, stockholders' equity at Sep. 30, 2018 | (2,896.6) | (2,678.4) | (185.1) | (33.1) | 0 |
Cumulative effect of adopting new accounting standard, see note 1 | (3.1) | (3.1) | |||
Beginning balance, stockholders' equity at Dec. 31, 2018 | (3,051.7) | (2,746.8) | (238.4) | (66.5) | 0 |
Increase (decrease) to stockholders' equity | |||||
Comprehensive income (loss) | (93.8) | (32.8) | (61) | ||
Share-based compensation expense | 54.6 | 54.6 | |||
Award reclassification, see note 14 | 8.8 | 8.8 | |||
Accumulation of yield | (136.4) | (136.4) | |||
Accretion of make whole premium | (220.4) | (220.4) | |||
Issuances, net of issuance costs | 4,235.6 | 3,231.9 | 1,003.7 | ||
Conversions | 1,562 | 1,562 | |||
Ending balance, stockholders' equity at Sep. 30, 2019 | 2,355.6 | 1,753.7 | (274.3) | (127.5) | 1,003.7 |
Beginning balance, stockholders' equity at Jun. 30, 2019 | 2,410.9 | 1,768.3 | (296.4) | (64.7) | 1,003.7 |
Increase (decrease) to stockholders' equity | |||||
Comprehensive income (loss) | (40.7) | 22.1 | (62.8) | ||
Share-based compensation expense | 1.9 | 1.9 | |||
Accumulation of yield | (16.4) | (16.4) | |||
Issuances, net of issuance costs | (0.1) | (0.1) | |||
Ending balance, stockholders' equity at Sep. 30, 2019 | $ 2,355.6 | $ 1,753.7 | $ (274.3) | $ (127.5) | $ 1,003.7 |
Unaudited condensed consolida_7
Unaudited condensed consolidated statements of cash flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||
Net income (loss) | $ (32.8) | $ (33.6) |
Reconciling adjustments: | ||
Depreciation and amortization | 301.6 | 303.5 |
Share-based compensation expense | 57.4 | 14.5 |
Other restructuring charges (see note 9) | 10 | 0 |
Deferred income tax benefit | (67.5) | (135.7) |
Amortization of deferred financing costs | 26.5 | 31.1 |
Loss on extinguishment of debt | 70.2 | 0 |
Provision for accounts receivable and inventory | 22.9 | 19.5 |
Changes in assets and liabilities: | ||
Accounts receivable | (76.9) | (86.7) |
Inventory | (74.1) | (19.8) |
Accounts payable | 7.9 | (28.1) |
Other assets and liabilities | 22.2 | 48.4 |
Other, net | (0.4) | 17.5 |
Net cash provided by operating activities | 267 | 130.6 |
Cash flows from investing activities | ||
Capital expenditures | (39.5) | (32.3) |
Other | 8.8 | 9.1 |
Net cash used in investing activities | (30.7) | (23.2) |
Cash flows from financing activities | ||
Debt repayments | (1,825.4) | (95.4) |
Dividend payment | (15.1) | 0 |
Payments of contingent consideration | (4.6) | (20.5) |
Proceeds from issuance of stock, net of issuance costs | 4,235.6 | 0 |
Redemption of series A preferred stock | (2,630.9) | 0 |
Net cash used in financing activities | (240.4) | (115.9) |
Effect of currency rate changes on cash, restricted cash and equivalents | (6.7) | (5.3) |
Net change in cash, restricted cash and equivalents | (10.8) | (13.8) |
Cash, restricted cash and equivalents, beginning of period | 187.7 | 188.5 |
Cash, restricted cash and equivalents, end of period | $ 176.9 | $ 174.7 |
Nature of operations and presen
Nature of operations and presentation of financial statements | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of operations and presentation of financial statements | 1 . Nature of operations and presentation of financial statements We are a global manufacturer and distributor that provides products and services to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries. Our IPO of common stock and MCPS was on May 17, 2019 (see note 12 ). Among other things, the IPO had the effect of reducing the ownership percentage of certain significant investors, changed the composition of our board and caused one of our investors to cease being a related party (see note 19 ). The following chart depicts selected ownership amounts as if all convertible securities were converted into common stock at the dates indicated: September 30, 2019 December 31, 2018 New Mountain Capital Goldman Sachs Other investors New Mountain Capital Goldman Sachs Other investors 17% 11% 72% 40% 15% 45% Avantor, Inc. and subsidiaries Avantor, Inc. and subsidiaries Basis of presentation We have prepared these condensed consolidated financial statements pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year. We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Registration Statement. Those audited consolidated financial statements include a summary of our significant accounting policies, updates to which are included in note 2 . We report three geographic segments based on customer location: the Americas, Europe and AMEA. For the periods presented, all share and per share information has been adjusted for a stock split that occurred in connection with our IPO (see note 12 ). All intercompany balances and transactions have been eliminated from the financial statements. These financial statements reflect the adoptions of a new revenue recognition standard at January 1, 2018 and a new lease standard at January 1, 2019. Information about the new revenue recognition standard is disclosed in the audited consolidated financial statements included within our Registration Statement. Information about the new lease standard is disclosed in note 3 . Immaterial error The initial draft of the Registration Statement issued in connection with the IPO included unaudited interim financial information for the nine months ended September 30, 2018. We subsequently identified and corrected an immaterial error in the segment financial information that was included therein. The following table presents the impact of the correction: (in millions) Nine months ended September 30, 2018 Previously reported Adjustment As adjusted Net sales: Americas $ 2,590.6 $ 12.4 $ 2,603.0 Europe 1,575.5 (16.2 ) 1,559.3 AMEA 224.3 3.8 228.1 Total $ 4,390.4 $ — $ 4,390.4 Management EBITDA: Americas $ 480.5 $ 3.3 $ 483.8 Europe 259.3 (6.0 ) 253.3 AMEA 51.7 3.0 54.7 Corporate (48.5 ) (0.3 ) (48.8 ) Total $ 743.0 $ — $ 743.0 Reclassifications In the second quarter of 2019, we changed our presentation of disaggregated net sales included in note 6 to depict the product line categories that are regularly used by management. Product sales associated with our service offerings, referred to as specialty procurement, have been reclassified from third party materials & consumables and combined with net sales from services to present the services & specialty procurement product line for all periods presented. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, income and loss during the reporting periods. Actual results could differ from those estimates. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2 . Summary of significant accounting policies Leases We primarily enter into real estate leases for manufacturing, warehousing and commercial office space to support our global operations. We also enter into vehicle and equipment leases to support those operations. We determine if an arrangement is a lease at inception. Short-term leases, defined as having an initial term of twelve months or less, are expensed as incurred and not recorded on the balance sheet. We record the value of all other leased property and the related obligations as assets and liabilities on the balance sheet. Information about the amount and classification of lease assets and liabilities is included in note 18 . At inception, lease assets and liabilities are measured at the present value of future lease payments over the lease term. As most of our leases do not provide an implicit rate, we exercise judgment in selecting the incremental borrowing rate based on the information available at inception to determine the present value of future payments. Operating lease assets are further adjusted for lease incentives and initial direct costs. Our lease terms may include options to extend or terminate the lease. We exercise judgment to calculate the term of those leases when extension or termination options are present, and we include such options in the calculation of the lease term when it is reasonably certain that we will exercise those options. Operating lease expense is recognized on a straight-line basis over the lease term, except for variable rent which is expensed as incurred. Short-term lease and variable rent expense was immaterial to the financial statements and has been included within operating lease expense. Finance lease expense includes depreciation, which is recognized on a straight-line basis over the expected life of the leased asset, and an immaterial amount of interest expense. Some of our lease agreements include both lease and non-lease components. We account for those components separately for real estate leases and as a combined single lease component for all other types of leases. Earnings or loss per share Basic earnings or loss per share is calculated by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares we could have repurchased with the proceeds from the issuance of the potentially dilutive shares. Variable conversion ratios are determined as of period end. Preferred dividends are added back to net income or loss available to common stockholders provided that the preferred securities are not anti-dilutive to the calculation. In periods of net loss available to common stockholders, diluted calculations are equal to basic calculations because the inclusion of dilutive shares would be anti-dilutive. Stockholders’ equity or deficit MCPS is classified as permanent equity and initially recorded at fair value, net of issuance costs. Accrued but unpaid MCPS dividends are classified as other current liabilities with a corresponding reduction to common stock including paid-in capital. Certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity financings are capitalized on the balance sheet as deferred offering costs until such financings are completed. Upon completion of an equity financing, these costs are recorded as a reduction of the proceeds received in arriving at the amount recorded in stockholders’ equity or deficit. When a planned equity financing is abandoned, the deferred offering costs are expensed immediately as a charge to SG&A expenses. |
New accounting standards
New accounting standards | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New accounting standards | 3 . New accounting standards In February 2016, the FASB issued a new standard related to leases. The most significant change for us was the recognition of new assets and liabilities for leases classified as operating leases. Our accounting for finance leases was substantially unchanged. The standard also expanded disclosures about the amount, timing, and uncertainty of cash flows arising from leases. Those new disclosures are provided in notes 2 and 18 . We adopted the standard effective January 1, 2019 using a modified retrospective transition approach whereby the new standard was applied to all leases existing at January 1, 2019 with a cumulative effect adjustment recorded in equity representing the cumulative earnings effect of this new standard. We elected to utilize the package of practical expedients permitted under the transition guidance in the standard which allowed us to not reassess (i) whether any expired or existing contracts contain leases, (ii) historical lease classification and (iii) initial direct costs. The most significant impacts upon adoption were: (i) a $3.1 million cumulative effect adjustment that increased accumulated deficit and (ii) recognition of $155.0 million of operating lease assets and $162.5 million of operating lease liabilities. Other impacts were immaterial and included adjustments to existing finance lease assets and liabilities, recognition of deferred income tax assets and a similar amount of deferred income tax liabilities, and derecognition of prepaid rent expense assets. There were no other new accounting standards that had a material impact to our financial position or results of operations upon adoption in 2019. |
