UNIVAR SOLUTIONS INC., 10-Q filed on 11/5/2019
Quarterly Report
v3.19.3
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2019
Oct. 24, 2019
Cover page.    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2019  
Document Transition Report false  
Entity File Number 001-37443  
Entity Registrant Name Univar Solutions Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 26-1251958  
Entity Address, Address Line One 3075 Highland Parkway, Suite 200  
Entity Address, City or Town  Downers Grove,  
Entity Address, State or Province IL  
Entity Address, Postal Zip Code 60515  
City Area Code 331  
Local Phone Number 777-6000  
Title of 12(b) Security Common Stock ($0.01 par value)  
Trading Symbol UNVR  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   168,616,579
Amendment Flag false  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q3  
Entity Central Index Key 0001494319  
Current Fiscal Year End Date --12-31  
v3.19.3
Condensed Consolidated Statements of Operations - USD ($)
shares in Millions, $ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Net sales $ 2,387.3 $ 2,130.7 $ 7,131.9 $ 6,661.3
Cost of goods sold (exclusive of depreciation) 1,842.4 1,662.0 5,513.3 5,205.5
Operating expenses:        
Warehousing, selling and administrative 269.2 229.0 803.4 710.9
Other operating expenses, net 30.2 12.4 258.8 37.0
Depreciation 41.6 31.5 114.5 93.8
Amortization 12.1 13.5 45.1 40.7
Impairment charges 7.0 0.0 7.0 0.0
Total operating expenses 456.9 369.1 1,503.9 1,130.9
Operating income 88.0 99.6 114.7 324.9
Other (expense) income:        
Interest income 0.6 0.6 2.3 2.7
Interest expense (37.4) (32.8) (111.2) (101.8)
Loss on extinguishment of debt 0.0 0.0 (0.7) 0.0
Other (expense) income, net (5.5) 2.5 (17.2) 3.0
Total other expense (42.3) (29.7) (126.8) (96.1)
Income (loss) before income taxes 45.7 69.9 (12.1) 228.8
Income tax expense from continuing operations 43.2 20.3 38.4 57.7
Net income (loss) from continuing operations 2.5 49.6 (50.5) 171.1
Net income from discontinued operations 0.0 0.0 5.4 0.0
Net income (loss) $ 2.5 $ 49.6 $ (45.1) $ 171.1
Income (loss) per common share:        
Basic from continuing operations (in dollars per share) $ 0.01 $ 0.35 $ (0.31) $ 1.21
Basic from discontinued operations (in dollars per share) 0 0 0.03 0
Basic income (loss) per common share (in dollars per share) 0.01 0.35 (0.28) 1.21
Diluted from continuing operations (in dollars per share) 0.01 0.35 (0.31) 1.20
Diluted from discontinued operations (in dollars per share) 0 0 0.03 0
Diluted income (loss) per common share (in dollars per share) $ 0.01 $ 0.35 $ (0.28) $ 1.20
Weighted average common shares outstanding:        
Basic (in shares) 168.6 141.2 162.6 141.1
Diluted (in shares) 169.5 142.3 162.6 142.1
Outbound freight and handling        
Operating expenses:        
Outbound freight and handling $ 96.8 $ 82.7 $ 275.1 $ 248.5
v3.19.3
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Condensed Statement of Income Captions [Line Items]        
Net income (loss) $ 2.5 $ 49.6 $ (45.1) $ 171.1
Other comprehensive (loss) income, net of tax:        
Foreign currency translation (31.9) 2.0 (12.1) (61.0)
Pension and postretirement benefit adjustment 0.0 0.0 0.1 0.1
Derivative financial instruments (4.4) (0.1) (28.6) 9.3
Total other comprehensive (loss) income, net of tax (36.3) 1.9 (43.8) (51.1)
Comprehensive (loss) income (33.8) 51.5 (88.9) 120.0
Impact due to adoption of ASU 2018-02        
Other comprehensive (loss) income, net of tax:        
Impact due to adoption of ASUs [1] 0.0 0.0 (3.2) 0.0
Impact due to adoption of ASU 2017-12        
Other comprehensive (loss) income, net of tax:        
Impact due to adoption of ASUs [2] $ 0.0 $ 0.0 $ 0.0 $ 0.5
[1]
Adjusted due to the adoption of Accounting Standards Update (“ASU”) 2018-02 “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” on January 1, 2019. Refer to “Note 2: Significant accounting policies” for more information.
[2]
Adjusted due to the adoption of ASU 2017-12 “Targeted Improvements to Accounting for Hedging Activities” on January 1, 2018.
v3.19.3
Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 134.6 $ 121.6
Trade accounts receivable, net 1,375.7 1,094.7
Inventories 872.9 803.3
Prepaid expenses and other current assets 193.1 169.1
Total current assets 2,576.3 2,188.7
Property, plant and equipment, net 1,161.1 955.8
Goodwill 2,409.5 1,780.7
Intangible assets, net 348.2 238.1
Deferred tax assets 22.0 24.8
Other assets [1] 267.6 84.3
Total assets 6,784.7 5,272.4
Current liabilities:    
Short-term financing 2.9 8.1
Trade accounts payable 973.3 925.4
Current portion of long-term debt 19.0 21.7
Accrued compensation 100.7 93.6
Other accrued expenses 349.8 285.8
Total current liabilities 1,445.7 1,334.6
Long-term debt 2,977.1 2,350.4
Pension and other postretirement benefit liabilities 244.6 254.4
Deferred tax liabilities 111.1 42.9
Other long-term liabilities [1] 261.2 98.4
Total liabilities 5,039.7 4,080.7
Stockholders’ equity:    
Preferred stock, 200.0 million shares authorized at $0.01 par value with no shares issued or outstanding as of September 30, 2019 and December 31, 2018 0.0 0.0
Common stock, 2.0 billion shares authorized at $0.01 par value with 168.6 million and 141.7 million shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively 1.7 1.4
Additional paid-in capital 2,963.7 2,325.0
Accumulated deficit (803.4) (761.5)
Accumulated other comprehensive loss (417.0) (373.2)
Total stockholders’ equity 1,745.0 1,191.7
Total liabilities and stockholders’ equity $ 6,784.7 $ 5,272.4
[1]
Operating lease assets and operating lease liabilities are included in other assets and other long-term liabilities. Refer to “Note 18: Leasing” for more information.

