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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________________ 
Form 10-Q
_________________________________________________________ 
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to                 
Commission File Number 001-37443
__________________________________________________________ 
Univar Solutions Inc.
(Exact name of registrant as specified in its charter)
__________________________________________________________ 
Delaware 26-1251958
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
3075 Highland Parkway, Suite 200 Downers Grove,Illinois 60515
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (331) 777-6000
__________________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($0.01 par value)UNVRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒     No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes    ☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
At October 31, 2022, 163,166,503 shares of the registrant’s common stock were outstanding.

Table of Contents
Univar Solutions Inc.
Form 10-Q
For the quarterly period ended September 30, 2022
TABLE OF CONTENTS
 
Page


Table of Contents
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
Univar Solutions Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
 Three months ended September 30,Nine months ended September 30,
(in millions, except per share data)2022202120222021
Net sales$2,983.5 $2,487.9 $8,882.7 $7,037.4 
Cost of goods sold (exclusive of depreciation)2,277.4 1,871.5 6,711.1 5,276.1 
Operating expenses:
Outbound freight and handling121.7 105.8 363.3 295.0 
Warehousing, selling and administrative324.8 299.7 937.8 875.7 
Other operating expenses, net5.7 17.7 26.7 91.8 
Depreciation32.8 36.7 97.9 117.8 
Amortization12.0 12.4 35.8 38.7 
Impairment charges0.3 0.9 0.3 3.0 
Total operating expenses497.3 473.2 1,461.8 1,422.0 
Operating income208.8 143.2 709.8 339.3 
Other (expense) income:
Interest income0.8 1.5 2.9 2.6 
Interest expense(27.6)(23.7)(74.1)(77.1)
Gain on sale of business— — — 88.2 
Other income, net 0.6 1.1 11.0 33.1 
Total other (expense) income(26.2)(21.1)(60.2)46.8 
Income before income taxes182.6 122.1 649.6 386.1 
Income tax expense52.6 37.7 175.9 82.3 
Net income $130.0 $84.4 $473.7 $303.8 
Income per common share:
Basic$0.78 $0.49 $2.82 $1.79 
Diluted$0.78 $0.49 $2.79 $1.78 
Weighted average common shares outstanding:
Basic165.9 170.9 167.9 170.1 
Diluted167.2 171.9 169.5 170.9 










The accompanying notes are an integral part of these condensed consolidated financial statements.
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Univar Solutions Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
 Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
Net income$130.0 $84.4 $473.7 $303.8 
Other comprehensive (loss) income, net of tax:
Foreign currency translation(79.9)(29.2)(118.0)9.7 
Pension and other postretirement benefits adjustment, net of tax of $— and $0.1 for the three and nine months ended September 30, 2022, respectively, and $— and $0.5 for the three and nine months ended September 30, 2021, respectively
(0.2)(0.1)(0.5)(2.7)
Derivative financial instruments, net of tax of $(10.4) and $(29.6) for the three and nine months ended September 30, 2022, respectively, and $(1.7) and $(4.4) for the three and nine months ended September 30, 2021, respectively
30.1 3.7 85.8 11.8 
Total other comprehensive (loss) income, net of tax(50.0)(25.6)(32.7)18.8 
Comprehensive income$80.0 $58.8 $441.0 $322.6 






































The accompanying notes are an integral part of these condensed consolidated financial statements.
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Univar Solutions Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions, except share and per share data)September 30,
2022		December 31,
2021
Assets
Current assets:
Cash and cash equivalents$276.3 $251.5 
Trade accounts receivable, net of allowance for doubtful accounts of $12.0 and $15.8 at September 30, 2022 and December 31, 2021, respectively
1,733.4 1,539.5 
Inventories1,165.6 932.2 
Prepaid expenses and other current assets212.2 169.1 
Total current assets3,387.5 2,892.3 
Property, plant and equipment, net1,016.3 1,031.0 
Goodwill2,277.4 2,310.4 
Intangible assets, net177.0 211.7 
Deferred tax assets24.3 29.4 
Other assets386.4 303.0 
Total assets$7,268.9 $6,777.8 
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable$1,042.3 $1,009.3 
Current portion of long-term debt38.5 41.5 
Accrued compensation162.7 196.4 
Other accrued expenses393.5 420.4 
Total current liabilities1,637.0 1,667.6 
Long-term debt2,466.0 2,223.5 
Pension and other postretirement benefit liabilities184.6 211.7 
Deferred tax liabilities107.7 56.1 
Other long-term liabilities309.2 326.4 
Total liabilities4,704.5 4,485.3 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 200,000,000 shares authorized, none issued
— — 
Common stock, $0.01 par value, 2,000,000,000 shares authorized, 172,489,238 and 171,199,938 shares issued at September 30, 2022 and December 31, 2021, respectively
1.7 1.7 
Additional paid-in capital3,084.3 3,048.5 
Treasury stock at cost, 9,336,213 and 1,832,385 shares at September 30, 2022 and December 31, 2021, respectively
(254.9)(50.0)
Retained earnings (accumulated deficit)128.7 (345.0)
Accumulated other comprehensive loss(395.4)(362.7)
Total stockholders’ equity2,564.4 2,292.5 
Total liabilities and stockholders’ equity$7,268.9 $6,777.8 



The accompanying notes are an integral part of these condensed consolidated financial statements.
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Univar Solutions Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Nine months ended September 30,
(in millions)20222021
Operating activities:
Net income$473.7 $303.8 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization133.7 156.5 
Impairment charges0.3 3.0 
Amortization of deferred financing fees and debt discount4.3 4.9 
Gain on sale of business— (88.2)
Gain on sale of property, plant and equipment(2.3)(6.3)
Deferred income taxes27.2 15.8 
Stock-based compensation expense26.9 16.0 
Fair value adjustment for warrants — (33.8)
Other6.3 2.3 
Changes in operating assets and liabilities:
Trade accounts receivable, net(251.4)(364.2)
Inventories(266.7)(184.8)
Prepaid expenses and other current assets(16.0)(24.5)
Trade accounts payable73.9 207.1 
Other, net
(39.1)107.5 
Net cash provided by operating activities170.8 115.1 
Investing activities:
Purchases of property, plant and equipment(103.7)(68.9)
Purchases of businesses, net of cash acquired(16.5)— 
Proceeds from sale of property, plant and equipment3.6 13.7 
Proceeds from sale of business— 136.5 
Other1.0 (2.3)
Net cash (used) provided by investing activities(115.6)79.0 
Financing activities:
Proceeds from issuance of long-term debt, net— 995.0 
Payments on long-term debt and finance lease obligations(77.3)(1,389.0)
Proceeds under revolving credit facilities1,422.4 2,006.3 
Payments under revolving credit facilities(1,128.3)(1,992.8)
Taxes paid related to net share settlements of stock-based compensation awards(7.7)(2.6)
Purchases of treasury stock(204.9)— 
Stock option exercises16.5 8.5 
Proceeds from the exercise of warrants— 27.1 
Other(2.0)0.1 
Net cash provided (used) by financing activities18.7 (347.4)
Effect of exchange rate changes on cash and cash equivalents(49.1)(12.5)
Net increase (decrease) in cash and cash equivalents24.8 (165.8)
Cash and cash equivalents at beginning of period251.5 386.6 
Cash and cash equivalents at end of period$276.3 $220.8 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes$161.1 $56.3 
Interest, net of capitalized interest56.8 61.5 
Non-cash activities:
Additions of property, plant and equipment included in trade accounts payable and other accrued expenses$6.8 $5.0 
Additions of property, plant and equipment under a finance lease obligation24.7 14.0 
Additions of assets under an operating lease obligation46.7 43.5 




The accompanying notes are an integral part of these condensed consolidated financial statements.
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Univar Solutions Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
(in millions)Common
stock outstanding
(shares)		Common
stock		Additional
paid-in
capital		Treasury stockRetained earnings (accumulated
deficit)		Accumulated
other
comprehensive
loss		Total
Balance as of June 30, 2022167.1 $1.7 $3,078.6 $(154.6)$(1.3)$(345.4)$2,579.0 
Net income— — — — 130.0 — 130.0 
Other comprehensive loss, net of tax— — — — — (50.0)(50.0)
Restricted stock units vested0.1 — — — — — — 
Tax withholdings related to net share settlements of stock-based compensation awards— — (0.2)— — — (0.2)
Stock option exercises— — 0.5 — — — 0.5 
Stock-based compensation expense— — 5.2 — — — 5.2 
Purchases of treasury stock(4.0)— — (100.3)— — (100.3)
Other— — 0.2 — — — 0.2 
Balance as of September 30, 2022163.2 $1.7 $3,084.3 $(254.9)$128.7 $(395.4)$2,564.4 
(in millions)Common
stock outstanding
(shares)		Common
stock		Additional
paid-in
capital		Treasury stockAccumulated
deficit		Accumulated
other
comprehensive
loss		Total
Balance as of June 30, 2021170.9 $1.7 $3,025.8 $— $(586.2)$(342.7)$2,098.6 
Net income— — — — 84.4 — 84.4 
Other comprehensive loss, net of tax— — — — — (25.6)(25.6)
Tax withholdings related to net share settlements of stock-based compensation awards— — (0.1)— — — (0.1)
Stock option exercises0.1 — 0.7 — — — 0.7 
Stock-based compensation expense— — 6.8 — — — 6.8 
Other— — (0.1)— — — (0.1)
Balance as of September 30, 2021171.0 $1.7 $3,033.1 $— $(501.8)$(368.3)$2,164.7 


The accompanying notes are an integral part of these condensed consolidated financial statements.
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(in millions)Common
stock outstanding
(shares)		Common
stock		Additional
paid-in
capital		Treasury stockRetained earnings (accumulated
deficit)		Accumulated
other
comprehensive
loss		Total
Balance as of December 31, 2021169.4 $1.7 $3,048.5 $(50.0)$(345.0)$(362.7)$2,292.5 
Net income— — — — 473.7 — 473.7 
Other comprehensive loss, net of tax— — — — — (32.7)(32.7)
Restricted stock units vested0.9 — — — — — — 
Tax withholdings related to net share settlements of stock-based compensation awards(0.3)— (7.7)— — — (7.7)
Stock option exercises0.7 — 16.5 — — — 16.5 
Employee stock purchase plan— — 0.8 — — — 0.8 
Stock-based compensation expense— — 26.9 — — — 26.9 
Purchases of treasury stock(7.5)— — (204.9)— — (204.9)
Other— — (0.7)— — — (0.7)
Balance as of September 30, 2022163.2 $1.7 $3,084.3 $(254.9)$128.7 $(395.4)$2,564.4 
(in millions)Common
stock outstanding
(shares)		Common
stock		Additional
paid-in
capital		Treasury stockAccumulated
deficit		Accumulated
other
comprehensive
loss		Total
Balance as of December 31, 2020169.3 $1.7 $2,983.3 $— $(805.6)$(387.1)$1,792.3 
Net income— — — — 303.8 — 303.8 
Other comprehensive income, net of tax— — — — — 18.8 18.8 
Exercise of warrants1.0 — 26.8 — — — 26.8 
Restricted stock units vested0.4 — — — — — — 
Tax withholdings related to net share settlements of stock-based compensation awards(0.1)— (2.6)— — — (2.6)
Stock option exercises0.4 — 8.5 — — — 8.5 
Employee stock purchase plan— — 0.8 — — — 0.8 
Stock-based compensation expense— — 16.0 — — — 16.0 
Other— — 0.3 — — — 0.3 
Balance as of September 30, 2021171.0 $1.7 $3,033.1 $— $(501.8)$(368.3)$2,164.7 