Earnings or loss per share
Earnings or loss per share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings or loss per share | 4 . Earnings or loss per share The following table presents the reconciliation of basic and diluted earnings per share for the three months ended September 30, 2019: (in millions, except per share data) Earnings (numerator) Weighted average shares outstanding (denominator) Earnings per share Basic $ 5.7 570.0 $ 0.01 Effect of dilutive securities: Stock-based awards — 8.3 Warrants — 2.4 Diluted $ 5.7 580.7 $ 0.01 For the three months ended September 30, 2019, diluted earnings per share included accumulated yield of $16.4 million and excluded 70.4 million of common stock equivalents under the MCPS because they were anti-dilutive to the calculation. For all other periods presented, basic and diluted loss per share calculations were the same because we reported a net loss available to common stockholders. As a result, the following potentially dilutive instruments were excluded from those calculations: (in millions) Three months ended September 30, 2018 Nine months ended September 30, 2019 2018 Stock-based awards 19.3 29.7 19.3 MCPS — 70.4 — Total 19.3 100.1 19.3 Additionally, the junior convertible preferred stock and warrants were excluded from the basic loss per share calculation in the 2018 periods because holders of those instruments do not participate in losses. |
Risk and uncertainties
Risk and uncertainties | 9 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Risks and uncertainties | 5 . Risks and uncertainties Remeasurement of foreign currency transactions For the three months ended September 30, 2019, other income, net included $8.2 million of net foreign currency loss from financing activities. On July 11, 2019, we completed an intercompany recapitalization that is intended to mitigate substantially all of our net euro financing exposure in future periods. We still expect to experience gains and losses related to other currencies whose effect has not historically been material to our earnings. |
Segment financial information
Segment financial information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment financial information | 6 . Segment financial information The following tables present information by reportable segment: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Net sales: (as adjusted, see note 1) Americas $ 918.2 $ 912.9 $ 2,701.0 $ 2,603.0 Europe 501.1 503.1 1,561.8 1,559.3 AMEA 84.5 78.2 253.5 228.1 Total $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Management EBITDA: Americas $ 187.7 $ 181.9 $ 560.4 $ 483.8 Europe 85.1 85.0 261.6 253.3 AMEA 16.9 18.9 53.4 54.7 Corporate (20.5 ) (17.6 ) (53.9 ) (48.8 ) Total $ 269.2 $ 268.2 $ 821.5 $ 743.0 The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers. The following table presents the reconciliation of Management EBITDA from net income or loss, the nearest measurement under GAAP: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Net income (loss) $ 22.1 $ 34.5 $ (32.8 ) $ (33.6 ) Interest expense 98.3 130.2 342.0 388.7 Income tax expense (benefit) 15.2 (33.4 ) 23.4 (33.9 ) Depreciation and amortization 100.3 101.3 301.6 303.5 Loss on extinguishment of debt — — 70.2 — Share-based compensation expense 1.7 5.8 57.4 14.5 Net foreign currency loss from financing activities 8.2 3.4 0.1 0.2 Restructuring and severance charges 13.4 16.7 19.8 57.1 Purchase accounting adjustments (3.1 ) (4.1 ) (7.2 ) 2.8 VWR transaction and integration expenses 5.4 5.1 16.8 19.4 Write-offs of working capital and other assets 5.5 0.2 19.9 0.2 Business performance improvement programs 0.4 3.1 2.2 6.4 Long-term incentive plan 0.5 2.7 5.1 8.1 Other 1.3 2.7 3.0 9.6 Management EBITDA $ 269.2 $ 268.2 $ 821.5 $ 743.0 The following table presents net sales by product line: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Proprietary materials & consumables $ 494.2 $ 522.0 $ 1,500.9 $ 1,469.0 Third party materials & consumables 592.8 572.2 1,792.8 1,765.4 Services & specialty procurement 195.7 177.1 562.5 511.1 Equipment & instrumentation 221.1 222.9 660.1 644.9 Total $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 |
Supplemental disclosures of cas
Supplemental disclosures of cash flow information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental disclosures of cash flow information | 7 . Supplemental disclosures of cash flow information The following tables present supplemental disclosures of cash flow information: (in millions) September 30, 2019 December 31, 2018 Cash and cash equivalents $ 173.9 $ 184.7 Restricted cash classified as other assets 3.0 3.0 Total $ 176.9 $ 187.7 (in millions) Nine months ended September 30, 2019 2018 Cash flows from operating activities: Cash paid for income taxes, net $ 100.2 $ 49.9 Cash paid for interest 258.4 300.5 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | 8 . Inventory The following table presents components of inventory: (in millions) September 30, 2019 December 31, 2018 Merchandise inventory $ 438.9 $ 409.0 Finished goods 117.8 122.9 Raw materials 121.4 105.2 Work in process 36.4 34.0 Total $ 714.5 $ 671.1 |
Restructuring and severance
Restructuring and severance | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and severance | 9 . Restructuring and severance The following table presents restructuring and severance charges by plan: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 2017 restructuring program $ 13.3 $ 16.6 $ 19.1 $ 54.8 Other 0.1 0.1 0.7 2.3 Total $ 13.4 $ 16.7 $ 19.8 $ 57.1 Restructuring and severance charges are classified as SG&A expenses. 2017 restructuring program We implemented a $215 million program over a three-year period to optimize our sales, gross margins and operating costs. The spending currently includes an estimated $55 million for capital expenditures and an estimated $135 million for employee severance and related costs, facility closures and other charges. Our plans have included combining sales and marketing resources, eliminating redundant corporate functions, optimizing procurement and our manufacturing footprint, and implementing best practices throughout the organization. We expect all synergies and cost savings to be fully realized by 2021. The following table presents information about charges under the 2017 restructuring program: (in millions) Three months ended September 30, Nine months ended September 30, September 30, 2019 Charges incurred to date Expected remaining charges Total expected charges 2019 2018 2019 2018 Employee severance and related $ 3.0 $ 12.4 $ 8.4 $ 46.0 $ 74.6 $ 15.4 $ 90.0 Facility closure 0.3 0.5 0.7 0.8 1.9 3.1 5.0 Other 10.0 3.7 10.0 8.0 38.4 1.6 40.0 Total $ 13.3 $ 16.6 $ 19.1 $ 54.8 $ 114.9 $ 20.1 $ 135.0 Americas $ 10.3 $ 6.3 $ 11.1 $ 15.7 $ 51.7 $ 9.3 $ 61.0 Europe 2.0 9.5 7.0 37.3 47.6 4.4 52.0 AMEA — 0.8 — 0.8 0.8 0.2 1.0 Corporate 1.0 — 1.0 1.0 14.8 6.2 21.0 Total $ 13.3 $ 16.6 $ 19.1 $ 54.8 $ 114.9 $ 20.1 $ 135.0 Other charges in the table above were to write-down the carrying value of assets we plan to close or sell under the program as well as expense related to a voluntary early retirement program under one of our pension plans in the United States. These charges do not impact the accrued restructuring charges shown in the following table. The following table presents changes to accrued employee severance and related charges under the 2017 restructuring program, which are primarily classified as employee-related current liabilities: (in millions) Employee severance and related Balance at December 31, 2018 $ 33.6 Charges 8.4 Cash payments (23.4 ) Currency translation (1.0 ) Balance at September 30, 2019 $ 17.6 |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 10 . Commitments and contingencies Our business involves commitments and contingencies related to compliance with environmental laws and regulations, the manufacture and sale of products, employment arrangements and litigation. The ultimate resolution of contingencies is subject to significant uncertainty, and it is reasonably possible that contingencies could be decided unfavorably for us. We have also entered into lease commitments as disclosed in note 18 . Environmental laws and regulations Our environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in technology. We believe that known and unknown environmental matters, if not resolved favorably, could have a material effect on our financial position, liquidity and profitability. Mallinckrodt indemnification In 2010, New Mountain Capital acquired us from Covidien plc in accordance with a stock purchase agreement dated May 25, 2010. At that time, we were organized as Mallinckrodt Baker, Inc. or MBI. Pursuant to the terms of that agreement, we are entitled to various levels of indemnification with respect to environmental liabilities involving the former MBI operations. In 2013, in connection with the Covidien plc divestiture of Mallinckrodt Group S.a.r.l and Mallinckrodt LLC, together “Mallinckrodt,” and by a second amendment to the stock purchase agreement dated June 6, 2013, but effective upon the consummation of the divestiture, Covidien plc assigned its obligations as described herein to Mallinckrodt, and Mallinckrodt assumed those obligations from Covidien plc. As a result of the stock purchase agreement and assignment, Mallinckrodt is contractually obligated to indemnify and defend us for all off-site environmental liabilities (for example, Superfund or Comprehensive Environmental Response, Compensation, and Clean-up Act type liabilities) arising from the pre-closing disposal of chemicals or wastes by former MBI operations. In connection with environmental liabilities arising from pre-closing noncompliance with environmental laws, Mallinckrodt is contractually obligated to reimburse us for a percentage of the total liability, with such reimbursements made through disbursements from a $30.0 million environmental escrow established at the time of the closing. Specifically, Mallinckrodt will be responsible for reimbursement of 80% of the total costs up to $40.0 million of such environmental liabilities, 50% of the next $40.0 million of such environmental liabilities and 100% of the next $30.0 million of such environmental liabilities in the aggregate. Currently, reimbursements are 80% of the amounts spent by us, with reimbursements and settlements to date exceeding $12.0 million . In addition, in connection with operation and maintenance activities required pursuant to administrative consent orders and subsequently issued remedial action permits involving our Phillipsburg, New Jersey, facility, amounts in excess of a small annual threshold are also subject to reimbursement, currently at the 80% level. In a separate matter, in 2013, we reached a settlement with Mallinckrodt whereby in exchange for a payment of $4.0 million , all claims regarding non-compliance with process safety management laws and regulations are deemed resolved. We used the settlement proceeds to establish a reserve of $4.0 million and have since made payments to address safety related matters that have reduced the balance of the reserve to $2.6 million as of September 30, 2019 . Other noteworthy matters The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. This matter is covered by the indemnification arrangement previously described. At September 30, 2019 , our accrued obligation under this order is $3.8 million , which is calculated based on expected cash payments discounted at rates ranging from 1.5% in 2019 to 2.1% in 2045. The undiscounted amount of that obligation is $4.5 million . In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland. Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are also monitoring the condition of a closed landfill on that site. These matters are not covered by our indemnification arrangement because they relate to an operation we subsequently acquired. At September 30, 2019 , our balance sheet includes a liability of $3.6 million for remediation and monitoring costs. That liability is estimated primarily on expected remediation payments discounted through 2020 and is not materially different than its undiscounted amount. Manufacture and sale of products Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings. We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements. We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. Litigation At September 30, 2019 , there was no outstanding litigation that we believe would result in material losses if decided against us, and we do not believe that there are any unasserted matters that are reasonably possible to result in a material loss. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 11 . Debt During the first nine months of 2019, we used proceeds from the IPO and operating cash flows to repay $1,096.2 million of U.S. dollar term loans and $625.5 million of euro term loans. We also incurred a loss on extinguishment of debt of $70.2 million , primarily caused by the proportional write-off of unamortized deferred financing costs related to the term loans. The repayment of debt from our IPO improved our credit profile which enabled us to amend our senior secured credit facilities in June 2019. The amendment reduced the annual interest rate margins on our euro term loans by 0.50% and our U.S. dollar term loans by 0.75% . The cost to complete the amendment was not material. The following table presents information about our debt: (dollars in millions) September 30, 2019 December 31, 2018 Interest terms Rate Amount Receivables facility LIBOR plus 1.50% 3.52 % $ — $ 104.0 Senior secured credit facilities: Euro term loans EURIBOR plus 3.25% 3.25 % 417.6 1,078.0 U.S. dollar term loans LIBOR plus 3.00% 5.11 % 742.7 1,838.9 4.75% secured notes fixed rate 4.75 % 545.3 572.5 6% secured notes fixed rate 6.00 % 1,500.0 1,500.0 9% unsecured notes fixed rate 9.00 % 2,000.0 2,000.0 Other 67.3 69.5 Total debt, gross 5,272.9 7,162.9 Less: unamortized deferred financing costs (142.8 ) (238.2 ) Total debt $ 5,130.1 $ 6,924.7 Classification on balance sheets: Current portion of debt $ 41.4 $ 142.4 Debt, net of current portion 5,088.7 6,782.3 Credit facilities The following table presents availability under our credit facilities: (in millions) September 30, 2019 Receivables facility Revolving credit facility Total Current availability $ 250.0 $ 250.0 $ 500.0 Undrawn letters of credit outstanding (12.5 ) (15.3 ) (27.8 ) Outstanding borrowings — — — Unused availability $ 237.5 $ 234.7 $ 472.2 Maximum availability $ 250.0 $ 250.0 $ 500.0 Current availability under the receivables facility depends upon maintaining a sufficient borrowing base of eligible accounts receivable. At September 30, 2019 , $455.6 million of accounts receivable were available as collateral under the facility. |
Redeemable equity and stockhold
Redeemable equity and stockholders' equity or deficit | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Redeemable equity and stockholders' equity or deficit | 12 . Redeemable equity and stockholders’ equity or deficit The following table presents information about our capitalization at September 30, 2019 : (shares in millions) Par value per share Shares authorized Undesignated preferred stock $ 0.01 50.0 Stockholders’ equity: Mandatory convertible preferred stock 0.01 25.0 Common stock 0.01 750.0 In connection with the closing of our IPO, we filed an amended and restated certificate of incorporation to effect a five -for-one split of our common stock and authorize the classes of stock noted above. All shares of common stock, stock-based instruments and per-share data included in these financial statements give effect to the stock split. Initial public offering In the second quarter of 2019, we completed the IPO of our common stock and MCPS. We sold 238.1 million shares of common stock at a price per share of $14 , resulting in net proceeds of $3,231.9 million after deducting underwriting discounts, commissions and other offering costs of $100.8 million . We also sold 20.7 million shares of MCPS at a price per share of $50 , resulting in net proceeds of $1,003.7 million after deducting underwriting discounts, commissions and other offering costs of $31.3 million . Mandatory convertible preferred stock MCPS accrues cumulative dividends at a rate of 6.250% per annum on the liquidation preference of $50 per share. Accrued cumulative dividends in arrears as of September 30, 2019 was $8.1 million , and we paid a dividend of $15.1 million during the nine months ended September 30, 2019. Each share of MCPS converts into between 3.0395 and 3.5714 shares of common stock, depending upon the average trading price of our common stock leading up to the conversion date and subject to customary anti-dilution adjustments. The MCPS converts: • Automatically on May 15, 2022; • Following the occurrence of a change of control or certain other defined events, in which case holders are also entitled to receive a make-whole dividend equal to the present value of all remaining dividends that would have accumulated through May 15, 2022; and • At any time at the option of the holder at the minimum conversion rate of 3.0395 . The holders have the right to appoint two additional members to the board of directors if dividends on the MCPS have not been declared or paid for the equivalent of six or more dividend periods. The holders do not have any other voting rights. In the event of any bankruptcy, liquidation, dissolution or winding up of the Company, the holders are entitled to a liquidation preference of $50 in cash per share before any payment or distribution is made to holders of common stock. Redemption of series A preferred stock In connection with the IPO, we redeemed all outstanding series A preferred stock at an aggregate redemption price of $2,630.9 million . The series A preferred stock redemption price was equal to the sum of their $2,410.5 million liquidation preference on such shares of series A preferred stock and a make-whole premium of $220.4 million . In connection with the redemption, we filed a certificate of elimination to eliminate the 25.0 million of authorized shares designated as series A preferred stock, making those shares available for other preferred stock designations. Conversion of junior convertible preferred stock As a result of the completion of our IPO, all outstanding shares of junior convertible preferred stock automatically converted into 194.5 million shares of common stock. The number of shares of common stock received upon conversion of the junior convertible preferred stock was based on the $2,722.5 million liquidation preference of such stock divided by the IPO price per share of common stock. In connection with the conversion, we filed a certificate of elimination to eliminate the 5.0 million of authorized shares designated as junior convertible preferred stock, making those shares available for other preferred stock designations. |
Accumulated other comprehensive
Accumulated other comprehensive income or loss | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Accumulated other comprehensive income or loss | 13 . Accumulated other comprehensive income or loss The following table presents changes in the components of AOCI: (in millions) Foreign currency translation Derivative instruments Defined benefit plans Total Balance at June 30, 2019 $ (55.6 ) $ (0.2 ) $ (8.9 ) $ (64.7 ) Unrealized (loss) gain (62.7 ) 1.0 (0.1 ) (61.8 ) Reclassification of gain into earnings — (0.9 ) (0.2 ) (1.1 ) Income tax benefit — — 0.1 0.1 Balance at September 30, 2019 $ (118.3 ) $ (0.1 ) $ (9.1 ) $ (127.5 ) Balance at June 30, 2018 $ (34.6 ) $ 0.9 $ 2.2 $ (31.5 ) Unrealized loss (0.8 ) (0.2 ) — (1.0 ) Reclassification of gain into earnings — (0.6 ) (0.2 ) (0.8 ) Income tax benefit — 0.2 — 0.2 Balance at September 30, 2018 $ (35.4 ) $ 0.3 $ 2.0 $ (33.1 ) Balance at December 31, 2018 $ (59.0 ) $ 1.1 $ (8.6 ) $ (66.5 ) Unrealized (loss) gain (59.3 ) (0.5 ) (0.1 ) (59.9 ) Reclassification of gain into earnings — (1.2 ) (0.5 ) (1.7 ) Income tax benefit — 0.5 0.1 0.6 Balance at September 30, 2019 $ (118.3 ) $ (0.1 ) $ (9.1 ) $ (127.5 ) Balance at December 31, 2017 $ 23.7 $ 0.3 $ 2.4 $ 26.4 Unrealized loss (59.1 ) 1.2 0.1 (57.8 ) Reclassification of gain into earnings — (1.2 ) (0.5 ) (1.7 ) Income tax benefit — — — — Balance at September 30, 2018 $ (35.4 ) $ 0.3 $ 2.0 $ (33.1 ) The reclassifications and income tax effects shown above were immaterial to the financial statements. The reclassifications were made to either cost of sales or SG&A expenses depending upon the nature of the underlying transaction. |
Stock-based compensation
Stock-based compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based compensation | 14 . Stock-based compensation The following table presents information about stock-based compensation expense (benefit): (in millions) Classification Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 2019 Plan: Stock options Equity $ 0.9 $ — $ 1.5 $ — Restricted stock units Equity 4.8 — 7.8 — 2017 Plan and predecessors: Stock options Equity 4.2 4.1 38.2 10.2 Optionholder awards Liability 0.7 1.7 2.6 4.2 Restricted stock units Equity 0.3 — 0.7 0.1 NuSil plans: Phantom units Liability (0.9 ) — 0.2 — SARs Equity (8.3 ) — 6.4 — Total $ 1.7 $ 5.8 $ 57.4 $ 14.5 Financial statement classification: Equity-classified $ 1.9 $ 4.1 $ 54.6 $ 10.3 Liability-classified (0.2 ) 1.7 2.8 4.2 At September 30, 2019 , unvested awards under the 2019 Plan have remaining share-based compensation expense of $65.4 million to be recognized over a weighted average period of 3.2 years . 2019 Plan In connection with the IPO, we adopted the 2019 Plan. The 2019 Plan initially provides for up to 23.5 million shares of common stock to be issued in the form of stock options, restricted stock units or other equity-based awards or cash-based awards. The 2019 Plan also provides for 1% annual increases to the number of shares of common stock available for issuance unless reduced by our Board of Directors. The following awards were granted under the 2019 plan in connection with the IPO: • We granted 3.2 million stock options having a grant date fair value of $4.79 per option using the following inputs: an expected term of 6.3 years as determined under the simplified method, 30% volatility and a risk free rate of 2.2% . The options have an exercise price of $14.00 , a ten -year contractual life and will vest annually over four years, subject to the recipient continuously providing service to us through each such date. • We granted 3.6 million restricted stock units having a grant date fair value of $14.00 each. The restricted stock units will vest annually over four years, subject to the recipient continuously providing service to us through each such date. • We converted $26.2 million of long-term cash incentive awards into 1.9 million restricted stock units having a grant date fair value of $14.00 each. Half of the restricted stock units vest on December 31, 2020, subject to the recipient continuously providing service to us through such date; half of the units vest upon achievement of a specified earnings target in addition to that service condition. The conversion was accounted for following the guidance for modifications of stock-based awards with no incremental compensation cost recognized as a result of the conversion. The conversion also resulted in the $8.8 million reclassification of a long-term incentive plan liability into equity. Interim update for awards issued under the 2017 Plan We recognized $26.9 million of stock-based compensation expense upon the completion of the IPO, which satisfied a performance condition for 0.9 million stock options. The expense recognized was equal to the grant date fair value for these awards. Interim update for awards issued under the NuSil Plans The value of a SAR is based on the value of NuSil LLC, a former owner of NuSil and one of our current investors, whose assets primarily consist of shares of our common stock. The IPO established a quoted price and an active market for our common stock, a level 1 fair value measurement. Expense related to our SARs is now remeasured quarterly at fair value based on movements in those quoted prices. At September 30, 2019, outstanding SARs had an aggregate intrinsic value of $28.2 million with no expiration. NuSil LLC is obligated to pay cash to the holders upon settlement of these awards. We do not have any funding obligations to SAR holders or NuSil LLC. Each $1.00 increase (decrease) in the quoted price of our common stock will result in the recognition of an additional $1.9 million of stock-based compensation expense (benefit). |
