Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Gates Industrial Corp plc | |
Entity Central Index Key | 1,718,512 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 289,756,379 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 852 | $ 730.2 |
Cost of sales | 516.1 | 443.4 |
Gross profit | 335.9 | 286.8 |
Selling, general and administrative expenses | 208.6 | 188.5 |
Transaction-related costs | 4.7 | 2 |
Impairment of intangibles and other assets | 0.3 | 0 |
Restructuring (benefits) expenses | (0.3) | 1.8 |
Other operating expenses | 4.3 | 0.1 |
Operating income from continuing operations | 118.3 | 94.4 |
Interest expense | 59.8 | 55.2 |
Other expenses | 17.4 | 0.7 |
Income from continuing operations before taxes | 41.1 | 38.5 |
Income tax expense | 11.7 | 12.5 |
Net income from continuing operations | 29.4 | 26 |
Loss (gain) on disposal of discontinued operations, net of tax, respectively, of $0 and $0 | 0.1 | (0.3) |
Net income | 29.3 | 26.3 |
Non-controlling interests | (5.1) | (7.5) |
Net income attributable to shareholders | $ 24.2 | $ 18.8 |
Basic | ||
Earnings per share from continuing operations (in usd per share) | $ 0.09 | $ 0.08 |
Earnings per share from discontinued operations (in usd per share) | 0 | 0 |
Net income per share (in usd per share) | 0.09 | 0.08 |
Diluted | ||
Earnings per share from continuing operations (in usd per share) | 0.09 | 0.07 |
Earnings per share from discontinued operations (in usd per share) | 0 | 0.01 |
Net income per share (in usd per share) | $ 0.09 | $ 0.08 |
Unaudited Condensed Consolidat3
Unaudited Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Income Statement [Abstract] | ||
Gain on disposal of discontinued operations, tax | $ 0 | $ 0 |
Unaudited Condensed Consolidat4
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Net income | $ 29.3 | $ 26.3 |
Foreign currency translation: | ||
—Net translation gain on foreign operations, net of tax benefit, respectively of $1.7 and $2.8 | 77 | 119.6 |
—Loss on net investment hedges, net of tax expense, respectively, of $0 and $0 | (20.9) | (17.9) |
Total foreign currency translation movements | 56.1 | 101.7 |
Cash flow hedges (interest rate caps): | ||
—Gain (loss) arising in the period, net of tax expense, respectively, of $0 and $0 | 9.7 | (1) |
—Reclassification to net income, net of tax expense, respectively, of $0.4 and $0.5 | 2 | 2.2 |
Total cash flow hedges movements | 11.7 | 1.2 |
Available-for-sale investments: | ||
—Net unrealized loss, net of tax benefit, respectively, of $0 and $0.1 | 0 | (0.2) |
Total available-for-sale investments | 0 | (0.2) |
Post-retirement benefits: | ||
—Actuarial loss, net of tax expense, respectively, of $0 and $0 | (0.1) | 0 |
—Reclassification of actuarial (gain) loss to net income, net of tax expense, respectively, of $0 and $0 | (0.2) | 0.1 |
Total post-retirement benefit movements | (0.3) | 0.1 |
Other comprehensive income | 67.5 | 102.8 |
Comprehensive income for the period | 96.8 | 129.1 |
Comprehensive income attributable to shareholders: | ||
Comprehensive income attributable to parent | 75 | 110.8 |
Comprehensive income attributable to non-controlling interests | 21.8 | 18.3 |
—Arising from continuing operations | ||
Comprehensive income attributable to shareholders: | ||
Comprehensive income attributable to parent | 75.1 | 110.5 |
—Arising from discontinued operations | ||
Comprehensive income attributable to shareholders: | ||
Comprehensive income attributable to parent | $ 0.1 | $ (0.3) |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Foreign currency translation: | ||
Net translation gain on foreign operations, tax benefit (expense) | $ 1.7 | $ 2.8 |
Loss on net investment hedges, tax benefit | 0 | 0 |
Cash flow hedges (interest rate caps): | ||
Gain (loss) arising in the period, tax expense | 0 | 0 |
Reclassification to net income, tax expense | 0.4 | 0.5 |
Available-for-sale investments: | ||
Unrealized loss, tax benefit | 0 | 0.1 |
Post-retirement benefits: | ||
Actuarial loss, tax (expense) benefit | 0 | 0 |
Reclassification of actuarial gain to net income, tax benefit | $ 0 | $ 0 |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Current assets | ||
Cash and cash equivalents | $ 328.5 | $ 564.4 |
Trade accounts receivable, net | 799.6 | 713.8 |
Inventories | 492 | 457.1 |
Taxes receivable | 7 | 14.1 |
Prepaid expenses and other assets | 91.5 | 76.8 |
Total current assets | 1,718.6 | 1,826.2 |
Non-current assets | ||
Property, plant and equipment, net | 738.9 | 686.2 |
Goodwill | 2,131.3 | 2,085.5 |
Pension surplus | 60.2 | 57.7 |
Intangible assets, net | 2,123.3 | 2,126.8 |
Taxes receivable | 33.1 | 32.7 |
Other non-current assets | 34.7 | 38.6 |
Total assets | 6,840.1 | 6,853.7 |
Current liabilities | ||
Debt, current portion | 33.7 | 66.4 |
Trade accounts payable | 423.2 | 392 |
Taxes payable | 34.4 | 29 |
Accrued expenses and other current liabilities | 190.2 | 210.4 |
Total current liabilities | 681.5 | 697.8 |
Non-current liabilities | ||
Debt, less current portion | 3,013.6 | 3,889.3 |
Post-retirement benefit obligations | 157.6 | 157.1 |
Taxes payable | 87.7 | 100.6 |
Deferred income taxes | 509.5 | 517.1 |
Other non-current liabilities | 75.1 | 63.4 |
Total liabilities | 4,525 | 5,425.3 |
Commitments and contingencies (Note 18) | ||
Shareholders’ equity | ||
—Shares, par value of $0.01 each - authorized shares: 3,000,000,000; outstanding shares: 289,756,379 (December 30, 2017: authorized shares: 3,000,000,000; outstanding shares: 245,474,605) | 2.9 | 2.5 |
—Additional paid-in capital | 2,412.1 | 1,622.6 |
—Accumulated other comprehensive loss | (696.6) | (747.4) |
—Retained earnings | 161.1 | 136.9 |
Total shareholders’ equity | 1,879.5 | 1,014.6 |
Non-controlling interests | 435.6 | 413.8 |
Total equity | 2,315.1 | 1,428.4 |
Total liabilities and equity | $ 6,840.1 | $ 6,853.7 |
Unaudited Condensed Consolidat7
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Par value (in usd per share) | $ 0.01 | $ 0.01 |
Authorized shares (in shares) | 3,000,000,000 | 3,000,000,000 |
Outstanding shares (in shares) | 289,756,379 | 245,474,605 |
Unaudited Condensed Consolidat8
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Cash flows from operating activities | ||
Net income | $ 29.3 | $ 26.3 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 55 | 52.4 |
Non-cash currency transaction loss (gain) on net debt and hedging instruments | 4.7 | (1.3) |
Premium paid on redemption of long-term debt | 27 | 0 |
Other net non-cash financing costs | 6.4 | 8.6 |
Share-based compensation expense | 1.6 | 0.8 |
Decrease in post-employment benefit obligations (net) | (1.2) | (0.2) |
Deferred income taxes | (11.1) | (12.1) |
Other operating activities | 0.8 | 0.7 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
—Increase in accounts receivable | (78.8) | (60.7) |
—Increase in inventories | (29) | (14.8) |
—Increase in accounts payable | 23.3 | 23.8 |
—Increase in prepaid expenses and other assets | (1.3) | (1.9) |
—(Decrease) increase in taxes payable | (2.4) | 5.6 |
—Decrease in other liabilities | (50.8) | (39.7) |
Net cash used in operations | (26.5) | (12.5) |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (55.9) | (12.6) |
Purchases of intangible assets | (4.6) | (1.3) |
Net cash paid under corporate-owned life insurance policies | (8) | (8.3) |
Proceeds from the sale of property, plant and equipment | 0 | 0.7 |
Other investing activities | (0.9) | (0.1) |
Net cash used in investing activities | (69.4) | (21.6) |
Cash flows from financing activities | ||
Issue of shares, net of cost of issuance | 799.1 | 0.6 |
Deferred offering costs | (3.2) | 0 |
Buy-back of shares | 0 | (1.3) |
Proceeds from long-term debt | 0 | 150 |
Payments of long-term debt | (920.1) | (7) |
Premium paid on redemption of long-term debt | (27) | 0 |
Debt issuance costs paid | 0 | (3.2) |
Dividends paid to non-controlling interests | 0 | (5.9) |
Other financing activities | 6.2 | 0 |
Net cash (used in) provided by financing activities | (145) | 133.2 |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 5.1 | 7.8 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (235.8) | 106.9 |
Cash and cash equivalents and restricted cash at the beginning of the period | 566 | 528.8 |
Cash and cash equivalents and restricted cash at the end of the period | 330.2 | 635.7 |
Supplemental schedule of cash flow information | ||
Interest paid | 73.4 | 67.7 |
Income taxes paid, net | 25.5 | 19.6 |
Non-cash accrued capital expenditures | 2.6 | 1.2 |
Accrued deferred offering costs | $ 5.1 | $ 0 |
Unaudited Condensed Consolidat9
Unaudited Condensed Consolidated Statements of Shareholders’ Equity - USD ($) $ in Millions | Total | Share capital | Additional paid-in capital | Accumulated other comprehensive loss | Retained (deficit) earnings | Total shareholders’ equity | Non- controlling interests |
Beginning Balance at Dec. 31, 2016 | $ 1,068.4 | $ 2.5 | $ 1,619 | $ (915.9) | $ (14.3) | $ 691.3 | $ 377.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 26.3 | 18.8 | 18.8 | 7.5 | |||
Other comprehensive income | 102.8 | 92 | 92 | 10.8 | |||
Comprehensive income for the period | 129.1 | 92 | 18.8 | 110.8 | 18.3 | ||
—Issue of shares | 0.6 | 0.6 | 0.6 | ||||
—Buy-back of shares | (1.3) | (1.3) | (1.3) | ||||
—Share-based compensation | 0.8 | 0.8 | 0.8 | ||||
—Dividends paid to non-controlling interests | (5.9) | (5.9) | |||||
Ending Balance at Apr. 01, 2017 | 1,191.7 | 2.5 | 1,619.1 | (823.9) | 4.5 | 802.2 | 389.5 |
Beginning Balance at Dec. 30, 2017 | 1,428.4 | 2.5 | 1,622.6 | (747.4) | 136.9 | 1,014.6 | 413.8 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 29.3 | 24.2 | 24.2 | 5.1 | |||
Other comprehensive income | 67.5 | 50.8 | 50.8 | 16.7 | |||
Comprehensive income for the period | 96.8 | 50.8 | 24.2 | 75 | 21.8 | ||
—Issue of shares | 841.2 | 0.4 | 840.8 | 841.2 | |||
—Share-based compensation | 1.4 | 1.4 | 1.4 | ||||
—Cost of shares issued | (52.7) | (52.7) | (52.7) | ||||
Ending Balance at Mar. 31, 2018 | $ 2,315.1 | $ 2.9 | $ 2,412.1 | $ (696.6) | $ 161.1 | $ 1,879.5 | $ 435.6 |
Introduction
Introduction | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Introduction | Introduction A. Background Gates Industrial Corporation plc (the “Company”) is a public limited company that was organized under the laws of England and Wales on September 25, 2017. Prior to the completion of the initial public offering of the Company’s shares in January 2018, the Company undertook certain reorganization transactions such that Gates Industrial Corporation plc became the indirect owner of all of the equity interests in Omaha Topco Limited (“Omaha Topco”), and has become the holding company of the Gates business. The previous owners of Omaha Topco were various investment funds managed by The Blackstone Group L.P. (“Blackstone” or our “Sponsor”), and Gates management equity holders. These equity owners of Omaha Topco received depositary receipts representing ordinary shares in the Company in consideration for their equity in Omaha Topco, at a ratio of 0.76293 of our ordinary shares for each outstanding ordinary share of Omaha Topco. All share and per share amounts in these condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of this split. The reorganization was accounted for as a transaction between entities under common control and the net assets were recorded on the historical cost basis, in a manner similar to a pooling of interests, when Omaha Topco was contributed into the Company. Gates Industrial Corporation plc had no significant business transactions or activities prior to the date of the reorganization transactions, and as a result, the historical financial information for periods prior to those transactions reflects that of Omaha Topco. In these condensed consolidated financial statements and related notes, all references to “Gates,” “we,” “us,” and “our” refer, (1) prior to the completion of the reorganization transactions completed immediately prior to the initial public offering, to Omaha Topco and its consolidated subsidiaries and (2) after the completion of the reorganization transactions, to Gates Industrial Corporation plc and its consolidated subsidiaries, as the case may be. B. Accounting periods The Company prepares its annual consolidated financial statements for the period ending on the Saturday nearest December 31. Accordingly, the condensed consolidated balance sheet is presented as of March 31, 2018 and December 30, 2017 and the related condensed consolidated statements of operations, comprehensive income, cash flows, and shareholders’ equity are presented for the 91 day period from December 31, 2017 to March 31, 2018 , with comparative information for the 91 day period from January 1, 2017 to April 1, 2017 . C. Basis of preparation The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars unless otherwise indicated. The condensed consolidated financial statements and related notes contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position as of March 31, 2018 and the results of its operations and cash flows for the periods ended March 31, 2018 and April 1, 2017 . Interim period results are not necessarily indicative of the results to be expected for the full fiscal year. These condensed consolidated financial statements are unaudited and have been prepared on substantially the same basis as Gates’ audited annual consolidated financial statements and related notes for the year ended December 30, 2017 . The condensed consolidated balance sheet as of December 30, 2017 has been derived from those audited financial statements. The accounting policies used in preparing these condensed consolidated financial statements are the same as those applied in the prior year, except for the adoption on the first day of the 2018 fiscal year of the following new Accounting Standard Updates (each, an “ASU”) , all of which were adopted using the method prescribed by the respective ASU, unless otherwise specified. • ASU 2014-09 “ Revenue From Contracts With Customers ” (Topic 606): Revenue Recognition • ASU 2016-08 “ Revenue from Contracts with Customers ” (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) • ASU 2016-10 “ Revenue from Contracts with Customers ” (Topic 606): Identifying Performance Obligations and Licensing • ASU 2016-12 “ Revenue from Contracts with Customers ” (Topic 606): Narrow-Scope Improvements and Practical Expedients • ASU 2016-20 “ Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers ” • ASU 2017-13 “ Revenue from Contracts with Customers ” (Topic 606): Amendments to SEC Paragraphs • ASU 2017-14 “ Income Statement – Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) ” In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09 “ Revenue from Contracts with Customers ” (Topic 606) (“Topic 606”). Topic 606 supersedes the revenue recognition requirements in Topic 605, “ Revenue Recognition ” (Topic 605) (“Topic 605”), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled in exchange for those goods or services. The standards update provides a single, principles-based, five-step model to be applied to all contracts with customers. The five steps are: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The ASU also sets out requirements to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Subsequent to issuing this ASU, the FASB issued several amendments, listed above, which provide clarification, additional guidance, practical expedients and technical corrections. The Company adopted the requirements of Topic 606 as of December 31, 2017, the first day of our 2018 fiscal year, utilizing the modified retrospective method of transition. We have therefore not made any changes to the comparative information which continues to be reported under the prior guidance of Topic 605. As part of the implementation process, t he Company comprehensively reviewed its relationships with its customers and analyzed a number of areas of potential change under Topic 606, including the treatment and calculation of warranty expenses, rebates, branded products, and consignment sales. Management concluded that the impact of Topic 606 on each of these areas on the Company's financial statements was not significant for any of the periods presented or for any of the annual periods that will be included in the Company's 2018 annual consolidated financial statements. No significant changes in net sales or other items in the condensed consolidated financial statements have therefore been made for the three months ended March 31, 2018 in relation to the adoption of Topic 606. Gates derives its net sales primarily from the sale of a wide range of power transmission and fluid power products and components for a large variety of industrial and automotive applications, both in the aftermarket and first-fit channels, throughout the world. Our products are sold in more than 100 countries across our four commercial regions: (1) the Americas; (2) Europe, Middle East & Africa (“EMEA”); (3) Greater China; and (4) East Asia & India. We have a long-standing presence in each of these regions, including our emerging markets, which include China, Southeast Asia, Eastern Europe and South America. We sell to a large variety of customers in many sectors of the industrial and consumer markets, with no significant exposure to any one customer or market. In the substantial majority of our agreements with customers, we consider accepted customer purchase orders, which in some cases are governed by master sales agreements, to represent the contracts with our customers. Revenue from the sale of goods under these contracts is measured at the invoiced amount, net of estimated returns, early settlement discounts and rebates. Taxes collected from customers relating to product sales and remitted to government authorities are excluded from revenues. Where a customer has the right