UNIVAR SOLUTIONS INC., 10-K/A filed on 5/7/2020
Amended Annual Report
v3.20.1
Cover - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Feb. 12, 2020
Jun. 30, 2019
Cover [Abstract]      
Document Type 10-K/A    
Document Annual Report true    
Document Period End Date Dec. 31, 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 Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
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 Public Float     $ 3,400
Entity Common Stock, Shares Outstanding   168,848,248  
Amendment Flag true    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Entity Central Index Key 0001494319    
Current Fiscal Year End Date --12-31    
Amendment Description Univar Solutions Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to its Annual Report on Form 10-K for the year ended December 31, 2019, originally filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2020 (the “Form 10-K”), for the sole purpose of including language from the introductory portion of paragraph 4 of the Section 302 certifications regarding the Company’s internal control over financial reporting, as reflected in the updated certifications included as Exhibits 31.1 and 31.2 with this Amendment.Other than as expressly set forth above, no changes have been made in this Amendment to amend, modify or restate any other information or disclosures presented in the Form 10-K. This Amendment does not reflect events occurring after the original filing of the Form 10-K. As a result, the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 continues to speak as of February 25, 2020. The Amendment should be read in conjunction with the Company's Form 10-K and other Company filings made with the SEC.    
v3.20.1
Consolidated Statements of Operations - USD ($)
shares in Millions, $ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Net sales $ 9,286.9 $ 8,632.5 $ 8,253.7
Operating expenses:      
Warehousing, selling and administrative 1,068.8 931.4 919.7
Other operating expenses, net 298.2 73.5 55.4
Depreciation 155.0 125.2 135.0
Amortization 59.7 54.3 65.4
Impairment charges 7.0 0.0 0.0
Total operating expenses 1,953.5 1,512.7 1,467.5
Operating income 187.3 387.4 338.0
Other (expense) income:      
Interest income 7.7 3.2 4.0
Interest expense (147.2) (135.6) (152.0)
Gain on sale of business 41.4 0.0 0.0
Loss on extinguishment of debt (19.8) (0.1) (3.8)
Loss on extinguishment of debt (13.1) (0.1) (3.8)
Other expense, net (70.5) (32.7) (17.4)
Total other expense (188.4) (165.2) (169.2)
(Loss) income before income taxes (1.1) 222.2 168.8
Income tax expense from continuing operations 104.5 49.9 49.0
Net (loss) income from continuing operations (105.6) 172.3 119.8
Net income from discontinued operations 5.4 0.0 0.0
Net (loss) income $ (100.2) $ 172.3 $ 119.8
Earnings Per Share, Basic [Abstract]      
Basic from continuing operations (usd per share) $ (0.64) $ 1.22 $ 0.85
Basic from discontinued operations (usd per share) 0.03 0 0
Basic (loss) income per common share (0.61) 1.22 0.85
Earnings Per Share, Diluted [Abstract]      
Diluted (loss) income per common share from continuing operations (usd per share) (0.64) 1.21 0.85
Diluted income per common share from discontinued operations (usd per share) 0.03 0 0
Diluted (loss) income per common share (usd per share) $ (0.61) $ 1.21 $ 0.85
Weighted average common shares outstanding:      
Basic (in shares) 164.1 141.2 140.2
Diluted (in shares) 164.1 142.2 141.4
Product      
Cost of goods sold (exclusive of depreciation) $ 7,146.1 $ 6,732.4 $ 6,448.2
Outbound freight and handling      
Cost of goods sold (exclusive of depreciation) $ 364.8 $ 328.3 $ 292.0
v3.20.1
Consolidated Statements of Comprehensive (Loss) Income - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Net (loss) income $ (100.2) $ 172.3 $ 119.8
Other comprehensive (loss) income, net of tax:      
Foreign currency translation 22.8 (97.0) 107.1
Pension and other postretirement benefits adjustment 0.1 0.1 (2.4)
Derivative financial instruments (25.8) 1.7 6.7
Total other comprehensive (loss) income, net of tax (6.1) (94.7) 111.4
Comprehensive (loss) income (106.3) 77.6 231.2
Accounting Standards Update 2018-02      
Other comprehensive (loss) income, net of tax:      
Impact due to adoption of ASU (3.2) 0.0 0.0
Accounting Standards Update 2017-12      
Other comprehensive (loss) income, net of tax:      
Impact due to adoption of ASU [1] $ 0.0 $ 0.5 $ 0.0
[1] Impact due to the adoption of Accounting Standards Update (“ASU”) 2017-12 “Targeted Improvements to Accounting for Hedging Activities” on January 1, 2018.