Other income, net
Other income, net | 9 Months Ended |
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Other income, net | 15 . Other income or expense, net The following table presents the components of other income, net: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Net foreign currency loss from financing activities $ (8.2 ) $ (3.4 ) $ (0.1 ) $ (0.2 ) Income related to defined benefit plans 1.3 2.5 3.8 7.5 Other (0.7 ) — (0.8 ) (0.3 ) Other (expense) income, net $ (7.6 ) $ (0.9 ) $ 2.9 $ 7.0 |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 16 . Income taxes The following table presents the relationship between income tax expense or benefit and income or loss before income taxes: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Income tax (expense) benefit $ (15.2 ) $ 33.4 $ (23.4 ) $ 33.9 Income (loss) before income taxes 37.3 1.1 (9.4 ) (67.5 ) Income tax expense or benefit in the quarter is based upon the estimated income or loss for the full year. The composition of the income or loss in different countries and adjustments, if any, in the applicable quarterly periods influences our expense or benefit. Because of the anomalies of losses to the effective rate and the inclusion in the prior year of the resolution of 2017 U.S. tax law changes, a prior year comparison is not meaningful. The relationship between pretax income or loss and income tax expense or benefit is greatly affected by the impact of losses for which we cannot claim a tax benefit, non-deductible expenses, and other items that increase tax expense without a relationship to income, such as withholding taxes and changes with respect to uncertain tax positions. |
Financial instruments and fair
Financial instruments and fair value measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial instruments and fair value measurements | 17 . Financial instruments and fair value measurements Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable, debt, contingent consideration arrangements and derivative instruments. Assets and liabilities for which fair value is only disclosed The carrying amount of cash and cash equivalents was the same as its fair value and is a Level 1 measurement. The carrying amounts for trade accounts receivable and accounts payable approximated fair value due to their short-term nature and are Level 2 measurements. The following table presents the gross amounts and fair values of debt instruments: (in millions) September 30, 2019 December 31, 2018 Gross amount Fair value Gross amount Fair value Receivables facility $ — $ — $ 104.0 $ 104.0 Senior secured credit facilities: Euro term loans 417.6 423.1 1,078.0 1,063.2 U.S. dollar term loans 742.7 749.6 1,838.9 1,786.0 4.75% secured notes 545.3 584.9 572.5 581.2 6% secured notes 1,500.0 1,610.0 1,500.0 1,467.8 9% unsecured notes 2,000.0 2,250.4 2,000.0 1,998.5 Other 67.3 67.3 69.5 69.5 Total $ 5,272.9 $ 5,685.3 $ 7,162.9 $ 7,070.2 The gross amounts of debt instruments exclude unamortized deferred financing costs (see note 11 ). The fair values of debt instruments are based on standard pricing models that take into account the present value of future cash flows, and in some cases private trading data, which are Level 2 measurements. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 18 . Leases The following table presents lease assets and liabilities and their balance sheet classification: (in millions) Classification September 30, 2019 Operating leases: Lease assets Other assets $ 119.5 Current portion of liabilities Other current liabilities 29.7 Liabilities, net of current portion Other liabilities 96.7 Finance leases: Lease assets Property, plant and equipment, net 54.7 Current portion of liabilities Current portion of debt 3.3 Liabilities, net of current portion Debt, net of current portion 56.4 The following tables present information about lease expense: (in millions) Classification Three months ended September 30, 2019 Nine months ended September 30, 2019 Operating lease expense SG&A expenses $ 12.7 $ 39.4 Finance lease expense SG&A expenses 1.6 8.6 Total $ 14.3 $ 48.0 Finance lease expense consists primarily of amortization of finance lease assets. September 30, 2019 Weighted average remaining lease term, in years: Operating leases 5.5 Finance leases 16.6 Weighted average discount rate: Operating leases 5.8 % Finance leases 8.5 % The following table presents future payments due under leases reconciled to lease liabilities: (in millions) September 30, 2019 Operating leases Finance leases Three months ending December 31, 2019 $ 10.3 $ 2.4 Year ending December 31, 2020 35.2 7.6 2021 30.2 6.6 2022 23.7 5.9 2023 20.2 5.4 Thereafter 32.8 92.7 Total undiscounted lease payments 152.4 120.6 Difference between undiscounted and discounted lease payments (26.0 ) (60.9 ) Lease liabilities $ 126.4 $ 59.7 The following table presents future minimum payments under operating leases: (in millions) December 31, 2018 2019 $ 44.2 2020 34.1 2021 29.2 2022 25.7 2023 20.9 Thereafter 58.9 Total minimum payments $ 213.0 The following tables present supplemental disclosures of cash flow information: (in millions) Nine months ended September 30, 2019 Cash flows from operating activities: Cash paid under operating leases $ 33.4 Cash paid under finance leases 3.7 Cash flows from financing activities: Cash paid under finance leases 4.1 |
Related party disclosures
Related party disclosures | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related party disclosures | 19 . Related party disclosures New Mountain Capital Prior to the completion of the IPO, we were party to an advisory agreement with New Mountain Capital that required us to pay various fees and expenses on their behalf. In connection with and as a result of the completion of the IPO, our advisory agreement with New Mountain Capital automatically terminated. Goldman Sachs Goldman Sachs acted as co-lead book-running manager for our IPO. In exchange for these services, Goldman Sachs received an aggregate underwriter discount of $24.5 million . Goldman Sachs also executed our June 2019 debt repricing. The cost to complete the repricing was not material. Goldman Sachs purchased shares of common stock in the IPO valued at $70.0 million . Goldman Sachs also received proceeds of $421.9 million upon the redemption of our series A preferred stock and from repayment of term loans held under our senior secured credit facilities. As of September 30, 2019, Goldman Sachs held $9.1 million of term loans under our senior secured credit facilities. PSP Investments Following the IPO, PSP Investments received proceeds of $302.5 million upon redemption of our series A preferred stock and lost the right to nominate a director to our board. As a result, PSP Investments no longer meets the definition of a related party. |
Nature of operations and pres_2
Nature of operations and presentation of financial statements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of presentation We have prepared these condensed consolidated financial statements pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year. We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Registration Statement. Those audited consolidated financial statements include a summary of our significant accounting policies, updates to which are included in note 2 . We report three geographic segments based on customer location: the Americas, Europe and AMEA. For the periods presented, all share and per share information has been adjusted for a stock split that occurred in connection with our IPO (see note 12 ). All intercompany balances and transactions have been eliminated from the financial statements. These financial statements reflect the adoptions of a new revenue recognition standard at January 1, 2018 and a new lease standard at January 1, 2019. Information about the new revenue recognition standard is disclosed in the audited consolidated financial statements included within our Registration Statement. Information about the new lease standard is disclosed in note 3 . |
Reclassifications | Reclassifications In the second quarter of 2019, we changed our presentation of disaggregated net sales included in note 6 to depict the product line categories that are regularly used by management. Product sales associated with our service offerings, referred to as specialty procurement, have been reclassified from third party materials & consumables and combined with net sales from services to present the services & specialty procurement product line for all periods presented. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, income and loss during the reporting periods. Actual results could differ from those estimates. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Leases | Leases We primarily enter into real estate leases for manufacturing, warehousing and commercial office space to support our global operations. We also enter into vehicle and equipment leases to support those operations. We determine if an arrangement is a lease at inception. Short-term leases, defined as having an initial term of twelve months or less, are expensed as incurred and not recorded on the balance sheet. We record the value of all other leased property and the related obligations as assets and liabilities on the balance sheet. Information about the amount and classification of lease assets and liabilities is included in note 18 . At inception, lease assets and liabilities are measured at the present value of future lease payments over the lease term. As most of our leases do not provide an implicit rate, we exercise judgment in selecting the incremental borrowing rate based on the information available at inception to determine the present value of future payments. Operating lease assets are further adjusted for lease incentives and initial direct costs. Our lease terms may include options to extend or terminate the lease. We exercise judgment to calculate the term of those leases when extension or termination options are present, and we include such options in the calculation of the lease term when it is reasonably certain that we will exercise those options. Operating lease expense is recognized on a straight-line basis over the lease term, except for variable rent which is expensed as incurred. Short-term lease and variable rent expense was immaterial to the financial statements and has been included within operating lease expense. Finance lease expense includes depreciation, which is recognized on a straight-line basis over the expected life of the leased asset, and an immaterial amount of interest expense. Some of our lease agreements include both lease and non-lease components. We account for those components separately for real estate leases and as a combined single lease component for all other types of leases. |
Earnings or loss per share | Earnings or loss per share Basic earnings or loss per share is calculated by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares we could have repurchased with the proceeds from the issuance of the potentially dilutive shares. Variable conversion ratios are determined as of period end. Preferred dividends are added back to net income or loss available to common stockholders provided that the preferred securities are not anti-dilutive to the calculation. In periods of net loss available to common stockholders, diluted calculations are equal to basic calculations because the inclusion of dilutive shares would be anti-dilutive. |
Stockholders' equity | Stockholders’ equity or deficit MCPS is classified as permanent equity and initially recorded at fair value, net of issuance costs. Accrued but unpaid MCPS dividends are classified as other current liabilities with a corresponding reduction to common stock including paid-in capital. Certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity financings are capitalized on the balance sheet as deferred offering costs until such financings are completed. Upon completion of an equity financing, these costs are recorded as a reduction of the proceeds received in arriving at the amount recorded in stockholders’ equity or deficit. When a planned equity financing is abandoned, the deferred offering costs are expensed immediately as a charge to SG&A expenses. |
Nature of operations and pres_3
Nature of operations and presentation of financial statements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of immaterial error correction | The following table presents the impact of the correction: (in millions) Nine months ended September 30, 2018 Previously reported Adjustment As adjusted Net sales: Americas $ 2,590.6 $ 12.4 $ 2,603.0 Europe 1,575.5 (16.2 ) 1,559.3 AMEA 224.3 3.8 228.1 Total $ 4,390.4 $ — $ 4,390.4 Management EBITDA: Americas $ 480.5 $ 3.3 $ 483.8 Europe 259.3 (6.0 ) 253.3 AMEA 51.7 3.0 54.7 Corporate (48.5 ) (0.3 ) (48.8 ) Total $ 743.0 $ — $ 743.0 |
Earnings or loss per share (Tab
Earnings or loss per share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted earnings per share | The following table presents the reconciliation of basic and diluted earnings per share for the three months ended September 30, 2019: (in millions, except per share data) Earnings (numerator) Weighted average shares outstanding (denominator) Earnings per share Basic $ 5.7 570.0 $ 0.01 Effect of dilutive securities: Stock-based awards — 8.3 Warrants — 2.4 Diluted $ 5.7 580.7 $ 0.01 |
Schedule of securities excluded from calculations of diluted loss per share | For all other periods presented, basic and diluted loss per share calculations were the same because we reported a net loss available to common stockholders. As a result, the following potentially dilutive instruments were excluded from those calculations: (in millions) Three months ended September 30, 2018 Nine months ended September 30, 2019 2018 Stock-based awards 19.3 29.7 19.3 MCPS — 70.4 — Total 19.3 100.1 19.3 |
Segment financial information (
Segment financial information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of segment financial information | The following tables present information by reportable segment: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Net sales: (as adjusted, see note 1) Americas $ 918.2 $ 912.9 $ 2,701.0 $ 2,603.0 Europe 501.1 503.1 1,561.8 1,559.3 AMEA 84.5 78.2 253.5 228.1 Total $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 Management EBITDA: Americas $ 187.7 $ 181.9 $ 560.4 $ 483.8 Europe 85.1 85.0 261.6 253.3 AMEA 16.9 18.9 53.4 54.7 Corporate (20.5 ) (17.6 ) (53.9 ) (48.8 ) Total $ 269.2 $ 268.2 $ 821.5 $ 743.0 The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers. |
Reconciliation of segment profitability to consolidated earnings | The following table presents the reconciliation of Management EBITDA from net income or loss, the nearest measurement under GAAP: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Net income (loss) $ 22.1 $ 34.5 $ (32.8 ) $ (33.6 ) Interest expense 98.3 130.2 342.0 388.7 Income tax expense (benefit) 15.2 (33.4 ) 23.4 (33.9 ) Depreciation and amortization 100.3 101.3 301.6 303.5 Loss on extinguishment of debt — — 70.2 — Share-based compensation expense 1.7 5.8 57.4 14.5 Net foreign currency loss from financing activities 8.2 3.4 0.1 0.2 Restructuring and severance charges 13.4 16.7 19.8 57.1 Purchase accounting adjustments (3.1 ) (4.1 ) (7.2 ) 2.8 VWR transaction and integration expenses 5.4 5.1 16.8 19.4 Write-offs of working capital and other assets 5.5 0.2 19.9 0.2 Business performance improvement programs 0.4 3.1 2.2 6.4 Long-term incentive plan 0.5 2.7 5.1 8.1 Other 1.3 2.7 3.0 9.6 Management EBITDA $ 269.2 $ 268.2 $ 821.5 $ 743.0 |
Schedule of net sales by product line | The following table presents net sales by product line: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Proprietary materials & consumables $ 494.2 $ 522.0 $ 1,500.9 $ 1,469.0 Third party materials & consumables 592.8 572.2 1,792.8 1,765.4 Services & specialty procurement 195.7 177.1 562.5 511.1 Equipment & instrumentation 221.1 222.9 660.1 644.9 Total $ 1,503.8 $ 1,494.2 $ 4,516.3 $ 4,390.4 |
Supplemental disclosures of c_2
Supplemental disclosures of cash flow information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental disclosures of cash flow information | The following tables present supplemental disclosures of cash flow information: (in millions) September 30, 2019 December 31, 2018 Cash and cash equivalents $ 173.9 $ 184.7 Restricted cash classified as other assets 3.0 3.0 Total $ 176.9 $ 187.7 (in millions) Nine months ended September 30, 2019 2018 Cash flows from operating activities: Cash paid for income taxes, net $ 100.2 $ 49.9 Cash paid for interest 258.4 300.5 The following tables present supplemental disclosures of cash flow information: (in millions) Nine months ended September 30, 2019 Cash flows from operating activities: Cash paid under operating leases $ 33.4 Cash paid under finance leases 3.7 Cash flows from financing activities: Cash paid under finance leases 4.1 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory components | The following table presents components of inventory: (in millions) September 30, 2019 December 31, 2018 Merchandise inventory $ 438.9 $ 409.0 Finished goods 117.8 122.9 Raw materials 121.4 105.2 Work in process 36.4 34.0 Total $ 714.5 $ 671.1 |
Restructuring and severance (Ta
Restructuring and severance (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of restructuring and severance charges | The following table presents restructuring and severance charges by plan: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 2017 restructuring program $ 13.3 $ 16.6 $ 19.1 $ 54.8 Other 0.1 0.1 0.7 2.3 Total $ 13.4 $ 16.7 $ 19.8 $ 57.1 |
2017 restructuring program | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of restructuring and severance charges | The following table presents information about charges under the 2017 restructuring program: (in millions) Three months ended September 30, Nine months ended September 30, September 30, 2019 Charges incurred to date Expected remaining charges Total expected charges 2019 2018 2019 2018 Employee severance and related $ 3.0 $ 12.4 $ 8.4 $ 46.0 $ 74.6 $ 15.4 $ 90.0 Facility closure 0.3 0.5 0.7 0.8 1.9 3.1 5.0 Other 10.0 3.7 10.0 8.0 38.4 1.6 40.0 Total $ 13.3 $ 16.6 $ 19.1 $ 54.8 $ 114.9 $ 20.1 $ 135.0 Americas $ 10.3 $ 6.3 $ 11.1 $ 15.7 $ 51.7 $ 9.3 $ 61.0 Europe 2.0 9.5 7.0 37.3 47.6 4.4 52.0 AMEA — 0.8 — 0.8 0.8 0.2 1.0 Corporate 1.0 — 1.0 1.0 14.8 6.2 21.0 Total $ 13.3 $ 16.6 $ 19.1 $ 54.8 $ 114.9 $ 20.1 $ 135.0 Other charges in the table above were to write-down the carrying value of assets we plan to close or sell under the program as well as expense related to a voluntary early retirement program under one of our pension plans in the United States. These charges do not impact the accrued restructuring charges shown in the following table. |
Schedule of changes to accrued restructuring and severance charges | The following table presents changes to accrued employee severance and related charges under the 2017 restructuring program, which are primarily classified as employee-related current liabilities: (in millions) Employee severance and related Balance at December 31, 2018 $ 33.6 Charges 8.4 Cash payments (23.4 ) Currency translation (1.0 ) Balance at September 30, 2019 $ 17.6 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of information about debt | The following table presents information about our debt: (dollars in millions) September 30, 2019 December 31, 2018 Interest terms Rate Amount Receivables facility LIBOR plus 1.50% 3.52 % $ — $ 104.0 Senior secured credit facilities: Euro term loans EURIBOR plus 3.25% 3.25 % 417.6 1,078.0 U.S. dollar term loans LIBOR plus 3.00% 5.11 % 742.7 1,838.9 4.75% secured notes fixed rate 4.75 % 545.3 572.5 6% secured notes fixed rate 6.00 % 1,500.0 1,500.0 9% unsecured notes fixed rate 9.00 % 2,000.0 2,000.0 Other 67.3 69.5 Total debt, gross 5,272.9 7,162.9 Less: unamortized deferred financing costs (142.8 ) (238.2 ) Total debt $ 5,130.1 $ 6,924.7 Classification on balance sheets: Current portion of debt $ 41.4 $ 142.4 Debt, net of current portion 5,088.7 6,782.3 |
Schedule of availability under credit facilities | The following table presents availability under our credit facilities: (in millions) September 30, 2019 Receivables facility Revolving credit facility Total Current availability $ 250.0 $ 250.0 $ 500.0 Undrawn letters of credit outstanding (12.5 ) (15.3 ) (27.8 ) Outstanding borrowings — — — Unused availability $ 237.5 $ 234.7 $ 472.2 Maximum availability $ 250.0 $ 250.0 $ 500.0 |
Redeemable equity and stockho_2
Redeemable equity and stockholders' equity or deficit (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of information about capitalization | The following table presents information about our capitalization at September 30, 2019 : (shares in millions) Par value per share Shares authorized Undesignated preferred stock $ 0.01 50.0 Stockholders’ equity: Mandatory convertible preferred stock 0.01 25.0 Common stock 0.01 750.0 |
Accumulated other comprehensi_2
Accumulated other comprehensive income or loss (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of changes in components of AOCI | The following table presents changes in the components of AOCI: (in millions) Foreign currency translation Derivative instruments Defined benefit plans Total Balance at June 30, 2019 $ (55.6 ) $ (0.2 ) $ (8.9 ) $ (64.7 ) Unrealized (loss) gain (62.7 ) 1.0 (0.1 ) (61.8 ) Reclassification of gain into earnings — (0.9 ) (0.2 ) (1.1 ) Income tax benefit — — 0.1 0.1 Balance at September 30, 2019 $ (118.3 ) $ (0.1 ) $ (9.1 ) $ (127.5 ) Balance at June 30, 2018 $ (34.6 ) $ 0.9 $ 2.2 $ (31.5 ) Unrealized loss (0.8 ) (0.2 ) — (1.0 ) Reclassification of gain into earnings — (0.6 ) (0.2 ) (0.8 ) Income tax benefit — 0.2 — 0.2 Balance at September 30, 2018 $ (35.4 ) $ 0.3 $ 2.0 $ (33.1 ) Balance at December 31, 2018 $ (59.0 ) $ 1.1 $ (8.6 ) $ (66.5 ) Unrealized (loss) gain (59.3 ) (0.5 ) (0.1 ) (59.9 ) Reclassification of gain into earnings — (1.2 ) (0.5 ) (1.7 ) Income tax benefit — 0.5 0.1 0.6 Balance at September 30, 2019 $ (118.3 ) $ (0.1 ) $ (9.1 ) $ (127.5 ) Balance at December 31, 2017 $ 23.7 $ 0.3 $ 2.4 $ 26.4 Unrealized loss (59.1 ) 1.2 0.1 (57.8 ) Reclassification of gain into earnings — (1.2 ) (0.5 ) (1.7 ) Income tax benefit — — — — Balance at September 30, 2018 $ (35.4 ) $ 0.3 $ 2.0 $ (33.1 ) The reclassifications and income tax effects shown above were immaterial to the financial statements. The reclassifications were made to either cost of sales or SG&A expenses depending upon the nature of the underlying transaction. |
Stock-based compensation (Table
Stock-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of information about stock-based compensation expense | The following table presents information about stock-based compensation expense (benefit): (in millions) Classification Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 2019 Plan: Stock options Equity $ 0.9 $ — $ 1.5 $ — Restricted stock units Equity 4.8 — 7.8 — 2017 Plan and predecessors: Stock options Equity 4.2 4.1 38.2 10.2 Optionholder awards Liability 0.7 1.7 2.6 4.2 Restricted stock units Equity 0.3 — 0.7 0.1 NuSil plans: Phantom units Liability (0.9 ) — 0.2 — SARs Equity (8.3 ) — 6.4 — Total $ 1.7 $ 5.8 $ 57.4 $ 14.5 Financial statement classification: Equity-classified $ 1.9 $ 4.1 $ 54.6 $ 10.3 Liability-classified (0.2 ) 1.7 2.8 4.2 |
Other income, net (Tables)
Other income, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of components of other income, net | The following table presents the components of other income, net: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Net foreign currency loss from financing activities $ (8.2 ) $ (3.4 ) $ (0.1 ) $ (0.2 ) Income related to defined benefit plans 1.3 2.5 3.8 7.5 Other (0.7 ) — (0.8 ) (0.3 ) Other (expense) income, net $ (7.6 ) $ (0.9 ) $ 2.9 $ 7.0 |
Income taxes (Tables)
Income taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of relationship between income tax expense or benefit and income or loss before income taxes | The following table presents the relationship between income tax expense or benefit and income or loss before income taxes: (in millions) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Income tax (expense) benefit $ (15.2 ) $ 33.4 $ (23.4 ) $ 33.9 Income (loss) before income taxes 37.3 1.1 (9.4 ) (67.5 ) |
Financial instruments and fai_2
Financial instruments and fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of gross amounts and fair values of debt instruments | The following table presents the gross amounts and fair values of debt instruments: (in millions) September 30, 2019 December 31, 2018 Gross amount Fair value Gross amount Fair value Receivables facility $ — $ — $ 104.0 $ 104.0 Senior secured credit facilities: Euro term loans 417.6 423.1 1,078.0 1,063.2 U.S. dollar term loans 742.7 749.6 1,838.9 1,786.0 4.75% secured notes 545.3 584.9 572.5 581.2 6% secured notes 1,500.0 1,610.0 1,500.0 1,467.8 9% unsecured notes 2,000.0 2,250.4 2,000.0 1,998.5 Other 67.3 67.3 69.5 69.5 Total $ 5,272.9 $ 5,685.3 $ 7,162.9 $ 7,070.2 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of lease assets and liabilities and their balance sheet classification | The following table presents lease assets and liabilities and their balance sheet classification: (in millions) Classification September 30, 2019 Operating leases: Lease assets Other assets $ 119.5 Current portion of liabilities Other current liabilities 29.7 Liabilities, net of current portion Other liabilities 96.7 Finance leases: Lease assets Property, plant and equipment, net 54.7 Current portion of liabilities Current portion of debt 3.3 Liabilities, net of current portion Debt, net of current portion 56.4 |
Schedule of information about lease expense | The following tables present information about lease expense: (in millions) Classification Three months ended September 30, 2019 Nine months ended September 30, 2019 Operating lease expense SG&A expenses $ 12.7 $ 39.4 Finance lease expense SG&A expenses 1.6 8.6 Total $ 14.3 $ 48.0 Finance lease expense consists primarily of amortization of finance lease assets. September 30, 2019 Weighted average remaining lease term, in years: Operating leases 5.5 Finance leases 16.6 Weighted average discount rate: Operating leases 5.8 % Finance leases 8.5 % |
Schedule of future payments under operating leases | The following table presents future payments due under leases reconciled to lease liabilities: (in millions) September 30, 2019 Operating leases Finance leases Three months ending December 31, 2019 $ 10.3 $ 2.4 Year ending December 31, 2020 35.2 7.6 2021 30.2 6.6 2022 23.7 5.9 2023 20.2 5.4 Thereafter 32.8 92.7 Total undiscounted lease payments 152.4 120.6 Difference between undiscounted and discounted lease payments (26.0 ) (60.9 ) Lease liabilities $ 126.4 $ 59.7 |
Schedule of future payments under finance leases | The following table presents future payments due under leases reconciled to lease liabilities: (in millions) September 30, 2019 Operating leases Finance leases Three months ending December 31, 2019 $ 10.3 $ 2.4 Year ending December 31, 2020 35.2 7.6 2021 30.2 6.6 2022 23.7 5.9 2023 20.2 5.4 Thereafter 32.8 92.7 Total undiscounted lease payments 152.4 120.6 Difference between undiscounted and discounted lease payments (26.0 ) (60.9 ) Lease liabilities $ 126.4 $ 59.7 |
Schedule of future minimum payments under operating leases | The following table presents future minimum payments under operating leases: (in millions) December 31, 2018 2019 $ 44.2 2020 34.1 2021 29.2 2022 25.7 2023 20.9 Thereafter 58.9 Total minimum payments $ 213.0 |
Schedule of supplemental disclosures of cash flow information | The following tables present supplemental disclosures of cash flow information: (in millions) September 30, 2019 December 31, 2018 Cash and cash equivalents $ 173.9 $ 184.7 Restricted cash classified as other assets 3.0 3.0 Total $ 176.9 $ 187.7 (in millions) Nine months ended September 30, 2019 2018 Cash flows from operating activities: Cash paid for income taxes, net $ 100.2 $ 49.9 Cash paid for interest 258.4 300.5 The following tables present supplemental disclosures of cash flow information: (in millions) Nine months ended September 30, 2019 Cash flows from operating activities: Cash paid under operating leases $ 33.4 Cash paid under finance leases 3.7 Cash flows from financing activities: Cash paid under finance leases 4.1 |
Nature of operations and pres_4
Nature of operations and presentation of financial statements - general (Details) - segment | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Nature of operations and basis of presentation | ||
Number of reportable segments | 3 | |
New Mountain Capital | ||
Nature of operations and basis of presentation | ||
Ownership percentage | 17.00% | 40.00% |
Goldman Sachs | ||
Nature of operations and basis of presentation | ||
Ownership percentage | 11.00% | 15.00% |
Other investors | ||
Nature of operations and basis of presentation | ||
Ownership percentage | 72.00% | 45.00% |
Nature of operations and pres_5
Nature of operations and presentation of financial statements - immaterial error (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment financial information | ||||
Net sales | $ 1,503.8 | $ 1,494.2 | $ 4,516.3 | $ 4,390.4 |
Management EBITDA | 269.2 | 268.2 | 821.5 | 743 |
Americas | ||||
Segment financial information | ||||
Net sales | 918.2 | 912.9 | 2,701 | 2,603 |
Management EBITDA | 187.7 | 181.9 | 560.4 | 483.8 |
Europe | ||||
Segment financial information | ||||
Net sales | 501.1 | 503.1 | 1,561.8 | 1,559.3 |
Management EBITDA | 85.1 | 85 | 261.6 | 253.3 |
AMEA | ||||
Segment financial information | ||||
Net sales | 84.5 | 78.2 | 253.5 | 228.1 |
Management EBITDA | 16.9 | 18.9 | 53.4 | 54.7 |
Corporate | ||||
Segment financial information | ||||
Management EBITDA | $ (20.5) | $ (17.6) | $ (53.9) | (48.8) |
Previously reported | ||||
Segment financial information | ||||
Net sales | 4,390.4 | |||
Management EBITDA | 743 | |||
Previously reported | Americas | ||||
Segment financial information | ||||
Net sales | 2,590.6 | |||
Management EBITDA | 480.5 | |||
Previously reported | Europe | ||||
Segment financial information | ||||
Net sales | 1,575.5 | |||
Management EBITDA | 259.3 | |||
Previously reported | AMEA | ||||
Segment financial information | ||||
Net sales | 224.3 | |||
Management EBITDA | 51.7 | |||
Previously reported | Corporate | ||||
Segment financial information | ||||
Management EBITDA | (48.5) | |||
Adjustment | ||||
Segment financial information | ||||
Net sales | 0 | |||
Management EBITDA | 0 | |||
Adjustment | Americas | ||||
Segment financial information | ||||
Net sales | 12.4 | |||
Management EBITDA | 3.3 | |||
Adjustment | Europe | ||||
Segment financial information | ||||
Net sales | (16.2) | |||
Management EBITDA | (6) | |||
Adjustment | AMEA | ||||
Segment financial information | ||||
Net sales | 3.8 | |||
Management EBITDA | 3 | |||
Adjustment | Corporate | ||||
Segment financial information | ||||
Management EBITDA | $ (0.3) |
New accounting standards (Detai
New accounting standards (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
New accounting standards | |||
Cumulative effect adjustment | $ 3.1 | $ (4.8) | |
Operating lease assets | $ 119.5 | ||
Operating lease liabilities | $ 126.4 | ||
New lease standard | |||
New accounting standards | |||
Cumulative effect adjustment | 3.1 | ||
Operating lease assets | 155 | ||
Operating lease liabilities | $ 162.5 |
Earnings or loss per share - re
Earnings or loss per share - reconciliation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings (numerator) | ||||
Basic | $ 5.7 | $ (34.4) | $ (389.6) | $ (232) |
Stock-based awards | 0 | |||
Warrants | 0 | |||
Diluted | $ 5.7 | |||
Weighted average shares outstanding (denominator) | ||||
Basic | 570 | 132.8 | 343.7 | 132.7 |
Stock-based awards | 8.3 | |||
Warrants | 2.4 | |||
Diluted | 580.7 | 132.8 | 343.7 | 132.7 |
Earnings per share | ||||
Basic | $ 0.01 | |||
Diluted | $ 0.01 |
Earnings or loss per share - an
Earnings or loss per share - antidilutive securities (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Diluted loss per share | ||||
Accumulated yield | $ 16.4 | $ 68.9 | $ 136.4 | $ 198.4 |
Number of common shares from convertible instruments that were excluded from calculation | 19.3 | 100.1 | 19.3 | |
Stock options | ||||
Diluted loss per share | ||||
Number of common shares from convertible instruments that were excluded from calculation | 19.3 | 29.7 | 19.3 | |
Mandatory convertible preferred stock | ||||
Diluted loss per share | ||||
Number of common shares from convertible instruments that were excluded from calculation | 0 | 70.4 | 0 |
Risk and uncertainties (Details
Risk and uncertainties (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | ||||
Net foreign currency loss from financing activities | $ 8.2 | $ 3.4 | $ 0.1 | $ 0.2 |
Segment financial information -
Segment financial information - reportable segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Information by reportable segment | ||||
Net sales | $ 1,503.8 | $ 1,494.2 | $ 4,516.3 | $ 4,390.4 |
Management EBITDA | 269.2 | 268.2 | 821.5 | 743 |
Reconciliation of Management EBITDA from net loss | ||||
Net income (loss) | 22.1 | 34.5 | (32.8) | (33.6) |
Interest expense | 98.3 | 130.2 | 342 | 388.7 |
Income tax expense (benefit) | 15.2 | (33.4) | 23.4 | (33.9) |
Depreciation and amortization | 100.3 | 101.3 | 301.6 | 303.5 |
Loss on extinguishment of debt | 0 | 0 | 70.2 | 0 |
Share-based compensation expense | 1.7 | 5.8 | 57.4 | 14.5 |
Net foreign currency loss from financing activities | 8.2 | 3.4 | 0.1 | 0.2 |
Restructuring and severance charges | 13.4 | 16.7 | 19.8 | 57.1 |
Purchase accounting adjustments | (3.1) | (4.1) | (7.2) | 2.8 |
VWR transaction and integration expenses | 5.4 | 5.1 | 16.8 | 19.4 |
Write-offs of working capital and other assets | 5.5 | 0.2 | 19.9 | 0.2 |
Business performance improvement programs | 0.4 | 3.1 | 2.2 | 6.4 |
Long-term incentive plan | 0.5 | 2.7 | 5.1 | 8.1 |
Other | 1.3 | 2.7 | 3 | 9.6 |
Management EBITDA | 269.2 | 268.2 | 821.5 | 743 |
Americas | ||||
Information by reportable segment | ||||
Net sales | 918.2 | 912.9 | 2,701 | 2,603 |
Management EBITDA | 187.7 | 181.9 | 560.4 | 483.8 |
Reconciliation of Management EBITDA from net loss | ||||
Management EBITDA | 187.7 | 181.9 | 560.4 | 483.8 |
Europe | ||||
Information by reportable segment | ||||
Net sales | 501.1 | 503.1 | 1,561.8 | 1,559.3 |
Management EBITDA | 85.1 | 85 | 261.6 | 253.3 |
Reconciliation of Management EBITDA from net loss | ||||
Management EBITDA | 85.1 | 85 | 261.6 | 253.3 |
AMEA | ||||
Information by reportable segment | ||||
Net sales | 84.5 | 78.2 | 253.5 | 228.1 |
Management EBITDA | 16.9 | 18.9 | 53.4 | 54.7 |
Reconciliation of Management EBITDA from net loss | ||||
Management EBITDA | 16.9 | 18.9 | 53.4 | 54.7 |
Corporate | ||||
Information by reportable segment | ||||
Management EBITDA | (20.5) | (17.6) | (53.9) | (48.8) |
Reconciliation of Management EBITDA from net loss | ||||
Management EBITDA | $ (20.5) | $ (17.6) | $ (53.9) | $ (48.8) |
Segment financial information_2
Segment financial information - product lines (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation by product line | ||||
Net sales | $ 1,503.8 | $ 1,494.2 | $ 4,516.3 | $ 4,390.4 |
Proprietary materials & consumables | ||||
Disaggregation by product line | ||||
Net sales | 494.2 | 522 | 1,500.9 | 1,469 |
Third party materials & consumables | ||||
Disaggregation by product line | ||||
Net sales | 592.8 | 572.2 | 1,792.8 | 1,765.4 |
Services & specialty procurement | ||||
Disaggregation by product line | ||||
Net sales | 195.7 | 177.1 | 562.5 | 511.1 |
Equipment & instrumentation | ||||
Disaggregation by product line | ||||
Net sales | $ 221.1 | $ 222.9 | $ 660.1 | $ 644.9 |
Supplemental disclosures of c_3
Supplemental disclosures of cash flow information (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Components and classification of cash, restricted cash and equivalents | ||||
Cash and cash equivalents | $ 173.9 | $ 184.7 | ||
Restricted cash classified as other assets | 3 | 3 | ||
Total | 176.9 | $ 174.7 | $ 187.7 | $ 188.5 |
Cash flows from operating activities | ||||
Cash paid for income taxes, net | 100.2 | 49.9 | ||
Cash paid for interest | $ 258.4 | $ 300.5 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Components of inventory | ||
Merchandise inventory | $ 438.9 | $ 409 |
Finished goods | 117.8 | 122.9 |
Raw materials | 121.4 | 105.2 |
Work in process | 36.4 | 34 |
Total | $ 714.5 | $ 671.1 |
Restructuring and severance - p
Restructuring and severance - period charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Information about restructuring charges | ||||
Charges | $ 13.4 | $ 16.7 | $ 19.8 | $ 57.1 |
2017 restructuring program | ||||
Information about restructuring charges | ||||
Charges | 13.3 | 16.6 | 19.1 | 54.8 |
2017 restructuring program | Americas | ||||
Information about restructuring charges | ||||
Charges | 10.3 | 6.3 | 11.1 | 15.7 |
2017 restructuring program | Europe | ||||
Information about restructuring charges | ||||
Charges | 2 | 9.5 | 7 | 37.3 |
2017 restructuring program | AMEA | ||||
Information about restructuring charges | ||||
Charges | 0 | 0.8 | 0 | 0.8 |
2017 restructuring program | Corporate | ||||
Information about restructuring charges | ||||
Charges | 1 | 0 | 1 | 1 |
2017 restructuring program | Employee severance and related | ||||
Information about restructuring charges | ||||
Charges | 3 | 12.4 | 8.4 | 46 |
2017 restructuring program | Facility closure | ||||
Information about restructuring charges | ||||
Charges | 0.3 | 0.5 | 0.7 | 0.8 |
2017 restructuring program | Other | ||||
Information about restructuring charges | ||||
Charges | 10 | 3.7 | 10 | 8 |
Other | ||||
Information about restructuring charges | ||||
Charges | $ 0.1 | $ 0.1 | $ 0.7 | $ 2.3 |
Restructuring and severance - i
Restructuring and severance - incurred to date and expected charges (Details) - 2017 restructuring program $ in Millions | Sep. 30, 2019USD ($) |
Incurred to date and expected charges | |
Total expected expenditures | $ 215 |
Expected capital expenditures | 55 |
Charges incurred to date | 114.9 |
Expected remaining charges | 20.1 |
Total expected charges | 135 |
Americas | |
Incurred to date and expected charges | |
Charges incurred to date | 51.7 |
Expected remaining charges | 9.3 |
Total expected charges | 61 |
Europe | |
Incurred to date and expected charges | |
Charges incurred to date | 47.6 |
Expected remaining charges | 4.4 |
Total expected charges | 52 |
AMEA | |
Incurred to date and expected charges | |
Charges incurred to date | 0.8 |
Expected remaining charges | 0.2 |
Total expected charges | 1 |
Corporate | |
Incurred to date and expected charges | |
Charges incurred to date | 14.8 |
Expected remaining charges | 6.2 |
Total expected charges | 21 |
Employee severance and related | |
Incurred to date and expected charges | |
Charges incurred to date | 74.6 |
Expected remaining charges | 15.4 |
Total expected charges | 90 |
Facility closure | |
Incurred to date and expected charges | |
Charges incurred to date | 1.9 |
Expected remaining charges | 3.1 |
Total expected charges | 5 |
Other | |
Incurred to date and expected charges | |
Charges incurred to date | 38.4 |
Expected remaining charges | 1.6 |
Total expected charges | $ 40 |
Restructuring and severance - a
Restructuring and severance - accrued charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Changes to accrued charges | ||||
Charges | $ 13.4 | $ 16.7 | $ 19.8 | $ 57.1 |
2017 restructuring program | ||||
Changes to accrued charges | ||||
Charges | 13.3 | 16.6 | 19.1 | 54.8 |
2017 restructuring program | Employee severance and related | ||||
Changes to accrued charges | ||||
Beginning balance | 33.6 | |||
Charges | 3 | $ 12.4 | 8.4 | $ 46 |
Cash payments | (23.4) | |||
Currency translation | (1) | |||
Ending balance | $ 17.6 | $ 17.6 |
Commitments and contingencies (
Commitments and contingencies (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2013 | |
Mallinckrodt indemnification | ||
Commitments and contingencies | ||
Cash held in escrow | $ 30 | |
Mallinckrodt indemnification | Minimum | ||
Commitments and contingencies | ||
Settlement amount awarded | $ 12 | |
Mallinckrodt indemnification | First $40 million of environmental costs | ||
Commitments and contingencies | ||
Percent indemnified | 80.00% | |
Mallinckrodt indemnification | First $40 million of environmental costs | Maximum | ||
Commitments and contingencies | ||
Estimate of possible loss | $ 40 | |
Mallinckrodt indemnification | $40 million to $80 million of environmental costs | ||
Commitments and contingencies | ||
Percent indemnified | 50.00% | |
Mallinckrodt indemnification | $40 million to $80 million of environmental costs | Maximum | ||
Commitments and contingencies | ||
Estimate of possible loss | $ 40 | |
Mallinckrodt indemnification | $80 million to $110 million of environmental costs | ||
Commitments and contingencies | ||
Percent indemnified | 100.00% | |
Mallinckrodt indemnification | $80 million to $110 million of environmental costs | Maximum | ||
Commitments and contingencies | ||
Estimate of possible loss | $ 30 | |
Mallinckrodt indemnification | Non-compliance with process safety | ||
Commitments and contingencies | ||
Settlement amount awarded | $ 4 | |
Accrued loss contingency | 2.6 | $ 4 |
Environmental remediation | Phillipsburg, New Jersey | ||
Commitments and contingencies | ||
Accrued environmental loss | 3.8 | |
Accrued environmental loss, gross | $ 4.5 | |
Environmental remediation | Phillipsburg, New Jersey | Minimum | ||
Commitments and contingencies | ||
Accrued environmental loss, discount rate | 1.50% | |
Environmental remediation | Phillipsburg, New Jersey | Maximum | ||
Commitments and contingencies | ||
Accrued environmental loss, discount rate | 2.10% | |
Environmental remediation | Gliwice, Poland | ||
Commitments and contingencies | ||
Accrued environmental loss | $ 3.6 |
Debt - repayments and repricing
Debt - repayments and repricing (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Repayment and repricing of debt | ||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 70.2 | $ 0 |
Senior secured credit facilities | Term loans | ||||
Repayment and repricing of debt | ||||
Loss on extinguishment of debt | 70.2 | |||
Senior secured credit facilities | Term loans | U.S. dollars | ||||
Repayment and repricing of debt | ||||
Repayment of debt | $ 1,096.2 | |||
Change in interest rate margin | 0.75% | |||
Senior secured credit facilities | Term loans | Euro | ||||
Repayment and repricing of debt | ||||
Repayment of debt | $ 625.5 | |||
Change in interest rate margin | 0.50% |
Debt - components (Details)
Debt - components (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Information about debt | ||
Debt, gross | $ 5,272.9 | $ 7,162.9 |
Unamortized deferred financing costs | (142.8) | (238.2) |
Debt | 5,130.1 | 6,924.7 |
Current portion of debt | 41.4 | 142.4 |
Debt, net of current portion | 5,088.7 | 6,782.3 |
Information about credit facilities | ||
Current availability | 500 | |
Undrawn letters of credit outstanding | (27.8) | |
Outstanding borrowings | 0 | |
Unused availability | 472.2 | |
Maximum availability | $ 500 | |
Receivables facility | ||
Information about debt | ||
Interest terms | LIBOR plus 1.50% | |
Interest rate margin | 1.50% | |
Interest rate | 3.52% | |
Debt, gross | $ 0 | 104 |
Information about credit facilities | ||
Current availability | 250 | |
Undrawn letters of credit outstanding | (12.5) | |
Outstanding borrowings | 0 | |
Unused availability | 237.5 | |
Maximum availability | 250 | |
Amount pledged as collateral | 455.6 | |
Senior secured credit facilities | Multi-currency revolving loan facility | ||
Information about credit facilities | ||
Current availability | 250 | |
Undrawn letters of credit outstanding | (15.3) | |
Outstanding borrowings | 0 | |
Unused availability | 234.7 | |
Maximum availability | $ 250 | |
Senior secured credit facilities | Term loans | Euro | ||
Information about debt | ||
Interest terms | EURIBOR plus 3.25% | |
Interest rate margin | 3.25% | |
Interest rate | 3.25% | |
Debt, gross | $ 417.6 | 1,078 |
Senior secured credit facilities | Term loans | U.S. dollars | ||
Information about debt | ||
Interest terms | LIBOR plus 3.00% | |
Interest rate margin | 3.00% | |
Interest rate | 5.11% | |
Debt, gross | $ 742.7 | 1,838.9 |
Notes | 4.75% secured | ||
Information about debt | ||
Interest terms | fixed rate | |
Interest rate | 4.75% | |
Debt, gross | $ 545.3 | 572.5 |
Notes | 6% secured | ||
Information about debt | ||
Interest terms | fixed rate | |
Interest rate | 6.00% | |
Debt, gross | $ 1,500 | 1,500 |
Notes | 9% unsecured | ||
Information about debt | ||
Interest terms | fixed rate | |
Interest rate | 9.00% | |
Debt, gross | $ 2,000 | 2,000 |
Other | ||
Information about debt | ||
Debt, gross | $ 67.3 | $ 69.5 |
Redeemable equity and stockho_3
Redeemable equity and stockholders' equity or deficit (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | |
Information about capitalization | |||
Dividend payment | $ 15.1 | $ 0 | |
Redemption and conversion of stock | |||
Amount paid to redeem stock | $ 2,630.9 | $ 0 | |
Undesignated preferred stock | |||
Information about capitalization | |||
Preferred stock, par value per share | $ / shares | $ 0.01 | $ 0.01 | |
Preferred stock, shares authorized | shares | 50,000,000 | 50,000,000 | |
Mandatory convertible preferred stock | |||
Information about capitalization | |||
Preferred stock, par value per share | $ / shares | $ 0.01 | $ 0.01 | |
Preferred stock, shares authorized | shares | 25,000,000 | 25,000,000 | |
Dividend rate | 6.25% | ||
Liquidation preference per share | $ / shares | $ 50 | $ 50 | |
Accrued cumulative dividends in arrears | $ 8.1 | ||
Dividend payment | $ 15.1 | ||
Initial public offering | |||
Number of shares issued | shares | 20,700,000 | ||
Price per share issued | $ / shares | $ 50 | $ 50 | |
Proceeds from offering of stock | $ 1,003.7 | ||
Payments of offering costs | $ 31.3 | ||
Mandatory convertible preferred stock | Minimum | |||
Information about capitalization | |||
Conversion ratio | 3.0395 | ||
Mandatory convertible preferred stock | Maximum | |||
Information about capitalization | |||
Conversion ratio | 3.5714 | ||
Common stock | |||
Information about capitalization | |||
Common stock, par value per share | $ / shares | $ 0.01 | $ 0.01 | |
Common stock, shares authorized | shares | 750,000,000 | 750,000,000 | |
Stock split ratio | 5 | ||
Initial public offering | |||
Number of shares issued | shares | 238,100,000 | ||
Price per share issued | $ / shares | $ 14 | $ 14 | |
Proceeds from offering of stock | $ 3,231.9 | ||
Payments of offering costs | 100.8 | ||
Series A preferred stock | |||
Redemption and conversion of stock | |||
Amount paid to redeem stock | $ 2,630.9 | ||
Liquidation preference | $ 2,410.5 | 2,410.5 | |
Redemption premium | $ 220.4 | ||
Shares authorized | shares | 25,000,000 | 25,000,000 | |
Junior convertible preferred stock | |||
Redemption and conversion of stock | |||
Conversion of stock, shares issued | shares | 194,500,000 | ||
Liquidation preference | $ 2,722.5 | $ 2,722.5 | |
Shares authorized | shares | 5,000,000 | 5,000,000 |
Accumulated other comprehensi_3
Accumulated other comprehensive income or loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Changes in AOCI, net of tax | ||||
Beginning balance | $ (64.7) | $ (31.5) | $ (66.5) | $ 26.4 |
Unrealized gain (loss) | (61.8) | (1) | (59.9) | (57.8) |
Reclassification of (gain) loss into earnings | (1.1) | (0.8) | (1.7) | (1.7) |
Income tax expense (benefit) | 0.1 | 0.2 | 0.6 | 0 |
Ending balance | (127.5) | (33.1) | (127.5) | (33.1) |
Foreign currency translation | ||||
Changes in AOCI, net of tax | ||||
Beginning balance | (55.6) | (34.6) | (59) | 23.7 |
Unrealized gain (loss) | (62.7) | (0.8) | (59.3) | (59.1) |
Reclassification of (gain) loss into earnings | 0 | 0 | 0 | 0 |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Ending balance | (118.3) | (35.4) | (118.3) | (35.4) |
Derivative instruments | ||||
Changes in AOCI, net of tax | ||||
Beginning balance | (0.2) | 0.9 | 1.1 | 0.3 |
Unrealized gain (loss) | 1 | (0.2) | (0.5) | 1.2 |
Reclassification of (gain) loss into earnings | (0.9) | (0.6) | (1.2) | (1.2) |
Income tax expense (benefit) | 0 | 0.2 | 0.5 | 0 |
Ending balance | (0.1) | 0.3 | (0.1) | 0.3 |
Defined benefit plans | ||||
Changes in AOCI, net of tax | ||||
Beginning balance | (8.9) | 2.2 | (8.6) | 2.4 |
Unrealized gain (loss) | (0.1) | 0 | (0.1) | 0.1 |
Reclassification of (gain) loss into earnings | (0.2) | (0.2) | (0.5) | (0.5) |
Income tax expense (benefit) | 0.1 | 0 | 0.1 | 0 |
Ending balance | $ (9.1) | $ 2 | $ (9.1) | $ 2 |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Information about expense and shares | ||||
Share-based compensation expense (benefit) | $ 1.7 | $ 5.8 | $ 57.4 | $ 14.5 |
Information about awards other than options | ||||
Award reclassification | 8.8 | |||
Equity-classified | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | 1.9 | 4.1 | 54.6 | 10.3 |
Liability-classified | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | (0.2) | 1.7 | 2.8 | 4.2 |
2019 Plan | ||||
Information about expense and shares | ||||
Remaining share-based compensation expense | $ 65.4 | $ 65.4 | ||
Remaining share-based compensation expense, period of recognition | 3 years 2 months 12 days | |||
Shares authorized | 23.5 | 23.5 | ||
2019 Plan | Stock options | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | $ 0.9 | 0 | $ 1.5 | 0 |
Information about stock options | ||||
Stock options granted | 3.2 | |||
Grant date fair value | $ 4.79 | |||
Expected term | 6 years 3 months 18 days | |||
Expected volatility | 30.00% | |||
Risk free interest rate | 2.20% | |||
Exercise price | $ 14 | |||
Contractual life | 10 years | |||
Vesting period | 4 years | |||
2019 Plan | Restricted stock units | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | 4.8 | 0 | $ 7.8 | 0 |
Information about awards other than options | ||||
Restricted stock units granted | 3.6 | |||
2019 Plan | Restricted stock units | Conversion of LTIP | ||||
Information about awards other than options | ||||
Amount of cash-based award converted | $ 26.2 | |||
Restricted stock units granted | 1.9 | |||
Grant date fair value | $ 14 | |||
Award reclassification | $ 8.8 | |||
2017 Plan and predecessors | Stock options | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | 4.2 | 4.1 | $ 38.2 | 10.2 |
2017 Plan and predecessors | Stock options | Satisfaction of performance condition | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | $ 26.9 | |||
Information about awards other than options | ||||
Stock options outstanding | 0.9 | 0.9 | ||
2017 Plan and predecessors | Optionholder awards | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | $ 0.7 | 1.7 | $ 2.6 | 4.2 |
2017 Plan and predecessors | Restricted stock units | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | 0.3 | 0 | 0.7 | 0.1 |
NuSil plans | Phantom units | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | (0.9) | 0 | 0.2 | 0 |
NuSil plans | SARs | ||||
Information about expense and shares | ||||
Share-based compensation expense (benefit) | (8.3) | $ 0 | 6.4 | $ 0 |
Information about awards other than options | ||||
Intrinsic value | 28.2 | |||
Sensitivity to $1.00 change | $ 1.9 | $ 1.9 |
Other income, net (Details)
Other income, net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | ||||
Net foreign currency loss from financing activities | $ (8.2) | $ (3.4) | $ (0.1) | $ (0.2) |
Income related to defined benefit plans | 1.3 | 2.5 | 3.8 | 7.5 |
Other | (0.7) | 0 | (0.8) | (0.3) |
Other (expense) income, net | $ (7.6) | $ (0.9) | $ 2.9 | $ 7 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (expense) benefit | $ (15.2) | $ 33.4 | $ (23.4) | $ 33.9 |
Income (loss) before income taxes | $ 37.3 | $ 1.1 | $ (9.4) | $ (67.5) |
Financial instruments and fai_3
Financial instruments and fair value measurements (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Gross amount | $ 5,272.9 | $ 7,162.9 |
Level 2 | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Fair value | 5,685.3 | 7,070.2 |
Receivables facility | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Gross amount | 0 | 104 |
Receivables facility | Level 2 | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Fair value | 0 | 104 |
Senior secured credit facilities | Term loans | Euro | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Gross amount | 417.6 | 1,078 |
Senior secured credit facilities | Term loans | Euro | Level 2 | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Fair value | 423.1 | 1,063.2 |
Senior secured credit facilities | Term loans | U.S. dollars | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Gross amount | 742.7 | 1,838.9 |
Senior secured credit facilities | Term loans | U.S. dollars | Level 2 | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Fair value | 749.6 | 1,786 |
Notes | 4.75% secured | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Gross amount | 545.3 | 572.5 |
Notes | 4.75% secured | Level 2 | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Fair value | 584.9 | 581.2 |
Notes | 6% secured | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Gross amount | 1,500 | 1,500 |
Notes | 6% secured | Level 2 | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Fair value | 1,610 | 1,467.8 |
Notes | 9% unsecured | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Gross amount | 2,000 | 2,000 |
Notes | 9% unsecured | Level 2 | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Fair value | 2,250.4 | 1,998.5 |
Other | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Gross amount | 67.3 | 69.5 |
Other | Level 2 | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Fair value | $ 67.3 | $ 69.5 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Information about lease assets and liabilities | |||
Operating lease assets | $ 119.5 | $ 119.5 | |
Finance lease assets | 54.7 | 54.7 | |
Current portion of operating lease liabilities | 29.7 | 29.7 | |
Current portion of finance lease liabilities | 3.3 | 3.3 | |
Operating lease liabilities, net of current portion | 96.7 | 96.7 | |
Finance lease liabilities, net of current portion | 56.4 | 56.4 | |
Information about lease expense | |||
Operating lease expense | 12.7 | 39.4 | |
Finance lease expense | 1.6 | 8.6 | |
Total | $ 14.3 | $ 48 | |
Weighted average remaining lease term, in years | |||
Operating leases | 5 years 6 months | 5 years 6 months | |
Finance leases | 16 years 7 months 6 days | 16 years 7 months 6 days | |
Weighted average discount rate | |||
Operating leases | 5.80% | 5.80% | |
Finance leases | 8.50% | 8.50% | |
Future payments due under operating leases | |||
Three months ending December 31, 2019 | $ 10.3 | $ 10.3 | |
Year ending December 31, | |||
2020 | 35.2 | 35.2 | |
2021 | 30.2 | 30.2 | |
2022 | 23.7 | 23.7 | |
2023 | 20.2 | 20.2 | |
Thereafter | 32.8 | 32.8 | |
Total undiscounted lease payments | 152.4 | 152.4 | |
Difference between undiscounted and discounted lease payments | (26) | (26) | |
Lease liabilities | 126.4 | 126.4 | |
Future payments due under finance leases | |||
Three months ending December 31, 2019 | 2.4 | 2.4 | |
Year ending December 31, | |||
2020 | 7.6 | 7.6 | |
2021 | 6.6 | 6.6 | |
2022 | 5.9 | 5.9 | |
2023 | 5.4 | 5.4 | |
Thereafter | 92.7 | 92.7 | |
Total undiscounted lease payments | 120.6 | 120.6 | |
Difference between undiscounted and discounted lease payments | (60.9) | (60.9) | |
Lease liabilities | $ 59.7 | 59.7 | |
Future payments under operating leases (legacy standard), year ended December 31, | |||
2019 | $ 44.2 | ||
2020 | 34.1 | ||
2021 | 29.2 | ||
2022 | 25.7 | ||
2023 | 20.9 | ||
Thereafter | 58.9 | ||
Total minimum payments | $ 213 | ||
Supplemental disclosures of cash flow information | |||
Cash paid under operating leases | 33.4 | ||
Cash paid under finance leases | 3.7 | ||
Cash paid under finance leases | $ 4.1 |
Related party disclosures (Deta
Related party disclosures (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goldman Sachs | |
Related Party Transaction [Line Items] | |
Related party loan | $ 9.1 |
Goldman Sachs | Underwriter fee | |
Related Party Transaction [Line Items] | |
Amount of related party transaction | 24.5 |
Goldman Sachs | Purchase of shares | |
Related Party Transaction [Line Items] | |
Amount of related party transaction | 70 |
Goldman Sachs | Redemption of preferred stock | |
Related Party Transaction [Line Items] | |
Amount of related party transaction | 421.9 |
PSP Investments | Redemption of preferred stock | |
Related Party Transaction [Line Items] | |
Amount of related party transaction | $ 302.5 |