to return goods, future returns are estimated based on historical returns profiles. Settlement discounts that may apply to unpaid invoices are estimated based on the settlement histories of the relevant customers. Our transactions prices often include variable consideration, usually in the form of rebates that may apply to issued invoices. The reduction in the transaction price for variable consideration requires that we make estimations of the expected total qualifying sales to the relevant customers. These estimates, including an analysis for potential constraint on variable consideration, take into account factors such as the nature of the rebate program, historical information and expectations of customer and consumer behavior. Overall, the transaction price is reduced to reflect our estimate of the amount of consideration to which we are entitled based on the terms of the contract. The Company allocates the transaction price to each distinct product based on their relative standalone selling price. The product price as specified on the accepted purchase order is considered to be the standalone selling price. In substantially all of our contracts with customers, our performance obligations are satisfied at a point in time, rather than over a period of time, when control of the product is transferred to the customer. This occurs typically at shipment. In determining whether control has transferred and the customer is consequently able to control the use of the product for their own benefit, the Company considers if there is a present right to payment, legal title has been transferred, and whether the risks and rewards of ownership have transferred to the customer. The majority of our revenue therefore continues to be recognized consistently with Topic 605, when products are shipped from our manufacturing or distribution facilities. As part of our adoption of Topic 606, we elected to use the following practical expedients: (i) to exclude disclosures of transaction prices allocated to remaining performance obligations when the Company expects to recognize such revenue for all periods prior to the date of initial application of Topic 606; (ii) to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less, which is the case in the substantial majority of the Company’s contracts with customers; (iii) not to assess whether a contract has a significant financing component (as the Company’s standard payment terms are less than one year); (iv) not to assess whether promised goods are performance obligations if they are immaterial in the context of the contract with the customer; (v) to exclude from the measurement of the transaction price all taxes assessed by a governmental authority and collected by the Company from a customer; and (vi) to account for shipping or handling activities occurring after control has passed to the customer as a fulfillment cost rather than as a performance obligation. • ASU 2016-15 “ Statement of Cash Flows ” (Topic 230): Classification of Certain Cash Receipts and Cash Payments • ASU 2016-18 “ Statement of Cash Flows ” (Topic 230): Restricted Cash In 2016, the FASB issued two ASUs that clarify the operating, investing and financing cash flow classifications when receiving or paying cash in certain situations including debt prepayments, distributions from equity method investees and proceeds from settlement of corporate-owned life insurance policies. In addition, the new requirement states that an entity should include restricted cash in the cash and cash equivalents line when reconciling the beginning-of-period and end-of-period amounts in the statement of cash flows. In accordance with the transition requirements of these ASUs, the presentation changes to the condensed consolidated statement of cash flows have been made retrospectively with comparative information restated accordingly. This resulted in the reclassification of a cash outflow of $8.3 million in the first three months of 2017 related to the payment of premiums paid under our corporate-owned life insurance policies from cash flow from operating activities to cash flows from investing activities. A similar amount is presented as an investing cash outflow in first three months of 2018. In addition, cash and cash equivalents for the purposes of the condensed consolidated statement of cash flows includes restricted cash of $1.7 million as of March 31, 2018 and $1.6 million as of December 30, 2017, and $1.6 million as of both April 1, 2017 and December 31, 2016 . • ASU 2017-07 “ Compensation-Retirement Benefits ” (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Periodic Post-retirement Benefit Cost In March 2017, the FASB issued an ASU which requires that an employer report the service cost component of its net periodic pension and other post-retirement costs in the same line item as other compensation costs arising from services rendered by the relevant employees during the period. The other components of net periodic benefit cost (which include the interest cost, expected return on plan assets, gains or losses on settlements and curtailments, the amortization of any prior service cost or credit and prior year actuarial gains or losses) are required to be presented in the income statement separately from the service cost component and outside of operating income. Following adoption of this ASU, Gates continues to present the service cost component of our net periodic pension and other post-retirement benefit cost in the lines within operating income to which the relevant employees' other compensation costs are reported. All other components are now included in the other expense (income) line, outside of operating income. In accordance with the transition requirements of this ASU, these presentation changes to the statement of operations have been amended retrospectively. We have adopted the practical expedient of using the amounts disclosed in our historical financial statements as the estimation basis for applying these retrospective presentation requirements. The following ASUs that were also adopted on the first day of the 2018 fiscal year did not have, and we believe will not have, a significant impact on Gates' results, financial position or disclosures: • ASU 2016-01 “ Financial Instruments ” (Topic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities • ASU 2016-16 “ Income Taxes ” (Topic 740): Intra-entity Transfers of Assets other than Inventory • ASU 2017-01 “ Business Combinations ” (Topic 805): Clarifying the definition of a business • ASU 2017-09 “ Stock Compensation ” (Topic 718): Scope of Modification Accounting • ASU 2018-03 “ Technical Corrections and Improvements to Financial Instruments - Overall ” (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities This ASU provides technical corrections and clarifications on various items included in ASU 2016-01, which we have adopted as of the beginning of the 2018 fiscal year. Consistent with our adoption of ASU 2016-01, none of these technical corrections or clarifications are currently expected to have an impact on Gates. While the amendments are effective for the current fiscal year, they are only effective for interim periods beginning after June 15, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 30, 2017 , prepared in accordance with U.S. GAAP, included the Company’s Annual Report on Form 10-K. Certain amounts in the prior period’s condensed consolidated financial statements have been reclassified to conform to the current year presentation. |
Recent accounting pronouncement
Recent accounting pronouncements not yet adopted | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Recent accounting pronouncements not yet adopted | Recent accounting pronouncements not yet adopted The following recent accounting pronouncements are relevant to Gates’ operations but have not yet been adopted. Unless otherwise indicated, management has not yet completed its evaluation of the impact of the adoption of these pronouncements. • ASU 2016-02 “ Leases ” (Topic 842) In February 2016, the FASB issued an ASU which introduces a lessee model that will bring most leases of property, plant and equipment onto the balance sheet. It requires a lessee to recognize a lease obligation (present value of future lease payments) and also a “right of use asset” for all leases, although certain short-term leases are exempted from the standard. The ASU introduces two models for the subsequent measurement of the lease asset and liability, depending on whether the lease qualifies as a “finance lease” or an “operating lease”. This distinction focuses on whether or not effective control of the asset is being transferred from the lessor to the lessee. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The impact on our consolidated financial statements of adopting this ASU, which will affect the recognition, measurement and presentation of leases, is expected to be material given the number and value of leases held, but is still early in the process of being evaluated. • ASU 2016-13 “ Financial Instruments ” (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued an ASU which broadens the information that an entity must consider when developing its expected credit loss estimate for assets. The financial asset must be measured at the net amount expected to be collected. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The impact on our consolidated financial statements of adopting this ASU, which may affect the recognition, measurement and presentation of financial assets, is still being evaluated. • ASU 2017-12 “ Derivatives and Hedging ” (Topic 815): Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued an ASU with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in ASU 2017-12 require an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The new approach no longer separately measures and reports hedge ineffectiveness. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2018. Early application is permitted in any interim period after issuance of ASU 2017-12. An entity should apply a cumulative effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income (“OCI”) and retained earnings as of the beginning of the fiscal year that the entity adopts. The amended presentation and disclosure guidance is required only prospectively. We expect the adoption of this standard update to affect the disclosure and presentation of our derivative and hedging activities, but we have not yet quantified the impact to our financial statements. • ASU 2018-02 “ Income Statement – Reporting Comprehensive Income ” (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued an ASU to address concerns about the guidance in current U.S. GAAP that requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. This concern stemmed from the U.S. federal government’s enactment of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018,” known as the Tax Cuts and Jobs Act (the “Tax Act”), on December 22, 2017. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. The amendments are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the amendments should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. The impact on our consolidated financial statements of adopting this standard update, which may affect the recognition, measurement and presentation of taxes, is still being evaluated. • ASU 2018-05 "Income Taxes" (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update) This ASU adds additional paragraphs to Topic 740, Income Taxes, that contain SEC guidance related to Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Description and financial effect of acquisitions In June 2017, Gates purchased 100% of GTF Engineering and Services UK Limited, the owner of the majority of the net assets of Techflow Flexibles, for $36.7 million . Techflow Flexibles is a fully integrated engineering, manufacturing and commercial operation based in the United Kingdom that specializes in high-pressure flexible hoses. On October 2, 2017, Gates completed the acquisition of Atlas Hydraulics for $74.0 million , net of cash acquired. Atlas Hydraulics is a fully-integrated product engineering, manufacturing, and commercial business headquartered in Ontario, Canada. With locations in Canada, the U.S. and Mexico, the company specializes in the design, manufacture, and supply of hydraulic tube and hose assemblies. Gates incurred aggregate costs related directly to these acquisitions of $3.0 million , all of which are included in the transaction-related costs line in the statement of operations. The following is the record of the fair value of net assets acquired and liabilities assumed: (dollars in millions) Techflow Flexibles Atlas Hydraulics Assets acquired Accounts receivable $ 1.7 $ 10.3 Inventories 4.2 21.2 Prepaid expenses and other receivables 1.7 0.5 Taxes receivable — 2.7 Property, plant and equipment 13.0 24.5 Intangible assets 3.8 23.0 Total assets 24.4 82.2 Liabilities assumed Accounts payable 2.6 5.5 Accrued expenses 4.8 2.4 Other current liabilities 0.3 10.5 Taxes payable 1.9 — Deferred income taxes 0.6 11.6 Total liabilities 10.2 30.0 Net assets acquired $ 14.2 $ 52.2 Goodwill has been recognized as follows: (dollars in millions) Techflow Flexibles Atlas Hydraulics Consideration, net of cash acquired $ 36.7 $ 74.0 Net assets acquired (14.2 ) (52.2 ) Goodwill $ 22.5 $ 21.8 The goodwill of $22.5 million arising from the acquisition of Techflow Flexibles relates largely to the expected enhancement to Gates’ ability to make and supply long-length and large-diameter hoses, primarily for the oil & gas exploration and production industries. None of the goodwill recognized is expected to be deductible for income tax purposes. The goodwill of $21.8 million arising from the acquisition of Atlas Hydraulics relates primarily to the expansion of Gates’ presence in industrial markets through increased manufacturing capacity and geographic reach. None of the goodwill recognized is expected to be deductible for income tax purposes. Pro forma information has not been presented for these acquisitions due to their size relative to Gates. |
Segment information
Segment information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment information | Segment information A. Background Topic 280 “ Segment Reporting ” requires segment information provided in the consolidated financial statements to reflect the information that was provided to the chief operating decision maker for the purposes of making decisions about allocating resources and in assessing the performance of each segment. The chief executive officer (“CEO”) of Gates serves as the chief operating decision maker. The segment information provided in these condensed consolidated financial statements reflects the information that is used by the chief operating decision maker for the purposes of making decisions about allocating resources and in assessing the performance of each segment. These decisions are based on net sales and Adjusted EBITDA (defined below). B. Operating Segments Gates manufactures a wide range of power transmission and fluid power products and components for a large variety of industrial and automotive applications, both in the aftermarket and first-fit channels, throughout the world. Our reportable segments are identified on the basis of our primary product lines, as this is the basis on which information is provided to the CEO for the purposes of allocating resources and assessing the performance of Gates’ businesses. Our operating and reporting segments are therefore Power Transmission and Fluid Power. C. Disaggregated revenue The following table summarizes our net sales by key geographic region: Net Sales Three months ended (dollars in millions) March 31, 2018 April 1, 2017 North America $ 396.0 $ 345.1 EMEA 231.3 189.0 East Asia & India 98.3 90.2 Greater China 92.7 73.4 South America 33.7 32.5 Net Sales $ 852.0 $ 730.2 The following table summarizes further our net sales into emerging and developed markets: Net Sales Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Developed $ 562.2 $ 487.0 Emerging 289.8 243.2 Net Sales $ 852.0 $ 730.2 D. Measure of segment profit or loss The CEO uses Adjusted EBITDA, as defined below, to measure the profitability of each segment. Adjusted EBITDA is, therefore, the measure of segment profit or loss presented in Gates’ segment disclosures. “EBITDA” represents net income for the period before net interest expense and other expenses, income taxes, depreciation and amortization derived from financial information prepared in accordance with U.S. GAAP. Adjusted EBITDA represents EBITDA before specific items that are considered to hinder comparison of the performance of our businesses either year-over-year or with other businesses. During the periods presented, the specific items excluded from EBITDA in computing Adjusted EBITDA primarily included: • the non-cash compensation charge in relation to share-based compensation; • transaction-related costs incurred in relation to business combinations and major corporate transactions, including acquisition integration activities; • the effect on cost of sales of fair value adjustments to the carrying amount of inventory acquired in business combinations; • impairments, comprising impairments of goodwill and significant impairments or write downs of other assets; • restructuring costs; • the net gain or loss on disposals and on the exit of businesses; and • fees paid to our private equity sponsor for monitoring, advisory and consulting services. E. Net sales and Adjusted EBITDA – continuing operations Segment asset information is not provided to the chief operating decision maker and therefore segment asset information has not been presented. Due to the nature of Gates’ operations, cash generation and profitability are viewed as the key measures rather than an asset base measure. Net Sales Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Power Transmission $ 546.0 $ 485.6 Fluid Power 306.0 244.6 Continuing operations $ 852.0 $ 730.2 Adjusted EBITDA Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Power Transmission $ 125.3 $ 107.5 Fluid Power 58.6 45.5 Continuing operations $ 183.9 $ 153.0 Sales between reporting segments and the impact of such sales on Adjusted EBITDA for each segment are not included in internal reports presented to the CEO and have therefore not been included above. Reconciliation of Adjusted EBITDA to net income from continuing operations: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Adjusted EBITDA $ 183.9 $ 153.0 Depreciation and amortization 55.0 52.4 Share-based compensation 1.6 0.8 Transaction-related costs (1) 4.7 2.0 Impairment of intangibles and other assets 0.3 — Restructuring (benefits) expenses (0.3 ) 1.8 Sponsor fees (included in other operating expenses) 1.9 1.5 Other operating expenses 2.4 0.1 Operating income from continuing operations 118.3 94.4 Interest expense 59.8 55.2 Other expenses 17.4 0.7 Income before income taxes 41.1 38.5 Income tax expense 11.7 12.5 Net income from continuing operations $ 29.4 $ 26.0 (1) Transaction-related costs relate primarily to advisory costs recognized in respect of our initial public offering, the acquisition of businesses and costs related to other corporate transactions such as debt refinancings. |