v3.19.3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Preferred stock, shares authorized (in shares) 200,000,000 200,000,000
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, share issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, shares authorized (in shares) 2,000,000,000 2,000,000,000
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares issued (in shares) 168,600,000 141,700,000
Common stock, shares outstanding (in shares) 168,600,000 141,700,000
v3.19.3
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Operating activities:    
Net income (loss) $ (45.1) $ 171.1
Adjustments to reconcile net (loss) income to net cash provided (used) by operating activities:    
Depreciation and amortization 159.6 134.5
Impairment charges 7.0 0.0
Amortization of deferred financing fees and debt discount 7.0 5.8
Amortization of pension credit from accumulated other comprehensive loss 0.1 0.1
Loss on extinguishment of debt 0.7 0.0
Deferred income taxes 4.4 8.9
Stock-based compensation expense 21.7 17.7
Charge for inventory step-up of acquired inventory 5.3 0.0
Other 3.8 (0.8)
Changes in operating assets and liabilities:    
Trade accounts receivable, net 3.7 (216.3)
Inventories 72.1 (11.9)
Prepaid expenses and other current assets 20.0 (13.3)
Trade accounts payable (85.2) (7.3)
Pensions and other postretirement benefit liabilities (22.6) (32.6)
Other, net (118.3) (58.5)
Net cash provided (used) by operating activities 34.2 (2.6)
Investing activities:    
Purchases of property, plant and equipment (72.1) (59.9)
Purchases of businesses, net of cash acquired (1,201.0) (20.0)
Proceeds from sale of property, plant and equipment 3.6 8.7
Proceeds from sale of business 664.3 0.0
Other (1.3) (0.1)
Net cash used by investing activities (606.5) (71.3)
Financing activities:    
Proceeds from issuance of long-term debt 1,077.6 267.7
Payments on long-term debt and finance lease obligations (465.4) (558.1)
Short-term financing, net (4.4) (2.3)
Taxes paid related to net share settlements of stock-based compensation awards (2.8) (3.7)
Stock option exercises 5.7 5.7
Other 0.6 0.6
Net cash provided (used) by financing activities 611.3 (290.1)
Effect of exchange rate changes on cash and cash equivalents (26.0) (17.1)
Net increase (decrease) in cash and cash equivalents 13.0 (381.1)
Cash and cash equivalents at beginning of period 121.6 467.0
Cash and cash equivalents at end of period 134.6 85.9
Non-cash activities:    
Fair value of common stock issued for acquisition of business 613.8 0.0
Additions of property, plant and equipment included in trade accounts payable and other accrued expenses 7.5 11.5
Additions of property, plant and equipment under a finance lease obligation 8.5 19.2
Additions of assets under an operating lease obligation $ 9.8 $ 0.0
v3.19.3
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)
shares in Millions, $ in Millions
Total
Common stock
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive loss
Beginning balance (in shares) at Dec. 31, 2017   141.1      
Beginning balance at Dec. 31, 2017 $ 1,090.1 $ 1.4 $ 2,301.3 $ (934.1) $ (278.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 171.1     171.1  
Foreign currency translation adjustment (61.0)       (61.0)
Pension and postretirement benefit adjustment 0.1       0.1
Derivative financial instruments, net of tax 9.3       9.3
Restricted stock units vested (in shares)   0.3      
Restricted stock units vested 0.0        
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)   (0.1)      
Tax withholdings related to net share settlements of stock-based compensation awards (3.7)   (3.7)    
Stock option exercises (in shares)   0.3      
Stock option exercises 5.7   5.7    
Employee stock purchase plan 0.6   0.6    
Stock-based compensation 17.7   17.7    
Ending balance (in shares) at Sep. 30, 2018   141.6      
Ending balance at Sep. 30, 2018 1,230.7 $ 1.4 2,321.6 (762.7) (329.6)
Beginning balance (in shares) at Jun. 30, 2018   141.4      
Beginning balance at Jun. 30, 2018 1,171.0 $ 1.4 2,313.4 (812.3) (331.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 49.6     49.6  
Foreign currency translation adjustment 2.0       2.0
Pension and postretirement benefit adjustment 0.0        
Derivative financial instruments, net of tax (0.1)       (0.1)
Tax withholdings related to net share settlements of stock-based compensation awards (0.5)   (0.5)    
Stock option exercises (in shares)   0.2      
Stock option exercises 4.6   4.6    
Employee stock purchase plan 0.1   0.1    
Stock-based compensation 4.0   4.0    
Ending balance (in shares) at Sep. 30, 2018   141.6      
Ending balance at Sep. 30, 2018 $ 1,230.7 $ 1.4 2,321.6 (762.7) (329.6)
Beginning balance (in shares) at Dec. 31, 2018 141.7 141.7      
Beginning balance at Dec. 31, 2018 $ 1,191.7 $ 1.4 2,325.0 (761.5) (373.2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) (45.1)     (45.1)  
Foreign currency translation adjustment (12.1)       (12.1)
Pension and postretirement benefit adjustment 0.1       0.1
Derivative financial instruments, net of tax (28.6)       (28.6)
Common stock issued for the Nexeo acquisition (in shares) [1]   27.9      
Common stock issued for the Nexeo acquisition [1] $ 649.3 $ 0.3 649.0    