v3.20.1
Consolidated Balance Sheets - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 330.3 $ 121.6
Trade accounts receivable, net 1,160.1 1,094.7
Inventories 796.0 803.3
Prepaid expenses and other current assets 167.2 169.1
Total current assets 2,453.6 2,188.7
Property, plant and equipment, net 1,152.4 955.8
Goodwill 2,280.8 1,780.7
Intangible assets, net 320.2 238.1
Deferred tax assets 21.3 24.8
Other assets [1] 266.5 84.3
Total assets 6,494.8 5,272.4
Current liabilities:    
Short-term financing 0.7 8.1
Trade accounts payable 895.0 925.4
Current portion of long-term debt 25.0 21.7
Accrued compensation 103.6 93.6
Other accrued expenses [1] 425.1 285.8
Total current liabilities 1,449.4 1,334.6
Long-term debt 2,688.8 2,350.4
Pension and other postretirement benefit liabilities 295.6 254.4
Deferred tax liabilities 56.3 42.9
Other long-term liabilities [1] 271.9 98.4
Total liabilities 4,762.0 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 December 31, 2019 and 2018, respectively 0.0 0.0
Common stock, 2.0 billion shares authorized at $0.01 par value with 168.7 million and 141.7 million shares issued and outstanding at December 31, 2019 and 2018, respectively 1.7 1.4
Additional paid-in capital 2,968.9 2,325.0
Accumulated deficit (858.5) (761.5)
Accumulated other comprehensive loss (379.3) (373.2)
Total stockholders’ equity 1,732.8 1,191.7
Total liabilities and stockholders’ equity $ 6,494.8 $ 5,272.4
Preferred stock, shares authorized (in shares) 200,000,000.0 200,000,000.0
Preferred stock, par value (usd 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) 2,000,000,000.0 2,000,000,000.0
Common stock, par value (usd per share) $ 0.01 $ 0.01
Common stock, shares issued (in shares) 168,700,000 141,700,000
Common stock, shares outstanding (in shares) 168,700,000 141,700,000
[1] Operating lease assets and operating lease liabilities are included in other assets, other accrued expenses and other long-term liabilities in 2019. Refer to “Note 22: Leasing” for more information.
v3.20.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Preferred stock, shares authorized (in shares) 200,000,000.0 200,000,000.0
Preferred stock, par value (usd 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) 2,000,000,000.0 2,000,000,000.0
Common stock, par value (usd per share) $ 0.01 $ 0.01
Common stock, shares issued (in shares) 168,700,000 141,700,000
Common stock, shares outstanding (in shares) 168,700,000 141,700,000
v3.20.1
Consolidated Statements of Cash Flows - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating activities:      
Net (loss) income $ (100.2) $ 172.3 $ 119.8
Adjustments to reconcile net (loss) income to net cash provided by operating activities:      
Depreciation and amortization 214.7 179.5 200.4
Impairment charges 7.0 0.0 0.0
Amortization of deferred financing fees and debt discount 8.9 7.6 7.9
Amortization of pension cost (credits) from accumulated other comprehensive loss 0.1 2.7 (0.2)
Gain on sale of business (41.4) 0.0 0.0
Loss on extinguishment of debt 13.1 0.1 3.8
(Gain) loss on sale of property, plant and equipment and other assets (9.9) 2.0 (11.3)
Deferred income taxes 24.3 2.8 11.7
Stock-based compensation expense 25.1 20.7 19.7
Charge for inventory step-up of acquired inventory 5.3 0.0 0.0
Other 3.0 0.7 (0.7)
Changes in operating assets and liabilities:      
Trade accounts receivable, net 197.0 (62.1) (58.5)
Inventories 69.0 14.4 (47.7)
Prepaid expenses and other current assets 54.3 (19.3) (8.7)
Trade accounts payable (70.9) 9.3 53.6
Pensions and other postretirement benefit liabilities 21.9 (15.4) (51.8)
Other, net (57.4) (25.4) 44.6
Net cash provided by operating activities 363.9 289.9 282.6
Investing activities:      
Purchases of property, plant and equipment (122.5) (94.6) (82.7)
Proceeds from sale of property, plant and equipment and other assets 54.8 14.5 29.2
Purchases of businesses, net of cash acquired (1,201.0) (18.6) (24.4)
Proceeds from sale of business 838.3 0.0 0.0
Other (2.7) (0.3) (1.2)
Net cash used by investing activities (433.1) (99.0) (79.1)
Financing activities:      
Proceeds from the issuance of long-term debt 1,845.8 0.0 4,477.8
Payments on long-term debt and finance lease obligations (1,545.9) (561.9) (4,588.7)
Net proceeds under revolving credit facilities 7.2 41.7 3.0
Short-term financing, net (9.2) 0.5 (22.2)
Financing fees paid (7.9) (1.1) (7.7)
Taxes paid related to net share settlements of stock-based compensation awards (2.8) (4.1) (8.5)
Stock option exercises 6.6 5.9 36.5
Contingent consideration payments 0.0 (0.4) (3.7)
Other 1.4 1.1 1.1
Net cash provided (used) by financing activities 295.2 (518.3) (112.4)
Effect of exchange rate changes on cash and cash equivalents (17.3) (18.0) 39.5
Net increase (decrease) in cash and cash equivalents 208.7 (345.4) 130.6
Cash and cash equivalents at beginning of period 121.6 467.0 336.4
Cash and cash equivalents at end of period 330.3 121.6 467.0
Cash paid during the period for:      
Income taxes 42.5 65.0 29.9
Interest, net of capitalized interest 146.1 128.2 140.2
Non-cash activities:      
Stock Issued During Period, Value, Net, Acquisitions Net of Shares Cancelled 613.8 0.0 0.0
Additions of property, plant and equipment included in trade accounts payable and other accrued expenses 9.8 14.6 7.4
Additions of property, plant and equipment under a finance lease obligation 23.3 23.6 19.9
Additions of assets under an operating lease obligation $ 25.5 $ 0.0 $ 0.0
v3.20.1
Consolidated Statements of Changes in Stockholders' Equity - USD ($)
$ in Millions
Total
Common stock
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income (loss)
Beginning balance, shares (in shares) at Dec. 31, 2016   138,800,000      
Beginning balance at Dec. 31, 2016 $ 809.9 $ 1.4 $ 2,251.8 $ (1,053.4) $ (389.9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net (loss) income 119.8     119.8  
