Document and entity information
Document and entity information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 20, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment flag | false | |
Document quarterly report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document transition report | false | |
Entity file number | 001-38912 | |
Entity Registrant Name | Avantor, Inc. | |
Entity incorporation state or country code | DE | |
Entity tax identification number | 82-2758923 | |
Entity Address, Address Line One | Radnor Corporate Center, Building One, Suite 200 | |
Entity Address, Address Line Two | 100 Matsonford Road | |
Entity Address, City or Town | Radnor | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19087 | |
Entity central index key | 0001722482 | |
Current fiscal year end date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document fiscal year focus | 2020 | |
Document fiscal period focus | Q3 | |
Entity common stock, shares outstanding | 578,338,818 | |
Local Phone Number | 386-1700 | |
City Area Code | 610 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, $0.01 par value | |
Trading Symbol | AVTR | |
Security Exchange Name | NYSE | |
Preferred Stock [Member] | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.250% Series A Mandatory Convertible Preferred Stock, $0.01 par value | |
Trading Symbol | AVTR PRA | |
Security Exchange Name | NYSE |
Unaudited condensed consolidate
Unaudited condensed consolidated balance sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 370.5 | $ 186.7 |
Accounts receivable, net of allowances of $27.5 and $18.6 | 1,036.9 | 988.8 |
Inventory | 729.8 | 711.2 |
Other current assets | 159.6 | 134.8 |
Total current assets | 2,296.8 | 2,021.5 |
Property, plant and equipment, net of accumulated depreciation of $360.3 and $307.8 | 552.5 | 557 |
Other intangible assets, net (see note 8) | 4,041.7 | 4,220.2 |
Goodwill | 2,808.8 | 2,769.4 |
Other assets | 238.6 | 205.2 |
Total assets | 9,938.4 | 9,773.3 |
Liabilities and stockholders’ equity | ||
Current portion of debt | 14.4 | 93.5 |
Accounts payable | 625.3 | 560.2 |
Employee-related liabilities | 130.4 | 114.3 |
Accrued interest | 63.5 | 74.2 |
Other current liabilities | 302.4 | 232.3 |
Total current liabilities | 1,136 | 1,074.5 |
Debt, net of current portion | 5,056.5 | 5,023 |
Deferred income tax liabilities | 760.7 | 785.4 |
Other liabilities | 432.9 | 428.2 |
Total liabilities | 7,386.1 | 7,311.1 |
Commitments and contingencies (see note 10) | ||
MCPS including paid-in capital, 20.7 shares outstanding | 1,003.7 | 1,003.7 |
Common stock including paid-in capital, 578.0 and 572.8 shares outstanding | 1,743.6 | 1,748.1 |
Accumulated deficit | (140.3) | (203.7) |
Accumulated other comprehensive loss | (54.7) | (85.9) |
Total stockholders’ equity | 2,552.3 | 2,462.2 |
Total liabilities and stockholders’ equity | $ 9,938.4 | $ 9,773.3 |
Unaudited condensed consolida_2
Unaudited condensed consolidated balance sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowances on accounts receivable | $ 27.5 | $ 18.6 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 360.3 | $ 307.8 |
Preferred Stock, Shares Outstanding | 20.7 | 20.7 |
Common Stock, Shares, Outstanding | 578 | 572.8 |
Unaudited condensed consolida_3
Unaudited condensed consolidated statements of operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,605 | $ 1,503.8 | $ 4,602.7 | $ 4,516.3 |
Cost of sales | 1,098.6 | 1,029.8 | 3,103.8 | 3,076 |
Gross profit | 506.4 | 474 | 1,498.9 | 1,440.3 |
Selling, general and administrative expenses | 329.2 | 330.8 | 996.7 | 1,040.4 |
Operating income | 177.2 | 143.2 | 502.2 | 399.9 |
Interest expense | (65.2) | (98.3) | (251.8) | (342) |
Loss on extinguishment of debt | (226.4) | 0 | (226.4) | (70.2) |
Other income (expense), net | 6.6 | (7.6) | 11.6 | 2.9 |
(Loss) income before income taxes | (107.8) | 37.3 | 35.6 | (9.4) |
Income tax benefit (expense) | 65.6 | (15.2) | 29.4 | (23.4) |
Net (loss) income | (42.2) | 22.1 | 65 | (32.8) |
Accumulation of yield on preferred stock | (16.1) | (16.4) | (48.4) | (136.4) |
Accretion of make whole premium on series A preferred stock | 0 | 0 | 0 | (220.4) |
Net (loss) income available to common stockholders | $ (58.3) | $ 5.7 | $ 16.6 | $ (389.6) |
(Loss) earnings per share: | ||||
Basic | $ (0.10) | $ 0.01 | $ 0.03 | $ (1.13) |
Diluted | $ (0.10) | $ 0.01 | $ 0.03 | $ (1.13) |
Weighted average shares outstanding: | ||||
Basic | 577.2 | 570 | 575.5 | 343.7 |
Diluted | 577.2 | 580.7 | 582.5 | 343.7 |
Unaudited condensed consolida_4
Unaudited condensed consolidated statements of comprehensive income or loss - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (42.2) | $ 22.1 | $ 65 | $ (32.8) |
Other comprehensive income (loss): | ||||
Foreign currency translation — unrealized gain (loss) | 55.1 | (62.7) | 31 | (59.3) |
Derivative instruments: | ||||
Unrealized gain (loss) | 0.3 | 1 | 2.6 | (0.5) |
Reclassification of gain into earnings | (0.7) | (0.9) | (1.5) | (1.2) |
Defined benefit plans: | ||||
Unrealized loss | (0.6) | (0.1) | (0.4) | (0.1) |
Reclassification of gain into earnings | (0.1) | (0.2) | (0.3) | (0.5) |
Other comprehensive income (loss) before income taxes | 54 | (62.9) | 31.4 | (61.6) |
Income tax effect | 0.1 | 0.1 | (0.2) | 0.6 |
Other comprehensive income (loss) | 54.1 | (62.8) | 31.2 | (61) |
Comprehensive income (loss) | $ 11.9 | $ (40.7) | $ 96.2 | $ (93.8) |
Unaudited condensed consolida_5
Unaudited condensed consolidated statements of stockholders' equity or deficit - shares - shares shares in Millions | MCPS including paid-in capital | Common stock including paid-in capital |
Beginning balance at Dec. 31, 2018 | 0 | 132.8 |
Issuances, net of issuance costs | 20.7 | 238.1 |
Conversion of JCPS | 194.5 | |
Exercise of warrants | 6 | |
Ending balance at Sep. 30, 2019 | 20.7 | 571.4 |
Beginning balance at Jun. 30, 2019 | 20.7 | 568.8 |
Exercise of warrants | 2.6 | |
Ending balance at Sep. 30, 2019 | 20.7 | 571.4 |
Beginning balance at Dec. 31, 2019 | 20.7 | 572.8 |
Exercised | 4.6 | |
Share-based compensation | 0.6 | |
Ending balance at Sep. 30, 2020 | 20.7 | 578 |
Beginning balance at Jun. 30, 2020 | 20.7 | 576.3 |
Exercised | 1.7 | |
Ending balance at Sep. 30, 2020 | 20.7 | 578 |
Unaudited condensed consolida_6
Unaudited condensed consolidated statements of stockholders' equity or deficit - amounts - USD ($) $ in Millions | Total | Cumulative effect adjustment | MCPS including paid-in capital | Common stock including paid-in capital | Accumulated deficit | Accumulated deficitCumulative effect adjustment | AOCI |
Beginning balance at Dec. 31, 2018 | $ (3,051.7) | $ (3.1) | $ 0 | $ (2,746.8) | $ (238.4) | $ (3.1) | $ (66.5) |
Issuances, net of issuance costs | 4,235.6 | 1,003.7 | 3,231.9 | ||||
Conversion of JCPS | 1,562 | 1,562 | |||||
Comprehensive income (loss) | (93.8) | (32.8) | (61) | ||||
Stock-based compensation expense | 54.6 | 54.6 | |||||
Accumulation of yield on preferred stock | (136.4) | (136.4) | |||||
Accretion of make whole premium on series A preferred stock | (220.4) | (220.4) | |||||
Award reclassification | 8.8 | 8.8 | |||||
Ending balance at Sep. 30, 2019 | 2,355.6 | 1,003.7 | 1,753.7 | (274.3) | (127.5) | ||
Beginning balance at Jun. 30, 2019 | 2,410.9 | 1,003.7 | 1,768.3 | (296.4) | (64.7) | ||
Issuances, net of issuance costs | (0.1) | (0.1) | |||||
Comprehensive income (loss) | (40.7) | 22.1 | (62.8) | ||||
Stock-based compensation expense | 1.9 | 1.9 | |||||
Accumulation of yield on preferred stock | (16.4) | (16.4) | |||||
Ending balance at Sep. 30, 2019 | 2,355.6 | 1,003.7 | 1,753.7 | (274.3) | (127.5) | ||
Beginning balance at Dec. 31, 2019 | 2,462.2 | $ (1.6) | 1,003.7 | 1,748.1 | (203.7) | $ (1.6) | (85.9) |
Comprehensive income (loss) | 96.2 | 65 | 31.2 | ||||
Stock-based compensation expense | 30.1 | 30.1 | |||||
Accumulation of yield on preferred stock | (48.4) | (48.4) | |||||
Stock option exercises and other common stock transactions | 13.8 | 13.8 | |||||
Ending balance at Sep. 30, 2020 | 2,552.3 | 1,003.7 | 1,743.6 | (140.3) | (54.7) | ||
Beginning balance at Jun. 30, 2020 | 2,540.8 | 1,003.7 | 1,744 | (98.1) | (108.8) | ||
Comprehensive income (loss) | 11.9 | (42.2) | 54.1 | ||||
Stock-based compensation expense | 10.6 | 10.6 | |||||
Accumulation of yield on preferred stock | (16.1) | (16.1) | |||||
Stock option exercises and other common stock transactions | 5.1 | 5.1 | |||||
Ending balance at Sep. 30, 2020 | $ 2,552.3 | $ 1,003.7 | $ 1,743.6 | $ (140.3) | $ (54.7) |
Unaudited condensed consolida_7
Unaudited condensed consolidated statements of cash flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ 65 | $ (32.8) |
Reconciling adjustments: | ||
Depreciation and amortization | 293.4 | 301.6 |
Stock-based compensation expense | 31.4 | 57.4 |
Non-cash restructuring charges | 0 | 10 |
Provision for accounts receivable and inventory | 31.5 | 22.9 |
Deferred income tax benefit | (90.7) | (67.5) |
Amortization of deferred financing costs | 19 | 26.5 |
Loss on extinguishment of debt | 226.4 | 70.2 |
Foreign currency remeasurement (gain) loss | (1.2) | 2.8 |
Changes in assets and liabilities: | ||
Accounts receivable | (50.6) | (76.9) |
Inventory | (33.5) | (74.1) |
Accounts payable | 67.8 | 11.7 |
Accrued interest | (10.7) | 58.5 |
Other assets and liabilities | 75.3 | (36.3) |
Other, net | 0.7 | (7) |
Net cash provided by operating activities | 623.8 | 267 |
Cash flows from investing activities: | ||
Capital expenditures | (41.4) | (39.5) |
Other | 1.1 | 8.8 |
Net cash used in investing activities | (40.3) | (30.7) |
Cash flows from financing activities: | ||
Debt borrowings | 2,001.6 | 0 |
Debt repayments | (2,171.5) | (1,825.4) |
Payments of debt refinancing fees and premiums | (198) | 0 |
Payments of contingent consideration | 0 | (4.6) |
Proceeds from issuance of stock, net of issuance costs | 0 | 4,235.6 |