Restructuring initiatives
Restructuring initiatives | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring initiatives | Restructuring initiatives Gates continues to undertake various restructuring activities to streamline its operations, consolidate and take advantage of available capacity and resources, and ultimately achieve net cost reductions. Restructuring activities include efforts to integrate and rationalize Gates’ businesses and to relocate manufacturing operations to lower cost locations. A majority of the accrual for restructuring costs is expected to be utilized during 2018 and 2019 . Restructuring costs for the three months ended March 31, 2018 were a net benefit of $0.3 million . Restructuring costs of $1.8 million were recognized during the three months ended April 1, 2017 , including $1.2 million in relation to severance costs, largely in our corporate division and in Europe. Restructuring costs recognized in the condensed consolidated statements of operations for each segment were as follows: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Power Transmission $ (0.4 ) $ 1.0 Fluid Power 0.1 0.8 Continuing operations $ (0.3 ) $ 1.8 The following summarizes the restructuring reserves activity for the three month periods ended March 31, 2018 and April 1, 2017, respectively: (dollars in millions) As of March 31, 2018 As of April 1, 2017 Balance as of the beginning of the period $ 8.6 $ 5.0 Net (benefit) charge for the period (1.0 ) 0.3 Utilized during the period (3.1 ) (2.0 ) Foreign currency translation 0.1 — Balance as of the end of the period $ 4.6 $ 3.3 Restructuring reserves are included in the accompanying condensed consolidated balance sheet as follows: (dollars in millions) As of March 31, 2018 As of April 1, 2017 Accrued expenses and other current liabilities $ 4.2 $ 3.1 Other non-current liabilities 0.4 0.2 $ 4.6 $ 3.3 |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes For interim income tax reporting Gates estimates its annual effective tax rate and applies this effective tax rate to its year to date pre-tax income. The tax effects of unusual or infrequently occurring items, including the effects of changes in tax laws or rates, are reported in the interim period in which they occur. For the three months ended March 31, 2018 , the Company had an income tax expense of $11.7 million on pre-tax income of $41.1 million , which resulted in an effective income tax rate of 28.5% compared with an income tax expense of $12.5 million on pre-tax income of $38.5 million , which resulted in an effective income tax rate of 32.5% for the three months ended April 1, 2017 . The decrease in the 2018 effective rate is due primarily to the beneficial impact of the jurisdictional mix of earnings. The decrease was offset partially by the discrete tax impacts of $21.1 million in non-operating expenses for which no corresponding tax benefit was recognized. On December 22, 2017, the U.S. government enacted comprehensive legislation commonly referred to as the Tax Act. In the fourth quarter of 2017, we made a reasonable estimate to account for the income tax effects of the Tax Act. We will continue to update our calculations as additional required information is prepared and analyzed, interpretations and assumptions are refined, and additional guidance is issued. The Tax Act established new provisions for global intangible low taxed income (“GILTI”) and base erosion anti-abuse tax (“BEAT”) that taxes certain payments between U.S. Corporations and their subsidiaries. We are subject to both the GILTI and BEAT provisions beginning January 1, 2018. For the period ended March 31, 2018, we have reported the estimated impacts of both GILTI and BEAT, including partial utilization of our foreign tax credit carryforwards, in the annual effective tax rate. However, due to the complexity of these provisions, we continue to monitor additional regulatory and administrative guidance to further refine the impacts. |
Earnings per share
Earnings per share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share Basic income per share represents net income attributable to shareholders divided by the weighted average number of shares outstanding during the period. Diluted income per share considers the effect of potential shares, unless the inclusion of the potential shares would have an anti-dilutive effect. The treasury stock method is used to determine the potential dilutive shares resulting from assumed exercises of equity related instruments. The computation of net income per share is presented below: Three months ended (dollars in millions, except share numbers and per share amounts) March 31, 2018 April 1, 2017 Net income attributable to shareholders $ 24.2 $ 18.8 Weighted average number of shares outstanding 274,876,458 245,603,089 Dilutive effect of share-based awards (number of shares) 9,427,991 4,285,142 Diluted weighted average number of shares outstanding 284,304,449 249,888,231 Basic net income per share $ 0.09 $ 0.08 Diluted net income per share $ 0.09 $ 0.08 For the three months ended March 31, 2018 , shares totaling 180,538 , compared with 0 shares for the three months ended April 1, 2017 , were excluded from the diluted income per share calculation because they were anti-dilutive. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories (dollars in millions) As of March 31, 2018 As of December 30, 2017 Raw materials and supplies $ 141.0 $ 128.0 Work in progress 37.5 32.8 Finished goods 313.5 296.3 Total inventories $ 492.0 $ 457.1 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill (dollars in millions) Power Fluid Total Cost and carrying amount As of December 30, 2017 $ 1,430.2 $ 655.3 $ 2,085.5 Foreign currency translation 31.9 13.9 45.8 As of March 31, 2018 $ 1,462.1 $ 669.2 $ 2,131.3 |
Intangible assets
Intangible assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | Intangible assets As of March 31, 2018 As of December 30, 2017 (dollars in millions) Cost Accumulated Net Cost Accumulated Net Finite-lived: —Customer relationships $ 2,082.1 $ (462.0 ) $ 1,620.1 $ 2,051.1 $ (424.4 ) $ 1,626.7 —Technology 91.0 (86.4 ) 4.6 90.8 (86.2 ) 4.6 —Capitalized software 52.8 (23.6 ) 29.2 48.3 (22.2 ) 26.1 2,225.9 (572.0 ) 1,653.9 2,190.2 (532.8 ) 1,657.4 Indefinite-lived: —Brands and trade names 513.4 (44.0 ) 469.4 513.4 (44.0 ) 469.4 Total intangible assets $ 2,739.3 $ (616.0 ) $ 2,123.3 $ 2,703.6 $ (576.8 ) $ 2,126.8 During the three months ended March 31, 2018 , the amortization expense recognized in continuing operations in respect of intangible assets was $32.9 million , compared with $32.9 million for the three months ended April 1, 2017 . In addition, movements in foreign currency exchange rates resulted in an increase of $24.6 million in the three months ended March 31, 2018 , compared with an increase of $32.7 million in the three months ended April 1, 2017 , in the net carrying value of total intangible assets. |
Derivative financial instrument
Derivative financial instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative financial instruments | Derivative financial instruments Gates is exposed to certain risks relating to its ongoing business operations. From time to time, we use derivative financial instruments, principally foreign currency swaps, forward foreign currency contracts and interest rate caps (options), to reduce our exposure to foreign currency risk and interest rate risk. Gates does not hold or issue derivatives for speculative purposes and monitors closely the credit quality of the institutions with which it transacts. Gates recognizes derivative instruments as either assets or liabilities in the condensed consolidated balance sheet. Gates designates certain of its currency swaps as net investment hedges and designates its interest rate caps as cash flow hedges. The effective portion of the gain or loss on the designated derivative instrument is recognized in OCI and reclassified into net income in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative instrument representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current period net income. All other derivative instruments not designated in an effective hedging relationship are considered economic hedges and their change in fair value is recognized in net income in each period. The following table sets out the fair value loss recognized in OCI in relation to the instruments designated as net investment hedging instruments: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Net fair value loss recognized in OCI in relation to: —Euro-denominated debt $ (15.2 ) $ (12.0 ) —Designated cross currency swaps (5.7 ) (5.9 ) Total net fair value loss $ (20.9 ) $ (17.9 ) The closing fair value of the designated currency swaps as of March 31, 2018 , was a liability of $45.6 million , compared with a liability of $38.9 million as of December 30, 2017 . During the first three months of 2018 , there was a $9.7 million gain, compared with a $1.0 million loss in the prior year period, recognized in OCI in relation to interest rate caps. In addition, $2.4 million in relation to the interest rate caps was reclassified from OCI to net income during the first three months of 2018 , compared with $2.7 million in the prior year period. The closing fair value of the interest rate caps as of March 31, 2018 was an asset of $5.6 million , compared with a liability of $5.6 million as of December 30, 2017 . Management does not designate its currency forward contracts, which are used primarily in respect of operational currency exposures related to payables, receivables and material procurement, as hedging instruments for the purposes of hedge accounting under Topic 815 “ Derivatives and Hedging ”. During the first three months of 2018 , a net loss of $0.1 million was recognized in selling, general and administrative expenses on the fair valuation of these currency contracts, compared with a net gain of $0.2 million in the prior year period. The fair values of derivative financial instruments held by Gates were as follows: As of March 31, 2018 As of December 30, 2017 (dollars in millions) Prepaid expenses and other assets Other non- Accrued expenses and other Other Net Prepaid expenses and other assets Other non- Accrued expenses and other Other non- Net Derivatives designated as hedging instruments: —Currency swaps $ 5.5 $ — $ — $ (51.1 ) $ (45.6 ) $ 3.2 $ — $ — $ (42.1 ) $ (38.9 ) —Interest rate caps 2.0 4.3 (0.7 ) — 5.6 — 0.6 (3.8 ) (2.4 ) (5.6 ) Derivatives not designated as hedging instruments: —Currency swaps 0.2 — — — 0.2 — — — — — —Currency forward contracts 0.6 — (1.0 ) — (0.4 ) 0.5 — (1.6 ) — (1.1 ) $ 8.3 $ 4.3 $ (1.7 ) $ (51.1 ) $ (40.2 ) $ 3.7 $ 0.6 $ (5.4 ) $ (44.5 ) $ (45.6 ) A. Currency derivatives As of March 31, 2018 , the notional principal amount of outstanding foreign exchange contracts that are used to manage the currency profile of Gates’ cash was $31.7 million , compared with $0 as of December 30, 2017 , none of which have been designated as hedging instruments during the current period. As of March 31, 2018 , the notional amount of outstanding currency forward contracts that are used to manage operational foreign exchange exposures was $131.5 million , compared with $99.2 million as of December 30, 2017 , none of which have been designated as hedging instruments during the current period. In addition, Gates held cross currency swaps that have been designated as net investment hedges. As of March 31, 2018 , the notional principal amount of these contracts was $270.0 million , compared with $270.0 million as of December 30, 2017 . B. Interest rate caps Gates uses interest rate caps as part of its interest rate risk management strategy to add stability to interest expense and to manage its exposure to interest rate movements. Interest rate caps designated as cash flow hedges involve the receipt of variable rate payments from a counterparty if interest rates rise above the strike rate on the contract in exchange for a premium. As of March 31, 2018 , the notional amount of the interest rate cap contracts outstanding was $2.2 billion , compared with $2.2 billion as of December 30, 2017 . Contracts with a notional amount of $1.0 billion run through June 30, 2019 and a further contract for $0.2 billion runs through June 30, 2020. The remaining contract, with a notional amount of $1.0 billion , is for the period June 28, 2019 through June 30, 2020. |
Fair value measurement
Fair value measurement | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | Fair value measurement A. Fair value hierarchy We account for certain assets and liabilities at fair value. Topic 820 “ Fair Value Measurements and Disclosures ” establishes the following hierarchy for the inputs that are used in fair value measurement: • “Level 1” inputs are unadjusted quoted prices in active markets for identical assets or liabilities. • “Level 2” inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). • “Level 3” inputs are not based on observable market data (unobservable inputs). Assets and liabilities that are measured at fair value are categorized in one of the three levels on the basis of the lowest-level input that is significant to its valuation. B. Financial instruments not held at fair value Certain financial assets and liabilities are not measured at fair value; however, items such as cash and cash equivalents, restricted cash, revolving credit facilities and bank overdrafts generally attract interest at floating rates and accordingly their carrying amounts are considered to approximate fair value. Due to their short maturities, the carrying amounts of accounts receivable and accounts payable are also considered to approximate their fair values. The carrying amount and fair value of Gates’ debt is set out below: As of March 31, 2018 As of December 30, 2017 (dollars in millions) Carrying amount Fair value Carrying amount Fair value Current $ 33.7 $ 33.3 $ 66.4 $ 66.2 Non-current 3,013.6 3,045.0 3,889.3 3,970.7 $ 3,047.3 $ 3,078.3 $ 3,955.7 $ 4,036.9 Debt is comprised principally of borrowings under the secured credit facilities and the unsecured senior notes. Loans under the secured credit facilities pay interest at floating rates, subject to a 1% LIBOR floor on the Dollar Term Loan and a 0% EURIBOR floor on the Euro Term Loan. Their principal amounts, derived from a market price, discounted for illiquidity, are considered to approximate fair value. The unsecured senior notes have fixed interest rates, are traded between “Qualified Institutional Buyers” and their fair value is derived from quoted market prices. C. Assets and liabilities measured at fair value on a recurring basis The following table categorizes the assets and liabilities that are measured at fair value on a recurring basis: (dollars in millions) Quoted prices in active Significant observable Total As of March 31, 2018 Available-for-sale securities $ 2.5 $ — $ 2.5 Derivative assets $ — $ 12.6 $ 12.6 Derivative liabilities $ — $ (52.8 ) $ (52.8 ) As of December 30, 2017 Available-for-sale securities $ 2.4 $ — $ 2.4 Derivative assets $ — $ 4.3 $ 4.3 Derivative liabilities $ — $ (49.9 ) $ (49.9 ) Available-for-sale securities represent equity securities that are traded in an active market and therefore are measured using quoted prices in an active market. Derivative assets and liabilities included in Level 2 represent foreign currency exchange forward and swap contracts, and interest rate cap contracts. We value our foreign currency exchange derivatives using models consistent with those used by a market participant that maximize the use of market observable inputs including forward prices for currencies. We value our interest rate cap contracts using a widely accepted discounted cash flow valuation methodology that reflects the contractual terms of each derivative, including the period to maturity. The methodology derives the fair values of the caps using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation are based on an expectation of future interest rates derived from observable market-based interest rate curves and implied volatilities. In addition, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential nonperformance risk. To comply with the provisions of Topic 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Transfers between Levels of the Fair Value Hierarchy During the periods presented, there were