10-Q

u

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________ 

FORM 10-Q

________________________________________________ 

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

For the quarterly period ended June 30, 2019

OR

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

For the transition period from                      to                     

Commission file number 1-9810

_______________________________________________________

Owens & Minor, Inc.

(Exact name of Registrant as specified in its charter)

_______________________________________________________

Virginia			54-1701843
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
9120 Lockwood Boulevard	Mechanicsville	Virginia	23116
(Address of principal executive offices)			(Zip Code)
Post Office Box 27626, Richmond, Virginia			23261-7626
(Mailing address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code (804) 723-7000

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, $2 par value per share	OMI	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  x    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  x    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 “larger 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	☐  (Do not check if a smaller reporting company)	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  x

The number of shares of Owens & Minor, Inc.’s common stock outstanding as of July 31, 2019, was 62,958,021 shares.

Owens & Minor, Inc. and Subsidiaries

Index

Part I. Financial Information		Page
Item 1.	Financial Statements	3
	Consolidated Statements of Income (Loss) —Three and Six Months Ended June 30, 2019 and 2018	3
	Consolidated Statements of Comprehensive Income (Loss) —Three and Six Months Ended June 30, 2019 and 2018	4
	Consolidated Balance Sheets—June 30, 2019 and December 31, 2018	5
	Consolidated Statements of Cash Flows—Six Months Ended June 30, 2019 and 2018	6
	Consolidated Statements of Changes in Equity—Three and Six Months Ended June 30, 2019 and 2018	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
Part II. Other Information
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	31
Item 6.	Exhibits	32

2

Part I. Financial Information

Item 1. Financial Statements

Owens & Minor, Inc. and Subsidiaries

Consolidated Statements of Income (Loss)

(unaudited)

	Three Months Ended   June 30,						Six Months Ended June 30,
(in thousands, except per share data)	2019			2018			2019			2018
Net revenue	$	2,484,200		$	2,458,271		$	4,945,587		$	4,830,850
Cost of goods sold	2,115,773			2,133,277			4,218,736			4,181,170
Gross margin	368,427			324,994			726,851			649,680
Distribution, selling and administrative expenses	345,892			308,775			684,595			593,136
Goodwill and intangible asset impairment charges	—			165,447			—			165,447
Acquisition-related and exit and realignment charges	5,655			24,930			10,645			39,690
Other operating (income) expense, net	736			(2,107		)	775			(759		)
Operating income (loss)	16,144			(172,051		)	30,836			(147,834		)
Interest expense, net	27,682			18,571			56,783			28,824
Loss before income taxes	(11,538		)	(190,622		)	(25,947		)	(176,658		)
Income tax benefit	(1,062		)	(7,845		)	(1,375		)	(2,032		)
Net loss	$	(10,476	)	$	(182,777	)	$	(24,572	)	$	(174,626	)
Net loss per common share: basic and diluted	$	(0.18	)	$	(3.07	)	$	(0.41	)	$	(2.92	)

See accompanying notes to consolidated financial statements.

3

Owens & Minor, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

	Three Months Ended   June 30,						Six Months Ended June 30,
(in thousands)	2019			2018			2019			2018
Net loss	$	(10,476	)	$	(182,777	)	$	(24,572	)	$	(174,626	)
Other comprehensive income (loss), net of tax:
Currency translation adjustments (net of income tax of $0 in 2019 and 2018)	7,452			(20,678		)	3,245			(11,757		)
Change in unrecognized net periodic pension costs (net of income tax of $63 and $126 in 2019 and $149 and $286 in 2018)	197			374			394			754
Net unrealized loss on derivative instruments and other (net of income tax of $2,662 and $3,641 in 2019 and $68 in 2018)	(5,262		)	(122		)	(7,675		)	(116		)
Total other comprehensive income (loss), net of tax	2,387			(20,426		)	(4,036		)	(11,119		)
Comprehensive loss	$	(8,089	)	$	(203,203	)	$	(28,608	)	$	(185,745	)

See accompanying notes to consolidated financial statements.

4

Owens & Minor, Inc. and Subsidiaries

Consolidated Balance Sheets

(unaudited)

	June 30,			December 31,
(in thousands, except per share data)	2019			2018
Assets
Current assets
Cash and cash equivalents	$	91,339		$	103,367
Accounts receivable, net of allowances of $21,456 and $19,618	843,343			823,418
Merchandise inventories	1,237,713			1,290,103
Other current assets	302,234			321,690
Total current assets	2,474,629			2,538,578
Property and equipment, net of accumulated depreciation of $297,297 and $270,105	389,933			386,723
Operating lease assets	206,199			—
Goodwill	407,651			414,122
Intangible assets, net	311,027			321,764
Other assets, net	106,632			112,601
Total assets	$	3,896,071		$	3,773,788
Liabilities and equity
Current liabilities
Accounts payable	$	1,039,074		$	1,109,589
Accrued payroll and related liabilities	47,284			48,203
Other current liabilities	384,040			314,219
Total current liabilities	1,470,398			1,472,011
Long-term debt, excluding current portion	1,624,692			1,650,582
Operating lease liabilities, excluding current portion	161,785			—
Deferred income taxes	49,507			50,852
Other liabilities	92,788			81,924
Total liabilities	3,399,170			3,255,369
Commitments and contingencies
Equity
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 62,964 shares and 62,294 shares	125,928			124,588
Paid-in capital	244,756			238,773
Retained earnings	175,865			200,670
Accumulated other comprehensive loss	(49,648		)	(45,612		)
Total equity	496,901			518,419
Total liabilities and equity	$	3,896,071		$	3,773,788

See accompanying notes to consolidated financial statements.

5

Owens & Minor, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

	Six Months Ended June 30,
(in thousands)	2019			2018
Operating activities:
Net loss	$	(24,572	)	$	(174,626	)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	58,902			43,813
Share-based compensation expense	8,093			6,140
Goodwill and intangible asset impairment charges	—			165,447
Provision for losses on accounts receivable	6,534			2,867
Deferred income tax benefit	(14,597		)	(6,172		)
Changes in operating lease right-of-use assets and lease liabilities	(616		)	—
Changes in operating assets and liabilities:
Accounts receivable	(23,346		)	(30,357		)
Merchandise inventories	52,346			5,211
Accounts payable	(71,704		)	47,260
Net change in other assets and liabilities	32,226			(14,629		)
Other, net	5,748			1,299
Cash provided by operating activities	29,014			46,253
Investing activities:
Acquisitions, net of cash acquired	—			(733,433		)
Additions to property and equipment	(21,020		)	(19,816		)
Additions to computer software	(4,511		)	(10,238		)
Proceeds from sale of property and equipment	339			12
Cash used for investing activities	(25,192		)	(763,475		)
Financing activities:
Proceeds from issuance of debt	—			695,750
Borrowings under revolving credit facility	19,900			101,000
Repayments of debt	(24,788		)	(6,250		)
Financing costs paid	(4,313		)	(27,697		)
Cash dividends paid	(4,918		)	(32,284		)
Other, net	(1,934		)	(3,670		)
Cash (used for) provided by financing activities	(16,053		)	726,849
Effect of exchange rate changes on cash and cash equivalents	203			4,039
Net (decrease) increase in cash and cash equivalents	(12,028		)	13,666
Cash and cash equivalents at beginning of period	103,367			104,522
Cash and cash equivalents at end of period	$	91,339		$	118,188
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	$	(13,929	)	$	12,318
Interest paid	$	53,183		$	24,848

See accompanying notes to consolidated financial statements.

6

Owens & Minor, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity

(unaudited)

(in thousands, except per share data)	Common Shares Outstanding	Common  Stock ($2 par value )		Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balance, December 31, 2017	61,476	$	122,952	$	226,937	$	690,674		$	(25,084	)	$	1,015,479
Net income						8,151						8,151
Other comprehensive income									9,307			9,307
Dividends declared ($0.26 per share)						(16,027		)				(16,027		)
Share-based compensation expense, exercises and other	336	672		1,336								2,008
Balance, March 31, 2018	61,812	$	123,624	$	228,273	$	682,798		$	(15,777	)	$	1,018,918
Net income						(182,777		)				(182,777		)
Other comprehensive loss									(20,426		)	(20,426		)
Dividends declared ($0.26 per share)						(16,175		)				(16,175		)
Share-based compensation expense, exercises and other	529	1,057		1,611								2,668
Balance, June 30, 2018	62,341	$	124,681	$	229,884	$	483,846		$	(36,203	)	$	802,208
Balance, December 31, 2018	62,294	$	124,588	$	238,773	$	200,670		$	(45,612	)	$	518,419
Net loss						(14,096		)				(14,096		)
Other comprehensive loss									(6,423		)	(6,423		)
Dividends declared ($0.0025 per share)						(119		)				(119		)
Share-based compensation expense, exercises and other	642	1,284		2,774								4,058
Balance, March 31, 2019	62,936	$	125,872	$	241,547	$	186,455		$	(52,035	)	$	501,839
Net loss						(10,476		)				(10,476		)
Other comprehensive income									2,387			2,387
Dividends declared ($0.0025 per share)						(114		)				(114		)
Share-based compensation expense, exercises and other	28	56		3,209								3,265
Balance, June 30, 2019	62,964	$	125,928	$	244,756	$	175,865		$	(49,648	)	$	496,901

See accompanying notes to consolidated financial statements.

7

Owens & Minor, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited)

(in thousands, unless otherwise indicated)

Note 1—Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Owens & Minor, Inc. and the subsidiaries it controls (we, us, or our) and contain all adjustments (which are comprised only of normal recurring accruals and use of estimates) necessary to conform with U.S. generally accepted accounting principles (GAAP). All significant intercompany accounts and transactions have been eliminated. The results of operations for interim periods are not necessarily indicative of the results expected for the full year.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect reported amounts and related disclosures. Actual results may differ from these estimates.

Note 2—Fair Value

The carrying amounts of cash and cash equivalents, accounts receivable, financing receivables, accounts payable and financing payables included in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments. The fair value of long-term debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2). The fair value of interest rate swaps and foreign currency contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows.

Note 3—Acquisition

On April 30, 2018 (the Acquisition Date), we completed the acquisition of substantially all of Avanos Medical, Inc.'s (Avanos, previously Halyard Health, Inc.) Surgical and Infection Prevention (S&IP) business, the name “Halyard Health” (and all variations of that name and related intellectual property rights) and its information technology (IT) systems in exchange for $758 million, net of cash acquired. The Halyard business is a leading global provider of medical supplies and solutions for the prevention of healthcare associated infections across acute care and non-acute care markets. This business is reported as part of the Global Products segment.

The following table presents the fair value of the assets acquired and liabilities assumed recognized as of the Acquisition Date. The fair value of intangibles from this acquisition was primarily determined by applying the income approach, using several significant unobservable inputs for projected cash flows and a discount rate. These inputs are considered Level 3 inputs.

8

	Preliminary Fair Value Originally Estimated as of Acquisition Date (1)		Differences Between Prior and Current Period Fair Value			Fair Value as of Acquisition Date
Assets acquired:
Current assets	$	330,870	$	—		$	330,870
Goodwill	130,217		(4,675		)	125,542
Intangible assets	191,230		13,000			204,230
Other noncurrent assets	218,387		5,616			224,003
Total assets	870,704		13,941			884,645
Liabilities assumed:
Current liabilities	92,438		741			93,179
Noncurrent liabilities	20,217		13,200			33,417
Total liabilities	112,655		13,941			126,596
Fair value of net assets acquired, net of cash	$	758,049	$	—		$	758,049

⁽¹⁾ As previously reported in our 2018 Form 10-K.

We are amortizing the fair value of acquired intangible assets, primarily customer relationships, a trade name and other intellectual property, over their estimated weighted average useful lives of eight to 12 years.

Goodwill of $126 million, which we assigned to our Global Products segment, consists largely of expected opportunities to expand into new markets and further develop a presence in the medical products segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

The unaudited pro forma results of net revenue for the three and six months ended June 30, 2018 as if Halyard was acquired on January 1, 2018 were $2,528,271 and $5,110,850, respectively. The pro forma results of net loss and net loss per common share have not been represented because the effects were not material to our historic consolidated financial statements. Accordingly, the pro forma results noted above are not necessarily indicative of the results that would have been if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the future.

Note 4—Financing Receivables and Payables

At June 30, 2019 and December 31, 2018, we had financing receivables of $194.7 million and $183.3 million, respectively, and related payables of $92.0 million and $100.3 million, respectively, outstanding under our order-to-cash program, which were included in other current assets and other current liabilities, respectively, in the consolidated balance sheets.

Note 5—Goodwill and Intangible Assets

The following table summarizes the goodwill balances by segment and the changes in the carrying amount of goodwill through June 30, 2019:

	Global Solutions		Global Products			Consolidated
Carrying amount of goodwill, December 31, 2018	$	283,905	$	130,217		$	414,122
Currency translation adjustments	—		(1,796		)	(1,796		)
Acquisition	—		(4,675		)	(4,675		)
Carrying amount of goodwill, June 30, 2019	$	283,905	$	123,746		$	407,651

9

Intangible assets at June 30, 2019 and December 31, 2018, were as follows:

	June 30, 2019									December 31, 2018
	Customer Relationships			Tradenames			Other Intangibles			Customer Relationships			Tradenames			Other Intangibles
Gross intangible assets	$	284,452		$	90,000		$	45,685		$	267,510		$	97,000		$	42,930
Accumulated amortization	(89,713		)	(12,338		)	(7,059		)	(72,947		)	(8,544		)	(4,185		)
Net intangible assets	$	194,739		$	77,662		$	38,626		$	194,563		$	88,456		$	38,745
Weighted average useful life	10 years			11 years			8 years			10 years			11 years			8 years

At June 30, 2019, $96.9 million in net intangible assets were held in the Global Solutions segment and $214.1 million were held in the Global Products segment. Amortization expense for intangible assets was $13.1 million and $9.4 million for the three months ended June 30, 2019 and 2018 and $23.5 million and $15.8 million for the six months ended June 30, 2019 and 2018, respectively.

Based on the current carrying value of intangible assets subject to amortization, estimated amortization expense is $22.0 million for the remainder of 2019, $43.0 million for 2020, $41.3 million for 2021, $40.4 million for 2022, $39.2 million for 2023 and $35.3 million for 2024.

Note 6—Leases

We adopted ASU No. 2016-02, Leases (Topic 842), as of January 1, 2019. We elected to use the adoption date as our date of initial application and thus have not restated comparative prior periods. We elected the ‘package of practical expedients’, which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us.

The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize right-of-use assets or lease liabilities, and this includes not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases.

The adoption of the new standard resulted in the recording of operating lease assets and lease liabilities of approximately $197 million and $201 million, respectively, as of January 1, 2019. The standard did not materially impact our consolidated net loss and had no impact on cash flows.

We enter into non-cancelable agreements to lease most of our office and warehouse facilities with remaining terms generally ranging from one to 20 years. Certain leases include renewal options, generally for one to five-year increments. The exercise of lease renewal options is at our sole discretion. Our lease terms may include those options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We also lease some of our transportation and material handling equipment for terms generally ranging from three to 10 years. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The depreciable life of right-of-use assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. We use the implicit rate when readily determinable. The operating lease asset also includes adjustments for any lease payments made and lease incentives.

10

The components of lease expense were as follows:

	Classification	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	Distribution, selling and administrative expenses	$	16,802	$	34,239
Finance lease cost:
Amortization of lease assets	Distribution, selling and administrative expenses	455		1,211
Interest on lease liabilities	Interest expense, net	299		633
Total finance lease cost		754		1,844
Total lease cost		$	17,556	$	36,083

Short-term lease costs and variable lease costs are immaterial.

Supplemental balance sheet information is as follows:

	Classification	As of June 30, 2019
Assets:
Operating lease assets	Operating lease assets	$	206,199
Finance lease assets	Property and equipment, net	13,084
Total lease assets		$	219,283
Liabilities:
Current
Operating	Other current liabilities	$	48,892
Finance	Other current liabilities	2,679
Noncurrent
Operating	Operating lease liabilities, excluding current portion	161,785
Finance	Long-term debt, excluding current portion	14,704
Total lease liabilities		$	228,060

Other information related to leases was as follows:

	Six months ended June 30, 2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	34,742
Financing cash flows from finance leases	$	1,143
Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	28,694
Weighted average remaining lease term (years)
Operating leases	6.1
Finance leases	8.1
Weighted average discount rate
Operating leases	12.0		%
Finance leases	9.3		%

11

Maturities of lease liabilities as of June 30, 2019 were as follows:

	Operating Leases			Finance Leases			Total
2019 (remainder)	$	40,239		$	2,262		$	42,501
2020	63,545			3,186			66,731
2021	54,918			2,631			57,549
2022	34,568			2,436			37,004
2023	23,968			2,314			26,282
Thereafter	86,009			11,455			97,464
Total lease payments	303,247			24,284			327,531
Less: Interest	(92,570		)	(6,901		)	(99,471		)
Present value of lease liabilities	$	210,677		$	17,383		$	228,060

At December 31, 2018, future minimum annual payments under non-cancelable lease agreements with original terms in excess of one year, and including payments required under operating leases for facilities we have vacated, were as follows:

	Total
2019	$	64,082
2020	53,138
2021	42,480
2022	26,445
2023	19,895
Thereafter	45,708
Total minimum payments	$	251,748

Rent expense for all operating leases for the year ended December 31, 2018 was $78.3 million.

Note 7—Derivatives

We are directly and indirectly affected by changes in foreign currency, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks. We do not enter into derivative financial instruments for trading purposes.

We use a layered hedging program to hedge select anticipated foreign currency cash flows to reduce volatility in cash flows. We account for the designated foreign exchange forward contracts as cash flow hedges. These foreign exchange forward contracts generally have maturities up to 12 months and the counterparties to the transactions are typically large international financial institutions.

We enter into foreign currency contracts to manage our foreign exchange exposure related to certain balance sheet items that do not meet the requirements for hedge accounting. These derivative instruments are adjusted to fair value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability.

We pay interest under our Credit Agreement which fluctuates based on changes in our benchmark interest rates. In order to mitigate the risk of increases in benchmark rates, we entered into interest rate swaps during the third quarter of 2018 whereby we agree to exchange with the counterparty, at specified intervals, the difference between fixed and variable amounts calculated by reference to the notional amount. The interest rate swaps were designated as cash flow hedges. Cash flows related to the interest rate swap agreements are included in interest expense.

We determine the fair value of our foreign currency derivatives and our interest rate swaps based on observable market-based inputs or unobservable inputs that are corroborated by market data. We do not view the fair value of our derivatives in isolation, but rather in relation to the fair values or cash flows of the underlying exposure. Our derivatives are over-the-counter instruments with liquid markets. All derivatives are carried at fair value in our consolidated balance sheets in other assets and other liabilities. We consider the risk of counterparty default to be minimal. We report cash flows from our hedging instruments in the same cash flow statement category as the hedged items.

12

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of June 30, 2019:

				Derivative Assets			Derivative Liabilities
	Notional Amount		Maturity Date	Classification	Fair Value		Classification	Fair Value
Cash flow hedges
Interest rate swaps	$	450,000	May 2022 and 2025	Other assets, net	$	—	Other liabilities	$	18,770
Foreign currency contracts	$	4,515	September 2019 to December 2019	Other assets, net	$	258	Other liabilities	$	—
Economic (non-designated) hedges
Foreign currency contracts	$	15,874	July 2019 to August 2019	Other assets, net	$	342	Other liabilities	$	—

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of income (loss) for the three and six months ended June 30, 2019:

	Amount of Gain/(Loss) Recognized in Other Comprehensive Income (Loss)						Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Total Amount of Income/(Expense) Line Items Presented in the Consolidated Statement of Income in Which the Effects are Recorded						Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019				Three Months Ended June 30, 2019			Six Months Ended June 30, 2019			Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Interest rate swaps	$	(8,162	)	$	(12,577	)	Interest expense, net	$	(27,682	)	$	(56,783	)	$	(361	)	$	(682	)
Foreign currency contracts	$	191		$	636		Cost of goods sold	$	(2,115,773	)	$	(4,218,736	)	$	314		$	57

The amount of ineffectiveness associated with these contracts was immaterial for the periods presented.

For the three and six months ended June 30, 2019, we recognized gains of $0.5 million and $1.0 million, respectively, associated with our economic (non-designated) foreign currency contracts.

The total notional values of derivatives that were designated and qualified for our foreign currency cash flow hedging program was $12.6 million as of June 30, 2018. We record the change in fair value of derivative instruments and the remeasurement adjustment on the foreign currency denominated asset or liability in acquisition-related and exit and realignment charges for contracts assumed with the Halyard acquisition and in other operating expense, net for all other foreign exchange contracts.

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Note 8—Exit and Realignment Costs

We periodically incur exit and realignment and other charges associated with optimizing our operations which includes the consolidation of certain distribution and logistics centers, administrative offices and warehouses in the United States and Europe. These charges also include costs associated with our strategic organizational realignment which include management changes, certain professional fees, and costs to streamline administrative functions and processes.