Redemption of series A preferred stock | 0 | (2,630.9) |
Payments of dividends on preferred stock | (48.4) | (15.1) |
Proceeds received from exercise of stock options | 13.8 | 0 |
Net cash used in financing activities | (402.5) | (240.4) |
Effect of currency rate changes on cash | 2.8 | (6.7) |
Net change in cash and cash equivalents | 183.8 | (10.8) |
Cash, cash equivalents and restricted cash, beginning of period | 189.3 | 187.7 |
Cash, cash equivalents and restricted cash, end of period | $ 373.1 | $ 176.9 |
Nature of operations and presen
Nature of operations and presentation of financial statements | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of operations and presentation of financial statements | 1. Nature of operations and presentation of financial statements We are a global manufacturer and distributor that provides products and services to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries. Basis of presentation We have prepared these condensed consolidated financial statements pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year. We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report. Those audited consolidated financial statements include a summary of our significant accounting policies, updates to which are included in note 2. Principles of consolidation All intercompany balances and transactions have been eliminated from the financial statements. Use of estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates. Global coronavirus outbreak The ongoing coronavirus outbreak known as COVID-19 has adversely affected global economies, financial markets and the overall environment in which we do business, and the extent to which it may impact our future results of operations and overall financial performance remains uncertain. In response to the COVID-19 outbreak, on March 27, 2020, the United States Government enacted the CARES Act, which provides financial stimulus to qualifying businesses. We expect to benefit from the provisions under the CARES Act that allow for an increased deduction of business interest for income tax purposes for fiscal years 2019 and 2020, and for the deferral of payments for certain employment taxes incurred through the end of fiscal year 2020. For the business interest deduction, we recognized a cash benefit o f $28.3 million for fiscal year 2019, which we applied to our 2020 estimated tax payments. We expect this deduction will also provide at least a $20.3 million cash benefit for fiscal year 2020. Secondary offerings On May 26, 2020 and August 21, 2020, we completed secondary offerings of 51.75 million shares and 63.89 million shares of our common stock, respectively, held by certain of our stockholders at the offering prices of $16.25 and $19.51 per share, respectively. The shares offered included the full exercise by the underwriters of their option to purchase up to 6.75 million and 8.33 million additional shares of common stock, respectively. No shares were sold by us, and we received no proceeds from these offerings. Fees incurred to complete these transactions were expensed as incurred and immaterial. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Interim update to segment reporting policy During the quarter ended March 31, 2020, our Chief Executive Officer, who is our chief operating decision maker, changed the measure he uses to evaluate segment profitability from Management EBITDA to Adjusted EBITDA. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change. |
New accounting standards
New accounting standards | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
New accounting standards | 3. New accounting standards New tax standard In December 2019, the FASB issued a new standard to simplify the accounting for income taxes by removing certain exceptions to the existing guidance and also providing for additional clarification. This standard encompasses multiple amendments, and requires adoption either retrospectively, prospectively, or using a modified retrospective approach, depending on the amendment. For the amendments in which we are given the choice between adopting retrospectively or on a modified retrospective basis, we expect to adopt on a modified retrospective basis. All other amendments will be adopted using the method prescribed by the standard. The standard is effective on January 1, 2021 and we are currently evaluating its impact. Two of the provisions included in this amendment that are most relevant to us are: 1) the provision requiring companies to recognize a franchise (or similar) tax that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, and 2) the provision requiring companies to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. New credit losses standard In June 2016, the FASB issued a new standard that modifies the recognition of credit losses related to financial assets. Under the new standard, an entity must measure and record its total expected credit losses, rather than recording such losses when it is probable that they have occurred, as was required under the previous standard. We adopted the new guidance on January 1, 2020 using a modified retrospective approach applied to our portfolio of trade receivables as of that date. On the adoption date, we (i) recorded a $1.6 million cumulative effect adjustment to increase accumulated deficit, (ii) increased our allowance for credit losses to accounts receivable by $2.2 million, and (iii) recognized a $0.6 million reduction to deferred income tax liabilities. Other There were no other new accounting standards that we expect to have a material impact to our financial position or results of operations upon adoption. |
Earnings or loss per share
Earnings or loss per share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 4. Earnings or loss per share The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2020: Three months ended September 30, 2020 Nine months ended September 30, 2020 (in millions, except per share data) Earnings /(loss) (numerator) Weighted average shares outstanding (denominator) Earnings / (loss) per share Earnings /(loss) (numerator) Weighted average shares outstanding (denominator) Earnings / (loss) per share Basic $ (58.3) 577.2 $ (0.10) $ 16.6 575.5 $ 0.03 Dilutive effect of stock-based awards — — — 7.0 Diluted $ (58.3) 577.2 $ (0.10) $ 16.6 582.5 $ 0.03 For the three months ended September 30, 2020, basic and diluted loss per share calculations were the same because there was a net loss available to common stockholders. As a result, 22.6 million of stock options, 5.2 million of restricted stock units and 62.9 million of MCPS were excluded from the calculation of diluted loss per share as their effect would be anti-dilutive. For the nine months ended September 30, 2020, diluted earnings per share included accumulated yield of $48.4 million and excluded 62.9 million of common stock equivalents under the MCPS because they were anti-dilutive to the calculation. The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2019: Three months ended September 30, 2019 Nine months ended September 30, 2019 (in millions, except per share data) Earnings /(loss) (numerator) Weighted average shares outstanding (denominator) Earnings / (loss) per share Earnings /(loss) (numerator) Weighted average shares outstanding (denominator) Earnings / (loss) per share Basic $ 5.7 570.0 $ 0.01 $ (389.6) 343.7 $ (1.13) Effect of dilutive securities: Stock-based awards — 8.3 — — Warrants — 2.4 — — Diluted $ 5.7 580.7 $ 0.01 $ (389.6) 343.7 $ (1.13) For the three months ended September 30, 2019, diluted earnings per share included accumulated yield of $16.4 million and excluded 70.4 million of common stock equivalents under the MCPS because they were anti-dilutive to the calculation. For the nine months ended September 30, 2019 basic and diluted loss per share calculations were the same because there was a net loss available to common stockholders. As a result, 24.1 million of stock options, 5.6 million of restricted stock units and 70.4 million of MCPS were excluded from the calculation of diluted loss per share as their effect would be anti-dilutive. |
Segment financial information
Segment financial information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment financial information | 5. Segment financial information We report based on three geographic segments based on customer location: Americas, Europe and AMEA. Each segment manufactures and distributes solutions for the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries. Corporate costs are managed on a standalone basis and not allocated to segments. The following table presents information by reportable segment: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net sales: Americas $ 950.5 $ 918.2 $ 2,707.1 $ 2,701.0 Europe 562.1 501.1 1,627.1 1,561.8 AMEA 92.4 84.5 268.5 253.5 Total $ 1,605.0 $ 1,503.8 $ 4,602.7 $ 4,516.3 Adjusted EBITDA: Americas $ 203.6 $ 182.7 $ 591.0 $ 542.8 Europe 98.4 84.0 278.4 255.3 AMEA 20.9 15.9 56.8 51.4 Corporate (37.3) (31.8) (104.5) (81.9) Total $ 285.6 $ 250.8 $ 821.7 $ 767.6 The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers. The following table presents the reconciliation of Adjusted EBITDA from net income or loss, the nearest measurement under GAAP: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net (loss) income $ (42.2) $ 22.1 $ 65.0 $ (32.8) Interest expense 65.2 98.3 251.8 342.0 Income tax (benefit) expense (65.6) 15.2 (29.4) 23.4 Depreciation and amortization 99.1 100.3 293.4 301.6 Net foreign currency (gain) loss from financing activities (4.1) 8.2 (4.3) 0.1 Loss on extinguishment of debt 226.4 — 226.4 70.2 Other stock-based compensation expense 0.6 (9.2) 0.6 33.5 Restructuring and severance charges 2.3 13.4 6.7 19.8 VWR transaction, integration and planning expenses 2.1 5.4 7.2 16.8 Other 1.8 (2.9) 4.3 (7.0) Adjusted EBITDA $ 285.6 $ 250.8 $ 821.7 $ 767.6 The following table presents net sales by product line: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Proprietary materials & consumables $ 562.2 $ 494.2 $ 1,654.3 $ 1,500.9 Third party materials & consumables 610.0 592.8 1,764.1 1,792.8 Services & specialty procurement 215.4 195.7 580.0 562.5 Equipment & instrumentation 217.4 221.1 604.3 660.1 Total $ 1,605.0 $ 1,503.8 $ 4,602.7 $ 4,516.3 |