Shares canceled (in shares) [1] (1.5)        
Shares canceled [1] $ (35.5)   (35.5)    
Restricted stock units vested (in shares)   0.4      
Restricted stock units vested 0.0        
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)   (0.2)      
Tax withholdings related to net share settlements of stock-based compensation awards (2.8)   (2.8)    
Stock option exercises (in shares)   0.3      
Stock option exercises 5.7   5.7    
Employee stock purchase plan 0.6   0.6    
Stock-based compensation $ 21.7   21.7    
Ending balance (in shares) at Sep. 30, 2019 168.6 168.6      
Ending balance at Sep. 30, 2019 $ 1,745.0 $ 1.7 2,963.7 (803.4) (417.0)
Beginning balance (in shares) at Jun. 30, 2019   168.6      
Beginning balance at Jun. 30, 2019 1,774.5 $ 1.7 2,959.4 (805.9) (380.7)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 2.5     2.5  
Foreign currency translation adjustment (31.9)       (31.9)
Pension and postretirement benefit adjustment 0.0        
Derivative financial instruments, net of tax (4.4)       (4.4)
Restricted stock units vested (in shares)   0.1      
Restricted stock units vested 0.0        
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)   (0.1)      
Tax withholdings related to net share settlements of stock-based compensation awards 0.0        
Stock-based compensation 4.4   4.4    
Other $ (0.1)   (0.1)    
Ending balance (in shares) at Sep. 30, 2019 168.6 168.6      
Ending balance at Sep. 30, 2019 $ 1,745.0 $ 1.7 $ 2,963.7 $ (803.4) $ (417.0)
[1]
Refer to “Note 3: Business combinations” for more information.
v3.19.3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Jan. 01, 2018
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax $ 0.2   $ 0.2 $ (0.1)  
Derivative financial instruments, net of tax $ 1.5 $ (0.3) $ 9.6 $ (3.1)  
Accounting Standards Update 2017-12          
Impact due to adoption of ASU's, net of tax         $ (0.3)
v3.19.3
Nature of operations
9 Months Ended
Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of operations
1. Nature of operations
Headquartered in Downers Grove, Illinois, Univar Solutions Inc. (“the Company” or “Univar Solutions”) is a leading global chemicals and ingredients distributor and provider of specialty chemicals. The Company’s operations are structured into four operating segments that represent the geographic areas under which the Company manages its business:
Univar Solutions USA (“USA”)
Univar Solutions Canada (“Canada”)
Univar Solutions Europe, the Middle East and Africa (“EMEA”)
Univar Solutions Latin America (“LATAM”)
In 2019, the Company renamed its “Rest of World” segment “Latin America” which includes certain developing businesses in Latin America (including Brazil and Mexico) and the Asia-Pacific region.
v3.19.3
Significant accounting policies
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Significant accounting policies
2. Significant accounting policies
Basis of presentation
The condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) as applicable to interim financial reporting. These condensed consolidated financial statements, in the Company’s opinion, include all adjustments consisting of normal recurring accruals necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, comprehensive income, cash flows and changes in stockholders’ equity. The results of operations for the periods presented are not necessarily indicative of the operating results that may be expected for the full year. The accompanying condensed consolidated financial statements of Univar Solutions includes the combined results of all directly and indirectly controlled companies, which have been adjusted to account for the elimination of intercompany balances and transactions.
The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ materially from these estimates. These condensed consolidated financial statements and related footnotes are unaudited and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
Recently adopted accounting pronouncements
In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02 “Leases” (Topic 842), which supersedes the lease recognition requirements in ASC Topic 840, “Leases.” On January 1, 2019, the Company adopted the new Accounting Standards Codification (“ASC”) Topic 842 (“new lease standard”) using the modified retrospective method. The Company has elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the historical lease classification to carry forward. The Company also made an accounting policy election to not recognize leases with an initial term of 12 months or less on the balance sheet. The Company will recognize short-term lease payments in the condensed consolidated statements of operations on a straight-line basis over the lease term. The Company recognized the cumulative effect of initially applying the new lease standard as an adjustment to the 2019 opening balance sheet. The cumulative effect of the standard’s adoption also includes adjustments related to previously unrecognized finance leases. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.
The cumulative effect of the changes made to the January 1, 2019 condensed consolidated balance sheet for the adoption of ASU 2016-02 “Leases” (Topic 842) is as follows:
(in millions)
 