The accompanying notes are an integral part of these condensed consolidated financial statements.
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Univar Solutions Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Basis of presentation
Financial statement presentation
The unaudited interim condensed consolidated financial statements of Univar Solutions Inc. (the “Company,” “we,” “our” and “us”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
In the opinion of management, the unaudited interim condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full year.
Proceeds and repayments under the revolving credit facilities for 2021, previously reported net in our interim condensed consolidated statements of cash flows, are now presented separately to conform to the current period presentation. Additionally, certain other immaterial amounts in the prior period interim condensed consolidated financial statements and notes have been reclassified to conform to the current period presentation.
Accounting pronouncements issued and not yet adopted
In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2021-08 “Business Combinations” (Topic 805) – “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This ASU requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). The standard is effective for public business entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company plans to adopt this guidance on a prospective basis effective January 1, 2023, which is not expected to have a material impact on the consolidated financial statements.
In November 2021, the FASB issued ASU 2021-10 “Government Assistance” (Topic 832) – “Disclosures by Business Entities about Government Assistance” to increase the transparency of disclosures for government assistance and grants. The ASU requires annual disclosures pertaining to the types of received government assistance, accounting for the transactions and the related impacts on the reported financial results. The standard is effective for annual periods beginning after December 15, 2021. The Company plans to adopt this guidance on a prospective basis in the fourth quarter of 2022, which is not expected to have an impact on the consolidated financial statements and disclosures as the Company has not received significant governmental assistance.
In September 2022, the FASB issued ASU 2022-04 “Liabilities – Supplier Finance Programs” (Subtopic 405-50) – “Disclosure of Supplier Finance Program Obligations” to enhance the transparency of disclosures regarding supplier finance programs. The ASU requires a buyer in a supplier finance program to disclose information about the program’s nature, activity during the period, changes from period to period and potential magnitude. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. Retrospective application of the guidance is required for all disclosures except rollforward information, which requires prospective application. The Company has not yet determined the impact of the standard on its disclosures.
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2. Business combinations
Vicom Distribución Productos Quimicos, S.L. (“Vicom”)
On July 29, 2022, the Company acquired all of the outstanding equity interests in Vicom, a leading regional specialty chemical distributor in Spain and Portugal, for cash consideration of $14.5 million. The transaction was accounted for under the acquisition method of accounting and the results of operations are included in the Europe and the Middle East and Africa ("EMEA") segment. The preliminary purchase price allocation included $3.4 million in identified intangible assets related to customer relationships and $5.6 million in goodwill, which is included in the EMEA segment and is not deductible for income tax purposes.
Sweetmix Distribuidora de Materias Primas Industriais Ltda (“Sweetmix”)
On December 1, 2021, the Company acquired all of the outstanding equity interests in Sweetmix, a food ingredients and coatings, adhesives, sealants and elastomers (“CASE”) specialty chemical distribution company in Brazil. The purchase price, including measurement period adjustments, was $53.0 million, $32.5 million of which was paid in cash (net of cash acquired of $1.2 million) upon closing, with the remaining $19.3 million to be paid over the next five years. The Company believes the acquisition of Sweetmix significantly enhances the Company’s specialty food ingredients product offering in Latin America and also enhances the Company's position in the local CASE market. The transaction was accounted for under the acquisition method of accounting and the results of operations are included in the Latin America ("LATAM") segment.
During the nine months ended September 30, 2022, the Company updated the purchase price allocation to reflect intangible asset fair value adjustments, purchase price adjustments and the deferred tax impacts of the recognized adjustments. The final purchase price allocation and measurement period adjustments are shown below:
(in millions)Initial Purchase Price AllocationMeasurement Period AdjustmentsFinal Purchase Price Allocation
Cash and cash equivalents$1.2 $— $1.2 
Trade accounts receivable, net15.6 — 15.6 
Inventories8.5 — 8.5 
Prepaid expenses and other current assets2.6 — 2.6 
Goodwill33.8 (0.8)33.0 
Intangible assets, net13.3 1.7 15.0 
Trade accounts payable(16.6)— (16.6)
Deferred tax liabilities(4.5)(0.8)(5.3)
Other assets and liabilities, net(1.0)— (1.0)
Purchase consideration52.9 0.1 53.0 
Less: Cash and cash equivalents(1.2)— (1.2)
Purchase consideration, net of cash$51.7 $0.1 $51.8 
The goodwill recognized is primarily attributable to synergies and the assembled workforce. The goodwill is included in the LATAM segment and is not deductible for income tax purposes. The identified intangible assets relate to customer relationships and will be amortized over a period of eight years.
3. Dispositions
On April 1, 2021, the Company completed the sale of its Distrupol business within the EMEA segment for total cash proceeds of $136.7 million. In the second quarter of 2021, the Company recorded a $87.6 million pre-tax gain on sale of business in the condensed consolidated statements of operations, net of a release of cumulative foreign currency translation losses of $18.1 million. The Company recorded $3.9 million of income before income taxes for the nine months ended September 30, 2021 attributable to Distrupol.
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4. Goodwill and intangibles, net
Goodwill
The following is a summary of the activity in goodwill by segment:
(in millions)USAEMEACanadaLATAMTotal
Balance as of December 31, 2021$1,812.6 $7.4 $431.4 $59.0 $2,310.4 
Acquisitions— 5.6 — — 5.6 
Purchase price adjustments— — — (0.8)(0.8)
Foreign currency translation— (1.5)(37.2)0.9 (37.8)
Balance as of September 30, 2022$1,812.6 $11.5 $394.2 $59.1 $2,277.4 

Intangible assets, net
 September 30, 2022December 31, 2021
(in millions)GrossAccumulated AmortizationNetGrossAccumulated AmortizationNet
Customer relationships$919.9 $(745.8)$174.1 $940.1 $(732.8)$207.3 
Other165.2 (162.3)2.9 168.9 (164.5)4.4 
Total intangible assets$1,085.1 $(908.1)$177.0 $1,109.0 $(897.3)$211.7 
Other intangible assets consist of intellectual property trademarks, trade names, producer relationships and contracts, non-compete agreements and exclusive distribution rights.
The estimated annual amortization expense in each of the next five years is as follows:
(in millions) 
2022$47.5 
202342.1 
202432.2 
202528.9 
202624.1 
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5. Revenue
The Company disaggregates revenues from contracts with customers by both geographic reportable segments and revenue contract types. Geographic reportable segmentation is pertinent to understanding the Company's revenues, as it aligns with how the Company reviews the financial performance of its operations. Revenue contract types are differentiated by the type of good or service the Company offers customers, since the contractual terms necessary for revenue recognition are unique to each of the identified revenue contract types.
The following tables disaggregate external customer net sales by major stream:
Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
USA
Chemical distribution$1,945.2 $1,548.5 $5,622.5 $4,199.4 
Services76.0 68.3 212.1 210.6 
Total external customer net sales$2,021.2 $1,616.8 $5,834.6 $4,410.0 
EMEA
Chemical distribution$486.5 $480.2 $1,595.8 $1,489.9 
Services— 0.1 0.1 0.3 
Total external customer net sales$486.5 $480.3 $1,595.9 $1,490.2 
Canada
Chemical distribution$273.9 $222.1 $865.5 $674.7 
Services— 1.2 — 9.9 
Total external customer net sales$273.9 $223.3 $865.5 $684.6 
LATAM
Chemical distribution$196.1 $163.4 $573.6 $444.2 
Services5.8 4.1 13.1 8.4 
Total external customer net sales$201.9 $167.5 $586.7 $452.6 
Consolidated
Chemical distribution$2,901.7 $2,414.2 $8,657.4 $6,808.2 
Services81.8 73.7 225.3 229.2 
Total external customer net sales$2,983.5 $2,487.9 $8,882.7 $7,037.4 
Deferred revenue
Deferred revenues are recognized as contract liabilities when customers provide the Company with consideration prior to the Company satisfying its performance obligations and are recognized in revenue when the performance obligations are met. Deferred revenues relate to revenues that are expected to be recognized within one year and are recorded within the other accrued expenses line item of the condensed consolidated balance sheets. Deferred revenues as of September 30, 2022 and December 31, 2021 were $6.8 million and $17.6 million, respectively.
Revenue recognized through the nine months ended September 30, 2022 and 2021 from amounts included in contract liabilities at the beginning of the period were $16.6 million and $4.7 million, respectively.
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6. Supplemental financial information
Other operating expenses, net
Other operating expenses, net consisted of the following:
 Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
Acquisition and integration related expenses$1.5 $12.0 $1.5 $44.8 
Stock-based compensation expense5.2 6.8 26.9 16.0 
Employee severance costs— 1.8 — 6.7 
Multi-employer pension plan exit liability— — — 31.2 
Gain on sale of property, plant and equipment(0.1)(3.2)(2.3)(6.3)
Other(0.9)0.3 0.6 (0.6)
Total other operating expenses, net$5.7 $17.7 $26.7 $91.8 
Other income, net
Other income, net consisted of the following:
 Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
Foreign currency loss, net$(2.4)$(1.4)$(6.3)$(6.8)
Undesignated foreign currency derivative instruments(2.8)(1.0)(0.9)(2.8)
Undesignated interest rate swap contracts1.5 (0.1)5.2 0.2 
Undesignated cross currency swap contracts2.2 0.5 5.1 1.2 
Non-operating retirement benefits 2.7 3.8 8.2 14.5 
Debt refinancing costs— (0.1)— (7.0)
Fair value adjustment for warrants — — — 33.8 
Other(0.6)(0.6)(0.3)— 
Total other income, net$0.6 $1.1 $11.0 $33.1 
Cash and cash equivalents
Certain of the Company’s subsidiaries participate in a multi-currency, notional cash pooling arrangement with a third-party bank provider to manage global liquidity requirements (the “Notional Cash Pool”). Under the Notional Cash Pool, cash deposited by participating subsidiaries is pledged as security against the overdraft balances of other participating subsidiaries, providing legal rights of offset. As a result, the balances are presented on a net basis within cash and cash equivalents in the condensed consolidated balance sheets. As of September 30, 2022, the net cash position of the Notional Cash Pool was $25.8 million, which consisted of a gross cash balance of $60.8 million less a bank overdraft balance of $35.0 million. As of December 31, 2021, the net cash position of the Notional Cash Pool was $43.2 million, which consisted of a gross cash balance of $146.0 million less a bank overdraft balance of $102.8 million.
Allowance for doubtful accounts
The allowance for doubtful accounts reflects the Company’s current estimate of credit losses expected to be incurred over the life of the trade accounts receivable. Collectability of the trade accounts receivable balance is assessed on an ongoing basis and determined based on the delinquency of customer accounts, the financial condition of individual customers, past collections experience and future economic expectations. The change in the allowance for doubtful accounts was as follows:
(in millions)
Balance as of December 31, 2021$15.8 
Provision for credit losses3.6 
Write-offs(6.8)
Foreign exchange(0.6)
Balance as of September 30, 2022$12.0 
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Property, plant and equipment, net
(in millions)September 30, 2022December 31, 2021
Property, plant and equipment, at cost$2,252.7 $2,238.8 
Less: accumulated depreciation(1,236.4)(1,207.8)
Property, plant and equipment, net$1,016.3 $1,031.0 
7. Employee benefit plans
The following table summarizes the components of net periodic benefit (income) cost recognized in the condensed consolidated statements of operations related to defined benefit plans:
DomesticForeign
 Three months ended September 30,Nine months ended September 30,Three months ended September 30,Nine months ended September 30,
(in millions)20222021202220212022202120222021
Service cost (1)
$— $— $— $— $0.3 $0.4 $1.0 $1.3 
Interest cost (2)
5.2 4.9 15.5 14.5 2.7 2.5 8.3 7.5 
Expected return on plan assets (2)
(7.6)(7.3)(22.8)(21.9)(2.8)(3.8)(8.6)(11.4)
Prior service credit (2)
— — — — (0.2)(0.1)(0.6)(3.2)
Net periodic benefit (income) cost$(2.4)$(2.4)$(7.3)$(7.4)$— $(1.0)$0.1 $(5.8)
(1)Service cost is included in warehousing, selling and administrative expenses.
(2)These amounts are included in other income, net and represent non-operating retirement benefits.
Multi-employer pension plan withdrawal liability
As of December 31, 2021, the Company recognized its best estimate of a withdrawal liability of $31.2 million related to triggering events at all eight sites of the Central States, Southeast and Southwest Areas Pension Plan (“Central States Pension Fund”), culminating in the Company ceasing to participate in the Central States Pension Fund. Upon an agreed final funding assessment with the Central States Pension Fund, the Company will recognize any differences between the estimated and actual withdrawal liability. As of September 30, 2022, this balance is unchanged.
The Company estimates its cash obligation to be approximately $1.9 million annually for each of the next 20 years. The net present value of the withdrawal liability was determined using a risk-free interest rate. Amounts associated with the withdrawal liability are included in other operating expenses, net in the condensed consolidated statements of operations and other accrued expenses and other long-term liabilities in the condensed consolidated balance sheets.
8. Income taxes
The income tax expense and effective income tax rate for the three and nine months ended September 30, 2022 and 2021 were as follows:
Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
Income tax expense$52.6 $37.7 $175.9 $82.3 
Effective income tax rate28.8 %30.9 %27.1 %21.3 %
The Company’s 2022 effective income tax rate was higher than the US federal statutory rate of 21.0%, primarily due to higher rates on foreign earnings, US tax on foreign earnings, US state income taxes and non-deductible employee costs.
On August 16, 2022, the Inflation Reduction Act ("IRA") was enacted into US law. Effective for tax years beginning after December 31, 2022, the IRA imposes a 15% corporate minimum tax, a 1% excise tax on share repurchases, and creates and extends certain tax-related energy incentives. Management does not expect the tax-related provisions of the IRA to have a material impact on its consolidated financial statements.
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9. 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)2022202120222021
Net income$130.0 $84.4 $473.7 $303.8 
Weighted average common shares outstanding
Basic165.9 170.9 167.9 170.1 
Effect of dilutive securities: stock compensation plans1.3 1.0 1.6 0.8 
Diluted167.2 171.9 169.5 170.9 
Income per common share
Basic$0.78 $0.49 $2.82 $1.79 
Diluted$0.78 $0.49 $2.79 $1.78 
The common shares that were not included in the computation of diluted earnings per share because their inclusion would be anti-dilutive were as follows:
 Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
Stock options1.1 1.9 0.6 2.3 