Supplemental disclosures of cas
Supplemental disclosures of cash flow information | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental disclosures of cash flow information | 6. Supplemental disclosures of cash flow information The following tables present supplemental disclosures of cash flow information: (in millions) September 30, 2020 December 31, 2019 Cash and cash equivalents $ 370.5 $ 186.7 Restricted cash classified as other assets 2.6 2.6 Total $ 373.1 $ 189.3 (in millions) Nine months ended September 30, 2020 2019 Cash flows from operating activities: Cash paid for income taxes, net $ 32.0 $ 100.2 Cash paid for interest 252.6 258.4 Cash paid under operating leases 31.7 33.4 Cash paid under finance leases 3.9 3.7 Cash flows from financing activities: Cash paid under finance leases 3.3 4.1 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | 7. Inventory The following table presents the components of inventory: (in millions) September 30, 2020 December 31, 2019 Merchandise inventory $ 452.5 $ 445.2 Finished goods 113.0 104.4 Raw materials 125.0 125.1 Work in process 39.3 36.5 Total $ 729.8 $ 711.2 |
Other intangible assets
Other intangible assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other intangible assets | 8. Other intangible assets The following table presents the components of other intangible assets: (in millions) September 30, 2020 December 31, 2019 Gross value Accumulated amortization Carrying value Gross value Accumulated amortization Carrying value Customer relationships $ 4,609.7 $ 822.4 $ 3,787.3 $ 4,547.7 $ 641.3 $ 3,906.4 VWR trade name 269.0 170.1 98.9 264.3 123.3 141.0 Other 183.2 120.0 63.2 182.8 102.3 80.5 Total finite-lived $ 5,061.9 $ 1,112.5 3,949.4 $ 4,994.8 $ 866.9 4,127.9 Indefinite-lived 92.3 92.3 Total $ 4,041.7 $ 4,220.2 |
Restructuring and severance
Restructuring and severance | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and severance | 9. Restructuring and severance The following table presents restructuring and severance charges by plan: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 2017 restructuring program $ 1.9 $ 13.3 $ 6.1 $ 19.1 Other 0.4 0.1 0.6 0.7 Total $ 2.3 $ 13.4 $ 6.7 $ 19.8 During the three months ended September 30, 2020, there were no material updates to our liabilities or expense under the 2017 restructuring program. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 10. Commitments and contingencies Our business involves commitments and contingencies related to compliance with environmental laws and regulations, the manufacture and sale of products and litigation. The ultimate resolution of contingencies is subject to significant uncertainty, and it is reasonably possible that we will experience adverse outcomes related to these matters. Environmental laws and regulations Our environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in technology. We believe that known and unknown environmental matters, if not resolved favorably, could have a material effect on our financial position, liquidity and profitability. Mallinckrodt indemnification In 2010, New Mountain Capital acquired us from Covidien plc in accordance with a stock purchase agreement dated May 25, 2010. At that time, we were organized as Mallinckrodt Baker, Inc. or MBI. Pursuant to the terms of that agreement, we are entitled to various levels of indemnification with respect to environmental liabilities involving the former MBI operations. In 2013, in connection with the Covidien plc divestiture of Mallinckrodt Group S.a.r.l and Mallinckrodt LLC, together “Mallinckrodt,” and by a second amendment to the stock purchase agreement dated June 6, 2013, but effective upon the consummation of the divestiture, Covidien plc assigned its obligations as described herein to Mallinckrodt, and Mallinckrodt assumed those obligations from Covidien plc. As a result of the stock purchase agreement and assignment, Mallinckrodt is contractually obligated to indemnify and defend us for all off-site environmental liabilities (for example, Superfund or CERCLA liabilities) arising from the pre-closing disposal of chemicals or wastes by former MBI operations. In connection with environmental liabilities arising from pre-closing noncompliance with environmental laws, Mallinckrodt is contractually obligated to reimburse us for a percentage of the total liability, with such reimbursements made through disbursements from a $30.0 million environmental escrow established at the time of the closing. Specifically, Mallinckrodt will be responsible for reimbursement of 80% of the total costs up to $40.0 million of such environmental liabilities. Mallinckrodt will then be responsible for reimbursement of 50% of the next $40.0 million of such environmental liabilities. If such environmental liabilities exceed $80.0 million in the aggregate, Mallinckrodt will be responsible for reimbursement of 100% of such liabilities up to the next $30.0 million in the aggregate. Currently, reimbursements are 80% of the amounts spent by us, with reimbursements and settlements to date exceeding $12.0 million. In addition, in connection with operation and maintenance activities required pursuant to administrative consent orders and subsequently issued remedial action permits involving our Phillipsburg, New Jersey facility, amounts in excess of a small annual threshold are also subject to reimbursement, currently at the 80% level. Other noteworthy matters The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. This matter is covered by the indemnification arrangement previously described. At September 30, 2020, our accrued obligation under this order is $3.9 million, which is calculated based on expected cash payments discounted at rates ranging from 0.1% in 2020 to 1.4% in 2045. The undiscounted amount of that obligation is $4.4 million. In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland. Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are also monitoring the condition of a closed landfill on that site. These matters are not covered by our indemnification arrangement because they relate to an operation we subsequently acquired. At September 30, 2020, our balance sheet includes a liability of $3.5 million for remediation and monitoring costs. That liability is estimated primarily on expected remediation payments discounted through 2020 and is not materially different than its undiscounted amount. Manufacture and sale of products Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings. We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements. We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. Litigation At September 30, 2020, there was no outstanding litigation that we believe would result in material losses if decided against us, and we do not believe that there are any unasserted matters that are reasonably possible to result in a material loss. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 11. Debt The following table presents information about our debt: (dollars in millions) September 30, 2020 December 31, 2019 Interest terms Rate Amount Receivables facility LIBOR plus 0.90% 1.05 % $ — $ 55.5 Senior secured credit facilities: Euro term loans EURIBOR plus 2.50% 2.50 % 368.8 391.8 U.S. dollar term loans LIBOR plus 2.25% 3.25 % 609.7 677.2 4.75% secured notes fixed rate 4.75 % 586.7 561.2 6% secured notes fixed rate 6.00 % 1,500.0 1,500.0 9% unsecured notes fixed rate 9.00 % — 2,000.0 3.875% unsecured notes fixed rate 3.875 % 469.3 — 4.625 % unsecured notes fixed rate 4.625 % 1,550.0 — Finance lease liabilities 71.0 59.2 Other — 4.5 Total debt, gross 5,155.5 5,249.4 Less: unamortized deferred financing costs (84.6) (132.9) Total debt $ 5,070.9 $ 5,116.5 Classification on balance sheets: Current portion of debt $ 14.4 $ 93.5 Debt, net of current portion 5,056.5 5,023.0 Credit facilities The following table presents availability under our credit facilities: (in millions) September 30, 2020 Receivables facility Revolving credit facility Total Capacity $ 300.0 $ 515.0 $ 815.0 Undrawn letters of credit outstanding (12.3) (1.6) (13.9) Outstanding borrowings — — — Unused availability $ 287.7 $ 513.4 $ 801.1 Maximum availability $ 300.0 $ 515.0 $ 815.0 Capacity under the receivables facility depends upon maintaining a sufficient borrowing base of eligible accounts receivable. At September 30, 2020, $458.2 million of accounts receivable were available as collateral under the facility. Receivables facility The receivables facility is with a commercial bank, functions like a line of credit and matures on March 27, 2023. Borrowings are secured by accounts receivable which are sold by certain of our domestic subsidiaries to a special-purpose consolidated subsidiary. As a result, those receivables are not available to satisfy the claims of other creditors. We bear the risk of collection on those receivables and account for the receivables facility as a secured borrowing. Revolving credit facility On July 14, 2020, we refinanced our revolving credit facility to obtain an additional $265.0 million of available funding, bringing the total amount of available funding under this facility to $515.0 million. The revolving credit facility will mature on July 14, 2025, and the fees incurred to complete the transaction were immaterial. Senior unsecured notes On July 17, 2020, we issued $1,550.0 million aggregate principal amount of 4.625% senior