Balance at December 31, 2018
 
Adjustments due to ASU 2016-02
 
Balance at January 1, 2019
Assets
 
 
 
 
 
 
Property, plant and equipment, net
 
$
955.8

 
$
5.4

 
$
961.2

Other assets
 
84.3

 
166.8

 
251.1

Liabilities
 
 
 
 
 
 
Current portion of long-term debt
 
$
21.7

 
$
(4.5
)
 
$
17.2

Other accrued expenses
 
285.8

 
43.8

 
329.6

Long-term debt
 
2,350.4

 
9.9

 
2,360.3

Other long-term liabilities
 
98.4

 
123.0

 
221.4


In February 2018, the FASB issued ASU 2018-02 “Income Statement - Reporting Comprehensive Income” (Topic 220)  “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“AOCI”) which gave entities the option to reclassify certain tax effects the FASB refers to as having been stranded, resulting from the Tax Cuts and Jobs Act from AOCI to retained earnings. The Company adopted the ASU as of January 1, 2019 and elected to reclassify $3.2 million of the stranded tax effects from accumulated other comprehensive loss to accumulated deficit.
The Company also adopted the following standard during 2019, which did not have a material impact to the financial statements or financial statement disclosures:
Standard
 
 
 
Effective date
2018-16
 
Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes
 
January 1, 2019

Accounting pronouncements issued and not yet adopted
In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses” (Topic 326) - “Measurement of Credit Losses on Financial Instruments.” The ASU requires entities to use a Current Expected Credit Loss model, which is a new impairment model based on expected losses rather than incurred losses. The model requires entities to recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect from financial assets measured at amortized cost. Components included in the computation of the estimated contractual cash flows include relevant information about past events, current conditions and reasonable and supportable forecasts, which will result in the recognition of lifetime expected credit losses upon the initial recognition of the related assets. The guidance in this ASU will be included in financial statement and footnote disclosures subsequent to the January 1, 2020 adoption date. The Company is currently determining the impacts that will be reflected in the financial statements and financial statement disclosures subsequent to the ASU adoption date.
In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement” (Topic 820) - “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” The ASU amends the requirements related to fair value disclosures to include new disclosure requirements and eliminates or modifies certain historic disclosures. The guidance in this ASU will be included in disclosures subsequent to the January 1, 2020 adoption date. The Company is currently determining the impacts that will be reflected in financial statement disclosures subsequent to the ASU adoption date.
In August 2018, the FASB issued ASU 2018-14 “Compensation - Retirement Benefits - Defined Benefit Plans - General” (Subtopic 715-20) - “Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans.” The ASU amends the requirements related to defined benefit pension and other postretirement plan disclosures to include new disclosure requirements and eliminates or clarifies certain historic disclosures. The guidance in this ASU will be included in disclosures subsequent to the January 1, 2021 adoption date. The Company is currently determining the impacts that will be reflected in financial statement disclosures subsequent to the ASU adoption date.
The Company has not yet adopted the following standards, none of which is expected to have a material impact to the financial statements or financial statement disclosures:
ASU
 
 
 
Expected adoption date
2018-18
 
Collaborative Arrangements (Topic 808) - Clarifying the Interaction between Topic 808 and Topic 606
 
January 1, 2020
2018-17
 
Consolidation (Topic 810) - Targeted Improvements to Related Party Guidance for Variable Interest Entities
 
January 1, 2020
2018-15
 
Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)
 
January 1, 2020

v3.19.3
Business combinations
9 Months Ended
Sep. 30, 2019
Business Combinations [Abstract]  
Business combinations
3. Business combinations
2019 Acquisitions
Acquisition of Nexeo Solutions
On February 28, 2019, the Company completed its previously announced acquisition of 100% of the equity interest of Nexeo Solutions, Inc. (“Nexeo”), a leading global chemicals and plastics distributor. The acquisition expands and strengthens Univar Solutions’ presence in North America and provides expanded opportunities to create the largest North American sales force in chemical and ingredients distribution and the broadest product offering.
The total purchase price of the acquisition was $1,814.8 million, composed of $1,201.0 million of cash paid (net of cash acquired of $46.8 million) and $613.8 million of newly issued shares of Univar Solutions common stock, which represented approximately 26.4 million shares, based on Univar Solutions’ closing stock price of $23.29 on February 27, 2019. The final 26.4 million shares issued include the cancellation of 1.5 million shares in connection with the appraisal litigation settlement, see “Note 17: Commitments and contingencies” for more information.
The cash portion of the purchase price, acquisition related costs and repayment of approximately $936.3 million of Nexeo’s debt and other long-term liabilities were funded using the proceeds from the $781.5 million of incremental Term B Loans, $309.3 million borrowings under the New Senior ABL Facility and $175.0 million borrowings under the ABL Term Loan issued on February 28, 2019. Refer to “Note 13: Debt” for more information.
As of September 30, 2019, the Company updated the purchase price allocation to reflect adjustments from the third-party valuation firm's preliminary report valuing Nexeo’s tangible and intangible assets which included changes in working capital, assets and liabilities held for sale, property, plant and equipment, net, other assets and other liabilities. The adjustments to these balances resulted in a $65.0 million decrease to goodwill.
The initial accounting for this acquisition is considered preliminary, and is subject to adjustments on receipt of additional information relevant to the acquisition to complete the opening balances for deferred income taxes. This valuation is in process and the preliminary values below are based on initial information that continues to be subject to the completion of the valuation and allocation of the assets acquired.
The preliminary purchase price allocation at February 28, 2019 is as follows:
(in millions)
 
 
Trade accounts receivable, net
 
$
296.3

Inventories
 
150.2

Prepaid expenses and other current assets
 
55.6

Assets held for sale
 
888.2

Property, plant and equipment, net
 
262.3

Goodwill
 
617.2

Intangible assets, net
 
155.7

Other assets
 
37.4

Trade accounts payable
 
(137.7
)
Other accrued expenses
 
(139.4
)
Liabilities held for sale
 
(221.5
)
Deferred tax liabilities
 
(78.5
)
Other long-term liabilities
 
(71.0
)
Purchase consideration, net of cash
 
$
1,814.8


Assets and liabilities held for sale are related to the Nexeo plastics distribution business (“Nexeo Plastics”). Nexeo Plastics was not aligned with the Company’s strategic objectives and, on March 29, 2019, the business was sold to an affiliate of One Rock Capital Partners, LLC for total proceeds of $664.3 million, net of cash disposed. Refer to “Note 4: Discontinued operations” for further information.
The Company recorded $617.2 million of goodwill, consisting of $600.7 million in the USA segment, $6.2 million in Canada and $10.3 million in LATAM. The goodwill is primarily attributable to expected synergies from combining operations. The Company is in process of determining the amount of goodwill that is deductible for income tax purposes.
The Company assumed 50.0 million warrants, equivalent to 25.0 million Nexeo shares, with an estimated aggregate fair value of $26.0 million at the February 28, 2019 closing date. The warrants were converted into the right to receive, upon exercise, the merger consideration consisting of approximately 7.6 million shares of Univar Solutions common stock plus cash. The warrants have an exercise price of $27.80. These warrants will expire on June 9, 2021. The Company recorded the warrants as other long-term liabilities within the condensed consolidated balance sheet. Refer to “Note 15: Fair value measurements” for more information.
The amounts of net sales and net loss from continuing operations related to the Nexeo chemical distribution business, included in the Company’s condensed consolidated statements of operations from March 1, 2019 to September 30, 2019 are as follows:
(in millions)
 