Foreign currency translation adjustment, net of tax 107.1       107.1
Pension and other postretirement benefits adjustment, net of tax (2.4)       (2.4)
Derivative financial instruments, net of tax 6.7       6.7
Restricted stock units vested (in shares)   800,000      
Restricted stock units vested 0.0        
Tax withholding related to net share settlements of stock-based compensation awards (in shares)   (300,000)      
Tax withholdings related to net share settlements of stock-based compensation awards (8.5)   (8.5)    
Stock option exercises (in shares)   1,800,000      
Stock option exercises 36.5   36.5    
Employee stock purchase plan 1.1   1.1    
Stock-based compensation 19.7   19.7    
Ending balance, shares (in shares) at Dec. 31, 2017   141,100,000      
Ending balance at Dec. 31, 2017 1,090.1 $ 1.4 2,301.3 (934.1) (278.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax (2.1)        
Pension and other postretirement benefits adjustment, net of tax 0.6        
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax 7.0        
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax (4.3)        
Net (loss) income 172.3     172.3  
Foreign currency translation adjustment, net of tax (97.0)       (97.0)
Pension and other postretirement benefits adjustment, net of tax 0.1       0.1
Derivative financial instruments, net of tax 1.7       1.7
Restricted stock units vested (in shares)   400,000      
Restricted stock units vested 0.0        
Tax withholding related to net share settlements of stock-based compensation awards (in shares)   (100,000)      
Tax withholdings related to net share settlements of stock-based compensation awards (4.1)   (4.1)    
Stock option exercises (in shares)   300,000      
Stock option exercises 5.9   5.9    
Employee stock purchase plan 1.1   1.1    
Stock-based compensation     20.7    
Other $ 0.1   0.1    
Ending balance, shares (in shares) at Dec. 31, 2018 141,700,000 141,700,000      
Ending balance at Dec. 31, 2018 $ 1,191.7 $ 1.4 2,325.0 (761.5) (373.2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax 2.4        
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | Accounting Standards Update 2014-09 4.9        
Pension and other postretirement benefits adjustment, net of tax (0.1)        
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax (0.4)        
Net (loss) income (100.2)     (100.2)  
Foreign currency translation adjustment, net of tax 22.8       22.8
Pension and other postretirement benefits adjustment, net of tax 0.1       0.1
Derivative financial instruments, net of tax (25.8)       (25.8)
Common stock issued for the Nexeo acquisition (in shares) [1]   27,900,000      
Common stock issued for the Nexeo acquisition [1] 649.3 $ 0.3 649.0    
Shares canceled (in shares)   (1,500,000)      
Shares canceled (35.5)   (35.5)    
Restricted stock units vested (in shares)   400,000      
Restricted stock units vested 0.0        
Tax withholding related to net share settlements of stock-based compensation awards (in shares)   (200,000)      
Tax withholdings related to net share settlements of stock-based compensation awards $ (2.8)   (2.8)    
Stock option exercises (in shares) 349,845 300,000      
Stock option exercises $ 6.6   6.6    
Employee stock purchase plan (in shares)   100,000      
Employee stock purchase plan 1.4   1.4    
Stock-based compensation 25.1   25.1    
Other $ 0.1   0.1    
Ending balance, shares (in shares) at Dec. 31, 2019 168,700,000 168,700,000      
Ending balance at Dec. 31, 2019 $ 1,732.8 $ 1.7 $ 2,968.9 $ (858.5) $ (379.3)
[1] Refer to “Note 3: Business combinations” for more information.
v3.20.1
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2019
Statement of Stockholders' Equity [Abstract]      
Foreign currency translation adjustments tax $ (2.4) $ 2.1  
Common stock, par value (usd per share) $ 0.01   $ 0.01
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Pension and other postretirement benefits adjustment, net of tax $ (0.1) 0.6  
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax 2.4 (2.1)  
Pension and other postretirement benefits adjustment, net of tax $ (0.1) $ 0.6  
v3.20.1
Nature of operations
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of operations
1. Nature of operations
Headquartered in Downers Grove, Illinois, Univar Solutions Inc. (“Company” or “Univar Solutions”) is a leading global chemical and ingredients distributor and provider of specialty services. The Company’s operations are structured into four reportable 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.
v3.20.1
Significant accounting policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Significant accounting policies
2. Significant accounting policies
Basis of consolidation and presentation
The consolidated financial statements include the financial statements of the Company and its majority-owned subsidiaries. Subsidiaries are consolidated if the Company has a controlling financial interest, which may exist based on ownership of a majority of the voting interest, or based on the Company’s determination that it is the primary beneficiary of a variable interest entity (“VIE”). The Company does not have any material interests in VIEs. All intercompany balances and transactions are eliminated in consolidation. Unless otherwise indicated, all financial data presented in these consolidated financial statements are expressed in US dollars.
On our consolidated statements of cash flows for 2018 and 2017, the amounts included in “net proceeds under revolving credit facilities,” which were previously included in “proceeds from the issuance of long-term debt,” are now presented separately to conform to the current year presentation.