unsecured notes and €400.0 million aggregate principal amount of 3.875% senior unsecured notes, which will mature on July 15, 2028. We used the proceeds of $1,975.0 million, net of $26.6 million of issuance costs from the sale of these notes, along with cash on hand, to redeem all $2,000.0 million aggregate principal amount of our 9.00% senior unsecured notes that were due in October of 2025. Of the total issuance costs incurred, $4.8 million were paid to Goldman Sachs, a related party. We incurred a loss on the extinguishment of our 9.00% senior unsecured notes of $223.4 million, which reflects the payment of $169.0 million of premiums and the expense of $54.4 million of previously unamortized deferred financing costs. Senior secured credit facilities On September 30, 2020, we made prepayments of $62.4 million on our U.S. dollar term loans and €32.2 million on our EURO term loans. In connection with these prepayments, we expensed $3.0 million of previously unamortized deferred financing costs as a loss on extinguishment of debt. Debt covenants Our debt agreements include representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities include a financial covenant that becomes applicable for periods in which we have drawn more than 35% of our revolving credit facility under the senior secured credit facilities. When applicable, we may not have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined. We were in compliance with this covenant at September 30, 2020. |
Accumulated other comprehensive
Accumulated other comprehensive income or loss | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Accumulated other comprehensive income or loss | 12. Accumulated other comprehensive income or loss The following table presents changes in the components of AOCI: (in millions) Foreign currency translation Derivative instruments Defined benefit plans Total Balance at June 30, 2020 $ (86.4) $ 0.6 $ (23.0) $ (108.8) Unrealized gain (loss) 55.1 0.3 (0.6) 54.8 Reclassification of gain into earnings — (0.7) (0.1) (0.8) Income tax effect — 0.1 — 0.1 Balance at September 30, 2020 $ (31.3) $ 0.3 $ (23.7) $ (54.7) Balance at June 30, 2019 $ (55.6) $ (0.2) $ (8.9) $ (64.7) Unrealized (loss) gain (62.7) 1.0 (0.1) (61.8) Reclassification of gain into earnings — (0.9) (0.2) (1.1) Income tax effect — — 0.1 0.1 Balance at September 30, 2019 $ (118.3) $ (0.1) $ (9.1) $ (127.5) Balance at December 31, 2019 $ (62.3) $ (0.5) $ (23.1) $ (85.9) Unrealized gain (loss) 31.0 2.6 (0.4) 33.2 Reclassification of gain into earnings — (1.5) (0.3) (1.8) Income tax effect — (0.3) 0.1 (0.2) Balance at September 30, 2020 $ (31.3) $ 0.3 $ (23.7) $ (54.7) Balance at December 31, 2018 $ (59.0) $ 1.1 $ (8.6) $ (66.5) Unrealized loss (59.3) (0.5) (0.1) (59.9) Reclassification of gain into earnings — (1.2) (0.5) (1.7) Income tax effect — 0.5 0.1 0.6 Balance at September 30, 2019 $ (118.3) $ (0.1) $ (9.1) $ (127.5) The reclassifications and income tax effects shown above were immaterial to the financial statements. The reclassifications were made to either cost of sales or SG&A expenses depending upon the nature of the underlying transaction. |
Stock-based compensation
Stock-based compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based compensation | 13. Stock-based compensation The following table presents the components of stock-based compensation expense: (in millions) Classification Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Stock options Equity $ 4.2 $ 5.1 $ 12.6 $ 39.7 RSUs Equity 6.0 5.1 16.4 8.5 Optionholder awards Liability 0.2 0.7 0.6 2.6 SARs Equity — (8.3) — 6.4 Other Both 1.0 (0.9) 1.8 0.2 Total $ 11.4 $ 1.7 $ 31.4 $ 57.4 Balance sheet classification: Equity $ 10.6 $ 1.9 $ 30.1 $ 54.6 Liability 0.8 (0.2) 1.3 2.8 At September 30, 2020, unvested awards under our plans, including the 2019 plan, have remaining stock-based compensation expense of $87.1 million to be recognized over a weighted average period of 1.8 years. At September 30, 2020, 12.6 million shares were available for future issuance under the 2019 Plan. During the nine months ended September 30, 2019, we recognized $26.9 million of stock-based compensation expense upon the completion of our initial public offering, which satisfied a performance condition for 0.9 million stock options. The stock-based compensation expense was equivalent to the grant date fair value for these awards. In November 2019, the NuSil Investors settled the SARs. We were not required to pay any cash upon settlement of those awards. Stock options The following table presents information about outstanding stock options: (options and intrinsic value in millions) Number of options Weighted average exercise price per option Aggregate intrinsic value Weighted average remaining term Balance at December 31, 2019 22.7 $ 15.04 Granted 5.0 17.57 Exercised (4.5) 3.83 Forfeited (1.8) 17.05 Balance at September 30, 2020 21.4 17.58 $ 109.6 7.5 years Expected to vest 9.9 18.53 39.8 8.7 years Vested 11.5 16.76 69.8 6.4 years During the nine months ended September 30, 2020, we granted stock options that have a contractual life of ten years and will vest annually over three RSUs The following table presents information about unvested RSUs: (awards in millions) Number of awards Weighted average grant date fair value per award Balance at December 31, 2019 5.2 $ 13.97 Granted 1.4 17.38 Vested (0.9) 13.92 Forfeited (0.6) 14.04 Balance at September 30, 2020 5.1 14.86 During the nine months ended September 30, 2020, we granted restricted stock units that will vest annually over three |
Other income or expense, net
Other income or expense, net | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other income or expense, net | 14. Other income or expense, net The following table presents the components of other income or expense, net: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net foreign currency gain (loss) from financing activities $ 4.1 $ (8.2) $ 4.3 $ (0.1) Income related to defined benefit plans 2.4 1.3 7.0 3.8 Other 0.1 (0.7) 0.3 (0.8) Other income (expense), net $ 6.6 $ (7.6) $ 11.6 $ 2.9 |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 15. Income taxes The following table presents the relationship between income tax expense or benefit and income or loss before income taxes: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Income tax benefit (expense) $ 65.6 $ (15.2) $ 29.4 $ (23.4) (Loss) income before income taxes (107.8) 37.3 35.6 (9.4) Income tax expense or benefit in the quarter is based upon the estimated income or loss for the full year. The composition of the income or loss in different countries and adjustments, if any, in the applicable quarterly periods influences our expense or benefit. The relationship between pretax income or loss and income tax expense or benefit is greatly affected by the impact of losses for which we cannot claim a tax benefit, non-deductible expenses, and other items that increase tax expense without a relationship to income, such as withholding taxes and changes with respect to uncertain tax positions. In the third quarter of 2020, we released a net of $31.5 million of previously recorded reserves for uncertain tax positions, primarily driven by the United States Internal Revenue Service finalizing their examination of our 2016 amended tax returns. The reduction in these reserves provided a direct benefit to our income tax expense. |
Derivative and hedging activiti
Derivative and hedging activities | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and hedging activities | 16. Derivative and hedging activities We engage in hedging activities to reduce our exposure to foreign currency exchange rates. Our hedging activities are designed to manage specific risks according to our strategies, as summarized below, which may change from time to time. Our hedging activities consist of the following: • Economic hedges — We are exposed to changes in foreign currency exchange rates on certain of our euro-denominated term loans and notes that move inversely from our portfolio of euro-denominated intercompany loans. The currency effects for these non-derivative instruments are recorded through earnings in the period of change and substantially offset one another; • Other hedging activities — Certain of our subsidiaries hedge short-term foreign currency denominated business transactions and intercompany financing transactions using foreign currency forward contracts. These activities were not material to our consolidated financial statements; and • Net investment hedge — We have designated €400.0 million of our 3.875% senior unsecured notes as a hedge of our net investment in certain European operations to manage our exposure to currency and exchange rate movements from these operations. Net Investment Hedge We designated all of our outstanding €400.0 million 3.875% senior unsecured notes, issued on July 17, 2020, and maturing on July 15, 2028, as a hedge of our net investment in certain of our European operations. For instruments that are designated and qualify as net investment hedges, the foreign currency transactional gains or losses are reported as a component of AOCI. The gains or losses would be reclassified into earnings upon a liquidation event or deconsolidation of a hedged foreign subsidiary. Net investment hedge effectiveness is assessed based upon the change in the spot rate of the foreign currency denominated debt. The critical terms of the foreign currency notes match the portion of the net investments designated as being hedged. At September 30, 2020, the net investment hedge was equal to the designated portion of the European operations and were considered to be perfectly effective. Non-derivative financial instruments which are designated as hedging instruments: The accumulated gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of AOCI was $17.7 million and $0.0 million as of September 30, 2020 and December 31, 2019, respectively. The amount of gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of other comprehensive income is presented below: (in millions) Three months ended September 30, 2020 Nine months ended September 30, 2020 Net investment hedges $ 17.7 $ 17.7 (in millions) Three months ended September 30, 2019 Nine months ended September 30, 2019 Net investment hedges $ — $ — |
Financial instruments and fair
Financial instruments and fair value measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial instruments and fair value measurements | 17. Financial instruments and fair value measurements Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and debt. Assets and liabilities for which fair value is only disclosed The carrying amount of cash and cash equivalents was the same as its fair value and is a Level 1 measurement. The carrying amounts for trade accounts receivable and accounts payable approximated fair value due to their short-term nature and are Level 2 measurements. The following table presents the carrying values, which exclude unamortized deferred financing costs, and the fair values of debt instruments: (in millions) September 30, 2020 December 31, 2019 Carrying value Fair value Carrying value Fair value Receivables facility $ — $ — $ 55.5 $ 55.5 Senior secured credit facilities: Euro term loans 368.8 367.5 391.8 397.4 U.S. dollar term loans 609.7 605.5 677.2 685.2 4.75% secured notes 586.7 608.4 561.2 599.7 6% secured notes 1,500.0 1,571.0 1,500.0 1,603.2 9% unsecured notes — — 2,000.0 2,241.7 3.875% unsecured notes 469.3 481.2 — — 4.625 % unsecured notes 1,550.0 1,606.5 — — Finance lease liabilities 71.0 71.0 59.2 59.2 Other — — 4.5 4.5 Total $ 5,155.5 $ 5,311.1 $ 5,249.4 $ 5,646.4 The fair values of debt instruments are based on standard pricing models that take into account the present value of future cash flows, and in some cases private trading data, which are level 2 measurements. |
Nature of operations and pres_2
Nature of operations and presentation of financial statements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of presentation We have prepared these condensed consolidated financial statements pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year. We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report. Those audited consolidated financial statements include a summary of our significant accounting policies, updates to which are included in note 2. |
Principles of consolidation | Principles of consolidation All intercompany balances and transactions have been eliminated from the financial statements. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Interim update to segment reporting policy | Interim update to segment reporting policy During the quarter ended March 31, 2020, our Chief Executive Officer, who is our chief operating decision maker, changed the measure he uses to evaluate segment profitability from Management EBITDA to Adjusted EBITDA. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change. |
New accounting standards (Polic
New accounting standards (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
New accounting standards | New tax standard In December 2019, the FASB issued a new standard to simplify the accounting for income taxes by removing certain exceptions to the existing guidance and also providing for additional clarification. This standard encompasses multiple amendments, and requires adoption either retrospectively, prospectively, or using a modified retrospective approach, depending on the amendment. For the amendments in which we are given the choice between adopting retrospectively or on a modified retrospective basis, we expect to adopt on a modified retrospective basis. All other amendments will be adopted using the method prescribed by the standard. The standard is effective on January 1, 2021 and we are currently evaluating its impact. Two of the provisions included in this amendment that are most relevant to us are: 1) the provision requiring companies to recognize a franchise (or similar) tax that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, and 2) the provision requiring companies to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. New credit losses standard In June 2016, the FASB issued a new standard that modifies the recognition of credit losses related to financial assets. Under the new standard, an entity must measure and record its total expected credit losses, rather than recording such losses when it is probable that they have occurred, as was required under the previous standard. We adopted the new guidance on January 1, 2020 using a modified retrospective approach applied to our portfolio of trade receivables as of that date. On the adoption date, we (i) recorded a $1.6 million cumulative effect adjustment to increase accumulated deficit, (ii) increased our allowance for credit losses to accounts receivable by $2.2 million, and (iii) recognized a $0.6 million reduction to deferred income tax liabilities. Other There were no other new accounting standards that we expect to have a material impact to our financial position or results of operations upon adoption. |
Earnings or loss per share (Tab
Earnings or loss per share (Tables) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Reconciliation of basic and diluted earnings per share | The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2020: Three months ended September 30, 2020 Nine months ended September 30, 2020 (in millions, except per share data) Earnings /(loss) (numerator) Weighted average shares outstanding (denominator) Earnings / (loss) per share Earnings /(loss) (numerator) Weighted average shares outstanding (denominator) Earnings / (loss) per share Basic $ (58.3) 577.2 $ (0.10) $ 16.6 575.5 $ 0.03 Dilutive effect of stock-based awards — — — 7.0 Diluted $ (58.3) 577.2 $ (0.10) $ 16.6 582.5 $ 0.03 | The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2019: Three months ended September 30, 2019 Nine months ended September 30, 2019 (in millions, except per share data) Earnings /(loss) (numerator) Weighted average shares outstanding (denominator) Earnings / (loss) per share Earnings /(loss) (numerator) Weighted average shares outstanding (denominator) Earnings / (loss) per share Basic $ 5.7 570.0 $ 0.01 $ (389.6) 343.7 $ (1.13) Effect of dilutive securities: Stock-based awards — 8.3 — — Warrants — 2.4 — — Diluted $ 5.7 580.7 $ 0.01 $ (389.6) 343.7 $ (1.13) |
Segment financial information (
Segment financial information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment financial information | The following table presents information by reportable segment: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net sales: Americas $ 950.5 $ 918.2 $ 2,707.1 $ 2,701.0 Europe 562.1 501.1 1,627.1 1,561.8 AMEA 92.4 84.5 268.5 253.5 Total $ 1,605.0 $ 1,503.8 $ 4,602.7 $ 4,516.3 Adjusted EBITDA: Americas $ 203.6 $ 182.7 $ 591.0 $ 542.8 Europe 98.4 84.0 278.4 255.3 AMEA 20.9 15.9 56.8 51.4 Corporate (37.3) (31.8) (104.5) (81.9) Total $ 285.6 $ 250.8 $ 821.7 $ 767.6 The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers. |
Reconciliation of segment profitability to consolidated earnings | The following table presents the reconciliation of Adjusted EBITDA from net income or loss, the nearest measurement under GAAP: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net (loss) income $ (42.2) $ 22.1 $ 65.0 $ (32.8) Interest expense 65.2 98.3 251.8 342.0 Income tax (benefit) expense (65.6) 15.2 (29.4) 23.4 Depreciation and amortization 99.1 100.3 293.4 301.6 Net foreign currency (gain) loss from financing activities (4.1) 8.2 (4.3) 0.1 Loss on extinguishment of debt 226.4 — 226.4 70.2 Other stock-based compensation expense 0.6 (9.2) 0.6 33.5 Restructuring and severance charges 2.3 13.4 6.7 19.8 VWR transaction, integration and planning expenses 2.1 5.4 7.2 16.8 Other 1.8 (2.9) 4.3 (7.0) Adjusted EBITDA $ 285.6 $ 250.8 $ 821.7 $ 767.6 |
Schedule of net sales by product line | The following table presents net sales by product line: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Proprietary materials & consumables $ 562.2 $ 494.2 $ 1,654.3 $ 1,500.9 Third party materials & consumables 610.0 592.8 1,764.1 1,792.8 Services & specialty procurement 215.4 195.7 580.0 562.5 Equipment & instrumentation 217.4 221.1 604.3 660.1 Total $ 1,605.0 $ 1,503.8 $ 4,602.7 $ 4,516.3 |
Supplemental disclosures of c_2
Supplemental disclosures of cash flow information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental disclosures of cash flow information | The following tables present supplemental disclosures of cash flow information: (in millions) September 30, 2020 December 31, 2019 Cash and cash equivalents $ 370.5 $ 186.7 Restricted cash classified as other assets 2.6 2.6 Total $ 373.1 $ 189.3 (in millions) Nine months ended September 30, 2020 2019 Cash flows from operating activities: Cash paid for income taxes, net $ 32.0 $ 100.2 Cash paid for interest 252.6 258.4 Cash paid under operating leases 31.7 33.4 Cash paid under finance leases 3.9 3.7 Cash flows from financing activities: Cash paid under finance leases 3.3 4.1 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory components | The following table presents the components of inventory: (in millions) September 30, 2020 December 31, 2019 Merchandise inventory $ 452.5 $ 445.2 Finished goods 113.0 104.4 Raw materials 125.0 125.1 Work in process 39.3 36.5 Total $ 729.8 $ 711.2 |
Other intangible assets (Tables