 
Net sales
 
$
1,061.1

Net loss from continuing operations
 
(2.4
)

The following unaudited pro forma financial information combines the unaudited results of operations as if the acquisition of Nexeo had occurred at the beginning of the periods presented below. The unaudited pro forma results for all periods presented below exclude the results of operations related to Nexeo Plastics, as this divestiture was reflected as discontinued operations. Refer to “Note 4: Discontinued operations” for additional information.
The unaudited pro forma financial information is as follows:
 
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions)
 
2019
 
2018
 
2019
 
2018
Net sales
 
$
2,387.3

 
$
2,659.6

 
$
7,457.9

 
$
8,248.1

Net income (loss) from continuing operations
 
1.1

 
70.4

 
(39.5
)
 
227.7


The pro forma financial information is for comparative purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2018.
The unaudited pro forma information is based upon accounting estimates and judgments the Company believes are reasonable. The unaudited pro forma information reflects adjustments directly attributed to the business combination including amortization on acquired intangible assets, interest expense, transaction and acquisition related costs, depreciation related to purchase accounting fair value adjustments and the related tax effects.
v3.19.3
Discontinued operations
9 Months Ended
Sep. 30, 2019
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued operations
4. Discontinued operations
On March 29, 2019, the Company completed the sale of the plastics distribution business of Nexeo to an affiliate of One Rock Capital Partners, LLC for total proceeds of $664.3 million (net of cash disposed of $2.4 million), including $26.7 million for excess working capital. The Nexeo preliminary purchase price allocation is inclusive of these working capital adjustments. Refer to “Note 3: Business combinations” for more information.
In connection with the transaction, the Company entered into a Transition Services Agreement (TSA), a Warehouse Service Agreement (WSA) and Real Property Agreements with One Rock Capital Partners, LLC which are designed to ensure and facilitate an orderly transfer of business operations. The services provided under the transitional arrangements will terminate at various times, between six and twenty-four months and can be renewed with a maximum of two twelve-month periods. The income and expense for the services will be reported as other operating expenses, net in the condensed consolidated statements of operations. The Real Property Agreements will have a maximum tenure of 3 years. These arrangements do not constitute significant continuing involvement in the plastics distribution business. 
The following table summarizes the operating results of the Company’s discontinued operations related to the sale described above for the nine months ended September 30, 2019, as presented in “Net income from discontinued operations” on the condensed consolidated statements of operations.
(in millions)
 
Nine months ended September 30, 2019
External sales
 
$
156.9

Cost of goods sold (exclusive of depreciation)
 
136.7

Outbound freight and handling
 
3.5

Warehousing, selling and administrative
 
7.9

Other expenses
 
1.4

Income from discontinued operations before income taxes
 
$
7.4

Income tax expense from discontinued operations (1)
 
2.0

Net income from discontinued operations
 
$
5.4


 
(1)
The provision for income taxes for the nine months ended September 30, 2019 includes an adjustment to the tax expense related to the one month operations reported as of March 31, 2019.
There were no significant non-cash operating activities from the Company’s discontinued operations related to the plastics distribution business.
v3.19.3
Revenue
9 Months Ended
Sep. 30, 2019
Revenue from Contract with Customer [Abstract]  
Revenue
5. Revenue
The Company disaggregates revenues from contracts with customers by both geographic segments and revenue contract types. Geographic reportable segmentation is pertinent to understanding Univar Solutions’ revenues, as it aligns to how the Company reviews the financial performance of its operations. Revenue contract types are differentiated by the type of good or service Univar Solutions offers customers, since the contractual terms necessary for revenue recognition are unique to each of the identified revenue contract types.
The following table disaggregates external customer net sales by major stream:
(in millions)
 
USA
 
Canada
 
EMEA
 
LATAM
 
Consolidated
 
 
Three months ended September 30, 2019
Chemical Distribution
 
$
1,477.0

 
$
207.3

 
$
424.7

 
$
114.0

 
$
2,223.0

Crop Sciences
 

 
64.3

 

 

 
64.3

Services
 
85.1

 
11.4

 
0.3

 
3.2

 
100.0

Total external customer net sales
 
$
1,562.1

 
$
283.0

 
$
425.0

 
$
117.2

 
$
2,387.3

(in millions)
 
USA
 
Canada
 
EMEA
 
LATAM
 
Consolidated
 
 
Nine months ended September 30, 2019
Chemical Distribution
 
$
4,240.1

 
$
644.1

 
$
1,365.6

 
$
321.2

 
$
6,571.0

Crop Sciences
 

 
281.9

 

 

 
281.9

Services
 
234.5

 
35.6

 
1.0

 
7.9

 
279.0

Total external customer net sales
 
$
4,474.6

 
$
961.6

 
$
1,366.6

 
$
329.1

 
$
7,131.9

Deferred revenue
Deferred revenues are recognized as a contract liability when customers provide Univar Solutions with consideration prior to the Company satisfying a performance obligation. The following table provides information pertaining to the deferred revenue balance and account activity:
(in millions)
 
 
Deferred revenue as of January 1, 2019
 
$
45.6

Deferred revenue as of September 30, 2019
 
5.7

Revenue recognized that was included in the deferred revenue balance at the beginning of the period
 
44.4


The deferred revenue balances are all expected to have a duration of one year or less and are recorded within the other accrued expenses line item of the condensed consolidated balance sheets.
v3.19.3
Other operating expenses, net
9 Months Ended
Sep. 30, 2019
Other Income and Expenses [Abstract]  
Other operating expenses, net
6. Other operating expenses, net
Other operating expenses, net consisted of the following:
 
 
Three months ended
September 30,
 
Nine months ended
September 30,
(in millions)
 