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10. Accumulated other comprehensive income (loss)
The following tables present the changes in accumulated other comprehensive income (loss) by component, net of tax:
(in millions)Cash flow hedgesDefined benefit pensionCurrency translationTotal AOCI
Balance as of June 30, 2022$44.9 $16.4 $(406.7)$(345.4)
Other comprehensive income (loss) before reclassifications52.1 — (79.9)(27.8)
Amounts reclassified from accumulated other comprehensive loss(22.0)(0.2)— (22.2)
Net current period other comprehensive income (loss)30.1 (0.2)(79.9)(50.0)
Balance as of September 30, 2022$75.0 $16.2 $(486.6)$(395.4)
Balance as of June 30, 2021$(24.6)$16.6 $(334.7)$(342.7)
Other comprehensive income (loss) before reclassifications7.2 — (29.2)(22.0)
Amounts reclassified from accumulated other comprehensive loss(3.5)(0.1)— (3.6)
Net current period other comprehensive income (loss)3.7 (0.1)(29.2)(25.6)
Balance as of September 30, 2021$(20.9)$16.5 $(363.9)$(368.3)
Balance as of December 31, 2021$(10.8)$16.7 $(368.6)$(362.7)
Other comprehensive income (loss) before reclassifications129.1 — (118.0)11.1 
Amounts reclassified from accumulated other comprehensive loss(43.3)(0.5)— (43.8)
Net current period other comprehensive income (loss)85.8 (0.5)(118.0)(32.7)
Balance as of September 30, 2022$75.0 $16.2 $(486.6)$(395.4)
Balance as of December 31, 2020$(32.7)$19.2 $(373.6)$(387.1)
Other comprehensive income (loss) before reclassifications17.4 — (8.4)9.0 
Amounts reclassified from accumulated other comprehensive loss(5.6)(2.7)— (8.3)
Amounts reclassified related to dispositions — — 18.1 18.1 
Net current period other comprehensive income (loss)11.8 (2.7)9.7 18.8 
Balance as of September 30, 2021$(20.9)$16.5 $(363.9)$(368.3)