no transfers between Levels 1 and 2, and Gates had no assets or liabilities measured at fair value on a recurring basis using Level 3 inputs. D. Assets measured at fair value on a non-recurring basis Gates has non-recurring fair value measurements related to certain assets, including goodwill, intangible assets, and property, plant, and equipment. No significant impairment was recognized during either the three months ended March 31, 2018 or April 1, 2017 . |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt, including the current portion and bank overdrafts, is analyzed as follows: (dollars in millions) As of March 31, 2018 As of December 30, 2017 Secured debt: —Dollar Term Loan $ 1,725.0 $ 1,729.4 —Euro Term Loan 801.3 785.6 Unsecured debt: —Dollar Senior Notes 568.0 1,190.0 —Euro Senior Notes — 282.5 —Other loans 0.3 0.4 Total principal of debt 3,094.6 3,987.9 Deferred issuance costs (55.5 ) (73.2 ) Accrued interest 8.2 41.0 Total carrying value of debt 3,047.3 3,955.7 Debt, current portion 33.7 66.4 Debt, less current portion $ 3,013.6 $ 3,889.3 Gates’ secured debt is jointly and severally, irrevocably and fully and unconditionally guaranteed by certain of its subsidiaries and are secured by liens on substantially all of their assets. Gates is subject to covenants, representations and warranties under certain of its debt facilities. During the periods covered by these condensed consolidated financial statements, we were in compliance with the applicable financial covenants. Also under the agreements governing our debt facilities, our ability to engage in activities such as incurring certain additional indebtedness, making certain investments and paying certain dividends is dependent, in part, on our ability to satisfy tests based on measures determined under those agreements. Debt redemptions During the first three months of 2018 , Gates redeemed in full its outstanding €235.0 million Euro Senior Notes, plus interest accrued up to and including January 31, 2018 of $0.7 million . The Euro Senior Notes were redeemed at a price of 102.875% and a redemption premium of $8.4 million was therefore paid in addition to the principal of $291.7 million . In addition, on February 8 and February 9, 2018, Gates made partial redemptions of the Dollar Senior Notes with a principal of $522.0 million and $100.0 million , respectively. Both of these calls were made at a price of 103.0% , incurring redemption premiums of $15.6 million and $3.0 million , respectively. Interest accrued of $2.0 million and $0.4 million , respectively, was also paid on these dates. All of the above prepayments, totaling $913.7 million in principal, $27.0 million in redemption premium and $3.1 million in accrued interest, were funded primarily by the net proceeds from our initial public offering of $799.1 million , with the remainder of the funds coming from excess cash on hand. As a result of these redemptions, the recognition of $15.4 million of deferred financing costs was accelerated and recognized in interest expense in the first three months of 2018. In addition, in connection with the reorganization transactions completed in connection with to our initial public offering, a wholly-owned U.S. subsidiary of Gates Global LLC, entered into an intercompany agreement pursuant to which it became an obligor under the notes for U.S. federal income tax purposes and agreed to make future payments due on the Dollar Senior Notes. As a result, interest on the Dollar Senior Notes is U.S. source income. Dollar and Euro Term Loans Gates’ secured credit facilities include a Dollar Term Loan credit facility and a Euro Term Loan credit facility that were drawn on July 3, 2014. The maturity date for each of the term loan facilities is March 31, 2024, with a springing maturity of April 15, 2022 if more than $500.0 million of the Dollar Senior Notes remain in issue at that time. These term loan facilities bear interest at a floating rate, which for U.S. dollar debt can be either a base rate as defined in the credit agreement plus an applicable margin, or at Gates’ option, LIBOR plus an applicable margin. On January 29, 2018, the applicable margin on each of the term loans was lowered by 0.25% following the successful completion of our initial public offering. The Dollar Term Loan interest rate is currently LIBOR, subject to a floor of 1.00% , plus a margin of 2.75% and as of March 31, 2018 , borrowings under this facility bore interest at a rate of 5.05% per annum. As of March 31, 2018 , the Euro Term Loan bears interest at Euro LIBOR, which is currently below 0% , subject to a floor of 0% , plus a margin of 3.00% . The next term loan interest rate re-set date is on June 29, 2018. Both term loans are subject to quarterly amortization payments of 0.25% , based on the original principal amount less certain prepayments with the balance payable on maturity. During the first three months of 2018 , Gates made quarterly amortization payments against the Dollar Term Loan and the Euro Term Loan of $4.3 million and $2.0 million , respectively. Under the terms of the credit agreement, Gates is obliged to offer annually to the term loan lenders an “excess cash flow” amount as defined under the agreement, based on the preceding year’s final results. Based on our 2017 results, the leverage ratio as defined under the credit agreement was below the threshold above which payments are required, and therefore no excess cash flow payment was required to be made in 2018 . During the first three months of 2018 , a transactional foreign exchange loss of $17.7 million , compared with a $5.4 million loss for the prior year period, was recognized in respect of the Euro Term Loan. Of these losses, $7.5 million , compared with $0 for the prior year period, was recognized in other expense and a $10.2 million loss, compared with a $5.4 million loss for the prior year period, was recognized in OCI as part of this facility is designated as a net investment hedge of certain of Gates’ Euro investm e nts. In the first three months of 2018 , this loss recognized in other expense was substantially offset by a gain on Euro-denominated intercompany loans. As of March 31, 2018 , the principal amount outstanding under the Dollar Term Loan was $1,725.0 million and the Euro Term Loan was $801.3 million ( €651.9 million ). Unsecured Senior Notes As of March 31, 2018 , there were $568.0 million of Dollar Senior Notes outstanding. These notes are scheduled to mature on July 15, 2022 and bear interest at an annual fixed rate of 6.00% with semi-annual interest payments. As noted above, during the first three months of 2018, Gates redeemed in full its outstanding €235.0 million Euro Senior Notes and made partial redemptions of the Dollar Senior Notes totaling $622.0 million . Up to the date of their redemption, a transactional foreign exchange loss of $9.2 million , compared with a $6.6 million loss in the prior year period, was recognized in respect of the Euro Senior Notes. Of these losses, $4.2 million , compared with $0 for the prior year period, was recognized in other expense and $5.0 million , compared with $6.6 million for the prior year period, was recognized in OCI for the period during which this facility was designated as a net investment hedge of certain of Gates’ Euro investments. Gates may redeem the Dollar Senior Notes, at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest to the redemption date: Dollar Senior Note During the year commencing: —July 15, 2018 101.500 % —July 15, 2019 and thereafter 100.000 % In the event of a change of control over the Company, each holder will have the right to require Gates to repurchase all of such holder’s notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase, except to the extent that Gates has previously elected to redeem the notes. Revolving credit facility Gates also has a secured revolving credit facility, maturing on January 29, 2023, that provides for multi-currency revolving loans up to an aggregate principal amount of $185.0 million , with a letter of credit sub-facility of $20.0 million . In January 2018, the maturity date of this facility was extended to January 29, 2023, with a springing maturity of April 15, 2022 if more than $500.0 million of the Dollar Senior Notes remain in issue at that time. In addition, as part of this amendment, the facility size was increased from $125.0 million to $185.0 million . As of both March 31, 2018 and December 30, 2017 , there were $0 drawings for cash under the revolving credit facility and there were no letters of credit outstanding. Debt under the revolving credit facility bears interest at a floating rate, which can be either a base rate as defined in the credit agreement plus an applicable margin or, at Gates’ option LIBOR, plus an applicable margin. Asset-backed revolver Gates has a revolving credit facility backed by certain of its assets in North America. The facility allows for loans of up to a maximum of $325.0 million ( $322.0 million as of March 31, 2018 , compared with $293.7 million as of December 30, 2017 , based on values of the secured assets on those dates) with a letter of credit sub-facility of $150.0 million within this maximum. In January 2018, the maturity date of this facility was extended to January 29, 2023, with a springing maturity of April 15, 2022 if more than $500.0 million of the Dollar Senior Notes remain in issue at that time. As of both March 31, 2018 and December 30, 2017 , there were $0 drawings for cash under the asset-backed revolver. Debt under the facility bears interest at a floating rate, which can be either a base rate as defined in the credit agreement plus an applicable margin or, at Gates’ option, LIBOR, plus an applicable margin. The letters of credit outstanding under the asset-backed revolver as of March 31, 2018 amounted to $58.4 million , compared with $58.0 million as of December 30, 2017 . |
Post-retirement benefits
Post-retirement benefits | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Post-retirement benefits | Post-retirement benefits Gates operates defined benefit pension plans in certain of the countries in which it operates, in particular, in the U.S. and U.K. All of the defined benefit pension plans are closed to new entrants. In addition to the funded defined benefit pension plans, Gates has unfunded defined benefit obligations to certain current and former employees. Gates also provides other post-retirement benefits, principally health and life insurance coverage, on an unfunded basis to certain of its employees in the U.S. and Canada. Net periodic benefit cost The components of the net periodic benefit cost for pensions and other post-retirement benefits were as follows: Three months ended March 31, 2018 Three months ended April 1, 2017 (dollars in millions) Pensions Other post-retirement benefits Total Pensions Other post-retirement benefits Total Reported in operating income: —Employer service cost $ 1.4 $ — $ 1.4 $ 1.3 $ — $ 1.3 Reported outside of operating income: —Interest cost 6.0 0.6 6.6 7.8 0.7 8.5 —Expected return on plan assets (5.8 ) — (5.8 ) (7.0 ) — (7.0 ) —Amortization of net actuarial (gain) loss — (0.2 ) (0.2 ) 0.1 — 0.1 —Settlements 0.4 — 0.4 — — — Net periodic benefit cost $ 2.0 $ 0.4 $ 2.4 $ 2.2 $ 0.7 $ 2.9 Contributions During the three months ended March 31, 2018 , Gates contributed $2.2 million , compared with $1.8 million for the three months ended April 1, 2017 , to its defined benefit pension plans and $1.3 million , compared with $1.3 million for the three months ended April 1, 2017 , to its other post-retirement benefit plans. For 2018 as a whole, Gates expects to contribute approximately $6.3 million to its defined benefit pension plans and approximately $6.1 million to its other post-retirement benefit plans. Amounts reclassified from accumulated other comprehensive income During the three months ended March 31, 2018 , $0.2 million of actuarial gains, compared with $0.1 million actuarial losses during the three months ended April 1, 2017 , were reclassified from other comprehensive income to the selling, general and administrative expenses line item in the condensed consolidated statements of operations. Settlements In September 2017, Gates completed an annuity purchase for most of the retirees in its largest U.S. defined benefit pension plan. The $154.0 million purchase price, funded from plan assets, settled $155.1 million of the pension benefit obligation. The net post-retirement benefit obligation has therefore reduced by $1.1 million . In connection with this transaction, a settlement gain of $3.9 million was recognized as part of the net periodic benefit cost. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Equity | Equity In January 2018, we completed an initial public offering of 38,500,000 shares at $19.00 each. Shortly thereafter, the underwriters of the initial public offering exercised their over-allotment option for a further 5,775,000 shares, also at $19.00 each. Movements in the Company's number of shares in issue for the three month periods ended March 31, 2018 and April 1, 2017, respectively, were as follows: (number of shares) As of March 31, 2018 As of April 1, 2017 Balance as of the beginning of the period 245,474,605 245,627,952 Issuance of shares 44,275,000 80,107 Exercise of share options 6,774 — Buy back of shares — (187,680 ) Balance as of the end of the period 289,756,379 245,520,379 The Company has one class of authorized and issued shares, with a par value of $0.01 . Each share carries equal voting rights but no right to fixed income. |
Analysis of accumulated other c
Analysis of accumulated other comprehensive income (loss) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Analysis of accumulated other comprehensive income (loss) | Analysis of accumulated other comprehensive income (loss) Changes in accumulated other comprehensive income (loss) by component (net of tax) are as follows: (dollars in millions) Available-for- Post- Cumulative Cash flow Accumulated OCI attributable to Non- Accumulated OCI As of December 31, 2016 $ (0.2 ) $ (6.5 ) $ (884.1 ) $ (25.1 ) $ (915.9 ) $ (55.4 ) $ (971.3 ) Foreign currency translation — — 90.8 — 90.8 10.9 101.7 Cash flow hedges movements — — — 1.2 1.2 — 1.2 Available-for-sale investment movements (0.1 ) — — — (0.1 ) (0.1 ) (0.2 ) Post-retirement benefit movements — 0.1 — — 0.1 — 0.1 Other comprehensive (loss) income (0.1 ) 0.1 90.8 1.2 92.0 10.8 102.8 As of April 1, 2017 $ (0.3 ) $ (6.4 ) $ (793.3 ) $ (23.9 ) $ (823.9 ) $ (44.6 ) $ (868.5 ) (dollars in millions) Available-for- Post- Cumulative Cash flow Accumulated OCI attributable to Non- Accumulated OCI As of December 30, 2017 $ (0.3 ) $ 13.2 $ (742.8 ) $ (17.5 ) $ (747.4 ) $ (25.5 ) $ (772.9 ) Foreign currency translation — — 39.4 — 39.4 16.7 56.1 Cash flow hedges movements — — — 11.7 11.7 — 11.7 Post-retirement benefit movements — (0.3 ) — — (0.3 ) — (0.3 ) Other comprehensive (loss) income — (0.3 ) 39.4 11.7 50.8 16.7 67.5 As of March 31, 2018 $ (0.3 ) $ 12.9 $ (703.4 ) $ (5.8 ) $ (696.6 ) $ (8.8 ) $ (705.4 ) |
Related party transactions
Related party transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions A. Entities affiliated with Blackstone On July 3, 2014, Blackstone Management Partners L.L.C. (“BMP”) and Blackstone Tactical Opportunities Advisors L.L.C., affiliates of our Sponsor (the “Managers”), entered into a Transaction and Monitoring Fee Agreement (the “Former Transaction and Monitoring Fee Agreement”) with Omaha Topco. Under this agreement, we paid the Managers at the closing of the acquisition of Gates by Blackstone $56.8 million as a transaction fee as consideration for the Managers undertaking due diligence investigations and financial and structural analysis and providing corporate strategy and other advice and negotiation assistance. In addition, under this agreement, Omaha Topco and certain of its direct and indirect subsidiaries (collectively the “Monitoring Service Recipients”) engaged the Managers to provide certain monitoring, advisory and consulting services in the following areas: • advice regarding financings and relationships with lenders and bankers; • advice regarding the selection, retention and supervision of independent auditors, outside legal counsel, investment bankers and other advisors or consultants; • advice regarding environmental, social and governance issues pertinent to our affairs; • advice regarding the strategic direction of our business; and • such other advice directly related to or ancillary to the above advisory services as we may reasonably request. In consideration of these oversight services, Gates agreed to pay BMP an annual fee of 1% of a covenant EBITDA measure defined under the agreements governing our senior secured credit facilities. In addition, the Monitoring Service Recipients agreed to reimburse the Managers for any related out-of-pocket expenses incurred by the Managers and their affiliates. During the first three months of 2018 , Gates incurred $1.9 million , compared with $1.5 million during the prior year period, in respect of these oversight services and out-of-pocket expenses, of which there was no amount owing at March 31, 2018 or December 30, 2017 . The Former Transaction and Monitoring Fee Agreement also contemplated that Gates would pay to the Managers a milestone payment upon the consummation of an initial public offering. In January 2018, we and the Managers terminated this agreement and entered into a new Monitoring Fee Agreement (the “New Monitoring Fee Agreement”) with the Managers that is substantially similar to the terminated agreement, except that the New Monitoring Fee Agreement does not require the payment of a milestone payment in connection with the initial public offering and it terminates upon the earlier to occur of (i) the second anniversary of the closing