2019
 
2018
 
2019
 
2018
Acquisition and integration related expenses
 
$
18.6

 
$
5.5

 
$
128.3

 
$
6.9

Stock-based compensation expense
 
4.4

 
4.0

 
21.7

 
17.7

Restructuring charges
 
0.6

 
2.9

 
1.2

 
3.4

Other employee termination costs
 
4.2

 
2.7

 
23.3

 
9.5

Other facility exit costs (1)
 
5.6

 

 
5.6

 

Saccharin legal settlement
 

 

 
62.5

 

Other
 
(3.2
)
 
(2.7
)
 
16.2

 
(0.5
)
Total other operating expenses, net
 
$
30.2

 
$
12.4

 
$
258.8

 
$
37.0


 
(1)
Other facility exit costs includes $3.6 million recorded as an estimated withdrawal liability associated with a multiemployer pension plan related to a facility closure.
v3.19.3
Restructuring charges
9 Months Ended
Sep. 30, 2019
Restructuring and Related Activities [Abstract]  
Restructuring charges
7. Restructuring charges
Restructuring charges recorded relate to large, strategic initiatives aimed at streamlining the Company’s cost structure and improving its operations. These actions primarily result in workforce reductions, lease termination costs and other facility rationalization costs. Restructuring charges are recorded in other operating expenses, net in the condensed consolidated statement of operations.
2018 Restructuring
In 2018, the Company recorded restructuring charges of $3.2 million in USA, consisting of $3.1 million in employee termination costs and $0.1 million in other exit costs for employees impacted by a decision to consolidate departments. Additionally, the Company recorded restructuring charges of $0.9 million in Other, relating to employee termination costs. The Company recorded restructuring charges of $0.5 million and $1.3 million in USA, consisting of $0.7 million and $1.3 million in employee termination costs during the three and nine months ended September 30, 2019 as well as reduced its estimate by $0.1 million in both facility and other exist costs during the three months ended September 30, 2019. The Company expects to incur approximately $1.3 million of additional employee termination and other exit costs over the next year and expects this program to be substantially completed by 2020.
Also during the year ended December 31, 2018, the Company recorded restructuring charges of $0.9 million in EMEA relating to employee termination costs. The Company recorded restructuring charges of $0.1 million in facility exit costs during the three and nine months ended September 30, 2019 and reduced its estimate by $0.2 million within employee termination costs for this program during the nine months ended September 30, 2019. The Company does not expect to incur material costs in the future related to this restructuring program. The actions associated with this program are expected to be completed by the end of 2019.
The following table summarizes activity related to accrued liabilities associated with restructuring:
(in millions)
 
January 1, 2019
 
Charge to 
earnings
 
Cash
paid
 
Non-cash 
and other
 
September 30, 2019
Employee termination costs
 
$
4.2

 
$
1.1

 
$
(4.6
)
 
$

 
$
0.7

Facility exit costs
 
5.0

 
0.1

 
(0.1
)
 

 
5.0

Other exit costs
 
0.2

 

 

 

 
0.2

Total
 
$
9.4

 
$
1.2

 
$
(4.7
)
 
$

 
$
5.9


(in millions)
 
January 1, 2018
 
Charge to 
earnings
 
Cash 
paid
 
Non-cash 
and other
 
December 31, 2018
Employee termination costs
 
$
3.0

 
$
5.3

 
$
(3.4
)
 
$
(0.7
)
 
$
4.2

Facility exit costs
 
10.2

 
(0.7
)
 
(4.4
)
 
(0.1
)
 
5.0

Other exit costs
 
(0.5
)
 
0.2

 
(0.1
)
 
0.6

 
0.2

Total
 
$
12.7

 
$
4.8

 
$
(7.9
)
 
$
(0.2
)
 
$
9.4



Restructuring liabilities of $5.5 million and $5.9 million were classified as current in other accrued expenses in the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively. The long-term portion of restructuring liabilities of $0.4 million and $3.5 million were recorded in other long-term liabilities in the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively, and primarily consists of facility exit costs that are expected to be paid within the next five years.
The cost information above does not contain any estimates for programs that may be developed and implemented in future periods. While the Company believes the recorded restructuring liabilities are adequate, revisions to current estimates may be recorded in future periods based on new information as it becomes available.
v3.19.3
Other (expense) income, net
9 Months Ended
Sep. 30, 2019
Other Income and Expenses [Abstract]  
Other (expense) income, net
8. Other (expense) income, net
Other (expense) income, net consisted of the following gains (losses):
 
 
Three months ended
September 30,
 
Nine months ended
September 30,
(in millions)
 
2019

2018
 
2019
 
2018
Foreign currency transactions
 
$
(0.9
)

$
(3.7
)
 
$
(3.7
)
 
$
(8.0
)
Foreign currency denominated loans revaluation
 
16.8


0.8

 
17.3

 
(0.6
)
Undesignated foreign currency derivative instruments (1)
 
(20.6
)

2.7

 
(26.2
)
 
3.6

Undesignated interest rate swap contracts (1)
 
(1.0
)
 

 
(3.8
)
 

Non-operating retirement benefits (2)
 
0.5

 
3.3

 
1.7

 
10.2

Other
 
(0.3
)

(0.6
)
 
(2.5
)
 
(2.2
)
Total other (expense) income, net
 
$
(5.5
)
 
$
2.5

 
$
(17.2
)
 
$
3.0

 
(1)
Refer to “Note 16: Derivatives” for more information.
(2)
Refer to “Note 9: Employee benefit plans” for more information.
v3.19.3
Employee benefit plans
9 Months Ended
Sep. 30, 2019
Postemployment Benefits [Abstract]  
Employee benefit plans
9. Employee benefit plans
The following table summarizes the components of net periodic cost (benefit) recognized in the condensed consolidated statements of operations: 
 
 
Domestic - Defined Benefit Pension Plans
 

Three months ended
September 30,
 
Nine months ended
September 30,
(in millions)