Exit and realignment charges by segment for the three and six months ended June 30, 2019 and 2018 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Global Solutions segment	$	1,902	$	1,737	$	2,595	$	4,444
Global Products segment	80		—		214		(29		)
Total exit and realignment charges	$	1,982	$	1,737	$	2,809	$	4,415

The following table summarizes the activity related to exit and realignment cost and related accruals through June 30, 2019 and 2018:

	Total (1)
Accrued exit and realignment costs, December 31, 2018	$	8,214
Provision for exit and realignment activities:
Severance	360
Information system restructuring costs	515
Other	83
Change in estimate	(127		)
Cash payments	(3,079		)
Accrued exit and realignment costs, March 31, 2019	$	5,966
Provision for exit and realignment activities:
Severance	1,008
Information system restructuring costs	948
Other	27
Cash payments	(2,569		)
Accrued exit and realignment costs, June 30, 2019	$	5,380
Accrued exit and realignment costs, December 31, 2017	$	11,972
Provision for exit and realignment activities:
Severance	2,295
Information system restructuring costs	177
Other	230
Change in estimate	(23		)
Cash payments	(6,886		)
Accrued exit and realignment costs, March 31, 2018	$	7,765
Provision for exit and realignment activities:
Severance	(415		)
Information system restructuring costs	1,079
Other	1,072
Cash payments	(6,358		)
Accrued exit and realignment costs, June 30, 2018	$	3,143

⁽¹⁾The accrued exit and realignment costs at June 30, 2019 and 2018 related primarily to accrued information system restructuring costs and accrued severance.

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Note 9—Retirement Plans

We have a noncontributory, unfunded retirement plan for certain officers and retirees in the United States. Certain of our foreign subsidiaries also have defined benefit pension plans covering substantially all of their respective employees.

The components of net periodic benefit cost, which are included in distribution, selling and administrative expenses, for the three and six months ended June 30, 2019 and 2018, were as follows:

	Three Months Ended   June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Service cost	$	387	$	18	$	761	$	38
Interest cost	600		419		1,200		838
Recognized net actuarial loss	260		522		520		1,044
Net periodic benefit cost	$	1,247	$	959	$	2,481	$	1,920

Certain of our foreign subsidiaries have health and welfare plans covering substantially all of their respective employees. Our expense for these plans totaled $0.6 million for the three months ended June 30, 2019 and 2018 and $1.2 million and $1.1 million for the six months ended June 30, 2019 and 2018, respectively.

Note 10—Debt

Debt consists of the following:

	June 30, 2019						December 31, 2018
	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
3.875% Senior Notes, $275 million par value, due September 2021	$	273,835		$	237,738		$	273,577		$	207,001
4.375% Senior Notes, $275 million par value, due December 2024	273,141			203,808			272,972			174,859
Term A Loans, due July 2022	398,615			405,337			422,422			422,422
Term B Loan, due April 2025	481,579			419,331			483,327			385,284
Revolver	230,000			230,000			210,100			210,100
Finance leases and other	21,792			21,792			18,774			18,774
Total debt	1,678,962			1,518,006			1,681,172			1,418,440
Less current maturities	(54,270		)	(54,270		)	(30,590		)	(30,590		)
Long-term debt	$	1,624,692		$	1,463,736		$	1,650,582		$	1,387,850

We have a Credit Agreement (amended February 2019) with a borrowing capacity of $400 million and term loans. The interest rate on our revolving credit facility and Term A loans is based on the Eurocurrency Rate, the Federal Funds Rate or the Prime Rate, plus an adjustment based on our Consolidated Total Leverage Ratio as defined by the Credit Agreement. Our credit spread at June 30, 2019 was Eurocurrency Rate plus 3.5%. Our Term B loan accrues interest based on the Eurocurrency Rate, the Federal Funds Rate or the Prime Rate, plus interest rate margin of 3.50% per annum with respect to Base Rate Loans (as defined in the Credit Agreement), and 4.50% per annum with respect to Eurocurrency Rate Loans (as defined in the Credit Agreement). We are charged a commitment fee of between 12.5 and 25.0 basis points on the unused portion of the facility. The terms of the Credit Agreement requires us to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition.

We also have a Security and Pledge Agreement (the Security Agreement) pursuant to which we granted collateral on behalf of the holders of the 2021 Notes and the 2024 Notes and parties secured on the Credit Agreement (the Secured Parties) including first priority liens and security interests in (a) all present and future shares of capital stock owned by the Credit Parties (as defined) in the Credit Parties’ present and future subsidiaries (limited, in the case of controlled foreign corporations, to a pledge of 65% of the voting capital stock of each first-tier foreign subsidiary of each Credit Party) and (b) all present and future personal property and assets of the Credit Parties, subject to certain exceptions. Our Credit Agreement has a “springing maturity date” with respect to the revolving loans and the Term A loans and the Term B loan, if as of the date that is 91 days prior to the maturity date of the Company’s 2021 Notes or the 2024 Notes, respectively, all outstanding amounts owing under the 2021 Notes or the 2024 Notes, respectively, have not been paid in full then the Termination Date (as defined in the Credit

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Agreement) of the revolving credit facility, Term A loans and Term B loan shall be the date that is 91 days prior to the maturity date of the 2021 Notes.

At June 30, 2019 and December 31, 2018, we had letters of credit of $11.7 million and $15.2 million, respectively, outstanding under the Credit Agreement. We also had letters of credit and bank guarantees outstanding for $6.1 million and $7.7 million as of June 30, 2019 and December 31, 2018, respectively, which supports certain facilities leased as well as other normal business activities in the United States and Europe.

The Credit Agreement and senior notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of either agreement. We believe we were in compliance with our debt covenants at June 30, 2019.

As of June 30, 2019, scheduled future principal payments of debt were $24.8 million in 2019, $49.6 million in 2020, $324.7 million in 2021, $528.8 million in 2022, $5.0 million in 2023, and $748.8 million thereafter.

Note 11—Income Taxes

The effective tax rate was 9.2% and 5.3% for the three and six months ended June 30, 2019, compared to 4.1% and 1.2% in the same periods of 2018. The change in these rates resulted from the mixture of income and losses in jurisdictions in which the company operates, including those of which require a full valuation allowance, and the incremental income tax expense associated with the vesting of restricted stock. The liability for unrecognized tax benefits was $11.5 million at June 30, 2019 and $9.6 million at December 31, 2018. Included in the liability at June 30, 2019 and December 31, 2018 were $3.4 million and $1.9 million, respectively, of tax positions for which ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

Note 12—Net Loss per Common Share

The following summarizes the calculation of net income per common share attributable to common shareholders for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended   June 30,						Six Months Ended June 30,
(in thousands, except per share data)	2019			2018			2019			2018
Numerator:
Net loss attributable to common shareholders - basic and diluted	$	(10,476	)	$	(182,777	)	$	(24,572	)	$	(174,626	)
Denominator:
Weighted average shares outstanding - basic and diluted	59,805			59,750			60,403			60,022
Net loss per share attributable to common shareholders:
Basic and diluted	$	(0.18	)	$	(3.07	)	$	(0.41	)	$	(2.92	)

Note 13—Shareholders’ Equity

Our Board of Directors authorized a share repurchase program of up to $100 million of our outstanding common stock to be executed at the discretion of management over a 3-year period, expiring in December 2019. The timing of repurchases and the exact number of shares of common stock to be purchased will depend upon market conditions and other factors and may be suspended or discontinued at any time. Purchases under the share repurchase program are made either pursuant to 10b5-1 plans entered into by the company from time to time and/or during the company’s scheduled quarterly trading windows for officers and directors. Our Credit Agreement contains restrictions on the amount and timing of share repurchase activity. This includes prohibiting share repurchases should a default under the Credit Agreement exist prior to or immediately after any share repurchases. We did not repurchase any shares of our common stock during the six months ended June 30, 2019 and 2018. As of June 30, 2019, we have approximately $94.0 million in remaining authorization available under the repurchase program. We have elected to allocate any excess of share repurchase price over par value to retained earnings.

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Note 14—Accumulated Other Comprehensive Income (Loss)

The following table shows the changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2019 and 2018: 

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive loss, March 31, 2019	$	(7,949	)	$	(36,758	)	$	(7,328	)	$	(52,035	)
Other comprehensive income (loss) before reclassifications	—			7,452			(7,971		)	(519		)
Income tax	—			—			2,678			2,678
Other comprehensive income (loss) before reclassifications, net of tax	—			7,452			(5,293		)	2,159
Amounts reclassified from accumulated other comprehensive income (loss)	260			—			47			307
Income tax	(63		)	—			(16		)	(79		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	197			—			31			228
Other comprehensive income (loss)	197			7,452			(5,262		)	2,387
Accumulated other comprehensive loss, June 30, 2019	$	(7,752	)	$	(29,306	)	$	(12,590	)	$	(49,648	)

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive income (loss), March 31, 2018	$	(11,686	)	$	(4,264	)	$	173		$	(15,777	)
Other comprehensive income (loss) before reclassifications	—			(20,678		)	(190		)	(20,868		)
Income tax	—			—			68			68
Other comprehensive income (loss) before reclassifications, net of tax	—			(20,678		)	(122		)	(20,800		)
Amounts reclassified from accumulated other comprehensive income (loss)	523			—			—			523
Income tax	(149		)	—			—			(149		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	374			—			—			374
Other comprehensive income (loss)	374			(20,678		)	(122		)	(20,426		)
Accumulated other comprehensive income (loss), June 30, 2018	$	(11,312	)	$	(24,942	)	$	51		$	(36,203	)

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	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive loss, December 31, 2018	$	(8,146	)	$	(32,551	)	$	(4,915	)	$	(45,612	)
Other comprehensive income (loss) before reclassifications	—			3,245			(11,941		)	(8,696		)
Income tax	—			—			3,831			3,831
Other comprehensive income (loss) before reclassifications, net of tax	—			3,245			(8,110		)	(4,865		)
Amounts reclassified from accumulated other comprehensive income (loss)	520			—			625			1,145
Income tax	(126		)	—			(190		)	(316		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	394			—			435			829
Other comprehensive income (loss)	394			3,245			(7,675		)	(4,036		)
Accumulated other comprehensive loss, June 30, 2019	$	(7,752	)	$	(29,306	)	$	(12,590	)	$	(49,648	)

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive income (loss), December 31, 2017	$	(12,066	)	$	(13,185	)	$	167		$	(25,084	)
Other comprehensive income (loss) before reclassifications	—			(11,757		)	(184		)	(11,941		)
Income tax	—			—			68			68
Other comprehensive income (loss) before reclassifications, net of tax	—			(11,757		)	(116		)	(11,873		)
Amounts reclassified from accumulated other comprehensive income (loss)	1,040			—			—			1,040
Income tax	(286		)	—			—			(286		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	754			—			—			754
Other comprehensive income (loss)	754			(11,757		)	(116		)	(11,119		)
Accumulated other comprehensive income (loss), June 30, 2018	$	(11,312	)	$	(24,942	)	$	51		$	(36,203	)

We include amounts reclassified out of accumulated other comprehensive income (loss) related to defined benefit pension plans as a component of net periodic pension cost recorded in distribution, selling and administrative expenses. For the three and six months ended June 30, 2019, we reclassified $0.2 million and $0.4 million, respectively, of actuarial net losses. For the three and six months ended June 30, 2018, we reclassified $0.4 million and $0.8 million, respectively, of actuarial net losses.

Note 15—Segment Information

We periodically evaluate our application of accounting guidance for reportable segments and disclose information about reportable segments based on the way management organizes the enterprise for making operating decisions and assessing performance. We report our business under two segments: Global Solutions and Global Products. The Global Solutions segment includes our United States and European distribution, logistics and value-added services business. Global Products manufactures and sources medical surgical products through our production and kitting operations. The Halyard business, acquired on April 30, 2018, is part of Global Products.

We evaluate the performance of our segments based on their operating income excluding intangible amortization, acquisition-related and exit and realignment charges, certain purchase price fair value adjustments, and other substantive items that, either as a result of their nature or size, would not be expected to occur as part of our normal business operations on a regular basis.

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Segment assets exclude inter-segment account balances as we believe their inclusion would be misleading and not meaningful. We believe all inter-segment sales are at prices that approximate market.

The following tables present financial information by segment:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net revenue:
Segment net revenue
Global Solutions	$	2,241,965		$	2,290,173		$	4,476,111		$	4,631,295
Global Products	363,889			279,588			710,974			400,875
Total segment net revenue	2,605,854			2,569,761			5,187,085			5,032,170
Inter-segment revenue
Global Products	(121,654		)	(111,490		)	(241,498		)	(201,320		)
Total inter-segment revenue	(121,654		)	(111,490		)	(241,498		)	(201,320		)
Consolidated net revenue	$	2,484,200		$	2,458,271		$	4,945,587		$	4,830,850
Operating income (loss):
Global Solutions	$	19,454		$	23,977		$	40,525		$	60,593
Global Products	17,949			22,489			25,673			33,717
Inter-segment eliminations	(729		)	167			1,017			(75		)
Goodwill and intangible asset impairment charges	—			(165,447		)	—			(165,447		)
Intangible amortization	(13,106		)	(9,374		)	(23,466		)	(15,781		)
Acquisition-related and exit and realignment charges	(5,655		)	(24,930		)	(10,645		)	(39,690		)
Other (1)	(1,769		)	(18,933		)	(2,268		)	(21,151		)
Consolidated operating income (loss)	$	16,144		$	(172,051	)	$	30,836		$	(147,834	)
Depreciation and amortization:
Global Solutions	$	14,936		$	15,854		$	31,049		$	31,635
Global Products	15,246			10,048			27,853			12,178
Consolidated depreciation and amortization	$	30,182		$	25,902		$	58,902		$	43,813
Capital expenditures:
Global Solutions	$	7,372		$	14,544		$	18,748		$	28,146
Global Products	3,880			1,350			6,783			1,908
Consolidated capital expenditures	$	11,252		$	15,894		$	25,531		$	30,054

⁽¹⁾ Other consists of Software as a Service (SaaS) implementation costs associated with significant global IT platforms in connection with the redesign of our global information system strategy and incremental charge to cost of goods sold from purchase accounting impacts related to the sale of acquired inventory that was written up to fair value.

.

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	June 30, 2019		December 31, 2018
Total assets:
Global Solutions	$	2,695,167	$	2,618,759
Global Products	1,109,565		1,051,662
Segment assets	3,804,732		3,670,421
Cash and cash equivalents	91,339		103,367
Consolidated total assets	$	3,896,071	$	3,773,788

The following table presents net revenue by geographic area, which were attributed based on the location from which we ship products or provide services.

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net revenue:
United States	$	2,270,768	$	2,248,728	$	4,574,680	$	4,494,564
International	213,432		209,543		370,907		336,286
Consolidated net revenue	$	2,484,200	$	2,458,271	$	4,945,587	$	4,830,850

Note 16—Recent Accounting Pronouncements

On June 16, 2016, the FASB issued ASU No. 2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. This standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact the adoption of ASU No. 2016-13 will have on our consolidated financial statements and related disclosures. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses and ASU 2019-05, Financial Instruments - Credit Losses (Topic 326) Targeted Transition Relief. These ASUs do not change the core principle of the guidance in ASU 2016-13. Instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard. These ASUs will have the same effective date and transition requirements as ASU 2016-13.

In August 2018, the SEC adopted a final rule under SEC Release No. 33-10532, Disclosure Update and Simplification that amends certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. The amendments also expanded the disclosure requirements on the analysis of shareholders' equity for interim financial statements, in which registrants must now analyze changes in shareholders’ equity, in the form of reconciliation, for the current and comparative year-to-date periods, with subtotals for each interim period. This final rule was effective on November 5, 2018. As of the first quarter of 2019, the Company has adopted all relevant disclosure requirements, including the shareholders’ equity interim disclosures.

There have been no further changes in our significant accounting policies from those contained in our Annual Report on Form 10-K for the year ended December 31, 2018.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis describes results of operations and material changes in the financial condition of Owens & Minor, Inc. and its subsidiaries since December 31, 2018. Trends of a material nature are discussed to the extent known and considered relevant. This discussion should be read in conjunction with the consolidated financial statements, related notes thereto, and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Overview

Owens & Minor, Inc., along with its subsidiaries, (we, us, or our) is a leading global healthcare solutions company with integrated technologies, products and services aligned to deliver significant and sustained value for healthcare providers and manufacturers across the continuum of care.

On April 30, 2018 (the Acquisition Date), we acquired substantially all of Avanos Medical, Inc.'s (Avanos, previously Halyard Health, Inc.) Surgical and Infection Prevention business, the name “Halyard Health” (and all variations of that name

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and related intellectual property rights) and its information technology (IT) systems in exchange for $758 million, net of cash acquired. The Halyard business is a leading global provider of medical supplies and solutions for the prevention of healthcare associated infections across acute care and non-acute care markets. This business is reported as part of the Global Products segment.

We entered into transition services agreements with Avanos pursuant to which they and we will provide to each other various transitional services, including, but not limited to, facilities, product supply, financial and business services, procurement, human resources, research and development, regulatory affairs and quality assurance, sales and marketing, information technology and other support services. The services under the transition services agreements generally commenced on the Acquisition Date and terminate within 18 months thereafter.

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Financial highlights. The following table provides a reconciliation of reported operating income, net income and net income per diluted common share to non-GAAP measures used by management.

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands except per share data)	2019			2018			2019			2018
Operating income (loss), as reported (GAAP)	$	16,144		$	(172,051	)	$	30,836		$	(147,834	)
Intangible amortization (1)	13,106			9,374			23,466			15,781
Goodwill and intangible asset impairment charges(5)	—			165,447			—			165,447
Acquisition-related and exit and realignment charges(2)	5,655			24,930			10,645			39,690
Fair value adjustments related to purchase accounting(6)	—			18,059			—			18,059
Other (3)	1,768			874			2,267			3,092
Operating income, adjusted (non-GAAP) (Adjusted Operating Income)	$	36,673		$	46,633		$	67,214		$	94,235
Operating income (loss) as a percent of revenue (GAAP)	0.65		%	(7.00		)%	0.62		%	(3.06		)%
Adjusted operating income as a percent of revenue (non-GAAP)	1.48		%	1.90		%	1.36		%	1.95		%
Net loss, as reported (GAAP)	$	(10,476	)	$	(182,777	)	$	(24,572	)	$	(174,626	)
Intangible amortization (1)	13,106			9,374			23,466			15,781
Income tax expense (benefit) (7)	(2,605		)	(2,519		)	(4,269		)	(4,075		)
Goodwill and intangible asset impairment charges(5)	—			165,447			—			165,447
Income tax expense (benefit) (7)	—			(2,060		)	—			(2,060		)
Acquisition-related and exit and realignment charges(2)	5,655			24,930			10,645			39,690
Income tax expense (benefit) (7)	(995		)	(6,693		)	(1,755		)	(10,268		)
Fair value adjustments related to purchase accounting(6)	—			18,059			—			18,059
Income tax expense (benefit) (7)	—			(4,950		)	—			(4,950		)
Write-off of deferred financing costs (4)	—			—			2,003			—
Income tax expense (benefit) (7)	—			—			(313		)	—
Other (3)	1,768			874			2,267			3,092
Income tax expense (benefit) (7)	(282		)	(242		)	(337		)	(474		)
Net income, adjusted (non-GAAP) (Adjusted Net Income)	$	6,171		$	19,443		$	7,135		$	45,616
Net loss per diluted common share, as reported (GAAP)	$	(0.18	)	$	(3.07	)	$	(0.41	)	$	(2.92	)
Intangible amortization (1)	0.18			0.12			0.32			0.19
Goodwill and intangible asset impairment charges(5)	—			2.73			—			2.73
Acquisition-related and exit and realignment charges(2)	0.08			0.31			0.15			0.49
Fair value adjustments related to purchase accounting(6)	—			0.22			—			0.22
Write-off of deferred financing costs (4)	—			—			0.03			—
Other (3)	0.02			0.01			0.03			0.04
Net income per diluted common share, adjusted (non-GAAP) (Adjusted EPS)	$	0.10		$	0.32		$	0.12		$	0.75

Net loss per diluted share was $(0.18) and $(0.41) for the three and six months ended June 30, 2019. Adjusted EPS (non-GAAP) was $0.10 and $0.12 for the three and six month periods ended June 30, 2019. Global Solutions operating income of $19.5 million in the quarter and $40.5 million year-to-date reflected lower revenues, continued pressure on distribution margins, and higher transportation expenses. Global Products operating income was $17.9 million in the quarter (decreased $4.5 million from 2018) and was $25.7 million year-to-date (decreased $8.0 million from 2018).

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Use of Non-GAAP Measures

Adjusted operating income, adjusted net income and adjusted EPS are an alternative view of performance used by management, and we believe that investors' understanding of our performance is enhanced by disclosing these performance measures. In general, the measures exclude items and charges that (i) management does not believe reflect our core business and relate more to strategic, multi-year corporate activities; or (ii) relate to activities or actions that may have occurred over multiple or in prior periods without predictable trends. Management uses these non-GAAP financial measures internally to evaluate our performance, evaluate the balance sheet, engage in financial and operational planning and determine incentive compensation.

Management provides these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on our financial and operating results and in comparing our performance to that of our competitors. However, the non-GAAP financial measures used by us may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

The non-GAAP financial measures disclosed by us should not be considered substitutes for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth above should be carefully evaluated.

The following items have been excluded in our non-GAAP financial measures:

⁽¹⁾ Intangible amortization includes amortization of intangible assets established during purchase accounting for business combinations. These amounts are highly dependent on the size and frequency of acquisitions and are being excluded to allow for a more consistent comparison with forecasted, current and historical results and the results of our peers.