Other intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of components of other intangible assets | The following table presents the components of other intangible assets: (in millions) September 30, 2020 December 31, 2019 Gross value Accumulated amortization Carrying value Gross value Accumulated amortization Carrying value Customer relationships $ 4,609.7 $ 822.4 $ 3,787.3 $ 4,547.7 $ 641.3 $ 3,906.4 VWR trade name 269.0 170.1 98.9 264.3 123.3 141.0 Other 183.2 120.0 63.2 182.8 102.3 80.5 Total finite-lived $ 5,061.9 $ 1,112.5 3,949.4 $ 4,994.8 $ 866.9 4,127.9 Indefinite-lived 92.3 92.3 Total $ 4,041.7 $ 4,220.2 |
Restructuring and severance (Ta
Restructuring and severance (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring and severance charges | The following table presents restructuring and severance charges by plan: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 2017 restructuring program $ 1.9 $ 13.3 $ 6.1 $ 19.1 Other 0.4 0.1 0.6 0.7 Total $ 2.3 $ 13.4 $ 6.7 $ 19.8 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of information about debt | The following table presents information about our debt: (dollars in millions) September 30, 2020 December 31, 2019 Interest terms Rate Amount Receivables facility LIBOR plus 0.90% 1.05 % $ — $ 55.5 Senior secured credit facilities: Euro term loans EURIBOR plus 2.50% 2.50 % 368.8 391.8 U.S. dollar term loans LIBOR plus 2.25% 3.25 % 609.7 677.2 4.75% secured notes fixed rate 4.75 % 586.7 561.2 6% secured notes fixed rate 6.00 % 1,500.0 1,500.0 9% unsecured notes fixed rate 9.00 % — 2,000.0 3.875% unsecured notes fixed rate 3.875 % 469.3 — 4.625 % unsecured notes fixed rate 4.625 % 1,550.0 — Finance lease liabilities 71.0 59.2 Other — 4.5 Total debt, gross 5,155.5 5,249.4 Less: unamortized deferred financing costs (84.6) (132.9) Total debt $ 5,070.9 $ 5,116.5 Classification on balance sheets: Current portion of debt $ 14.4 $ 93.5 Debt, net of current portion 5,056.5 5,023.0 |
Schedule of availability under credit facilities | The following table presents availability under our credit facilities: (in millions) September 30, 2020 Receivables facility Revolving credit facility Total Capacity $ 300.0 $ 515.0 $ 815.0 Undrawn letters of credit outstanding (12.3) (1.6) (13.9) Outstanding borrowings — — — Unused availability $ 287.7 $ 513.4 $ 801.1 Maximum availability $ 300.0 $ 515.0 $ 815.0 |
Accumulated other comprehensi_2
Accumulated other comprehensive income or loss (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of changes in components of AOCI | The following table presents changes in the components of AOCI: (in millions) Foreign currency translation Derivative instruments Defined benefit plans Total Balance at June 30, 2020 $ (86.4) $ 0.6 $ (23.0) $ (108.8) Unrealized gain (loss) 55.1 0.3 (0.6) 54.8 Reclassification of gain into earnings — (0.7) (0.1) (0.8) Income tax effect — 0.1 — 0.1 Balance at September 30, 2020 $ (31.3) $ 0.3 $ (23.7) $ (54.7) Balance at June 30, 2019 $ (55.6) $ (0.2) $ (8.9) $ (64.7) Unrealized (loss) gain (62.7) 1.0 (0.1) (61.8) Reclassification of gain into earnings — (0.9) (0.2) (1.1) Income tax effect — — 0.1 0.1 Balance at September 30, 2019 $ (118.3) $ (0.1) $ (9.1) $ (127.5) Balance at December 31, 2019 $ (62.3) $ (0.5) $ (23.1) $ (85.9) Unrealized gain (loss) 31.0 2.6 (0.4) 33.2 Reclassification of gain into earnings — (1.5) (0.3) (1.8) Income tax effect — (0.3) 0.1 (0.2) Balance at September 30, 2020 $ (31.3) $ 0.3 $ (23.7) $ (54.7) Balance at December 31, 2018 $ (59.0) $ 1.1 $ (8.6) $ (66.5) Unrealized loss (59.3) (0.5) (0.1) (59.9) Reclassification of gain into earnings — (1.2) (0.5) (1.7) Income tax effect — 0.5 0.1 0.6 Balance at September 30, 2019 $ (118.3) $ (0.1) $ (9.1) $ (127.5) The reclassifications and income tax effects shown above were immaterial to the financial statements. The reclassifications were made to either cost of sales or SG&A expenses depending upon the nature of the underlying transaction. |
Stock-based compensation (Table
Stock-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of components of stock-based compensation expense | The following table presents the components of stock-based compensation expense: (in millions) Classification Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Stock options Equity $ 4.2 $ 5.1 $ 12.6 $ 39.7 RSUs Equity 6.0 5.1 16.4 8.5 Optionholder awards Liability 0.2 0.7 0.6 2.6 SARs Equity — (8.3) — 6.4 Other Both 1.0 (0.9) 1.8 0.2 Total $ 11.4 $ 1.7 $ 31.4 $ 57.4 Balance sheet classification: Equity $ 10.6 $ 1.9 $ 30.1 $ 54.6 Liability 0.8 (0.2) 1.3 2.8 |
Schedule of information about outstanding stock options | The following table presents information about outstanding stock options: (options and intrinsic value in millions) Number of options Weighted average exercise price per option Aggregate intrinsic value Weighted average remaining term Balance at December 31, 2019 22.7 $ 15.04 Granted 5.0 17.57 Exercised (4.5) 3.83 Forfeited (1.8) 17.05 Balance at September 30, 2020 21.4 17.58 $ 109.6 7.5 years Expected to vest 9.9 18.53 39.8 8.7 years Vested 11.5 16.76 69.8 6.4 years |
Schedule of information about unvested RSUs | The following table presents information about unvested RSUs: (awards in millions) Number of awards Weighted average grant date fair value per award Balance at December 31, 2019 5.2 $ 13.97 Granted 1.4 17.38 Vested (0.9) 13.92 Forfeited (0.6) 14.04 Balance at September 30, 2020 5.1 14.86 |
Other income or expense, net (T
Other income or expense, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of components of other income or expense, net | The following table presents the components of other income or expense, net: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net foreign currency gain (loss) from financing activities $ 4.1 $ (8.2) $ 4.3 $ (0.1) Income related to defined benefit plans 2.4 1.3 7.0 3.8 Other 0.1 (0.7) 0.3 (0.8) Other income (expense), net $ 6.6 $ (7.6) $ 11.6 $ 2.9 |
Income taxes (Tables)
Income taxes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of relationship between income tax expense or benefit and income or loss before income taxes | The following table presents the relationship between income tax expense or benefit and income or loss before income taxes: (in millions) Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Income tax benefit (expense) $ 65.6 $ (15.2) $ 29.4 $ (23.4) (Loss) income before income taxes (107.8) 37.3 35.6 (9.4) |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Net Investment Hedges, Statements of Financial Performance and Financial Position, Location | The amount of gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of other comprehensive income is presented below: (in millions) Three months ended September 30, 2020 Nine months ended September 30, 2020 Net investment hedges $ 17.7 $ 17.7 (in millions) Three months ended September 30, 2019 Nine months ended September 30, 2019 Net investment hedges $ — $ — |
Financial instruments and fai_2
Financial instruments and fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of gross amounts and fair values of debt instruments | The following table presents the carrying values, which exclude unamortized deferred financing costs, and the fair values of debt instruments: (in millions) September 30, 2020 December 31, 2019 Carrying value Fair value Carrying value Fair value Receivables facility $ — $ — $ 55.5 $ 55.5 Senior secured credit facilities: Euro term loans 368.8 367.5 391.8 397.4 U.S. dollar term loans 609.7 605.5 677.2 685.2 4.75% secured notes 586.7 608.4 561.2 599.7 6% secured notes 1,500.0 1,571.0 1,500.0 1,603.2 9% unsecured notes — — 2,000.0 2,241.7 3.875% unsecured notes 469.3 481.2 — — 4.625 % unsecured notes 1,550.0 1,606.5 — — Finance lease liabilities 71.0 71.0 59.2 59.2 Other — — 4.5 4.5 Total $ 5,155.5 $ 5,311.1 $ 5,249.4 $ 5,646.4 |
Nature of operations and pres_3
Nature of operations and presentation of financial statements (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Aug. 21, 2020 | May 26, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Subsidiary, Sale of Stock [Line Items] | ||||
Benefits expected from provisions under CARES Act | $ 20.3 | $ 28.3 | ||
Secondary Offering | Common Stock | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares issued in transaction (in shares) | 63,890 | 51,750 | ||
Price per share (in dollars per share) | $ 19.51 | $ 16.25 | ||
Over-Allotment Option | Common Stock | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares issued in transaction (in shares) | 8,330 | 6,750 |
New accounting standards (Detai
New accounting standards (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
New accounting standards | ||
Accumulated deficit | $ (140.3) | $ (203.7) |
Allowances on accounts receivable | 27.5 | 18.6 |
Deferred income tax liabilities | $ 760.7 | 785.4 |
New credit losses standard | Cumulative effect adjustment | ||
New accounting standards | ||
Accumulated deficit | (1.6) | |
Allowances on accounts receivable | 2.2 | |
Deferred income tax liabilities | $ 0.6 |
Earnings or loss per share - re
Earnings or loss per share - reconciliation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings (numerator) | ||||
Basic | $ (58.3) | $ 5.7 | $ 16.6 | $ (389.6) |
Dilutive effect of stock-based awards | 0 | 0 | 0 | 0 |
Dilutive effect of warrants | 0 | 0 | ||
Diluted | $ (58.3) | $ 5.7 | $ 16.6 | $ (389.6) |
Weighted average shares outstanding (denominator) | ||||
Basic | 577.2 | 570 | 575.5 | 343.7 |
Dilutive effect of stock-based awards | 0 | 8.3 | 7 | 0 |
Dilutive effect of warrants | 2.4 | 0 | ||
Diluted | 577.2 | 580.7 | 582.5 | 343.7 |
Earnings per share | ||||
Basic | $ (0.10) | $ 0.01 | $ 0.03 | $ (1.13) |
Diluted | $ (0.10) | $ 0.01 | $ 0.03 | $ (1.13) |
Earnings or loss per share - an
Earnings or loss per share - antidilutive securities (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Accumulation of yield on preferred stock | $ (16.1) | $ (16.4) | $ (48.4) | $ (136.4) |
MCPS | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded | 62.9 | 70.4 | 62.9 | 70.4 |
Accumulation of yield on preferred stock | $ (16.4) | $ (48.4) | ||