Use of estimates
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions affecting the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ materially from these estimates.
Recently issued and adopted accounting pronouncements
On January 1, 2019, the Company adopted ASU 2016-02 “Leases” (Topic 842), which supersedes the lease recognition requirements in ASC Topic 840, “Leases,” using the modified retrospective method by applying the new guidance to all leases existing at the date of initial application and not restating comparative periods. 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 recognized the cumulative effect of initially applying the new
lease standard as an adjustment to the 2019 opening balance sheet and also includes adjustments related to previously unrecognized finance leases as follows:
(in millions)Balance at December 31, 2018Adjustments due to ASU 2016-02Balance at January 1, 2019
Assets
Property, plant and equipment, net$955.8  $5.4  $961.2  
Other assets84.3  166.8  251.1  
Liabilities
Current portion of long-term debt$21.7  $(4.5) $17.2  
Other accrued expenses285.8  43.8  329.6  
Long-term debt2,350.4  9.9  2,360.3  
Other long-term liabilities98.4  123.0  221.4  
On January 1, 2019, the Company adopted ASU 2018-02 “Income Statement - Reporting Comprehensive Income” (Topic 220) “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“AOCI”) which enabled the Company to reclassify from AOCI to retained earnings, certain stranded tax effects, resulting from the Tax Cuts and Jobs Act. Upon adoption, we reclassified $3.2 million of the stranded tax effects from AOCI to accumulated deficit.
Accounting pronouncements issued but not yet adopted
In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses” (Topic 326) which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. The Company will adopt this guidance effective January 1, 2020 and is finalizing the impacts which are not expected to be material.
In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement” (Topic 820) which modifies the requirements related to fair value disclosures. The Company will adopt this guidance effective January 1, 2020 and is finalizing the impacts that will be reflected in the financial statement disclosures, which are not expected to be material.
In August 2018, the FASB issued ASU 2018-14 “Compensation - Retirement Benefits - Defined Benefit Plans - General” (Subtopic 715-20) which amends the disclosure requirements related to defined benefit pension and other postretirement plan. The Company will adopt this guidance effective January 1, 2021 and is currently determining the impacts that will be reflected in financial statement disclosures.
In August 2018, the FASB issued ASU 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” which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company will adopt this guidance effective January 1, 2020 and is finalizing the impacts which are not expected to be material.
In December 2019, the FASB issued ASU 2019-12 “Income Taxes” (Topic 740) – “Simplifying the Accounting for Income Taxes” which simplifies the accounting for income taxes. The Company will adopt this guidance effective January 1, 2021 and is currently determining the impacts of the guidance on our consolidated financial statements.
Cash and cash equivalents
Cash and cash equivalents include highly-liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash.
Trade accounts receivable, net
Trade accounts receivable are stated at the invoiced amount, net of an allowance for doubtful accounts of $12.9 million and $11.2 million at December 31, 2019 and 2018, respectively. The allowance for doubtful accounts is estimated based on an individual assessment of collectability based on factors that include current ability to pay, bankruptcy and payment history, as well as a general reserve related to prior experience.
Inventories
Inventories consist primarily of products purchased for resale and are stated at the lower of cost or net realizable value. Inventory cost is determined based on the weighted average cost method and includes purchase price from producers net of rebates received, inbound freight and handling, and direct labor and other costs incurred to blend and repackage product, but excludes depreciation expense.
Property, plant and equipment, net
Property, plant and equipment are carried at historical cost, net of accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful life of each asset as follows:
Buildings
10-50 years
Main components of tank farms
5-40 years
Containers
2-15 years
Machinery and equipment
5-20 years
Furniture, fixtures and others
5-20 years
Information technology
3-10 years
The Company evaluates the useful life and carrying value of property, plant and equipment for impairment if an event occurs or circumstances change that would indicate the carrying value may not be recoverable. If the carrying amount of the asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent that the asset group's carrying amount exceeds its estimated fair value.
Goodwill and intangible assets
Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in business combinations. Goodwill is tested for impairment annually on October 1, or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s reporting units are USA, Canada, EMEA, Latin America and Asia-Pacific.
For each of the reporting units, the Company has the option to perform either the qualitative or the quantitative test. In the event a reporting unit fails the qualitative assessment, it is required to perform the quantitative test. If the fair value of the reporting unit is less than its carrying value, the reporting unit will recognize an impairment for the lesser of either the amount by which the reporting unit's carrying amount exceeds the fair value of the reporting unit or the reporting unit’s goodwill carrying value.
Intangible assets have finite lives and are amortized over their respective useful lives of 2 to 20 years. Intangible assets are tested for impairment if an event occurs or circumstances change that indicates the carrying value may not be recoverable.
Short-term financing
Short-term financing includes bank overdrafts and short-term lines of credit.
Income taxes
Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Deferred tax assets are also recognized for the estimated future effects of tax loss carryforwards. The effect on deferred taxes of changes in tax rates is recognized in the period in which the revised tax rate is enacted.
The Company records valuation allowances to reduce deferred tax assets to the extent it believes it is more likely than not that such assets will not be realized. In making such determinations, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, forecasted and appropriate character of future taxable income, tax planning strategies, our experience with operating loss and tax credit carryforwards not expiring unused, tax planning strategies and the ability to carry back losses to prior years.
The Company is subject to the global intangible low tax income (“GILTI”), which is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company treats taxes due on future US inclusions in taxable income related to GILTI as a current-period expense when incurred.
The Company recognizes interest and penalties related to unrecognized tax benefits within interest expense and warehousing, selling and administrative, respectively, in the accompanying consolidated statements of operations. Accrued interest and penalties are included in other accrued expenses and other long-term liabilities in the consolidated balance sheets.
Defined benefit plans
The Company sponsors several defined benefit plans and recognizes actuarial gains or losses, known as “mark to market” adjustments, at the measurement date, December 31. The mark to market adjustments primarily include gains and losses resulting from changes in discount rates and the difference between the expected and actual rate of return on plan assets. Settlement gains and losses are recognized in the period in which the settlement occurs.
The fair value of plan assets is used to calculate the expected return on assets component of the net periodic benefit cost.
Leases
At the commencement date of a lease, the Company recognizes a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The lease liability is measured at the present value of lease payments over the lease term, including variable fees that are known or subject to a minimum floor. The lease liability includes lease component fees, while non-lease component fees are expensed as incurred for all asset classes. When a contract excludes an implicit rate, the Company utilizes an incremental borrowing rate based on information available at the lease commencement date including, lease term and geographic region. The initial valuation of the right-of-use (“ROU”) asset includes the initial measurement of the lease liability, lease payments made in advance of the lease commencement date and initial direct costs incurred by the Company and excludes lease incentives.
Leases with an initial term of 12 months or less are classified as short-term leases and are not recorded on the consolidated balance sheets. The lease expense for short-term leases is recognized on a straight-line basis over the lease term.
Legal costs
We expense legal costs as incurred.
Environmental liabilities
Environmental liabilities are recognized for probable and reasonably estimable losses associated with environmental remediation. Incremental direct costs of the investigation, remediation effort and post-remediation monitoring are included in the estimated environmental liabilities. Expected cash outflows related to environmental remediation for the next 12 months and amounts for which the timing is uncertain are reported as current within other accrued expenses in the consolidated balance sheets. The long-term portion of environmental liabilities is reported within other long-term liabilities in the consolidated balance sheets on an undiscounted basis, except for sites for which the amount and timing of future cash payments are fixed or reliably determinable. Environmental remediation expenses are included within warehousing, selling and administrative expenses in the consolidated statements of operations, unless associated with disposed operations, in which case such expenses are included in other operating expenses, net.
Revenue recognition
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring a good or providing a service. Since the term between invoicing and payment is less than a year, the Company has not recognized a significant financing component. Revenue for bill-and-hold arrangements is recognized if the Company has a substantive customer request, the materials are properly segregated and designated as belonging to the customer, materials are ready to be transferred to the customer and the Company is unable to direct the materials to service another customer.
Chemical Distribution
Revenue is recognized when performance obligations under the terms of the contract are satisfied, which generally occurs when goods are transferred to a customer under the terms of the sale. Net sales include product sales and billings for freight and handling charges, net of discounts, expected returns, customer price and volume incentives, and sales or other revenue-based taxes. The Company estimates price and volume incentives, which are expected to be provided to customers, and expected returns based on historical experience.
Crop Sciences
The Company generates revenue when control for products is transferred to customers. The amount of consideration recorded varies due to price movements and rights granted to customers to return product. Customer payment terms often extend through a growing season, which may be up to six months.
Transaction prices may move during an agricultural growing season and are affected by special offers or volume discounts, which affect the amount of consideration the Company will receive. Customers also may be provided rights to return eligible products. The Company estimates the expected returns and changes in the transaction price based on the combination of historical experience and the impact of weather on the current agriculture season. The adjustments to the transaction price and estimate of returns impacts revenues recognized.
Services
The Company generates revenue from services as they are performed and economic value is transferred to customers. Services provided to customers are primarily related to waste management services and warehousing services.
Foreign currency translation
Assets and liabilities of foreign subsidiaries are translated into US dollars at period-end exchange rates. Income and expense accounts of foreign subsidiaries are translated into US dollars at the average exchange rates for the period. The net exchange gains and losses arising on this translation are reflected as a component of currency translation within AOCI.
Transaction gains and losses are recognized in other expense, net in the consolidated statements of operations. Transaction gains and losses relating to intercompany borrowings that are an investment in a foreign subsidiary are reflected as a component of currency translation within AOCI in stockholders’ equity.
Stock-based compensation plans
The Company measures the total amount of employee stock-based compensation expense based on the grant date fair value of each award. Expense is recognized for each separately vesting tranche on a straight-line basis over the requisite service period, which is the shorter of the service period of the award or the period until the employees' retirement eligibility date. The Company recognizes forfeitures when incurred.
Fair value
Certain assets and liabilities are required to be recorded at fair value. The estimated fair values of those assets and liabilities have been determined using market information and valuation methodologies. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. There are three levels of inputs that may be used to measure fair value:
Level 1
Quoted prices for identical instruments in active markets.
Level 2
Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuation in which all significant inputs and significant value drivers are observable in active markets.
Level 3
Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Derivatives
The Company uses derivative financial instruments to manage risks associated with foreign currency and interest rate fluctuations. We do not use derivative instruments for speculative trading purposes. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. The fair value of interest rate swaps is determined by estimating the net present value of amounts to be paid under the agreement offset by the net present value of the expected cash inflows based on market rates and associated yield curves. For derivative contracts with the same counterparty where the Company has a master netting arrangement with the counterparty, the fair value of the asset/liability is presented on a net basis within the consolidated balance sheets. Changes in the fair value of derivative financial instruments are recognized in the consolidated statements of operations within interest expense or other expense, net, unless specific hedge accounting criteria are met. Cash flows associated with derivative financial instruments are recognized in the operating section of the consolidated statements of cash flows.
For derivatives designated as cash flow hedges, changes in the fair value of the derivative are recorded to AOCI and are reclassified to earnings when the underlying forecasted transaction affects earnings. For contracts designated as cash flow hedges, we reassess the probability of the underlying forecasted transactions occurring on a quarterly basis. For derivatives not designated as hedging instruments, all changes in fair value are recorded to earnings in the current period.
Earnings per share
Basic earnings per share is based on the weighted average number of common shares outstanding during each period. Diluted earnings per share is based on the weighted average number of common shares and dilutive common share equivalents outstanding during each period. The Company reflects common share equivalents relating to stock options, non-vested restricted stock and non-vested restricted stock units in its computation of diluted weighted average shares outstanding, unless the effect of inclusion is anti-dilutive. The effect of dilutive securities is calculated using the treasury stock method.
We consider restricted stock awards to be participating securities, since holders of such shares have non-forfeitable dividend rights in the event the Company declares a common stock dividend.
v3.20.1
Business combinations
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Business combinations
3. Business combinations
Year ended December 31, 2019
Acquisition of Nexeo Solutions
On February 28, 2019, the Company completed an acquisition of 100% of the equity interest of Nexeo Solutions, Inc., 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 21: 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 issuance of Term B Loans, borrowings under the New Senior ABL Facility and the ABL Term Loan issued on February 28, 2019. Refer to “Note 18: Debt” for more information.
As of December 31, 2019, the Company updated the purchase price allocation to reflect fair value adjustments from the third-party valuation firm’s report valuing Nexeo’s tangible and intangible assets, working capital adjustments associated with the sale of the Nexeo plastics distribution business (“Nexeo Plastics”) as well as tax adjustments. 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. The preliminary values and measurement period adjustments are shown below:
(in millions)At Acquisition DateMeasurement Period AdjustmentsAs Adjusted
Trade accounts receivable, net$286.9  $9.4  $296.3  
Inventories149.0  1.2  150.2  
Prepaid expenses and other current assets27.2  38.2  65.4  
Assets held for sale1,030.9  (142.7) 888.2  
Property, plant and equipment, net227.4  34.9  262.3  
Goodwill682.2  (126.5) 555.7  
Intangible assets, net173.9  (35.2) 138.7  
Other assets37.0  0.4  37.4  
Trade accounts payable(133.7) (4.0) (137.7) 
Other accrued expenses(94.9) (50.9) (145.8) 
Liabilities held for sale(390.9) 169.4  (221.5) 
Deferred tax liabilities(102.3) 98.1  (4.2) 
Other long-term liabilities(77.9) 7.7  (70.2) 
Purchase consideration, net of cash$1,814.8  $—  $1,814.8  
Assets and liabilities held for sale are related to the Nexeo plastics distribution business. Nexeo Plastics was not aligned with the Company’s strategic objectives and on March 29, 2019, the business was sold for total proceeds of $664.3 million, net of cash disposed. Refer to “Note 4: Discontinued operations and dispositions” for further information.
The Company recorded $555.7 million of goodwill, consisting of $540.1 million in the USA segment, $3.8 million in Canada and $11.8 million in LATAM. The goodwill is primarily attributable to expected synergies from combining operations. The Company expects approximately $108.3 million of goodwill to be deductible for income tax purposes.
The identified intangible assets were related to customer relationships which have a weighted-average amortization period of ten years.
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 and will expire on June 9, 2021. The warrants as other long-term liabilities within the consolidated balance sheets. Refer to “Note 19: Fair value measurements” for more information.
The amounts of net sales and net income from continuing operations related to the Nexeo chemical distribution business, included in the Company’s consolidated statements of operations from March 1, 2019 to December 31, 2019 are as follows:
(in millions)
Net sales$1,489.3  
Net loss from continuing operations(12.1) 
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 and exclude the results of operations related to Nexeo Plastics, as this divestiture was reflected as discontinued operations. Refer to “Note 4: Discontinued operations and dispositions” for additional information.
Three months ended December 31,Year ended December 31,
(in millions)2019201820192018
Net sales$2,155.0  $2,437.4  $9,612.9  $10,685.5  
Net (loss) income from continuing operations(54.8) (72.9) (94.3) 154.8  
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 and 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.
Year ended December 31, 2018
In the year ended December 31, 2018, the Company completed two acquisitions. On January 4, 2018, the Company completed a $7.5 million acquisition of Kemetyl Norge Industri AS (“Kemetyl”) as well as a definitive asset purchase agreement with Kemetyl Aktiebolag, leading distributors of chemical products in the Nordic region which provide bulk and specialty chemicals. On May 31, 2018, the Company completed a $13.3 million acquisition of Earthoil Plantations Limited (“Earthoil”), a supplier of pure, organic, fair trade essential and cold-pressed vegetable seed oils. The accounting for both acquisitions was completed in 2019.
v3.20.1
Discontinued operations and dispositions
12 Months Ended
Dec. 31, 2019
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued operations and dispositions
4. Discontinued operations and dispositions
Discontinued operations
On March 29, 2019, the Company completed the sale of the Nexeo Plastics to an affiliate of One Rock Capital Partners, LLC (“Buyer”) for total proceeds of $664.3 million (net of cash disposed of $2.4 million), including $26.7 million for a working capital adjustment. 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 the Buyer which are designed to ensure and facilitate an orderly transfer of business operations and 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 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 year ended December 31, 2019, as presented in “Net income from discontinued operations” on the consolidated statements of operations.
(in millions)Year Ended December 31, 2019
External sales$156.9  
Cost of goods sold (exclusive of depreciation)136.7  
Outbound freight and handling3.5  
Warehousing, selling and administrative7.9  
Other expenses1.4  
Income from discontinued operations before income taxes$7.4  
Income tax expense from discontinued operations2.0  
Net income from discontinued operations$5.4  

There were no significant non-cash operating activities from the Company’s discontinued operations related to the plastics distribution business.
Dispositions
On December 31, 2019, the Company completed the sale of the Environmental Sciences business to AEA Investors LP for total cash proceeds of $174.0 million (net of cash disposed of $0.7 million and $5.9 million of transaction expenses) plus a $5.0 million ($2.4 million present value) subordinated note receivable (the “Transaction”) and subject to a working capital adjustment. The Company recorded a $41.4 million gain on sale of this business in the consolidated statements of operations and was included in the USA and Canada segments. The sale of the business did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements because the disposition did not represent a strategic shift, that has, or will have, a major effect on the Company's operations and financial results.
The following summarizes the income before income taxes attributable to the Environmental Sciences business:
Year ended December 31,
(in millions)201920182017
Income before income taxes$28.6  $28.2  $28.7  
v3.20.1
Revenue Revenue
12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Revenue
5. Revenue
The Company disaggregates revenues 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 since the contractual terms necessary for revenue recognition are unique to each of the identified revenue contract types.
(in millions)USACanadaEMEALATAMConsolidated
Year Ended December 31, 2019
Chemical Distribution$5,507.2  $852.8  $1,784.2  $443.7  $8,587.9  
Crop Sciences—  318.0  —  —  318.0  
Services321.3  47.0  1.3  11.4  381.0  
Total external customer net sales$5,828.5  $1,217.8  $1,785.5  $455.1  $9,286.9  

(in millions)USACanadaEMEALATAMConsolidated
Year Ended December 31, 2018
Chemical Distribution$4,775.2  $877.6  $1,974.4  $383.8  $8,011.0  
Crop Sciences—  381.6  —  —  381.6  
Services185.8  43.1  1.3  9.7  239.9  
Total external customer net sales$4,961.0  $1,302.3  $1,975.7  $393.5  $8,632.5  
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 December 31, 2019
65.5  
Revenue recognized that was included in the deferred revenue balance at the beginning of the period44.5  
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 consolidated balance sheet.
v3.20.1
Other operating expenses, net
12 Months Ended
Dec. 31, 2019
Other Income and Expenses [Abstract]  
Other operating expenses, net
6. Other operating expenses, net
Other operating expenses, net consisted of the following items:
 Year ended December 31,
(in millions)201920182017
Acquisition and integration related expenses$152.1  $22.0  $3.1  
Stock-based compensation expense25.1  20.7  19.7  
Restructuring charges2.6  4.8  5.5  
Other employee severance costs31.2  16.4  8.1  
Other facility closure costs (1)
7.1  —  —  
(Gain) loss on sale of property, plant and equipment and other assets(9.9) 2.0  (11.3) 
Saccharin legal settlement62.5  —  —  
Business transformation costs—  —  23.4  
Other27.5  7.6  6.9  
Total other operating expenses, net$298.2  $73.5  $55.4  
(1)Other facility closure costs includes $3.6 million recorded as an estimated withdrawal liability associated with a multi-employer pension plan related to an announced facility closure.
v3.20.1
Restructuring charges
12 Months Ended
Dec. 31, 2018
Restructuring and Related Activities [Abstract]  
Restructuring charges
7. Restructuring charges
Restructuring charges relate to the implementation of several regional strategic initiatives aimed at streamlining the Company’s cost structure and improving its operations. These actions primarily resulted in workforce reductions, lease termination costs and other facility rationalization costs. Restructuring charges are recorded in other operating expenses, net in the consolidated statement of operations.
2018 Restructuring
During 2018, management approved a plan to consolidate departments resulting in restructuring charges of $3.2 million in USA, consisting of $3.1 million in severance costs and $0.1 million in other costs and in Other, the Company recorded $0.9 million, relating to severance costs. In 2019, under the same program the Company recorded restructuring charges of $2.4 million in USA and $0.3 million in Other consisting of severance costs. The Company expects to incur approximately $0.4 million of additional severance 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 year ended December 31, 2019 and reduced its estimate by $0.2 million within employee termination costs for this program. The actions associated with this program are complete as of December 31, 2019.
In 2018, the Company recorded restructuring charges of $0.7 million for the LATAM segment, consisting of $0.4 million in employee termination costs, $0.2 million in facility exit costs and $0.1 million in other exit costs. The actions associated with this program were completed as of December 31, 2018.