2019

2018
 
2019
 
2018
Interest cost (1)

$
6.8


$
6.8

 
$
20.4

 
$
20.4

Expected return on plan assets (1)

(6.3
)

(7.8
)
 
(18.9
)
 
(23.4
)
Net periodic cost (benefit)

$
0.5

 
$
(1.0
)
 
$
1.5

 
$
(3.0
)
 
 
Foreign - Defined Benefit Pension Plans
 
 
Three months ended
September 30,
 
Nine months ended
September 30,
(in millions)
 
2019
 
2018
 
2019
 
2018
Service cost (2)
 
$
0.6

 
$
0.7

 
$
1.8

 
$
2.1

Interest cost (1)
 
3.9

 
3.8

 
11.7

 
11.7

Expected return on plan assets (1)
 
(4.9
)
 
(6.2
)
 
(15.0
)
 
(19.1
)
Prior service cost (1)
 

 

 
0.1

 
0.1

Net periodic benefit
 
$
(0.4
)
 
$
(1.7
)
 
$
(1.4
)
 
$
(5.2
)
 

(1)
These amounts are included in other (expense) income, net.
(2)
Service cost is included in warehouse, selling and administrative expenses.
v3.19.3
Income taxes
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Income taxes
10. Income taxes
The Company’s tax provision for interim periods is determined using an estimate of the annual effective income tax rate, adjusted for discrete items, if any, that occur in the relevant period. Each quarter, an estimate of the annual effective income tax rate is updated should management revise its forecast of earnings based upon the Company’s operating results. If there is a change in the estimated effective annual income tax rate, a cumulative adjustment is made. The quarterly income tax provision and forecast estimate of the annual effective income tax rate may be subject to volatility due to several factors, including the complexity in forecasting jurisdictional earnings before income tax, the rate of realization of forecasting earnings or losses by quarter, acquisitions, divestitures, foreign currency gains and losses, pension gains and losses, and other factors.
The income tax expense of $43.2 million and $38.4 million for the three and nine months ended September 30, 2019 resulted in an effective income tax rate of 94.5% and (317.4)%, respectively. Discrete tax expense (benefit) of $9.1 million and $(4.9) million are included in the $43.2 million and the $38.4 million income tax expense for the three and nine month period ended September 30, 2019. The Company’s effective income tax rate without discrete items was 68.4%, higher than the US federal statutory rate of 21.0% primarily due to the impact of non-deductible Nexeo related acquisition and integration costs, along with state taxes, foreign rate differential, non-deductible compensation and other expenses, and an increase in the valuation allowance on certain income tax attributes. The nine months ended September 30, 2019 discrete tax benefit of $4.9 million is attributable to the indirect effects of the Nexeo Plastics sale offset by the US return to provision adjustment, an increase in valuation allowance on tax attributes and various other items.
The income tax expense of $20.3 million and $57.7 million for the three and nine months ended September 30, 2018, resulted in an effective income tax rate of 29.0% and 25.2%, respectively. The Company’s effective income tax rate for the three and nine month period ended September 30, 2018 was higher than the US federal statutory rate of 21.0% primarily due to the addition of state taxes, and the higher tax rates incurred on the Company’s earnings outside the US, including the overall net impact of the 2017 US Tax Cuts and Jobs Act on foreign net earnings. The increases in the effective income tax rate were partially offset by the release of valuation allowances on certain tax attributes. The Company’s effective income tax rate for the nine month period ended September 30, 2018 was lower than its three month period effective income tax rate ended September 30, 2018 mainly due to the impact of the discrete tax benefits recorded in previous quarters.
v3.19.3
Earnings per share
9 Months Ended
Sep. 30, 2019
Earnings Per Share [Abstract]  
Earnings per share
11. Earnings per share
The following table presents the basic and diluted earnings per share computations:
 
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions, except per share data)
 
2019
 
2018
 
2019
 
2018
Basic:
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
 
$
2.5

 
$
49.6

 
$
(50.5
)
 
$
171.1

Net income from discontinued operations
 

 

 
5.4

 

Net income (loss)
 
$
2.5

 
$
49.6

 
$
(45.1
)
 
$
171.1

Less: earnings allocated to participating securities
 

 
0.1

 

 
0.3

Earnings allocated to common shares outstanding
 
$
2.5

 
$
49.5

 
$
(45.1
)
 
$
170.8

 
 


 
 
 
 
 
 
Weighted average common shares outstanding
 
168.6

 
141.2

 
162.6

 
141.1

Basic income (loss) per common share from continuing operations
 
$
0.01

 
$
0.35

 
$
(0.31
)
 
$
1.21

Basic income per common share from discontinued operations
 

 

 
0.03

 

Basic income (loss) per common share (2)
 
$
0.01

 
$
0.35

 
$
(0.28
)
 
$
1.21

 
 
 
 
 
 
 
 
 
Diluted:
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
 
$
2.5

 
$
49.6

 
$
(50.5
)
 
$
171.1

Net income from discontinued operations
 

 

 
5.4

 

Net income (loss)
 
$
2.5

 
$
49.6

 
$
(45.1
)
 
$
171.1

Less: earnings allocated to participating securities
 

 

 

 

Earnings allocated to common shares outstanding
 
$
2.5

 
$
49.6

 
$
(45.1
)
 
$
171.1

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
168.6

 
141.2

 
162.6

 
141.1

Effect of dilutive securities: stock compensation plans (1)
 
0.9

 
1.1

 

 
1.0

Weighted average common shares outstanding – diluted
 
169.5

 
142.3

 
162.6

 
142.1

Diluted income (loss) per common share from continuing operations
 
$
0.01

 
$
0.35

 
$
(0.31
)
 
$
1.20

Diluted income per common share from discontinued operations
 

 

 
0.03

 

Diluted income (loss) per common share (2)
 
$
0.01

 
$
0.35

 
$
(0.28
)
 