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded | 22.6 | 24.1 | ||
Restricted Stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded | 5.2 | 5.6 |
Segment financial information -
Segment financial information - reportable segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Information by reportable segment | ||||
Net sales | $ 1,605 | $ 1,503.8 | $ 4,602.7 | $ 4,516.3 |
Adjusted EBITDA | 285.6 | 250.8 | 821.7 | 767.6 |
Americas | ||||
Information by reportable segment | ||||
Net sales | 950.5 | 918.2 | 2,707.1 | 2,701 |
Adjusted EBITDA | 203.6 | 182.7 | 591 | 542.8 |
Europe | ||||
Information by reportable segment | ||||
Net sales | 562.1 | 501.1 | 1,627.1 | 1,561.8 |
Adjusted EBITDA | 98.4 | 84 | 278.4 | 255.3 |
AMEA | ||||
Information by reportable segment | ||||
Net sales | 92.4 | 84.5 | 268.5 | 253.5 |
Adjusted EBITDA | 20.9 | 15.9 | 56.8 | 51.4 |
Corporate | ||||
Information by reportable segment | ||||
Adjusted EBITDA | $ (37.3) | $ (31.8) | $ (104.5) | $ (81.9) |
Segment financial information_2
Segment financial information - reconciliation of segment profitability measure (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reconciliation of Adjusted EBITDA from net income or loss | ||||
Net (loss) income | $ (42.2) | $ 22.1 | $ 65 | $ (32.8) |
Interest expense | 65.2 | 98.3 | 251.8 | 342 |
Income tax (benefit) expense | (65.6) | 15.2 | (29.4) | 23.4 |
Depreciation and amortization | 99.1 | 100.3 | 293.4 | 301.6 |
Net foreign currency (gain) loss from financing activities | (4.1) | 8.2 | (4.3) | 0.1 |
Loss on extinguishment of debt | 226.4 | 0 | 226.4 | 70.2 |
Other stock-based compensation expense | 0.6 | (9.2) | 0.6 | 33.5 |
Restructuring and severance charges | 2.3 | 13.4 | 6.7 | 19.8 |
VWR transaction, integration and planning expenses | 2.1 | 5.4 | 7.2 | 16.8 |
Other | 1.8 | (2.9) | 4.3 | (7) |
Adjusted EBITDA | $ 285.6 | $ 250.8 | $ 821.7 | $ 767.6 |
Segment financial information_3
Segment financial information - product lines (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation by product line | ||||
Net sales | $ 1,605 | $ 1,503.8 | $ 4,602.7 | $ 4,516.3 |
Proprietary materials & consumables | ||||
Disaggregation by product line | ||||
Net sales | 562.2 | 494.2 | 1,654.3 | 1,500.9 |
Third party materials & consumables | ||||
Disaggregation by product line | ||||
Net sales | 610 | 592.8 | 1,764.1 | 1,792.8 |
Services & specialty procurement | ||||
Disaggregation by product line | ||||
Net sales | 215.4 | 195.7 | 580 | 562.5 |
Equipment & instrumentation | ||||
Disaggregation by product line | ||||
Net sales | $ 217.4 | $ 221.1 | $ 604.3 | $ 660.1 |
Supplemental disclosures of c_3
Supplemental disclosures of cash flow information (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components and classification of cash, restricted cash and equivalents | ||||
Cash and cash equivalents | $ 370.5 | $ 186.7 | ||
Restricted cash classified as other assets | 2.6 | 2.6 | ||
Total | 373.1 | $ 176.9 | $ 189.3 | $ 187.7 |
Cash flows from operating activities: | ||||
Cash paid for income taxes, net | 32 | 100.2 | ||
Cash paid for interest | 252.6 | 258.4 | ||
Cash paid under operating leases | 31.7 | 33.4 | ||
Cash paid under finance leases | 3.9 | 3.7 | ||
Cash flows from financing activities: | ||||
Cash paid under finance leases | $ 3.3 | $ 4.1 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Components of inventory | ||
Merchandise inventory | $ 452.5 | $ 445.2 |
Finished goods | 113 | 104.4 |
Raw materials | 125 | 125.1 |
Work in process | 39.3 | 36.5 |
Total | $ 729.8 | $ 711.2 |
Other intangible assets (Detail
Other intangible assets (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-lived | ||
Gross value | $ 5,061.9 | $ 4,994.8 |
Accumulated amortization | 1,112.5 | 866.9 |
Carrying value | 3,949.4 | 4,127.9 |
Indefinite-lived | 92.3 | 92.3 |
Total | 4,041.7 | 4,220.2 |
Customer relationships | ||
Finite-lived | ||
Gross value | 4,609.7 | 4,547.7 |
Accumulated amortization | 822.4 | 641.3 |
Carrying value | 3,787.3 | 3,906.4 |
VWR trade name | ||
Finite-lived | ||
Gross value | 269 | 264.3 |
Accumulated amortization | 170.1 | 123.3 |
Carrying value | 98.9 | 141 |
Other | ||
Finite-lived | ||
Gross value | 183.2 | 182.8 |
Accumulated amortization | 120 | 102.3 |
Carrying value | $ 63.2 | $ 80.5 |
Restructuring and severance (De
Restructuring and severance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Information about restructuring charges | ||||
Restructuring and severance charges | $ 2.3 | $ 13.4 | $ 6.7 | $ 19.8 |
2017 restructuring program | ||||
Information about restructuring charges | ||||
Restructuring and severance charges | 1.9 | 13.3 | 6.1 | 19.1 |
Other | ||||
Information about restructuring charges | ||||
Restructuring and severance charges | $ 0.4 | $ 0.1 | $ 0.6 | $ 0.7 |
Commitments and contingencies (
Commitments and contingencies (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Mallinckrodt indemnification | |
Commitments and contingencies | |
Cash held in escrow | $ 30 |
Mallinckrodt indemnification | Minimum | |
Commitments and contingencies | |
Settlement amount awarded | $ 12 |
Mallinckrodt indemnification | First $40 million of environmental costs | |
Commitments and contingencies | |
Percent indemnified | 80.00% |
Mallinckrodt indemnification | First $40 million of environmental costs | Maximum | |
Commitments and contingencies | |
Estimate of possible loss | $ 40 |
Mallinckrodt indemnification | $40 million to $80 million of environmental costs | |
Commitments and contingencies | |
Percent indemnified | 50.00% |
Mallinckrodt indemnification | $40 million to $80 million of environmental costs | Maximum | |
Commitments and contingencies | |
Estimate of possible loss | $ 40 |
Mallinckrodt indemnification | $80 million to $110 million of environmental costs | |
Commitments and contingencies | |
Percent indemnified | 100.00% |
Mallinckrodt indemnification | $80 million to $110 million of environmental costs | Maximum | |
Commitments and contingencies | |
Estimate of possible loss | $ 30 |
Environmental remediation | Phillipsburg, New Jersey | |
Commitments and contingencies | |
Accrued environmental loss | 3.9 |
Accrued environmental loss, gross | $ 4.4 |
Environmental remediation | Phillipsburg, New Jersey | Minimum | |
Commitments and contingencies | |
Accrued environmental loss, discount rate | 0.10% |
Environmental remediation | Phillipsburg, New Jersey | Maximum | |
Commitments and contingencies | |
Accrued environmental loss, discount rate | 1.40% |
Environmental remediation | Gliwice, Poland | |
Commitments and contingencies | |
Accrued environmental loss | $ 3.5 |
Debt (Details)
Debt (Details) € in Millions, $ in Millions | Sep. 30, 2020USD ($) | Jul. 17, 2020USD ($) | Jul. 14, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jul. 17, 2020EUR (€) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||||||
Debt, gross | $ 5,155.5 | $ 5,155.5 | $ 5,155.5 | $ 5,249.4 | |||||
Unamortized deferred financing costs | (84.6) | (84.6) | (84.6) | (132.9) | |||||
Debt | 5,070.9 | 5,070.9 | 5,070.9 | 5,116.5 | |||||
Current portion of debt | 14.4 | 14.4 | 14.4 | 93.5 | |||||
Debt, net of current portion | 5,056.5 | 5,056.5 | 5,056.5 | 5,023 | |||||
Capacity | 815 | 815 | 815 | ||||||
Undrawn letters of credit outstanding | (13.9) | (13.9) | (13.9) | ||||||
Outstanding borrowings | 0 | 0 | 0 | ||||||
Unused availability | 801.1 | 801.1 | 801.1 | ||||||
Maximum availability | $ 815 | 815 | 815 | ||||||
Loss on extinguishment of debt | $ (226.4) | $ 0 | (226.4) | $ (70.2) | |||||
Amortization of deferred financing costs | $ 19 | $ 26.5 | |||||||
Receivables facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate margin | 0.90% | ||||||||
Interest rate | 1.05% | 1.05% | 1.05% | ||||||
Debt, gross | $ 0 | $ 0 | $ 0 | 55.5 | |||||
Capacity | 300 | 300 | 300 | ||||||
Undrawn letters of credit outstanding | (12.3) | (12.3) | (12.3) | ||||||
Outstanding borrowings | 0 | 0 | 0 | ||||||
Unused availability | 287.7 | 287.7 | 287.7 | ||||||
Maximum availability | 300 | 300 | 300 | ||||||
Amount pledged as collateral | 458.2 | 458.2 | 458.2 | ||||||
Senior secured credit facilities: | Multi-currency revolving loan facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Capacity | 515 | 515 | 515 | ||||||
Undrawn letters of credit outstanding | (1.6) | (1.6) | (1.6) | ||||||
Outstanding borrowings | 0 | 0 | 0 | ||||||
Unused availability | 513.4 | 513.4 | 513.4 | ||||||
Line of credit facility, increase | $ 265 | ||||||||
Maximum availability | 515 | $ 515 | $ 515 | $ 515 | |||||
Senior secured credit facilities: | Term loans | |||||||||
Debt Instrument [Line Items] | |||||||||
Loss on extinguishment of debt | $ 3 | ||||||||
Senior secured credit facilities: | Term loans | Euro | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate margin | 2.50% | ||||||||
Interest rate | 2.50% | 2.50% | 2.50% | ||||||
Debt, gross | $ 368.8 | $ 368.8 | $ 368.8 | 391.8 | |||||
Repayments of debt | $ 32.2 | ||||||||
Senior secured credit facilities: | Term loans | U.S. dollars | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate margin | 2.25% | ||||||||
Interest rate | 3.25% | 3.25% | 3.25% | ||||||
Debt, gross | $ 609.7 | $ 609.7 | $ 609.7 | 677.2 | |||||
Repayments of debt | $ 62.4 | ||||||||
Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from Debt, Net of Issuance Costs | $ 1,975 | ||||||||
Debt Issuance Costs, Current, Net | 26.6 | ||||||||
Notes | Goldman Sachs | |||||||||
Debt Instrument [Line Items] | |||||||||
Related Party Transaction, Amounts of Transaction | $ 4.8 | ||||||||
Notes | 4.75% secured notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 4.75% | 4.75% | 4.75% | ||||||
Debt, gross | $ 586.7 | $ 586.7 | $ 586.7 | 561.2 | |||||
Notes | 6% secured notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 6.00% | 6.00% | 6.00% | ||||||