⁽²⁾ Acquisition-related charges were $3.7 million and $7.8 million for the three and six months ended June 30, 2019, compared to $23.2 million and $35.3 million for the same period of 2018. Acquisition-related charges in 2019 and 2018 consist primarily of transition and transaction costs for the Halyard transaction.

Exit and realignment charges were $2.0 million and $2.8 million for the three and six months ended June 30, 2019. Amounts in 2019 were associated with severance costs, the establishment of our client engagement centers, and IT restructuring charges. Exit and realignment charges were $1.7 million and $4.4 million for the three and six months ended June 30, 2018. Amounts in 2018 were associated with the establishment of our client engagement centers.

⁽³⁾ Other consists of Software as a Service (SaaS) implementation costs associated with significant global IT platforms in connection with the redesign of our global information system strategy.

⁽⁴⁾ Write-off of deferred financing costs associated with the revolving credit facility as a result of the Fourth Amendment to the Credit Agreement.

⁽⁵⁾ Goodwill and intangible assets impairment charges in 2018 included in our Global Products segment were $149 million and $16.5 million, respectively.

⁽⁶⁾ The second quarter of 2018 included an incremental charge to cost of goods sold from purchase accounting impacts related to the sale of acquired inventory that was written up to fair value in connection with the Halyard acquisition.

⁽⁷⁾ These charges have been tax effected in the preceding table by determining the income tax rate depending on the amount of charges incurred in different tax jurisdictions and the deductibility of those charges for income tax purposes.

Results of Operations

Net revenue.

	Three Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$			%
Global Solutions	$	2,241,965		$	2,290,173		$	(48,208	)	(2.1	)%
Global Products	363,889			279,588			84,301			30.2	%
Inter-segment	(121,654		)	(111,490		)	(10,164		)	(9.1	)%
Net revenue	$	2,484,200		$	2,458,271		$	25,929		1.1	%

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	Six Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$			%
Global Solutions	$	4,476,111		$	4,631,295		$	(155,184	)	(3.4	)%
Global Products	710,974			400,875			310,099			77.4	%
Inter-segment	(241,498		)	(201,320		)	(40,178		)	(20.0	)%
Net revenue	$	4,945,587		$	4,830,850		$	114,737		2.4	%

Net revenue increased year over year primarily as a result of the acquisition of Halyard in April 2018. Halyard sales from January through April 2019 were $255 million (net of $71 million of intercompany sales). Lower distribution revenues as a result of customer non-renewals, primarily resulting from service issues prior to early 2019, contributed to the year over year change in the Global Solutions segment, which was partially offset by sales growth from Byram.

Cost of goods sold.

	Three Months Ended June 30,			Change
(Dollars in thousands)	2019		2018	$			%
Cost of goods sold	$	2,115,773	2,133,277	$	(17,504	)	(0.8	)%

	Six Months Ended June 30,				Change
(Dollars in thousands)	2019		2018		$		%
Cost of goods sold	$	4,218,736	$	4,181,170	$	37,566	0.9	%

Cost of goods sold includes the cost of the product (net of supplier incentives and cash discounts) and all costs incurred for shipments of products from manufacturers to our distribution centers for all customer arrangements where we are the primary obligor and bear risk of general and physical inventory loss. These are sometimes referred to as distribution contracts. Cost of goods sold also includes direct and certain indirect labor, material and overhead costs associated with our Global Products business. There is no cost of goods sold associated with our fee-for-service arrangements. Cost of goods sold compared to prior year reflects changes in sales activity, including sales mix.

Gross margin.

	Three Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$		%
Gross margin	$	368,427		$	324,994		$	43,433	13.4	%
As a % of net revenue	14.83		%	13.22		%

	Six Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$		%
Gross margin	$	726,851		$	649,680		$	77,171	11.9	%
As a % of net revenue	14.70		%	13.45		%

Gross margin in the three and six months ended June 30, 2019, included contributions from Halyard, strong revenue growth with Byram, and increased fee-for-service revenues, which were partially offset by the impact from lower distribution revenues, a decline in distribution margins, and unfavorable impact from foreign currency translation of $5.5 million and $10.9 million, respectively. In addition, Global Products gross margin was impacted by lower fixed cost absorption partially offset by favorability in commodity prices.

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Operating expenses.

	Three Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$		%
Distribution, selling and administrative expenses	$	345,892		$	308,775		$	37,117	12.0	%
As a % of net revenue	13.92		%	12.56		%
Other operating expense (income), net	$	736		$	(2,107	)	$	2,843	134.9	%

	Six Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$		%
Distribution, selling and administrative expenses	$	684,595		$	593,136		$	91,459	15.4	%
As a % of net revenue	13.84		%	12.28		%
Other operating expense (income), net	$	775		$	(759	)	$	1,534	202.1	%

Distribution, selling and administrative (DS&A) expenses include labor and warehousing costs associated with our distribution and logistics services and all costs associated with our fee-for-service arrangements. Shipping and handling costs are primarily included in DS&A expenses and include costs to store, move, and prepare products for shipment, as well as costs to deliver products to customers.

Overall DS&A expenses compared to prior year reflected increased expenses to support the Halyard business, strong revenue growth with Byram, and fee-for-service arrangements within Manufacturer Solutions, higher transportation expenses, and increased expenses incurred for the development of new customer solutions, partially offset by favorable impacts for foreign currency translation of $5.0 million and $10.5 million for the three and six months ended June 30, 2019.

The change in other operating expense (income), net was attributed primarily to higher software as a service implementation expenses in the quarter and lower foreign currency transactional gains compared to prior year.

A discussion of the acquisition-related and exit and realignment charges is included above in the Overview section.

Interest expense, net.

	Three Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$		%
Interest expense, net	$	27,682		$	18,571		$	9,111	49.1	%
Effective interest rate	6.94		%	5.01		%

	Six Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$		%
Interest expense, net	$	56,783		$	28,824		$	27,959	97.0	%
Effective interest rate	6.63		%	4.64		%

Interest expense in the second quarter and year-to-date 2019 was higher than prior year primarily as a result of borrowings under our revolving credit facility and term loans entered into in the second quarter of 2018 and the increase in interest rates. In addition, interest expense year-to-date included $2.0 million related to write-off of deferred financing costs associated with the revolving credit facility as a result of the debt amendment in February 2019. See Note 10 in Notes to Consolidated Financial Statements.

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Income taxes.

	Three Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$		%
Income tax benefit	$	(1,062	)	$	(7,845	)	$	6,783	86.5	%
Effective tax rate	9.2		%	4.1		%

	Six Months Ended June 30,						Change
(Dollars in thousands)	2019			2018			$		%
Income tax benefit	$	(1,375	)	$	(2,032	)	$	657	32.3	%
Effective tax rate	5.3		%	1.2		%

The change in the effective tax rates compared to 2018 resulted from the mixture of income and losses in jurisdictions in which the Company operates, including those of which require a full valuation allowance, and the incremental income tax expense associated with the vesting of restricted stock.  

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Financial Condition, Liquidity and Capital Resources

Financial condition. We monitor operating working capital through days sales outstanding (DSO) and merchandise inventory turnover. We estimate a hypothetical increase (decrease) in DSO of one day would result in a decrease (increase) in our cash balances, an increase (decrease) in borrowings against our revolving credit facility, or a combination thereof of approximately $27 million.

The majority of our cash and cash equivalents are held in cash depository accounts with major banks in the United States, Europe, and Asia. Changes in our working capital can vary in the normal course of business based upon the timing of inventory purchases, collections of accounts receivable, and payments to suppliers.

	June 30, 2019		December 31, 2018		Change
(Dollars in thousands)					$			%
Cash and cash equivalents	$	91,339	$	103,367	$	(12,028	)	(11.6	)%
Accounts receivable, net of allowances	$	843,343	$	823,418	$	19,925		2.4	%
Consolidated DSO (1)	29.1		28.5
Merchandise inventories	$	1,237,713	$	1,290,103	$	(52,390	)	(4.1	)%
Consolidated inventory turnover (2)	6.9		7.4
Accounts payable	$	1,039,074	$	1,109,589	$	(70,515	)	(6.4	)%

(1) Based on period end accounts receivable and net revenue for the quarter

(2) Based on average annual inventory and costs of goods sold for the quarter ended June 30, 2019 and year ended December 31, 2018

Liquidity and capital expenditures. The following table summarizes our consolidated statements of cash flows for the six months ended June 30, 2019 and 2018:

(Dollars in thousands)	2019			2018
Net cash provided by (used for):
Operating activities	$	29,014		$	46,253
Investing activities	(25,192		)	(763,475		)
Financing activities	(16,053		)	726,849
Effect of exchange rate changes	203			4,039
Net (decrease) increase in cash and cash equivalents	$	(12,028	)	$	13,666

Cash provided by operating activities in the first six months of 2019 reflected fluctuations in net income along with changes in working capital.

Cash used for investing activities in the first six months of 2019 included capital expenditures of $25.5 million for our strategic and operational efficiency initiatives, particularly initiatives relating to capital expenditures of property and equipment and capitalized software. Cash used for investing activities in 2018 primarily included cash paid for the Halyard acquisition offset by the final purchase price settlement with the seller of Byram for $6.2 million.

Cash (used for) provided by financing activities included dividend payments of $4.9 million in the first six months of 2019, compared to $32.3 million in the same period of 2018. In the first six months of 2019 and 2018, cash (used for) provided by financing activities included proceeds from borrowings of $19.9 million and $101.0 million under our revolving credit facility. Financing activities in the first six months of 2019 and 2018 also included the repayment of $24.8 million and $6.3 million in borrowings on our Credit Agreement. We also paid $4.3 million in financing costs related to the Fourth Amendment to the Credit Agreement in February 2019. In 2018, we borrowed $661.8 million in term loans and $101.0 million under our revolving credit facility to fund the Halyard acquisition.

Capital resources. Our sources of liquidity include cash and cash equivalents and a revolving credit facility under our Credit Agreement (amended February 2019) with Wells Fargo Bank, N.A., JPMorgan Chase Bank, N.A., Bank of America, N.A. and a syndicate of financial institutions (the Credit Agreement). The Credit Agreement provides a borrowing capacity of $400 million and $902 million outstanding in term loans. The interest rate on our revolving credit facility and Term A loans is based on the Eurocurrency Rate, the Federal Funds Rate or the Prime Rate, plus an adjustment based on our Consolidated Total Leverage Ratio as defined by the Credit Agreement. Our credit spread at June 30, 2019 was Eurocurrency Rate plus 3.5%. Our Term B loan accrues interest based on the Eurocurrency Rate, the Federal Funds Rate or the Prime Rate, plus interest rate margin of 3.50% per annum with respect to Base Rate Loans (as defined in the Credit Agreement), and 4.50% per annum with respect to Eurocurrency Rate Loans (as defined in the Credit Agreement). We are charged a commitment fee of between 12.5

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and 25.0 basis points on the unused portion of the facility. The terms of the Credit Agreement requires us to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition.

We also have a Security and Pledge Agreement (the Security Agreement) pursuant to which we granted collateral on behalf of the holders of the 2021 Notes and the 2024 Notes and parties secured on the Credit Agreement (the Secured Parties) including first priority liens and security interests in (a) all present and future shares of capital stock owned by the Credit Parties (as defined) in the Credit Parties’ present and future subsidiaries (limited, in the case of controlled foreign corporations, to a pledge of 65% of the voting capital stock of each first-tier foreign subsidiary of each Credit Party) and (b) all present and future personal property and assets of the Credit Parties, subject to certain exceptions. Our Credit Agreement has a “springing maturity date” with respect to the revolving loans and the Term A loans and the Term B loan, if as of the date that is 91 days prior to the maturity date of the Company’s 2021 Notes or the 2024 Notes, respectively, all outstanding amounts owing under the 2021 Notes or the 2024 Notes, respectively, have not been paid in full then the Termination Date (as defined in the Credit Agreement) of the revolving credit facility, Term A loans and Term B loan shall be the date that is 91 days prior to the maturity date of the 2021 Notes.

At June 30, 2019 and December 31, 2018, we had borrowings of $230 million and $210.1 million, respectively, under the revolver and letters of credit of $11.7 million and $15.2 million, respectively, outstanding under the Credit Agreement along with $550 million in Senior Notes. We also had letters of credit and bank guarantees outstanding for $6.1 million and $7.7 million as of June 30, 2019 and December 31, 2018, respectively, which supports certain facilities leased as well as other normal business activities in the United States and Europe.

The second quarter dividend of $0.0025 per share was paid in June 2019. The payment of future dividends remains within the discretion of the Board of Directors and will depend upon our results of operations, financial condition, capital requirements, current and future limitations under our Credit Agreement (as amended) and other factors.

Our Board of Directors authorized a share repurchase program of up to $100 million of our outstanding common stock to be executed at the discretion of management over a three-year period, expiring in December 2019. The program is intended to offset shares issued in conjunction with our stock incentive plan and return capital to shareholders, and may be suspended or discontinued at any time. However, our Credit Agreement contains restrictions on the amount and timing of share repurchase activity. This includes prohibiting share repurchases should a default under the Credit Agreement exist prior to or immediately after any share repurchases. We did not repurchase any shares during 2019. At June 30, 2019, the remaining amount authorized for repurchase under this program was $94.0 million.

We believe available financing sources, including cash generated by operating activities and borrowings under the Credit Agreement, will be sufficient to fund our working capital needs, capital expenditures, long-term strategic growth, payments under long-term debt and lease arrangements, payments of quarterly cash dividends, share repurchases and other cash requirements. While we believe that we will have the ability to meet our financing needs in the foreseeable future, changes in economic conditions may impact (i) the ability of financial institutions to meet their contractual commitments to us, (ii) the ability of our customers and suppliers to meet their obligations to us or (iii) our cost of borrowing.

We earn a portion of our operating income in foreign jurisdictions outside the United States. Prior to the reporting period in which the Tax Cuts and Jobs Act (the Act) was enacted we considered foreign earnings to be indefinitely reinvested and provided no United States federal and state taxes or withholding taxes on those earnings. Our cash and cash equivalents held by our foreign subsidiaries totaled $59.9 million at June 30, 2019 and $64.9 million at December 31, 2018. Upon enactment, the Act imposes a tax on our total post-1986 foreign earnings at various tax rates. The Company has recognized an amount for this one-time transition tax. The Company continues to remain permanently reinvested in its foreign subsidiaries, with the exception of a subsidiary in Thailand. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities in which we assert permanent reinvestment. Management has no specific plans to indefinitely reinvest the unremitted earnings of our foreign subsidiary located in Thailand as of June 30, 2019. As such, we have recorded withholding tax liabilities that would be incurred upon future distribution to the U.S. There are no unrecognized deferred taxes as there is no outside basis difference unrelated to unremitted earnings for Thailand. The Company will continue to evaluate its foreign earnings repatriation policy during 2019 for all other foreign subsidiaries in which we operate.

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Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see our Annual Report on Form 10-K for the year ended December 31, 2018 and Note 16 in the Notes to Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for the quarterly period ended on June 30, 2019.

Forward-looking Statements

Certain statements in this discussion constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, all forward-looking statements involve risks and uncertainties and, as a result, actual results could differ materially from those projected, anticipated or implied by these statements. Such forward-looking statements involve known and unknown risks, including, but not limited to:

• competitive pressures in the marketplace, including intense pricing pressure;

• our ability to retain existing and attract new customers in a market characterized by significant customer consolidation and intense cost-containment initiatives;

• our dependence on sales to certain customers or the loss or material reduction in purchases by key customers;

• our dependence on distribution of product of certain suppliers;

• our ability to successfully identify, manage or integrate acquisitions, including our ability to successfully integrate the S&IP business into our operations and to realize the anticipated benefits and synergies from the S&IP acquisition;

• our ability to successfully manage our international operations, including risks associated with changes in international trade regulations, foreign currency volatility, changes in regulatory conditions, deteriorating economic conditions, adverse tax consequences, and other risks of operating in international markets;

• uncertainties related to and our ability to adapt to changes in government regulations, including healthcare laws and regulations (including the Affordable Care Act);

• risks arising from possible violations of legal, regulatory or licensing requirements of the markets in which we operate;

• uncertainties related to general economic, regulatory and business conditions;

• our ability to successfully implement our strategic initiatives;

• the availability of and modifications to existing supplier funding programs and our ability to meet the terms to qualify for certain of these programs;

• the effect of price volatility in the commodities markets, including fuel price fluctuations, on our operating costs and supplier product prices;

• our ability to adapt to changes in product pricing and other terms of purchase by suppliers of product;

• the ability of customers and suppliers to meet financial commitments due to us;

• changes in manufacturer preferences between direct sales and wholesale distribution;

• changing trends in customer profiles and ordering patterns and our ability to meet customer demand for additional value-added services;

• our ability to manage operating expenses and improve operational efficiencies in response to changing customer profiles;

• our ability to meet performance targets specified by customer contracts under contractual commitments;

• availability of and our ability to access special inventory buying opportunities;

• the ability of business partners and financial institutions to perform their contractual responsibilities;

• our ability to continue to obtain financing, obtain financing at reasonable rates and to manage financing costs and interest rate risk, and our ability to refinance, extend or repay our substantial indebtedness;

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• the risk that information systems are interrupted or damaged or fail for any extended period of time, that new information systems are not successfully implemented or integrated, or that there is a data security breach in our information systems;

• the risk that a decline in business volume or profitability could result in an impairment of goodwill or other long-lived assets;

• our ability to timely or adequately respond to technological advances in the medical supply industry;

• the costs associated with and outcome of outstanding and any future litigation, including product and professional liability claims;

• adverse changes in U.S. and foreign tax laws and the outcome of outstanding tax contingencies and legislative and tax proposals;

• our ability to successfully implement the expense reduction and productivity and efficiency increasing initiatives;

• our ability to continue to comply with the terms and conditions of Byram Healthcare’s Corporate Integrity Agreement;

• the potentially adverse impact of the United Kingdom’s planned withdrawal from the European Union; and

• other factors detailed from time to time in the reports we file with the SEC.

We undertake no obligation to update or revise any forward-looking statements, except as required by applicable law.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in interest rates related to our borrowing under our Credit Agreement. However, we enter into interest rate swap agreements to manage our exposure to interest rate changes. We had $902 million in borrowings under our term loans, $230 million in borrowings under our revolving credit facility and $12 million in letters of credit under the Credit Agreement at June 30, 2019. After considering the effects of interest rate swap agreements entered into during July 2018, we estimate an increase in interest rates of 100 basis points would result in a potential reduction in future pre-tax earnings of approximately $7 million per year based on our borrowings outstanding and the effective interest rates at June 30, 2019.

Due to the nature and pricing of our Global Solutions segment distribution services, we are exposed to potential volatility in fuel prices. Our strategies for helping to mitigate our exposure to changing domestic fuel prices have included using trucks with improved fuel efficiency. We benchmark our domestic diesel fuel purchase prices against the U.S. Weekly Retail On-Highway Diesel Prices (benchmark) as quoted by the U.S. Energy Information Administration. The benchmark averaged $3.07 per gallon and $3.10 in the first six months of 2019 and 2018, respectively. Based on our fuel consumption in the first six months of 2019, we estimate that every 10 cents per gallon increase in the benchmark would reduce our Global Solutions segment operating income by approximately $0.4 million on an annualized basis.

In the normal course of business, we are exposed to foreign currency translation and transaction risks. Our business transactions outside of the United States are primarily denominated in the euro, British pound and Thai baht. We may use foreign currency forwards, swaps and options, where possible, to manage our risk related to certain foreign currency fluctuations.

We are subject to price risk for our raw materials, the most significant of which relates to the cost of polypropylene and nitrile used in the manufacturing processes of our Global Products segment. Prices of the commodities underlying these raw materials are volatile and have fluctuated significantly in recent years and in the future may contribute to fluctuations in our results of operations. The ability to hedge these commodity prices is limited.

Item 4. Controls and Procedures

We carried out an evaluation, with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (pursuant to Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2019.

In connection with the Halyard acquisition, we entered into transition services agreements with Avanos pursuant to which they and we will provide to each other various transitional services, including, but not limited to, facilities, product supply, financial and business services, procurement, human resources, regulatory affairs and quality assurance, sales and marketing, information technology and other support services for a period of up to 18 months after the closing date. Management has established controls to mitigate the risk over financial reporting and will continue to monitor and evaluate the

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sufficiency of the controls. We are currently evaluating the acquired processes, information technology systems and other components of internal controls over financial reporting as part of the Company's integration activities which may result in periodic changes to our internal control over financial reporting. Such changes will be disclosed as required by applicable SEC guidance.

There was no change in our internal control over financial reporting that occurred during the period of this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We implemented internal controls to ensure we adequately assessed the adoption impact of the new lease standard, and its related amendments, on our consolidated financial statements. There were no significant changes to our internal control over financial reporting due to the adoption of the new standard.

Part II. Other Information

Item 1. Legal Proceedings

Certain legal proceedings pending against us are described in our Annual Report on Form 10-K for the year ended December 31, 2018. Through June 30, 2019, there have been no material developments in any legal proceedings reported in such Annual Report.

Item 1A. Risk Factors

Certain risk factors that we believe could affect our business and prospects are described in our Annual Report on Form 10-K for the year ended December 31, 2018. Through June 30, 2019, there have been no material changes in the risk factors described in such Annual Report.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

In October 2016, our Board of Directors authorized a share repurchase program of up to $100 million of the company’s outstanding common stock to be executed at the discretion of management over a three-year period. The timing of repurchases and the exact number of shares of common stock to be purchased will depend upon market conditions and other factors and may be suspended or discontinued at any time. Purchases under the share repurchase program are made either pursuant to 10b5-1 plans entered into by the company from time to time and/or during the company’s scheduled quarterly trading windows for officers and directors. We did not repurchase any shares for the six months ended June 30, 2019.

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Item 6. Exhibits

(a) Exhibits

10.1	Executive Separation Agreement and General Release, dated as of June 26, 2019, by and between Stuart Morris-Hipkins and Owens & Minor, Inc.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
	* Certain exhibits and schedules been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish copies of such omitted materials supplementally upon request by the SEC.
	** Management contract or compensatory plan or arrangement

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SIGNATURES

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

		Owens & Minor, Inc.
		(Registrant)
Date:	August 7, 2019	/s/ Edward A. Pesicka
		Edward A. Pesicka
		President & Chief Executive Officer
Date:	August 7, 2019	/s/ Robert K. Snead
		Robert K. Snead
		Executive Vice President & Chief Financial Officer

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EX-10.1

CONFIDENTIAL EXECUTIVE SEPARATION AGREEMENT AND GENERAL RELEASE I am Stuart Morris-Hipkins. This document represents my Confidential Executive Separation Agreement and General Release, and I refer to this generally as my “Agreement.” This document represents the agreement I have reached with Owens & Minor, Inc. (together, with its subsidiaries and Affiliates, “Owens & Minor” or the “Company” with “Affiliate” defined to mean any entity in which Owens & Minor, Inc. owns an interest of 50% or greater or which it otherwise functionally controls) and is a condition precedent to my receipt of separation benefits from Owens & Minor. In consideration of the various promises and commitments that I and the Company have made to each other within this Agreement, and the fact that I and Owens & Minor, Inc. intend to be legally bound, as of the Effective Date (defined below), I agree to all the terms in this Agreement. 1. Termination Date. a. The parties hereto acknowledge and agree that my employment with the Company terminated on April 5, 2019 (the “Termination Date”). b. I acknowledge and agree that my employment relationship with the Company and my services as an officer and director of the Company ended on the Termination Date. c. I acknowledge that my employment as President, Global Solutions of the Company terminated effective on the Termination Date, and I resigned my employment and service from all other officer, director, employee or other positions with the Company. d. I acknowledge and represent that during my employment with the Company, to the best of my knowledge, I abided by Owens & Minor’s Code of Honor - Standards of Conduct (the “Code”) and that I have reported any material violations of the Code of which I am aware to the appropriate Company representative. 2. Accrued Benefits. a. I acknowledge and agree that as of the Termination Date, except as otherwise set forth in this Section 2(a) and Section 3(d) below, the Company shall have no obligation to continue my coverage under the Company’s medical, dental, life insurance, or other employee insurance or benefit plans. Following the Termination Date, I will be eligible for COBRA coverage to the extent required by applicable law. I also understand, however, that my COBRA coverage will be at my sole expense and will be offered at 102% of the full cost of coverage. b. I acknowledge and agree that, subject to the Company’s compliance with the terms of this Section 2 and Section 3, the Company will have paid me in full all accrued salary, expenses, reimbursements, vacation, sick leave, and other payments to which I may have been entitled through the Termination Date, and I acknowledge that there are no sums or other benefits, outside of this Agreement, due or owing to me by the Company. 3. Severance Benefits. In consideration of my promises, covenants and agreements set forth in this Agreement (including but not limited to the covenants regarding Confidentiality, Non- Competition and Non-Solicitation), the Company shall provide me with the following payments

and benefits (collectively, the “Severance Benefits”) to which I would not be otherwise entitled in the absence of this Agreement: a. The Company-shall pay me a lump sum in the amount of $419,642.00, less all applicable tax withholdings. This payment shall be made on the first regularly scheduled Company payday following either the Effective Date of this Agreement or July 1, 2019, whichever is later. I understand and agree that for purposes of this Agreement the 12-month period immediately following my Termination Date is designated as the “Severance Period.” b. I understand and agree that all of my outstanding unvested restricted shares were forfeited as of the Termination Date. c. I understand and agree that all of my outstanding performance share awards were forfeited as of the Termination Date. d. I understand that I have the right to COBRA coverage for up to eighteen (18) months following the Termination Date or any earlier termination of the continued health/dental coverage described in Section 2(a) above. I also understand, however, that my COBRA coverage will be at my sole expense and will be offered at 102% of the full cost of coverage. 4. Covenant to Maintain Confidentiality. a. I acknowledge that, during my employment with the Company, I have been exposed to information that is confidential to the Company (“Confidential Information”). Such Confidential Information includes but is not limited to: information technology and computer systems; trade secrets; financial or investor relations information; sales activity information; accounting information; revenue recognition information; cash-flow information; lists of and other information about current and prospective customers, vendors or suppliers; prices or pricing strategy or information; sales and account records; reports, pricing, sales manuals and training manuals regarding selling, strategic planning and business development information; purchasing, and pricing procedures and financing methods of the Company, together with any specific and proprietary techniques utilized by the Company in designing, developing, testing or marketing its products, product mix and supplier information or in performing services for clients, customers and accounts of the Company; information concerning existing or contemplated software, products, services, technology, designs, processes and research or product developments of the Company; and, any other information of a similar nature made available to me and not known to the public, which, if misused or disclosed, could adversely affect the business of the Company. Confidential Information includes any such information that I may have prepared or created during my employment with the Company, as well as such information that has been or may be created or prepared by others. Confidential Information shall not include any information that (i) has been voluntarily disclosed to the public by the Company, (ii) has been independently developed and disclosed to the public by others, or (iii) otherwise enters the public domain through lawful means. b. I agree that for as long as such information remains confidential to the Company, including after the Severance Period, or is a trade secret under the Virginia Uniform Trade Secrets Act, I will not disclose any Confidential Information to any person, agency, institution, company, or other entity, and I will not use any Confidential Information in any way, except as required by my duties to the Company or by law. SEPARATION AGREEMENT AND GENERAL RELEASE - Confidential -2-

c. I agree that my duties and obligations under this Paragraph 4 will continue for as long as such information remains confidential to the Company or is a trade secret under the Virginia Uniform Trade Secrets Act. In the event that I am unsure whether certain information remains confidential, I will send the Company a written inquiry about its confidentiality. 5. Anti-Piracy. In this Paragraph 5, I agree not to take the actions identified below. By making this commitment, I agree not to take any such actions, either as principal, agent, employee, employer, owner, stockholder (owning more than 10% of a corporation’s shares), partner, or in any other individual or representative capacity whatsoever. a. Covenant Not to Hire Company Employees. I agree that, during the Severance Period, I will not: i. hire any officer or other employee of the Company, or solicit or induce any officer or other employee of the Company to leave his or her employment; ii. encourage or solicit any independent contractor engaged by the Company to cease doing business with the Company, cease providing services to the Company, or diminish the amount of business done with or services provided to the Company; or, iii. aid, assist, or otherwise cause any other person, firm, or corporation to do any of the acts described in the previous subsections (i) or (ii) of this Paragraph 5(a). b. Covenant Not To Interfere With Others. Independent of the foregoing provisions, I agree that during the Severance Period: i. I will not divert from the Company, interfere with or entice away from the Company any person or entity who was a Customer of the Company, and with whom I had Material Contact at any time during the last twelve (12) months of my employment, if the purpose of such diversion, interference or enticement is to provide products or services that are the same as, or similar to, and in competition with, the products or services offered by the Company within the last twelve (12) months of my employment. “Material Contact” means that I personally communicated with the Customer, either orally or in writing, for the purpose of providing products or services of the Company, or about whom I was provided non-public information by the Company. “Customer” means any person or entity to whom the Company provided products or services, in exchange for compensation, during the last twenty-four (24) months of my employment. ii. I will not engage in any conduct for the purpose of causing any of the Company’s suppliers or manufacturing partners to cease doing business with the Company or to diminish the volume of business they do with the Company; provided that said suppliers or manufacturing partners conducted business with the Company at any time during the twelve (12) month period immediately preceding the Termination Date; or, iii. aid, assist, or otherwise cause any other person, firm, or corporation to do any of the acts described in the previous subsections (i) or (ii) of this Paragraph 5(b). SEPARATION AGREEMENT AND GENERAL RELEASE - Confidential -3-

6. Covenant Not To Compete. a. Subject to the specifics provided below, I agree that during the Severance Period I will not compete with the Company by providing “Competitive Services” to a “Prohibited Business.” The term “Competitive Services” shall mean services (whether as an employee, a consultant or otherwise and regardless of job title or name of the organizational unit) that are the same or similar to the duties or services that I performed for or provided to the Company during the last twelve (12) months of my employment. The term “Prohibited Business” means any healthcare supply chain services company, healthcare distribution company, manufacturer or distributor of clinical minor procedure kits and trays, or other company which is a competitor of the Company and provides products or services that are similar or identical to those offered by the Company within the last twelve (12) months of my employment. Such Prohibited Businesses specifically include, but are not limited to, Cardinal Health, Inc., and its subsidiaries and affiliates; and Medline Industries, Inc., and its subsidiaries and affiliates; and any company engaged in any awardee convener or similar business that is competitive with the business of Fusion 5 Inc. b. Because the Company’s business competes throughout the United States, and in view of the officer and senior management position that I held with the Company, I agree that the obligations described in this Paragraph 6 and its subparagraphs will apply throughout the United States. I understand and agree that nothing in this Paragraph 6 shall prevent me from performing activities for or on behalf of a Prohibited Business that are not the same as or similar to the activities I performed for the Company. I also understand that nothing in this provision shall prevent my purchase or ownership of less than 2% of the securities of any class of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934, whether or not such enterprise is engaged in a Prohibited Business. c. I understand that during the Severance Period I may engage in any business activity or gainful employment of any type and in any place except as described above. I acknowledge that I will be reasonably able to earn a livelihood without violating the terms of this Agreement. 7. Return of Company Property. I have delivered to the Company all Company property in my possession, including all documents, computers, computer tapes, disks and any other media (and all copies thereof) that belong to or were provided by the Company and/or contain information related to the business of the Company. 8. Non-disparagement. a. I agree that I shall not make or cause any other person or entity to make any statement or take any action that criticizes or disparages any Releasee (as defined below). This provision is in addition to, and not in lieu of, the substantive protections under applicable law relating to defamation, libel, slander, interference with contractual or business relationships, or other statutory, contractual or tort theories. Similarly, the Company agrees that it shall direct its officers and directors not to communicate any comments to any person that may reasonably be interpreted as disparaging of me. For purposes of this Agreement, “disparaging” is defined to mean critical, derogatory, deprecating, detracting, SEPARATION AGREEMENT AND GENERAL RELEASE - Confidential -4-

or pejorative, or that would be harmful to or impugn the business, professional, or personal reputation or integrity of another. b. In response to requests for references regarding my employment, the Company will respond only by confirming my dates of employment and positions held with the Company, and providing a statement that I left the Company to pursue other professional opportunities. In addition, the Company agrees that, if necessary upon inquiry, it will represent that the termination of my employment with the Company was not for cause. 9. Permitted Disclosure. I understand and acknowledge that nothing in this Agreement shall prohibit or impede me from communicating, cooperating or filing a complaint with any U.S. federal, state or local governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation, provided that in each case such communications and disclosures are consistent with applicable law. I also understand and acknowledge that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. I understand and acknowledge further that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Notwithstanding the foregoing, under no circumstance will I be authorized to disclose any information covered by attorney-client privilege or attorney work product of Company or any of its affiliates or subsidiaries without prior written consent of Company’s General Counsel or other officer designated by the Company. Similarly, I understand and acknowledge that nothing in this Agreement shall prohibit or impede the Company from making any disclosures required by law. 10. Remedies. I understand that the foregoing protective covenants in Paragraphs 4, 5, 6, 7 and 8 are material to the Company’s decision to offer me the Severance Benefits. I have carefully read and considered these protective covenants and agree that they are fair and reasonable. I also understand that if I materially breach this Agreement, the Company would have the right to cease payment of any Severance Benefits otherwise payable hereunder and that I would be obligated to repay to the Company the gross amount of any Severance Benefits that I had received under this Agreement. I further agree that in any action arising out of this Agreement, including any claims or counterclaims brought by the Company to enforce its terms, the prevailing party in such action shall be entitled to recover its attorneys’ fees and costs. 11. Releases. a. In this Agreement I use the term “Releasee” and “Releasees.” The term “Releasee” and Releasees” means the Company and any and all of their boards, past and present directors, trustees, officers, shareholders, members, partners, managers, supervisors, employees, attorneys, agents, representatives, insurers and consultants, as well as the predecessors, successors and assigns of any of them, and all persons or entities acting by, with, though, under or in contract with any of them. SEPARATION AGREEMENT AND GENERAL RELEASE - Confidential -5-

b. I also use the term “Claims” in this Agreement. Except as specifically provided below, the term “Claims” means each and every claim, complaint, cause of action, grievance, demand, controversy, allegation, or accusation, whether known or unknown, that is based on or otherwise related to (1) any promise, assurance, contract, representation, obligation, guarantee, warranty, liability, right, agreement and commitment of any kind, whether known or unknown, or (2) any forms or theories of relief, including, but not limited to, all remedies, costs, expenses, losses, damages, debts and attorneys’ and other professionals’ fees and related disbursements, whether known or unknown. Notwithstanding the foregoing, “Claims” do not include a charge filed with any government agency charged with enforcement of any law, including but not limited to a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”), or any claims that cannot be waived or released by law. Thus, this Agreement does not preclude me from filing a charge or participating in an investigation with the EEOC or other governmental agency. c. In partial consideration for the Severance Benefits, and subject to the limited exclusions and limitations set forth below and in Section 13 of this Agreement, I hereby irrevocably release and forever discharge all Releasees from any and all Claims that I, or anyone on my behalf ever had or now has against any and all of the Releasees, or which I, or any of my executors, administrators, representatives, attorneys or assigns, hereafter can, shall or may have against any and all of the Releasees for or by reason of any cause, matter, thing, occurrence, or event whatsoever from the date of my birth to the date that I have signed this Agreement. I acknowledge and agree that the Claims released in this paragraph include, but are not limited to, (a) any and all Claims based on any law, statute, or constitution or based on contract or in tort or in common law, and any and all Claims based on or arising under any civil rights laws, such as the civil rights laws of any state or jurisdiction, the Americans with Disabilities Act; the Civil Rights Act of 1991; the Employee Retirement Income Security Act; the Equal Pay Act; the Genetic Information Non-discrimination Act; the Family and Medical Leave Act; Section 1981 of the Civil Rights Act of 1866; Title VII of the Civil Rights Act of 1964; the Fair Credit Reporting Act; the Worker Adjustment and Retraining Notification Act; the Genetic Information Nondiscrimination Act; the Immigration Reform and Control Act, or the Virginia Human Rights Act; the Virginians with Disabilities Act; the Virginia Equal Pay Act; the Virginia Genetic Testing Law; the Virginia Occupational Safety and Health Act; the Virginia Minimum Wage Act; the Virginia Payment of Wage Law; and/or the Virginia Right to Work Law; (b) any and all Claims under any grievance or complaint procedure of any kind; and (c) any and all Claims based on or arising out of or related to my recruitment by, employment with, the termination of my employment with, my performance of any service in any capacity for, or any business transaction with, each or any of the Releasees, as well as any and all Claims based on or related to compensation, equity, shares, stock, or any other benefit of any kind arising from my employment or termination of employment with the Company, including those reflected in any Officer Severance Policy, Executive Severance Agreement, and/or any agreement concerning equity, stock, or shares (collectively, the “Released Claims”). I also hereby waive any and all right to personal recovery of money damages or other relief from any Releasee for any of the Claims released by this Section 11. I hereby represent and warrant that I have not assigned any claim to any third party. d. Notwithstanding the foregoing, I do not waive, and “Released Claims” shall not include, any rights I may have to seek to enforce the terms of this Agreement. I also do not waive, and “Released Claims” does not include, any rights or claims: (i) based on any cause, matter, thing, or event arising or occurring at any time after I sign this Agreement; SEPARATION AGREEMENT AND GENERAL RELEASE - Confidential -6-

(ii) my right, if any, to payment of vested qualified retirement benefits under the Company’s ERISA plans; (iii) under my right to continuation in the Company’s medical plans as provided by COBRA; (iv) under my right to indemnification (including advances of attorneys’ fees and expenses) for acts or omissions occurring during my service as an officer and director to the maximum extent permitted under the Company charter, bylaws and applicable law; or (v) under applicable Company directors and officers liability insurance. 12. Specific Release and Waiver of ADEA Claims. In further consideration for the payments and benefits to be provided to me as set forth in this Agreement, I hereby waive, release, and discharge all Claims available against the Company under the Age Discrimination in Employment Act (“ADEA”) and the Older Workers Benefit Protection Act, whether known or unknown, from the date of my birth to the date that I have signed this Agreement. By signing this Agreement, I acknowledge and confirm that: a. I have read this Agreement in its entirety and understand all of its terms; b. By this Agreement, the Company has advised me in writing to consult with an attorney and I have consulted with such attorney regarding this Agreement before signing it; c. I am signing this Agreement knowingly, freely, and voluntarily in order to release my claims against the Company; d. I am signing this Agreement in exchange for payments that are greater than I would otherwise have received and that are in addition to anything of value to which I am otherwise entitled; e. I was given at least twenty-one (21) days to consider the terms of this Agreement and consult with an attorney of my choice, although I may sign this Agreement sooner if I desire, provided, however, that changes to this Agreement before its execution, whether material or immaterial, do not restart the twenty-one (21) day period for me to review the Agreement; f. I have seven (7) days from the date I sign this Agreement to revoke the Agreement by delivering written notice of such revocation to the Company in the manner described in Paragraph 16 of this Agreement, below. 13. Limitations on Covenants and Obligations. I understand and agree that this Agreement is to be broadly construed, provided that notwithstanding anything contained herein, this Agreement expressly does not include a release of any claims that cannot be released by law or under applicable public policy. Additionally, I understand and agree that nothing in this Agreement is intended to, or shall, interfere with my rights under federal, state, or local civil rights or employment discrimination laws (including, but not limited to, the statutes referenced in Sections 11 and 12, above, or their state or local counterparts) to file or otherwise institute a charge of discrimination, to participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its investigation, none of which shall constitute a breach of this Agreement. I also acknowledge and agree, however, that I shall not be entitled to any relief, recovery, or monies in connection with any such claim or proceeding brought against any of the Releasees, regardless of who filed or initiated any such complaint, charge or proceeding. Nothing contained in this Agreement, including, but not limited to Section 4, is designed to prohibit me from disclosing this Agreement SEPARATION AGREEMENT AND GENERAL RELEASE - Confidential -7-

to the EEOC or any other government agency. I understand that I am free to do so if I choose. I also understands that this Agreement may not affect the rights and responsibilities of the EEOC to enforce federal laws or be used to justify interfering with the protected right of myself or others to file a charge with the EEOC. Additionally, nothing in this Agreement shall prohibit me or others from participating in any investigation or proceeding conducted by the EEOC, the National Labor Relations Board, the Securities and Exchange Commission or other state or federal agency, and nothing herein shell be construed to limit or restrict my “Section 7” rights under the National Labor Relations Act. 14. No Admission. I agree that the offer of this Agreement and the Agreement itself are not an admission, and shall not be construed to be an admission, by each or any of the Releasees, that the personnel, employment, termination and any other decisions involving me or any conduct or actions at any time effecting or involving me were wrongful, discriminatory, or in any way unlawful or in violation of any right of mine; moreover, any such liability or wrongdoing is denied by me. I shall not attempt to offer this Agreement or any of its terms as evidence of any liability or wrongdoing by each or any of the Releasees in any judicial, administrative or other proceeding now pending or hereafter instituted by any person or entity. 15. Taxes. I also acknowledge and agree that, as applicable, the Company will withhold from the Severance Benefits payroll deductions for taxes, such as my federal taxes, FICA, Medicare, as well as any state and local taxes and unemployment compensation, etc. These amounts shall be determined by the Company. I also understand that I am responsible for all taxes that I may incur with respect to any of the consideration to be delivered to me under this Agreement. 16. Revocation. As set forth in Paragraph 12 of this Agreement, above, I understand that I have twenty-one (21) days from today to accept this Agreement by signing it and returning it to the Company, and that the Company will not withdraw or revoke its severance offer before that twenty-one (21) day-period is up; I further understand that I also have within seven (7) days of my signing this Agreement and returning it to the Company to change my mind and revoke this Agreement by sending or otherwise giving written notice of revocation to the Company’s Senior Vice President, Human Resources at 9120 Lockwood Boulevard, Mechanicsville, VA 23116. If I do not revoke this Agreement by the end of the seventh (7th) day, the next day following shall be the “Effective Date.” 17. Governing Law; Arbitration. I agree that this Agreement shell in all respects be governed by and interpreted under and in accordance with the laws of the Commonwealth of Virginia without regard to any otherwise applicable principles of conflicts of law or choice of law rules (whether of the Commonwealth of Virginia or any other jurisdiction) that would result in the application of the substantive or procedural laws or rules of any other jurisdiction. Any claim or controversy arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in accordance with the employment law-related rules of the American Arbitration Association, as applicable, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration of any such claim or controversy shall take place in Richmond, Virginia. Notwithstanding the foregoing, any claim for temporary equitable relief in the form of a temporary restraining order or preliminary injunction or any other temporary equitable remedy which may then be available in aid of arbitration may be resolved in any appropriate judicial forum. 18. Entire Agreement. I intend to have this Agreement constitute a complete and final agreement and I intend this Agreement to supersede and replace all prior or contemporaneous agreements, negotiations, or discussions relating to the subject matter of this Agreement, if any. SEPARATION AGREEMENT AND GENERAL RELEASE - Confidential -8-

19. Validity. I agree that the invalidation of any provision of this Agreement shall not invalidate the entire Agreement. 20. Amendments Must Be in Writing and Signed; Waiver. I agree that no provision of this Agreement may be amended, modified, waived or discharged unless such amendment, waiver, modification or discharge is agreed to in writing and signed by me and the Company. I further agree that no waiver by either party hereto at any time of any breach or failure to enforce that party’s rights with respect to any such breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any similar or dissimilar provisions or conditions at the same or any prior or subsequent time. 21. Assignments. This Agreement may and shall be assigned or transferred to, and shall be binding upon and shall inure to the benefit of, any successor or other assign of the Company. I acknowledge and agree that I may not assign this Agreement. 22. Counsel. a. I acknowledge that I have been advised by the Company to consult with an attorney before signing this Agreement. b. I also acknowledge and agree that the Company is not obligated to pay my attorneys’ fees, costs or expenses relating to this Agreement and that the release in Section 11 above releases, among other things, all Claims for attorneys’ fees, costs and expenses. c. I acknowledge that I am signing this Agreement voluntarily, with full knowledge of the nature and consequences of its terms and without duress or undue influence by the Company or any other person or entity. 23. JURY TRIAL. BY EXECUTING THIS AGREEMENT, I HEREBY KNOWINGLY AND WILLINGLY WAIVE ANY RIGHT I MAY HAVE UNDER APPLICABLE LAW TO A TRIAL BY JURY IN ANY DISPUTES ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT. 24. 409A. Notwithstanding any other provision of this Agreement, it is intended that any payment or benefit provided hereto that is considered nonqualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), will be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code, and this Agreement shall be interpreted in accordance with such intent. For purposes of this Agreement, all rights to payments and benefits hereunder will be treated as rights to a series of separate payments and benefits to the fullest extent allowable by Section 409A of the Code. Notwithstanding any other provision of this Agreement, however, none of the Releasees shall be liable to you in the event any provision of this Agreement fails to comply with, or be exempt from, Section 409A of the Code. 25. Knowing and Voluntary. BY SIGNING BELOW, I EXPRESSLY ACKNOWLEDGE THAT I AM SIGNING THIS AGREEMENT VOLUNTARILY AND OF MY OWN FREE WILL, WITH FULL KNOWLEDGE OF THE NATURE AND CONSEQUENCES OF ITS TERMS. I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND THAT IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. SEPARATION AGREEMENT AND GENERAL RELEASE - Confidential -9-

26. Severability. In the event that any provision of this Agreement becomes or is declared by an arbitrator or a court of competent jurisdiction to be illegal, unenforceable, or void, the parties intend for the such provision to be enforced to the fullest extent permitted under law, and the remainder of the Agreement shall continue in full force and effect without regard to such provision determined to be illegal, unenforceable, or void. 27. Counterparts. Finally, I agree that all executed copies of this Agreement (including by facsimile), and any photo-copies shall have the same force and effect and shall be as legally binding and enforceable as the original. IN WITNESS WHEREOF, the parties have executed this Confidential Executive Separation Agreement and General Release as of the day and year indicated below. Accepted By: Stuart Morris-Hipkins Owens & Minor, Inc. Signature: Signature: Date: Name: Nicholas J. Pace Title: Executive VP & General Counsel Date: June 26, 2019 SEPARATION AGREEMENT AND GENERAL RELEASE - Confidential -10-

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edward A. Pesicka, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 of Owens & Minor, 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. 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

d. 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:	August 7, 2019
/s/ Edward A. Pesicka
Edward A. Pesicka
President & Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert K. Snead, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, of Owens & Minor, 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. 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

d. 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:	August 7, 2019
/s/ Robert K. Snead
Robert K. Snead
Executive Vice President & Chief 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 of Owens & Minor, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward A. Pesicka, President & Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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, as amended; and

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

/s/ Edward A. Pesicka

Edward A. Pesicka

President & Chief Executive Officer

Owens & Minor, Inc.

August 7, 2019

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 of Owens & Minor, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert K. Snead, Executive Vice President & Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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, as amended; and

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

/s/ Robert K. Snead

Robert K. Snead

Executive Vice President & Chief Financial Officer

Owens & Minor, Inc.

August 7, 2019

XML

Cover - shares	6 Months Ended
	Jun. 30, 2019	Jul. 31, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Entity File Number	1-9810
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-1701843
Entity Address, Address Line One	9120 Lockwood Boulevard
Entity Address, City or Town	Mechanicsville
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23116
City Area Code	804
Local Phone Number	723-7000
Title of 12(b) Security	Common Stock, $2 par value per share
Trading Symbol	OMI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Smaller Reporting Entity	true
Entity Shell Company	false
Entity Registrant Name	OWENS & MINOR INC/VA/
Entity Central Index Key	0000075252
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		62,958,021

XML

Consolidated Statements of Income (loss) (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Net revenue	$ 2,484,200	$ 2,458,271	$ 4,945,587	$ 4,830,850
Cost of goods sold	2,115,773	2,133,277	4,218,736	4,181,170
Gross margin	368,427	324,994	726,851	649,680
Distribution, selling and administrative expenses	345,892	308,775	684,595	593,136
Goodwill and intangible asset impairment charges	0	165,447	0	165,447
Acquisition-related and exit and realignment charges	5,655	24,930	10,645	39,690
Other operating (income) expense, net	736	(2,107)	775	(759)
Operating income (loss)	16,144	(172,051)	30,836	(147,834)
Interest expense, net	27,682	18,571	56,783	28,824
Loss before income taxes	(11,538)	(190,622)	(25,947)	(176,658)
Income tax benefit	(1,062)	(7,845)	(1,375)	(2,032)
Net loss	$ (10,476)	$ (182,777)	$ (24,572)	$ (174,626)
Net income per common share:
Basic and diluted (in usd per share)	$ (0.18)	$ (3.07)	$ (0.41)	$ (2.92)

XML

Consolidated Statements of Comprehensive Income (loss) (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Net loss	$ (10,476)	$ (182,777)	$ (24,572)	$ (174,626)
Other comprehensive income (loss), net of tax:
Currency translation adjustments (net of income tax of $0 in 2019 and 2018)	7,452	(20,678)	3,245	(11,757)
Change in unrecognized net periodic pension costs (net of income tax of $63 and $126 in 2019 and $149 and $286 in 2018)	197	374	394	754
Total other comprehensive income (loss), net of tax	2,387	(20,426)	(4,036)	(11,119)
Comprehensive loss	(8,089)	(203,203)	(28,608)	(185,745)
Parent
Other comprehensive income (loss), net of tax:
Net unrealized loss on derivative instruments and other (net of income tax of $2,662 and $3,641 in 2019 and $68 in 2018)	$ (5,262)	$ (122)	$ (7,675)	$ (116)

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Consolidated Statements of Comprehensive Income (loss) (unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Currency translation adjustments, income tax benefit	$ 0	$ 0	$ 0	$ 0
Change in unrecognized net periodic pension costs, income tax expense	63	149	126	286
Parent
Other, income tax expense	$ 2,662	$ 68	$ 3,641	$ 68

XML

Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 91,339	$ 103,367
Accounts receivable, net of allowances of $21,456 and $19,618	843,343	823,418
Merchandise inventories	1,237,713	1,290,103
Other current assets	302,234	321,690
Total current assets	2,474,629	2,538,578
Property and equipment, net of accumulated depreciation of $297,297 and $270,105	389,933	386,723
Operating lease assets	206,199
Goodwill	407,651	414,122
Intangible assets, net	311,027	321,764
Other assets, net	106,632	112,601
Total assets	3,896,071	3,773,788
Current liabilities
Accounts payable	1,039,074	1,109,589
Accrued payroll and related liabilities	47,284	48,203
Other current liabilities	384,040	314,219
Total current liabilities	1,470,398	1,472,011
Long-term debt, excluding current portion	1,624,692	1,650,582
Operating lease liabilities, excluding current portion	161,785
Deferred income taxes	49,507	50,852
Other liabilities	92,788	81,924
Total liabilities	3,399,170	3,255,369
Commitments and contingencies
Equity
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 62,964 shares and 62,294 shares	125,928	124,588
Paid-in capital	244,756	238,773
Retained earnings	175,865	200,670
Accumulated other comprehensive loss	(49,648)	(45,612)
Total equity	496,901	518,419
Total liabilities and equity	$ 3,896,071	$ 3,773,788

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Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Accounts and notes receivable, allowances	$ 21,456	$ 19,618
Property and equipment, accumulated depreciation	$ 297,297	$ 270,105
Common stock, par value (in USD per share)	$ 2	$ 2
Common stock, authorized (shares)	200,000,000	200,000,000
Common stock, issued (shares)	62,964,000	62,294,000
Common stock, outstanding (shares)	62,964,000	62,294,000

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Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Operating activities:
Net income (loss)	$ (24,572)	$ (174,626)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	58,902	43,813
Share-based compensation expense	8,093	6,140
Goodwill and intangible asset impairment charges	0	165,447
Provision for losses on accounts receivable	6,534	2,867
Deferred income tax benefit	(14,597)	(6,172)
Changes in operating lease right-of-use assets and lease liabilities	(616)	0
Changes in operating assets and liabilities:
Accounts receivable	(23,346)	(30,357)
Merchandise inventories	52,346	5,211
Accounts payable	(71,704)	47,260
Net change in other assets and liabilities	32,226	(14,629)
Other, net	5,748	1,299
Cash provided by operating activities	29,014	46,253
Investing activities:
Acquisitions, net of cash acquired	0	(733,433)
Additions to property and equipment	(21,020)	(19,816)
Additions to computer software	(4,511)	(10,238)
Proceeds from sale of property and equipment	339	12
Cash used for investing activities	(25,192)	(763,475)
Financing activities:
Proceeds from issuance of debt	0	695,750
Borrowings under revolving credit facility	19,900	101,000
Repayments of debt	(24,788)	(6,250)
Financing costs paid	(4,313)	(27,697)
Cash dividends paid	(4,918)	(32,284)
Other, net	(1,934)	(3,670)
Cash (used for) provided by financing activities	(16,053)	726,849
Effect of exchange rate changes on cash and cash equivalents	203	4,039
Net (decrease) increase in cash and cash equivalents	(12,028)	13,666
Cash and cash equivalents at beginning of period	103,367	104,522
Cash and cash equivalents at end of period	91,339	118,188
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	(13,929)	12,318
Interest paid	$ 53,183	$ 24,848

XML

Consolidated Statements of Changes in Equity (unaudited) - USD ($) $ in Thousands	Total	Common Stock	Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning Balance (in shares) at Dec. 31, 2017		61,476,000
Beginning Balance at Dec. 31, 2017	$ 1,015,479	$ 122,952	$ 226,937	$ 690,674	$ (25,084)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	8,151			8,151
Other comprehensive income	9,307				9,307
Dividends declared	(16,027)			(16,027)
Share-based compensation expense, exercises and other (in shares)		336,000
Share-based compensation expense, exercises and other	2,008	$ 672	1,336
Ending Balance (in shares) at Mar. 31, 2018		61,812,000
Ending Balance at Mar. 31, 2018	1,018,918	$ 123,624	228,273	682,798	(15,777)
Beginning Balance (in shares) at Dec. 31, 2017		61,476,000
Beginning Balance at Dec. 31, 2017	1,015,479	$ 122,952	226,937	690,674	(25,084)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(174,626)
Ending Balance (in shares) at Jun. 30, 2018		62,341,000
Ending Balance at Jun. 30, 2018	802,208	$ 124,681	229,884	483,846	(36,203)
Beginning Balance (in shares) at Mar. 31, 2018		61,812,000
Beginning Balance at Mar. 31, 2018	1,018,918	$ 123,624	228,273	682,798	(15,777)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(182,777)			(182,777)
Other comprehensive income	(20,426)				(20,426)
Dividends declared	(16,175)			(16,175)
Share-based compensation expense, exercises and other (in shares)		529,000
Share-based compensation expense, exercises and other	2,668	$ 1,057	1,611
Ending Balance (in shares) at Jun. 30, 2018		62,341,000
Ending Balance at Jun. 30, 2018	$ 802,208	$ 124,681	229,884	483,846	(36,203)
Beginning Balance (in shares) at Dec. 31, 2018	62,294,000	62,294,000
Beginning Balance at Dec. 31, 2018	$ 518,419	$ 124,588	238,773	200,670	(45,612)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(14,096)			(14,096)
Other comprehensive income	(6,423)				(6,423)
Dividends declared	(119)			(119)
Share-based compensation expense, exercises and other (in shares)		642,000
Share-based compensation expense, exercises and other	4,058	$ 1,284	2,774
Ending Balance (in shares) at Mar. 31, 2019		62,936,000
Ending Balance at Mar. 31, 2019	$ 501,839	$ 125,872	241,547	186,455	(52,035)
Beginning Balance (in shares) at Dec. 31, 2018	62,294,000	62,294,000
Beginning Balance at Dec. 31, 2018	$ 518,419	$ 124,588	238,773	200,670	(45,612)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (24,572)
Ending Balance (in shares) at Jun. 30, 2019	62,964,000	62,964,000
Ending Balance at Jun. 30, 2019	$ 496,901	$ 125,928	244,756	175,865	(49,648)
Beginning Balance (in shares) at Mar. 31, 2019		62,936,000
Beginning Balance at Mar. 31, 2019	501,839	$ 125,872	241,547	186,455	(52,035)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(10,476)
Other comprehensive income	2,387
Dividends declared	(114)			(114)
Share-based compensation expense, exercises and other (in shares)		28,000
Share-based compensation expense, exercises and other	$ 3,265	$ 56	3,209
Ending Balance (in shares) at Jun. 30, 2019	62,964,000	62,964,000
Ending Balance at Jun. 30, 2019	$ 496,901	$ 125,928	$ 244,756	$ 175,865	$ (49,648)

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Consolidated Statements of Changes in Equity (unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Statement of Stockholders' Equity [Abstract]
Dividends declared, per share (in USD per share)	$ 0.0025	$ 0.0025	$ 0.26	$ 0.26
Common stock, par value (in USD per share)	$ 2

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Owens & Minor, Inc. and the subsidiaries it controls (we, us, or our) and contain all adjustments (which are comprised only of normal recurring accruals and use of estimates) necessary to conform with U.S. generally accepted accounting principles (GAAP). All significant intercompany accounts and transactions have been eliminated. The results of operations for interim periods are not necessarily indicative of the results expected for the full year.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect reported amounts and related disclosures. Actual results may differ from these estimates.

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Fair Value	6 Months Ended
	Jun. 30, 2019
Fair Value Disclosures [Abstract]
Fair Value	Fair ValueThe carrying amounts of cash and cash equivalents, accounts receivable, financing receivables, accounts payable and financing payables included in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments. The fair value of long-term debt is estimated based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market (Level 1) or, if quoted market prices or dealer quotes are not available, on the borrowing rates currently available for loans with similar terms, credit ratings, and average remaining maturities (Level 2). The fair value of interest rate swaps and foreign currency contracts is determined based on the present value of expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Observable Level 2 inputs are used to determine the present value of expected future cash flows.

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Acquisitions

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Acquisitions

Acquisition

On April 30, 2018 (the Acquisition Date), we completed the acquisition of substantially all of Avanos Medical, Inc.'s (Avanos, previously Halyard Health, Inc.) Surgical and Infection Prevention (S&IP) business, the name “Halyard Health” (and all variations of that name and related intellectual property rights) and its information technology (IT) systems in exchange for $758 million, net of cash acquired. The Halyard business is a leading global provider of medical supplies and solutions for the prevention of healthcare associated infections across acute care and non-acute care markets. This business is reported as part of the Global Products segment.

The following table presents the fair value of the assets acquired and liabilities assumed recognized as of the Acquisition Date. The fair value of intangibles from this acquisition was primarily determined by applying the income approach, using several significant unobservable inputs for projected cash flows and a discount rate. These inputs are considered Level 3 inputs.

	Preliminary Fair Value Originally Estimated as of Acquisition Date (1)		Differences Between Prior and Current Period Fair Value			Fair Value as of Acquisition Date
Assets acquired:
Current assets	$	330,870	$	—		$	330,870
Goodwill	130,217		(4,675		)	125,542
Intangible assets	191,230		13,000			204,230
Other noncurrent assets	218,387		5,616			224,003
Total assets	870,704		13,941			884,645
Liabilities assumed:
Current liabilities	92,438		741			93,179
Noncurrent liabilities	20,217		13,200			33,417
Total liabilities	112,655		13,941			126,596
Fair value of net assets acquired, net of cash	$	758,049	$	—		$	758,049

⁽¹⁾ As previously reported in our 2018 Form 10-K.

We are amortizing the fair value of acquired intangible assets, primarily customer relationships, a trade name and other intellectual property, over their estimated weighted average useful lives of eight to 12 years.

Goodwill of $126 million, which we assigned to our Global Products segment, consists largely of expected opportunities to expand into new markets and further develop a presence in the medical products segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

The unaudited pro forma results of net revenue for the three and six months ended June 30, 2018 as if Halyard was acquired on January 1, 2018 were $2,528,271 and $5,110,850, respectively. The pro forma results of net loss and net loss per common share have not been represented because the effects were not material to our historic consolidated financial statements. Accordingly, the pro forma results noted above are not necessarily indicative of the results that would have been if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the future.

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Financing Receivables and Payables

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Financing Receivables and Payables

Financing Receivables and Payables

At June 30, 2019 and December 31, 2018, we had financing receivables of $194.7 million and $183.3 million, respectively, and related payables of $92.0 million and $100.3 million, respectively, outstanding under our order-to-cash program, which were included in other current assets and other current liabilities, respectively, in the consolidated balance sheets.

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

The following table summarizes the goodwill balances by segment and the changes in the carrying amount of goodwill through June 30, 2019:

	Global Solutions		Global Products			Consolidated
Carrying amount of goodwill, December 31, 2018	$	283,905	$	130,217		$	414,122
Currency translation adjustments	—		(1,796		)	(1,796		)
Acquisition	—		(4,675		)	(4,675		)
Carrying amount of goodwill, June 30, 2019	$	283,905	$	123,746		$	407,651

Intangible assets at June 30, 2019 and December 31, 2018, were as follows:

	June 30, 2019									December 31, 2018
	Customer Relationships			Tradenames			Other Intangibles			Customer Relationships			Tradenames			Other Intangibles
Gross intangible assets	$	284,452		$	90,000		$	45,685		$	267,510		$	97,000		$	42,930
Accumulated amortization	(89,713		)	(12,338		)	(7,059		)	(72,947		)	(8,544		)	(4,185		)
Net intangible assets	$	194,739		$	77,662		$	38,626		$	194,563		$	88,456		$	38,745
Weighted average useful life	10 years			11 years			8 years			10 years			11 years			8 years

At June 30, 2019, $96.9 million in net intangible assets were held in the Global Solutions segment and $214.1 million were held in the Global Products segment. Amortization expense for intangible assets was $13.1 million and $9.4 million for the three months ended June 30, 2019 and 2018 and $23.5 million and $15.8 million for the six months ended June 30, 2019 and 2018, respectively.

Based on the current carrying value of intangible assets subject to amortization, estimated amortization expense is $22.0 million for the remainder of 2019, $43.0 million for 2020, $41.3 million for 2021, $40.4 million for 2022, $39.2 million for 2023 and $35.3 million for 2024.

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Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Leases

We adopted ASU No. 2016-02, Leases (Topic 842), as of January 1, 2019. We elected to use the adoption date as our date of initial application and thus have not restated comparative prior periods. We elected the ‘package of practical expedients’, which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us.

The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize right-of-use assets or lease liabilities, and this includes not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases.

The adoption of the new standard resulted in the recording of operating lease assets and lease liabilities of approximately $197 million and $201 million, respectively, as of January 1, 2019. The standard did not materially impact our consolidated net loss and had no impact on cash flows.

We enter into non-cancelable agreements to lease most of our office and warehouse facilities with remaining terms generally ranging from one to 20 years. Certain leases include renewal options, generally for one to five-year increments. The exercise of lease renewal options is at our sole discretion. Our lease terms may include those options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We also lease some of our transportation and material handling equipment for terms generally ranging from three to 10 years. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The depreciable life of right-of-use assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. We use the implicit rate when readily determinable. The operating lease asset also includes adjustments for any lease payments made and lease incentives.

The components of lease expense were as follows:

	Classification	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	Distribution, selling and administrative expenses	$	16,802	$	34,239
Finance lease cost:
Amortization of lease assets	Distribution, selling and administrative expenses	455		1,211
Interest on lease liabilities	Interest expense, net	299		633
Total finance lease cost		754		1,844
Total lease cost		$	17,556	$	36,083

Short-term lease costs and variable lease costs are immaterial.

Supplemental balance sheet information is as follows:

	Classification	As of June 30, 2019
Assets:
Operating lease assets	Operating lease assets	$	206,199
Finance lease assets	Property and equipment, net	13,084
Total lease assets		$	219,283
Liabilities:
Current
Operating	Other current liabilities	$	48,892
Finance	Other current liabilities	2,679
Noncurrent
Operating	Operating lease liabilities, excluding current portion	161,785
Finance	Long-term debt, excluding current portion	14,704
Total lease liabilities		$	228,060

Other information related to leases was as follows:

	Six months ended June 30, 2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	34,742
Financing cash flows from finance leases	$	1,143
Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	28,694
Weighted average remaining lease term (years)
Operating leases	6.1
Finance leases	8.1
Weighted average discount rate
Operating leases	12.0		%
Finance leases	9.3		%

Maturities of lease liabilities as of June 30, 2019 were as follows:

	Operating Leases			Finance Leases			Total
2019 (remainder)	$	40,239		$	2,262		$	42,501
2020	63,545			3,186			66,731
2021	54,918			2,631			57,549
2022	34,568			2,436			37,004
2023	23,968			2,314			26,282
Thereafter	86,009			11,455			97,464
Total lease payments	303,247			24,284			327,531
Less: Interest	(92,570		)	(6,901		)	(99,471		)
Present value of lease liabilities	$	210,677		$	17,383		$	228,060

At December 31, 2018, future minimum annual payments under non-cancelable lease agreements with original terms in excess of one year, and including payments required under operating leases for facilities we have vacated, were as follows:

	Total
2019	$	64,082
2020	53,138
2021	42,480
2022	26,445
2023	19,895
Thereafter	45,708
Total minimum payments	$	251,748

Leases

Leases

We adopted ASU No. 2016-02, Leases (Topic 842), as of January 1, 2019. We elected to use the adoption date as our date of initial application and thus have not restated comparative prior periods. We elected the ‘package of practical expedients’, which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us.

The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize right-of-use assets or lease liabilities, and this includes not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases.

The adoption of the new standard resulted in the recording of operating lease assets and lease liabilities of approximately $197 million and $201 million, respectively, as of January 1, 2019. The standard did not materially impact our consolidated net loss and had no impact on cash flows.

We enter into non-cancelable agreements to lease most of our office and warehouse facilities with remaining terms generally ranging from one to 20 years. Certain leases include renewal options, generally for one to five-year increments. The exercise of lease renewal options is at our sole discretion. Our lease terms may include those options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We also lease some of our transportation and material handling equipment for terms generally ranging from three to 10 years. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The depreciable life of right-of-use assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. We use the implicit rate when readily determinable. The operating lease asset also includes adjustments for any lease payments made and lease incentives.

The components of lease expense were as follows:

	Classification	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	Distribution, selling and administrative expenses	$	16,802	$	34,239
Finance lease cost:
Amortization of lease assets	Distribution, selling and administrative expenses	455		1,211
Interest on lease liabilities	Interest expense, net	299		633
Total finance lease cost		754		1,844
Total lease cost		$	17,556	$	36,083

Short-term lease costs and variable lease costs are immaterial.

Supplemental balance sheet information is as follows:

	Classification	As of June 30, 2019
Assets:
Operating lease assets	Operating lease assets	$	206,199
Finance lease assets	Property and equipment, net	13,084
Total lease assets		$	219,283
Liabilities:
Current
Operating	Other current liabilities	$	48,892
Finance	Other current liabilities	2,679
Noncurrent
Operating	Operating lease liabilities, excluding current portion	161,785
Finance	Long-term debt, excluding current portion	14,704
Total lease liabilities		$	228,060

Other information related to leases was as follows:

	Six months ended June 30, 2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	34,742
Financing cash flows from finance leases	$	1,143
Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	28,694
Weighted average remaining lease term (years)
Operating leases	6.1
Finance leases	8.1
Weighted average discount rate
Operating leases	12.0		%
Finance leases	9.3		%

Maturities of lease liabilities as of June 30, 2019 were as follows:

	Operating Leases			Finance Leases			Total
2019 (remainder)	$	40,239		$	2,262		$	42,501
2020	63,545			3,186			66,731
2021	54,918			2,631			57,549
2022	34,568			2,436			37,004
2023	23,968			2,314			26,282
Thereafter	86,009			11,455			97,464
Total lease payments	303,247			24,284			327,531
Less: Interest	(92,570		)	(6,901		)	(99,471		)
Present value of lease liabilities	$	210,677		$	17,383		$	228,060

At December 31, 2018, future minimum annual payments under non-cancelable lease agreements with original terms in excess of one year, and including payments required under operating leases for facilities we have vacated, were as follows:

	Total
2019	$	64,082
2020	53,138
2021	42,480
2022	26,445
2023	19,895
Thereafter	45,708
Total minimum payments	$	251,748

Rent expense for all operating leases for the year ended December 31, 2018 was $78.3 million.

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Derivatives

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

We are directly and indirectly affected by changes in foreign currency, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks. We do not enter into derivative financial instruments for trading purposes.

We use a layered hedging program to hedge select anticipated foreign currency cash flows to reduce volatility in cash flows. We account for the designated foreign exchange forward contracts as cash flow hedges. These foreign exchange forward contracts generally have maturities up to 12 months and the counterparties to the transactions are typically large international financial institutions.

We enter into foreign currency contracts to manage our foreign exchange exposure related to certain balance sheet items that do not meet the requirements for hedge accounting. These derivative instruments are adjusted to fair value at the end of each period through earnings. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability.

We pay interest under our Credit Agreement which fluctuates based on changes in our benchmark interest rates. In order to mitigate the risk of increases in benchmark rates, we entered into interest rate swaps during the third quarter of 2018 whereby we agree to exchange with the counterparty, at specified intervals, the difference between fixed and variable amounts calculated by reference to the notional amount. The interest rate swaps were designated as cash flow hedges. Cash flows related to the interest rate swap agreements are included in interest expense.

We determine the fair value of our foreign currency derivatives and our interest rate swaps based on observable market-based inputs or unobservable inputs that are corroborated by market data. We do not view the fair value of our derivatives in isolation, but rather in relation to the fair values or cash flows of the underlying exposure. Our derivatives are over-the-counter instruments with liquid markets. All derivatives are carried at fair value in our consolidated balance sheets in other assets and other liabilities. We consider the risk of counterparty default to be minimal. We report cash flows from our hedging instruments in the same cash flow statement category as the hedged items.

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of June 30, 2019:

				Derivative Assets			Derivative Liabilities
	Notional Amount		Maturity Date	Classification	Fair Value		Classification	Fair Value
Cash flow hedges
Interest rate swaps	$	450,000	May 2022 and 2025	Other assets, net	$	—	Other liabilities	$	18,770
Foreign currency contracts	$	4,515	September 2019 to December 2019	Other assets, net	$	258	Other liabilities	$	—
Economic (non-designated) hedges
Foreign currency contracts	$	15,874	July 2019 to August 2019	Other assets, net	$	342	Other liabilities	$	—

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of income (loss) for the three and six months ended June 30, 2019:

	Amount of Gain/(Loss) Recognized in Other Comprehensive Income (Loss)						Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Total Amount of Income/(Expense) Line Items Presented in the Consolidated Statement of Income in Which the Effects are Recorded						Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019				Three Months Ended June 30, 2019			Six Months Ended June 30, 2019			Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Interest rate swaps	$	(8,162	)	$	(12,577	)	Interest expense, net	$	(27,682	)	$	(56,783	)	$	(361	)	$	(682	)
Foreign currency contracts	$	191		$	636		Cost of goods sold	$	(2,115,773	)	$	(4,218,736	)	$	314		$	57

The amount of ineffectiveness associated with these contracts was immaterial for the periods presented.

For the three and six months ended June 30, 2019, we recognized gains of $0.5 million and $1.0 million, respectively, associated with our economic (non-designated) foreign currency contracts.

The total notional values of derivatives that were designated and qualified for our foreign currency cash flow hedging program was $12.6 million as of June 30, 2018. We record the change in fair value of derivative instruments and the remeasurement adjustment on the foreign currency denominated asset or liability in acquisition-related and exit and realignment charges for contracts assumed with the Halyard acquisition and in other operating expense, net for all other foreign exchange contracts.

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Exit and Realignment Costs

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities [Abstract]

Exit and Realignment Costs

Exit and Realignment Costs

We periodically incur exit and realignment and other charges associated with optimizing our operations which includes the consolidation of certain distribution and logistics centers, administrative offices and warehouses in the United States and Europe. These charges also include costs associated with our strategic organizational realignment which include management changes, certain professional fees, and costs to streamline administrative functions and processes.

Exit and realignment charges by segment for the three and six months ended June 30, 2019 and 2018 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Global Solutions segment	$	1,902	$	1,737	$	2,595	$	4,444
Global Products segment	80		—		214		(29		)
Total exit and realignment charges	$	1,982	$	1,737	$	2,809	$	4,415

The following table summarizes the activity related to exit and realignment cost and related accruals through June 30, 2019 and 2018:

	Total (1)
Accrued exit and realignment costs, December 31, 2018	$	8,214
Provision for exit and realignment activities:
Severance	360
Information system restructuring costs	515
Other	83
Change in estimate	(127		)
Cash payments	(3,079		)
Accrued exit and realignment costs, March 31, 2019	$	5,966
Provision for exit and realignment activities:
Severance	1,008
Information system restructuring costs	948
Other	27
Cash payments	(2,569		)
Accrued exit and realignment costs, June 30, 2019	$	5,380
Accrued exit and realignment costs, December 31, 2017	$	11,972
Provision for exit and realignment activities:
Severance	2,295
Information system restructuring costs	177
Other	230
Change in estimate	(23		)
Cash payments	(6,886		)
Accrued exit and realignment costs, March 31, 2018	$	7,765
Provision for exit and realignment activities:
Severance	(415		)
Information system restructuring costs	1,079
Other	1,072
Cash payments	(6,358		)
Accrued exit and realignment costs, June 30, 2018	$	3,143

⁽¹⁾The accrued exit and realignment costs at June 30, 2019 and 2018 related primarily to accrued information system restructuring costs and accrued severance.

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Retirement Plans

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Retirement Plans

Retirement Plans

We have a noncontributory, unfunded retirement plan for certain officers and retirees in the United States. Certain of our foreign subsidiaries also have defined benefit pension plans covering substantially all of their respective employees.

The components of net periodic benefit cost, which are included in distribution, selling and administrative expenses, for the three and six months ended June 30, 2019 and 2018, were as follows:

	Three Months Ended   June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Service cost	$	387	$	18	$	761	$	38
Interest cost	600		419		1,200		838
Recognized net actuarial loss	260		522		520		1,044
Net periodic benefit cost	$	1,247	$	959	$	2,481	$	1,920

Certain of our foreign subsidiaries have health and welfare plans covering substantially all of their respective employees. Our expense for these plans totaled $0.6 million for the three months ended June 30, 2019 and 2018 and $1.2 million and $1.1 million for the six months ended June 30, 2019 and 2018, respectively.

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Debt

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Debt

Debt

Debt consists of the following:

	June 30, 2019						December 31, 2018
	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
3.875% Senior Notes, $275 million par value, due September 2021	$	273,835		$	237,738		$	273,577		$	207,001
4.375% Senior Notes, $275 million par value, due December 2024	273,141			203,808			272,972			174,859
Term A Loans, due July 2022	398,615			405,337			422,422			422,422
Term B Loan, due April 2025	481,579			419,331			483,327			385,284
Revolver	230,000			230,000			210,100			210,100
Finance leases and other	21,792			21,792			18,774			18,774
Total debt	1,678,962			1,518,006			1,681,172			1,418,440
Less current maturities	(54,270		)	(54,270		)	(30,590		)	(30,590		)
Long-term debt	$	1,624,692		$	1,463,736		$	1,650,582		$	1,387,850

We have a Credit Agreement (amended February 2019) with a borrowing capacity of $400 million and term loans. The interest rate on our revolving credit facility and Term A loans is based on the Eurocurrency Rate, the Federal Funds Rate or the Prime Rate, plus an adjustment based on our Consolidated Total Leverage Ratio as defined by the Credit Agreement. Our credit spread at June 30, 2019 was Eurocurrency Rate plus 3.5%. Our Term B loan accrues interest based on the Eurocurrency Rate, the Federal Funds Rate or the Prime Rate, plus interest rate margin of 3.50% per annum with respect to Base Rate Loans (as defined in the Credit Agreement), and 4.50% per annum with respect to Eurocurrency Rate Loans (as defined in the Credit Agreement). We are charged a commitment fee of between 12.5 and 25.0 basis points on the unused portion of the facility. The terms of the Credit Agreement requires us to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition.

We also have a Security and Pledge Agreement (the Security Agreement) pursuant to which we granted collateral on behalf of the holders of the 2021 Notes and the 2024 Notes and parties secured on the Credit Agreement (the Secured Parties) including first priority liens and security interests in (a) all present and future shares of capital stock owned by the Credit Parties (as defined) in the Credit Parties’ present and future subsidiaries (limited, in the case of controlled foreign corporations, to a pledge of 65% of the voting capital stock of each first-tier foreign subsidiary of each Credit Party) and (b) all present and future personal property and assets of the Credit Parties, subject to certain exceptions. Our Credit Agreement has a “springing maturity date” with respect to the revolving loans and the Term A loans and the Term B loan, if as of the date that is 91 days prior to the maturity date of the Company’s 2021 Notes or the 2024 Notes, respectively, all outstanding amounts owing under the 2021 Notes or the 2024 Notes, respectively, have not been paid in full then the Termination Date (as defined in the Credit

Agreement) of the revolving credit facility, Term A loans and Term B loan shall be the date that is 91 days prior to the maturity date of the 2021 Notes.

At June 30, 2019 and December 31, 2018, we had letters of credit of $11.7 million and $15.2 million, respectively, outstanding under the Credit Agreement. We also had letters of credit and bank guarantees outstanding for $6.1 million and $7.7 million as of June 30, 2019 and December 31, 2018, respectively, which supports certain facilities leased as well as other normal business activities in the United States and Europe.

The Credit Agreement and senior notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of either agreement. We believe we were in compliance with our debt covenants at June 30, 2019.

As of June 30, 2019, scheduled future principal payments of debt were $24.8 million in 2019, $49.6 million in 2020, $324.7 million in 2021, $528.8 million in 2022, $5.0 million in 2023, and $748.8 million thereafter.

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate was 9.2% and 5.3% for the three and six months ended June 30, 2019, compared to 4.1% and 1.2% in the same periods of 2018. The change in these rates resulted from the mixture of income and losses in jurisdictions in which the company operates, including those of which require a full valuation allowance, and the incremental income tax expense associated with the vesting of restricted stock. The liability for unrecognized tax benefits was $11.5 million at June 30, 2019 and $9.6 million at December 31, 2018. Included in the liability at June 30, 2019 and December 31, 2018 were $3.4 million and $1.9 million, respectively, of tax positions for which ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

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Net Loss per Common Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Net Income per Common Share

Net Loss per Common Share

The following summarizes the calculation of net income per common share attributable to common shareholders for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended   June 30,						Six Months Ended June 30,
(in thousands, except per share data)	2019			2018			2019			2018
Numerator:
Net loss attributable to common shareholders - basic and diluted	$	(10,476	)	$	(182,777	)	$	(24,572	)	$	(174,626	)
Denominator:
Weighted average shares outstanding - basic and diluted	59,805			59,750			60,403			60,022
Net loss per share attributable to common shareholders:
Basic and diluted	$	(0.18	)	$	(3.07	)	$	(0.41	)	$	(2.92	)

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Shareholders' Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Our Board of Directors authorized a share repurchase program of up to $100 million of our outstanding common stock to be executed at the discretion of management over a 3-year period, expiring in December 2019. The timing of repurchases and the exact number of shares of common stock to be purchased will depend upon market conditions and other factors and may be suspended or discontinued at any time. Purchases under the share repurchase program are made either pursuant to 10b5-1 plans entered into by the company from time to time and/or during the company’s scheduled quarterly trading windows for officers and directors. Our Credit Agreement contains restrictions on the amount and timing of share repurchase activity. This includes prohibiting share repurchases should a default under the Credit Agreement exist prior to or immediately after any share repurchases. We did not repurchase any shares of our common stock during the six months ended June 30, 2019 and 2018. As of June 30, 2019, we have approximately $94.0 million in remaining authorization available under the repurchase program. We have elected to allocate any excess of share repurchase price over par value to retained earnings.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The following table shows the changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2019 and 2018: 

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive loss, March 31, 2019	$	(7,949	)	$	(36,758	)	$	(7,328	)	$	(52,035	)
Other comprehensive income (loss) before reclassifications	—			7,452			(7,971		)	(519		)
Income tax	—			—			2,678			2,678
Other comprehensive income (loss) before reclassifications, net of tax	—			7,452			(5,293		)	2,159
Amounts reclassified from accumulated other comprehensive income (loss)	260			—			47			307
Income tax	(63		)	—			(16		)	(79		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	197			—			31			228
Other comprehensive income (loss)	197			7,452			(5,262		)	2,387
Accumulated other comprehensive loss, June 30, 2019	$	(7,752	)	$	(29,306	)	$	(12,590	)	$	(49,648	)

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive income (loss), March 31, 2018	$	(11,686	)	$	(4,264	)	$	173		$	(15,777	)
Other comprehensive income (loss) before reclassifications	—			(20,678		)	(190		)	(20,868		)
Income tax	—			—			68			68
Other comprehensive income (loss) before reclassifications, net of tax	—			(20,678		)	(122		)	(20,800		)
Amounts reclassified from accumulated other comprehensive income (loss)	523			—			—			523
Income tax	(149		)	—			—			(149		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	374			—			—			374
Other comprehensive income (loss)	374			(20,678		)	(122		)	(20,426		)
Accumulated other comprehensive income (loss), June 30, 2018	$	(11,312	)	$	(24,942	)	$	51		$	(36,203	)

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive loss, December 31, 2018	$	(8,146	)	$	(32,551	)	$	(4,915	)	$	(45,612	)
Other comprehensive income (loss) before reclassifications	—			3,245			(11,941		)	(8,696		)
Income tax	—			—			3,831			3,831
Other comprehensive income (loss) before reclassifications, net of tax	—			3,245			(8,110		)	(4,865		)
Amounts reclassified from accumulated other comprehensive income (loss)	520			—			625			1,145
Income tax	(126		)	—			(190		)	(316		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	394			—			435			829
Other comprehensive income (loss)	394			3,245			(7,675		)	(4,036		)
Accumulated other comprehensive loss, June 30, 2019	$	(7,752	)	$	(29,306	)	$	(12,590	)	$	(49,648	)

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive income (loss), December 31, 2017	$	(12,066	)	$	(13,185	)	$	167		$	(25,084	)
Other comprehensive income (loss) before reclassifications	—			(11,757		)	(184		)	(11,941		)
Income tax	—			—			68			68
Other comprehensive income (loss) before reclassifications, net of tax	—			(11,757		)	(116		)	(11,873		)
Amounts reclassified from accumulated other comprehensive income (loss)	1,040			—			—			1,040
Income tax	(286		)	—			—			(286		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	754			—			—			754
Other comprehensive income (loss)	754			(11,757		)	(116		)	(11,119		)
Accumulated other comprehensive income (loss), June 30, 2018	$	(11,312	)	$	(24,942	)	$	51		$	(36,203	)

We include amounts reclassified out of accumulated other comprehensive income (loss) related to defined benefit pension plans as a component of net periodic pension cost recorded in distribution, selling and administrative expenses. For the three and six months ended June 30, 2019, we reclassified $0.2 million and $0.4 million, respectively, of actuarial net losses. For the three and six months ended June 30, 2018, we reclassified $0.4 million and $0.8 million, respectively, of actuarial net losses.

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Segment Information

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Segment Information

Segment Information

We periodically evaluate our application of accounting guidance for reportable segments and disclose information about reportable segments based on the way management organizes the enterprise for making operating decisions and assessing performance. We report our business under two segments: Global Solutions and Global Products. The Global Solutions segment includes our United States and European distribution, logistics and value-added services business. Global Products manufactures and sources medical surgical products through our production and kitting operations. The Halyard business, acquired on April 30, 2018, is part of Global Products.

We evaluate the performance of our segments based on their operating income excluding intangible amortization, acquisition-related and exit and realignment charges, certain purchase price fair value adjustments, and other substantive items that, either as a result of their nature or size, would not be expected to occur as part of our normal business operations on a regular basis.

Segment assets exclude inter-segment account balances as we believe their inclusion would be misleading and not meaningful. We believe all inter-segment sales are at prices that approximate market.

The following tables present financial information by segment:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net revenue:
Segment net revenue
Global Solutions	$	2,241,965		$	2,290,173		$	4,476,111		$	4,631,295
Global Products	363,889			279,588			710,974			400,875
Total segment net revenue	2,605,854			2,569,761			5,187,085			5,032,170
Inter-segment revenue
Global Products	(121,654		)	(111,490		)	(241,498		)	(201,320		)
Total inter-segment revenue	(121,654		)	(111,490		)	(241,498		)	(201,320		)
Consolidated net revenue	$	2,484,200		$	2,458,271		$	4,945,587		$	4,830,850
Operating income (loss):
Global Solutions	$	19,454		$	23,977		$	40,525		$	60,593
Global Products	17,949			22,489			25,673			33,717
Inter-segment eliminations	(729		)	167			1,017			(75		)
Goodwill and intangible asset impairment charges	—			(165,447		)	—			(165,447		)
Intangible amortization	(13,106		)	(9,374		)	(23,466		)	(15,781		)
Acquisition-related and exit and realignment charges	(5,655		)	(24,930		)	(10,645		)	(39,690		)
Other (1)	(1,769		)	(18,933		)	(2,268		)	(21,151		)
Consolidated operating income (loss)	$	16,144		$	(172,051	)	$	30,836		$	(147,834	)
Depreciation and amortization:
Global Solutions	$	14,936		$	15,854		$	31,049		$	31,635
Global Products	15,246			10,048			27,853			12,178
Consolidated depreciation and amortization	$	30,182		$	25,902		$	58,902		$	43,813
Capital expenditures:
Global Solutions	$	7,372		$	14,544		$	18,748		$	28,146
Global Products	3,880			1,350			6,783			1,908
Consolidated capital expenditures	$	11,252		$	15,894		$	25,531		$	30,054

⁽¹⁾ Other consists of Software as a Service (SaaS) implementation costs associated with significant global IT platforms in connection with the redesign of our global information system strategy and incremental charge to cost of goods sold from purchase accounting impacts related to the sale of acquired inventory that was written up to fair value.

.

	June 30, 2019		December 31, 2018
Total assets:
Global Solutions	$	2,695,167	$	2,618,759
Global Products	1,109,565		1,051,662
Segment assets	3,804,732		3,670,421
Cash and cash equivalents	91,339		103,367
Consolidated total assets	$	3,896,071	$	3,773,788

The following table presents net revenue by geographic area, which were attributed based on the location from which we ship products or provide services.

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net revenue:
United States	$	2,270,768	$	2,248,728	$	4,574,680	$	4,494,564
International	213,432		209,543		370,907		336,286
Consolidated net revenue	$	2,484,200	$	2,458,271	$	4,945,587	$	4,830,850

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

On June 16, 2016, the FASB issued ASU No. 2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. This standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact the adoption of ASU No. 2016-13 will have on our consolidated financial statements and related disclosures. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses and ASU 2019-05, Financial Instruments - Credit Losses (Topic 326) Targeted Transition Relief. These ASUs do not change the core principle of the guidance in ASU 2016-13. Instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard. These ASUs will have the same effective date and transition requirements as ASU 2016-13.

In August 2018, the SEC adopted a final rule under SEC Release No. 33-10532, Disclosure Update and Simplification that amends certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. The amendments also expanded the disclosure requirements on the analysis of shareholders' equity for interim financial statements, in which registrants must now analyze changes in shareholders’ equity, in the form of reconciliation, for the current and comparative year-to-date periods, with subtotals for each interim period. This final rule was effective on November 5, 2018. As of the first quarter of 2019, the Company has adopted all relevant disclosure requirements, including the shareholders’ equity interim disclosures.

There have been no further changes in our significant accounting policies from those contained in our Annual Report on Form 10-K for the year ended December 31, 2018.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Owens & Minor, Inc. and the subsidiaries it controls (we, us, or our) and contain all adjustments (which are comprised only of normal recurring accruals and use of estimates) necessary to conform with U.S. generally accepted accounting principles (GAAP). All significant intercompany accounts and transactions have been eliminated. The results of operations for interim periods are not necessarily indicative of the results expected for the full year.

Reclassifications

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect reported amounts and related disclosures. Actual results may differ from these estimates.

Fair Value

The carrying amounts of cash and cash equivalents, accounts receivable, financing receivables, accounts payable and financing payables included in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments.

Segment Reporting

We periodically evaluate our application of accounting guidance for reportable segments and disclose information about reportable segments based on the way management organizes the enterprise for making operating decisions and assessing performance. We report our business under two segments: Global Solutions and Global Products. The Global Solutions segment includes our United States and European distribution, logistics and value-added services business. Global Products manufactures and sources medical surgical products through our production and kitting operations. The Halyard business, acquired on April 30, 2018, is part of Global Products.

We evaluate the performance of our segments based on their operating income excluding intangible amortization, acquisition-related and exit and realignment charges, certain purchase price fair value adjustments, and other substantive items that, either as a result of their nature or size, would not be expected to occur as part of our normal business operations on a regular basis.

Segment assets exclude inter-segment account balances as we believe their inclusion would be misleading and not meaningful. We believe all inter-segment sales are at prices that approximate market.

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Schedule of estimated fair value of assets acquired and liabilities assumed recognized

The following table presents the fair value of the assets acquired and liabilities assumed recognized as of the Acquisition Date. The fair value of intangibles from this acquisition was primarily determined by applying the income approach, using several significant unobservable inputs for projected cash flows and a discount rate. These inputs are considered Level 3 inputs.

	Preliminary Fair Value Originally Estimated as of Acquisition Date (1)		Differences Between Prior and Current Period Fair Value			Fair Value as of Acquisition Date
Assets acquired:
Current assets	$	330,870	$	—		$	330,870
Goodwill	130,217		(4,675		)	125,542
Intangible assets	191,230		13,000			204,230
Other noncurrent assets	218,387		5,616			224,003
Total assets	870,704		13,941			884,645
Liabilities assumed:
Current liabilities	92,438		741			93,179
Noncurrent liabilities	20,217		13,200			33,417
Total liabilities	112,655		13,941			126,596
Fair value of net assets acquired, net of cash	$	758,049	$	—		$	758,049

⁽¹⁾ As previously reported in our 2018 Form 10-K.

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill

The following table summarizes the goodwill balances by segment and the changes in the carrying amount of goodwill through June 30, 2019:

	Global Solutions		Global Products			Consolidated
Carrying amount of goodwill, December 31, 2018	$	283,905	$	130,217		$	414,122
Currency translation adjustments	—		(1,796		)	(1,796		)
Acquisition	—		(4,675		)	(4,675		)
Carrying amount of goodwill, June 30, 2019	$	283,905	$	123,746		$	407,651

Intangible Assets

Intangible assets at June 30, 2019 and December 31, 2018, were as follows:

	June 30, 2019									December 31, 2018
	Customer Relationships			Tradenames			Other Intangibles			Customer Relationships			Tradenames			Other Intangibles
Gross intangible assets	$	284,452		$	90,000		$	45,685		$	267,510		$	97,000		$	42,930
Accumulated amortization	(89,713		)	(12,338		)	(7,059		)	(72,947		)	(8,544		)	(4,185		)
Net intangible assets	$	194,739		$	77,662		$	38,626		$	194,563		$	88,456		$	38,745
Weighted average useful life	10 years			11 years			8 years			10 years			11 years			8 years

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Components of Lease Expense

The components of lease expense were as follows:

	Classification	Three months ended June 30, 2019		Six months ended June 30, 2019
Operating lease cost	Distribution, selling and administrative expenses	$	16,802	$	34,239
Finance lease cost:
Amortization of lease assets	Distribution, selling and administrative expenses	455		1,211
Interest on lease liabilities	Interest expense, net	299		633
Total finance lease cost		754		1,844
Total lease cost		$	17,556	$	36,083

Short-term lease costs and variable lease costs are immaterial.

Lease, Supplemental Balance Sheet Information

Supplemental balance sheet information is as follows:

	Classification	As of June 30, 2019
Assets:
Operating lease assets	Operating lease assets	$	206,199
Finance lease assets	Property and equipment, net	13,084
Total lease assets		$	219,283
Liabilities:
Current
Operating	Other current liabilities	$	48,892
Finance	Other current liabilities	2,679
Noncurrent
Operating	Operating lease liabilities, excluding current portion	161,785
Finance	Long-term debt, excluding current portion	14,704
Total lease liabilities		$	228,060

Lease, Supplemental Cash Flow Information

Other information related to leases was as follows:

	Six months ended June 30, 2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	34,742
Financing cash flows from finance leases	$	1,143
Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	28,694
Weighted average remaining lease term (years)
Operating leases	6.1
Finance leases	8.1
Weighted average discount rate
Operating leases	12.0		%
Finance leases	9.3		%

Schedule of Maturities of Operating Lease Liabilities

aturities of lease liabilities as of June 30, 2019 were as follows:

	Operating Leases			Finance Leases			Total
2019 (remainder)	$	40,239		$	2,262		$	42,501
2020	63,545			3,186			66,731
2021	54,918			2,631			57,549
2022	34,568			2,436			37,004
2023	23,968			2,314			26,282
Thereafter	86,009			11,455			97,464
Total lease payments	303,247			24,284			327,531
Less: Interest	(92,570		)	(6,901		)	(99,471		)
Present value of lease liabilities	$	210,677		$	17,383		$	228,060

Schedule of Maturities of Finance Lease Liabilities

aturities of lease liabilities as of June 30, 2019 were as follows:

	Operating Leases			Finance Leases			Total
2019 (remainder)	$	40,239		$	2,262		$	42,501
2020	63,545			3,186			66,731
2021	54,918			2,631			57,549
2022	34,568			2,436			37,004
2023	23,968			2,314			26,282
Thereafter	86,009			11,455			97,464
Total lease payments	303,247			24,284			327,531
Less: Interest	(92,570		)	(6,901		)	(99,471		)
Present value of lease liabilities	$	210,677		$	17,383		$	228,060

Schedule of Future Minimum Rental Payments for Operating Leases

At December 31, 2018, future minimum annual payments under non-cancelable lease agreements with original terms in excess of one year, and including payments required under operating leases for facilities we have vacated, were as follows:

	Total
2019	$	64,082
2020	53,138
2021	42,480
2022	26,445
2023	19,895
Thereafter	45,708
Total minimum payments	$	251,748

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Derivatives (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of June 30, 2019:

				Derivative Assets			Derivative Liabilities
	Notional Amount		Maturity Date	Classification	Fair Value		Classification	Fair Value
Cash flow hedges
Interest rate swaps	$	450,000	May 2022 and 2025	Other assets, net	$	—	Other liabilities	$	18,770
Foreign currency contracts	$	4,515	September 2019 to December 2019	Other assets, net	$	258	Other liabilities	$	—
Economic (non-designated) hedges
Foreign currency contracts	$	15,874	July 2019 to August 2019	Other assets, net	$	342	Other liabilities	$	—

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of income (loss) for the three and six months ended June 30, 2019:

	Amount of Gain/(Loss) Recognized in Other Comprehensive Income (Loss)						Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Total Amount of Income/(Expense) Line Items Presented in the Consolidated Statement of Income in Which the Effects are Recorded						Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019				Three Months Ended June 30, 2019			Six Months Ended June 30, 2019			Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Interest rate swaps	$	(8,162	)	$	(12,577	)	Interest expense, net	$	(27,682	)	$	(56,783	)	$	(361	)	$	(682	)
Foreign currency contracts	$	191		$	636		Cost of goods sold	$	(2,115,773	)	$	(4,218,736	)	$	314		$	57

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Exit and Realignment Costs (Tables)

6 Months Ended

Jun. 30, 2019

Restructuring and Related Activities [Abstract]

Summary of Accrued Exit Costs

Exit and realignment charges by segment for the three and six months ended June 30, 2019 and 2018 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Global Solutions segment	$	1,902	$	1,737	$	2,595	$	4,444
Global Products segment	80		—		214		(29		)
Total exit and realignment charges	$	1,982	$	1,737	$	2,809	$	4,415

Schedule of Restructuring and Related Costs Accrual Activity

The following table summarizes the activity related to exit and realignment cost and related accruals through June 30, 2019 and 2018:

	Total (1)
Accrued exit and realignment costs, December 31, 2018	$	8,214
Provision for exit and realignment activities:
Severance	360
Information system restructuring costs	515
Other	83
Change in estimate	(127		)
Cash payments	(3,079		)
Accrued exit and realignment costs, March 31, 2019	$	5,966
Provision for exit and realignment activities:
Severance	1,008
Information system restructuring costs	948
Other	27
Cash payments	(2,569		)
Accrued exit and realignment costs, June 30, 2019	$	5,380
Accrued exit and realignment costs, December 31, 2017	$	11,972
Provision for exit and realignment activities:
Severance	2,295
Information system restructuring costs	177
Other	230
Change in estimate	(23		)
Cash payments	(6,886		)
Accrued exit and realignment costs, March 31, 2018	$	7,765
Provision for exit and realignment activities:
Severance	(415		)
Information system restructuring costs	1,079
Other	1,072
Cash payments	(6,358		)
Accrued exit and realignment costs, June 30, 2018	$	3,143

⁽¹⁾The accrued exit and realignment costs at June 30, 2019 and 2018 related primarily to accrued information system restructuring costs and accrued severance.

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Retirement Plans (Tables)

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Schedule of Components of Net Periodic Benefit Cost for Domestic Retirement Plan

The components of net periodic benefit cost, which are included in distribution, selling and administrative expenses, for the three and six months ended June 30, 2019 and 2018, were as follows:

	Three Months Ended   June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Service cost	$	387	$	18	$	761	$	38
Interest cost	600		419		1,200		838
Recognized net actuarial loss	260		522		520		1,044
Net periodic benefit cost	$	1,247	$	959	$	2,481	$	1,920

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Debt - (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Schedule of Debt

Debt consists of the following:

	June 30, 2019						December 31, 2018
	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
3.875% Senior Notes, $275 million par value, due September 2021	$	273,835		$	237,738		$	273,577		$	207,001
4.375% Senior Notes, $275 million par value, due December 2024	273,141			203,808			272,972			174,859
Term A Loans, due July 2022	398,615			405,337			422,422			422,422
Term B Loan, due April 2025	481,579			419,331			483,327			385,284
Revolver	230,000			230,000			210,100			210,100
Finance leases and other	21,792			21,792			18,774			18,774
Total debt	1,678,962			1,518,006			1,681,172			1,418,440
Less current maturities	(54,270		)	(54,270		)	(30,590		)	(30,590		)
Long-term debt	$	1,624,692		$	1,463,736		$	1,650,582		$	1,387,850

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Net Loss per Common Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Summary of Calculation of Net Income Per Common Share

The following summarizes the calculation of net income per common share attributable to common shareholders for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended   June 30,						Six Months Ended June 30,
(in thousands, except per share data)	2019			2018			2019			2018
Numerator:
Net loss attributable to common shareholders - basic and diluted	$	(10,476	)	$	(182,777	)	$	(24,572	)	$	(174,626	)
Denominator:
Weighted average shares outstanding - basic and diluted	59,805			59,750			60,403			60,022
Net loss per share attributable to common shareholders:
Basic and diluted	$	(0.18	)	$	(3.07	)	$	(0.41	)	$	(2.92	)

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Changes in Accumulated Other Comprehensive Income (Loss) by Component

The following table shows the changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2019 and 2018: 

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive loss, March 31, 2019	$	(7,949	)	$	(36,758	)	$	(7,328	)	$	(52,035	)
Other comprehensive income (loss) before reclassifications	—			7,452			(7,971		)	(519		)
Income tax	—			—			2,678			2,678
Other comprehensive income (loss) before reclassifications, net of tax	—			7,452			(5,293		)	2,159
Amounts reclassified from accumulated other comprehensive income (loss)	260			—			47			307
Income tax	(63		)	—			(16		)	(79		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	197			—			31			228
Other comprehensive income (loss)	197			7,452			(5,262		)	2,387
Accumulated other comprehensive loss, June 30, 2019	$	(7,752	)	$	(29,306	)	$	(12,590	)	$	(49,648	)

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive income (loss), March 31, 2018	$	(11,686	)	$	(4,264	)	$	173		$	(15,777	)
Other comprehensive income (loss) before reclassifications	—			(20,678		)	(190		)	(20,868		)
Income tax	—			—			68			68
Other comprehensive income (loss) before reclassifications, net of tax	—			(20,678		)	(122		)	(20,800		)
Amounts reclassified from accumulated other comprehensive income (loss)	523			—			—			523
Income tax	(149		)	—			—			(149		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	374			—			—			374
Other comprehensive income (loss)	374			(20,678		)	(122		)	(20,426		)
Accumulated other comprehensive income (loss), June 30, 2018	$	(11,312	)	$	(24,942	)	$	51		$	(36,203	)

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive loss, December 31, 2018	$	(8,146	)	$	(32,551	)	$	(4,915	)	$	(45,612	)
Other comprehensive income (loss) before reclassifications	—			3,245			(11,941		)	(8,696		)
Income tax	—			—			3,831			3,831
Other comprehensive income (loss) before reclassifications, net of tax	—			3,245			(8,110		)	(4,865		)
Amounts reclassified from accumulated other comprehensive income (loss)	520			—			625			1,145
Income tax	(126		)	—			(190		)	(316		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	394			—			435			829
Other comprehensive income (loss)	394			3,245			(7,675		)	(4,036		)
Accumulated other comprehensive loss, June 30, 2019	$	(7,752	)	$	(29,306	)	$	(12,590	)	$	(49,648	)

	Retirement Plans			Currency Translation Adjustments			Derivatives and Other			Total
Accumulated other comprehensive income (loss), December 31, 2017	$	(12,066	)	$	(13,185	)	$	167		$	(25,084	)
Other comprehensive income (loss) before reclassifications	—			(11,757		)	(184		)	(11,941		)
Income tax	—			—			68			68
Other comprehensive income (loss) before reclassifications, net of tax	—			(11,757		)	(116		)	(11,873		)
Amounts reclassified from accumulated other comprehensive income (loss)	1,040			—			—			1,040
Income tax	(286		)	—			—			(286		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	754			—			—			754
Other comprehensive income (loss)	754			(11,757		)	(116		)	(11,119		)
Accumulated other comprehensive income (loss), June 30, 2018	$	(11,312	)	$	(24,942	)	$	51		$	(36,203	)

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Financial Information by Segment

The following tables present financial information by segment:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net revenue:
Segment net revenue
Global Solutions	$	2,241,965		$	2,290,173		$	4,476,111		$	4,631,295
Global Products	363,889			279,588			710,974			400,875
Total segment net revenue	2,605,854			2,569,761			5,187,085			5,032,170
Inter-segment revenue
Global Products	(121,654		)	(111,490		)	(241,498		)	(201,320		)
Total inter-segment revenue	(121,654		)	(111,490		)	(241,498		)	(201,320		)
Consolidated net revenue	$	2,484,200		$	2,458,271		$	4,945,587		$	4,830,850
Operating income (loss):
Global Solutions	$	19,454		$	23,977		$	40,525		$	60,593
Global Products	17,949			22,489			25,673			33,717
Inter-segment eliminations	(729		)	167			1,017			(75		)
Goodwill and intangible asset impairment charges	—			(165,447		)	—			(165,447		)
Intangible amortization	(13,106		)	(9,374		)	(23,466		)	(15,781		)
Acquisition-related and exit and realignment charges	(5,655		)	(24,930		)	(10,645		)	(39,690		)
Other (1)	(1,769		)	(18,933		)	(2,268		)	(21,151		)
Consolidated operating income (loss)	$	16,144		$	(172,051	)	$	30,836		$	(147,834	)
Depreciation and amortization:
Global Solutions	$	14,936		$	15,854		$	31,049		$	31,635
Global Products	15,246			10,048			27,853			12,178
Consolidated depreciation and amortization	$	30,182		$	25,902		$	58,902		$	43,813
Capital expenditures:
Global Solutions	$	7,372		$	14,544		$	18,748		$	28,146
Global Products	3,880			1,350			6,783			1,908
Consolidated capital expenditures	$	11,252		$	15,894		$	25,531		$	30,054

⁽¹⁾ Other consists of Software as a Service (SaaS) implementation costs associated with significant global IT platforms in connection with the redesign of our global information system strategy and incremental charge to cost of goods sold from purchase accounting impacts related to the sale of acquired inventory that was written up to fair value.

.

Consolidated Total Assets

	June 30, 2019		December 31, 2018
Total assets:
Global Solutions	$	2,695,167	$	2,618,759
Global Products	1,109,565		1,051,662
Segment assets	3,804,732		3,670,421
Cash and cash equivalents	91,339		103,367
Consolidated total assets	$	3,896,071	$	3,773,788

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical

The following table presents net revenue by geographic area, which were attributed based on the location from which we ship products or provide services.