date of the initial public offering and (ii) the date our Sponsor beneficially owns less than 5% of our ordinary shares and such shares have a fair market value of less than $25.0 million . Following termination, the Managers will refund us any portion of the monitoring fee previously paid in respect of fiscal quarters that follow the termination date. In addition, we have entered into a Support and Services Agreement with BMP. Under this agreement, the Company and certain of its direct and indirect subsidiaries reimburse BMP for customary support services provided by Blackstone’s portfolio operations group to the Company at BMP’s direction. BMP will invoice the Company for such services based on the time spent by the relevant personnel providing such services during the applicable period and Blackstone’s allocated costs of such personnel. During the periods presented, no amounts were paid or outstanding under this agreement. In connection with the initial public offering in January 2018, we and BMP terminated this agreement and we entered into a new agreement with the Managers that is substantially similar to the existing agreement, except that it terminates on the date our Sponsor beneficially owns less than 5% of our ordinary shares and such shares have a fair market value of less than $25.0 million , or such earlier date as may be chosen by Blackstone. In connection with our initial public offering, Blackstone Advisory Partners L.P. received underwriting fees of $3.2 million . During the periods presented, through to November 2, 2017, Blackstone held a controlling interest in Alliance Automotive Group (“Alliance”), a wholesale distributor of automotive parts in France and the United Kingdom. Net sales by Gates to affiliates of Alliance for the three months ended March 31, 2018 , were $0 million , compared with $8.2 million for the three months ended April 1, 2017 . B. Equity method investees Sales to and purchases from equity method investees were as follows: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Sales $ 0.6 $ 0.5 Purchases $ (2.5 ) $ (2.6 ) Amounts outstanding in respect of these transactions were payables of $0.3 million as of March 31, 2018 , compared with $0.2 million as of December 30, 2017 . During the first three months of March 31, 2018 , we received dividends of $0.4 million from our equity method investees, compared with $0.3 million in the prior year period. C. Non-Gates entities controlled by non-controlling shareholders Sales to and purchases from non-Gates entities controlled by non-controlling shareholders were as follows: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Sales $ 16.0 $ 12.9 Purchases $ (5.3 ) $ (5.7 ) Amounts outstanding in respect of these transactions were as follows: (dollars in millions) As of March 31, 2018 As of December 30, 2017 Receivables $ 2.1 $ 1.2 Payables $ (0.4 ) $ (0.2 ) |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies A. Performance bonds, letters of credit and bank guarantees As of March 31, 2018 , letters of credit were outstanding against the asset-backed revolving facility amounting to $58.4 million , compared with $58.0 million as of December 30, 2017 . Gates had additional outstanding performance bonds, letters of credit and bank guarantees amounting to $3.4 million , compared with $3.4 million as of December 30, 2017 . B. Contingencies Gates is, from time to time, party to general legal proceedings and claims, which arise in the ordinary course of business. Gates is also, from time to time, party to legal proceedings and claims in respect of environmental obligations, product liability, intellectual property and other matters which arise in the ordinary course of business and against which management believes Gates has meritorious defenses available. While it is not possible to quantify the financial impact or predict the outcome of all pending claims and litigation, management does not anticipate that the outcome of any current proceedings or known claims, either individually or in aggregate, will materially affect Gates’ financial position, results of operations or cash flows. C. Warranties The following summarizes the movements in the warranty liability for the three month periods ended March 31, 2018 and April 1, 2017, respectively: (dollars in millions) As of March 31, 2018 As of April 1, 2017 Balance as of the beginning of the period $ 14.1 $ 14.3 Charge for the period 4.4 4.6 Payments made (3.2 ) (3.6 ) Released during the period (0.2 ) — Foreign currency translation 0.1 0.2 Balance as of the end of the period $ 15.2 $ 15.5 |
Subsequent events
Subsequent events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events On April 26, 2018, we signed a share purchase agreement to acquire Rapro, a Turkey-based business that engineers, manufactures and sells molded and branched hoses and other products, the majority of which are sold into replacement markets. Rapro’s annual sales are approximately $23 million and it operates out of two facilities in Izmir, Turkey, with its products serving heavy-duty, commercial and light-vehicle applications. This bolt-on acquisition accelerates our growth strategy within the Fluid Power product line, expanding our product range and geographic coverage to accelerate our growth in replacement channels, particularly in emerging markets. |
Introduction (Policies)
Introduction (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background | Background Gates Industrial Corporation plc (the “Company”) is a public limited company that was organized under the laws of England and Wales on September 25, 2017. Prior to the completion of the initial public offering of the Company’s shares in January 2018, the Company undertook certain reorganization transactions such that Gates Industrial Corporation plc became the indirect owner of all of the equity interests in Omaha Topco Limited (“Omaha Topco”), and has become the holding company of the Gates business. The previous owners of Omaha Topco were various investment funds managed by The Blackstone Group L.P. (“Blackstone” or our “Sponsor”), and Gates management equity holders. These equity owners of Omaha Topco received depositary receipts representing ordinary shares in the Company in consideration for their equity in Omaha Topco, at a ratio of 0.76293 of our ordinary shares for each outstanding ordinary share of Omaha Topco. All share and per share amounts in these condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of this split. The reorganization was accounted for as a transaction between entities under common control and the net assets were recorded on the historical cost basis, in a manner similar to a pooling of interests, when Omaha Topco was contributed into the Company. |
Historical financial information | Gates Industrial Corporation plc had no significant business transactions or activities prior to the date of the reorganization transactions, and as a result, the historical financial information for periods prior to those transactions reflects that of Omaha Topco. |
Accounting periods | Accounting periods The Company prepares its annual consolidated financial statements for the period ending on the Saturday nearest December 31. Accordingly, the condensed consolidated balance sheet is presented as of March 31, 2018 and December 30, 2017 and the related condensed consolidated statements of operations, comprehensive income, cash flows, and shareholders’ equity are presented for the 91 day period from December 31, 2017 to March 31, 2018 , with comparative information for the 91 day period from January 1, 2017 to April 1, 2017 . |
Basis of preparation | Basis of preparation The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars unless otherwise indicated. The condensed consolidated financial statements and related notes contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position as of March 31, 2018 and the results of its operations and cash flows for the periods ended March 31, 2018 and April 1, 2017 . Interim period results are not necessarily indicative of the results to be expected for the full fiscal year. These condensed consolidated financial statements are unaudited and have been prepared on substantially the same basis as Gates’ audited annual consolidated financial statements and related notes for the year ended December 30, 2017 . The condensed consolidated balance sheet as of December 30, 2017 has been derived from those audited financial statements. |
Recent accounting pronouncements adopted and not yet adopted | The accounting policies used in preparing these condensed consolidated financial statements are the same as those applied in the prior year, except for the adoption on the first day of the 2018 fiscal year of the following new Accounting Standard Updates (each, an “ASU”) , all of which were adopted using the method prescribed by the respective ASU, unless otherwise specified. • ASU 2014-09 “ Revenue From Contracts With Customers ” (Topic 606): Revenue Recognition • ASU 2016-08 “ Revenue from Contracts with Customers ” (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) • ASU 2016-10 “ Revenue from Contracts with Customers ” (Topic 606): Identifying Performance Obligations and Licensing • ASU 2016-12 “ Revenue from Contracts with Customers ” (Topic 606): Narrow-Scope Improvements and Practical Expedients • ASU 2016-20 “ Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers ” • ASU 2017-13 “ Revenue from Contracts with Customers ” (Topic 606): Amendments to SEC Paragraphs • ASU 2017-14 “ Income Statement – Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) ” In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09 “ Revenue from Contracts with Customers ” (Topic 606) (“Topic 606”). Topic 606 supersedes the revenue recognition requirements in Topic 605, “ Revenue Recognition ” (Topic 605) (“Topic 605”), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled in exchange for those goods or services. The standards update provides a single, principles-based, five-step model to be applied to all contracts with customers. The five steps are: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The ASU also sets out requirements to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Subsequent to issuing this ASU, the FASB issued several amendments, listed above, which provide clarification, additional guidance, practical expedients and technical corrections. The Company adopted the requirements of Topic 606 as of December 31, 2017, the first day of our 2018 fiscal year, utilizing the modified retrospective method of transition. We have therefore not made any changes to the comparative information which continues to be reported under the prior guidance of Topic 605. As part of the implementation process, t he Company comprehensively reviewed its relationships with its customers and analyzed a number of areas of potential change under Topic 606, including the treatment and calculation of warranty expenses, rebates, branded products, and consignment sales. Management concluded that the impact of Topic 606 on each of these areas on the Company's financial statements was not significant for any of the periods presented or for any of the annual periods that will be included in the Company's 2018 annual consolidated financial statements. No significant changes in net sales or other items in the condensed consolidated financial statements have therefore been made for the three months ended March 31, 2018 in relation to the adoption of Topic 606. Gates derives its net sales primarily from the sale of a wide range of power transmission and fluid power products and components for a large variety of industrial and automotive applications, both in the aftermarket and first-fit channels, throughout the world. Our products are sold in more than 100 countries across our four commercial regions: (1) the Americas; (2) Europe, Middle East & Africa (“EMEA”); (3) Greater China; and (4) East Asia & India. We have a long-standing presence in each of these regions, including our emerging markets, which include China, Southeast Asia, Eastern Europe and South America. We sell to a large variety of customers in many sectors of the industrial and consumer markets, with no significant exposure to any one customer or market. In the substantial majority of our agreements with customers, we consider accepted customer purchase orders, which in some cases are governed by master sales agreements, to represent the contracts with our customers. Revenue from the sale of goods under these contracts is measured at the invoiced amount, net of estimated returns, early settlement discounts and rebates. Taxes collected from customers relating to product sales and remitted to government authorities are excluded from revenues. Where a customer has the right to return goods, future returns are estimated based on historical returns profiles. Settlement discounts that may apply to unpaid invoices are estimated based on the settlement histories of the relevant customers. Our transactions prices often include variable consideration, usually in the form of rebates that may apply to issued invoices. The reduction in the transaction price for variable consideration requires that we make estimations of the expected total qualifying sales to the relevant customers. These estimates, including an analysis for potential constraint on variable consideration, take into account factors such as the nature of the rebate program, historical information and expectations of customer and consumer behavior. Overall, the transaction price is reduced to reflect our estimate of the amount of consideration to which we are entitled based on the terms of the contract. The Company allocates the transaction price to each distinct product based on their relative standalone selling price. The product price as specified on the accepted purchase order is considered to be the standalone selling price. In substantially all of our contracts with customers, our performance obligations are satisfied at a point in time, rather than over a period of time, when control of the product is transferred to the customer. This occurs typically at shipment. In determining whether control has transferred and the customer is consequently able to control the use of the product for their own benefit, the Company considers if there is a present right to payment, legal title has been transferred, and whether the risks and rewards of ownership have transferred to the customer. The majority of our revenue therefore continues to be recognized consistently with Topic 605, when products are shipped from our manufacturing or distribution facilities. As part of our adoption of Topic 606, we elected to use the following practical expedients: (i) to exclude disclosures of transaction prices allocated to remaining performance obligations when the Company expects to recognize such revenue for all periods prior to the date of initial application of Topic 606; (ii) to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less, which is the case in the substantial majority of the Company’s contracts with customers; (iii) not to assess whether a contract has a significant financing component (as the Company’s standard payment terms are less than one year); (iv) not to assess whether promised goods are performance obligations if they are immaterial in the context of the contract with the customer; (v) to exclude from the measurement of the transaction price all taxes assessed by a governmental authority and collected by the Company from a customer; and (vi) to account for shipping or handling activities occurring after control has passed to the customer as a fulfillment cost rather than as a performance obligation. • ASU 2016-15 “ Statement of Cash Flows ” (Topic 230): Classification of Certain Cash Receipts and Cash Payments • ASU 2016-18 “ Statement of Cash Flows ” (Topic 230): Restricted Cash In 2016, the FASB issued two ASUs that clarify the operating, investing and financing cash flow classifications when receiving or paying cash in certain situations including debt prepayments, distributions from equity method investees and proceeds from settlement of corporate-owned life insurance policies. In addition, the new requirement states that an entity should include restricted cash in the cash and cash equivalents line when reconciling the beginning-of-period and end-of-period amounts in the statement of cash flows. In accordance with the transition requirements of these ASUs, the presentation changes to the condensed consolidated statement of cash flows have been made retrospectively with comparative information restated accordingly. This resulted in the reclassification of a cash outflow of $8.3 million in the first three months of 2017 related to the payment of premiums paid under our corporate-owned life insurance policies from cash flow from operating activities to cash flows from investing activities. A similar amount is presented as an investing cash outflow in first three months of 2018. In addition, cash and cash equivalents for the purposes of the condensed consolidated statement of cash flows includes restricted cash of $1.7 million as of March 31, 2018 and $1.6 million as of December 30, 2017, and $1.6 million as of both April 1, 2017 and December 31, 2016 . • ASU 2017-07 “ Compensation-Retirement Benefits ” (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Periodic Post-retirement Benefit Cost In March 2017, the FASB issued an ASU which requires that an employer report the service cost component of its net periodic pension and other post-retirement costs in the same line item as other compensation costs arising from services rendered by the relevant employees during the period. The other components of net periodic benefit cost (which include the interest cost, expected return on