The following is a summary of the amounts reclassified from accumulated other comprehensive income (loss) to net income:
Statement of Operations ClassificationThree months ended September 30,Nine months ended September 30,
(in millions)
2022 (1)
2021 (1)
2022 (1)
2021 (1)
Amortization of defined benefit pension items:
Prior service creditOther income, net$(0.2)$(0.1)$(0.6)$(3.2)
Tax expenseIncome tax expense— — 0.1 0.5 
Net of tax(0.2)(0.1)(0.5)(2.7)
Cash flow hedges:
Interest rate swap contractsInterest expense(0.7)4.4 3.2 13.5 
Cross currency swap contracts
Interest expense and other income, net
(28.8)(9.3)(61.4)(21.2)
Tax expenseIncome tax expense7.5 1.4 14.9 2.1 
Net of tax(22.0)(3.5)(43.3)(5.6)
Total reclassifications for the period, net of tax$(22.2)$(3.6)$(43.8)$(8.3)
(1)Amounts in parentheses represent income in the condensed consolidated statements of operations.
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11. Debt
Short-term financing
The Company had no outstanding balance in short-term financing facilities as of September 30, 2022 and December 31, 2021.
The Company had $125.5 million and $141.9 million of outstanding letters of credits as of September 30, 2022 and December 31, 2021, respectively.
Long-term debt
Long-term debt consisted of the following:
(in millions)September 30, 2022December 31, 2021
Senior Term Loan Facilities:
Term B-5 Loan due 2026, variable interest rate of 5.12% and 2.10% at September 30, 2022 and December 31, 2021, respectively
$389.0 $392.0 
Term B-6 Loan due 2028, variable interest rate of 4.87% and 2.10% at September 30, 2022 and December 31, 2021, respectively
987.5 995.0 
Asset Backed Loan (“ABL”) Facilities:
North American ABL Facility due 2024, variable interest rate of 4.44% and 1.43% at September 30, 2022 and December 31, 2021, respectively
592.0 297.9 
Senior Unsecured Notes:
Senior Unsecured Notes due 2027, fixed interest rate of 5.13% at September 30, 2022 and December 31, 2021
454.0 500.0 
Finance lease obligations100.5 101.9 
Total long-term debt before unamortized debt issuance costs and discount2,523.0 2,286.8 
Less: unamortized debt issuance costs and discount on debt(18.5)(21.8)
Total long-term debt2,504.5 2,265.0 
Less: current maturities(38.5)(41.5)
Total long-term debt, excluding current maturities$2,466.0 $2,223.5 
The weighted average interest rate on long-term debt, including the effect of designated and undesignated derivative instruments (refer to “Note 13: Derivatives” for more information), was 3.92% and 3.25% as of September 30, 2022 and December 31, 2021, respectively.
Senior Unsecured Notes
During the second quarter of 2022, the Company repaid $46.0 million of its Senior Unsecured Notes due 2027, resulting in a gain on extinguishment of debt of $1.5 million, which is included in other income, net in the condensed consolidated statements of operations.
Senior Term Loan Facilities
During the second quarter of 2021, the Company entered into the Sixth Amendment (“Sixth Amendment”) to its Credit Agreement, dated July 1, 2015, which provided a new Term B-6 Loan Facility in an aggregate principal amount of $1.0 billion that matures on June 3, 2028 (“Term B-6 Loan”). The proceeds from the new Term B-6 Loan and an incremental borrowing of $274.2 million under the Company's existing North American ABL Facility were used to repay in full the outstanding Term B-3 Loan facility and satisfy related lending and refinancing fees.
As a result of the issuance of the Term B-6 Loan and the Sixth Amendment, and the repayment of the Term B-3 Loan, the Company recognized a loss on extinguishment of debt of $2.0 million and debt refinancing costs of $6.9 million during the second quarter of 2021, both of which are included in other income, net in the condensed consolidated statements of operations.
Other Information
September 30, 2022December 31, 2021
(in millions)Carrying amountFair valueCarrying amountFair value
Fair value of debt$2,504.5 $2,462.1 $2,265.0 $2,307.8 
The fair values of debt were based on current market quotes for similar borrowings and credit risk adjusted for liquidity, margins and amortization, as necessary, and are classified as Level 2 in the fair value hierarchy.
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12. Equity and stock-based compensation
Share repurchase program
In November 2021, the Company announced that the Board of Directors had approved a share repurchase program of up to $500.0 million of its outstanding common stock, which expires on October 27, 2026. The program does not require the repurchase of any minimum number of shares and can be suspended, modified or discontinued at any time at the Company’s discretion. Under the share repurchase program, the Company may purchase shares from time-to-time at the discretion of management through open market purchases, privately negotiated transactions, block trades, accelerated or other structured share repurchase programs, or other means.
The Company repurchased 7,503,828 shares for $204.9 million during the nine months ended September 30, 2022, which includes the repurchase of 4,016,343 shares of its common stock for $100.3 million during the three months ended September 30, 2022. The Company’s remaining stock repurchase authorization under this program was approximately $245.1 million as of September 30, 2022.
Stock-based compensation
The Company grants stock-based compensation to employees and non-employee directors under the Univar Solutions Inc. 2020 Omnibus Incentive Plan. Most of the Company’s stock-based compensation awards to employees are granted in the first quarter of each year.
During the nine months ended September 30, 2022, the Company granted the following stock-based awards to employees:
•785,137 of restricted stock units (“RSUs”) with a weighted-average fair value of $28.38 per share;
•243,750 of performance-based restricted stock units ("PRSUs") with a weighted-average fair value of $27.94 per share; and
•20,304 of restricted stock awards (“RSAs”) with a weighted-average fair value of $30.05 per share.
As of September 30, 2022, the Company has unrecognized stock-based compensation expense related to non-vested RSUs of $17.4 million, which will be recognized over a weighted-average period of 1.1 years, and non-vested PRSUs of $9.3 million, which will be recognized over a weighted-average period of 1.5 years.
13. Derivatives
Foreign currency derivatives
The Company uses forward currency contracts to hedge earnings from the effects of foreign exchange rates relating to certain of the Company’s intercompany and third-party receivables and payables denominated in foreign currencies. These derivative instruments are not formally designated as cash flow hedges by the Company and the terms of these instruments range from one to three months.
Interest rate swap contracts
The objective of the Company’s designated interest rate swap contracts is to offset the variability of cash flows in LIBOR indexed debt interest payments attributable to changes in the benchmark interest rate related to the Term B-6 Loan and a portion of debt outstanding under the North American ABL Facility.
On June 4, 2021, the Company executed two interest rate swap contracts, both effective June 30, 2023, to replace existing interest rate swap contracts with maturities occurring between June 2023 and June 2024. These interest rate swap contracts contain an initial aggregate notional value of $250.0 million from June 2023 to June 2024 that increases to an aggregate notional value of $500.0 million from June 2024 to May 2028.
The Company also uses undesignated interest rate swap contracts to manage interest rate variability.
Cross currency swap contracts
Cross currency swap contracts are used to effectively convert the Term B-5 Loan’s principal amount of floating rate US dollar-denominated debt, including interest payments, to fixed-rate Euro-denominated debt. The cross currency swap contracts mature in November 2024 and approximately 95% of the contracts are designated as a cash flow hedge.
The Company also uses undesignated cross currency swap contracts to manage interest rate variability and mitigate foreign exchange exposure.
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Notional amounts and fair value of derivative instruments
The following table presents the notional amounts of the Company’s outstanding derivative instruments by type:
(in millions)September 30, 2022December 31, 2021
Designated Derivatives:
Interest rate swap contracts$650.0 $650.0 
Cross currency swap contracts381.0 381.0 
Undesignated Derivatives:
Interest rate swap contracts$100.0 $100.0 
Foreign currency derivatives195.2 179.0 
Cross currency swap contracts19.0 19.0 
The following table presents the pre-tax gains (losses) recognized in accumulated other comprehensive loss related to designated derivative instruments:
Amount of gain (loss) recognized in accumulated other comprehensive loss
Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
Derivatives in cash flow hedging relationships: 
Interest rate swap contracts$26.3 $0.3 $71.9 $(0.7)
Cross currency swap contracts43.7 10.1 101.7 24.7 
The following are the pre-tax effects of designated derivative instruments on the condensed consolidated statements of operations:
Statement of Operations ClassificationAmount of gain (loss) reclassified from accumulated other comprehensive loss into incomeAmount of gain to be reclassified to consolidated statement of operations within the next 12 months
Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
Derivatives in cash flow hedging relationships: 
Interest rate swap contractsInterest expense$0.7 $(4.4)$(3.2)$(13.5)$16.2 
Cross currency swap contractsInterest expense2.8 0.3 4.5 0.9 18.0 
Cross currency swap contractsOther income, net26.0 9.0 56.9 20.3 — 
Refer to “Note 6: Supplemental financial information” for the gains and losses related to derivatives not designated as hedging instruments.
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The following table presents the Company’s gross assets and liabilities measured on a recurring basis and classified as Level 2 within the fair value hierarchy:
Derivative AssetsDerivative Liabilities
(in millions)Balance Sheet ClassificationSeptember 30, 2022December 31, 2021Balance Sheet ClassificationSeptember 30, 2022December 31, 2021
Designated Derivatives:
Cross currency swap contractsPrepaid expenses and other current assets$18.0 $2.8 Other accrued expenses$— $— 
Cross currency swap contractsOther assets63.3 — Other long-term liabilities— 12.7 
Interest rate swap contractsPrepaid expenses and other current assets16.2 — Other accrued expenses— 8.1 
Interest rate swap contractsOther assets43.0 — Other long-term liabilities— 7.8 
Total designated derivatives$140.5 $2.8 $— $28.6 
Undesignated Derivatives:
Foreign currency contractsPrepaid expenses and other current assets$— $1.8 Other accrued expenses$2.4 $0.8 
Cross currency swap contractsPrepaid expenses and other current assets0.9 0.1 Other accrued expenses— — 
Cross currency swap contractsOther assets3.2 — Other long-term liabilities— 0.6 
Interest rate swap contractsPrepaid expenses and other current assets2.2 — Other accrued expenses— 1.7 
Interest rate swap contractsOther assets1.0 — Other long-term liabilities— 1.1 
Total undesignated derivatives$7.3 $1.9 $2.4 $4.2 
Total derivatives$147.8 $4.7 $2.4 $32.8 
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 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. Based on these valuation methodologies, these derivative contracts are classified as Level 2 in the fair value hierarchy.
14. Commitments and contingencies
Litigation
In the ordinary course of business, the Company is subject to pending or threatened claims, lawsuits, regulatory matters and administrative proceedings from time to time. Where appropriate the Company has recorded provisions in the consolidated financial statements for these matters. The liabilities for injuries to persons or property are in some instances covered by liability insurance, subject to various deductibles and self-insured retentions.
The Company is not aware of any claims, lawsuits, regulatory matters or administrative proceedings, pending or threatened, that are likely to have a material effect on its overall financial position, results of operations, or cash flows. However, the Company cannot predict the outcome of any present or future claims or litigation or the potential for future claims or litigation and adverse developments could negatively impact earnings or cash flows in a particular future period.
Asbestos Claims
The Company is subject to liabilities from claims alleging personal injury from exposure to asbestos. The claims result primarily from an indemnification obligation related to Univar Solutions USA Inc.’s (“Univar”) 1986 purchase of McKesson Chemical Company from McKesson Corporation (“McKesson”). Once certain conditions have been met, Univar will have the ability to pursue insurance coverage, if any, that may be available under McKesson's historical insurance coverage to offset the impact of any fees, settlements, or judgments that Univar is obligated to pay because of its obligation to defend and indemnify McKesson. As of September 30, 2022, there were approximately 218 asbestos-related cases for which Univar has the obligation to defend and indemnify; however, this number tends to fluctuate up and down over time. Historically, the vast majority of
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these asbestos cases have been dismissed without payment or with a nominal payment. While the Company is unable to predict the outcome of these matters, it does not believe, based upon currently available facts, that the ultimate resolution of any of these matters will have a material effect on its overall financial position, results of operations, or cash flows.
Unclaimed Property Audit
The Company and its subsidiaries were the subject of an unclaimed property audit request issued by the State of Delaware in 2015. On June 29, 2022, the State of Delaware notified the Company that it was closing its examination with a $0 finding. On September 13, 2022, the parties executed a confidential settlement agreement and release.
Canada Revenue Agency
In October 2022, the Company received notice from the Canada Revenue Agency ("CRA") proposing that certain historical financing transactions between one of the Company's Canadian subsidiaries (Univar Canada Ltd.) and one of the Company's US subsidiaries (Univar Holdco Canada LLC) should be recharacterized as equity and not debt for the 2015 and 2016 tax years. The CRA has proposed that certain deductions claimed by the Canadian entity should be denied, resulting in additional tax due, as well as penalties and interest on the unpaid tax. The proposed assessment against the Company, inclusive of interest and penalties of Canadian Dollar ("C$") 21.4 million, totals C$50.4 million.
It is possible that the CRA might take a similar position in relation to two additional tax years (2017 and 2018), but the Company has not received a proposal in relation to those years. The transactions that are being challenged by the CRA for 2015 and 2016 do not apply in periods after 2018.
The Company believes that the tax position previously taken was proper and it will defend itself as appropriate. The Company has not recorded any liabilities in its consolidated financial statements for this matter, as it believes it is more likely than not that the Company's position will be sustained.
Environmental
The Company is subject to various federal, state and local environmental laws and regulations that require environmental assessment or remediation efforts (collectively “environmental remediation work”) and from time to time the Company becomes aware of compliance matters regarding possible or alleged violations of these laws or regulations. For example, over the years, the Company has been identified as a “potentially responsible party” (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act and/or similar state laws that impose liability for costs relating to environmental remediation work at various sites. As a PRP, the Company may be required to pay a share of the costs of investigation and cleanup of certain sites. The Company is currently engaged in environmental remediation work at approximately 125 locations, some that are now or were previously Company-owned/occupied and some that were never Company-owned/occupied (“non-owned sites”).
The Company’s environmental remediation work at some sites is being conducted pursuant to governmental proceedings or investigations. At other sites, the Company, with appropriate state or federal agency oversight and approval, is conducting the environmental remediation work voluntarily. The Company is currently undergoing remediation efforts or is in the process of active review of the need for potential remediation efforts at approximately 104 current or formerly Company-owned/occupied sites. In addition, the Company may be liable as a PRP for a share of the clean-up of approximately 21 non-owned sites. These non-owned sites are typically (a) locations of independent waste disposal or recycling operations with alleged or confirmed contaminated soil and/or groundwater to which the Company may have shipped waste products or drums for re-conditioning, or (b) contaminated non-owned sites near historical sites owned or operated by the Company or its predecessors from which contamination is alleged to have arisen.
In determining the appropriate level of environmental reserves, the Company considers several factors such as information obtained from investigatory studies; the scope of remediation (including any changes over time); the interpretation, application and enforcement of laws and regulations; changes in the costs of remediation programs; the development of alternative cleanup technologies and methods; and the relative level of the Company’s involvement at various sites for which the Company is allegedly associated. The level of annual expenditures for remedial, monitoring and investigatory activities will change in the future as major components of planned remediation activities are completed and the scope, timing and costs of existing activities are changed. Project lives, and therefore cash flows, range from 2 to 30 years, depending on the specific site and type of remediation project.
Although the Company believes that its reserves are adequate for environmental contingencies, it is possible, due to the uncertainties noted above, that additional reserves could be required in the future that could have a material effect on the overall financial position, results of operations, or cash flows in a particular period.
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Changes in total environmental liabilities were as follows:
(in millions)
Environmental liabilities as of December 31, 2021
$88.1 
Revised obligation estimates13.7 
Environmental payments(16.9)
Foreign exchange(0.8)
Environmental liabilities as of September 30, 2022
$84.1 
(in millions)Balance Sheet ClassificationSeptember 30, 2022December 31, 2021
Current environmental liabilitiesOther accrued expenses$31.6 $39.3 
Long-term environmental liabilitiesOther long-term liabilities52.5 48.8 

15. Leasing
The Company leases certain warehouses and distribution centers, office space, transportation equipment and other machinery and equipment.
(in millions)Balance Sheet ClassificationSeptember 30, 2022December 31, 2021
Assets
Operating lease assetsOther assets$161.3 $164.3 
Finance lease assets
Property, plant and equipment, net (1)
103.1 102.1 
Total lease assets$264.4 $266.4 
Liabilities
Current liabilities:
Current portion of operating lease liabilitiesOther accrued expenses$42.2 $45.7 
Current portion of finance lease liabilitiesCurrent portion of long-term debt24.5 27.5 
Noncurrent liabilities:
Operating lease liabilitiesOther long-term liabilities125.0 125.5 
Finance lease liabilitiesLong-term debt76.0 74.4 
Total lease liabilities$267.7 $273.1 
(1)Finance lease right-of-use assets are recorded net of accumulated depreciation of $72.4 million and $75.8 million as of September 30, 2022 and December 31, 2021, respectively.
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Lease cost
(in millions)Three months ended September 30, 2022Three months ended September 30, 2021
Statement of Operations ClassificationOperating LeasesFinance LeasesTotalOperating LeasesFinance LeasesTotal
Cost of goods sold (exclusive of depreciation)$5.8 $— $5.8 $6.1 $— $6.1 
Outbound freight and handling1.6 — 1.6 1.2 — 1.2 
Warehousing, selling and administrative6.7 — 6.7 6.8 — 6.8 
Depreciation— 6.7 6.7 — 6.3 6.3 
Interest expense— 0.9 0.9 — 0.9 0.9 
Total gross lease component costs$14.1 $7.6 21.7 $14.1 $7.2 21.3 
Variable lease costs0.3 0.4 
Short-term lease costs1.8 2.0 
Total gross lease costs23.8 23.7 
Less: sublease income0.2 0.5 
Total net lease costs$23.6 $23.2 
(in millions)Nine months ended September 30, 2022Nine months ended September 30, 2021
Statement of Operations ClassificationOperating LeasesFinance LeasesTotalOperating LeasesFinance LeasesTotal
Cost of goods sold (exclusive of depreciation)$17.0 $— $17.0 $17.2 $— $17.2 
Outbound freight and handling4.9 — 4.9 5.0 — 5.0 
Warehousing, selling and administrative20.2 — 20.2 21.4 — 21.4 
Depreciation— 20.3 20.3 — 19.7 19.7 
Interest expense— 2.7 2.7 — 2.8 2.8 
Total gross lease component costs$42.1 $23.0 65.1 $43.6 $22.5 66.1 
Variable lease costs1.0 1.3 
Short-term lease costs5.6 5.3 
Total gross lease costs71.7 72.7 
Less: sublease income0.6 1.6 
Total net lease costs$71.1 $71.1 

Maturity of lease liabilities
(in millions)Operating LeasesFinance LeasesTotal
Remainder of 2022$14.1 $7.7 $21.8 
202343.6 26.2 69.8 
202429.9 22.9 52.8 
202521.2 21.0 42.2 
202617.7 18.1 35.8 
2027 and after73.3 13.9 87.2 
Total lease payments199.8 109.8 309.6 
Less: interest32.6 9.3 41.9 
Present value of lease liabilities$167.2 $100.5 $267.7 
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Lease term and discount rate
September 30, 2022December 31, 2021
Weighted-average remaining lease term (years)
Operating leases7.66.7
Finance leases6.36.5
Weighted-average discount rate
Operating leases4.01 %3.99 %
Finance leases3.98 %3.59 %
Other information
Nine months ended September 30,
(in millions)20222021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$43.3 $42.1 
Operating cash flows from finance leases2.7 2.7 
Financing cash flows from finance leases22.6 20.4 

16. Segments
The Company’s operations are structured into four reportable segments that represent the geographic areas under which it operates and manages the business. Management, including the Chief Operating Decision Maker, monitors the operating results of its reportable segments separately for the purpose of making decisions about resource allocation and performance assessment. Management evaluates performance of its reportable segments on the basis of Adjusted EBITDA. Adjusted EBITDA is defined as the sum of consolidated net income; depreciation; amortization; net interest expense; income tax expense; impairment charges; gain on sale of business; other operating expenses, net and other income, net (for both, see “Note 6: Supplemental financial information”).
Transfer prices between reportable segments are set on an arms-length basis in a similar manner to transactions with third parties. Corporate operating expenses that directly benefit segments have been allocated to the reportable segments. Allocable operating expenses are identified through a review process by management. The allocable operating expenses are assigned to the reportable segments on a basis that reasonably approximates the use of services, which is generally measured based on a weighted distribution of margin, asset, headcount or time spent.
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Financial information for the Company’s reportable segments was as follows:
(in millions)USAEMEACanadaLATAM
Other/
Eliminations(1)
Consolidated
Net Sales
Three months ended September 30, 2022
External customers$2,021.2 $486.5 $273.9 $201.9 $— $2,983.5 
Inter-segment28.2 4.8 3.2 0.1 (36.3)— 
Net Sales$2,049.4 $491.3 $277.1 $202.0 $(36.3)$2,983.5 
Three months ended September 30, 2021
External customers$1,616.8 $480.3 $223.3 $167.5 $— $2,487.9 
Inter-segment28.9 0.9 0.6 0.7 (31.1)— 
Net Sales$1,645.7 $481.2 $223.9 $168.2 $(31.1)$2,487.9 
Nine months ended September 30, 2022
External customers$5,834.6 $1,595.9 $865.5 $586.7 $— $8,882.7 
Inter-segment100.5 8.5 7.5 0.2 (116.7)— 
Net Sales$5,935.1 $1,604.4 $873.0 $586.9 $(116.7)$8,882.7 
Nine months ended September 30, 2021
External customers$4,410.0 $1,490.2 $684.6 $452.6 $— $7,037.4 
Inter-segment65.8 3.6 2.6 0.7 (72.7)— 
Net Sales$4,475.8 $1,493.8 $687.2 $453.3 $(72.7)$7,037.4 
(1)Other/Eliminations represents the elimination of intersegment transactions.

Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
Adjusted EBITDA
USA$182.5 $140.2 $590.3 $367.6 
EMEA35.0 34.4 149.2 132.8 
Canada27.9 24.0 96.6 75.3 
LATAM17.3 15.7 49.7 44.6 
Other/Eliminations (1)
(3.1)(3.4)(15.3)(29.7)
Consolidated$259.6 $210.9 $870.5 $590.6 
(1)Other/Eliminations represents unallocated corporate costs consisting of items specifically related to parent company operations that do not directly benefit segments, either individually or collectively.
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The following is a reconciliation of net income to Adjusted EBITDA for the three and nine months ended September 30, 2022 and 2021:
 Three months ended September 30,Nine months ended September 30,
(in millions)2022202120222021
Net income$130.0 $84.4 $473.7 $303.8 
Depreciation32.8 36.7 97.9 117.8 
Amortization12.0 12.4 35.8 38.7 
Interest expense, net26.8 22.2 71.2 74.5 
Income tax expense52.6 37.7 175.9 82.3 
EBITDA254.2 193.4 854.5 617.1 
Other operating expenses, net5.7 17.7 26.7 91.8 
Other income, net(0.6)(1.1)(11.0)(33.1)
Impairment charges0.3 0.9 0.3 3.0 
Gain on sale of business— — — (88.2)
Adjusted EBITDA$259.6 $210.9 $870.5 $590.6 

17. Subsequent events
Second Amended and Restated ABL Credit Agreement (“New Senior ABL Facility”)
On October 27, 2022, the Company and certain of its U.S., Canadian and European subsidiaries entered into the New Senior ABL Facility pursuant to which Bank of America, N.A. and the other lenders party thereto agreed to provide for a five year senior secured ABL credit facility in an aggregate principal amount of $1.6 billion and a five year senior secured term loan facility in an aggregate principal amount of $200 million. The New Senior ABL Facility amends and restates in full the amended and restated ABL facility entered into by the Company on February 28, 2019. The maximum amount available to be borrowed under the New Senior ABL Facility will be determined by a borrowing base consisting of eligible inventory, eligible accounts receivable and cash of the Company and certain of its subsidiaries.
The New Senior ABL Facility is secured by (i) a first priority lien on the loan parties' accounts receivable, inventory and cash and (ii) a second priority lien on (A) substantially all other assets of the U.S. loan parties and (B) other assets of certain European loan parties in each case subject to various limitations and exceptions.
In connection with the entry into the New Senior ABL Facility, the Company terminated its existing European ABL Credit Agreement and the €200 million Euro ABL Facility thereunder.
Share repurchase program
On November 1, 2022, the Company announced that its Board of Directors had approved an increase in the amount of authorized purchases under its existing share repurchase program by $1 billion. As part of the share repurchase program, the Company also entered into an accelerated share repurchase agreement (“ASR”) with Goldman Sachs & Co. LLC (“Goldman”) on November 1, 2022 to repurchase $200 million of its common stock. Goldman is expected to make an initial delivery of approximately 5.8 million shares of the Company's common stock on November 3, 2022, which represents 75% of the notional value of the ASR divided by the closing price of the Company's common stock on November 1, 2022.
At settlement of the ASR, Goldman may be required to deliver additional shares of the Company's common stock to the Company or, under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to Goldman. The final number of shares to be repurchased under the ASR will be based on the daily volume-weighted average prices for Rule 10b-18 eligible transactions in the Company's common stock during the term of the ASR, less a discount and subject to adjustment pursuant to the terms of the ASR. The final settlement of the ASR is expected to occur prior to the end of the first quarter of 2023 and may be accelerated at the option of Goldman.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is based on financial data derived from the financial statements prepared in accordance with US GAAP and certain other financial data that is prepared using non-GAAP financial measures. For a reconciliation of each non-GAAP financial measure to its most comparable GAAP measure, see “Analysis of Segment Results” within this Item and “Note 16: Segments” to our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q. Refer to “Non-GAAP Financial Measures” within this Item for more information about our use of non-GAAP financial measures.
Our MD&A is provided in addition to the accompanying condensed consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flow. The MD&A should be read in conjunction with both the unaudited consolidated financial information and related notes included in this Form 10-Q and the MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2021.
Overview
Univar Solutions is a leading global solutions provider to users of specialty ingredients and chemicals and provider of value-added services to customers across a wide range of diverse industries. We purchase chemicals and ingredients from thousands of producers worldwide and warehouse, repackage, blend, dilute, transport and sell them to more than 100,000 customer locations across approximately 115 countries.
Our operations are structured into four reportable segments that represent the geographic areas under which we operate and manage our business. These segments are USA, EMEA, Canada and LATAM, which includes developing businesses in Latin America and the Asia-Pacific region.
Comparability of Results
Acquisitions and Divestitures
On April 1, 2021, we sold our Distrupol business within the EMEA segment. The sale of this business did not meet the criteria to be classified as discontinued operations in our condensed consolidated financial statements.
On December 1, 2021, we acquired Sweetmix Distribuidora de Materias Primas Industriais Ltda ("Sweetmix"), a food ingredients and coatings, adhesives, sealants and elastomers (“CASE”) specialty chemical distribution company in Brazil.
On July 29, 2022, we acquired Vicom Distribución Productos Quimicos, S.L., a leading regional specialty chemicals distributor in Spain and Portugal.
Constant Currency
We believe providing information on a non-GAAP constant currency basis offers valuable supplemental information regarding our results of operations, consistent with how we evaluate our performance. Currency impacts on consolidated and segment results have been derived by translating current period financial results in local currency using the average exchange rate for the prior period to which the financial information is being compared.
Inflation Reduction Act
On August 16, 2022, the Inflation Reduction Act ("IRA") was enacted into US law. Effective for tax years beginning after December 31, 2022, the IRA imposes a 15% corporate minimum tax, a 1% excise tax on share repurchases, and creates and extends certain tax-related energy incentives. Management does not expect the tax-related provisions of the IRA to have a material impact on its consolidated financial statements.
Market Conditions
We sell commodity and specialty chemicals and ingredients that are used in manufacturing processes and as components in other products. Our sales are correlated with and affected by seasonal fluctuations and cycles in the levels of industrial production, manufacturing output and general economic activity. The current business environment in the markets in which we operate consists of complex dynamics. A combination of factors has impacted and disrupted global trade flows, which has resulted in differing pricing conditions, in different end-markets, in different geographies. The duration of these dislocated and imbalanced conditions is unknown.
These market factors have also impacted the transportation market and coupled with continued energy price pressure, driver shortages and inflation, have resulted in higher operating costs. Additionally, shortages across a range of chemicals and ingredients have generally led to fluctuations in chemical prices globally, with corresponding impacts to sales and interim profits.
In such a dynamic environment, we believe remaining connected with our customers to understand demand and supply impacts on their operations is critical to our success. We believe our value as a distributor is heightened in the current environment as
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we work to meet demand requirements through our extensive network, installed asset base, transportation and digital assets, and supplier partnerships, supported by our network of Solutions Centers and technically trained professionals with deep industry knowledge.
A summary of our sales channel and underlying end market performance as of September 30, 2022, with corresponding impacts from the current environment are as follows (percentages represent 2022 third quarter Consolidated Net Sales):
Chemicals and Services (67%) - Within our Chemicals and Services channel, we are seeing resilient growth in inorganic chemistries as well as our Energy and Mining markets. We continue to focus our efforts on expanding our role in Municipal and Industrial Water treatment, with a wide array of chemistries and services designed to ensure sustainably clean water for modern life. We are also seeing growth in our Services channel due in part to increased automotive manufacturing as the microchip shortage begins to abate. In our core chemical distribution, we are seeing strong share gain in the US as we leverage our scale and provide customers with security of supply. In Industrial, our integrated supply chain has enabled us to expand our customer base and better service existing business. We are also capitalizing on our ability to reduce our carbon footprint as well as the carbon footprint of our customers and suppliers.
Ingredients and Specialties (33%) - Our Ingredients and Specialties channel continues to see growth from our numerous exclusive supplier authorizations and pricing discipline despite growing concerns of a recession in the US and the ongoing conflict in Ukraine. Some product shortages have begun to abate; however, for some select geographies and chemistries, we are still seeing challenges in meeting all of the demand in the market. We saw growth in Pharma, as we focus on formulations that have high-quality ingredients for our customers and the medicines we require to stay healthy. In Food and Personal Care, we grew despite dampening sentiment, as new supplier partnerships and a focused technical sales force are driving value for our customers and suppliers. In Household and Industrial Cleaning, we saw strong growth in Canada and Latin America as our supplier partnerships have helped us expand our market presence. In Lubricants and Metalworking Fluids, we saw sustained growth due to improving demand within both automotive and heavy-duty equipment along with solvent pricing discipline.
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Results of Operations 
The following tables set forth, for the periods indicated, certain statements of operations data:
 Three months ended September 30,% ChangeNine months ended September 30,% Change
(in millions)2022202120222021
Net sales$2,983.5 $2,487.9 19.9 %$8,882.7 $7,037.4 26.2 %
Cost of goods sold (exclusive of depreciation)2,277.4 1,871.5 21.7 %6,711.1 5,276.1 27.2 %
Operating expenses:
Outbound freight and handling121.7 105.8 15.0 %363.3 295.0 23.2 %
Warehousing, selling and administrative324.8 299.7 8.4 %937.8 875.7 7.1 %
Other operating expenses, net5.7 17.7 (67.8)%26.7 91.8 (70.9)%
Depreciation32.8 36.7 (10.6)%97.9 117.8 (16.9)%
Amortization12.0 12.4 (3.2)%35.8 38.7 (7.5)%
Impairment charges0.3 0.9 (66.7)%0.3 3.0 (90.0)%
Total operating expenses497.3 473.2 5.1 %1,461.8 1,422.0 2.8 %
Operating income208.8 143.2 45.8 %709.8 339.3 109.2 %
Other (expense) income:
Interest income0.8 1.5 (46.7)%2.9 2.6 11.5 %
Interest expense(27.6)(23.7)16.5 %(74.1)(77.1)(3.9)%
Gain on sale of business— — N/A— 88.2 (100.0)%
Other income, net0.6 1.1 (45.5)%11.0 33.1 (66.8)%
Total other (expense) income(26.2)(21.1)24.2 %(60.2)46.8 N/M
Income before income taxes182.6 122.1 49.5 %649.6 386.1 68.2 %
Income tax expense52.6 37.7 39.5 %175.9 82.3 113.7 %
Net income$130.0 $84.4 54.0 %$473.7 $303.8 55.9 %
Net sales
Net sales increased $495.6 million, or 19.9%, and $1,845.3 million, or 26.2%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, net sales increased $619.6 million, or 24.9%, and $2,130.9 million, or 30.3%, for the three and nine months ended September 30, 2022, respectively. The increase was primarily due to our pricing discipline in inflationary markets and market share gains. Refer to the “Analysis of Segment Results” for the three and nine months ended September 30, 2022 for additional information.
Gross profit (exclusive of depreciation)
Gross profit (exclusive of depreciation) increased $89.7 million, or 14.6%, and $410.3 million, or 23.3%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, gross profit (exclusive of depreciation) increased $116.5 million, or 18.9%, and $474.9 million, or 27.0%, for the three and nine months ended September 30, 2022, respectively. The increase in gross profit (exclusive of depreciation) was primarily attributable to our pricing discipline in inflationary markets, operational execution and market share gains, partially offset by higher input cost inflation. Refer to the “Analysis of Segment Results” for the three and nine months ended September 30, 2022 and “Non-GAAP Financial Measures” for additional information.
Operating expenses
Outbound freight and handling
Outbound freight and handling expenses increased $15.9 million, or 15.0%, and $68.3 million, or 23.2%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, outbound freight and handling expenses increased $19.2 million, or 18.1%, and $75.8 million, or 25.7%, for the three and nine months ended September 30, 2022. Refer to the “Analysis of Segment Results” for the three and nine months ended September 30, 2022 for additional information.
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Warehousing, selling and administrative
Warehousing, selling and administrative expenses (“WS&A”) increased $25.1 million, or 8.4%, and $62.1 million, or 7.1%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, WS&A increased $38.0 million, or 12.7%, and $90.7 million, or 10.4%, for the three and nine months ended September 30, 2022, respectively, primarily attributable to higher operating costs and variable compensation, partially offset by higher environmental remediation costs in the prior year. Additionally, the nine months ended September 30, 2022 was further offset by net synergies and an environmental recovery. Refer to the “Analysis of Segment Results” for the three and nine months ended September 30, 2022 for additional information.
Other operating expenses, net
Other operating expenses, net decreased $12.0 million for the three months ended September 30, 2022 and $65.1 million for the nine months ended September 30, 2022. Refer to “Note 6: Supplemental financial information” in Item 1 of this Quarterly Report on Form 10-Q for additional information. 
Depreciation and Amortization
Depreciation expense decreased $3.9 million, or 10.6%, and $19.9 million, or 16.9%, for the three and nine months ended September 30, 2022, respectively, primarily due to certain assets reaching the end of their depreciable lives. On a constant currency basis, depreciation expense decreased $2.9 million, or 7.9%, and $17.6 million, or 14.9%, for the three and nine months ended September 30, 2022, respectively, due to certain assets reaching the end of their depreciable lives.
Amortization expense decreased $0.4 million, or 3.2%, and $2.9 million, or 7.5%, for the three and nine months ended September 30, 2022, respectively, primarily due to certain intangibles reaching the end of their amortizable lives.
Interest expense
Interest expense increased $3.9 million, or 16.5%, for the three months ended September 30, 2022 mainly due to higher interest rates on floating debt, and decreased $3.0 million, or 3.9%, for the nine months ended September 30, 2022, primarily due to lower average outstanding borrowings partially offset by higher interest rates on floating debt. Refer to “Note 11: Debt” in Item 1 of this Quarterly Report on Form 10-Q for additional information.
Gain on sale of business
Gain on sale of business was $88.2 million for the nine months ended September 30, 2021, which was primarily due to the sale of our Distrupol business and also included adjustments to the sale price of the Canadian Agriculture services business.
Other income, net
Other income, net decreased $0.5 million, or 45.5%, and $22.1 million, or 66.8%, for the three and nine months ended September 30, 2022, respectively. Refer to “Note 6: Supplemental financial information” in Item 1 of this Quarterly Report on Form 10-Q for additional information.
Income tax expense
Income tax expense was $52.6 million and $37.7 million for the three months ended September 30, 2022 and 2021, respectively, resulting in effective income tax rates of 28.8% and 30.9% for the respective periods. Income tax expense was $175.9 million and $82.3 million for the nine months ended September 30, 2022 and 2021, respectively, resulting in effective income tax rates of 27.1% and 21.3% for the respective periods.
Our 2022 effective income tax rate was higher than the US federal statutory rate of 21.0%, primarily due to higher rates on foreign earnings, US tax on foreign earnings, US state income taxes and non-deductible employee costs.
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Results of Reportable Business Segments
Our operations are structured into four reportable segments that represent the geographic areas under which we operate and manage our business. These segments are USA, EMEA, Canada and LATAM, which includes developing businesses in Latin America and the Asia-Pacific region. Management believes Adjusted EBITDA is an important measure of operating performance, which is used as the primary basis for the chief operating decision maker to evaluate the performance of each of our reportable segments.
We believe certain other financial measures that are not calculated in accordance with US GAAP provide relevant and meaningful information concerning the ongoing operating results of the Company. These financial measures include gross profit (exclusive of depreciation), gross margin and Adjusted EBITDA margin. Such non-GAAP financial measures are referred to from time to time in this report, but should not be viewed as a substitute for GAAP measures of performance and should be considered along with the comparable US GAAP measures. See “Note 16: Segments” to our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q, “Analysis of Segment Results” within this Item and “Non-GAAP Financial Measures” within this Item for additional information.
Analysis of Segment Results
USA
Three months ended September 30,% ChangeNine months ended September 30,% Change
(in millions)2022202120222021
Net sales:
External customers$2,021.2 $1,616.8 25.0 %$5,834.6 $4,410.0 32.3 %
Inter-segment28.2 28.9 (2.4)%100.5 65.8 52.7 %
Total net sales2,049.4 1,645.7 24.5 %5,935.1 4,475.8 32.6 %
Cost of goods sold (exclusive of depreciation)1,559.3 1,234.8 26.3 %4,476.9 3,357.3 33.3 %
Outbound freight and handling93.6 77.7 20.5 %273.8 209.8 30.5 %
Warehousing, selling and administrative214.0 193.0 10.9 %594.1 541.1 9.8 %
Adjusted EBITDA$182.5 $140.2 30.2 %$590.3 $367.6 60.6 %
Three months ended September 30,% ChangeNine months ended September 30,% Change
(in millions)2022202120222021
Gross profit (exclusive of depreciation):
Net sales$2,049.4 $1,645.7 24.5 %$5,935.1 $4,475.8 32.6 %
Cost of goods sold (exclusive of depreciation)1,559.3 1,234.8 26.3 %4,476.9 3,357.3 33.3 %
Gross profit (exclusive of depreciation)$490.1 $410.9 19.3 %$1,458.2 $1,118.5 30.4 %
External sales increased $404.4 million, or 25.0%, and $1,424.6 million, or 32.3%, for the three and nine months ended September 30, 2022, respectively, primarily due to our pricing discipline in inflationary markets and market share gains.
Gross profit (exclusive of depreciation) increased $79.2 million, or 19.3%, and $339.7 million, or 30.4%, for the three and nine months ended September 30, 2022, respectively, primarily due to our pricing discipline in inflationary markets, operational execution and market share gains, partially offset by input cost inflation. Gross margin decreased from 25.4% for the three months ended September 30, 2021 to 24.2% for the three months ended September 30, 2022 and decreased from 25.4% for the nine months ended September 30, 2021 to 25.0% for the nine months ended September 30, 2022, with both comparable periods primarily impacted by input cost inflation, partially offset by our pricing discipline in inflationary markets.
Outbound freight and handling expenses increased $15.9 million, or 20.5%, and $64.0 million, or 30.5%, for the three and nine months ended September 30, 2022, respectively, primarily due to higher delivery costs caused by supply chain constraints.
WS&A increased $21.0 million, or 10.9%, and $53.0 million, or 9.8%, for the three and nine months ended September 30, 2022, respectively, primarily due to higher operating costs and variable compensation, partially offset by higher environmental remediation costs in the prior year. Net synergies and an environmental recovery in 2022 also favorably impacted the nine month comparable periods. As a percentage of external sales, WS&A decreased from 11.9% for the three months ended
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September 30, 2021 to 10.6% for the three months ended September 30, 2022 and decreased from 12.3% for the nine months ended September 30, 2021 to 10.2% for the nine months ended September 30, 2022 primarily due to the increase in sales.
Adjusted EBITDA increased $42.3 million, or 30.2%, and $222.7 million, or 60.6%, for the three and nine months ended September 30, 2022, respectively, primarily driven by higher gross profit (exclusive of depreciation), partially offset by higher outbound freight and handling expenses as well as higher WS&A. Adjusted EBITDA margin increased from 8.7% in the three months ended September 30, 2021 to 9.0% for the three months ended September 30, 2022 and increased from 8.3% in the nine months ended September 30, 2021 to 10.1% for the nine months ended September 30, 2022, reflecting the business operating leverage for the full nine month period.
EMEA
Three months ended September 30,% ChangeNine months ended September 30,% Change
(in millions)2022202120222021
Net sales:
External customers$486.5 $480.3 1.3 %$1,595.9 $1,490.2 7.1 %
Inter-segment4.8 0.9 433.3 %8.5 3.6 136.1 %
Total net sales491.3 481.2 2.1 %1,604.4 1,493.8 7.4 %
Cost of goods sold (exclusive of depreciation)384.4 368.1 4.4 %1,225.4 1,124.4 9.0 %
Outbound freight and handling15.5 16.3 (4.9)%50.3 48.3 4.1 %
Warehousing, selling and administrative56.4 62.4 (9.6)%179.5 188.3 (4.7)%
Adjusted EBITDA$35.0 $34.4 1.7 %$149.2 $132.8 12.3 %
Three months ended September 30,% ChangeNine months ended September 30,% Change
(in millions)2022202120222021
Gross profit (exclusive of depreciation):
Net sales$491.3 $481.2 2.1 %$1,604.4 $1,493.8 7.4 %
Cost of goods sold (exclusive of depreciation)384.4 368.1 4.4 %1,225.4 1,124.4 9.0 %
Gross profit (exclusive of depreciation)$106.9 $113.1 (5.5)%$379.0 $369.4 2.6 %
External sales increased $6.2 million, or 1.3%, and $105.7 million, or 7.1%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, external sales increased $116.9 million, or 24.3%, and $373.1 million, or 25.0%, for the three and nine months ended September 30, 2022, respectively. The increase was primarily due to our pricing discipline in inflationary markets and market share gains, with the nine month comparison period partially offset by the effects of the Distrupol divestiture.
Gross profit (exclusive of depreciation) decreased $6.2 million, or 5.5%, and increased $9.6 million, or 2.6%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, gross profit (exclusive of depreciation) increased $17.7 million, or 15.6%, and $70.4 million, or 19.1%, for the three and nine months ended September 30, 2022, respectively. The increase was primarily due to our pricing discipline in inflationary markets, operational execution and market share gains, with the nine month comparison period partially offset by the effects of the Distrupol divestiture. Gross margin decreased from 23.5% for the three months ended September 30, 2021 to 22.0% for the three months ended September 30, 2022 and decreased from 24.8% for the nine months ended September 30, 2021 to 23.7% for the nine months ended September 30, 2022, with both comparable periods negatively impacted by input cost inflation, partially offset by our pricing discipline in inflationary markets.
Outbound freight and handling expenses decreased $0.8 million, or 4.9%, and increased $2.0 million, or 4.1%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, outbound freight and handling expenses increased $2.1 million, or 12.9%, and $8.8 million, or 18.2%, for the three and nine months ended September 30, 2022, respectively, primarily due to higher delivery costs caused by supply chain constraints.
WS&A decreased $6.0 million, or 9.6%, and $8.8 million, or 4.7%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, WS&A increased $5.8 million, or 9.3% and $18.5 million, or 9.8%, for the three and nine months ended September 30, 2022, respectively, primarily due to higher operating costs and variable compensation. As a percentage of external sales, WS&A decreased from 13.0% for the three months ended September 30, 2021 to 11.6% for the
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three months ended September 30, 2022 and decreased from 12.6% for the nine months ended September 30, 2021 to 11.2% for the nine months ended September 30, 2022 due to the impact of fluctuations in foreign currency exchange rates partially offset by higher operating costs and variable compensation.
Adjusted EBITDA increased $0.6 million, or 1.7%, and $16.4 million, or 12.3%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, Adjusted EBITDA increased $9.8 million, or 28.5%, and $43.1 million, or 32.5%, for the three and nine months ended September 30, 2022, respectively, primarily due to higher gross profit (exclusive of depreciation). Adjusted EBITDA margin remained flat at 7.2% for the three months ended September 30, 2022 and 2021 primarily due to lower gross margin offset by the business operating leverage. Adjusted EBITDA margin increased from 8.9% for the nine months ended September 30, 2021 to 9.3% for the nine months ended September 30, 2022, reflecting the business operating leverage for the full nine month period.
Canada
Three months ended September 30,% ChangeNine months ended September 30,% Change
(in millions)2022202120222021
Net sales:
External customers$273.9 $223.3 22.7 %$865.5 $684.6 26.4 %
Inter-segment3.2 0.6 433.3 %7.5 2.6 188.5 %
Total net sales277.1 223.9 23.8 %873.0 687.2 27.0 %
Cost of goods sold (exclusive of depreciation)212.1 167.1 26.9 %664.0 515.2 28.9 %
Outbound freight and handling9.2 8.7 5.7 %29.3 27.8 5.4 %
Warehousing, selling and administrative27.9 24.1 15.8 %83.1 68.9 20.6 %
Adjusted EBITDA$27.9 $24.0 16.3 %$96.6 $75.3 28.3 %
Three months ended September 30,% ChangeNine months ended September 30,% Change
(in millions)2022202120222021
Gross profit (exclusive of depreciation):
Net sales$277.1 $223.9 23.8 %$873.0 $687.2 27.0 %
Cost of goods sold (exclusive of depreciation)212.1 167.1 26.9 %664.0 515.2 28.9 %
Gross profit (exclusive of depreciation)$65.0 $56.8 14.4 %$209.0 $172.0 21.5 %
External sales increased $50.6 million, or 22.7%, and $180.9 million, or 26.4%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, external sales increased $61.1 million, or 27.4%, and $203.1 million, or 29.7%, for the three and nine months ended September 30, 2022, respectively. The increase was primarily due to our pricing discipline in inflationary markets and market share gains.
Gross profit (exclusive of depreciation) increased $8.2 million, or 14.4%, and $37.0 million, or 21.5%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, gross profit (exclusive of depreciation) increased $10.7 million, or 18.8%, and $42.3 million, or 24.6%, for the three and nine months ended September 30, 2022, respectively. The increase was primarily due to our pricing discipline in inflationary markets, operational execution and market share gains, partially offset by input cost inflation. Gross margin decreased from 25.4% for the three months ended September 30, 2021 to 23.7% for the three months ended September 30, 2022 and decreased from 25.1% for the nine months ended September 30, 2021 to 24.1% for the nine months ended September 30, 2022, with both comparable periods impacted by input cost inflation partially offset by our pricing discipline in inflationary markets.
Outbound freight and handling expenses increased $0.5 million, or 5.7%, and $1.5 million, or 5.4%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, outbound freight and handling expenses increased $0.9 million, or 10.3%, and $2.2 million, or 7.9%, for the three and nine months ended September 30, 2022, respectively, primarily due to higher delivery costs caused by supply chain constraints.
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WS&A increased $3.8 million, or 15.8%, and $14.2 million, or 20.6%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, WS&A increased by $4.9 million, or 20.3%, and $16.4 million, or 23.8%, for the three and nine months ended September 30, 2022, respectively. The increase was primarily due to higher operating costs and variable compensation. As a percentage of external sales, WS&A decreased from 10.8% for the three months ended September 30, 2021 to 10.2% for the three months ended September 30, 2022 and decreased from 10.1% for the nine months ended September 30, 2021 to 9.6% for the nine months ended September 30, 2022 primarily due to the increase in sales.
Adjusted EBITDA increased $3.9 million, or 16.3%, and $21.3 million, or 28.3%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, Adjusted EBITDA increased $4.9 million, or 20.4%, and $23.7 million, or 31.5%, for the three and nine months ended September 30, 2022, respectively. The increase was primarily due to higher gross profit (exclusive of depreciation), partially offset by increased WS&A. Adjusted EBITDA margin decreased from 10.7% for the three months ended September 30, 2021 to 10.2% for the three months ended September 30, 2022 primarily due to lower gross margin, partially offset by business operating leverage, and increased from 11.0% for the nine months ended September 30, 2021 to 11.2% for the nine months ended September 30, 2022, reflecting the business operating leverage for the full nine month period.
LATAM
Three months ended September 30,% ChangeNine months ended September 30,% Change
(in millions)2022202120222021
Net sales:
External customers$201.9 $167.5 20.5 %$586.7 $452.6 29.6 %
Inter-segment0.1 0.7 (85.7)%0.2 0.7 (71.4)%
Total net sales202.0 168.2 20.1 %586.9 453.3 29.5 %
Cost of goods sold (exclusive of depreciation)157.9 132.6 19.1 %461.5 351.9 31.1 %
Outbound freight and handling3.4 3.1 9.7 %9.9 9.1 8.8 %
Warehousing, selling and administrative23.4 16.8 39.3 %65.8 47.7 37.9 %
Adjusted EBITDA$17.3 $15.7 10.2 %$49.7 $44.6 11.4 %
Three months ended September 30,% ChangeNine months ended September 30,% Change
(in millions)2022202120222021
Gross profit (exclusive of depreciation):
Net sales$202.0 $168.2 20.1 %$586.9 $453.3 29.5 %
Cost of goods sold (exclusive of depreciation)157.9 132.6 19.1 %461.5 351.9 31.1 %
Gross profit (exclusive of depreciation)$44.1 $35.6 23.9 %$125.4 $101.4 23.7 %
External sales increased $34.4 million, or 20.5%, and $134.1 million, or 29.6%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, external net sales increased $37.1 million, or 22.1%, and $130.1 million, or 28.7%, for the three and nine months ended September 30, 2022, respectively, primarily due to our pricing discipline in inflationary markets and the Sweetmix acquisition, which contributed 9.2% and 10.3% of the increase for the three and nine months ended September 30, 2022, respectively.
Gross profit (exclusive of depreciation) increased $8.5 million, or 23.9%, and $24.0 million, or 23.7%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, gross profit (exclusive of depreciation) increased $9.0 million, or 25.3%, and $22.4 million, or 22.1%, for the three and nine months ended September 30, 2022, respectively, primarily due to our pricing discipline in inflationary markets and the Sweetmix acquisition, which contributed 6.4% and 8.9% of the increase for the three and nine months ended September 30, 2022, respectively. Both comparable periods were also negatively impacted by input cost inflation. Gross margin increased from 21.3% for the three months ended September 30, 2021 to 21.8% for the three months ended September 30, 2022 primarily driven by our pricing discipline in inflationary markets, partially offset by higher input cost inflation, and decreased from 22.4% for the nine months ended September 30, 2021 to 21.4% for the nine months ended September 30, 2022, impacted by input cost inflation.
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Outbound freight and handling expenses increased $0.3 million, or 9.7%, and $0.8 million, or 8.8%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, outbound freight and handling expenses increased $0.4 million, or 12.9%, and $0.7 million, or 7.7%, for the three and nine months ended September 30, 2022, respectively.
WS&A increased $6.6 million, or 39.3%, and $18.1 million, or 37.9%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, WS&A increased $6.8 million, or 40.5%, and $17.3 million, or 36.3%, for the three and nine months ended September 30, 2022, respectively, primarily due to increased corporate cost allocation as a result of the SAP implementation and higher operating costs. As a percentage of external sales, WS&A increased from 10.0% for the three months ended September 30, 2021 to 11.6% for the three months ended September 30, 2022 and increased from 10.5% for the nine months ended September 30, 2021 to 11.2% for the nine months ended September 30, 2022 primarily due to increased corporate cost allocation as a result of the SAP implementation and higher operating costs.
Adjusted EBITDA increased $1.6 million, or 10.2%, and $5.1 million, or 11.4%, for the three and nine months ended September 30, 2022, respectively. On a constant currency basis, Adjusted EBITDA increased $1.8 million, or 11.5%, and $4.4 million, or 9.9%, for the three and nine months ended September 30, 2022, respectively. The increase was primarily due to higher gross profit (exclusive of depreciation), partially offset by increased WS&A. Adjusted EBITDA margin decreased from 9.4% for the three months ended September 30, 2021 to 8.6% for the three months ended September 30, 2022 and decreased from 9.9% for the nine months ended September 30, 2021 to 8.5% for the nine months ended September 30, 2022, primarily due to higher WS&A.
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Liquidity and Capital Resources
The Company’s primary sources of liquidity are cash generated from its operations and borrowings under its committed North American and European credit facilities (“credit facilities”). As of September 30, 2022, liquidity for the Company was $1,077.3 million, comprised of $276.3 million of cash and cash equivalents and $801.0 million of available borrowings under our credit facilities. These credit facilities are guaranteed by certain significant subsidiaries and secured by such parties’ eligible trade receivables and inventory with the maximum borrowing capacity under these credit facilities of $1.5 billion and €200 million. Significant reductions in our trade receivables and inventory would reduce our availability to access liquidity under these credit facilities. We have no active financial maintenance covenants in our credit agreements, however, there is a springing fixed charge coverage ratio (“FCCR”) under the revolving credit facilities of 1.0x, applicable only if availability is less than or equal to 10% of the borrowing capacity. If the FCCR was applicable, the calculation would have been 7.4x as of September 30, 2022.
Our primary short-term liquidity and capital resource needs are to finance operating expenses, working capital, capital expenditures, other liabilities including environmental remediation and interest, possible business acquisitions, share repurchases and general corporate purposes. The majority of our debt obligations mature in 2026 and beyond. To the extent that our cash balances from time to time exceed amounts that are needed to fund our immediate liquidity requirements, we will consider alternative uses of some or all of such excess cash. Such alternatives may include, among others, the redemption or repurchase of debt securities or other borrowings through open market purchases, privately negotiated transactions or otherwise. Refer to “Note 11: Debt” in Item 1 of this Quarterly Report on Form 10-Q for additional information related to our debt obligations. Management continues to balance its focus on sales and earnings growth with continuing efforts in cost control and working capital management.
On October 27, 2022, we entered into the New Senior ABL Facility. Refer to “Note 17: Subsequent events” in Item 1 of this Quarterly Report on Form 10-Q for additional information.
Access to debt capital markets has historically provided the Company with sources of liquidity, beyond normal operating cash flows. We do not anticipate having difficulty in obtaining financing from those markets in the future with our history of favorable results in the debt capital markets and strong relationships with global financial institutions. However, our ability to continue to access the debt capital markets with favorable interest rates and other terms will depend, to a significant degree, on maintaining our current ratings assigned by the credit rating agencies.
We expect our 2022 capital expenditures to be approximately $145 million for maintenance and growth, including safety, cost improvements and ESG investments. Interest payments for 2022 are expected to be approximately $90 million. We expect to fund our capital expenditures and our interest payments with cash from operations or cash on hand.
We believe funds provided by our primary sources of liquidity will be adequate to meet our liquidity, debt repayment obligations and capital resource needs for at least the next 12 months under current operating conditions.
Cash Flows
The following table presents a summary of our cash flows:
 Nine months ended September 30,Change
(in millions)20222021
Net cash provided by operating activities$170.8 $115.1 $55.7 
Net cash (used) provided by investing activities(115.6)79.0 (194.6)
Net cash provided (used) by financing activities18.7 (347.4)366.1 
Cash Provided by Operating Activities
Cash provided by operating activities increased $55.7 million for the nine months ended September 30, 2022. The increase was primarily due to higher net income, exclusive of non-cash items, partially offset by the timing of changes in trade working capital and other, net cash flow items.
The change in net income, exclusive of non-cash items, increased $296.1 million from $374.0 million for the nine months ended September 30, 2021 to $670.1 million for the nine months ended September 30, 2022. Cash used by other, net increased $146.6 million for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021, primarily attributable to tax payments, accrued compensation and timing differences related to other assets and liabilities.
Cash used by trade working capital, which includes trade accounts receivable, net, inventories and trade accounts payable, increased $102.3 million for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. The year-over-year increase in cash used by trade working capital was due to increased inventory purchase costs and higher trade accounts payable primarily attributable to increased inventory purchases in the current year partially offset by a favorable change in trade accounts receivable, net related to the timing of sales and cash collections.
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Cash (Used) Provided by Investing Activities
Investing cash flows for the nine months ended September 30, 2022 included capital expenditures of $103.7 million, cash paid for the Vicom acquisition of $12.7 million, cash paid for the Sweetmix acquisition of $3.8 million and proceeds of $3.6 million from the sale of property, plant and equipment. Investing cash flows for the nine months ended September 30, 2021 included proceeds of $136.5 million from the sale of the Distrupol business, capital expenditures of $68.9 million and proceeds of $13.7 million from the sale of property, plant and equipment.
Cash Provided (Used) by Financing Activities
Financing cash flows for the nine months ended September 30, 2022 included net proceeds under revolving credit facilities of $294.1 million, share repurchases of $204.9 million and long-term debt repayments of $77.3 million. Financing cash flows for the nine months ended September 30, 2021 included long-term debt repayments of $1,389.0 million, long-term debt issuances of $995.0 million, proceeds from the exercise of warrants of $27.1 million and net proceeds under revolving credit facilities of $13.5 million.
Off-Balance Sheet Arrangements
There were no material changes in the Company’s off-balance sheet arrangements since the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Contractual Obligations and Commitments
There were no material changes in the Company’s contractual obligations and commitments since the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, other than as disclosed in “Note 11: Debt” and “Note 17: Subsequent events” to the interim condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, as well as the “Liquidity and Capital Resources” included in Item 2 of this Quarterly Report on Form 10-Q.
Critical Accounting Estimates
There were no material changes in the Company’s critical accounting estimates since the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Recently Issued Accounting Pronouncements
See “Note 1: Basis of presentation” to the interim condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
Forward Looking Statements and Information
Certain parts of this Quarterly Report on Form 10-Q contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally accompanied by words such as “believes,” “expects,” “may,” “will,” “should,” “could,” “seeks,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms. All forward-looking statements made in this Quarterly Report on Form 10-Q are qualified by these cautionary statements.
Any forward-looking statements represent our views only as of the date of this report and should not be relied upon as representing our views as of any subsequent date, and we undertake no obligation, other than as may be required by law, to update any forward-looking statement. We caution you that forward-looking statements are not guarantees of future performance and that our actual performance may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. Forward-looking statements include, but are not limited to, statements about:
•the impact of general economic conditions, supplier shut-downs, port congestion, acute COVID-19 pandemic recovery demand, the Russia-Ukraine conflict and weather events on our end markets, operations, financial condition and operating results;
•our expense control and cost reduction plans and other strategic plans and initiatives;
•demand for products, systems and services that meet growing customer sustainability standards, expectations and preferences and our ability to provide such products, systems and services to maintain our competitive position;
•our ability to sell specialty products at higher profit;
•our liquidity outlook and the funding thereof, and cash requirements and adequacy of resources to fund them;
•significant factors that may adversely affect us and our industry;
•the outcome and effect of ongoing and future legal proceedings;
•market conditions and outlook;
•return of capital to shareholders;
•future contributions to, and withdrawal liability in connection with, our pension plans and cash payments for postretirement benefits; and
•future capital expenditures and investments.
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Potential factors that could affect such forward-looking statements include, among others:
•general economic conditions, particularly fluctuations in industrial production and consumption and the timing and extent of economic downturns;
•significant changes in the business strategies of producers or in the operations of our customers;
•increased competitive pressures, including as a result of competitor consolidation;
•potential supply chain disruptions;
•significant changes in the pricing, demand and availability of chemicals;
•our indebtedness, the restrictions imposed by, and costs associated with, our debt instruments, and our ability to obtain additional financing;
•the broad spectrum of laws and regulations that we are subject to, including extensive environmental, health and safety laws and regulations and changes in tax laws;
•potential cybersecurity incidents, including security breaches;
•an inability to generate sufficient working capital;
•transportation related challenges, including increases in transportation and fuel costs, changes in our relationship with third party transportation providers, and ability to attract and retain qualified drivers;
•accidents, safety failures, environmental damage, product quality issues, delivery failures or hazards and risks related to our operations and the hazardous materials we handle;
•potential inability to obtain adequate insurance coverage;
•ongoing litigation, potential product liability claims and recalls, and other environmental, legal and regulatory risks;
•challenges associated with international operations;
•exposure to interest rate and currency fluctuations;
•possible impairment of goodwill and intangible assets;
•the ongoing and evolving COVID-19 pandemic, including impacts on the global economy, our employees, customers, vendors and suppliers, and our business, results of operations and financial condition;
•an inability to integrate the business and systems of companies we acquire, including failure to realize the anticipated benefits of such acquisitions;
•negative developments affecting our pension plans and multi-employer pensions;
•labor disruptions associated with the unionized portion of our workforce;
•our ability to attract or retain a qualified and diverse workforce; and
•our ability to execute on our strategies related to environmental, social, and governance matters, and achieve related expectations may be impacted as a result of evolving regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs and the availability of requisite financing and changes in carbon markets; and
•the other factors described in the Company’s filings with the Securities and Exchange Commission.
The Quarterly Report on Form 10-Q, including the uncertainties and factors discussed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 should be read in full and with the understanding that actual future results may be materially different from expectations expressed or implied by any forward-looking statement. All forward-looking statements made in this Quarterly Report on Form 10-Q are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise and changes in future operating results over time or otherwise.
Comparisons of results between current and prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Non-GAAP Financial Measures
We monitor the results of our reportable segments separately for the purposes of making decisions about resource allocation and performance assessment, and evaluate performance using Adjusted EBITDA. Additionally, the Company uses Adjusted EBITDA in setting performance incentive targets to align management compensation measurement with operational performance.
We define Adjusted EBITDA as the sum of consolidated net income; depreciation; amortization; net interest expense; income tax expense; impairment charges; (gain) loss on sale of business; other operating expenses, net and other income, net (for both, see “Note 6: Supplemental financial information” in Item 1 of this Quarterly Report on Form 10-Q for additional information). For a reconciliation of net income to Adjusted EBITDA, the most comparable measure calculated in accordance with GAAP, see “Note 16: Segments” to our condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q.
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We believe other financial measures, as defined below, that do not comply with US GAAP provide relevant and meaningful information concerning the ongoing operating results of the Company.
•Gross profit (exclusive of depreciation): net sales less cost of goods sold (exclusive of depreciation);
•Gross margin: gross profit (exclusive of depreciation) divided by external sales on a segment level and by net sales on a consolidated level; and
•Adjusted EBITDA margin: Adjusted EBITDA divided by external sales on a segment level and by net sales on a consolidated level.
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation is a non-GAAP financial measure, which excludes the impact of fluctuations in foreign currency exchange rates. We believe providing information on a constant currency basis provides valuable supplemental information regarding our results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages and other information by converting our financial results in local currency for a period using the average exchange rate for the prior period to which we are comparing.
The non-GAAP financial measures noted above are not calculated in accordance with GAAP and should not be considered a substitute for net income or any other measure of financial performance presented in accordance with GAAP. They are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help investors’ ability to analyze underlying trends in the Company’s business, evaluate its performance relative to other companies in its industry and provide useful information to both management and investors by excluding certain items that may not be indicative of the Company’s core operating results. Additionally, other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
Item 3.    Quantitative and Qualitative Disclosures about Market Risk
There were no material changes from the “Quantitative and Qualitative Disclosures about Market Risk” disclosed in Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Item 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of the Company’s management, including the principal executive officer and principal financial officer, the Company conducted an evaluation as of September 30, 2022 of the effectiveness of the design and operation of its disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the principal executive officer and principal financial officer concluded the Company’s disclosure controls and procedures were effective as of September 30, 2022.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
Information pertaining to legal proceedings can be found in Note 14 to the interim condensed consolidated financial statements included in Part I, Item 1. Financial Statements of this report.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Information on common stock purchases by the Company or any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Exchange Act, during the third quarter of 2022 is provided below:
Period
Total Number of Shares Purchased
Average Price Paid per Share
Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program(1)
Maximum Approximate Dollar Value of Shares that may yet be Purchased Under the Plan or Program (millions)(1)
July 1-31, 2022485,898 $24.59 485,898 $333.5 
August 1-31, 2022(2)
561,224 26.50 536,224 319.2 
September 1-30, 20222,994,221 24.77 2,994,221 245.1 
Total4,041,343 24.99 4,016,343 
(1)As announced on November 1, 2021, our Board of Directors authorized the repurchase of up to $500.0 million of our outstanding common stock, which expires on October 27, 2026.
(2)Includes 25,000 shares purchased in open market transactions by an executive officer of the Company who may be deemed to be an "affiliated purchaser" as defined in Rule 10b-18(a)(3) of the Exchange Act.



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Item 6.     Exhibits
Exhibit NumberExhibit Description
Letter Agreement, by and between Nick Powell and Univar Solutions Inc., dated as of September 12, 2022
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
_______________________
†Identifies each management compensation plan or arrangement.
*Filed herewith.
**Furnished herewith.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
Univar Solutions Inc.
(Registrant)
By:/s/ David C. Jukes
David C. Jukes
President and Chief Executive Officer
Date: November 2, 2022
 
By:/s/ Nicholas W. Alexos
Nicholas W. Alexos
Executive Vice President and Chief Financial Officer
Date: November 2, 2022

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