2014 to 2017 Restructuring
Between 2014 through 2017, management implemented several regional strategic initiatives aimed at streamlining the Company’s cost structure and improving its operations. During the year ended December 31, 2018, the Company reduced its estimate in the amount of $0.9 million within facility exit costs relating to a favorable lease buyout for USA. The actions associated with the restructuring programs were completed as of June 30, 2018, although cash payments will be made into the future.
The following table summarizes the cumulative activities recorded through December 31, 2018 related to the Company's 2014 to 2017 restructuring charges by segment:
(in millions)USACanadaEMEALATAMOtherTotal
Employee termination costs$16.5  $5.7  $22.5  $6.2  $5.8  $56.7  
Facility exit costs21.3  —  3.7  0.2  —  25.2  
Other exit costs1.7  —  6.6  —  0.8  9.1  
Total$39.5  $5.7  $32.8  $6.4  $6.6  $91.0  

The following tables summarize activity related to the restructuring liability:
(in millions)January 1, 2019
Charge to
earnings
Cash paid
Non-cash
and other
December 31, 2019
Employee termination costs$4.2  $2.5  $(3.0) $—  $3.7  
Facility exit costs5.0  0.1  (3.2) —  1.9  
Other exit costs0.2  —  —  —  0.2  
Total$9.4  $2.6  $(6.2) $—  $5.8  
 
(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 costs10.2  (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 $5.3 million and $5.9 million were classified as current in other accrued expenses and $0.5 million and $3.5 million were recorded in other long-term liabilities in the consolidated balance sheets as of December 31, 2019 and 2018, respectively. The long-term portion primarily consists of facility exit costs that are expected to be paid within the next five years.
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.
v3.20.1
Other expense, net
12 Months Ended
Dec. 31, 2019
Other Income and Expenses [Abstract]  
Other expense, net
8. Other expense, net
Other expense, net consisted of the following (losses) gains:
 Year ended December 31,
(in millions)201920182017
Pension mark to market loss (1)(2)
$(50.4) $(34.2) $(3.8) 
Pension curtailment and settlement gains (1)
1.3  —  9.7  
Non-operating retirement benefits (1)(2)
2.2  11.0  9.9  
Foreign currency transactions(10.1) (6.7) (4.6) 
Foreign currency denominated loans revaluation17.5  (0.8) (17.9) 
Undesignated foreign currency derivative instruments (3)
(23.7) 1.1  0.3  
Undesignated interest rate swap contracts (3)
(3.0) —  (2.2) 
Debt refinancing costs (4)
(1.2) —  (5.3) 
Other(3.1) (3.1) (3.5) 
Total other expense, net  $(70.5) $(32.7) $(17.4) 
(1)Refer to “Note 11: Employee benefit plans” for more information.
(2)Represents mark to market loss and non-operating retirement benefits for both the defined benefit pension and other postretirement benefit plans.
(3)Refer to “Note 20: Derivatives” for more information.
(4)Refer to “Note 18: Debt” for more information.
v3.20.1
Income taxes
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income taxes
9. Income taxes
For financial reporting purposes, (loss) income before income taxes includes the following components:
 Year ended December 31,
(in millions)201920182017
(Loss) income before income taxes
United States$(194.5) $36.6  $1.5  
Foreign193.4  185.6  167.3  
Total (loss) income before income taxes $(1.1) $222.2  $168.8  
The expense for income taxes is summarized as follows:
 Year ended December 31,
(in millions)201920182017
Current:
Federal$33.9  $13.8  $6.8  
State7.1  2.1  2.0  
Foreign39.2  31.2  28.5  
Total current$80.2  $47.1  $37.3  
Deferred:
Federal$12.2  $6.5  $26.5  
State3.4  (0.5) —  
Foreign8.7  (3.2) (14.8) 
Total deferred$24.3  $2.8  $11.7  
Total income tax expense from continuing operations  $104.5  $49.9  $49.0  
For our continuing operations, differences between actual provisions for income taxes and provisions for income taxes at the US federal statutory rate (21.0% in 2019 and 2018 and 35.0% in 2017) were as follows:
 Year ended December 31,
(in millions)201920182017
US federal statutory income tax (benefit) expense applied to (loss) income before income taxes$(0.2) $46.7  $59.1  
State income taxes, net of federal benefit10.7  1.1  1.4  
Foreign tax rate differential8.7  8.1  (18.0) 
Effect of flow-through entities30.6  (0.6) 8.9  
Distributions from foreign subsidiaries31.9  9.0  17.6  
Global intangible low-taxed income22.8  19.9  —  
Gain on disposal12.9  —  —  
Change in valuation allowance, net(18.8) (11.6) (18.1) 
Foreign tax credit(13.5) (38.3) (47.6) 
Fines and penalties5.6  —  0.2  
Non-deductible employee expenses4.4  3.9  2.5  
Non-deductible acquisition costs3.5  0.3  0.2  
Shareholder settlements2.7  —  —  
Withholding and other taxes based on income1.7  0.5  0.5  
Warrants1.5  —  —  
Change in statutory income tax rates(1.1) —  (17.5) 
Adjustment to prior year due to change in estimate1.0  (0.8) (0.5) 
Net stock-based compensation0.6  —  (3.7) 
Foreign exchange rate remeasurement(0.4) (0.2) 0.3  
Unrecognized tax benefits(0.3) (2.7) (1.7) 
Non-deductible expense0.3  0.6  0.4  
2017 US repatriation tax—  13.0  76.5  
Non-taxable interest income—  (0.7) (11.4)