GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | 20. GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION The Company’s 2022 Notes and 2024 Notes are guaranteed fully and unconditionally, as well as jointly and severally, by its Guarantor Subsidiaries. The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances, only upon the occurrence of certain customary conditions. There are no significant restrictions on the ability of the parent company or any guarantor to obtain funds from its subsidiaries by dividend or loan. The following condensed supplemental consolidating financial information presents the results of operations, financial position, and cash flows of the parent company, its Guarantor Subsidiaries, its non-guarantor subsidiaries, and the eliminations necessary to arrive at the information for the Company on a consolidated basis as of September 30, 2017 and 2016, and for the three and nine months ended September 30, 2017 and 2016. The equity method has been used with respect to investments in subsidiaries. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Condensed Supplemental Consolidating Balance Sheet September 30, 2017 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 76.7 $ 0.2 $ 55.0 $ — $ 131.9 Investments — — 13.2 — 13.2 Accounts receivable, net — 377.6 54.5 — 432.1 Inventories, net — 1,008.3 129.2 — 1,137.5 Prepaid expenses and other current assets 71.7 17.6 21.1 — 110.4 Total current assets 148.4 1,403.7 273.0 — 1,825.1 Property, plant, and equipment, net 27.9 1,104.8 157.1 — 1,289.8 Goodwill — 2,333.7 125.5 — 2,459.2 Investment in subsidiaries 5,212.5 572.0 — (5,784.5 ) — Intercompany accounts (payable) receivable, net (152.7 ) 137.4 15.3 — — Deferred income taxes 23.4 — — (23.4 ) — Intangible and other assets, net 59.4 945.3 106.8 — 1,111.5 Total assets $ 5,318.9 $ 6,496.9 $ 677.7 $ (5,807.9 ) $ 6,685.6 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses $ 25.3 $ 675.3 $ 73.2 $ — $ 773.8 Current portion of long-term debt 70.8 1.2 0.1 — 72.1 Total current liabilities 96.1 676.5 73.3 — 845.9 Long-term debt 2,618.7 1.5 0.2 — 2,620.4 Deferred income taxes — 418.7 26.1 (23.4 ) 421.4 Other long-term liabilities 6.8 187.7 6.1 — 200.6 Stockholders’ equity 2,597.3 5,212.5 572.0 (5,784.5 ) 2,597.3 Total liabilities and stockholders’ equity $ 5,318.9 $ 6,496.9 $ 677.7 $ (5,807.9 ) $ 6,685.6 Condensed Supplemental Consolidating Balance Sheet December 31, 2016 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ — $ 0.2 $ 61.9 $ — $ 62.1 Investments — — 10.4 — 10.4 Accounts receivable, net — 372.9 56.1 — 429.0 Inventories, net — 869.6 108.4 — 978.0 Assets held for sale — 3.6 — — 3.6 Prepaid expenses and other current assets 23.6 36.7 17.3 — 77.6 Total current assets 23.6 1,283.0 254.1 — 1,560.7 Property, plant, and equipment, net 31.3 1,181.0 147.0 — 1,359.3 Goodwill — 2,330.8 116.4 — 2,447.2 Investment in subsidiaries 5,031.5 519.4 — (5,550.9 ) — Intercompany accounts receivable (payable), net 199.6 (196.9 ) (2.7 ) — — Deferred income taxes 20.7 — — (20.7 ) — Intangible and other assets, net 53.9 1,018.0 106.7 — 1,178.6 Total assets $ 5,360.6 $ 6,135.3 $ 621.5 $ (5,571.6 ) $ 6,545.8 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses $ 61.3 $ 493.1 $ 72.4 $ — $ 626.8 Current portion of long-term debt 63.1 3.2 0.1 — 66.4 Total current liabilities 124.4 496.3 72.5 — 693.2 Long-term debt 2,722.3 2.2 0.3 — 2,724.8 Deferred income taxes — 418.3 24.6 (20.7 ) 422.2 Other long-term liabilities 10.6 187.0 4.7 — 202.3 Stockholders’ equity 2,503.3 5,031.5 519.4 (5,550.9 ) 2,503.3 Total liabilities and stockholders’ equity $ 5,360.6 $ 6,135.3 $ 621.5 $ (5,571.6 ) $ 6,545.8 Condensed Supplemental Consolidating Statement of Operations Three Months Ended September 30, 2017 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ 1,458.0 $ 175.9 $ (85.1 ) $ 1,548.8 Cost of sales — 1,221.5 152.3 (85.1 ) 1,288.7 Gross profit — 236.5 23.6 — 260.1 Selling, general, and administrative expense 23.9 128.5 10.3 — 162.7 Amortization expense 3.3 22.7 2.5 — 28.5 Other operating expense, net 2.4 8.0 0.7 — 11.1 Operating (loss) income (29.6 ) 77.3 10.1 — 57.8 Interest expense 31.3 0.1 3.8 (3.8 ) 31.4 Interest income — (3.8 ) (0.4 ) 3.8 (0.4 ) Other (income) expense, net (2.4 ) (1.7 ) 0.8 — (3.3 ) (Loss) income before income taxes (58.5 ) 82.7 5.9 — 30.1 Income taxes (22.4 ) 22.7 1.0 — 1.3 Equity in net income (loss) of subsidiaries 64.9 4.9 — (69.8 ) — Net income (loss) $ 28.8 $ 64.9 $ 4.9 $ (69.8 ) $ 28.8 Condensed Supplemental Consolidating Statement of Operations Three Months Ended September 30, 2016 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ 1,501.8 $ 167.0 $ (81.9 ) $ 1,586.9 Cost of sales — 1,240.2 143.0 (81.9 ) 1,301.3 Gross profit — 261.6 24.0 — 285.6 Selling, general, and administrative expense 23.5 134.5 16.1 — 174.1 Amortization expense 2.3 23.9 2.4 — 28.6 Other operating expense, net — 4.7 0.6 — 5.3 Operating (loss) income (25.8 ) 98.5 4.9 — 77.6 Interest expense 31.0 (0.1 ) 1.1 (1.2 ) 30.8 Interest income — (1.0 ) (0.3 ) 1.2 (0.1 ) Other (income) expense, net — (0.5 ) (5.2 ) — (5.7 ) (Loss) income before income taxes (56.8 ) 100.1 9.3 — 52.6 Income taxes (22.1 ) 35.4 1.9 — 15.2 Equity in net income (loss) of subsidiaries 72.1 7.4 — (79.5 ) — Net income (loss) $ 37.4 $ 72.1 $ 7.4 $ (79.5 ) $ 37.4 Condensed Supplemental Consolidating Statement of Operations Nine Months Ended September 30, 2017 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ 4,353.3 $ 498.8 $ (244.9 ) $ 4,607.2 Cost of sales — 3,596.9 431.8 (244.9 ) 3,783.8 Gross profit — 756.4 67.0 — 823.4 Selling, general, and administrative expense 86.0 408.0 30.3 — 524.3 Amortization expense 9.4 69.2 7.2 — 85.8 Other operating expense, net 2.4 107.4 2.1 — 111.9 Operating (loss) income (97.8 ) 171.8 27.4 — 101.4 Interest expense 94.2 0.3 4.8 (6.4 ) 92.9 Interest income (2.2 ) (6.4 ) (1.3 ) 6.4 (3.5 ) Other (income) expense, net (0.8 ) (1.8 ) 0.8 — (1.8 ) (Loss) income before income taxes (189.0 ) 179.7 23.1 — 13.8 Income taxes (72.6 ) 59.2 4.4 — (9.0 ) Equity in net income (loss) of subsidiaries 139.2 18.7 — (157.9 ) — Net income (loss) $ 22.8 $ 139.2 $ 18.7 $ (157.9 ) $ 22.8 Condensed Supplemental Consolidating Statement of Operations Nine Months Ended September 30, 2016 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net sales $ — $ 4,161.1 $ 459.8 $ (222.4 ) $ 4,398.5 Cost of sales — 3,448.0 396.9 (222.4 ) 3,622.5 Gross profit — 713.1 62.9 — 776.0 Selling, general, and administrative expense 100.1 394.1 42.4 — 536.6 Amortization expense 6.8 67.1 7.0 — 80.9 Other operating expense, net — 8.8 1.5 — 10.3 Operating (loss) income (106.9 ) 243.1 12.0 — 148.2 Interest expense 87.4 0.2 4.0 (3.6 ) 88.0 Interest income (2.2 ) (3.9 ) (1.0 ) 3.6 (3.5 ) Other (income), net — (2.5 ) (3.8 ) — (6.3 ) (Loss) income before income taxes (192.1 ) 249.3 12.8 — 70.0 Income taxes (73.4 ) 90.1 0.1 — 16.8 Equity in net income (loss) of subsidiaries 171.9 12.7 — (184.6 ) — Net income (loss) $ 53.2 $ 171.9 $ 12.7 $ (184.6 ) $ 53.2 Condensed Supplemental Consolidating Statement of Comprehensive Income (Loss) Three Months Ended September 30, 2017 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net income (loss) $ 28.8 $ 64.9 $ 4.9 $ (69.8 ) $ 28.8 Other comprehensive income: Foreign currency translation adjustments — — 18.0 — 18.0 Pension and postretirement reclassification adjustment, net of tax — 0.1 — — 0.1 Other comprehensive income — 0.1 18.0 — 18.1 Equity in other comprehensive income (loss) of subsidiaries 18.1 18.0 — (36.1 ) — Comprehensive income (loss) $ 46.9 $ 83.0 $ 22.9 $ (105.9 ) $ 46.9 Condensed Supplemental Consolidating Statement of Comprehensive Income (Loss) Three Months Ended September 30, 2016 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net income (loss) $ 37.4 $ 72.1 $ 7.4 $ (79.5 ) $ 37.4 Other comprehensive income: Foreign currency translation adjustments — — (7.3 ) — (7.3 ) Pension and postretirement reclassification adjustment, net of tax — 0.3 — — 0.3 Other comprehensive income (loss) — 0.3 (7.3 ) — (7.0 ) Equity in other comprehensive (loss) income of subsidiaries (7.0 ) (7.3 ) — 14.3 — Comprehensive income (loss) $ 30.4 $ 65.1 $ 0.1 $ (65.2 ) $ 30.4 Condensed Supplemental Consolidating Statement of Comprehensive Income (Loss) Nine Months Ended September 30, 2017 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net income (loss) $ 22.8 $ 139.2 $ 18.7 $ (157.9 ) $ 22.8 Other comprehensive income: Foreign currency translation adjustments — — 34.5 — 34.5 Pension and postretirement reclassification adjustment, net of tax — 7.2 — — 7.2 Other comprehensive income — 7.2 34.5 — 41.7 Equity in other comprehensive income (loss) of subsidiaries 41.7 34.5 — (76.2 ) — Comprehensive income (loss) $ 64.5 $ 180.9 $ 53.2 $ (234.1 ) $ 64.5 Condensed Supplemental Consolidating Statement of Comprehensive Income (Loss) Nine Months Ended September 30, 2016 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Net income (loss) $ 53.2 $ 171.9 $ 12.7 $ (184.6 ) $ 53.2 Other comprehensive income: Foreign currency translation adjustments — — 21.6 — 21.6 Pension and postretirement reclassification adjustment, net of tax — 0.8 — — 0.8 Other comprehensive income — 0.8 21.6 — 22.4 Equity in other comprehensive income (loss) of subsidiaries 22.4 21.6 — (44.0 ) — Comprehensive income (loss) $ 75.6 $ 194.3 $ 34.3 $ (228.6 ) $ 75.6 Condensed Supplemental Consolidating Statement of Cash Flows Nine Months Ended September 30, 2017 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ 13.4 $ 406.0 $ 1.4 $ (157.4 ) $ 263.4 Cash flows from investing activities: Additions to property, plant, and equipment (1.6 ) (87.4 ) (13.5 ) — (102.5 ) Additions to intangible assets (17.7 ) (0.8 ) (0.1 ) — (18.6 ) Intercompany transfer 69.8 (128.2 ) — 58.4 — Proceeds from sale of fixed assets — 7.2 — — 7.2 Proceeds from divestiture — 19.0 0.3 — 19.3 Other — — (1.0 ) — (1.0 ) Net cash provided by (used in) investing activities 50.5 (190.2 ) (14.3 ) 58.4 (95.6 ) Cash flows from financing activities: Net (repayment) borrowing of debt (100.8 ) (2.2 ) (0.1 ) — (103.1 ) Intercompany transfer 109.2 (213.6 ) 5.4 99.0 — Receipts related to stock-based award activities 11.1 — — — 11.1 Payments related to stock-based award activities (6.7 ) — — — (6.7 ) Net cash provided by (used in) financing activities 12.8 (215.8 ) 5.3 99.0 (98.7 ) Effect of exchange rate changes on cash and cash equivalents — — 0.7 — 0.7 Increase (decrease) in cash and cash equivalents 76.7 — (6.9 ) — 69.8 Cash and cash equivalents, beginning of period — 0.2 61.9 — 62.1 Cash and cash equivalents, end of period $ 76.7 $ 0.2 $ 55.0 $ — $ 131.9 Condensed Supplemental Consolidating Statement of Cash Flows Nine Months Ended September 30, 2016 (In millions) Parent Guarantor Non-Guarantor Company Subsidiaries Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ 94.2 $ 398.7 $ (10.7 ) $ (183.8 ) $ 298.4 Cash flows from investing activities: Additions to property, plant, and equipment (2.8 ) (119.9 ) (9.2 ) — (131.9 ) Additions to intangible assets (8.2 ) (2.7 ) — — (10.9 ) Intercompany transfer 32.4 (78.4 ) — 46.0 — Acquisitions, less cash acquired (2,687.7 ) 0.3 43.0 — (2,644.4 ) Proceeds from sale of fixed assets — 1.5 — — 1.5 Other — (0.6 ) (0.8 ) — (1.4 ) Net cash (used in) provided by investing activities (2,666.3 ) (199.8 ) 33.0 46.0 (2,787.1 ) Cash flows from financing activities: Net borrowing (repayment) of debt 1,700.1 (2.6 ) — — 1,697.5 Payment of deferred financing costs (34.3 ) — — — (34.3 ) Intercompany transfer 61.9 (196.4 ) (3.3 ) 137.8 — Net proceeds from issuance of common stock 835.1 — — — 835.1 Receipts related to stock-based award activities 7.6 — — — 7.6 Payments related to stock-based award activities (8.7 ) — — — (8.7 ) Net cash provided by (used in) financing activities 2,561.7 (199.0 ) (3.3 ) 137.8 2,497.2 Effect of exchange rate changes on cash and cash equivalents — — 3.8 — 3.8 (Decrease) increase in cash and cash equivalents (10.4 ) (0.1 ) 22.8 — 12.3 Cash and cash equivalents, beginning of period 10.4 0.1 24.4 — 34.9 Cash and cash equivalents, end of period $ — $ — $ 47.2 $ — $ 47.2 |