$
1.20

 
(1)
Stock options to purchase 3.1 million and 1.5 million shares of common stock and restricted stock of nil were outstanding during the three months ended September 30, 2019 and 2018, respectively, but were not included in the calculation of diluted income per share as the impact of these awards would have been anti-dilutive. Stock options to purchase 3.0 million and 1.6 million shares of common stock and restricted stock of 0.8 million and nil were outstanding during the nine months ended September 30, 2019 and 2018, respectively, but were not included in the calculation of diluted income per share as the impact of these awards would have been anti-dilutive. Diluted shares outstanding also did not include 7.6 million and 6.0 million shares of common stock issuable on the exercise of warrants because the warrants were out-of-the-money for the three and nine months ended September 30, 2019.
(2)
As a result of changes in the number of shares outstanding during the year and rounding, the sum of the quarters’ earnings per share may not equal the earnings per share for any year-to-date period.
v3.19.3
Accumulated other comprehensive loss
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
Accumulated other comprehensive loss
12. Accumulated other comprehensive loss
The following tables present the changes in accumulated other comprehensive loss by component, net of tax:
(in millions)
 
Cash flow hedges
 
Defined
benefit
pension items
 
Currency
translation
items
 
Total
Balance as of December 31, 2018
 
$
8.9

 
$
(1.1
)
 
$
(381.0
)
 
$
(373.2
)
Impact due to adoption of ASU 2018-02 (1)
 
1.5

 


 
(4.7
)
 
(3.2
)
Other comprehensive (loss) income before reclassifications
 
(22.1
)
 

 
(12.1
)
 
(34.2
)
Amounts reclassified from accumulated other comprehensive loss
 
(6.5
)
 
0.1

 

 
(6.4
)
Net current period other comprehensive (loss) income
 
$
(27.1
)
 
$
0.1

 
$
(16.8
)
 
$
(43.8
)
Balance as of September 30, 2019
 
$
(18.2
)
 
$
(1.0
)
 
$
(397.8
)
 
$
(417.0
)
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2017
 
$
6.7

 
$
(1.2
)
 
$
(284.0
)
 
$
(278.5
)
Impact due to adoption of ASU 2017-12 (2)
 
0.5

 

 

 
0.5

Other comprehensive income (loss) before reclassifications
 
13.3

 

 
(61.0
)
 
(47.7
)
Amounts reclassified from accumulated other comprehensive loss
 
$
(4.0
)
 
$
0.1

 
$

 
$
(3.9
)
Net current period other comprehensive income (loss)
 
$
9.8

 
$
0.1

 
$
(61.0
)
 
$
(51.1
)
Balance as of September 30, 2018
 
$
16.5

 
$
(1.1
)
 
$
(345.0
)
 
$
(329.6
)

 
(1)
Adjusted due to the adoption of ASU 2018-02 “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” on January 1, 2019. Refer to “Note 2: Significant accounting policies” for more information.
(2)
Adjusted due to the adoption of ASU 2017-12 “Targeted Improvements to Accounting for Hedging Activities” on January 1, 2018.

The following is a summary of the amounts reclassified from accumulated other comprehensive loss to net income (loss):
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
(in millions)
 
2019 (1)
 
2018 (1)
 
2019 (1)
 
2018 (1)
 
Location of impact on
  statement of operations  
Amortization of defined benefit pension items:
 
 
 
 
 
 
 
 
 
 
Prior service cost
 
$

 
$

 
$
0.1

 
$
0.1

 
Other (expense) income, net
Tax expense
 

 

 

 

 
Income tax expense
Net of tax
 
$

 
$

 
$
0.1

 
$
0.1

 
 
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
 
$
(1.2
)
 
$
(2.4
)
 
$
(8.7
)
 
$
(5.4
)
 
Interest expense
Tax expense
 
0.3

 
0.6

 
2.2

 
1.4

 
Income tax expense
Net of tax
 
$
(0.9
)
 
$
(1.8
)
 
$
(6.5
)
 
$
(4.0
)
 
 
Total reclassifications for the period
 
$
(0.9
)
 
$
(1.8
)
 
$
(6.4
)
 
$
(3.9
)
 
 
 
(1)
Amounts in parentheses indicate credits to net income (loss) in the condensed consolidated statement of operations.
v3.19.3
Debt
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Debt
13. Debt
Short-term financing
Short-term financing consisted of the following:
(in millions)
 
September 30, 2019
 
December 31, 2018
Amounts drawn under credit facilities
 
$
2.1

 
$
4.7

Bank overdrafts
 
0.8

 
3.4

Total short-term financing
 
$
2.9

 
$
8.1


As of September 30, 2019 and December 31, 2018, the Company had $140.2 million and $139.4 million in outstanding letters of credit, respectively.
Long-term debt
Long-term debt consisted of the following:
(in millions)
 
September 30, 2019
 
December 31, 2018
Senior Term Loan Facilities:




Term B Loan due 2024, variable interest rate of 4.29% and 4.77% at September 30, 2019 and December 31, 2018, respectively

$
1,438.0


$
1,747.8

Euro Term B-2 Loan due 2024, variable interest rate of 2.75% at September 30, 2019
 
381.7

 

Term B-4 Loan due 2024, variable interest rate of 4.54% at September 30, 2019
 
245.0

 

Asset Backed Loan (ABL) Facilities:




North American ABL Facility due 2024, variable interest rate of 3.74% at September 30, 2019

284.3



Canadian ABL Term Loan due 2022, variable interest rate of 4.20% at September 30, 2019
 
173.7

 

Euro ABL Facility due 2023, variable interest rate of 1.75% at September 30, 2019 and December 31, 2018
 
38.1

 
58.5

North American ABL Facility due 2020, variable interest rate of 4.19% at December 31, 2018 (amended February 2019)
 

 
134.7

Senior Unsecured Notes: