10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐ 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: 001-38912

____________________________

Avantor, Inc.

(Exact name of registrant as specified in its charter)

___________________________________

Delaware	82-2758923
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Radnor Corporate Center, Building One, Suite 200

100 Matsonford Road

Radnor, Pennsylvania 19087

(Address of principal executive offices) (zip code)

(610) 386-1700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	AVTR	New York Stock Exchange
6.250% Series A Mandatory Convertible Preferred Stock, $0.01 par value	AVTR PRA	New 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

On October 20, 2020, 578,338,818 shares of common stock, $0.01 par value per share, were outstanding.

Avantor, Inc. and subsidiaries

Form 10-Q for the quarterly period ended September 30, 2020

Table of contents

	Page
Glossary	ii
Cautionary factors regarding forward-looking statements	iii
PART I — FINANCIAL INFORMATION
Item 1. Financial statements	1
Item 2. Management’s discussion and analysis of financial condition and results of operations	25
Item 3. Quantitative and qualitative disclosures about market risk	35
Item 4. Controls and procedures	36
PART II — OTHER INFORMATION
Item 1. Legal proceedings	36
Item 1A. Risk factors	36
Item 2. Unregistered sales of equity securities and use of proceeds	38
Item 3. Defaults upon senior securities	38
Item 4. Mine safety disclosures	38
Item 5. Other information	38
Item 6. Exhibits	39
Signature	40

i

Glossary

	Description
we, us, our	Avantor, Inc. and its subsidiaries
2019 Plan	the Avantor, Inc. 2019 Equity Incentive Plan, a stock-based compensation plan
Adjusted EBITDA	our earnings or loss before interest, taxes, depreciation, amortization and certain other adjustments
Annual Report	our annual report on Form 10-K for the year ended December 31, 2019
AMEA	Asia, Middle-East and Africa
AOCI	accumulated other comprehensive income or loss
CARES	the Coronavirus Aid, Relief, and Economic Security Act
CERCLA	Comprehensive Environmental Response, Compensation, and Liability Act
cGMP	Current Good Manufacturing Practice
double-digit	greater than 10%
EURIBOR	the basic rate of interest used in lending between banks on the European Union interbank market
FASB	the Financial Accounting Standards Board of the United States
GAAP	United States generally accepted accounting principles
high single-digit	7 - 9%
JCPS	Junior Convertible Preferred Stock
LIBOR	the basic rate of interest used in lending between banks on the London interbank market
low single-digit	1 - 3%
MCPS	6.250% Series A Mandatory Convertible Preferred Stock
mid single-digit	4 - 6%
NuSil	NuSil Acquisition Corp, NuSil Investments LLC and subsidiaries, a business organization with which we merged in 2016
NuSil Investors	NuSil LLC and NuSil 2.0 LLC, former owners of NuSil that are controlled by its former management
PPE	personal protective equipment
RSU	restricted stock unit
SAR	stand alone appreciation right
SEC	the United States Securities and Exchange Commission
SG&A expenses	selling, general and administrative expenses
Specialty procurement	product sales related to customer procurement services
VWR	VWR Corporation and its subsidiaries, a company we acquired in November 2017

ii

Cautionary factors regarding forward-looking statements

This report contains forward-looking statements. All statements other than statements of historical fact included in this report are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “outlook,” “plan,” “potential,” “project,” “projection,” “seek,” “can,” “could,” “may,” “should,” “would,” “will,” the negatives thereof and other words and terms of similar meaning.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct.

In the first and second quarters of 2020, we updated our risk factors to reflect new developments in the scale and scope of the new global coronavirus pandemic under Part II, Item 1A, “Risk Factors.” You should also understand that the following important factors, in addition to those discussed under “Risk Factors” in our Annual Report, as such risk factors may be updated from time to time in our periodic filings with the SEC and in this report, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

•disruptions to our operations;

•competition from other industry providers;

•our ability to implement our growth strategy;

•our ability to anticipate and respond to changing industry trends;

•adverse trends in consumer, business, and government spending;

•our dependence on sole or limited sources for some essential materials and components;

•our ability to successfully value and integrate acquired businesses;

•our products’ satisfaction of applicable quality criteria, specifications and performance standards;

•our ability to maintain our relationships with key customers;

•our ability to maintain our relationships with distributors;

iii

•our ability to maintain consistent purchase volumes under purchase orders;

•our ability to maintain and develop relationships with drug manufacturers and contract manufacturing organizations;

•the impact of new laws, regulations, or other industry standards;

•changes in the interest rate environment that increase interest on our borrowings;

•adverse impacts from currency exchange rates or currency controls imposed by any government in major areas where we operate or otherwise;

•our ability to implement and improve processing systems and prevent a compromise of our information systems;

•our ability to protect our intellectual property and avoid third-party infringement claims;

•exposure to product liability and other claims in the ordinary course of business;

•our ability to develop new products responsive to the markets we serve;

•the availability of raw materials;

•our ability to avoid negative outcomes related to the use of chemicals;

•our ability to maintain highly skilled employees;

•adverse impact of impairment charges on our goodwill and other intangible assets;

•fluctuations and uncertainties related to doing business outside the United States;

•our ability to obtain and maintain required regulatory clearances or approvals may constrain the commercialization of submitted products;

•our ability to comply with environmental, health and safety laws and regulations, or the impact of any liability or obligation imposed under such laws or regulations;

•our indebtedness could adversely affect our financial condition and prevent us from fulfilling our debt or contractual obligations;

•our ability to generate sufficient cash flows or access sufficient additional capital to meet our debt obligations or to fund our other liquidity needs; and

•our ability to maintain an adequate system of internal control over financial reporting.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this report. We undertake no obligations to update or

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revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.

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PART I — FINANCIAL INFORMATION

Item 1.    Financial statements

Avantor, Inc. and subsidiaries

Index to unaudited condensed consolidated financial statements

	Page
Unaudited condensed consolidated balance sheets	2
Unaudited condensed consolidated statements of operations	3
Unaudited condensed consolidated statements of comprehensive income or loss	4
Unaudited condensed consolidated statements of stockholders’ equity	5
Unaudited condensed consolidated statements of cash flows	7
Notes to unaudited condensed consolidated financial statements	8

1

Avantor, Inc. and subsidiaries

Unaudited condensed consolidated balance sheets

(in millions)	September 30, 2020		December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	370.5	$	186.7
Accounts receivable, net of allowances of $27.5 and $18.6	1,036.9		988.8
Inventory	729.8		711.2
Other current assets	159.6		134.8
Total current assets	2,296.8		2,021.5
Property, plant and equipment, net of accumulated depreciation of $360.3 and $307.8	552.5		557.0
Other intangible assets, net (see note 8)	4,041.7		4,220.2
Goodwill	2,808.8		2,769.4
Other assets	238.6		205.2
Total assets	$	9,938.4	$	9,773.3
Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt	$	14.4	$	93.5
Accounts payable	625.3		560.2
Employee-related liabilities	130.4		114.3
Accrued interest	63.5		74.2
Other current liabilities	302.4		232.3
Total current liabilities	1,136.0		1,074.5
Debt, net of current portion	5,056.5		5,023.0
Deferred income tax liabilities	760.7		785.4
Other liabilities	432.9		428.2
Total liabilities	7,386.1		7,311.1
Commitments and contingencies (see note 10)
Stockholders’ equity:
MCPS including paid-in capital, 20.7 shares outstanding	1,003.7		1,003.7
Common stock including paid-in capital, 578.0 and 572.8 shares outstanding	1,743.6		1,748.1
Accumulated deficit	(140.3)		(203.7)
Accumulated other comprehensive loss	(54.7)		(85.9)
Total stockholders’ equity	2,552.3		2,462.2
Total liabilities and stockholders’ equity	$	9,938.4	$	9,773.3

See accompanying notes to the unaudited condensed consolidated financial statements.

2

Avantor, Inc. and subsidiaries

Unaudited condensed consolidated statements of operations

(in millions, except per share data)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net sales	$	1,605.0	$	1,503.8	$	4,602.7	$	4,516.3
Cost of sales	1,098.6		1,029.8		3,103.8		3,076.0
Gross profit	506.4		474.0		1,498.9		1,440.3
Selling, general and administrative expenses	329.2		330.8		996.7		1,040.4
Operating income	177.2		143.2		502.2		399.9
Interest expense	(65.2)		(98.3)		(251.8)		(342.0)
Loss on extinguishment of debt	(226.4)		—		(226.4)		(70.2)
Other income (expense), net	6.6		(7.6)		11.6		2.9
(Loss) income before income taxes	(107.8)		37.3		35.6		(9.4)
Income tax benefit (expense)	65.6		(15.2)		29.4		(23.4)
Net (loss) income	(42.2)		22.1		65.0		(32.8)
Accumulation of yield on preferred stock	(16.1)		(16.4)		(48.4)		(136.4)
Accretion of make whole premium on series A preferred stock	—		—		—		(220.4)
Net (loss) income available to common stockholders	$	(58.3)	$	5.7	$	16.6	$	(389.6)
(Loss) earnings per share:
Basic	$	(0.10)	$	0.01	$	0.03	$	(1.13)
Diluted	$	(0.10)	$	0.01	$	0.03	$	(1.13)
Weighted average shares outstanding:
Basic	577.2		570.0		575.5		343.7
Diluted	577.2		580.7		582.5		343.7

See accompanying notes to the unaudited condensed consolidated financial statements.

3

Avantor, Inc. and subsidiaries

Unaudited condensed consolidated statements of comprehensive income or loss

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net (loss) income	$	(42.2)	$	22.1	$	65.0	$	(32.8)
Other comprehensive income (loss):
Foreign currency translation — unrealized gain (loss)	55.1		(62.7)		31.0		(59.3)
Derivative instruments:
Unrealized gain (loss)	0.3		1.0		2.6		(0.5)
Reclassification of gain into earnings	(0.7)		(0.9)		(1.5)		(1.2)
Defined benefit plans:
Unrealized loss	(0.6)		(0.1)		(0.4)		(0.1)
Reclassification of gain into earnings	(0.1)		(0.2)		(0.3)		(0.5)
Other comprehensive income (loss) before income taxes	54.0		(62.9)		31.4		(61.6)
Income tax effect	0.1		0.1		(0.2)		0.6
Other comprehensive income (loss)	54.1		(62.8)		31.2		(61.0)
Comprehensive income (loss)	$	11.9	$	(40.7)	$	96.2	$	(93.8)

See accompanying notes to the unaudited condensed consolidated financial statements.

4

Avantor, Inc. and subsidiaries

Unaudited condensed consolidated statements of stockholders’ equity

(in millions)	Stockholders’ equity
	MCPS including paid-in capital			Common stock including paid-in capital			Accumulated deficit		AOCI		Total
	Shares	Amount		Shares	Amount
Balance at June 30, 2020	20.7	$	1,003.7	576.3	$	1,744.0	$	(98.1)	$	(108.8)	$	2,540.8
Comprehensive (loss) income	—	—		—	—		(42.2)		54.1		11.9
Stock-based compensation expense	—	—		—	10.6		—		—		10.6
Accumulation of yield on preferred stock	—	—		—	(16.1)		—		—		(16.1)
Stock option exercises and other common stock transactions	—	—		1.7	5.1		—		—		5.1
Balance at September 30, 2020	20.7	$	1,003.7	578.0	$	1,743.6	$	(140.3)	$	(54.7)	$	2,552.3
Balance at June 30, 2019	20.7	$	1,003.7	568.8	$	1,768.3	$	(296.4)	$	(64.7)	$	2,410.9
Issuances, net of issuance costs	—	—		—	(0.1)		—		—		(0.1)
Comprehensive income (loss)	—	—		—	—		22.1		(62.8)		(40.7)
Stock-based compensation expense	—	—		—	1.9		—		—		1.9
Accumulation of yield on preferred stock	—	—		—	(16.4)		—		—		(16.4)
Exercise of warrants	—	—		2.6	—		—		—		—
Balance at September 30, 2019	20.7	$	1,003.7	571.4	$	1,753.7	$	(274.3)	$	(127.5)	$	2,355.6

See accompanying notes to the unaudited condensed consolidated financial statements.

5

Avantor, Inc. and subsidiaries

Unaudited condensed consolidated statements of stockholders’ equity (continued)

(in millions)	Stockholders’ equity
	MCPS including paid-in capital			Common stock including paid-in capital			Accumulated deficit		AOCI		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2019	20.7	$	1,003.7	572.8	$	1,748.1	$	(203.7)	$	(85.9)	$	2,462.2
Impact of new accounting standard	—	—		—	—		(1.6)		—		(1.6)
Comprehensive income	—	—		—	—		65.0		31.2		96.2
Stock-based compensation expense	—	—		0.6	30.1		—		—		30.1
Accumulation of yield on preferred stock	—	—		—	(48.4)		—		—		(48.4)
Stock option exercises and other common stock transactions	—	—		4.6	13.8		—		—		13.8
Balance at September 30, 2020	20.7	$	1,003.7	578.0	$	1,743.6	$	(140.3)	$	(54.7)	$	2,552.3
Balance at December 31, 2018	—	$	—	132.8	$	(2,746.8)	$	(238.4)	$	(66.5)	$	(3,051.7)
Impact of new accounting standard	—	—		—	—		(3.1)		—		(3.1)
Issuances, net of issuance costs	20.7	1,003.7		238.1	3,231.9		—		—		4,235.6
Conversion of JCPS	—	—		194.5	1,562.0		—		—		1,562.0
Comprehensive loss	—	—		—	—		(32.8)		(61.0)		(93.8)
Stock-based compensation expense	—	—		—	54.6		—		—		54.6
Accumulation of yield on preferred stock	—	—		—	(136.4)		—		—		(136.4)
Accretion of make whole premium on series A preferred stock	—	—		—	(220.4)		—		—		(220.4)
Exercise of warrants	—	—		6.0	—		—		—		—
Award reclassification	—	—		—	8.8		—		—		8.8
Balance at September 30, 2019	20.7	$	1,003.7	571.4	$	1,753.7	$	(274.3)	$	(127.5)	$	2,355.6

See accompanying notes to the unaudited condensed consolidated financial statements.

6

Avantor, Inc. and subsidiaries

Unaudited condensed consolidated statements of cash flows

(in millions)	Nine months ended September 30,
	2020		2019
Cash flows from operating activities:
Net income (loss)	$	65.0	$	(32.8)
Reconciling adjustments:
Depreciation and amortization	293.4		301.6
Stock-based compensation expense	31.4		57.4
Non-cash restructuring charges	—		10.0
Provision for accounts receivable and inventory	31.5		22.9
Deferred income tax benefit	(90.7)		(67.5)
Amortization of deferred financing costs	19.0		26.5
Loss on extinguishment of debt	226.4		70.2
Foreign currency remeasurement (gain) loss	(1.2)		2.8
Changes in assets and liabilities:
Accounts receivable	(50.6)		(76.9)
Inventory	(33.5)		(74.1)
Accounts payable	67.8		11.7
Accrued interest	(10.7)		58.5
Other assets and liabilities	75.3		(36.3)
Other, net	0.7		(7.0)
Net cash provided by operating activities	623.8		267.0
Cash flows from investing activities:
Capital expenditures	(41.4)		(39.5)
Other	1.1		8.8
Net cash used in investing activities	(40.3)		(30.7)
Cash flows from financing activities:
Debt borrowings	2,001.6		—
Debt repayments	(2,171.5)		(1,825.4)
Payments of debt refinancing fees and premiums	(198.0)		—
Payments of contingent consideration	—		(4.6)
Proceeds from issuance of stock, net of issuance costs	—		4,235.6
Redemption of series A preferred stock	—		(2,630.9)
Payments of dividends on preferred stock	(48.4)		(15.1)
Proceeds received from exercise of stock options	13.8		—
Net cash used in financing activities	(402.5)		(240.4)
Effect of currency rate changes on cash	2.8		(6.7)
Net change in cash and cash equivalents	183.8		(10.8)
Cash, cash equivalents and restricted cash, beginning of period	189.3		187.7
Cash, cash equivalents and restricted cash, end of period	$	373.1	$	176.9

See accompanying notes to the unaudited condensed consolidated financial statements.

7

Avantor, Inc. and subsidiaries

Notes to unaudited condensed consolidated financial statements

1.    Nature of operations and presentation of financial statements

We are a global manufacturer and distributor that provides products and services to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries.

Basis of presentation

We have prepared these condensed consolidated financial statements pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year.

We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report. Those audited consolidated financial statements include a summary of our significant accounting policies, updates to which are included in note 2.

Principles of consolidation

All intercompany balances and transactions have been eliminated from the financial statements.

Use of estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates.

Global coronavirus outbreak

The ongoing coronavirus outbreak known as COVID-19 has adversely affected global economies, financial markets and the overall environment in which we do business, and the extent to which it may impact our future results of operations and overall financial performance remains uncertain.

In response to the COVID-19 outbreak, on March 27, 2020, the United States Government enacted the CARES Act, which provides financial stimulus to qualifying businesses. We expect to benefit from the provisions under the CARES Act that allow for an increased deduction of business interest for income tax purposes for fiscal years 2019 and 2020, and for the deferral of payments for certain employment taxes incurred through the end of fiscal year 2020. For the business interest deduction, we recognized a cash benefit of $28.3 million for fiscal year 2019,

8

which we applied to our 2020 estimated tax payments. We expect this deduction will also provide at least a $20.3 million cash benefit for fiscal year 2020.

Secondary offerings

On May 26, 2020 and August 21, 2020, we completed secondary offerings of 51.75 million shares and 63.89 million shares of our common stock, respectively, held by certain of our stockholders at the offering prices of $16.25 and $19.51 per share, respectively. The shares offered included the full exercise by the underwriters of their option to purchase up to 6.75 million and 8.33 million additional shares of common stock, respectively. No shares were sold by us, and we received no proceeds from these offerings. Fees incurred to complete these transactions were expensed as incurred and immaterial.

2.    Summary of significant accounting policies

Interim update to segment reporting policy

During the quarter ended March 31, 2020, our Chief Executive Officer, who is our chief operating decision maker, changed the measure he uses to evaluate segment profitability from Management EBITDA to Adjusted EBITDA. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change.

3.    New accounting standards

New tax standard

In December 2019, the FASB issued a new standard to simplify the accounting for income taxes by removing certain exceptions to the existing guidance and also providing for additional clarification. This standard encompasses multiple amendments, and requires adoption either retrospectively, prospectively, or using a modified retrospective approach, depending on the amendment. For the amendments in which we are given the choice between adopting retrospectively or on a modified retrospective basis, we expect to adopt on a modified retrospective basis. All other amendments will be adopted using the method prescribed by the standard. The standard is effective on January 1, 2021 and we are currently evaluating its impact. Two of the provisions included in this amendment that are most relevant to us are: 1) the provision requiring companies to recognize a franchise (or similar) tax that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, and 2) the provision requiring companies to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction.

New credit losses standard

In June 2016, the FASB issued a new standard that modifies the recognition of credit losses related to financial assets. Under the new standard, an entity must measure and record its total expected credit losses, rather than recording such losses when it is probable that they have

9

occurred, as was required under the previous standard. We adopted the new guidance on January 1, 2020 using a modified retrospective approach applied to our portfolio of trade receivables as of that date. On the adoption date, we (i) recorded a $1.6 million cumulative effect adjustment to increase accumulated deficit, (ii) increased our allowance for credit losses to accounts receivable by $2.2 million, and (iii) recognized a $0.6 million reduction to deferred income tax liabilities.

Other

There were no other new accounting standards that we expect to have a material impact to our financial position or results of operations upon adoption.

4.    Earnings or loss per share

The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2020:

	Three months ended September 30, 2020					Nine months ended September 30, 2020
(in millions, except per share data)	Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share		Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share
Basic	$	(58.3)	577.2	$	(0.10)	$	16.6	575.5	$	0.03
Dilutive effect of stock-based awards	—		—			—		7.0
Diluted	$	(58.3)	577.2	$	(0.10)	$	16.6	582.5	$	0.03

For the three months ended September 30, 2020, basic and diluted loss per share calculations were the same because there was a net loss available to common stockholders. As a result, 22.6 million of stock options, 5.2 million of restricted stock units and 62.9 million of MCPS were excluded from the calculation of diluted loss per share as their effect would be anti-dilutive.

For the nine months ended September 30, 2020, diluted earnings per share included accumulated yield of $48.4 million and excluded 62.9 million of common stock equivalents under the MCPS because they were anti-dilutive to the calculation.

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The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2019:

	Three months ended September 30, 2019					Nine months ended September 30, 2019
(in millions, except per share data)	Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share		Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share
Basic	$	5.7	570.0	$	0.01	$	(389.6)	343.7	$	(1.13)
Effect of dilutive securities:
Stock-based awards	—		8.3			—		—
Warrants	—		2.4			—		—
Diluted	$	5.7	580.7	$	0.01	$	(389.6)	343.7	$	(1.13)

For the three months ended September 30, 2019, diluted earnings per share included accumulated yield of $16.4 million and excluded 70.4 million of common stock equivalents under the MCPS because they were anti-dilutive to the calculation.

For the nine months ended September 30, 2019 basic and diluted loss per share calculations were the same because there was a net loss available to common stockholders. As a result, 24.1 million of stock options, 5.6 million of restricted stock units and 70.4 million of MCPS were excluded from the calculation of diluted loss per share as their effect would be anti-dilutive.

5.    Segment financial information

We report based on three geographic segments based on customer location: Americas, Europe and AMEA. Each segment manufactures and distributes solutions for the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries. Corporate costs are managed on a standalone basis and not allocated to segments.

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The following table presents information by reportable segment:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net sales:
Americas	$	950.5	$	918.2	$	2,707.1	$	2,701.0
Europe	562.1		501.1		1,627.1		1,561.8
AMEA	92.4		84.5		268.5		253.5
Total	$	1,605.0	$	1,503.8	$	4,602.7	$	4,516.3
Adjusted EBITDA:
Americas	$	203.6	$	182.7	$	591.0	$	542.8
Europe	98.4		84.0		278.4		255.3
AMEA	20.9		15.9		56.8		51.4
Corporate	(37.3)		(31.8)		(104.5)		(81.9)
Total	$	285.6	$	250.8	$	821.7	$	767.6

The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers.

The following table presents the reconciliation of Adjusted EBITDA from net income or loss, the nearest measurement under GAAP:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net (loss) income	$	(42.2)	$	22.1	$	65.0	$	(32.8)
Interest expense	65.2		98.3		251.8		342.0
Income tax (benefit) expense	(65.6)		15.2		(29.4)		23.4
Depreciation and amortization	99.1		100.3		293.4		301.6
Net foreign currency (gain) loss from financing activities	(4.1)		8.2		(4.3)		0.1
Loss on extinguishment of debt	226.4		—		226.4		70.2
Other stock-based compensation expense	0.6		(9.2)		0.6		33.5
Restructuring and severance charges	2.3		13.4		6.7		19.8
VWR transaction, integration and planning expenses	2.1		5.4		7.2		16.8
Other	1.8		(2.9)		4.3		(7.0)
Adjusted EBITDA	$	285.6	$	250.8	$	821.7	$	767.6

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The following table presents net sales by product line:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Proprietary materials & consumables	$	562.2	$	494.2	$	1,654.3	$	1,500.9
Third party materials & consumables	610.0		592.8		1,764.1		1,792.8
Services & specialty procurement	215.4		195.7		580.0		562.5
Equipment & instrumentation	217.4		221.1		604.3		660.1
Total	$	1,605.0	$	1,503.8	$	4,602.7	$	4,516.3

6.    Supplemental disclosures of cash flow information

The following tables present supplemental disclosures of cash flow information:

(in millions)	September 30, 2020		December 31, 2019
Cash and cash equivalents	$	370.5	$	186.7
Restricted cash classified as other assets	2.6		2.6
Total	$	373.1	$	189.3

(in millions)	Nine months ended September 30,
	2020		2019
Cash flows from operating activities:
Cash paid for income taxes, net	$	32.0	$	100.2
Cash paid for interest	252.6		258.4
Cash paid under operating leases	31.7		33.4
Cash paid under finance leases	3.9		3.7
Cash flows from financing activities:
Cash paid under finance leases	3.3		4.1

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7.    Inventory

The following table presents the components of inventory:

(in millions)	September 30, 2020		December 31, 2019
Merchandise inventory	$	452.5	$	445.2
Finished goods	113.0		104.4
Raw materials	125.0		125.1
Work in process	39.3		36.5
Total	$	729.8	$	711.2

8.    Other intangible assets

The following table presents the components of other intangible assets:

(in millions)	September 30, 2020						December 31, 2019
	Gross value		Accumulated amortization		Carrying value		Gross value		Accumulated amortization		Carrying value
Customer relationships	$	4,609.7	$	822.4	$	3,787.3	$	4,547.7	$	641.3	$	3,906.4
VWR trade name	269.0		170.1		98.9		264.3		123.3		141.0
Other	183.2		120.0		63.2		182.8		102.3		80.5
Total finite-lived	$	5,061.9	$	1,112.5	3,949.4		$	4,994.8	$	866.9	4,127.9
Indefinite-lived					92.3						92.3
Total					$	4,041.7					$	4,220.2

9.    Restructuring and severance

The following table presents restructuring and severance charges by plan:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
2017 restructuring program	$	1.9	$	13.3	$	6.1	$	19.1
Other	0.4		0.1		0.6		0.7
Total	$	2.3	$	13.4	$	6.7	$	19.8

During the three months ended September 30, 2020, there were no material updates to our liabilities or expense under the 2017 restructuring program.

10.    Commitments and contingencies

Our business involves commitments and contingencies related to compliance with environmental laws and regulations, the manufacture and sale of products and litigation. The ultimate resolution

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of contingencies is subject to significant uncertainty, and it is reasonably possible that we will experience adverse outcomes related to these matters.

Environmental laws and regulations

Our environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in technology. We believe that known and unknown environmental matters, if not resolved favorably, could have a material effect on our financial position, liquidity and profitability.

Mallinckrodt indemnification

In 2010, New Mountain Capital acquired us from Covidien plc in accordance with a stock purchase agreement dated May 25, 2010. At that time, we were organized as Mallinckrodt Baker, Inc. or MBI. Pursuant to the terms of that agreement, we are entitled to various levels of indemnification with respect to environmental liabilities involving the former MBI operations. In 2013, in connection with the Covidien plc divestiture of Mallinckrodt Group S.a.r.l and Mallinckrodt LLC, together “Mallinckrodt,” and by a second amendment to the stock purchase agreement dated June 6, 2013, but effective upon the consummation of the divestiture, Covidien plc assigned its obligations as described herein to Mallinckrodt, and Mallinckrodt assumed those obligations from Covidien plc. As a result of the stock purchase agreement and assignment, Mallinckrodt is contractually obligated to indemnify and defend us for all off-site environmental liabilities (for example, Superfund or CERCLA liabilities) arising from the pre-closing disposal of chemicals or wastes by former MBI operations.

In connection with environmental liabilities arising from pre-closing noncompliance with environmental laws, Mallinckrodt is contractually obligated to reimburse us for a percentage of the total liability, with such reimbursements made through disbursements from a $30.0 million environmental escrow established at the time of the closing. Specifically, Mallinckrodt will be responsible for reimbursement of 80% of the total costs up to $40.0 million of such environmental liabilities. Mallinckrodt will then be responsible for reimbursement of 50% of the next $40.0 million of such environmental liabilities. If such environmental liabilities exceed $80.0 million in the aggregate, Mallinckrodt will be responsible for reimbursement of 100% of such liabilities up to the next $30.0 million in the aggregate. Currently, reimbursements are 80% of the amounts spent by us, with reimbursements and settlements to date exceeding $12.0 million. In addition, in connection with operation and maintenance activities required pursuant to administrative consent orders and subsequently issued remedial action permits involving our Phillipsburg, New Jersey facility, amounts in excess of a small annual threshold are also subject to reimbursement, currently at the 80% level.

Other noteworthy matters

The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. This matter is covered by the indemnification arrangement previously described. At September 30, 2020, our accrued

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obligation under this order is $3.9 million, which is calculated based on expected cash payments discounted at rates ranging from 0.1% in 2020 to 1.4% in 2045. The undiscounted amount of that obligation is $4.4 million.

In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland. Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are also monitoring the condition of a closed landfill on that site. These matters are not covered by our indemnification arrangement because they relate to an operation we subsequently acquired. At September 30, 2020, our balance sheet includes a liability of $3.5 million for remediation and monitoring costs. That liability is estimated primarily on expected remediation payments discounted through 2020 and is not materially different than its undiscounted amount.

Manufacture and sale of products

Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings.

We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements.

We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

Litigation

At September 30, 2020, there was no outstanding litigation that we believe would result in material losses if decided against us, and we do not believe that there are any unasserted matters that are reasonably possible to result in a material loss.

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11.    Debt

The following table presents information about our debt:

(dollars in millions)	September 30, 2020					December 31, 2019
	Interest terms	Rate		Amount
Receivables facility	LIBOR plus 0.90%	1.05	%	$	—	$	55.5
Senior secured credit facilities:
Euro term loans	EURIBOR plus 2.50%	2.50	%	368.8		391.8
U.S. dollar term loans	LIBOR plus 2.25%	3.25	%	609.7		677.2
4.75% secured notes	fixed rate	4.75	%	586.7		561.2
6% secured notes	fixed rate	6.00	%	1,500.0		1,500.0
9% unsecured notes	fixed rate	9.00	%	—		2,000.0
3.875% unsecured notes	fixed rate	3.875	%	469.3		—
4.625 % unsecured notes	fixed rate	4.625	%	1,550.0		—
Finance lease liabilities				71.0		59.2
Other				—		4.5
Total debt, gross				5,155.5		5,249.4
Less: unamortized deferred financing costs				(84.6)		(132.9)
Total debt				$	5,070.9	$	5,116.5
Classification on balance sheets:
Current portion of debt				$	14.4	$	93.5
Debt, net of current portion				5,056.5		5,023.0

Credit facilities

The following table presents availability under our credit facilities:

(in millions)	September 30, 2020
	Receivables facility		Revolving credit facility		Total
Capacity	$	300.0	$	515.0	$	815.0
Undrawn letters of credit outstanding	(12.3)		(1.6)		(13.9)
Outstanding borrowings	—		—		—
Unused availability	$	287.7	$	513.4	$	801.1
Maximum availability	$	300.0	$	515.0	$	815.0

Capacity under the receivables facility depends upon maintaining a sufficient borrowing base of eligible accounts receivable. At September 30, 2020, $458.2 million of accounts receivable were available as collateral under the facility.

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Receivables facility

The receivables facility is with a commercial bank, functions like a line of credit and matures on March 27, 2023. Borrowings are secured by accounts receivable which are sold by certain of our domestic subsidiaries to a special-purpose consolidated subsidiary. As a result, those receivables are not available to satisfy the claims of other creditors. We bear the risk of collection on those receivables and account for the receivables facility as a secured borrowing.

Revolving credit facility

On July 14, 2020, we refinanced our revolving credit facility to obtain an additional $265.0 million of available funding, bringing the total amount of available funding under this facility to $515.0 million. The revolving credit facility will mature on July 14, 2025, and the fees incurred to complete the transaction were immaterial.

Senior unsecured notes

On July 17, 2020, we issued $1,550.0 million aggregate principal amount of 4.625% senior unsecured notes and €400.0 million aggregate principal amount of 3.875% senior unsecured notes, which will mature on July 15, 2028. We used the proceeds of $1,975.0 million, net of $26.6 million of issuance costs from the sale of these notes, along with cash on hand, to redeem all $2,000.0 million aggregate principal amount of our 9.00% senior unsecured notes that were due in October of 2025. Of the total issuance costs incurred, $4.8 million were paid to Goldman Sachs, a related party. We incurred a loss on the extinguishment of our 9.00% senior unsecured notes of $223.4 million, which reflects the payment of $169.0 million of premiums and the expense of $54.4 million of previously unamortized deferred financing costs.

Senior secured credit facilities

On September 30, 2020, we made prepayments of $62.4 million on our U.S. dollar term loans and €32.2 million on our EURO term loans. In connection with these prepayments, we expensed $3.0 million of previously unamortized deferred financing costs as a loss on extinguishment of debt.

Debt covenants

Our debt agreements include representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities include a financial covenant that becomes applicable for periods in which we have drawn more than 35% of our revolving credit facility under the senior secured credit facilities. When applicable, we may not have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined. We were in compliance with this covenant at September 30, 2020.

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12.    Accumulated other comprehensive income or loss

The following table presents changes in the components of AOCI:

(in millions)	Foreign currency translation		Derivative instruments		Defined benefit plans		Total
Balance at June 30, 2020	$	(86.4)	$	0.6	$	(23.0)	$	(108.8)
Unrealized gain (loss)	55.1		0.3		(0.6)		54.8
Reclassification of gain into earnings	—		(0.7)		(0.1)		(0.8)
Income tax effect	—		0.1		—		0.1
Balance at September 30, 2020	$	(31.3)	$	0.3	$	(23.7)	$	(54.7)
Balance at June 30, 2019	$	(55.6)	$	(0.2)	$	(8.9)	$	(64.7)
Unrealized (loss) gain	(62.7)		1.0		(0.1)		(61.8)
Reclassification of gain into earnings	—		(0.9)		(0.2)		(1.1)
Income tax effect	—		—		0.1		0.1
Balance at September 30, 2019	$	(118.3)	$	(0.1)	$	(9.1)	$	(127.5)
Balance at December 31, 2019	$	(62.3)	$	(0.5)	$	(23.1)	$	(85.9)
Unrealized gain (loss)	31.0		2.6		(0.4)		33.2
Reclassification of gain into earnings	—		(1.5)		(0.3)		(1.8)
Income tax effect	—		(0.3)		0.1		(0.2)
Balance at September 30, 2020	$	(31.3)	$	0.3	$	(23.7)	$	(54.7)
Balance at December 31, 2018	$	(59.0)	$	1.1	$	(8.6)	$	(66.5)
Unrealized loss	(59.3)		(0.5)		(0.1)		(59.9)
Reclassification of gain into earnings	—		(1.2)		(0.5)		(1.7)
Income tax effect	—		0.5		0.1		0.6
Balance at September 30, 2019	$	(118.3)	$	(0.1)	$	(9.1)	$	(127.5)

The reclassifications and income tax effects shown above were immaterial to the financial statements. The reclassifications were made to either cost of sales or SG&A expenses depending upon the nature of the underlying transaction.

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13.    Stock-based compensation

The following table presents the components of stock-based compensation expense:

(in millions)	Classification	Three months ended September 30,				Nine months ended September 30,
		2020		2019		2020		2019
Stock options	Equity	$	4.2	$	5.1	$	12.6	$	39.7
RSUs	Equity	6.0		5.1		16.4		8.5
Optionholder awards	Liability	0.2		0.7		0.6		2.6
SARs	Equity	—		(8.3)		—		6.4
Other	Both	1.0		(0.9)		1.8		0.2
Total		$	11.4	$	1.7	$	31.4	$	57.4
Balance sheet classification:
Equity		$	10.6	$	1.9	$	30.1	$	54.6
Liability		0.8		(0.2)		1.3		2.8

At September 30, 2020, unvested awards under our plans, including the 2019 plan, have remaining stock-based compensation expense of $87.1 million to be recognized over a weighted average period of 1.8 years.

At September 30, 2020, 12.6 million shares were available for future issuance under the 2019 Plan.

During the nine months ended September 30, 2019, we recognized $26.9 million of stock-based compensation expense upon the completion of our initial public offering, which satisfied a performance condition for 0.9 million stock options. The stock-based compensation expense was equivalent to the grant date fair value for these awards.

In November 2019, the NuSil Investors settled the SARs. We were not required to pay any cash upon settlement of those awards.

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Stock options

The following table presents information about outstanding stock options:

(options and intrinsic value in millions)	Number of options	Weighted average exercise price per option		Aggregate intrinsic value		Weighted average remaining term
Balance at December 31, 2019	22.7	$	15.04
Granted	5.0	17.57
Exercised	(4.5)	3.83
Forfeited	(1.8)	17.05
Balance at September 30, 2020	21.4	17.58		$	109.6	7.5 years
Expected to vest	9.9	18.53		39.8		8.7 years
Vested	11.5	16.76		69.8		6.4 years

During the nine months ended September 30, 2020, we granted stock options that have a contractual life of ten years and will vest annually over three to four years, subject to the recipient continuously providing service to us through each such date.

RSUs

The following table presents information about unvested RSUs:

(awards in millions)	Number of awards	Weighted average grant date fair value per award
Balance at December 31, 2019	5.2	$	13.97
Granted	1.4	17.38
Vested	(0.9)	13.92
Forfeited	(0.6)	14.04
Balance at September 30, 2020	5.1	14.86

During the nine months ended September 30, 2020, we granted restricted stock units that will vest annually over three to four years, subject to the recipient continuously providing service to us through each such date.

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14.    Other income or expense, net

The following table presents the components of other income or expense, net:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net foreign currency gain (loss) from financing activities	$	4.1	$	(8.2)	$	4.3	$	(0.1)
Income related to defined benefit plans	2.4		1.3		7.0		3.8
Other	0.1		(0.7)		0.3		(0.8)
Other income (expense), net	$	6.6	$	(7.6)	$	11.6	$	2.9

15.    Income taxes

The following table presents the relationship between income tax expense or benefit and income or loss before income taxes:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Income tax benefit (expense)	$	65.6	$	(15.2)	$	29.4	$	(23.4)
(Loss) income before income taxes	(107.8)		37.3		35.6		(9.4)

Income tax expense or benefit in the quarter is based upon the estimated income or loss for the full year. The composition of the income or loss in different countries and adjustments, if any, in the applicable quarterly periods influences our expense or benefit.

The relationship between pretax income or loss and income tax expense or benefit is greatly affected by the impact of losses for which we cannot claim a tax benefit, non-deductible expenses, and other items that increase tax expense without a relationship to income, such as withholding taxes and changes with respect to uncertain tax positions.

In the third quarter of 2020, we released a net of $31.5 million of previously recorded reserves for uncertain tax positions, primarily driven by the United States Internal Revenue Service finalizing their examination of our 2016 amended tax returns. The reduction in these reserves provided a direct benefit to our income tax expense.

16.    Derivative and hedging activities

We engage in hedging activities to reduce our exposure to foreign currency exchange rates. Our hedging activities are designed to manage specific risks according to our strategies, as

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summarized below, which may change from time to time. Our hedging activities consist of the following:

•Economic hedges — We are exposed to changes in foreign currency exchange rates on certain of our euro-denominated term loans and notes that move inversely from our portfolio of euro-denominated intercompany loans. The currency effects for these non-derivative instruments are recorded through earnings in the period of change and substantially offset one another;

•Other hedging activities — Certain of our subsidiaries hedge short-term foreign currency denominated business transactions and intercompany financing transactions using foreign currency forward contracts. These activities were not material to our consolidated financial statements; and

•Net investment hedge — We have designated €400.0 million of our 3.875% senior unsecured notes as a hedge of our net investment in certain European operations to manage our exposure to currency and exchange rate movements from these operations.

Net Investment Hedge

We designated all of our outstanding €400.0 million 3.875% senior unsecured notes, issued on July 17, 2020, and maturing on July 15, 2028, as a hedge of our net investment in certain of our European operations. For instruments that are designated and qualify as net investment hedges, the foreign currency transactional gains or losses are reported as a component of AOCI. The gains or losses would be reclassified into earnings upon a liquidation event or deconsolidation of a hedged foreign subsidiary.

Net investment hedge effectiveness is assessed based upon the change in the spot rate of the foreign currency denominated debt. The critical terms of the foreign currency notes match the portion of the net investments designated as being hedged. At September 30, 2020, the net investment hedge was equal to the designated portion of the European operations and were considered to be perfectly effective.

Non-derivative financial instruments which are designated as hedging instruments:

The accumulated gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of AOCI was $17.7 million and $0.0 million as of September 30, 2020 and December 31, 2019, respectively.

The amount of gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of other comprehensive income is presented below:

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(in millions)	Three months ended September 30, 2020		Nine months ended September 30, 2020
Net investment hedges	$	17.7	$	17.7

(in millions)	Three months ended September 30, 2019		Nine months ended September 30, 2019
Net investment hedges	$	—	$	—

17.    Financial instruments and fair value measurements

Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and debt.

Assets and liabilities for which fair value is only disclosed

The carrying amount of cash and cash equivalents was the same as its fair value and is a Level 1 measurement. The carrying amounts for trade accounts receivable and accounts payable approximated fair value due to their short-term nature and are Level 2 measurements.

The following table presents the carrying values, which exclude unamortized deferred financing costs, and the fair values of debt instruments:

(in millions)	September 30, 2020				December 31, 2019
	Carrying value		Fair value		Carrying value		Fair value
Receivables facility	$	—	$	—	$	55.5	$	55.5
Senior secured credit facilities:
Euro term loans	368.8		367.5		391.8		397.4
U.S. dollar term loans	609.7		605.5		677.2		685.2
4.75% secured notes	586.7		608.4		561.2		599.7
6% secured notes	1,500.0		1,571.0		1,500.0		1,603.2
9% unsecured notes	—		—		2,000.0		2,241.7
3.875% unsecured notes	469.3		481.2		—		—
4.625 % unsecured notes	1,550.0		1,606.5		—		—
Finance lease liabilities	71.0		71.0		59.2		59.2
Other	—		—		4.5		4.5
Total	$	5,155.5	$	5,311.1	$	5,249.4	$	5,646.4

The fair values of debt instruments are based on standard pricing models that take into account the present value of future cash flows, and in some cases private trading data, which are level 2 measurements.

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Item 2.    Management’s discussion and analysis of financial condition and results of operations

In addition to historical financial information, this discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our results may differ materially from those contained in or implied by any forward-looking statements. You should carefully read “Cautionary factors regarding forward-looking statements” for additional information. Also, please refer to the “Factors and current trends affecting our business and results of operations” for discussion concerning the ongoing coronavirus outbreak known as COVID-19.

Basis of presentation

Pursuant to SEC rules for reports covering interim periods, we have prepared this discussion and analysis to enable you to assess material changes in our financial condition and results of operations since December 31, 2019, the date of our Annual Report. Therefore, we encourage you to read this discussion and analysis in conjunction with the Annual Report.

Overview

We are a leading global provider of mission critical products and services to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries. We have global operations and an extensive product portfolio. We strive to enable customer success through innovation, cGMP manufacturing and comprehensive service offerings. The depth and breadth of our portfolio provides our customers a comprehensive range of products and services and allows us to create customized and integrated solutions for our customers.

In the third quarter of 2020, we recorded net sales of $1,605.0 million, net loss of $42.2 million, which included a $226.4 loss on extinguishment of debt, and Adjusted EBITDA of $285.6 million. Net sales increased by 6.7%, including an increase in organic net sales of 5.4% compared to the same period in 2019. See “Reconciliations of non-GAAP measures” for a reconciliation of net income (loss) to Adjusted EBITDA and “Results of operations” for a reconciliation of net sales growth to organic net sales growth.

Factors and current trends affecting our business and results of operations

The following updates the factors and current trends disclosed in the Annual Report. These updates could affect our performance and financial condition in future periods.

Our results are being impacted by the ongoing global coronavirus outbreak

The COVID-19 pandemic continues to adversely affect global economies, financial markets and the overall environment in which we do business as further described in Part II, Item 1A, “Risk Factors.” The outbreak continued to have a mixed impact on the third quarter results of our three regions, as described further in the “Results of operations” section.

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Key indicators of performance and financial condition

To evaluate our performance, we monitor a number of key indicators including certain non-GAAP financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These measurements should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measurements, and such measurements may not be comparable to similarly-titled measurements reported by other companies. Rather, these measurements should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business.

The key indicators that we monitor are as follows:

•Net sales, gross margin, operating income and net income or loss. These measures are discussed in the section entitled “Results of operations;”

•Organic net sales growth, which is a non-GAAP measure discussed in the section entitled “Results of operations.” Organic net sales growth eliminates from our reported net sales the impacts of earnings from any acquired or disposed businesses and changes in foreign currency exchange rates. We believe that this measurement is useful to investors as a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented. This measurement is used by our management for the same reason. Reconciliations to the change in reported net sales, the most directly comparable GAAP financial measure, are included in the section entitled “Results of operations;”

•Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP measures discussed in the section entitled “Results of Operations.” Adjusted EBITDA is used by investors to measure and evaluate our operating performance exclusive of interest expense, income tax expense, depreciation, amortization and certain other adjustments. Adjusted EBITDA margin is Adjusted EBITDA divided by net sales as determined under GAAP. We believe that these measurements are useful to investors as a way to analyze the underlying trends in our core business consistently across the periods presented. This measurement is used by our management for the same reason. A reconciliation of net income or loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA is included in the section entitled “Reconciliations of non-GAAP measures;”

•Cash flows from operating activities, which we discuss in the section entitled “Liquidity and capital resources—historical cash flows.”

Results of operations

We present results of operations in the same way that we manage our business, evaluate our performance and allocate our resources. We also provide discussion of net sales and Adjusted EBITDA by geographic segment based on customer location: Americas, Europe and AMEA. Corporate costs are managed on a standalone basis and not allocated to segments.

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Executive summary

(dollars in millions)	Three months ended September 30,						Change
	2020			2019
Net sales	$	1,605.0		$	1,503.8		$	101.2
Gross margin	31.6		%	31.5		%	10 bps
Operating income	$	177.2		$	143.2		$	34.0
Net income (loss)	(42.2)			22.1			(64.3)
Adjusted EBITDA	285.6			250.8			34.8
Adjusted EBITDA margin	17.8		%	16.7		%	110 bps

Third quarter revenue growth reflects strong growth in the biopharma and healthcare end markets and COVID-19 related sales of PPE and solutions to support diagnostic testing and vaccine development. Double-digit growth of our proprietary materials and consumables product group, commercial excellence, and continued impact of productivity and cost containment contributed to Adjusted EBITDA margin expansion.

Net sales

Three months ended

(in millions)	Three months ended September 30,				Reconciliation of net sales growth to organic net sales growth
					Net sales growth		Foreign currency impact		Organic net sales growth
	2020		2019
Americas	$	950.5	$	918.2	$	32.3	$	(4.3)	$	36.6
Europe	562.1		501.1		61.0		25.1		35.9
AMEA	92.4		84.5		7.9		(0.1)		8.0
Total	$	1,605.0	$	1,503.8	$	101.2	$	20.7	$	80.5

Net sales increased $101.2 million or 6.7%, which included $20.7 million or 1.3% of favorable foreign currency impact. The increase in organic net sales of $80.5 million or 5.4% was due to growth in our ongoing business as well as to COVID-19 related sales.

In the Americas, net sales increased $32.3 million or 3.5%, which included $4.3 million or 0.5% of unfavorable foreign currency impact. Organic net sales increased $36.6 million or 4.0%. Additional information by end market is as follows:

•Biopharma — Sales grew in the high single-digits driven by double-digit growth in biopharma production from sales of process ingredients and additives, chromatography resins, excipients, and single use solutions, partially offset by declines in sales of equipment and instrumentation as customers delayed spending due to COVID-19.

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•Healthcare — Sales increased double-digits driven by demand for chemicals and consumables in our medical/clinical reference lab business, partially offset by continued softness in the demand for elective procedures.

•Education and government — Sales declined in the high single-digits due to school and academic lab closures related to COVID-19. This was partially offset by double-digit growth from government customers related to COVID-19.

•Advanced technologies & applied materials — Sales were roughly flat, with growth in our semiconductor and microelectronics platforms largely offset by softness in our industrial sector.

In Europe, net sales increased $61.0 million or 12.2%, which included $25.1 million or 5.0% of favorable foreign currency impact. Organic net sales increased $35.9 million or 7.2%. Additional information by end market is as follows:

•Biopharma — Sales grew in the double-digits driven by sales of production chemicals, single-use solutions, consumables and PPE to support our ongoing business, as well as solutions to support COVID-19 detection and testing.

•Healthcare — Sales grew in the high single-digits as sales of COVID-19 testing content and PPE were partially offset by a continued decline in elective procedures and ongoing clinical diagnostics due to COVID-19.

•Education & government — Sales grew in the mid single-digits driven by our government customers, partially offset by academic lab closures due to COVID-19.

• Advanced technologies & applied materials — Sales declined in the mid single-digits as COVID-19 continues to impact industrial customers.

In AMEA, net sales increased $7.9 million or 9.3%, which included $0.1 million or 0.1% of unfavorable foreign currency impact. Organic net sales increased $8.0 million or 9.4%. Additional information by end market is as follows:

•Biopharma — Sales grew in the double-digits driven by strong growth in biopharma production chemicals and lab supplies.

•Advanced technologies & applied materials — Sales declined in the high single-digits primarily driven by prior year sales of equipment and instrumentation to labs in China and timing of sales for our electronic materials products.

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Nine months ended

(in millions)	Nine months ended September 30,				Reconciliation of net sales growth to organic net sales growth
					Net sales growth		Foreign currency impact		Organic net sales growth
	2020		2019
Americas	$	2,707.1	$	2,701.0	$	6.1	$	(14.8)	$	20.9
Europe	1,627.1		1,561.8		65.3		(3.5)		68.8
AMEA	268.5		253.5		15.0		(4.9)		19.9
Total	$	4,602.7	$	4,516.3	$	86.4	$	(23.2)	$	109.6

Net sales increased $86.4 million or 1.9%, which included $23.2 million or 0.5% of unfavorable foreign currency impact. Organic net sales increased $109.6 million or 2.4%, which was negatively impacted by the effects of the COVID-19 pandemic experienced primarily in the second and third quarters.

In the Americas, net sales increased $6.1 million or 0.2%, which included $14.8 million or 0.6% of unfavorable foreign currency impact. Organic net sales increased $20.9 million or 0.8% including 5.4% growth in the first quarter, 6.7% decline in the second quarter and 4.0% growth in the third quarter. The negative impacts from COVID-19 were most pronounced in the second quarter and began to moderate in the third. Increased sales of PPE and solutions to support COVID-19 detection and vaccination and moderation of academic and school closure rates are driving the improvement in quarterly growth rates.

In Europe, net sales increased $65.3 million or 4.2%, which included $3.5 million or 0.3% of unfavorable foreign currency impact. Organic net sales increased $68.8 million or 4.5% driven by strength in biopharma and by solutions to support COVID-19 detection and vaccination.

In AMEA, net sales increased $15.0 million or 5.9%, which included $4.9 million or 2.0% of unfavorable foreign currency impact. Organic net sales increased $19.9 million or 7.9% largely due to strength in our biopharma production business. The AMEA region dealt with the effects of the COVID-19 pandemic in the first quarter when we experienced organic net sales decline of 5.1%. Growth from sales of PPE helped to drive a return to organic net sales growth in the second quarter of 18.2%. The third quarter has seen the region return to normalized high single-digit growth.

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Gross margin

	Three months ended September 30,				Change	Nine months ended September 30,				Change
	2020		2019			2020		2019
Gross margin	31.6	%	31.5	%	10 bps	32.6	%	31.9	%	70 bps

Three months ended

The increase in gross margin included 60 basis points from commercial excellence and 20 basis points of favorable product mix, reflecting strong growth from proprietary materials and consumables, which was partially offset by 70 basis points worth of adjustments to reduce the carrying value of inventories to their market value.

The global restructuring program initiated following the VWR acquisition contributed an additional $13.6 million to third quarter 2020 gross profit compared to the same period of the prior year and included more favorable prices relative to cost inflation, product cost reductions and productivity improvements from leaner footprints and operating practices.

Nine months ended

The increase in gross margin included 50 basis points of favorable product mix, reflecting strong growth from proprietary materials products and 40 basis points from commercial excellence. This was partially offset by 20 basis points worth of adjustments to reduce the carrying value of inventories to their market value.

The global restructuring program initiated following the VWR acquisition contributed an additional $55.4 million to nine months ended September 30, 2020 gross profit compared to the same period of the prior year and included more favorable prices relative to cost inflation, product cost reductions and productivity improvements from leaner footprints and operating practices.

Operating income

(in millions)	Three months ended September 30,				Change		Nine months ended September 30,				Change
	2020		2019				2020		2019
Gross profit	$	506.4	$	474.0	$	32.4	$	1,498.9	$	1,440.3	$	58.6
Operating expenses	329.2		330.8		(1.6)		996.7		1,040.4		(43.7)
Operating income	$	177.2	$	143.2	$	34.0	$	502.2	$	399.9	$	102.3

Three months ended

Gross profit increased $32.4 million due to the reasons described above. The reduction in operating expenses primarily reflects cost containment due to COVID-19 related measures such as discretionary cost controls around travel, expenses and hiring, along with the reduction in

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restructuring and severance charges and the benefit of prior year restructuring activity. These benefit were offset by the non-recurrence of $9.2 million of stock-based compensation benefits from the prior year, as well as inflation.

Nine months ended

Gross profit increased $58.6 million due to the reasons described above. The reduction in operating expenses primarily reflects the non-recurrence of $33.5 million of stock-based compensation expense from the prior year. Operating expenses also declined reflecting cost containment due to COVID-19 related measures such as discretionary cost controls around travel, expenses and hiring, along with the reduction in restructuring and severance charges and the benefit of prior year restructuring activity offset by inflation.

Net income or loss

(in millions)	Three months ended September 30,				Change		Nine months ended September 30,				Change
	2020		2019				2020		2019
Operating income	$	177.2	$	143.2	$	34.0	$	502.2	$	399.9	$	102.3
Interest expense	(65.2)		(98.3)		33.1		(251.8)		(342.0)		90.2
Loss on extinguishment of debt	(226.4)		—		(226.4)		(226.4)		(70.2)		(156.2)
Other income (expense), net	6.6		(7.6)		14.2		11.6		2.9		8.7
Income tax benefit (expense)	65.6		(15.2)		80.8		29.4		(23.4)		52.8
Net (loss) income	$	(42.2)	$	22.1	$	(64.3)	$	65.0	$	(32.8)	$	97.8

Three and nine months ended

Net (loss) income for the three and nine months ended decreased $64.3 million and increased $97.8 million, respectively. The third quarter decline was primarily driven by $226.4 million of loss on extinguishment of our 9% senior unsecured notes, which we refinanced in the third quarter for more favorable interest rates. For the nine-month period, higher operating income along with lower interest expense from our refinancing and declining debt balance, and lower tax expense from rate improvement more than offset the loss on extinguishment of our 9% senior unsecured notes.

Adjusted EBITDA and Adjusted EBITDA margin

For a reconciliation of Adjusted EBITDA to the most directly comparable measure under GAAP, see “Reconciliations of non-GAAP financial measures.”

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(in millions)	Three months ended September 30,						Change			Nine months ended September 30,						Change
	2020			2019						2020			2019
Adjusted EBITDA:
Americas	$	203.6		$	182.7		$	20.9		$	591.0		$	542.8		$	48.2
Europe	98.4			84.0			14.4			278.4			255.3			23.1
AMEA	20.9			15.9			5.0			56.8			51.4			5.4
Corporate	(37.3)			(31.8)			(5.5)			(104.5)			(81.9)			(22.6)
Total	$	285.6		$	250.8		$	34.8		$	821.7		$	767.6		$	54.1
Adjusted EBITDA margin	17.8		%	16.7		%	1.1		%	17.9		%	17.0		%	0.9		%

Three months ended

Adjusted EBITDA increased $34.8 million or 13.9%, which included a favorable foreign currency translation impact of $3.7 million or 1.5%. The reasons for the remaining growth of $31.1 million or 12.4%, are discussed below:

In the Americas, Adjusted EBITDA grew $20.9 million or 11.4%, or 10.8% when adjusted for favorable foreign currency translation impact. Gross margin expansion from commercial excellence, favorable volume and product mix along with savings from SG&A cost containment initiatives in response to COVID-19 challenges offset by inventory provisions drove significant Adjusted EBITDA rate expansion.

In Europe, Adjusted EBITDA grew $14.4 million or 17.1%, or 13.9% when adjusted for favorable foreign currency translation impact. Strong volume and commercial excellence along with savings from SG&A cost containment initiatives in response to COVID-19 were partially offset by unfavorable product mix and inventory provisions.

In AMEA, Adjusted EBITDA grew $5.0 million or 31.3%, or 31.6% when adjusted for unfavorable foreign currency translation. In addition to the favorable volume, lower inventory provisions, SG&A favorability due to cost containment initiatives and government-mandated stay-at-home orders in response to COVID-19 contributed to the strong growth.

In Corporate, Adjusted EBITDA declined $5.5 million or 17.1% reflecting increased public company costs and miscellaneous provisions.

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Nine months ended

Adjusted EBITDA increased $54.1 million or 7.0%, which included an unfavorable foreign currency translation impact of $1.9 million or 0.3%. The reasons for the remaining growth of $56.0 million or 7.3%, are discussed below:

In the Americas, Adjusted EBITDA grew $48.2 million or 8.8%, driven by commercial excellence, favorable product mix reflecting strong growth from proprietary products and cost containment initiatives.

In Europe, Adjusted EBITDA grew $23.1 million or 9.0%, or 9.5% when adjusted for unfavorable foreign currency translation impact driven by commercial excellence, favorable volume from COVID-19 related sales and cost containment initiatives.

In AMEA, Adjusted EBITDA grew $5.4 million or 10.6%, or 12.3% when adjusted for unfavorable foreign currency translation driven by strong volume, favorable product mix reflecting strong growth from proprietary products and cost containment initiatives.

In Corporate, Adjusted EBITDA declined $22.6 million or 27.5% reflecting increased public company costs, stock-based compensation expense and miscellaneous provisions.

Reconciliations of non-GAAP financial measures

The following table presents the reconciliation of net income or loss to Adjusted EBITDA:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net (loss) income	$	(42.2)	$	22.1	$	65.0	$	(32.8)
Interest expense	65.2		98.3		251.8		342.0
Income tax (benefit) expense	(65.6)		15.2		(29.4)		23.4
Depreciation and amortization	99.1		100.3		293.4		301.6
Net foreign currency (gain) loss from financing activities	(4.1)		8.2		(4.3)		0.1
Loss on extinguishment of debt	226.4		—		226.4		70.2
Other share-based compensation expense	0.6		(9.2)		0.6		33.5
Restructuring and severance charges	2.3		13.4		6.7		19.8
VWR transaction, integration and planning expenses	2.1		5.4		7.2		16.8
Other	1.8		(2.9)		4.3		(7.0)
Adjusted EBITDA	$	285.6	$	250.8	$	821.7	$	767.6

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Liquidity and capital resources

We fund short-term cash requirements primarily from operating cash flows. Most of our long-term financing is from indebtedness.

The ongoing COVID-19 outbreak has dramatically reduced global economic activity and negatively impacted the financial markets. Despite this, in the third quarter of 2020 our results remained strong. We generated $281.5 million of cash provided by operating activities, we ended the quarter with $370.5 million of cash and cash equivalents and our availability under credit facilities was $801.1 million. We also have no debt repayments due in the next twelve months other than required term loan prepayments of $10.8 million.

Liquidity

The following table presents our primary sources of liquidity:

(in millions)	September 30, 2020
	Receivables facility		Revolving credit facility		Total
Unused availability under credit facilities:
Capacity	$	300.0	$	515.0	$	815.0
Undrawn letters of credit outstanding	(12.3)		(1.6)		(13.9)
Outstanding borrowings	—		—		—
Unused availability	$	287.7	$	513.4	$	801.1
Cash and cash equivalents					370.5
Total liquidity					$	1,171.6

We fund short-term cash requirements primarily from operating cash flows. Some of our credit line availability depends upon maintaining a sufficient borrowing base of eligible accounts receivable. We believe that we have sufficient capital resources to meet our liquidity needs. As of September 30, 2020, we were in compliance with our debt covenants.

At September 30, 2020, $201.8 million or 54.5% of our $370.5 million in cash and cash equivalents was held by our non-U.S. subsidiaries and may be subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply.

On July 14, 2020, we refinanced our revolving credit facility to obtain an additional $265.0 million of available funding, bringing the total amount of available funding under this facility to $515.0 million, and $815.0 million when combined with the receivables facility. The revolving credit facility will mature on July 14, 2025. For additional information, see note 11 to our unaudited condensed consolidated financial statements included in Part I, Item 1 — “Financial statements.”

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Historical cash flows

The following table presents a summary of cash provided by (used in) various activities:

(in millions)	Nine months ended September 30,				Change
	2020		2019
Operating activities:
Working capital changes*	$	(7.7)	$	(156.0)	$	148.3
Non-cash items	509.8		423.9		85.9
All other	121.7		(0.9)		122.6
Total	623.8		267.0		356.8
Investing activities	(40.3)		(30.7)		(9.6)
Financing activities	(402.5)		(240.4)		(162.1)
Capital expenditures	(41.4)		(39.5)		(1.9)

━━━━━━━━━

*    Includes changes to our accounts receivable, inventory, contract assets and accounts payable balances.

Cash flows from operating activities increased $356.8 million in 2020 primarily due to an increase of operating income and reductions in cash paid for income taxes and working capital.

Investing activities used $9.6 million more cash in 2020, reflecting a modest increase in capital spending and lower proceeds from the sale of capital assets.

Financing activities used $162.1 million more cash in 2020 primarily due to cash paid to refinance our 9% senior unsecured notes at significantly reduced interest rates.

Indebtedness

For information about our indebtedness, refer to the section entitled “Liquidity” and note 11 to our unaudited condensed consolidated financial statements included in Part I, Item 1 — “Financial statements.”

New accounting standards

For information about new accounting standards, see note 3 to our unaudited condensed consolidated financial statements included in Part I, Item 1 — “Financial statements.”

Item 3.    Quantitative and qualitative disclosures about market risk

There have been no significant changes to the disclosures about market risk included in our Annual Report.

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Item 4.    Controls and procedures

Management’s evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2020. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2020, our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, reported, accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended September 30, 2020 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.    Legal proceedings

In April 2018 the EPA notified us of potential liabilities under the Toxic Substances Control Act and the Emergency Planning and Community Right to Know Act that were identified in March 2017 and June 2017 inspections of our Phillipsburg, New Jersey facility. The alleged violations relate to our failure to timely file reports regarding the Phillipsburg facility. We have also become aware of additional potential liabilities under the Toxic Substances Control Act relating to failure to timely file reports regarding the Paris, Kentucky facility, and relating to export shipments of elemental mercury, which we have voluntarily disclosed to the EPA. We have taken steps to correct these errors and have filed amended reports. Through our cooperation with the EPA, we believe that we will settle the matter for less than $1 million.

For additional information regarding legal proceedings and matters, see note 10 to our unaudited condensed consolidated financial statements included in Part I, Item 1 — “Financial Statements,” which information is incorporated into this item by reference.

Item 1A.    Risk factors

For information regarding factors that could affect the Company's results of operations, financial condition and liquidity, see the risk factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019.

In light of developments relating to the coronavirus (COVID-19) pandemic occurring subsequent to the filing of our Annual Report, the Company is supplementing the risk factors discussed in

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our Annual Report with the following risk factor, which should be read in conjunction with the risk factors contained in our Annual Report.

The scale and scope of the recent coronavirus (COVID-19) outbreak and resulting pandemic is unknown and is expected to adversely impact our business at least for the near term. The overall impact on our business, operating results, cash flows and/or financial condition could be material.

In December 2019, a novel coronavirus disease was reported and in January 2020, the World Health Organization (“WHO”) declared COVID-19 a Public Health Emergency of International Concern. On February 28, 2020, the WHO raised its assessment of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic. The COVID-19 pandemic has adversely affected global economies, financial markets and the overall environment in which we do business, and the extent to which it may impact our future results of operations and overall financial performance remains uncertain.

The scale and scope of the COVID-19 pandemic may heighten the potential adverse effects on our business, operating results, cash flows and/or financial condition described in the risk factors contained in our Annual Report on Form 10-K, including the impact of:

•Significant interruptions in the operations of our manufacturing or distribution centers and logistics providers for the reasons described below;

•Global and regional economic and political conditions on our production, supply chain, the overall demand for our products and the ability of our customers to purchase and/or pay for our products as a result of the pandemic’s impact on them; our ability to develop and produce new products and services in an effort to address medical and other requirements as a result of the pandemic;

•Changes in foreign laws, regulations and regulatory requirements;

•Limitations on our ability to enforce legal rights and remedies with third parties or partners outside the United States;

•The risk of regulatory enforcement actions, product defects or claims thereof;

•Our ability to pursue our growth strategies;

•Our strategy to pursue strategic acquisitions;

•Changes within the industries that we serve;

•Our ability to access raw materials for use in the products we manufacture; and

•The potential loss of customers or a reduction in orders from a significant number of customers.

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In addition, COVID-19 is adversely affecting, and is expected to continue to adversely affect, certain elements of our business (including certain elements of our operations, supply chains and distribution systems) as a result of impacts associated with preventive and precautionary measures that we, other businesses, our communities and governments are taking. In an effort to halt the outbreak of COVID-19, countries throughout the world, including the United States, most European Union member states, India and China, have placed significant restrictions on travel and many businesses have announced extended closures. These restrictions extend to a number of locations where we have significant operations and include shelter in place or stay-at-home orders that require our employees in that area to work from home and avoid unnecessary travel. In addition to existing travel restrictions, jurisdictions may continue to close borders, impose prolonged quarantines and further restrict travel and business activity, which could significantly impact our ability to support our operations and customers, the ability of our employees to get to their workplaces to produce products and provide services and the availability of raw materials for production of our products, as well as significantly hamper our products from moving through the supply chain.

Further, in connection with the global outbreak and spread of COVID-19 and in an effort to increase the wider availability of needed medical and other supplies and products, we may elect to, or governments may require us to, allocate our products (for example pursuant to the U.S. Defense Production Act) in a way that adversely affects our regular operations and financial results, results in differential treatment of customers and/or adversely affects our reputation and customer relationships. In addition, unpredictable increases in demand for certain of our products could exceed our capacity to meet such demand, which could adversely affect our financial results and customer relationships and result in negative publicity.

The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions and the impact of these and other factors on our employees, customers, suppliers and partners. Such impact on our business, operating results, cash flows and/or financial condition could be material.

Item 2.    Unregistered sales of equity securities and use of proceeds

None.

Item 3.    Defaults upon senior securities

None.

Item 4.    Mine safety disclosures

Not applicable.

Item 5.    Other information

None.

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Item 6.    Exhibits

Exhibit no.	Exhibit description	Method of filing
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)	Furnished herewith
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)	Furnished herewith
101	XBRL exhibits	Filed herewith

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SIGNATURE

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.

	Avantor, Inc.
Date: October 27, 2020	By:	/s/ Steven Eck
		Name:	Steven Eck
		Title:	Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael Stubblefield, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Avantor, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 27, 2020	By:	/s/ Michael Stubblefield
		Name:	Michael Stubblefield
		Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Thomas A. Szlosek, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Avantor, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 27, 2020	By:	/s/ Thomas A. Szlosek
		Name:	Thomas A. Szlosek
		Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Avantor, Inc. (the “Company”) for the three months ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Stubblefield, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 27, 2020	By:	/s/ Michael Stubblefield
		Name:	Michael Stubblefield
		Title:	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Avantor, Inc. (the “Company”) for the three months ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas A. Szlosek, Executive Vice President, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 27, 2020	By:	/s/ Thomas A. Szlosek
		Name:	Thomas A. Szlosek
		Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

XML

Document and entity information - shares	9 Months Ended
	Sep. 30, 2020	Oct. 20, 2020
Document Information [Line Items]
Document Type	10-Q
Amendment flag	false
Document quarterly report	true
Document Period End Date	Sep. 30, 2020
Document transition report	false
Entity file number	001-38912
Entity Registrant Name	Avantor, Inc.
Entity incorporation state or country code	DE
Entity tax identification number	82-2758923
Entity Address, Address Line One	Radnor Corporate Center, Building One, Suite 200
Entity Address, Address Line Two	100 Matsonford Road
Entity Address, City or Town	Radnor
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19087
Entity central index key	0001722482
Current fiscal year end date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document fiscal year focus	2020
Document fiscal period focus	Q3
Entity common stock, shares outstanding		578,338,818
Local Phone Number	386-1700
City Area Code	610
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common stock, $0.01 par value
Trading Symbol	AVTR
Security Exchange Name	NYSE
Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	6.250% Series A Mandatory Convertible Preferred Stock, $0.01 par value
Trading Symbol	AVTR PRA
Security Exchange Name	NYSE

XML

Unaudited condensed consolidated balance sheets - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Assets
Cash and cash equivalents	$ 370.5	$ 186.7
Accounts receivable, net of allowances of $27.5 and $18.6	1,036.9	988.8
Inventory	729.8	711.2
Other current assets	159.6	134.8
Total current assets	2,296.8	2,021.5
Property, plant and equipment, net of accumulated depreciation of $360.3 and $307.8	552.5	557.0
Other intangible assets, net (see note 8)	4,041.7	4,220.2
Goodwill	2,808.8	2,769.4
Other assets	238.6	205.2
Total assets	9,938.4	9,773.3
Liabilities and stockholders’ equity
Current portion of debt	14.4	93.5
Accounts payable	625.3	560.2
Employee-related liabilities	130.4	114.3
Accrued interest	63.5	74.2
Other current liabilities	302.4	232.3
Total current liabilities	1,136.0	1,074.5
Debt, net of current portion	5,056.5	5,023.0
Deferred income tax liabilities	760.7	785.4
Other liabilities	432.9	428.2
Total liabilities	7,386.1	7,311.1
Commitments and contingencies (see note 10)
MCPS including paid-in capital, 20.7 shares outstanding	1,003.7	1,003.7
Common stock including paid-in capital, 578.0 and 572.8 shares outstanding	1,743.6	1,748.1
Accumulated deficit	(140.3)	(203.7)
Accumulated other comprehensive loss	(54.7)	(85.9)
Total stockholders’ equity	2,552.3	2,462.2
Total liabilities and stockholders’ equity	$ 9,938.4	$ 9,773.3

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Unaudited condensed consolidated balance sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Allowances on accounts receivable	$ 27.5	$ 18.6
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 360.3	$ 307.8
Preferred Stock, Shares Outstanding	20.7	20.7
Common Stock, Shares, Outstanding	578.0	572.8

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Unaudited condensed consolidated statements of operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Net sales	$ 1,605.0	$ 1,503.8	$ 4,602.7	$ 4,516.3
Cost of sales	1,098.6	1,029.8	3,103.8	3,076.0
Gross profit	506.4	474.0	1,498.9	1,440.3
Selling, general and administrative expenses	329.2	330.8	996.7	1,040.4
Operating income	177.2	143.2	502.2	399.9
Interest expense	(65.2)	(98.3)	(251.8)	(342.0)
Loss on extinguishment of debt	(226.4)	0.0	(226.4)	(70.2)
Other income (expense), net	6.6	(7.6)	11.6	2.9
(Loss) income before income taxes	(107.8)	37.3	35.6	(9.4)
Income tax benefit (expense)	65.6	(15.2)	29.4	(23.4)
Net (loss) income	(42.2)	22.1	65.0	(32.8)
Accumulation of yield on preferred stock	(16.1)	(16.4)	(48.4)	(136.4)
Accretion of make whole premium on series A preferred stock	0.0	0.0	0.0	(220.4)
Net (loss) income available to common stockholders	$ (58.3)	$ 5.7	$ 16.6	$ (389.6)
(Loss) earnings per share:
Basic	$ (0.10)	$ 0.01	$ 0.03	$ (1.13)
Diluted	$ (0.10)	$ 0.01	$ 0.03	$ (1.13)
Weighted average shares outstanding:
Basic	577.2	570.0	575.5	343.7
Diluted	577.2	580.7	582.5	343.7

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Unaudited condensed consolidated statements of comprehensive income or loss - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (42.2)	$ 22.1	$ 65.0	$ (32.8)
Other comprehensive income (loss):
Foreign currency translation — unrealized gain (loss)	55.1	(62.7)	31.0	(59.3)
Derivative instruments:
Unrealized gain (loss)	0.3	1.0	2.6	(0.5)
Reclassification of gain into earnings	(0.7)	(0.9)	(1.5)	(1.2)
Defined benefit plans:
Unrealized loss	(0.6)	(0.1)	(0.4)	(0.1)
Reclassification of gain into earnings	(0.1)	(0.2)	(0.3)	(0.5)
Other comprehensive income (loss) before income taxes	54.0	(62.9)	31.4	(61.6)
Income tax effect	0.1	0.1	(0.2)	0.6
Other comprehensive income (loss)	54.1	(62.8)	31.2	(61.0)
Comprehensive income (loss)	$ 11.9	$ (40.7)	$ 96.2	$ (93.8)

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Unaudited condensed consolidated statements of stockholders' equity or deficit - shares - shares shares in Millions	MCPS including paid-in capital	Common stock including paid-in capital
Beginning balance at Dec. 31, 2018	0.0	132.8
Issuances, net of issuance costs	20.7	238.1
Conversion of JCPS		194.5
Exercise of warrants		6.0
Ending balance at Sep. 30, 2019	20.7	571.4
Beginning balance at Jun. 30, 2019	20.7	568.8
Exercise of warrants		2.6
Ending balance at Sep. 30, 2019	20.7	571.4
Beginning balance at Dec. 31, 2019	20.7	572.8
Exercised		4.6
Share-based compensation		0.6
Ending balance at Sep. 30, 2020	20.7	578.0
Beginning balance at Jun. 30, 2020	20.7	576.3
Exercised		1.7
Ending balance at Sep. 30, 2020	20.7	578.0

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Unaudited condensed consolidated statements of stockholders' equity or deficit - amounts - USD ($) $ in Millions	Total	Cumulative effect adjustment	MCPS including paid-in capital	Common stock including paid-in capital	Accumulated deficit	Accumulated deficit Cumulative effect adjustment	AOCI
Beginning balance at Dec. 31, 2018	$ (3,051.7)	$ (3.1)	$ 0.0	$ (2,746.8)	$ (238.4)	$ (3.1)	$ (66.5)
Issuances, net of issuance costs	4,235.6		1,003.7	3,231.9
Conversion of JCPS	1,562.0			1,562.0
Comprehensive income (loss)	(93.8)				(32.8)		(61.0)
Stock-based compensation expense	54.6			54.6
Accumulation of yield on preferred stock	(136.4)			(136.4)
Accretion of make whole premium on series A preferred stock	(220.4)			(220.4)
Award reclassification	8.8			8.8
Ending balance at Sep. 30, 2019	2,355.6		1,003.7	1,753.7	(274.3)		(127.5)
Beginning balance at Jun. 30, 2019	2,410.9		1,003.7	1,768.3	(296.4)		(64.7)
Issuances, net of issuance costs	(0.1)			(0.1)
Comprehensive income (loss)	(40.7)				22.1		(62.8)
Stock-based compensation expense	1.9			1.9
Accumulation of yield on preferred stock	(16.4)			(16.4)
Ending balance at Sep. 30, 2019	2,355.6		1,003.7	1,753.7	(274.3)		(127.5)
Beginning balance at Dec. 31, 2019	2,462.2	$ (1.6)	1,003.7	1,748.1	(203.7)	$ (1.6)	(85.9)
Comprehensive income (loss)	96.2				65.0		31.2
Stock-based compensation expense	30.1			30.1
Accumulation of yield on preferred stock	(48.4)			(48.4)
Stock option exercises and other common stock transactions	13.8			13.8
Ending balance at Sep. 30, 2020	2,552.3		1,003.7	1,743.6	(140.3)		(54.7)
Beginning balance at Jun. 30, 2020	2,540.8		1,003.7	1,744.0	(98.1)		(108.8)
Comprehensive income (loss)	11.9				(42.2)		54.1
Stock-based compensation expense	10.6			10.6
Accumulation of yield on preferred stock	(16.1)			(16.1)
Stock option exercises and other common stock transactions	5.1			5.1
Ending balance at Sep. 30, 2020	$ 2,552.3		$ 1,003.7	$ 1,743.6	$ (140.3)		$ (54.7)

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Unaudited condensed consolidated statements of cash flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net (loss) income	$ 65.0	$ (32.8)
Reconciling adjustments:
Depreciation and amortization	293.4	301.6
Stock-based compensation expense	31.4	57.4
Non-cash restructuring charges	0.0	10.0
Provision for accounts receivable and inventory	31.5	22.9
Deferred income tax benefit	(90.7)	(67.5)
Amortization of deferred financing costs	19.0	26.5
Loss on extinguishment of debt	226.4	70.2
Foreign currency remeasurement (gain) loss	(1.2)	2.8
Changes in assets and liabilities:
Accounts receivable	(50.6)	(76.9)
Inventory	(33.5)	(74.1)
Accounts payable	67.8	11.7
Accrued interest	(10.7)	58.5
Other assets and liabilities	75.3	(36.3)
Other, net	0.7	(7.0)
Net cash provided by operating activities	623.8	267.0
Cash flows from investing activities:
Capital expenditures	(41.4)	(39.5)
Other	1.1	8.8
Net cash used in investing activities	(40.3)	(30.7)
Cash flows from financing activities:
Debt borrowings	2,001.6	0.0
Debt repayments	(2,171.5)	(1,825.4)
Payments of debt refinancing fees and premiums	(198.0)	0.0
Payments of contingent consideration	0.0	(4.6)
Proceeds from issuance of stock, net of issuance costs	0.0	4,235.6
Redemption of series A preferred stock	0.0	(2,630.9)
Payments of dividends on preferred stock	(48.4)	(15.1)
Proceeds received from exercise of stock options	13.8	0.0
Net cash used in financing activities	(402.5)	(240.4)
Effect of currency rate changes on cash	2.8	(6.7)
Net change in cash and cash equivalents	183.8	(10.8)
Cash, cash equivalents and restricted cash, beginning of period	189.3	187.7
Cash, cash equivalents and restricted cash, end of period	$ 373.1	$ 176.9

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Nature of operations and presentation of financial statements

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of operations and presentation of financial statements

1.    Nature of operations and presentation of financial statements

We are a global manufacturer and distributor that provides products and services to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries.

Basis of presentation

We have prepared these condensed consolidated financial statements pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year.

We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report. Those audited consolidated financial statements include a summary of our significant accounting policies, updates to which are included in note 2.

Principles of consolidation

All intercompany balances and transactions have been eliminated from the financial statements.

Use of estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates.

Global coronavirus outbreak

The ongoing coronavirus outbreak known as COVID-19 has adversely affected global economies, financial markets and the overall environment in which we do business, and the extent to which it may impact our future results of operations and overall financial performance remains uncertain.

In response to the COVID-19 outbreak, on March 27, 2020, the United States Government enacted the CARES Act, which provides financial stimulus to qualifying businesses. We expect to benefit from the provisions under the CARES Act that allow for an increased deduction of business interest for income tax purposes for fiscal years 2019 and 2020, and for the deferral of payments for certain employment taxes incurred through the end of fiscal year 2020. For the business interest deduction, we recognized a cash benefit of $28.3 million for fiscal year 2019,

which we applied to our 2020 estimated tax payments. We expect this deduction will also provide at least a $20.3 million cash benefit for fiscal year 2020.

Secondary offerings

On May 26, 2020 and August 21, 2020, we completed secondary offerings of 51.75 million shares and 63.89 million shares of our common stock, respectively, held by certain of our stockholders at the offering prices of $16.25 and $19.51 per share, respectively. The shares offered included the full exercise by the underwriters of their option to purchase up to 6.75 million and 8.33 million additional shares of common stock, respectively. No shares were sold by us, and we received no proceeds from these offerings. Fees incurred to complete these transactions were expensed as incurred and immaterial.

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Summary of significant accounting policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of significant accounting policies

2.    Summary of significant accounting policies

Interim update to segment reporting policy

During the quarter ended March 31, 2020, our Chief Executive Officer, who is our chief operating decision maker, changed the measure he uses to evaluate segment profitability from Management EBITDA to Adjusted EBITDA. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change.

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New accounting standards

9 Months Ended

Sep. 30, 2020

Accounting Changes and Error Corrections [Abstract]

New accounting standards

3.    New accounting standards

New tax standard

In December 2019, the FASB issued a new standard to simplify the accounting for income taxes by removing certain exceptions to the existing guidance and also providing for additional clarification. This standard encompasses multiple amendments, and requires adoption either retrospectively, prospectively, or using a modified retrospective approach, depending on the amendment. For the amendments in which we are given the choice between adopting retrospectively or on a modified retrospective basis, we expect to adopt on a modified retrospective basis. All other amendments will be adopted using the method prescribed by the standard. The standard is effective on January 1, 2021 and we are currently evaluating its impact. Two of the provisions included in this amendment that are most relevant to us are: 1) the provision requiring companies to recognize a franchise (or similar) tax that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, and 2) the provision requiring companies to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction.

New credit losses standard

In June 2016, the FASB issued a new standard that modifies the recognition of credit losses related to financial assets. Under the new standard, an entity must measure and record its total expected credit losses, rather than recording such losses when it is probable that they have

occurred, as was required under the previous standard. We adopted the new guidance on January 1, 2020 using a modified retrospective approach applied to our portfolio of trade receivables as of that date. On the adoption date, we (i) recorded a $1.6 million cumulative effect adjustment to increase accumulated deficit, (ii) increased our allowance for credit losses to accounts receivable by $2.2 million, and (iii) recognized a $0.6 million reduction to deferred income tax liabilities.

Other

There were no other new accounting standards that we expect to have a material impact to our financial position or results of operations upon adoption.

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Earnings or loss per share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

4.    Earnings or loss per share

The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2020:

	Three months ended September 30, 2020					Nine months ended September 30, 2020
(in millions, except per share data)	Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share		Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share
Basic	$	(58.3)	577.2	$	(0.10)	$	16.6	575.5	$	0.03
Dilutive effect of stock-based awards	—		—			—		7.0
Diluted	$	(58.3)	577.2	$	(0.10)	$	16.6	582.5	$	0.03

For the three months ended September 30, 2020, basic and diluted loss per share calculations were the same because there was a net loss available to common stockholders. As a result, 22.6 million of stock options, 5.2 million of restricted stock units and 62.9 million of MCPS were excluded from the calculation of diluted loss per share as their effect would be anti-dilutive.

For the nine months ended September 30, 2020, diluted earnings per share included accumulated yield of $48.4 million and excluded 62.9 million of common stock equivalents under the MCPS because they were anti-dilutive to the calculation.

The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2019:

	Three months ended September 30, 2019					Nine months ended September 30, 2019
(in millions, except per share data)	Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share		Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share
Basic	$	5.7	570.0	$	0.01	$	(389.6)	343.7	$	(1.13)
Effect of dilutive securities:
Stock-based awards	—		8.3			—		—
Warrants	—		2.4			—		—
Diluted	$	5.7	580.7	$	0.01	$	(389.6)	343.7	$	(1.13)

For the three months ended September 30, 2019, diluted earnings per share included accumulated yield of $16.4 million and excluded 70.4 million of common stock equivalents under the MCPS because they were anti-dilutive to the calculation.

For the nine months ended September 30, 2019 basic and diluted loss per share calculations were the same because there was a net loss available to common stockholders. As a result, 24.1 million of stock options, 5.6 million of restricted stock units and 70.4 million of MCPS were excluded from the calculation of diluted loss per share as their effect would be anti-dilutive.

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Segment financial information

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment financial information

5.    Segment financial information

We report based on three geographic segments based on customer location: Americas, Europe and AMEA. Each segment manufactures and distributes solutions for the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries. Corporate costs are managed on a standalone basis and not allocated to segments.

The following table presents information by reportable segment:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net sales:
Americas	$	950.5	$	918.2	$	2,707.1	$	2,701.0
Europe	562.1		501.1		1,627.1		1,561.8
AMEA	92.4		84.5		268.5		253.5
Total	$	1,605.0	$	1,503.8	$	4,602.7	$	4,516.3
Adjusted EBITDA:
Americas	$	203.6	$	182.7	$	591.0	$	542.8
Europe	98.4		84.0		278.4		255.3
AMEA	20.9		15.9		56.8		51.4
Corporate	(37.3)		(31.8)		(104.5)		(81.9)
Total	$	285.6	$	250.8	$	821.7	$	767.6

The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers.

The following table presents the reconciliation of Adjusted EBITDA from net income or loss, the nearest measurement under GAAP:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net (loss) income	$	(42.2)	$	22.1	$	65.0	$	(32.8)
Interest expense	65.2		98.3		251.8		342.0
Income tax (benefit) expense	(65.6)		15.2		(29.4)		23.4
Depreciation and amortization	99.1		100.3		293.4		301.6
Net foreign currency (gain) loss from financing activities	(4.1)		8.2		(4.3)		0.1
Loss on extinguishment of debt	226.4		—		226.4		70.2
Other stock-based compensation expense	0.6		(9.2)		0.6		33.5
Restructuring and severance charges	2.3		13.4		6.7		19.8
VWR transaction, integration and planning expenses	2.1		5.4		7.2		16.8
Other	1.8		(2.9)		4.3		(7.0)
Adjusted EBITDA	$	285.6	$	250.8	$	821.7	$	767.6

The following table presents net sales by product line:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Proprietary materials & consumables	$	562.2	$	494.2	$	1,654.3	$	1,500.9
Third party materials & consumables	610.0		592.8		1,764.1		1,792.8
Services & specialty procurement	215.4		195.7		580.0		562.5
Equipment & instrumentation	217.4		221.1		604.3		660.1
Total	$	1,605.0	$	1,503.8	$	4,602.7	$	4,516.3

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Supplemental disclosures of cash flow information

9 Months Ended

Sep. 30, 2020

Supplemental Cash Flow Elements [Abstract]

Supplemental disclosures of cash flow information

6.    Supplemental disclosures of cash flow information

The following tables present supplemental disclosures of cash flow information:

(in millions)	September 30, 2020		December 31, 2019
Cash and cash equivalents	$	370.5	$	186.7
Restricted cash classified as other assets	2.6		2.6
Total	$	373.1	$	189.3

(in millions)	Nine months ended September 30,
	2020		2019
Cash flows from operating activities:
Cash paid for income taxes, net	$	32.0	$	100.2
Cash paid for interest	252.6		258.4
Cash paid under operating leases	31.7		33.4
Cash paid under finance leases	3.9		3.7
Cash flows from financing activities:
Cash paid under finance leases	3.3		4.1

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Inventory

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventory

7.    Inventory

The following table presents the components of inventory:

(in millions)	September 30, 2020		December 31, 2019
Merchandise inventory	$	452.5	$	445.2
Finished goods	113.0		104.4
Raw materials	125.0		125.1
Work in process	39.3		36.5
Total	$	729.8	$	711.2

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Other intangible assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Other intangible assets

8.    Other intangible assets

The following table presents the components of other intangible assets:

(in millions)	September 30, 2020						December 31, 2019
	Gross value		Accumulated amortization		Carrying value		Gross value		Accumulated amortization		Carrying value
Customer relationships	$	4,609.7	$	822.4	$	3,787.3	$	4,547.7	$	641.3	$	3,906.4
VWR trade name	269.0		170.1		98.9		264.3		123.3		141.0
Other	183.2		120.0		63.2		182.8		102.3		80.5
Total finite-lived	$	5,061.9	$	1,112.5	3,949.4		$	4,994.8	$	866.9	4,127.9
Indefinite-lived					92.3						92.3
Total					$	4,041.7					$	4,220.2

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Restructuring and severance

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Restructuring and severance

9.    Restructuring and severance

The following table presents restructuring and severance charges by plan:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
2017 restructuring program	$	1.9	$	13.3	$	6.1	$	19.1
Other	0.4		0.1		0.6		0.7
Total	$	2.3	$	13.4	$	6.7	$	19.8

During the three months ended September 30, 2020, there were no material updates to our liabilities or expense under the 2017 restructuring program.

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Commitments and contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

10.    Commitments and contingencies

Our business involves commitments and contingencies related to compliance with environmental laws and regulations, the manufacture and sale of products and litigation. The ultimate resolution

of contingencies is subject to significant uncertainty, and it is reasonably possible that we will experience adverse outcomes related to these matters.

Environmental laws and regulations

Our environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in technology. We believe that known and unknown environmental matters, if not resolved favorably, could have a material effect on our financial position, liquidity and profitability.

Mallinckrodt indemnification

In 2010, New Mountain Capital acquired us from Covidien plc in accordance with a stock purchase agreement dated May 25, 2010. At that time, we were organized as Mallinckrodt Baker, Inc. or MBI. Pursuant to the terms of that agreement, we are entitled to various levels of indemnification with respect to environmental liabilities involving the former MBI operations. In 2013, in connection with the Covidien plc divestiture of Mallinckrodt Group S.a.r.l and Mallinckrodt LLC, together “Mallinckrodt,” and by a second amendment to the stock purchase agreement dated June 6, 2013, but effective upon the consummation of the divestiture, Covidien plc assigned its obligations as described herein to Mallinckrodt, and Mallinckrodt assumed those obligations from Covidien plc. As a result of the stock purchase agreement and assignment, Mallinckrodt is contractually obligated to indemnify and defend us for all off-site environmental liabilities (for example, Superfund or CERCLA liabilities) arising from the pre-closing disposal of chemicals or wastes by former MBI operations.

In connection with environmental liabilities arising from pre-closing noncompliance with environmental laws, Mallinckrodt is contractually obligated to reimburse us for a percentage of the total liability, with such reimbursements made through disbursements from a $30.0 million environmental escrow established at the time of the closing. Specifically, Mallinckrodt will be responsible for reimbursement of 80% of the total costs up to $40.0 million of such environmental liabilities. Mallinckrodt will then be responsible for reimbursement of 50% of the next $40.0 million of such environmental liabilities. If such environmental liabilities exceed $80.0 million in the aggregate, Mallinckrodt will be responsible for reimbursement of 100% of such liabilities up to the next $30.0 million in the aggregate. Currently, reimbursements are 80% of the amounts spent by us, with reimbursements and settlements to date exceeding $12.0 million. In addition, in connection with operation and maintenance activities required pursuant to administrative consent orders and subsequently issued remedial action permits involving our Phillipsburg, New Jersey facility, amounts in excess of a small annual threshold are also subject to reimbursement, currently at the 80% level.

Other noteworthy matters

The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. This matter is covered by the indemnification arrangement previously described. At September 30, 2020, our accrued

obligation under this order is $3.9 million, which is calculated based on expected cash payments discounted at rates ranging from 0.1% in 2020 to 1.4% in 2045. The undiscounted amount of that obligation is $4.4 million.

In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland. Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are also monitoring the condition of a closed landfill on that site. These matters are not covered by our indemnification arrangement because they relate to an operation we subsequently acquired. At September 30, 2020, our balance sheet includes a liability of $3.5 million for remediation and monitoring costs. That liability is estimated primarily on expected remediation payments discounted through 2020 and is not materially different than its undiscounted amount.

Manufacture and sale of products

Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings.

We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements.

We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

Litigation

At September 30, 2020, there was no outstanding litigation that we believe would result in material losses if decided against us, and we do not believe that there are any unasserted matters that are reasonably possible to result in a material loss.

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Debt

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Debt

11.    Debt

The following table presents information about our debt:

(dollars in millions)	September 30, 2020					December 31, 2019
	Interest terms	Rate		Amount
Receivables facility	LIBOR plus 0.90%	1.05	%	$	—	$	55.5
Senior secured credit facilities:
Euro term loans	EURIBOR plus 2.50%	2.50	%	368.8		391.8
U.S. dollar term loans	LIBOR plus 2.25%	3.25	%	609.7		677.2
4.75% secured notes	fixed rate	4.75	%	586.7		561.2
6% secured notes	fixed rate	6.00	%	1,500.0		1,500.0
9% unsecured notes	fixed rate	9.00	%	—		2,000.0
3.875% unsecured notes	fixed rate	3.875	%	469.3		—
4.625 % unsecured notes	fixed rate	4.625	%	1,550.0		—
Finance lease liabilities				71.0		59.2
Other				—		4.5
Total debt, gross				5,155.5		5,249.4
Less: unamortized deferred financing costs				(84.6)		(132.9)
Total debt				$	5,070.9	$	5,116.5
Classification on balance sheets:
Current portion of debt				$	14.4	$	93.5
Debt, net of current portion				5,056.5		5,023.0

Credit facilities

The following table presents availability under our credit facilities:

(in millions)	September 30, 2020
	Receivables facility		Revolving credit facility		Total
Capacity	$	300.0	$	515.0	$	815.0
Undrawn letters of credit outstanding	(12.3)		(1.6)		(13.9)
Outstanding borrowings	—		—		—
Unused availability	$	287.7	$	513.4	$	801.1
Maximum availability	$	300.0	$	515.0	$	815.0

Capacity under the receivables facility depends upon maintaining a sufficient borrowing base of eligible accounts receivable. At September 30, 2020, $458.2 million of accounts receivable were available as collateral under the facility.

Receivables facility

The receivables facility is with a commercial bank, functions like a line of credit and matures on March 27, 2023. Borrowings are secured by accounts receivable which are sold by certain of our domestic subsidiaries to a special-purpose consolidated subsidiary. As a result, those receivables are not available to satisfy the claims of other creditors. We bear the risk of collection on those receivables and account for the receivables facility as a secured borrowing.

Revolving credit facility

On July 14, 2020, we refinanced our revolving credit facility to obtain an additional $265.0 million of available funding, bringing the total amount of available funding under this facility to $515.0 million. The revolving credit facility will mature on July 14, 2025, and the fees incurred to complete the transaction were immaterial.

Senior unsecured notes

On July 17, 2020, we issued $1,550.0 million aggregate principal amount of 4.625% senior unsecured notes and €400.0 million aggregate principal amount of 3.875% senior unsecured notes, which will mature on July 15, 2028. We used the proceeds of $1,975.0 million, net of $26.6 million of issuance costs from the sale of these notes, along with cash on hand, to redeem all $2,000.0 million aggregate principal amount of our 9.00% senior unsecured notes that were due in October of 2025. Of the total issuance costs incurred, $4.8 million were paid to Goldman Sachs, a related party. We incurred a loss on the extinguishment of our 9.00% senior unsecured notes of $223.4 million, which reflects the payment of $169.0 million of premiums and the expense of $54.4 million of previously unamortized deferred financing costs.

Senior secured credit facilities

On September 30, 2020, we made prepayments of $62.4 million on our U.S. dollar term loans and €32.2 million on our EURO term loans. In connection with these prepayments, we expensed $3.0 million of previously unamortized deferred financing costs as a loss on extinguishment of debt.

Debt covenants

Our debt agreements include representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities include a financial covenant that becomes applicable for periods in which we have drawn more than 35% of our revolving credit facility under the senior secured credit facilities. When applicable, we may not have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined. We were in compliance with this covenant at September 30, 2020.

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Accumulated other comprehensive income or loss

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Accumulated other comprehensive income or loss

12.    Accumulated other comprehensive income or loss

The following table presents changes in the components of AOCI:

(in millions)	Foreign currency translation		Derivative instruments		Defined benefit plans		Total
Balance at June 30, 2020	$	(86.4)	$	0.6	$	(23.0)	$	(108.8)
Unrealized gain (loss)	55.1		0.3		(0.6)		54.8
Reclassification of gain into earnings	—		(0.7)		(0.1)		(0.8)
Income tax effect	—		0.1		—		0.1
Balance at September 30, 2020	$	(31.3)	$	0.3	$	(23.7)	$	(54.7)
Balance at June 30, 2019	$	(55.6)	$	(0.2)	$	(8.9)	$	(64.7)
Unrealized (loss) gain	(62.7)		1.0		(0.1)		(61.8)
Reclassification of gain into earnings	—		(0.9)		(0.2)		(1.1)
Income tax effect	—		—		0.1		0.1
Balance at September 30, 2019	$	(118.3)	$	(0.1)	$	(9.1)	$	(127.5)
Balance at December 31, 2019	$	(62.3)	$	(0.5)	$	(23.1)	$	(85.9)
Unrealized gain (loss)	31.0		2.6		(0.4)		33.2
Reclassification of gain into earnings	—		(1.5)		(0.3)		(1.8)
Income tax effect	—		(0.3)		0.1		(0.2)
Balance at September 30, 2020	$	(31.3)	$	0.3	$	(23.7)	$	(54.7)
Balance at December 31, 2018	$	(59.0)	$	1.1	$	(8.6)	$	(66.5)
Unrealized loss	(59.3)		(0.5)		(0.1)		(59.9)
Reclassification of gain into earnings	—		(1.2)		(0.5)		(1.7)
Income tax effect	—		0.5		0.1		0.6
Balance at September 30, 2019	$	(118.3)	$	(0.1)	$	(9.1)	$	(127.5)

The reclassifications and income tax effects shown above were immaterial to the financial statements. The reclassifications were made to either cost of sales or SG&A expenses depending upon the nature of the underlying transaction.

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Stock-based compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-based compensation

13.    Stock-based compensation

The following table presents the components of stock-based compensation expense:

(in millions)	Classification	Three months ended September 30,				Nine months ended September 30,
		2020		2019		2020		2019
Stock options	Equity	$	4.2	$	5.1	$	12.6	$	39.7
RSUs	Equity	6.0		5.1		16.4		8.5
Optionholder awards	Liability	0.2		0.7		0.6		2.6
SARs	Equity	—		(8.3)		—		6.4
Other	Both	1.0		(0.9)		1.8		0.2
Total		$	11.4	$	1.7	$	31.4	$	57.4
Balance sheet classification:
Equity		$	10.6	$	1.9	$	30.1	$	54.6
Liability		0.8		(0.2)		1.3		2.8

At September 30, 2020, unvested awards under our plans, including the 2019 plan, have remaining stock-based compensation expense of $87.1 million to be recognized over a weighted average period of 1.8 years.

At September 30, 2020, 12.6 million shares were available for future issuance under the 2019 Plan.

During the nine months ended September 30, 2019, we recognized $26.9 million of stock-based compensation expense upon the completion of our initial public offering, which satisfied a performance condition for 0.9 million stock options. The stock-based compensation expense was equivalent to the grant date fair value for these awards.

In November 2019, the NuSil Investors settled the SARs. We were not required to pay any cash upon settlement of those awards.

Stock options

The following table presents information about outstanding stock options:

(options and intrinsic value in millions)	Number of options	Weighted average exercise price per option		Aggregate intrinsic value		Weighted average remaining term
Balance at December 31, 2019	22.7	$	15.04
Granted	5.0	17.57
Exercised	(4.5)	3.83
Forfeited	(1.8)	17.05
Balance at September 30, 2020	21.4	17.58		$	109.6	7.5 years
Expected to vest	9.9	18.53		39.8		8.7 years
Vested	11.5	16.76		69.8		6.4 years

During the nine months ended September 30, 2020, we granted stock options that have a contractual life of ten years and will vest annually over three to four years, subject to the recipient continuously providing service to us through each such date.

RSUs

The following table presents information about unvested RSUs:

(awards in millions)	Number of awards	Weighted average grant date fair value per award
Balance at December 31, 2019	5.2	$	13.97
Granted	1.4	17.38
Vested	(0.9)	13.92
Forfeited	(0.6)	14.04
Balance at September 30, 2020	5.1	14.86

During the nine months ended September 30, 2020, we granted restricted stock units that will vest annually over three to four years, subject to the recipient continuously providing service to us through each such date.

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Other income or expense, net

9 Months Ended

Sep. 30, 2020

Other Income and Expenses [Abstract]

Other income or expense, net

14.    Other income or expense, net

The following table presents the components of other income or expense, net:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net foreign currency gain (loss) from financing activities	$	4.1	$	(8.2)	$	4.3	$	(0.1)
Income related to defined benefit plans	2.4		1.3		7.0		3.8
Other	0.1		(0.7)		0.3		(0.8)
Other income (expense), net	$	6.6	$	(7.6)	$	11.6	$	2.9

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Income taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income taxes

15.    Income taxes

The following table presents the relationship between income tax expense or benefit and income or loss before income taxes:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Income tax benefit (expense)	$	65.6	$	(15.2)	$	29.4	$	(23.4)
(Loss) income before income taxes	(107.8)		37.3		35.6		(9.4)

Income tax expense or benefit in the quarter is based upon the estimated income or loss for the full year. The composition of the income or loss in different countries and adjustments, if any, in the applicable quarterly periods influences our expense or benefit.

The relationship between pretax income or loss and income tax expense or benefit is greatly affected by the impact of losses for which we cannot claim a tax benefit, non-deductible expenses, and other items that increase tax expense without a relationship to income, such as withholding taxes and changes with respect to uncertain tax positions.

In the third quarter of 2020, we released a net of $31.5 million of previously recorded reserves for uncertain tax positions, primarily driven by the United States Internal Revenue Service finalizing their examination of our 2016 amended tax returns. The reduction in these reserves provided a direct benefit to our income tax expense.

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Derivative and hedging activities

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative and hedging activities

16.    Derivative and hedging activities

We engage in hedging activities to reduce our exposure to foreign currency exchange rates. Our hedging activities are designed to manage specific risks according to our strategies, as

summarized below, which may change from time to time. Our hedging activities consist of the following:

•Economic hedges — We are exposed to changes in foreign currency exchange rates on certain of our euro-denominated term loans and notes that move inversely from our portfolio of euro-denominated intercompany loans. The currency effects for these non-derivative instruments are recorded through earnings in the period of change and substantially offset one another;

•Other hedging activities — Certain of our subsidiaries hedge short-term foreign currency denominated business transactions and intercompany financing transactions using foreign currency forward contracts. These activities were not material to our consolidated financial statements; and

•Net investment hedge — We have designated €400.0 million of our 3.875% senior unsecured notes as a hedge of our net investment in certain European operations to manage our exposure to currency and exchange rate movements from these operations.

Net Investment Hedge

We designated all of our outstanding €400.0 million 3.875% senior unsecured notes, issued on July 17, 2020, and maturing on July 15, 2028, as a hedge of our net investment in certain of our European operations. For instruments that are designated and qualify as net investment hedges, the foreign currency transactional gains or losses are reported as a component of AOCI. The gains or losses would be reclassified into earnings upon a liquidation event or deconsolidation of a hedged foreign subsidiary.

Net investment hedge effectiveness is assessed based upon the change in the spot rate of the foreign currency denominated debt. The critical terms of the foreign currency notes match the portion of the net investments designated as being hedged. At September 30, 2020, the net investment hedge was equal to the designated portion of the European operations and were considered to be perfectly effective.

Non-derivative financial instruments which are designated as hedging instruments:

The accumulated gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of AOCI was $17.7 million and $0.0 million as of September 30, 2020 and December 31, 2019, respectively.

The amount of gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of other comprehensive income is presented below:

(in millions)	Three months ended September 30, 2020		Nine months ended September 30, 2020
Net investment hedges	$	17.7	$	17.7

(in millions)	Three months ended September 30, 2019		Nine months ended September 30, 2019
Net investment hedges	$	—	$	—

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Financial instruments and fair value measurements

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Financial instruments and fair value measurements

17.    Financial instruments and fair value measurements

Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and debt.

Assets and liabilities for which fair value is only disclosed

The carrying amount of cash and cash equivalents was the same as its fair value and is a Level 1 measurement. The carrying amounts for trade accounts receivable and accounts payable approximated fair value due to their short-term nature and are Level 2 measurements.

The following table presents the carrying values, which exclude unamortized deferred financing costs, and the fair values of debt instruments:

(in millions)	September 30, 2020				December 31, 2019
	Carrying value		Fair value		Carrying value		Fair value
Receivables facility	$	—	$	—	$	55.5	$	55.5
Senior secured credit facilities:
Euro term loans	368.8		367.5		391.8		397.4
U.S. dollar term loans	609.7		605.5		677.2		685.2
4.75% secured notes	586.7		608.4		561.2		599.7
6% secured notes	1,500.0		1,571.0		1,500.0		1,603.2
9% unsecured notes	—		—		2,000.0		2,241.7
3.875% unsecured notes	469.3		481.2		—		—
4.625 % unsecured notes	1,550.0		1,606.5		—		—
Finance lease liabilities	71.0		71.0		59.2		59.2
Other	—		—		4.5		4.5
Total	$	5,155.5	$	5,311.1	$	5,249.4	$	5,646.4

The fair values of debt instruments are based on standard pricing models that take into account the present value of future cash flows, and in some cases private trading data, which are level 2 measurements.

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Nature of operations and presentation of financial statements (Policies)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation

Basis of presentation

We have prepared these condensed consolidated financial statements pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year.

We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report. Those audited consolidated financial statements include a summary of our significant accounting policies, updates to which are included in note 2.

Principles of consolidation

Principles of consolidation

All intercompany balances and transactions have been eliminated from the financial statements.

Use of estimates

Use of estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates.

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Summary of significant accounting policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Interim update to segment reporting policy

Interim update to segment reporting policy

During the quarter ended March 31, 2020, our Chief Executive Officer, who is our chief operating decision maker, changed the measure he uses to evaluate segment profitability from Management EBITDA to Adjusted EBITDA. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change.

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New accounting standards (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Changes and Error Corrections [Abstract]

New accounting standards

New tax standard

In December 2019, the FASB issued a new standard to simplify the accounting for income taxes by removing certain exceptions to the existing guidance and also providing for additional clarification. This standard encompasses multiple amendments, and requires adoption either retrospectively, prospectively, or using a modified retrospective approach, depending on the amendment. For the amendments in which we are given the choice between adopting retrospectively or on a modified retrospective basis, we expect to adopt on a modified retrospective basis. All other amendments will be adopted using the method prescribed by the standard. The standard is effective on January 1, 2021 and we are currently evaluating its impact. Two of the provisions included in this amendment that are most relevant to us are: 1) the provision requiring companies to recognize a franchise (or similar) tax that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, and 2) the provision requiring companies to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction.

New credit losses standard

In June 2016, the FASB issued a new standard that modifies the recognition of credit losses related to financial assets. Under the new standard, an entity must measure and record its total expected credit losses, rather than recording such losses when it is probable that they have

occurred, as was required under the previous standard. We adopted the new guidance on January 1, 2020 using a modified retrospective approach applied to our portfolio of trade receivables as of that date. On the adoption date, we (i) recorded a $1.6 million cumulative effect adjustment to increase accumulated deficit, (ii) increased our allowance for credit losses to accounts receivable by $2.2 million, and (iii) recognized a $0.6 million reduction to deferred income tax liabilities.

Other

There were no other new accounting standards that we expect to have a material impact to our financial position or results of operations upon adoption.

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Earnings or loss per share (Tables)

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

Earnings Per Share [Abstract]

Reconciliation of basic and diluted earnings per share

The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2020:

	Three months ended September 30, 2020					Nine months ended September 30, 2020
(in millions, except per share data)	Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share		Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share
Basic	$	(58.3)	577.2	$	(0.10)	$	16.6	575.5	$	0.03
Dilutive effect of stock-based awards	—		—			—		7.0
Diluted	$	(58.3)	577.2	$	(0.10)	$	16.6	582.5	$	0.03

The following table presents the reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2019:

	Three months ended September 30, 2019					Nine months ended September 30, 2019
(in millions, except per share data)	Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share		Earnings /(loss) (numerator)		Weighted average shares outstanding (denominator)	Earnings / (loss) per share
Basic	$	5.7	570.0	$	0.01	$	(389.6)	343.7	$	(1.13)
Effect of dilutive securities:
Stock-based awards	—		8.3			—		—
Warrants	—		2.4			—		—
Diluted	$	5.7	580.7	$	0.01	$	(389.6)	343.7	$	(1.13)

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Segment financial information (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of segment financial information

The following table presents information by reportable segment:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net sales:
Americas	$	950.5	$	918.2	$	2,707.1	$	2,701.0
Europe	562.1		501.1		1,627.1		1,561.8
AMEA	92.4		84.5		268.5		253.5
Total	$	1,605.0	$	1,503.8	$	4,602.7	$	4,516.3
Adjusted EBITDA:
Americas	$	203.6	$	182.7	$	591.0	$	542.8
Europe	98.4		84.0		278.4		255.3
AMEA	20.9		15.9		56.8		51.4
Corporate	(37.3)		(31.8)		(104.5)		(81.9)
Total	$	285.6	$	250.8	$	821.7	$	767.6

The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers.

Reconciliation of segment profitability to consolidated earnings

The following table presents the reconciliation of Adjusted EBITDA from net income or loss, the nearest measurement under GAAP:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net (loss) income	$	(42.2)	$	22.1	$	65.0	$	(32.8)
Interest expense	65.2		98.3		251.8		342.0
Income tax (benefit) expense	(65.6)		15.2		(29.4)		23.4
Depreciation and amortization	99.1		100.3		293.4		301.6
Net foreign currency (gain) loss from financing activities	(4.1)		8.2		(4.3)		0.1
Loss on extinguishment of debt	226.4		—		226.4		70.2
Other stock-based compensation expense	0.6		(9.2)		0.6		33.5
Restructuring and severance charges	2.3		13.4		6.7		19.8
VWR transaction, integration and planning expenses	2.1		5.4		7.2		16.8
Other	1.8		(2.9)		4.3		(7.0)
Adjusted EBITDA	$	285.6	$	250.8	$	821.7	$	767.6

Schedule of net sales by product line

The following table presents net sales by product line:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Proprietary materials & consumables	$	562.2	$	494.2	$	1,654.3	$	1,500.9
Third party materials & consumables	610.0		592.8		1,764.1		1,792.8
Services & specialty procurement	215.4		195.7		580.0		562.5
Equipment & instrumentation	217.4		221.1		604.3		660.1
Total	$	1,605.0	$	1,503.8	$	4,602.7	$	4,516.3

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Supplemental disclosures of cash flow information (Tables)

9 Months Ended

Sep. 30, 2020

Supplemental Cash Flow Elements [Abstract]

Schedule of supplemental disclosures of cash flow information

The following tables present supplemental disclosures of cash flow information:

(in millions)	September 30, 2020		December 31, 2019
Cash and cash equivalents	$	370.5	$	186.7
Restricted cash classified as other assets	2.6		2.6
Total	$	373.1	$	189.3

(in millions)	Nine months ended September 30,
	2020		2019
Cash flows from operating activities:
Cash paid for income taxes, net	$	32.0	$	100.2
Cash paid for interest	252.6		258.4
Cash paid under operating leases	31.7		33.4
Cash paid under finance leases	3.9		3.7
Cash flows from financing activities:
Cash paid under finance leases	3.3		4.1

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Inventory (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Schedule of inventory components

The following table presents the components of inventory:

(in millions)	September 30, 2020		December 31, 2019
Merchandise inventory	$	452.5	$	445.2
Finished goods	113.0		104.4
Raw materials	125.0		125.1
Work in process	39.3		36.5
Total	$	729.8	$	711.2

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Other intangible assets (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of components of other intangible assets

The following table presents the components of other intangible assets:

(in millions)	September 30, 2020						December 31, 2019
	Gross value		Accumulated amortization		Carrying value		Gross value		Accumulated amortization		Carrying value
Customer relationships	$	4,609.7	$	822.4	$	3,787.3	$	4,547.7	$	641.3	$	3,906.4
VWR trade name	269.0		170.1		98.9		264.3		123.3		141.0
Other	183.2		120.0		63.2		182.8		102.3		80.5
Total finite-lived	$	5,061.9	$	1,112.5	3,949.4		$	4,994.8	$	866.9	4,127.9
Indefinite-lived					92.3						92.3
Total					$	4,041.7					$	4,220.2

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Restructuring and severance (Tables)

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Schedule of restructuring and severance charges

The following table presents restructuring and severance charges by plan:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
2017 restructuring program	$	1.9	$	13.3	$	6.1	$	19.1
Other	0.4		0.1		0.6		0.7
Total	$	2.3	$	13.4	$	6.7	$	19.8

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Debt (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of information about debt

The following table presents information about our debt:

(dollars in millions)	September 30, 2020					December 31, 2019
	Interest terms	Rate		Amount
Receivables facility	LIBOR plus 0.90%	1.05	%	$	—	$	55.5
Senior secured credit facilities:
Euro term loans	EURIBOR plus 2.50%	2.50	%	368.8		391.8
U.S. dollar term loans	LIBOR plus 2.25%	3.25	%	609.7		677.2
4.75% secured notes	fixed rate	4.75	%	586.7		561.2
6% secured notes	fixed rate	6.00	%	1,500.0		1,500.0
9% unsecured notes	fixed rate	9.00	%	—		2,000.0
3.875% unsecured notes	fixed rate	3.875	%	469.3		—
4.625 % unsecured notes	fixed rate	4.625	%	1,550.0		—
Finance lease liabilities				71.0		59.2
Other				—		4.5
Total debt, gross				5,155.5		5,249.4
Less: unamortized deferred financing costs				(84.6)		(132.9)
Total debt				$	5,070.9	$	5,116.5
Classification on balance sheets:
Current portion of debt				$	14.4	$	93.5
Debt, net of current portion				5,056.5		5,023.0

Schedule of availability under credit facilities

The following table presents availability under our credit facilities:

(in millions)	September 30, 2020
	Receivables facility		Revolving credit facility		Total
Capacity	$	300.0	$	515.0	$	815.0
Undrawn letters of credit outstanding	(12.3)		(1.6)		(13.9)
Outstanding borrowings	—		—		—
Unused availability	$	287.7	$	513.4	$	801.1
Maximum availability	$	300.0	$	515.0	$	815.0

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Accumulated other comprehensive income or loss (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Schedule of changes in components of AOCI

The following table presents changes in the components of AOCI:

(in millions)	Foreign currency translation		Derivative instruments		Defined benefit plans		Total
Balance at June 30, 2020	$	(86.4)	$	0.6	$	(23.0)	$	(108.8)
Unrealized gain (loss)	55.1		0.3		(0.6)		54.8
Reclassification of gain into earnings	—		(0.7)		(0.1)		(0.8)
Income tax effect	—		0.1		—		0.1
Balance at September 30, 2020	$	(31.3)	$	0.3	$	(23.7)	$	(54.7)
Balance at June 30, 2019	$	(55.6)	$	(0.2)	$	(8.9)	$	(64.7)
Unrealized (loss) gain	(62.7)		1.0		(0.1)		(61.8)
Reclassification of gain into earnings	—		(0.9)		(0.2)		(1.1)
Income tax effect	—		—		0.1		0.1
Balance at September 30, 2019	$	(118.3)	$	(0.1)	$	(9.1)	$	(127.5)
Balance at December 31, 2019	$	(62.3)	$	(0.5)	$	(23.1)	$	(85.9)
Unrealized gain (loss)	31.0		2.6		(0.4)		33.2
Reclassification of gain into earnings	—		(1.5)		(0.3)		(1.8)
Income tax effect	—		(0.3)		0.1		(0.2)
Balance at September 30, 2020	$	(31.3)	$	0.3	$	(23.7)	$	(54.7)
Balance at December 31, 2018	$	(59.0)	$	1.1	$	(8.6)	$	(66.5)
Unrealized loss	(59.3)		(0.5)		(0.1)		(59.9)
Reclassification of gain into earnings	—		(1.2)		(0.5)		(1.7)
Income tax effect	—		0.5		0.1		0.6
Balance at September 30, 2019	$	(118.3)	$	(0.1)	$	(9.1)	$	(127.5)

The reclassifications and income tax effects shown above were immaterial to the financial statements. The reclassifications were made to either cost of sales or SG&A expenses depending upon the nature of the underlying transaction.

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Stock-based compensation (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of components of stock-based compensation expense

The following table presents the components of stock-based compensation expense:

(in millions)	Classification	Three months ended September 30,				Nine months ended September 30,
		2020		2019		2020		2019
Stock options	Equity	$	4.2	$	5.1	$	12.6	$	39.7
RSUs	Equity	6.0		5.1		16.4		8.5
Optionholder awards	Liability	0.2		0.7		0.6		2.6
SARs	Equity	—		(8.3)		—		6.4
Other	Both	1.0		(0.9)		1.8		0.2
Total		$	11.4	$	1.7	$	31.4	$	57.4
Balance sheet classification:
Equity		$	10.6	$	1.9	$	30.1	$	54.6
Liability		0.8		(0.2)		1.3		2.8

Schedule of information about outstanding stock options

The following table presents information about outstanding stock options:

(options and intrinsic value in millions)	Number of options	Weighted average exercise price per option		Aggregate intrinsic value		Weighted average remaining term
Balance at December 31, 2019	22.7	$	15.04
Granted	5.0	17.57
Exercised	(4.5)	3.83
Forfeited	(1.8)	17.05
Balance at September 30, 2020	21.4	17.58		$	109.6	7.5 years
Expected to vest	9.9	18.53		39.8		8.7 years
Vested	11.5	16.76		69.8		6.4 years

Schedule of information about unvested RSUs

The following table presents information about unvested RSUs:

(awards in millions)	Number of awards	Weighted average grant date fair value per award
Balance at December 31, 2019	5.2	$	13.97
Granted	1.4	17.38
Vested	(0.9)	13.92
Forfeited	(0.6)	14.04
Balance at September 30, 2020	5.1	14.86

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Other income or expense, net (Tables)

9 Months Ended

Sep. 30, 2020

Other Income and Expenses [Abstract]

Schedule of components of other income or expense, net

The following table presents the components of other income or expense, net:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net foreign currency gain (loss) from financing activities	$	4.1	$	(8.2)	$	4.3	$	(0.1)
Income related to defined benefit plans	2.4		1.3		7.0		3.8
Other	0.1		(0.7)		0.3		(0.8)
Other income (expense), net	$	6.6	$	(7.6)	$	11.6	$	2.9

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Income taxes (Tables)

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Schedule of relationship between income tax expense or benefit and income or loss before income taxes

The following table presents the relationship between income tax expense or benefit and income or loss before income taxes:

(in millions)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Income tax benefit (expense)	$	65.6	$	(15.2)	$	29.4	$	(23.4)
(Loss) income before income taxes	(107.8)		37.3		35.6		(9.4)

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Net Investment Hedges, Statements of Financial Performance and Financial Position, Location

The amount of gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of other comprehensive income is presented below:

(in millions)	Three months ended September 30, 2020		Nine months ended September 30, 2020
Net investment hedges	$	17.7	$	17.7

(in millions)	Three months ended September 30, 2019		Nine months ended September 30, 2019
Net investment hedges	$	—	$	—

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Financial instruments and fair value measurements (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of gross amounts and fair values of debt instruments

The following table presents the carrying values, which exclude unamortized deferred financing costs, and the fair values of debt instruments:

(in millions)	September 30, 2020				December 31, 2019
	Carrying value		Fair value		Carrying value		Fair value
Receivables facility	$	—	$	—	$	55.5	$	55.5
Senior secured credit facilities:
Euro term loans	368.8		367.5		391.8		397.4
U.S. dollar term loans	609.7		605.5		677.2		685.2
4.75% secured notes	586.7		608.4		561.2		599.7
6% secured notes	1,500.0		1,571.0		1,500.0		1,603.2
9% unsecured notes	—		—		2,000.0		2,241.7
3.875% unsecured notes	469.3		481.2		—		—
4.625 % unsecured notes	1,550.0		1,606.5		—		—
Finance lease liabilities	71.0		71.0		59.2		59.2
Other	—		—		4.5		4.5
Total	$	5,155.5	$	5,311.1	$	5,249.4	$	5,646.4

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Nature of operations and presentation of financial statements (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions			9 Months Ended
	Aug. 21, 2020	May 26, 2020	Sep. 30, 2020	Sep. 30, 2019
Subsidiary, Sale of Stock [Line Items]
Benefits expected from provisions under CARES Act			$ 20.3	$ 28.3
Secondary Offering | Common Stock
Subsidiary, Sale of Stock [Line Items]
Number of shares issued in transaction (in shares)	63,890	51,750
Price per share (in dollars per share)	$ 19.51	$ 16.25
Over-Allotment Option | Common Stock
Subsidiary, Sale of Stock [Line Items]
Number of shares issued in transaction (in shares)	8,330	6,750

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New accounting standards (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
New accounting standards
Accumulated deficit	$ (140.3)	$ (203.7)
Allowances on accounts receivable	27.5	18.6
Deferred income tax liabilities	$ 760.7	785.4
New credit losses standard | Cumulative effect adjustment
New accounting standards
Accumulated deficit		(1.6)
Allowances on accounts receivable		2.2
Deferred income tax liabilities		$ 0.6

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Earnings or loss per share - reconciliation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings (numerator)
Basic	$ (58.3)	$ 5.7	$ 16.6	$ (389.6)
Dilutive effect of stock-based awards	0.0	0.0	0.0	0.0
Dilutive effect of warrants		0.0		0.0
Diluted	$ (58.3)	$ 5.7	$ 16.6	$ (389.6)
Weighted average shares outstanding (denominator)
Basic	577.2	570.0	575.5	343.7
Dilutive effect of stock-based awards	0.0	8.3	7.0	0.0
Dilutive effect of warrants		2.4		0.0
Diluted	577.2	580.7	582.5	343.7
Earnings per share
Basic	$ (0.10)	$ 0.01	$ 0.03	$ (1.13)
Diluted	$ (0.10)	$ 0.01	$ 0.03	$ (1.13)

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Earnings or loss per share - antidilutive securities (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Accumulation of yield on preferred stock	$ (16.1)	$ (16.4)	$ (48.4)	$ (136.4)
MCPS
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded	62.9	70.4	62.9	70.4
Accumulation of yield on preferred stock		$ (16.4)		$ (48.4)
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded	22.6			24.1
Restricted Stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded	5.2			5.6

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Segment financial information - reportable segments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Information by reportable segment
Net sales	$ 1,605.0	$ 1,503.8	$ 4,602.7	$ 4,516.3
Adjusted EBITDA	285.6	250.8	821.7	767.6
Americas
Information by reportable segment
Net sales	950.5	918.2	2,707.1	2,701.0
Adjusted EBITDA	203.6	182.7	591.0	542.8
Europe
Information by reportable segment
Net sales	562.1	501.1	1,627.1	1,561.8
Adjusted EBITDA	98.4	84.0	278.4	255.3
AMEA
Information by reportable segment
Net sales	92.4	84.5	268.5	253.5
Adjusted EBITDA	20.9	15.9	56.8	51.4
Corporate
Information by reportable segment
Adjusted EBITDA	$ (37.3)	$ (31.8)	$ (104.5)	$ (81.9)

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Segment financial information - reconciliation of segment profitability measure (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Reconciliation of Adjusted EBITDA from net income or loss
Net (loss) income	$ (42.2)	$ 22.1	$ 65.0	$ (32.8)
Interest expense	65.2	98.3	251.8	342.0
Income tax (benefit) expense	(65.6)	15.2	(29.4)	23.4
Depreciation and amortization	99.1	100.3	293.4	301.6
Net foreign currency (gain) loss from financing activities	(4.1)	8.2	(4.3)	0.1
Loss on extinguishment of debt	226.4	0.0	226.4	70.2
Other stock-based compensation expense	0.6	(9.2)	0.6	33.5
Restructuring and severance charges	2.3	13.4	6.7	19.8
VWR transaction, integration and planning expenses	2.1	5.4	7.2	16.8
Other	1.8	(2.9)	4.3	(7.0)
Adjusted EBITDA	$ 285.6	$ 250.8	$ 821.7	$ 767.6

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Segment financial information - product lines (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation by product line
Net sales	$ 1,605.0	$ 1,503.8	$ 4,602.7	$ 4,516.3
Proprietary materials & consumables
Disaggregation by product line
Net sales	562.2	494.2	1,654.3	1,500.9
Third party materials & consumables
Disaggregation by product line
Net sales	610.0	592.8	1,764.1	1,792.8
Services & specialty procurement
Disaggregation by product line
Net sales	215.4	195.7	580.0	562.5
Equipment & instrumentation
Disaggregation by product line
Net sales	$ 217.4	$ 221.1	$ 604.3	$ 660.1

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Supplemental disclosures of cash flow information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Components and classification of cash, restricted cash and equivalents
Cash and cash equivalents	$ 370.5		$ 186.7
Restricted cash classified as other assets	2.6		2.6
Total	373.1	$ 176.9	$ 189.3	$ 187.7
Cash flows from operating activities:
Cash paid for income taxes, net	32.0	100.2
Cash paid for interest	252.6	258.4
Cash paid under operating leases	31.7	33.4
Cash paid under finance leases	3.9	3.7
Cash flows from financing activities:
Cash paid under finance leases	$ 3.3	$ 4.1

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Inventory (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Components of inventory
Merchandise inventory	$ 452.5	$ 445.2
Finished goods	113.0	104.4
Raw materials	125.0	125.1
Work in process	39.3	36.5
Total	$ 729.8	$ 711.2

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Other intangible assets (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Finite-lived
Gross value	$ 5,061.9	$ 4,994.8
Accumulated amortization	1,112.5	866.9
Carrying value	3,949.4	4,127.9
Indefinite-lived	92.3	92.3
Total	4,041.7	4,220.2
Customer relationships
Finite-lived
Gross value	4,609.7	4,547.7
Accumulated amortization	822.4	641.3
Carrying value	3,787.3	3,906.4
VWR trade name
Finite-lived
Gross value	269.0	264.3
Accumulated amortization	170.1	123.3
Carrying value	98.9	141.0
Other
Finite-lived
Gross value	183.2	182.8
Accumulated amortization	120.0	102.3
Carrying value	$ 63.2	$ 80.5

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Restructuring and severance (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Information about restructuring charges
Restructuring and severance charges	$ 2.3	$ 13.4	$ 6.7	$ 19.8
2017 restructuring program
Information about restructuring charges
Restructuring and severance charges	1.9	13.3	6.1	19.1
Other
Information about restructuring charges
Restructuring and severance charges	$ 0.4	$ 0.1	$ 0.6	$ 0.7

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Commitments and contingencies (Details) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Mallinckrodt indemnification
Commitments and contingencies
Cash held in escrow	$ 30.0
Mallinckrodt indemnification | Minimum
Commitments and contingencies
Settlement amount awarded	$ 12.0
Mallinckrodt indemnification | First $40 million of environmental costs
Commitments and contingencies
Percent indemnified	80.00%
Mallinckrodt indemnification | First $40 million of environmental costs | Maximum
Commitments and contingencies
Estimate of possible loss	$ 40.0
Mallinckrodt indemnification | $40 million to $80 million of environmental costs
Commitments and contingencies
Percent indemnified	50.00%
Mallinckrodt indemnification | $40 million to $80 million of environmental costs | Maximum
Commitments and contingencies
Estimate of possible loss	$ 40.0
Mallinckrodt indemnification | $80 million to $110 million of environmental costs
Commitments and contingencies
Percent indemnified	100.00%
Mallinckrodt indemnification | $80 million to $110 million of environmental costs | Maximum
Commitments and contingencies
Estimate of possible loss	$ 30.0
Environmental remediation | Phillipsburg, New Jersey
Commitments and contingencies
Accrued environmental loss	3.9
Accrued environmental loss, gross	$ 4.4
Environmental remediation | Phillipsburg, New Jersey | Minimum
Commitments and contingencies
Accrued environmental loss, discount rate	0.10%
Environmental remediation | Phillipsburg, New Jersey | Maximum
Commitments and contingencies
Accrued environmental loss, discount rate	1.40%
Environmental remediation | Gliwice, Poland
Commitments and contingencies
Accrued environmental loss	$ 3.5

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Debt (Details) € in Millions, $ in Millions				3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($)	Jul. 17, 2020 USD ($)	Jul. 14, 2020 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jul. 17, 2020 EUR (€)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Debt, gross	$ 5,155.5			$ 5,155.5		$ 5,155.5			$ 5,249.4
Unamortized deferred financing costs	(84.6)			(84.6)		(84.6)			(132.9)
Debt	5,070.9			5,070.9		5,070.9			5,116.5
Current portion of debt	14.4			14.4		14.4			93.5
Debt, net of current portion	5,056.5			5,056.5		5,056.5			5,023.0
Capacity	815.0			815.0		815.0
Undrawn letters of credit outstanding	(13.9)			(13.9)		(13.9)
Outstanding borrowings	0.0			0.0		0.0
Unused availability	801.1			801.1		801.1
Maximum availability	$ 815.0			815.0		815.0
Loss on extinguishment of debt				$ (226.4)	$ 0.0	(226.4)	$ (70.2)
Amortization of deferred financing costs						$ 19.0	$ 26.5
Receivables facility
Debt Instrument [Line Items]
Interest rate margin						0.90%
Interest rate	1.05%			1.05%		1.05%
Debt, gross	$ 0.0			$ 0.0		$ 0.0			55.5
Capacity	300.0			300.0		300.0
Undrawn letters of credit outstanding	(12.3)			(12.3)		(12.3)
Outstanding borrowings	0.0			0.0		0.0
Unused availability	287.7			287.7		287.7
Maximum availability	300.0			300.0		300.0
Amount pledged as collateral	458.2			458.2		458.2
Senior secured credit facilities: | Multi-currency revolving loan facility
Debt Instrument [Line Items]
Capacity	515.0			515.0		515.0
Undrawn letters of credit outstanding	(1.6)			(1.6)		(1.6)
Outstanding borrowings	0.0			0.0		0.0
Unused availability	513.4			513.4		513.4
Line of credit facility, increase			$ 265.0
Maximum availability	515.0		$ 515.0	$ 515.0		$ 515.0
Senior secured credit facilities: | Term loans
Debt Instrument [Line Items]
Loss on extinguishment of debt	$ 3.0
Senior secured credit facilities: | Term loans | Euro
Debt Instrument [Line Items]
Interest rate margin						2.50%
Interest rate	2.50%			2.50%		2.50%
Debt, gross	$ 368.8			$ 368.8		$ 368.8			391.8
Repayments of debt	$ 32.2
Senior secured credit facilities: | Term loans | U.S. dollars
Debt Instrument [Line Items]
Interest rate margin						2.25%
Interest rate	3.25%			3.25%		3.25%
Debt, gross	$ 609.7			$ 609.7		$ 609.7			677.2
Repayments of debt	$ 62.4
Notes
Debt Instrument [Line Items]
Proceeds from Debt, Net of Issuance Costs		$ 1,975.0
Debt Issuance Costs, Current, Net		26.6
Notes | Goldman Sachs
Debt Instrument [Line Items]
Related Party Transaction, Amounts of Transaction		$ 4.8
Notes | 4.75% secured notes
Debt Instrument [Line Items]
Interest rate	4.75%			4.75%		4.75%
Debt, gross	$ 586.7			$ 586.7		$ 586.7			561.2
Notes | 6% secured notes
Debt Instrument [Line Items]
Interest rate	6.00%			6.00%		6.00%
Debt, gross	$ 1,500.0			$ 1,500.0		$ 1,500.0			1,500.0
Notes | 9% unsecured notes
Debt Instrument [Line Items]
Interest rate	9.00%	9.00%		9.00%		9.00%		9.00%
Debt, gross	$ 0.0			$ 0.0		$ 0.0			2,000.0
Repayments of debt		$ 2,000.0
Loss on extinguishment of debt		223.4
Amortization of debt premium		169.0
Amortization of deferred financing costs		$ 54.4
Notes | 3.875% unsecured notes
Debt Instrument [Line Items]
Interest rate	3.875%	3.875%		3.875%		3.875%		3.875%
Debt, gross	$ 469.3			$ 469.3		$ 469.3			0.0
Debt instrument, face amount | €								€ 400.0
Notes | 4.625 % unsecured notes
Debt Instrument [Line Items]
Interest rate	4.625%	4.625%		4.625%		4.625%		4.625%
Debt, gross	$ 1,550.0			$ 1,550.0		$ 1,550.0			0.0
Debt instrument, face amount		$ 1,550.0
Finance lease liabilities
Debt Instrument [Line Items]
Debt, gross	71.0			71.0		71.0			59.2
Other
Debt Instrument [Line Items]
Debt, gross	$ 0.0			$ 0.0		$ 0.0			$ 4.5

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Accumulated other comprehensive income or loss (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Changes in AOCI, net of tax
Beginning balance	$ (108.8)	$ (64.7)	$ (85.9)	$ (66.5)
Unrealized gain (loss)	54.8	(61.8)	33.2	(59.9)
Reclassification of (gain) loss into earnings	(0.8)	(1.1)	(1.8)	(1.7)
Income tax effect	0.1	0.1	(0.2)	0.6
Ending balance	(54.7)	(127.5)	(54.7)	(127.5)
Foreign currency translation
Changes in AOCI, net of tax
Beginning balance	(86.4)	(55.6)	(62.3)	(59.0)
Unrealized gain (loss)	55.1	(62.7)	31.0	(59.3)
Reclassification of (gain) loss into earnings	0.0	0.0	0.0	0.0
Income tax effect	0.0	0.0	0.0	0.0
Ending balance	(31.3)	(118.3)	(31.3)	(118.3)
Derivative instruments
Changes in AOCI, net of tax
Beginning balance	0.6	(0.2)	(0.5)	1.1
Unrealized gain (loss)	0.3	1.0	2.6	(0.5)
Reclassification of (gain) loss into earnings	(0.7)	(0.9)	(1.5)	(1.2)
Income tax effect	0.1	0.0	(0.3)	0.5
Ending balance	0.3	(0.1)	0.3	(0.1)
Defined benefit plans
Changes in AOCI, net of tax
Beginning balance	(23.0)	(8.9)	(23.1)	(8.6)
Unrealized gain (loss)	(0.6)	(0.1)	(0.4)	(0.1)
Reclassification of (gain) loss into earnings	(0.1)	(0.2)	(0.3)	(0.5)
Income tax effect	0.0	0.1	0.1	0.1
Ending balance	$ (23.7)	$ (9.1)	$ (23.7)	$ (9.1)

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Stock-based compensation - expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Other information about options outstanding
Expense	$ 11.4	$ 1.7	$ 31.4	$ 57.4
Stock options
Other information about options outstanding
Expense	4.2	5.1	12.6	39.7
RSUs
Other information about options outstanding
Expense	6.0	5.1	16.4	8.5
Optionholder awards
Other information about options outstanding
Expense	0.2	0.7	0.6	2.6
Other
Other information about options outstanding
Expense	1.0	(0.9)	1.8	0.2
SARs
Other information about options outstanding
Expense	0.0	(8.3)	0.0	6.4
Performance Shares
Other information about options outstanding
Expense		26.9
Equity
Other information about options outstanding
Expense	10.6	1.9	30.1	54.6
Liability
Other information about options outstanding
Expense	$ 0.8	$ (0.2)	$ 1.3	$ 2.8

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Stock-based compensation - stock option rollforward information (Details) - Common stock - USD ($) $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2020
Number of options outstanding
Beginning balance	22.7
Granted	5.0
Exercised	(4.5)
Forfeited	(1.8)
Ending balance	21.4
Weighted average exercise price per outstanding option
Beginning balance	$ 15.04
Granted	17.57
Exercised	3.83
Forfeited	17.05
Ending balance	$ 17.58
Other information about options outstanding
Aggregate intrinsic value	$ 109.6
Weighted average remaining term	7 years 6 months
Information about options expected to vest and exercisable
Options expected to vest, number	9.9
Options expected to vest, weighted average exercise price per option	$ 18.53
Options expected to vest, aggregate intrinsic value	$ 39.8
Options expected to vest, weighted average remaining term	8 years 8 months 12 days
Options exercisable, number	11.5
Options exercisable, weighted average exercise price per option	$ 16.76
Options exercisable, aggregate intrinsic value	$ 69.8
Options exercisable, weighted average remaining term	6 years 4 months 24 days

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Stock-based compensation - non-option award rollforward (Details) - RSUs shares in Millions	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Number of awards
Beginning balance | shares	5.2
Granted | shares	1.4
Vested | shares	(0.9)
Forfeited | shares	(0.6)
Ending balance | shares	5.1
Weighted average grant date fair value per award
Beginning balance | $ / shares	$ 13.97
Granted | $ / shares	17.38
Vested | $ / shares	13.92
Forfeited | $ / shares	14.04
Ending balance | $ / shares	$ 14.86
Minimum
Weighted average grant date fair value per award
Award vesting period	3 years
Maximum
Weighted average grant date fair value per award
Award vesting period	4 years

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Stock-based compensation - other information (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Other information about options outstanding
Remaining expense to be recognized	$ 87.1		$ 87.1
Weighted average period over which remaining expense will be recognized			1 year 9 months 18 days
Shares available for future issuance			12.6
Expense	11.4	$ 1.7	$ 31.4	$ 57.4
Common stock including paid-in capital
Other information about options outstanding
Options exercised in the period (in shares)			4.5
Stock options
Other information about options outstanding
Expense	4.2	5.1	$ 12.6	39.7
Contractual life			10 years
RSUs
Other information about options outstanding
Expense	$ 6.0	5.1	$ 16.4	$ 8.5
Performance Shares
Other information about options outstanding
Expense		$ 26.9
Options exercised in the period (in shares)	0.9
Minimum | Stock options
Other information about options outstanding
Award vesting period			3 years
Minimum | RSUs
Other information about options outstanding
Award vesting period			3 years
Maximum | Stock options
Other information about options outstanding
Award vesting period			4 years
Maximum | RSUs
Other information about options outstanding
Award vesting period			4 years

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Other income or expense, net (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Other Income and Expenses [Abstract]
Net foreign currency gain (loss) from financing activities	$ 4.1	$ (8.2)	$ 4.3	$ (0.1)
Income related to defined benefit plans	2.4	1.3	7.0	3.8
Other income	0.1		0.3
Other expense		0.7		0.8
Other income (expense), net	$ 6.6	$ (7.6)	$ 11.6	$ 2.9

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Income taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income tax benefit (expense)	$ 65.6	$ (15.2)	$ 29.4	$ (23.4)
(Loss) income before income taxes	(107.8)	$ 37.3	$ 35.6	$ (9.4)
Internal Revenue Service (IRS)
Income Tax Disclosure [Abstract]
Release of previously recorded reserves for uncertain tax positions	31.5
Income Tax Contingency [Line Items]
Release of previously recorded reserves for uncertain tax positions	$ 31.5

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Derivative Instruments and Hedging Activities (Details) - Foreign Exchange Contract - Designated as Hedging Instrument - 3.875% unsecured notes € in Millions, $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2020 EUR (€)
Derivatives, Fair Value [Line Items]
Derivative liability | €						€ 400.0
Interest rate						3.875%
Accumulated transactional gain related the net investment hedges | $	$ 17.7	$ 0.0	$ 17.7	$ 0.0	$ 0.0

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Financial instruments and fair value measurements (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	$ 5,155.5	$ 5,249.4
Fair value	5,311.1	5,646.4
Receivables facility
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	0.0	55.5
Fair value	0.0	55.5
Senior secured credit facilities: | Term loans | Euro
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	368.8	391.8
Fair value	367.5	397.4
Senior secured credit facilities: | Term loans | U.S. dollars
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	609.7	677.2
Fair value	605.5	685.2
Notes | 4.75% secured notes
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	586.7	561.2
Fair value	608.4	599.7
Notes | 6% secured notes
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	1,500.0	1,500.0
Fair value	1,571.0	1,603.2
Notes | 9% unsecured notes
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	0.0	2,000.0
Fair value	0.0	2,241.7
Notes | 3.875% unsecured notes
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	469.3	0.0
Fair value	481.2	0.0
Notes | 4.625 % unsecured notes
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	1,550.0	0.0
Fair value	1,606.5	0.0
Finance lease liabilities
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	71.0	59.2
Fair value	71.0	59.2
Other
Estimated Fair Value Of Financial Instruments [Line Items]
Carrying value	0.0	4.5
Fair value	$ 0.0	$ 4.5