plan assets, gains or losses on settlements and curtailments, the amortization of any prior service cost or credit and prior year actuarial gains or losses) are required to be presented in the income statement separately from the service cost component and outside of operating income. Following adoption of this ASU, Gates continues to present the service cost component of our net periodic pension and other post-retirement benefit cost in the lines within operating income to which the relevant employees' other compensation costs are reported. All other components are now included in the other expense (income) line, outside of operating income. In accordance with the transition requirements of this ASU, these presentation changes to the statement of operations have been amended retrospectively. We have adopted the practical expedient of using the amounts disclosed in our historical financial statements as the estimation basis for applying these retrospective presentation requirements. The following ASUs that were also adopted on the first day of the 2018 fiscal year did not have, and we believe will not have, a significant impact on Gates' results, financial position or disclosures: • ASU 2016-01 “ Financial Instruments ” (Topic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities • ASU 2016-16 “ Income Taxes ” (Topic 740): Intra-entity Transfers of Assets other than Inventory • ASU 2017-01 “ Business Combinations ” (Topic 805): Clarifying the definition of a business • ASU 2017-09 “ Stock Compensation ” (Topic 718): Scope of Modification Accounting • ASU 2018-03 “ Technical Corrections and Improvements to Financial Instruments - Overall ” (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities This ASU provides technical corrections and clarifications on various items included in ASU 2016-01, which we have adopted as of the beginning of the 2018 fiscal year. Consistent with our adoption of ASU 2016-01, none of these technical corrections or clarifications are currently expected to have an impact on Gates. While the amendments are effective for the current fiscal year, they are only effective for interim periods beginning after June 15, 2018. Recent accounting pronouncements not yet adopted The following recent accounting pronouncements are relevant to Gates’ operations but have not yet been adopted. Unless otherwise indicated, management has not yet completed its evaluation of the impact of the adoption of these pronouncements. • ASU 2016-02 “ Leases ” (Topic 842) In February 2016, the FASB issued an ASU which introduces a lessee model that will bring most leases of property, plant and equipment onto the balance sheet. It requires a lessee to recognize a lease obligation (present value of future lease payments) and also a “right of use asset” for all leases, although certain short-term leases are exempted from the standard. The ASU introduces two models for the subsequent measurement of the lease asset and liability, depending on whether the lease qualifies as a “finance lease” or an “operating lease”. This distinction focuses on whether or not effective control of the asset is being transferred from the lessor to the lessee. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The impact on our consolidated financial statements of adopting this ASU, which will affect the recognition, measurement and presentation of leases, is expected to be material given the number and value of leases held, but is still early in the process of being evaluated. • ASU 2016-13 “ Financial Instruments ” (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued an ASU which broadens the information that an entity must consider when developing its expected credit loss estimate for assets. The financial asset must be measured at the net amount expected to be collected. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The impact on our consolidated financial statements of adopting this ASU, which may affect the recognition, measurement and presentation of financial assets, is still being evaluated. • ASU 2017-12 “ Derivatives and Hedging ” (Topic 815): Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued an ASU with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in ASU 2017-12 require an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. The new approach no longer separately measures and reports hedge ineffectiveness. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2018. Early application is permitted in any interim period after issuance of ASU 2017-12. An entity should apply a cumulative effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income (“OCI”) and retained earnings as of the beginning of the fiscal year that the entity adopts. The amended presentation and disclosure guidance is required only prospectively. We expect the adoption of this standard update to affect the disclosure and presentation of our derivative and hedging activities, but we have not yet quantified the impact to our financial statements. • ASU 2018-02 “ Income Statement – Reporting Comprehensive Income ” (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued an ASU to address concerns about the guidance in current U.S. GAAP that requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. This concern stemmed from the U.S. federal government’s enactment of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018,” known as the Tax Cuts and Jobs Act (the “Tax Act”), on December 22, 2017. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. The amendments are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the amendments should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. The impact on our consolidated financial statements of adopting this standard update, which may affect the recognition, measurement and presentation of taxes, is still being evaluated. • ASU 2018-05 "Income Taxes" (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update) This ASU adds additional paragraphs to Topic 740, Income Taxes, that contain SEC guidance related to Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. |
Reclassifications | Certain amounts in the prior period’s condensed consolidated financial statements have been reclassified to conform to the current year presentation. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of fair value of net assets acquired and liabilities assumed | The following is the record of the fair value of net assets acquired and liabilities assumed: (dollars in millions) Techflow Flexibles Atlas Hydraulics Assets acquired Accounts receivable $ 1.7 $ 10.3 Inventories 4.2 21.2 Prepaid expenses and other receivables 1.7 0.5 Taxes receivable — 2.7 Property, plant and equipment 13.0 24.5 Intangible assets 3.8 23.0 Total assets 24.4 82.2 Liabilities assumed Accounts payable 2.6 5.5 Accrued expenses 4.8 2.4 Other current liabilities 0.3 10.5 Taxes payable 1.9 — Deferred income taxes 0.6 11.6 Total liabilities 10.2 30.0 Net assets acquired $ 14.2 $ 52.2 |
Schedule of goodwill recognized | Goodwill has been recognized as follows: (dollars in millions) Techflow Flexibles Atlas Hydraulics Consideration, net of cash acquired $ 36.7 $ 74.0 Net assets acquired (14.2 ) (52.2 ) Goodwill $ 22.5 $ 21.8 |
Segment information (Tables)
Segment information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of net sales by key geographic regions and markets | The following table summarizes our net sales by key geographic region: Net Sales Three months ended (dollars in millions) March 31, 2018 April 1, 2017 North America $ 396.0 $ 345.1 EMEA 231.3 189.0 East Asia & India 98.3 90.2 Greater China 92.7 73.4 South America 33.7 32.5 Net Sales $ 852.0 $ 730.2 The following table summarizes further our net sales into emerging and developed markets: Net Sales Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Developed $ 562.2 $ 487.0 Emerging 289.8 243.2 Net Sales $ 852.0 $ 730.2 |
Schedule of net sales by operating segment | Net Sales Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Power Transmission $ 546.0 $ 485.6 Fluid Power 306.0 244.6 Continuing operations $ 852.0 $ 730.2 Adjusted EBITDA Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Power Transmission $ 125.3 $ 107.5 Fluid Power 58.6 45.5 Continuing operations $ 183.9 $ 153.0 |
Reconciliation of Adjusted EBITDA to net income from continuing operations | Reconciliation of Adjusted EBITDA to net income from continuing operations: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Adjusted EBITDA $ 183.9 $ 153.0 Depreciation and amortization 55.0 52.4 Share-based compensation 1.6 0.8 Transaction-related costs (1) 4.7 2.0 Impairment of intangibles and other assets 0.3 — Restructuring (benefits) expenses (0.3 ) 1.8 Sponsor fees (included in other operating expenses) 1.9 1.5 Other operating expenses 2.4 0.1 Operating income from continuing operations 118.3 94.4 Interest expense 59.8 55.2 Other expenses 17.4 0.7 Income before income taxes 41.1 38.5 Income tax expense 11.7 12.5 Net income from continuing operations $ 29.4 $ 26.0 (1) Transaction-related costs relate primarily to advisory costs recognized in respect of our initial public offering, the acquisition of businesses and costs related to other corporate transactions such as debt refinancings. |
Restructuring initiatives (Tabl
Restructuring initiatives (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring costs | Restructuring costs recognized in the condensed consolidated statements of operations for each segment were as follows: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Power Transmission $ (0.4 ) $ 1.0 Fluid Power 0.1 0.8 Continuing operations $ (0.3 ) $ 1.8 |
Schedule of restructuring reserves activity | The following summarizes the restructuring reserves activity for the three month periods ended March 31, 2018 and April 1, 2017, respectively: (dollars in millions) As of March 31, 2018 As of April 1, 2017 Balance as of the beginning of the period $ 8.6 $ 5.0 Net (benefit) charge for the period (1.0 ) 0.3 Utilized during the period (3.1 ) (2.0 ) Foreign currency translation 0.1 — Balance as of the end of the period $ 4.6 $ 3.3 Restructuring reserves are included in the accompanying condensed consolidated balance sheet as follows: (dollars in millions) As of March 31, 2018 As of April 1, 2017 Accrued expenses and other current liabilities $ 4.2 $ 3.1 Other non-current liabilities 0.4 0.2 $ 4.6 $ 3.3 |
Earnings per share (Tables)
Earnings per share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of computation of net income per share | The computation of net income per share is presented below: Three months ended (dollars in millions, except share numbers and per share amounts) March 31, 2018 April 1, 2017 Net income attributable to shareholders $ 24.2 $ 18.8 Weighted average number of shares outstanding 274,876,458 245,603,089 Dilutive effect of share-based awards (number of shares) 9,427,991 4,285,142 Diluted weighted average number of shares outstanding 284,304,449 249,888,231 Basic net income per share $ 0.09 $ 0.08 Diluted net income per share $ 0.09 $ 0.08 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | (dollars in millions) As of March 31, 2018 As of December 30, 2017 Raw materials and supplies $ 141.0 $ 128.0 Work in progress 37.5 32.8 Finished goods 313.5 296.3 Total inventories $ 492.0 $ 457.1 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | (dollars in millions) Power Fluid Total Cost and carrying amount As of December 30, 2017 $ 1,430.2 $ 655.3 $ 2,085.5 Foreign currency translation 31.9 13.9 45.8 As of March 31, 2018 $ 1,462.1 $ 669.2 $ 2,131.3 |
Intangible assets (Tables)
Intangible assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of finite-lived intangible assets | As of March 31, 2018 As of December 30, 2017 (dollars in millions) Cost Accumulated Net Cost Accumulated Net Finite-lived: —Customer relationships $ 2,082.1 $ (462.0 ) $ 1,620.1 $ 2,051.1 $ (424.4 ) $ 1,626.7 —Technology 91.0 (86.4 ) 4.6 90.8 (86.2 ) 4.6 —Capitalized software 52.8 (23.6 ) 29.2 48.3 (22.2 ) 26.1 2,225.9 (572.0 ) 1,653.9 2,190.2 (532.8 ) 1,657.4 Indefinite-lived: —Brands and trade names 513.4 (44.0 ) 469.4 513.4 (44.0 ) 469.4 Total intangible assets $ 2,739.3 $ (616.0 ) $ 2,123.3 $ 2,703.6 $ (576.8 ) $ 2,126.8 |
Schedule of indefinite-lived intangible assets | As of March 31, 2018 As of December 30, 2017 (dollars in millions) Cost Accumulated Net Cost Accumulated Net Finite-lived: —Customer relationships $ 2,082.1 $ (462.0 ) $ 1,620.1 $ 2,051.1 $ (424.4 ) $ 1,626.7 —Technology 91.0 (86.4 ) 4.6 90.8 (86.2 ) 4.6 —Capitalized software 52.8 (23.6 ) 29.2 48.3 (22.2 ) 26.1 2,225.9 (572.0 ) 1,653.9 2,190.2 (532.8 ) 1,657.4 Indefinite-lived: —Brands and trade names 513.4 (44.0 ) 469.4 513.4 (44.0 ) 469.4 Total intangible assets $ 2,739.3 $ (616.0 ) $ 2,123.3 $ 2,703.6 $ (576.8 ) $ 2,126.8 |
Derivative financial instrume37
Derivative financial instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of net investment hedging instruments recognized in OCI | The following table sets out the fair value loss recognized in OCI in relation to the instruments designated as net investment hedging instruments: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Net fair value loss recognized in OCI in relation to: —Euro-denominated debt $ (15.2 ) $ (12.0 ) —Designated cross currency swaps (5.7 ) (5.9 ) Total net fair value loss $ (20.9 ) $ (17.9 ) |
Schedule of fair values of derivative financial instruments | The fair values of derivative financial instruments held by Gates were as follows: As of March 31, 2018 As of December 30, 2017 (dollars in millions) Prepaid expenses and other assets Other non- Accrued expenses and other Other Net Prepaid expenses and other assets Other non- Accrued expenses and other Other non- Net Derivatives designated as hedging instruments: —Currency swaps $ 5.5 $ — $ — $ (51.1 ) $ (45.6 ) $ 3.2 $ — $ — $ (42.1 ) $ (38.9 ) —Interest rate caps 2.0 4.3 (0.7 ) — 5.6 — 0.6 (3.8 ) (2.4 ) (5.6 ) Derivatives not designated as hedging instruments: —Currency swaps 0.2 — — — 0.2 — — — — — —Currency forward contracts 0.6 — (1.0 ) — (0.4 ) 0.5 — (1.6 ) — (1.1 ) $ 8.3 $ 4.3 $ (1.7 ) $ (51.1 ) $ (40.2 ) $ 3.7 $ 0.6 $ (5.4 ) $ (44.5 ) $ (45.6 ) |
Fair value measurement (Tables)
Fair value measurement (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying amount and fair value of debt | The carrying amount and fair value of Gates’ debt is set out below: As of March 31, 2018 As of December 30, 2017 (dollars in millions) Carrying amount Fair value Carrying amount Fair value Current $ 33.7 $ 33.3 $ 66.4 $ 66.2 Non-current 3,013.6 3,045.0 3,889.3 3,970.7 $ 3,047.3 $ 3,078.3 $ 3,955.7 $ 4,036.9 |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table categorizes the assets and liabilities that are measured at fair value on a recurring basis: (dollars in millions) Quoted prices in active Significant observable Total As of March 31, 2018 Available-for-sale securities $ 2.5 $ — $ 2.5 Derivative assets $ — $ 12.6 $ 12.6 Derivative liabilities $ — $ (52.8 ) $ (52.8 ) As of December 30, 2017 Available-for-sale securities $ 2.4 $ — $ 2.4 Derivative assets $ — $ 4.3 $ 4.3 Derivative liabilities $ — $ (49.9 ) $ (49.9 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt, including the current portion and bank overdrafts, is analyzed as follows: (dollars in millions) As of March 31, 2018 As of December 30, 2017 Secured debt: —Dollar Term Loan $ 1,725.0 $ 1,729.4 —Euro Term Loan 801.3 785.6 Unsecured debt: —Dollar Senior Notes 568.0 1,190.0 —Euro Senior Notes — 282.5 —Other loans 0.3 0.4 Total principal of debt 3,094.6 3,987.9 Deferred issuance costs (55.5 ) (73.2 ) Accrued interest 8.2 41.0 Total carrying value of debt 3,047.3 3,955.7 Debt, current portion 33.7 66.4 Debt, less current portion $ 3,013.6 $ 3,889.3 |
Schedule of redemption prices plus accrued and unpaid interest | Gates may redeem the Dollar Senior Notes, at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest to the redemption date: Dollar Senior Note During the year commencing: —July 15, 2018 101.500 % —July 15, 2019 and thereafter 100.000 % |
Post-retirement benefits (Table
Post-retirement benefits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of components of net periodic benefit cost for pensions and other post-retirement benefits | The components of the net periodic benefit cost for pensions and other post-retirement benefits were as follows: Three months ended March 31, 2018 Three months ended April 1, 2017 (dollars in millions) Pensions Other post-retirement benefits Total Pensions Other post-retirement benefits Total Reported in operating income: —Employer service cost $ 1.4 $ — $ 1.4 $ 1.3 $ — $ 1.3 Reported outside of operating income: —Interest cost 6.0 0.6 6.6 7.8 0.7 8.5 —Expected return on plan assets (5.8 ) — (5.8 ) (7.0 ) — (7.0 ) —Amortization of net actuarial (gain) loss — (0.2 ) (0.2 ) 0.1 — 0.1 —Settlements 0.4 — 0.4 — — — Net periodic benefit cost $ 2.0 $ 0.4 $ 2.4 $ 2.2 $ 0.7 $ 2.9 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of movement in number of shares in issue | Movements in the Company's number of shares in issue for the three month periods ended March 31, 2018 and April 1, 2017, respectively, were as follows: (number of shares) As of March 31, 2018 As of April 1, 2017 Balance as of the beginning of the period 245,474,605 245,627,952 Issuance of shares 44,275,000 80,107 Exercise of share options 6,774 — Buy back of shares — (187,680 ) Balance as of the end of the period 289,756,379 245,520,379 |
Analysis of accumulated other42