Debt, gross | $ 1,500 | $ 1,500 | $ 1,500 | 1,500 | |||||
Notes | 9% unsecured notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 9.00% | 9.00% | 9.00% | 9.00% | 9.00% | ||||
Debt, gross | $ 0 | $ 0 | $ 0 | 2,000 | |||||
Repayments of debt | $ 2,000 | ||||||||
Loss on extinguishment of debt | 223.4 | ||||||||
Amortization of debt premium | 169 | ||||||||
Amortization of deferred financing costs | $ 54.4 | ||||||||
Notes | 3.875% unsecured notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 3.875% | 3.875% | 3.875% | 3.875% | 3.875% | ||||
Debt, gross | $ 469.3 | $ 469.3 | $ 469.3 | 0 | |||||
Debt instrument, face amount | € | € 400 | ||||||||
Notes | 4.625 % unsecured notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 4.625% | 4.625% | 4.625% | 4.625% | 4.625% | ||||
Debt, gross | $ 1,550 | $ 1,550 | $ 1,550 | 0 | |||||
Debt instrument, face amount | $ 1,550 | ||||||||
Finance lease liabilities | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, gross | 71 | 71 | 71 | 59.2 | |||||
Other | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, gross | $ 0 | $ 0 | $ 0 | $ 4.5 |
Accumulated other comprehensi_3
Accumulated other comprehensive income or loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Changes in AOCI, net of tax | ||||
Beginning balance | $ (108.8) | $ (64.7) | $ (85.9) | $ (66.5) |
Unrealized gain (loss) | 54.8 | (61.8) | 33.2 | (59.9) |
Reclassification of (gain) loss into earnings | (0.8) | (1.1) | (1.8) | (1.7) |
Income tax effect | 0.1 | 0.1 | (0.2) | 0.6 |
Ending balance | (54.7) | (127.5) | (54.7) | (127.5) |
Foreign currency translation | ||||
Changes in AOCI, net of tax | ||||
Beginning balance | (86.4) | (55.6) | (62.3) | (59) |
Unrealized gain (loss) | 55.1 | (62.7) | 31 | (59.3) |
Reclassification of (gain) loss into earnings | 0 | 0 | 0 | 0 |
Income tax effect | 0 | 0 | 0 | 0 |
Ending balance | (31.3) | (118.3) | (31.3) | (118.3) |
Derivative instruments | ||||
Changes in AOCI, net of tax | ||||
Beginning balance | 0.6 | (0.2) | (0.5) | 1.1 |
Unrealized gain (loss) | 0.3 | 1 | 2.6 | (0.5) |
Reclassification of (gain) loss into earnings | (0.7) | (0.9) | (1.5) | (1.2) |
Income tax effect | 0.1 | 0 | (0.3) | 0.5 |
Ending balance | 0.3 | (0.1) | 0.3 | (0.1) |
Defined benefit plans | ||||
Changes in AOCI, net of tax | ||||
Beginning balance | (23) | (8.9) | (23.1) | (8.6) |
Unrealized gain (loss) | (0.6) | (0.1) | (0.4) | (0.1) |
Reclassification of (gain) loss into earnings | (0.1) | (0.2) | (0.3) | (0.5) |
Income tax effect | 0 | 0.1 | 0.1 | 0.1 |
Ending balance | $ (23.7) | $ (9.1) | $ (23.7) | $ (9.1) |
Stock-based compensation - expe
Stock-based compensation - expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other information about options outstanding | ||||
Expense | $ 11.4 | $ 1.7 | $ 31.4 | $ 57.4 |
Stock options | ||||
Other information about options outstanding | ||||
Expense | 4.2 | 5.1 | 12.6 | 39.7 |
RSUs | ||||
Other information about options outstanding | ||||
Expense | 6 | 5.1 | 16.4 | 8.5 |
Optionholder awards | ||||
Other information about options outstanding | ||||
Expense | 0.2 | 0.7 | 0.6 | 2.6 |
Other | ||||
Other information about options outstanding | ||||
Expense | 1 | (0.9) | 1.8 | 0.2 |
SARs | ||||
Other information about options outstanding | ||||
Expense | 0 | (8.3) | 0 | 6.4 |
Performance Shares | ||||
Other information about options outstanding | ||||
Expense | 26.9 | |||
Equity | ||||
Other information about options outstanding | ||||
Expense | 10.6 | 1.9 | 30.1 | 54.6 |
Liability | ||||
Other information about options outstanding | ||||
Expense | $ 0.8 | $ (0.2) | $ 1.3 | $ 2.8 |
Stock-based compensation - stoc
Stock-based compensation - stock option rollforward information (Details) - Common stock - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2020 | |
Number of options outstanding | |
Beginning balance | 22.7 |
Granted | 5 |
Exercised | (4.5) |
Forfeited | (1.8) |
Ending balance | 21.4 |
Weighted average exercise price per outstanding option | |
Beginning balance | $ 15.04 |
Granted | 17.57 |
Exercised | 3.83 |
Forfeited | 17.05 |
Ending balance | $ 17.58 |
Other information about options outstanding | |
Aggregate intrinsic value | $ 109.6 |
Weighted average remaining term | 7 years 6 months |
Information about options expected to vest and exercisable | |
Options expected to vest, number | 9.9 |
Options expected to vest, weighted average exercise price per option | $ 18.53 |
Options expected to vest, aggregate intrinsic value | $ 39.8 |
Options expected to vest, weighted average remaining term | 8 years 8 months 12 days |
Options exercisable, number | 11.5 |
Options exercisable, weighted average exercise price per option | $ 16.76 |
Options exercisable, aggregate intrinsic value | $ 69.8 |
Options exercisable, weighted average remaining term | 6 years 4 months 24 days |
Stock-based compensation - non-
Stock-based compensation - non-option award rollforward (Details) - RSUs shares in Millions | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Number of awards | |
Beginning balance | shares | 5.2 |
Granted | shares | 1.4 |
Vested | shares | (0.9) |
Forfeited | shares | (0.6) |
Ending balance | shares | 5.1 |
Weighted average grant date fair value per award | |
Beginning balance | $ / shares | $ 13.97 |
Granted | $ / shares | 17.38 |
Vested | $ / shares | 13.92 |
Forfeited | $ / shares | 14.04 |
Ending balance | $ / shares | $ 14.86 |
Minimum | |
Weighted average grant date fair value per award | |
Award vesting period | 3 years |
Maximum | |
Weighted average grant date fair value per award | |
Award vesting period | 4 years |
Stock-based compensation - othe
Stock-based compensation - other information (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other information about options outstanding | ||||
Remaining expense to be recognized | $ 87.1 | $ 87.1 | ||
Weighted average period over which remaining expense will be recognized | 1 year 9 months 18 days | |||
Shares available for future issuance | 12.6 | |||
Expense | 11.4 | $ 1.7 | $ 31.4 | $ 57.4 |
Common stock including paid-in capital | ||||
Other information about options outstanding | ||||
Options exercised in the period (in shares) | 4.5 | |||
Stock options | ||||
Other information about options outstanding | ||||
Expense | 4.2 | 5.1 | $ 12.6 | 39.7 |
Contractual life | 10 years | |||
RSUs | ||||
Other information about options outstanding | ||||
Expense | $ 6 | 5.1 | $ 16.4 | $ 8.5 |
Performance Shares | ||||
Other information about options outstanding | ||||
Expense | $ 26.9 | |||
Options exercised in the period (in shares) | 0.9 | |||
Minimum | Stock options | ||||
Other information about options outstanding | ||||
Award vesting period | 3 years | |||
Minimum | RSUs | ||||
Other information about options outstanding | ||||
Award vesting period | 3 years | |||
Maximum | Stock options | ||||
Other information about options outstanding | ||||
Award vesting period | 4 years | |||
Maximum | RSUs | ||||
Other information about options outstanding | ||||
Award vesting period | 4 years |
Other income or expense, net (D
Other income or expense, net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | ||||
Net foreign currency gain (loss) from financing activities | $ 4.1 | $ (8.2) | $ 4.3 | $ (0.1) |
Income related to defined benefit plans | 2.4 | 1.3 | 7 | 3.8 |
Other income | 0.1 | 0.3 | ||
Other expense | 0.7 | 0.8 | ||
Other income (expense), net | $ 6.6 | $ (7.6) | $ 11.6 | $ 2.9 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit (expense) | $ 65.6 | $ (15.2) | $ 29.4 | $ (23.4) |
(Loss) income before income taxes | (107.8) | $ 37.3 | $ 35.6 | $ (9.4) |
Internal Revenue Service (IRS) | ||||
Income Tax Disclosure [Abstract] | ||||
Release of previously recorded reserves for uncertain tax positions | 31.5 | |||
Income Tax Contingency [Line Items] | ||||
Release of previously recorded reserves for uncertain tax positions | $ 31.5 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Details) - Foreign Exchange Contract - Designated as Hedging Instrument - 3.875% unsecured notes € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2020EUR (€) | |
Derivatives, Fair Value [Line Items] | ||||||
Derivative liability | € | € 400 | |||||
Interest rate | 3.875% | |||||
Accumulated transactional gain related the net investment hedges | $ | $ 17.7 | $ 0 | $ 17.7 | $ 0 | $ 0 |
Financial instruments and fai_3
Financial instruments and fair value measurements (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | $ 5,155.5 | $ 5,249.4 |
Fair value | 5,311.1 | 5,646.4 |
Receivables facility | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 0 | 55.5 |
Fair value | 0 | 55.5 |
Senior secured credit facilities: | Term loans | Euro | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 368.8 | 391.8 |
Fair value | 367.5 | 397.4 |
Senior secured credit facilities: | Term loans | U.S. dollars | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 609.7 | 677.2 |
Fair value | 605.5 | 685.2 |
Notes | 4.75% secured notes | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 586.7 | 561.2 |
Fair value | 608.4 | 599.7 |
Notes | 6% secured notes | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 1,500 | 1,500 |
Fair value | 1,571 | 1,603.2 |
Notes | 9% unsecured notes | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 0 | 2,000 |
Fair value | 0 | 2,241.7 |
Notes | 3.875% unsecured notes | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 469.3 | 0 |
Fair value | 481.2 | 0 |
Notes | 4.625 % unsecured notes | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 1,550 | 0 |
Fair value | 1,606.5 | 0 |
Finance lease liabilities | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 71 | 59.2 |
Fair value | 71 | 59.2 |
Other | ||
Estimated Fair Value Of Financial Instruments [Line Items] | ||
Carrying value | 0 | 4.5 |
Fair value | $ 0 | $ 4.5 |