Analysis of accumulated other comprehensive income (loss) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | Changes in accumulated other comprehensive income (loss) by component (net of tax) are as follows: (dollars in millions) Available-for- Post- Cumulative Cash flow Accumulated OCI attributable to Non- Accumulated OCI As of December 31, 2016 $ (0.2 ) $ (6.5 ) $ (884.1 ) $ (25.1 ) $ (915.9 ) $ (55.4 ) $ (971.3 ) Foreign currency translation — — 90.8 — 90.8 10.9 101.7 Cash flow hedges movements — — — 1.2 1.2 — 1.2 Available-for-sale investment movements (0.1 ) — — — (0.1 ) (0.1 ) (0.2 ) Post-retirement benefit movements — 0.1 — — 0.1 — 0.1 Other comprehensive (loss) income (0.1 ) 0.1 90.8 1.2 92.0 10.8 102.8 As of April 1, 2017 $ (0.3 ) $ (6.4 ) $ (793.3 ) $ (23.9 ) $ (823.9 ) $ (44.6 ) $ (868.5 ) (dollars in millions) Available-for- Post- Cumulative Cash flow Accumulated OCI attributable to Non- Accumulated OCI As of December 30, 2017 $ (0.3 ) $ 13.2 $ (742.8 ) $ (17.5 ) $ (747.4 ) $ (25.5 ) $ (772.9 ) Foreign currency translation — — 39.4 — 39.4 16.7 56.1 Cash flow hedges movements — — — 11.7 11.7 — 11.7 Post-retirement benefit movements — (0.3 ) — — (0.3 ) — (0.3 ) Other comprehensive (loss) income — (0.3 ) 39.4 11.7 50.8 16.7 67.5 As of March 31, 2018 $ (0.3 ) $ 12.9 $ (703.4 ) $ (5.8 ) $ (696.6 ) $ (8.8 ) $ (705.4 ) |
Related party transactions (Tab
Related party transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Sales to and purchases from equity method investees were as follows: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Sales $ 0.6 $ 0.5 Purchases $ (2.5 ) $ (2.6 ) Sales to and purchases from non-Gates entities controlled by non-controlling shareholders were as follows: Three months ended (dollars in millions) March 31, 2018 April 1, 2017 Sales $ 16.0 $ 12.9 Purchases $ (5.3 ) $ (5.7 ) Amounts outstanding in respect of these transactions were as follows: (dollars in millions) As of March 31, 2018 As of December 30, 2017 Receivables $ 2.1 $ 1.2 Payables $ (0.4 ) $ (0.2 ) |
Commitments and contingencies (
Commitments and contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of warranty liabilities | The following summarizes the movements in the warranty liability for the three month periods ended March 31, 2018 and April 1, 2017, respectively: (dollars in millions) As of March 31, 2018 As of April 1, 2017 Balance as of the beginning of the period $ 14.1 $ 14.3 Charge for the period 4.4 4.6 Payments made (3.2 ) (3.6 ) Released during the period (0.2 ) — Foreign currency translation 0.1 0.2 Balance as of the end of the period $ 15.2 $ 15.5 |
Introduction (Details)
Introduction (Details) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018USD ($) | Apr. 01, 2017USD ($) | Dec. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Depository receipts ratio | 0.76293 | |||
Cash flow from operating activities | $ (26.5) | $ (12.5) | ||
Cash flow from investing activities | (69.4) | (21.6) | ||
Restricted cash | $ 1.7 | 1.6 | $ 1.6 | $ 1.6 |
Accounting Standards Update 2016-15 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash flow from operating activities | (8.3) | |||
Cash flow from investing activities | $ 8.3 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | Oct. 02, 2017 | Jun. 30, 2017 | Mar. 31, 2018 | Dec. 30, 2017 |
Business Acquisition [Line Items] | ||||
Aggregate costs related directly to acquisitions | $ 3,000,000 | |||
Goodwill arising from acquisition | $ 2,131,300,000 | $ 2,085,500,000 | ||
Techflow Flexibles | ||||
Business Acquisition [Line Items] | ||||
Ownership interest acquired (as a percent) | 100.00% | |||
Purchase price | $ 36,700,000 | |||
Purchase price, net of cash acquired | 36,700,000 | |||
Goodwill arising from acquisition | 22,500,000 | |||
Goodwill expected to be deductible for income tax purposes | $ 0 | |||
Atlas Hydraulics | ||||
Business Acquisition [Line Items] | ||||
Purchase price, net of cash acquired | $ 74,000,000 | |||
Goodwill arising from acquisition | 21,800,000 | |||
Goodwill expected to be deductible for income tax purposes | $ 0 |
Acquisitions - Schedule of fair
Acquisitions - Schedule of fair value of net assets acquired and liabilities assumed (Details) - USD ($) $ in Millions | Oct. 02, 2017 | Jun. 30, 2017 |
Techflow Flexibles | ||
Assets acquired | ||
Accounts receivable | $ 1.7 | |
Inventories | 4.2 | |
Prepaid expenses and other receivables | 1.7 | |
Taxes receivable | 0 | |
Property, plant and equipment | 13 | |
Intangible assets | 3.8 | |
Total assets | 24.4 | |
Liabilities assumed | ||
Accounts payable | 2.6 | |
Accrued expenses | 4.8 | |
Other current liabilities | 0.3 | |
Taxes payable | 1.9 | |
Deferred income taxes | 0.6 | |
Total liabilities | 10.2 | |
Net assets acquired | $ 14.2 | |
Atlas Hydraulics | ||
Assets acquired | ||
Accounts receivable | $ 10.3 | |
Inventories | 21.2 | |
Prepaid expenses and other receivables | 0.5 | |
Taxes receivable | 2.7 | |
Property, plant and equipment | 24.5 | |
Intangible assets | 23 | |
Total assets | 82.2 | |
Liabilities assumed | ||
Accounts payable | 5.5 | |
Accrued expenses | 2.4 | |
Other current liabilities | 10.5 | |
Taxes payable | 0 | |
Deferred income taxes | 11.6 | |
Total liabilities | 30 | |
Net assets acquired | $ 52.2 |
Acquisitions - Schedule of good
Acquisitions - Schedule of goodwill recognized (Details) - USD ($) $ in Millions | Oct. 02, 2017 | Jun. 30, 2017 | Mar. 31, 2018 | Dec. 30, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,131.3 | $ 2,085.5 | ||
Techflow Flexibles | ||||
Business Acquisition [Line Items] | ||||
Consideration, net of cash acquired | $ 36.7 | |||
Net assets acquired | (14.2) | |||
Goodwill | $ 22.5 | |||
Atlas Hydraulics | ||||
Business Acquisition [Line Items] | ||||
Consideration, net of cash acquired | $ 74 | |||
Net assets acquired | (52.2) | |||
Goodwill | $ 21.8 |
Segment information - Net Sales
Segment information - Net Sales by Geographic Regions and Markets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 852 | $ 730.2 |
North America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 396 | 345.1 |
EMEA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 231.3 | 189 |
East Asia & India | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 98.3 | 90.2 |
Greater China | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 92.7 | 73.4 |
South America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 33.7 | 32.5 |
Developed | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 562.2 | 487 |
Emerging | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 289.8 | $ 243.2 |
Segment information - Segment (
Segment information - Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 852 | $ 730.2 |
Adjusted EBITDA | 183.9 | 153 |
Power Transmission | ||
Segment Reporting Information [Line Items] | ||
Net sales | 546 | 485.6 |
Adjusted EBITDA | 125.3 | 107.5 |
Fluid Power | ||
Segment Reporting Information [Line Items] | ||
Net sales | 306 | 244.6 |
Adjusted EBITDA | $ 58.6 | $ 45.5 |
Segment information - Reconcili
Segment information - Reconciliation of Adjusted EBITDA to Net Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting [Abstract] | ||
Adjusted EBITDA | $ 183.9 | $ 153 |
Depreciation and amortization | 55 | 52.4 |
Share-based compensation | 1.6 | 0.8 |
Transaction-related costs | 4.7 | 2 |
Impairment of intangibles and other assets | 0.3 | 0 |
Restructuring (benefits) expenses | (0.3) | 1.8 |
Sponsor fees (included in other operating expenses) | 1.9 | 1.5 |
Other operating expenses | 2.4 | 0.1 |
Operating income from continuing operations | 118.3 | 94.4 |
Interest expense | 59.8 | 55.2 |
Other expenses | 17.4 | 0.7 |
Income from continuing operations before taxes | 41.1 | 38.5 |
Income tax expense | 11.7 | 12.5 |
Net income from continuing operations | $ 29.4 | $ 26 |
Restructuring initiatives - Nar
Restructuring initiatives - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Restructuring and Related Activities [Abstract] | ||
Restructuring costs | $ (0.3) | $ 1.8 |
Severance costs | $ 1.2 |
Restructuring initiatives - Res
Restructuring initiatives - Restructuring Costs by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ (0.3) | $ 1.8 |
Power Transmission | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | (0.4) | 1 |
Fluid Power | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 0.1 | $ 0.8 |
Restructuring initiatives - R54
Restructuring initiatives - Restructuring Reserve Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Balance as of the beginning of the period | $ 8.6 | $ 5 |
Net (benefit) charge for the period | (1) | 0.3 |
Utilized during the period | (3.1) | (2) |
Foreign currency translation | 0.1 | 0 |
Balance as of the end of the period | $ 4.6 | $ 3.3 |
Restructuring initiatives - R55
Restructuring initiatives - Restructuring Reserve Balance Sheet Impact (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 | Apr. 01, 2017 | Dec. 31, 2016 |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve | $ 4.6 | $ 8.6 | $ 3.3 | $ 5 |
Accrued expenses and other current liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve | 4.2 | 3.1 | ||
Other non-current liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve | $ 0.4 | $ 0.2 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 11.7 | $ 12.5 |
Pre-tax income | $ 41.1 | $ 38.5 |
Effective income tax rate | 28.50% | 32.50% |
Increase (decrease) in income tax expense from changes in valuation allowances | $ (21.1) |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Earnings Per Share [Abstract] | ||
Net income attributable to shareholders of Gates Industrial Corporation plc | $ 24.2 | $ 18.8 |
Weighted average number of shares outstanding (in shares) | 274,876,458 | 245,603,089 |
Dilutive effect of share-based awards (in shares) | 9,427,991 | 4,285,142 |
Diluted weighted average number of shares outstanding (in shares) | 284,304,449 | 249,888,231 |
Basic net income per share (in usd per share) | $ 0.09 | $ 0.08 |
Diluted net income per share (in usd per share) | $ 0.09 | $ 0.08 |
Anti-dilutive shares excluded from diluted income per share calculation (in shares) | 180,538 | 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 141 | $ 128 |
Work in progress | 37.5 | 32.8 |
Finished goods | 313.5 | 296.3 |
Total inventories | $ 492 | $ 457.1 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Cost and carrying amount | |
December 30, 2017 | $ 2,085.5 |
Foreign currency translation | 45.8 |
March 31, 2018 | 2,131.3 |
Power Transmission | |
Cost and carrying amount | |
December 30, 2017 | 1,430.2 |
Foreign currency translation | 31.9 |
March 31, 2018 | 1,462.1 |
Fluid Power | |
Cost and carrying amount | |
December 30, 2017 | 655.3 |
Foreign currency translation | 13.9 |
March 31, 2018 | $ 669.2 |
Intangible assets - Finite-Live
Intangible assets - Finite-Lived and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived, cost | $ 2,225.9 | $ 2,190.2 |
Finite-lived, accumulated amortization | (572) | (532.8) |
Finite-lived, net | 1,653.9 | 1,657.4 |
Indefinite-lived, cost | 513.4 | 513.4 |
Indefinite-lived, accumulated impairment | (44) | (44) |
Indefinite-lived, net | 469.4 | 469.4 |
Cost | 2,739.3 | 2,703.6 |
Accumulated amortization and impairment | (616) | (576.8) |
Net | 2,123.3 | 2,126.8 |
—Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived, cost | 2,082.1 | 2,051.1 |
Finite-lived, accumulated amortization | (462) | (424.4) |
Finite-lived, net | 1,620.1 | 1,626.7 |
—Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived, cost | 91 | 90.8 |
Finite-lived, accumulated amortization | (86.4) | (86.2) |
Finite-lived, net | 4.6 | 4.6 |
—Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived, cost | 52.8 | 48.3 |
Finite-lived, accumulated amortization | (23.6) | (22.2) |
Finite-lived, net | $ 29.2 | $ 26.1 |
Intangible assets - Narrative (
Intangible assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 32.9 | $ 32.9 |
Intangible assets, foreign currency translation gain (loss) | $ 24.6 | $ 32.7 |
Derivative financial instrume62
Derivative financial instruments - Net Investment Hedging Instruments in OCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total net fair value loss | $ 11.7 | $ 1.2 |
Net investment hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total net fair value loss | (20.9) | (17.9) |
Euro-denominated debt | Net investment hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total net fair value loss | (15.2) | (12) |
Designated cross currency swaps | Net investment hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total net fair value loss | $ (5.7) | $ (5.9) |
Derivative financial instrume63
Derivative financial instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Apr. 01, 2017 | Dec. 30, 2017 | |
Derivative [Line Items] | |||
Gain (loss) recognized in OCI in relation to interest rate caps, before tax | $ 9.7 | $ (1) | |
Reclassification adjustment from OCI in relation to interest rate caps, before tax | 2.4 | 2.7 | |
Designated cross currency swaps | |||
Derivative [Line Items] | |||
Fair value of derivative liability | 45.6 | $ 38.9 | |
Notional amount of derivative contracts | 270 | 270 | |
—Interest rate caps | |||
Derivative [Line Items] | |||
Fair value of derivative liability | 5.6 | ||
Fair value of derivative asset | 5.6 | ||
Notional amount of derivative contracts | 2,200 | 2,200 | |
Currency forward contracts | |||
Derivative [Line Items] | |||
Notional amount of derivative contracts | 131.5 | 99.2 | |
Currency forward contracts | Selling, general and administrative expenses | Not designated as hedging instrument | |||
Derivative [Line Items] | |||
Gain (loss) on derivative, recognized in the income statement | (0.1) | $ 0.2 | |
Foreign exchange contracts | |||
Derivative [Line Items] | |||
Notional amount of derivative contracts | 31.7 | $ 0 | |
Interest rate caps due June 30, 2019 | |||
Derivative [Line Items] | |||
Notional amount of derivative contracts | 1,000 | ||
Interest rate caps due June 30, 2020 | |||
Derivative [Line Items] | |||
Notional amount of derivative contracts | 200 | ||
Interest rate caps due June 28, 2019 through June 30, 2020 | |||
Derivative [Line Items] | |||
Notional amount of derivative contracts | $ 1,000 |
Derivative financial instrume64
Derivative financial instruments - Fair Values of Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Derivatives, Fair Value [Line Items] | ||
Net | $ (40.2) | $ (45.6) |
Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 8.3 | 3.7 |
Other non- current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 4.3 | 0.6 |
Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | (1.7) | (5.4) |
Other non- current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | (51.1) | (44.5) |
—Currency swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | (45.6) | (38.9) |
—Currency swaps | Derivatives designated as hedging instruments: | ||
Derivatives, Fair Value [Line Items] | ||
Net | (45.6) | (38.9) |
—Currency swaps | Derivatives designated as hedging instruments: | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 5.5 | 3.2 |
—Currency swaps | Derivatives designated as hedging instruments: | Other non- current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
—Currency swaps | Derivatives designated as hedging instruments: | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0 | 0 |
—Currency swaps | Derivatives designated as hedging instruments: | Other non- current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | (51.1) | (42.1) |
—Currency swaps | Derivatives not designated as hedging instruments: | ||
Derivatives, Fair Value [Line Items] | ||
Net | 0.2 | 0 |
—Currency swaps | Derivatives not designated as hedging instruments: | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0.2 | 0 |
—Currency swaps | Derivatives not designated as hedging instruments: | Other non- current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
—Currency swaps | Derivatives not designated as hedging instruments: | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0 | 0 |
—Currency swaps | Derivatives not designated as hedging instruments: | Other non- current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0 | 0 |
—Interest rate caps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 5.6 | |
Derivative liabilities | (5.6) | |
—Interest rate caps | Derivatives designated as hedging instruments: | ||
Derivatives, Fair Value [Line Items] | ||
Net | 5.6 | (5.6) |
—Interest rate caps | Derivatives designated as hedging instruments: | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 2 | 0 |
—Interest rate caps | Derivatives designated as hedging instruments: | Other non- current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 4.3 | 0.6 |
—Interest rate caps | Derivatives designated as hedging instruments: | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | (0.7) | (3.8) |
—Interest rate caps | Derivatives designated as hedging instruments: | Other non- current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0 | (2.4) |
—Interest rate caps | Derivatives not designated as hedging instruments: | ||
Derivatives, Fair Value [Line Items] | ||
Net | (0.4) | (1.1) |
—Interest rate caps | Derivatives not designated as hedging instruments: | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0.6 | 0.5 |
—Interest rate caps | Derivatives not designated as hedging instruments: | Other non- current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
—Interest rate caps | Derivatives not designated as hedging instruments: | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | (1) | (1.6) |
—Interest rate caps | Derivatives not designated as hedging instruments: | Other non- current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 0 | $ 0 |
Fair value measurement - Schedu
Fair value measurement - Schedule of carrying amount and fair value of debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt | ||
Carrying amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current | 33.7 | 66.4 |
Non-current | 3,013.6 | 3,889.3 |
Fair value of debt | 3,047.3 | 3,955.7 |
Fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current | 33.3 | 66.2 |
Non-current | 3,045 | 3,970.7 |
Fair value of debt | $ 3,078.3 | $ 4,036.9 |
Fair value measurement - Narrat
Fair value measurement - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Secured credit facilities | Secured debt: | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate floor | 1.00% |
—Euro Term Loan | Secured debt: | LIBOR | |
Debt Instrument [Line Items] | |
Variable rate floor | 3.00% |
—Euro Term Loan | Term loan | EURIBOR | |
Debt Instrument [Line Items] | |
Variable rate floor | 0.00% |
Fair value measurement - Sche67
Fair value measurement - Schedule of assets and liabilities measured at fair value on a recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 2.5 | $ 2.4 |
Derivative assets | 12.6 | 4.3 |
Derivative liabilities | (52.8) | (49.9) |
Quoted prices in active markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 2.5 | 2.4 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Significant observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Derivative assets | 12.6 | 4.3 |
Derivative liabilities | $ (52.8) | $ (49.9) |
Debt - Schedule of long-term de
Debt - Schedule of long-term debt (Details) € in Millions, $ in Millions | Mar. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Dec. 30, 2017USD ($) |
Debt Instrument [Line Items] | |||
Total principal of debt | $ 3,094.6 | $ 3,987.9 | |
Deferred issuance costs | (55.5) | (73.2) | |
Accrued interest | 8.2 | 41 | |
Total carrying value of debt | 3,047.3 | 3,955.7 | |
Debt, current portion | 33.7 | 66.4 | |
Debt, less current portion | 3,013.6 | 3,889.3 | |
Secured debt: | —Dollar Term Loan | |||
Debt Instrument [Line Items] | |||
Total principal of debt | 1,725 | 1,729.4 | |
Secured debt: | —Euro Term Loan | |||
Debt Instrument [Line Items] | |||
Total principal of debt | € 651.9 | 801.3 | 785.6 |
Unsecured debt: | —Dollar Senior Notes | |||
Debt Instrument [Line Items] | |||
Total principal of debt | 568 | 1,190 | |
Unsecured debt: | —Euro Senior Notes | |||
Debt Instrument [Line Items] | |||
Total principal of debt | 0 | 282.5 | |
Unsecured debt: | —Other loans | |||
Debt Instrument [Line Items] | |||
Total principal of debt | $ 0.3 | $ 0.4 |
Debt - Debt redemptions Narrati
Debt - Debt redemptions Narrative (Details) € in Millions, $ in Millions | Feb. 09, 2018USD ($) | Feb. 08, 2018USD ($) | Jan. 31, 2018USD ($) | Mar. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Apr. 01, 2017USD ($) |
Debt Instrument [Line Items] | ||||||
Premium paid on redemption of debt | $ 27 | $ 0 | ||||
Net proceeds from initial public offering | 799.1 | $ 0.6 | ||||
Unsecured debt: | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | 913.7 | |||||
Payments of accrued interest | $ 3.1 | |||||
Redemption price (as a percent) | 101.00% | 101.00% | ||||
Premium paid on redemption of debt | $ 27 | |||||
Accelerated recognition of deferred financing costs | 15.4 | |||||
Unsecured debt: | —Euro Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | € 235 | $ 291.7 | ||||
Payments of accrued interest | $ 0.7 | |||||
Redemption price (as a percent) | 102.875% | 102.875% | ||||
Premium paid on redemption of debt | $ 8.4 | |||||
Unsecured debt: | —Dollar Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 100 | $ 522 | $ 622 | |||
Payments of accrued interest | $ 0.4 | $ 2 | ||||
Redemption price (as a percent) | 103.00% | 103.00% | ||||
Premium paid on redemption of debt | $ 3 | $ 15.6 |
Debt - Dollar and Euro Term Loa
Debt - Dollar and Euro Term Loans Narrative (Details) € in Millions | Jan. 29, 2018 | Mar. 31, 2018USD ($) | Apr. 01, 2017USD ($) | Mar. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Dec. 30, 2017USD ($) |
Debt Instrument [Line Items] | ||||||
Foreign exchange gain (loss) | $ (4,700,000) | $ 1,300,000 | ||||
Other expenses from debt related foreign exchange losses | 17,400,000 | 700,000 | ||||
Foreign exchange gain (loss) recognized in OCI | 20,900,000 | 17,900,000 | ||||
Principal amount of debt outstanding | $ 3,094,600,000 | $ 3,987,900,000 | ||||
Secured debt: | ||||||
Debt Instrument [Line Items] | ||||||
Springing maturity trigger on debt | $ 500,000,000 | |||||
Increase (decrease) in applicable variable interest rate margin | 0.25% | |||||
Secured debt: | —Dollar Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate during period on debt | 5.05% | |||||
Quarterly amortization payment rate | 0.25% | |||||
Quarterly amortization payment on debt | $ 4,300,000 | |||||
Principal amount of debt outstanding | 1,725,000,000 | 1,729,400,000 | ||||
Secured debt: | —Dollar Term Loan | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate on debt | 2.75% | |||||
Secured debt: | —Dollar Term Loan | LIBOR | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate on debt | 1.00% | |||||
Secured debt: | —Euro Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate during period on debt | 0.00% | |||||
Quarterly amortization payment rate | 0.25% | |||||
Quarterly amortization payment on debt | $ 2,000,000 | |||||
Foreign exchange gain (loss) | (17,700,000) | (5,400,000) | ||||
Other expenses from debt related foreign exchange losses | 7,500,000 | 0 | ||||
Foreign exchange gain (loss) recognized in OCI | $ (10,200,000) | $ (5,400,000) | ||||
Principal amount of debt outstanding | € 651.9 | $ 801,300,000 | $ 785,600,000 | |||
Secured debt: | —Euro Term Loan | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate on debt | 3.00% | |||||
Secured debt: | —Euro Term Loan | LIBOR | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate on debt | 0.00% |
Debt - Unsecured senior notes N
Debt - Unsecured senior notes Narrative (Details) € in Millions, $ in Millions | Feb. 09, 2018USD ($) | Feb. 08, 2018USD ($) | Mar. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Apr. 01, 2017USD ($) | Dec. 30, 2017USD ($) |
Debt Instrument [Line Items] | ||||||
Principal amount of debt outstanding | $ 3,094.6 | $ 3,987.9 | ||||
Foreign exchange gain (loss) | (4.7) | $ 1.3 | ||||
Other expenses from debt related foreign exchange losses | 17.4 | 0.7 | ||||
Foreign exchange gain (loss) recognized in OCI | 20.9 | 17.9 | ||||
Unsecured debt: | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | $ 913.7 | |||||
Redemption price (as a percent) | 101.00% | 101.00% | ||||
Unsecured debt: | —Dollar Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of debt outstanding | $ 568 | 1,190 | ||||
Stated interest rate on debt | 6.00% | |||||
Repayments of debt | $ 100 | $ 522 | $ 622 | |||
Redemption price (as a percent) | 103.00% | 103.00% | ||||
Unsecured debt: | —Euro Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of debt outstanding | 0 | $ 282.5 | ||||
Repayments of debt | € 235 | 291.7 | ||||
Foreign exchange gain (loss) | (9.2) | (6.6) | ||||
Other expenses from debt related foreign exchange losses | 4.2 | 0 | ||||
Foreign exchange gain (loss) recognized in OCI | $ (5) | $ (6.6) | ||||
Redemption price (as a percent) | 102.875% | 102.875% |
Debt - Schedule of redemption p
Debt - Schedule of redemption prices plus accrued and unpaid interest (Details) - Unsecured debt: | Feb. 09, 2018 | Feb. 08, 2018 | Mar. 31, 2018 |
Debt Instrument, Redemption [Line Items] | |||
Redemption price (as a percent) | 101.00% | ||
Dollar Senior Note Redemption price | |||
Debt Instrument, Redemption [Line Items] | |||
Redemption price (as a percent) | 103.00% | 103.00% | |
Dollar Senior Note Redemption price | During the year commencing July 15, 2018 | |||
Debt Instrument, Redemption [Line Items] | |||
Redemption price (as a percent) | 101.50% | ||
Dollar Senior Note Redemption price | During the year commencing July 15, 2019 and thereafter | |||
Debt Instrument, Redemption [Line Items] | |||
Redemption price (as a percent) | 100.00% |
Debt - Revolving credit facilit
Debt - Revolving credit facility Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 30, 2017 | |
Revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit carrying value | $ 0 | |
Revolving credit facility | Secured multi-currency facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity of credit facility | $ 185,000,000 | 125,000,000 |
Springing maturity trigger on debt | 500,000,000 | |
Line of credit carrying value | 0 | |
Letter of credit sub-facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit carrying value | $ 0 | |
Letter of credit sub-facility | Secured multi-currency facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity of credit facility | 20,000,000 | |
Line of credit carrying value | $ 0 |
Debt - Asset-backed revolver Na
Debt - Asset-backed revolver Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 30, 2017 | |
Revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit carrying value | $ 0 | |
Revolving credit facility | Asset-backed revolver | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity of credit facility | $ 325,000,000 | |
Current borrowing capacity of credit facility | 322,000,000 | 293,700,000 |
Springing maturity trigger on debt | 500,000,000 | |
Line of credit carrying value | 0 | 0 |
Letter of credit sub-facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit carrying value | 0 | |
Letter of credit sub-facility | Asset-backed revolver | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity of credit facility | 150,000,000 | |
Line of credit carrying value | $ 58,400,000 | $ 58,000,000 |
Post-retirement benefits - Comp
Post-retirement benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2017 | Mar. 31, 2018 | Apr. 01, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
—Employer service cost | $ 1.4 | $ 1.3 | |
—Interest cost | 6.6 | 8.5 | |
—Expected return on plan assets | (5.8) | (7) | |
—Amortization of net actuarial (gain) loss | (0.2) | 0.1 | |
—Settlements | $ (3.9) | 0.4 | 0 |
Net periodic benefit cost | 2.4 | 2.9 | |
Pensions | |||
Defined Benefit Plan Disclosure [Line Items] | |||
—Employer service cost | 1.4 | 1.3 | |
—Interest cost | 6 | 7.8 | |
—Expected return on plan assets | (5.8) | (7) | |
—Amortization of net actuarial (gain) loss | 0 | 0.1 | |
—Settlements | 0.4 | 0 | |
Net periodic benefit cost | 2 | 2.2 | |
Other post-retirement benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
—Employer service cost | 0 | 0 | |
—Interest cost | 0.6 | 0.7 | |
—Expected return on plan assets | 0 | 0 | |
—Amortization of net actuarial (gain) loss | (0.2) | 0 | |
—Settlements | 0 | 0 | |
Net periodic benefit cost | $ 0.4 | $ 0.7 |
Post-retirement benefits - Narr
Post-retirement benefits - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2017 | Mar. 31, 2018 | Apr. 01, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Actuarial gains (losses) reclassified from OCI | $ 0.2 | $ (0.1) | |
Gain (loss) due to settlement | $ 3.9 | (0.4) | 0 |
Pensions | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions by employer | 2.2 | 1.8 | |
Expected future employer contributions in current fiscal year | 6.3 | ||
Actuarial gains (losses) reclassified from OCI | 0.2 | (0.1) | |
Payment for settlement of benefit obligation | 154 | ||
Settlement of benefit obligation | 155.1 | ||
Gain (loss) due to settlement | (0.4) | 0 | |
Other post-retirement benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions by employer | 1.3 | 1.3 | |
Expected future employer contributions in current fiscal year | 6.1 | ||
Settlement of benefit obligation | $ 1.1 | ||
Gain (loss) due to settlement | $ 0 | $ 0 |
Equity - Narrative (Details)
Equity - Narrative (Details) - $ / shares | 1 Months Ended | ||
Jan. 31, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | |
Subsidiary, Sale of Stock [Line Items] | |||
Par value (in usd per share) | $ 0.01 | $ 0.01 | |
Initial public offering | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares sold in offering (in shares) | 38,500,000 | ||
Offering price (in usd per share) | $ 19 | ||
Underwriters option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares sold in offering (in shares) | 5,775,000 | ||
Offering price (in usd per share) | $ 19 |
Equity - Movement in Number of
Equity - Movement in Number of Shares in Issue (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance as of the beginning of the period (in shares) | 245,474,605 | 245,627,952 |
Issuance of shares (in shares) | 44,275,000 | 80,107 |
Exercise of share options (in shares) | 6,774 | 0 |
Buy back of shares (in shares) | 0 | (187,680) |
Balance as of the end of the period (in shares) | 289,756,379 | 245,520,379 |
Analysis of accumulated other79
Analysis of accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 1,428.4 | $ 1,068.4 |
Other comprehensive income (loss), net of tax, attributable to parent | ||
Other comprehensive (loss) income | 67.5 | 102.8 |
Ending Balance | 2,315.1 | 1,191.7 |
Accumulated OCI attributable to shareholders | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (747.4) | (915.9) |
Other comprehensive income (loss), net of tax, attributable to parent | 50.8 | 92 |
Other comprehensive (loss) income | 50.8 | 92 |
Ending Balance | (696.6) | (823.9) |
Available-for- sale investments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (0.3) | (0.2) |
Other comprehensive income (loss), net of tax, attributable to parent | 0 | (0.1) |
Other comprehensive income (loss), net of tax, attributable to noncontrolling interest | (0.1) | |
Other comprehensive (loss) income | (0.2) | |
Ending Balance | (0.3) | (0.3) |
Post- retirement benefit | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | 13.2 | (6.5) |
Other comprehensive income (loss), net of tax, attributable to parent | (0.3) | 0.1 |
Ending Balance | 12.9 | (6.4) |
Cumulative translation adjustment | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (742.8) | (884.1) |
Other comprehensive income (loss), net of tax, attributable to parent | 39.4 | 90.8 |
Other comprehensive income (loss), net of tax, attributable to noncontrolling interest | 16.7 | 10.9 |
Other comprehensive (loss) income | 56.1 | 101.7 |
Ending Balance | (703.4) | (793.3) |
Cash flow hedges | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (17.5) | (25.1) |
Other comprehensive income (loss), net of tax, attributable to parent | 11.7 | 1.2 |
Ending Balance | (5.8) | (23.9) |
Non- controlling interests | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (25.5) | (55.4) |
Other comprehensive income (loss), net of tax, attributable to noncontrolling interest | 16.7 | 10.8 |
Ending Balance | (8.8) | (44.6) |
Accumulated OCI | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (772.9) | (971.3) |
Ending Balance | $ (705.4) | $ (868.5) |
Related party transactions - Na
Related party transactions - Narrative (Details) - USD ($) | Jul. 03, 2014 | Jan. 31, 2018 | Mar. 31, 2018 | Apr. 01, 2017 | Dec. 30, 2017 |
Related Party Transaction [Line Items] | |||||
Dividends received from equity method investees | $ 400,000 | $ 300,000 | |||
Blackstone, The Sponsor | Former transaction and monitoring fee agreement | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, amounts of transaction | $ 56,800,000 | ||||
Related party transaction, fee ass percentage of EBITDA | 1.00% | ||||
Related party transaction, expenses incurred | 1,900,000 | 1,500,000 | |||
Blackstone, The Sponsor | New monitoring fee agreement | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, ownership percentage threshold which terminates milestone payment | 5.00% | ||||
Related party transaction, fair value of equity threshold which terminates milestone payment | $ 25,000,000 | ||||
Blackstone, The Sponsor | Support and services agreement | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, ownership percentage threshold which terminates milestone payment | 5.00% | ||||
Related party transaction, fair value of equity threshold which terminates milestone payment | $ 25,000,000 | ||||
Blackstone, The Sponsor | Underwriting fees | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, expenses incurred | $ 3,200,000 | ||||
Alliance Automotive Group | |||||
Related Party Transaction [Line Items] | |||||
Net sales from related parties | 0 | 8,200,000 | |||
Equity method investees | |||||
Related Party Transaction [Line Items] | |||||
Net sales from related parties | 600,000 | $ 500,000 | |||
Payables to related parties | $ 300,000 | $ 200,000 |
Related party transactions - Sa
Related party transactions - Sales and Purchases with Equity Method Investees (Details) - Equity method investees - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Related Party Transaction [Line Items] | ||
Sales | $ 0.6 | $ 0.5 |
Purchases | $ (2.5) | $ (2.6) |
Related party transactions - Tr
Related party transactions - Transactions with Non-Gates entities (Details) - Non-Gates entities controlled by non-controlling shareholders - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Apr. 01, 2017 | Dec. 30, 2017 | |
Related Party Transaction [Line Items] | |||
Sales | $ 16 | $ 12.9 | |
Purchases | (5.3) | $ (5.7) | |
Receivables | 2.1 | $ 1.2 | |
Payables | $ (0.4) | $ (0.2) |
Commitments and contingencies -
Commitments and contingencies - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 30, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Letters of credit outstanding | $ 58.4 | $ 58 |
Bonds, letters of credit, and bank guarantees | $ 3.4 | $ 3.4 |
Commitments and contingencies84
Commitments and contingencies - Warranty Liability (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance as of the beginning of the period | $ 14.1 | $ 14.3 |
Charge for the period | 4.4 | 4.6 |
Payments made | (3.2) | (3.6) |
Released during the period | (0.2) | 0 |
Foreign currency translation | 0.1 | 0.2 |
Balance as of the end of the period | $ 15.2 | $ 15.5 |
Subsequent events (Details)
Subsequent events (Details) - Subsequent Event - Rapro $ in Millions | Apr. 26, 2018USD ($)facility |
Subsequent Event [Line Items] | |
Business acquisition, revenue reported by acquired entity for last annual period | $ | $ 23 |
Business acquisition, number of facilities in which acquired entity operates | facility | 2 |