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net revenue:
United States	$	2,270,768	$	2,248,728	$	4,574,680	$	4,494,564
International	213,432		209,543		370,907		336,286
Consolidated net revenue	$	2,484,200	$	2,458,271	$	4,945,587	$	4,830,850

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Acquisitions - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
	Apr. 30, 2018	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill			$ 407,651		$ 414,122
Halyard's Health And IT System
Business Acquisition [Line Items]
Combined consideration, net of cash acquired	$ 758,000
Goodwill	$ 126,000		$ 125,542
Business Acquisition, Pro Forma Revenue		$ 2,528,271		$ 5,110,850
Halyard's Health And IT System | Minimum
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			8 years
Halyard's Health And IT System | Maximum
Business Acquisition [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			12 years

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Acquisitions - Allocation of purchase price (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Apr. 30, 2018	Aug. 01, 2017
Assets acquired:
Goodwill	$ 407,651	$ 414,122
Halyard's Health And IT System
Assets acquired:
Current assets	330,870
Goodwill	125,542		$ 126,000
Intangible assets	204,230
Other noncurrent assets	224,003
Total assets	884,645
Liabilities assumed:
Current liabilities	93,179
Noncurrent liabilities	33,417
Total liabilities	126,596
Fair value of net assets acquired, net of cash	758,049
Preliminary Fair Value Originally Estimated as of Acquisition Date | Halyard's Health And IT System
Assets acquired:
Current assets				$ 330,870
Goodwill				130,217
Intangible assets				191,230
Other noncurrent assets				218,387
Total assets				870,704
Liabilities assumed:
Current liabilities				92,438
Noncurrent liabilities				20,217
Total liabilities				112,655
Fair value of net assets acquired, net of cash				$ 758,049
Differences Between Prior and Current Period Fair Value | Halyard's Health And IT System
Assets acquired:
Current assets	0
Goodwill	(4,675)
Intangible assets	13,000
Other noncurrent assets	5,616
Total assets	13,941
Liabilities assumed:
Current liabilities	741
Noncurrent liabilities	13,200
Total liabilities	13,941
Fair value of net assets acquired, net of cash	$ 0

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Financing Receivables and Payables - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Financing Receivables [Line Items]
Other current liabilities	$ 384,040	$ 314,219
Other Current Assets
Financing Receivables [Line Items]
Other current assets	194,700	183,300
Other Current Liabilities
Financing Receivables [Line Items]
Other current liabilities	$ 92,000	$ 100,300

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Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Goodwill [Roll Forward]
Carrying amount of goodwill, December 31, 2018	$ 414,122
Currency translation adjustments	(1,796)
Acquisition	(4,675)
Carrying amount of goodwill, June 30, 2019	407,651
Global Solutions
Goodwill [Roll Forward]
Carrying amount of goodwill, December 31, 2018	283,905
Currency translation adjustments	0
Acquisition	0
Carrying amount of goodwill, June 30, 2019	283,905
Global Products
Goodwill [Roll Forward]
Carrying amount of goodwill, December 31, 2018	130,217
Currency translation adjustments	(1,796)
Acquisition	(4,675)
Carrying amount of goodwill, June 30, 2019	$ 123,746

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Goodwill and Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Net intangible assets	$ 311,027	$ 321,764
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross intangible assets	284,452	267,510
Accumulated amortization	(89,713)	(72,947)
Net intangible assets	$ 194,739	$ 194,563
Finite-lived intangible asset, weighted average useful life	10 years	10 years
Tradenames
Finite-Lived Intangible Assets [Line Items]
Gross intangible assets	$ 90,000	$ 97,000
Accumulated amortization	(12,338)	(8,544)
Net intangible assets	$ 77,662	$ 88,456
Finite-lived intangible asset, weighted average useful life	11 years	11 years
Other Intangibles
Finite-Lived Intangible Assets [Line Items]
Gross intangible assets	$ 45,685	$ 42,930
Accumulated amortization	(7,059)	(4,185)
Net intangible assets	$ 38,626	$ 38,745
Finite-lived intangible asset, weighted average useful life	8 years	8 years

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 311,027		$ 311,027		$ 321,764
Amortization expense for intangible assets	13,100	$ 9,400	23,500	$ 15,800
Estimated amortization expense for the remainder of 2019	22,000		22,000
Estimated amortization expense for 2020	43,000		43,000
Estimated amortization expense for 2021	41,300		41,300
Estimated amortization expense for 2022	40,400		40,400
Estimated amortization expense for 2023	39,200		39,200
Estimated amortization expense for 2024	35,300		35,300
Global Solutions
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	96,900		96,900
Global Products
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 214,100		$ 214,100

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Leases - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2019	Jan. 01, 2019
Lessee, Lease, Description [Line Items]
Operating lease assets		$ 206,199
Operating lease liabilities		$ 210,677
Rent expense, net	$ 78,300
Minimum
Lessee, Lease, Description [Line Items]
Lessee, operating lease, renewal term		1 year
Maximum
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract		12 months
Lessee, operating lease, renewal term		5 years
Transportation And Material Handling Equipment [Member] | Minimum
Lessee, Lease, Description [Line Items]
Lessor, operating lease, term of contract		3 years
Transportation And Material Handling Equipment [Member] | Maximum
Lessee, Lease, Description [Line Items]
Lessor, operating lease, term of contract		10 years
Office and Warehouse Facilities [Member] | Minimum
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract		1 year
Office and Warehouse Facilities [Member] | Maximum
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract		20 years
Accounting Standards Update 2016-02
Lessee, Lease, Description [Line Items]
Operating lease assets			$ 197,000
Operating lease liabilities			$ 201,000

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Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases [Abstract]
Operating lease cost	$ 16,802	$ 34,239
Finance lease cost:
Amortization of lease assets	455	1,211
Interest on lease liabilities	299	633
Total finance lease cost	754	1,844
Total lease cost	$ 17,556	36,083
Short-term lease cost		$ 3,300

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Leases - Supplemental balance sheet information (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Assets
Operating lease assets	$ 206,199
Finance lease assets	13,084
Total lease assets	219,283
Current
Operating	48,892
Finance	2,679
Noncurrent
Operating	161,785
Finance	14,704
Present value of lease liabilities	$ 228,060

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Leases - Supplemental cash flow information (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Leases [Abstract]
Operating cash flows from operating and finance leases	$ 34,742
Financing cash flows from finance leases	1,143
Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$ 28,694
Operating lease, weighted average remaining lease term (years)	6 years 1 month 6 days
Finance lease, weighted average remaining lease term (years)	8 years 1 month 6 days
Lessee, operating lease, discount rate (percentage)	12.00%
Lessee, finance lease, discount rate (percentage)	9.30%

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Leases - Maturities of lease liabilities (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	$ 40,239
Lessee, Operating Lease, Liability, Payments, Due Year Two	63,545
Lessee, Operating Lease, Liability, Payments, Due Year Three	54,918
Lessee, Operating Lease, Liability, Payments, Due Year Four	34,568
Lessee, Operating Lease, Liability, Payments, Due Year Five	23,968
Lessee, Operating Lease, Liability, Payments, Due after Year Five	86,009
Lessee, Operating Lease, Liability, Payments, Due	303,247
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(92,570)
Operating lease liabilities	210,677
Finance Lease, Liability, Payment, Due [Abstract]
Finance Lease, Liability, Payments, Remainder of Fiscal Year	2,262
Finance Lease, Liability, Payments, Due Year Two	3,186
Finance Lease, Liability, Payments, Due Year Three	2,631
Finance Lease, Liability, Payments, Due Year Four	2,436
Finance Lease, Liability, Payments, Due Year Five	2,314
Finance Lease, Liability, Payments, Due after Year Five	11,455
Finance Lease, Liability, Payment, Due	24,284
Finance Lease, Liability, Undiscounted Excess Amount	(6,901)
Finance leases and other	17,383
Operating Lease And Finance Lease Liabilities, Payments Due [Abstract]
2019 (remainder)	42,501
2020	66,731
2021	57,549
2022	37,004
2023	26,282
Thereafter	97,464
Total lease payments	327,531
Less: Interest	(99,471)
Present value of lease liabilities	$ 228,060

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Leases - Future minimum annual payments under non-cancelable lease agreements (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 64,082
2020	53,138
2021	42,480
2022	26,445
2023	19,895
Thereafter	45,708
Total minimum payments	$ 251,748

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Derivatives - Narrative (Details) - Foreign Exchange Contract - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018
Designated as Hedging Instrument | Cash Flow Hedging
Derivative [Line Items]
Derivative, term of contract		12 months
Notional Amount	$ 4,515	$ 4,515	$ 12,600
Not Designated as Hedging Instrument, Economic Hedge
Derivative [Line Items]
Derivative, gain on derivative	500	1,000
Not Designated as Hedging Instrument, Economic Hedge | Cash Flow Hedging
Derivative [Line Items]
Notional Amount	$ 15,874	$ 15,874

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Derivatives - Summary of the terms and fair value of our outstanding derivative financial instruments (Details) - Cash Flow Hedging - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
Designated as Hedging Instrument | Interest Rate Swap
Derivative [Line Items]
Notional Amount	$ 450,000
Designated as Hedging Instrument | Foreign Exchange Contract
Derivative [Line Items]
Notional Amount	4,515	$ 12,600
Not Designated as Hedging Instrument, Economic Hedge | Foreign Exchange Contract
Derivative [Line Items]
Notional Amount	15,874
Other assets, net | Designated as Hedging Instrument | Interest Rate Swap
Derivative [Line Items]
Derivative Assets	0
Other assets, net | Designated as Hedging Instrument | Foreign Exchange Contract
Derivative [Line Items]
Derivative Assets	258
Other assets, net | Not Designated as Hedging Instrument, Economic Hedge | Foreign Exchange Contract
Derivative [Line Items]
Derivative Assets	342
Other liabilities | Designated as Hedging Instrument | Interest Rate Swap
Derivative [Line Items]
Derivative Liabilities	18,770
Other liabilities | Designated as Hedging Instrument | Foreign Exchange Contract
Derivative [Line Items]
Derivative Liabilities	0
Other liabilities | Not Designated as Hedging Instrument, Economic Hedge | Foreign Exchange Contract
Derivative [Line Items]
Derivative Liabilities	$ 0

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Derivatives - Summary of the effect of cash flow hedge (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Interest Rate Swap
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain/(Loss) Recognized in Other Comprehensive Income (Loss)	$ (8,162)	$ (12,577)
Foreign Exchange Contract
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain/(Loss) Recognized in Other Comprehensive Income (Loss)	191	636
Interest expense, net
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	(27,682)	(56,783)
Interest expense, net | Reclassification out of Accumulated Other Comprehensive Income | Interest Rate Swap
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	(361)	(682)
Cost of goods sold
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	(2,115,773)	(4,218,736)
Cost of goods sold | Reclassification out of Accumulated Other Comprehensive Income | Foreign Exchange Contract
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	$ 314	$ 57

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Exit and Realignment Costs - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Restructuring Cost and Reserve [Line Items]
Exit and realignment charges	$ 1,982	$ 1,737	$ 2,809	$ 4,415
Global Solutions
Restructuring Cost and Reserve [Line Items]
Exit and realignment charges	1,902	1,737	2,595	4,444
Global Products
Restructuring Cost and Reserve [Line Items]
Exit and realignment charges	$ 80	$ 0	$ 214	$ (29)

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Exit and Realignment Costs - Accrual for Exit and Realignment Costs (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Severance
Restructuring Reserve [Roll Forward]
Accrued exit and realignment costs, beginning of period	$ 5,966	$ 8,214	$ 7,765	$ 11,972
Provision for exit and realignment activities:	1,008	360	(415)	2,295
Change in estimate		(127)		(23)
Cash payments	(2,569)	(3,079)	(6,358)	(6,886)
Accrued exit and realignment costs, end of period	5,380	5,966	3,143	7,765
Information system restructuring costs
Restructuring Reserve [Roll Forward]
Provision for exit and realignment activities:	948	515	1,079	177
Other
Restructuring Reserve [Roll Forward]
Provision for exit and realignment activities:	$ 27	$ 83	$ 1,072	$ 230

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Retirement Plans - Components of Net Periodic Benefit Cost (Detail) - Domestic Plan - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 387	$ 18	$ 761	$ 38
Interest cost	600	419	1,200	838
Recognized net actuarial loss	260	522	520	1,044
Net periodic benefit cost	$ 1,247	$ 959	$ 2,481	$ 1,920

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Retirement Plans - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Foreign Plan
Defined Benefit Plan Disclosure [Line Items]
Other postretirement benefits expense (reversal of expense), noncash	$ 0.6	$ 0.6	$ 1.2	$ 1.1

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term debt, excluding current portion	$ 1,624,692	$ 1,650,582
Senior Notes | 3.875% Senior Notes, $275 million par value, due September 2021
Debt Instrument [Line Items]
Debt instrument, face amount	$ 275,000	$ 275,000
Interest rate of debt	3.875%	3.875%
Senior Notes | 4.375% Senior Notes, $275 million par value, due December 2024
Debt Instrument [Line Items]
Debt instrument, face amount	$ 275,000	$ 275,000
Interest rate of debt	4.375%	4.375%
Carrying Amount
Debt Instrument [Line Items]
Finance leases and other	$ 21,792
Finance leases and other		$ 18,774
Total debt	1,678,962	1,681,172
Less current maturities	(54,270)	(30,590)
Long-term debt, excluding current portion	1,624,692	1,650,582
Carrying Amount | Senior Notes | 3.875% Senior Notes, $275 million par value, due September 2021
Debt Instrument [Line Items]
Long-term debt	273,835	273,577
Carrying Amount | Senior Notes | 4.375% Senior Notes, $275 million par value, due December 2024
Debt Instrument [Line Items]
Long-term debt	273,141	272,972
Carrying Amount | Term Loan | Term Loan
Debt Instrument [Line Items]
Long-term debt	398,615	422,422
Carrying Amount | Term Loan | Term B Loan, due April 2025
Debt Instrument [Line Items]
Long-term debt	481,579	483,327
Carrying Amount | Revolving Credit Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt	230,000	210,100
Estimated Fair Value
Debt Instrument [Line Items]
Finance leases and other	21,792
Finance leases and other		18,774
Total debt	1,518,006	1,418,440
Less current maturities	(54,270)	(30,590)
Long-term debt, excluding current portion	1,463,736	1,387,850
Estimated Fair Value | Senior Notes | 3.875% Senior Notes, $275 million par value, due September 2021
Debt Instrument [Line Items]
Long-term debt	237,738	207,001
Estimated Fair Value | Senior Notes | 4.375% Senior Notes, $275 million par value, due December 2024
Debt Instrument [Line Items]
Long-term debt	203,808	174,859
Estimated Fair Value | Term Loan | Term Loan
Debt Instrument [Line Items]
Long-term debt	405,337	422,422
Estimated Fair Value | Term Loan | Term B Loan, due April 2025
Debt Instrument [Line Items]
Long-term debt	419,331	385,284
Estimated Fair Value | Revolving Credit Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt	$ 230,000	$ 210,100

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Debt - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Common stock, voting rights, pledged	65.00%
Senior Notes
Debt Instrument [Line Items]
Rate of interest discounted	0.30%
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 400.0
Letter of Credit
Debt Instrument [Line Items]
Letters of credit outstanding, amount	11.7	$ 15.2
European Lease Agreement | Replaced Line Of Credit
Debt Instrument [Line Items]
Letters of credit outstanding, amount	6.1	$ 7.7
Long-term debt, maturities, repayments of principal in 2019	24.8
Long-term debt, maturities, repayments of principal in 2020	49.6
Long-term debt, maturities, repayments of principal in 2021	324.7
Long-term debt, maturities, repayments of principal in 2022	528.8
Long-term debt, maturities, repayments of principal in 2023	5.0
Long-term debt, maturities, repayments of principal in the years thereafter	$ 748.8
Term Loan
Debt Instrument [Line Items]
Debt Convent, springing maturity date, period	91 days
Base Rate | Term B Loan, due April 2025
Debt Instrument [Line Items]
Best instrument, basis spread on variable rate	3.50%
Eurodollar | Revolving Credit Facility
Debt Instrument [Line Items]
Best instrument, basis spread on variable rate	3.50%
Eurodollar | Term B Loan, due April 2025
Debt Instrument [Line Items]
Best instrument, basis spread on variable rate	4.50%
Minimum | Revolving Credit Facility
Debt Instrument [Line Items]
Unused capacity, commitment fee percentage	0.125%
Maximum | Revolving Credit Facility
Debt Instrument [Line Items]
Unused capacity, commitment fee percentage	0.25%

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate	9.20%	4.10%	5.30%	1.20%
Liability for unrecognized tax benefit	$ 11.5		$ 11.5		$ 9.6
Unrecognized tax benefit highly certain	$ 3.4		$ 3.4		$ 1.9

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Net Loss per Common Share - Summary of Calculation of Net Income Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Numerator:
Net loss attributable to common shareholders - basic and diluted	$ (10,476)	$ (182,777)	$ (24,572)	$ (174,626)
Denominator:
Weighted average shares outstanding - basic and diluted (in shares)	59,805,000	59,750,000	60,403,000	60,022,000
Net loss per share attributable to common shareholders:
Basic and diluted (in usd per share)	$ (0.18)	$ (3.07)	$ (0.41)	$ (2.92)

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Shareholders' Equity - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, term (in years)	3 years
Stock repurchase program, remaining authorized repurchase amount	$ 94.0
October 2016 Share Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Share repurchase program, authorized amount	$ 100.0

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Accumulated Other Comprehensive Income (Loss) - Changes in Accumulated Income (Loss) by Component (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Total other comprehensive income (loss), net of tax	$ 2,387	$ (20,426)	$ (4,036)	$ (11,119)
Accumulated other comprehensive income (loss), ending balance	(12,590)		(12,590)
Retirement Plans
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income (loss), beginning balance	(7,949)	(11,686)	(8,146)	(12,066)
Other comprehensive income (loss) before reclassifications	0	0	0	0
Income tax	0	0	0	0
Other comprehensive income (loss) before reclassifications, net of tax	0	0	0	0
Amounts reclassified from accumulated other comprehensive income (loss)	260	523	520	1,040
Income tax	(63)	(149)	(126)	(286)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	197	374	394	754
Total other comprehensive income (loss), net of tax	197	374	394	754
Accumulated other comprehensive income (loss), ending balance	(7,752)	(11,312)	(7,752)	(11,312)
Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income (loss), beginning balance	(36,758)	(4,264)	(32,551)	(13,185)
Other comprehensive income (loss) before reclassifications	7,452	(20,678)	3,245	(11,757)
Income tax	0	0	0	0
Other comprehensive income (loss) before reclassifications, net of tax	7,452	(20,678)	3,245	(11,757)
Amounts reclassified from accumulated other comprehensive income (loss)	0	0	0	0
Income tax	0	0	0	0
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	0	0	0	0
Total other comprehensive income (loss), net of tax	7,452	(20,678)	3,245	(11,757)
Accumulated other comprehensive income (loss), ending balance	(29,306)	(24,942)	(29,306)	(24,942)
Derivatives and Other
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income (loss), beginning balance	(7,328)	173	(4,915)	167
Other comprehensive income (loss) before reclassifications	(7,971)	(190)	(11,941)	(184)
Income tax	2,678	68	3,831	68
Other comprehensive income (loss) before reclassifications, net of tax	(5,293)	(122)	(8,110)	(116)
Amounts reclassified from accumulated other comprehensive income (loss)	47	0	625	0
Income tax	(16)	0	(190)	0
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	31	0	435	0
Total other comprehensive income (loss), net of tax	(5,262)	(122)	(7,675)	(116)
Accumulated other comprehensive income (loss), ending balance	(12,590)	51	(12,590)	51
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income (loss), beginning balance	(52,035)	(15,777)	(45,612)	(25,084)
Other comprehensive income (loss) before reclassifications	(519)	(20,868)	(8,696)	(11,941)
Income tax	2,678	68	3,831	68
Other comprehensive income (loss) before reclassifications, net of tax	2,159	(20,800)	(4,865)	(11,873)
Amounts reclassified from accumulated other comprehensive income (loss)	307	523	1,145	1,040
Income tax	(79)	(149)	(316)	(286)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	228	374	829	754
Total other comprehensive income (loss), net of tax	2,387	(20,426)	(4,036)	(11,119)
Accumulated other comprehensive income (loss), ending balance	$ (49,648)	$ (36,203)	$ (49,648)	$ (36,203)

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Accumulated Other Comprehensive Income (Loss) - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Equity [Abstract]
Amounts reclassified out of accumulated other comprehensive income related to defined benefit pension plans as component of net periodic benefit cost, actuarial net gain or loss	$ 0.2	$ 0.4	$ 0.4	$ 0.8

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Segment Information Financial Information by Segment (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) segment	Jun. 30, 2018 USD ($)
Segment Reporting, Revenue Reconciling Item [Line Items]
Number of reportable segments | segment			2
Net revenue	$ 2,484,200	$ 2,458,271	$ 4,945,587	$ 4,830,850
Operating earnings (loss):	16,144	(172,051)	30,836	(147,834)
Goodwill and intangible asset impairment charges	0	165,447	0	165,447
Amortization of Intangible Assets	(13,100)	(9,400)	(23,500)	(15,800)
Acquisition-related and exit and realignment charges	(5,655)	(24,930)	(10,645)	(39,690)
Depreciation and amortization	30,182	25,902	58,902	43,813
Capital expenditures	11,252	15,894	25,531	30,054
Operating Segments
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue	2,605,854	2,569,761	5,187,085	5,032,170
Operating Segments | Global Solutions
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue	2,241,965	2,290,173	4,476,111	4,631,295
Operating earnings (loss):	19,454	23,977	40,525	60,593
Depreciation and amortization	14,936	15,854	31,049	31,635
Capital expenditures	7,372	14,544	18,748	28,146
Operating Segments | Global Products
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue	363,889	279,588	710,974	400,875
Operating earnings (loss):	17,949	22,489	25,673	33,717
Depreciation and amortization	15,246	10,048	27,853	12,178
Capital expenditures	3,880	1,350	6,783	1,908
Intersegment Eliminations
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue	(121,654)	(111,490)	(241,498)	(201,320)
Operating earnings (loss):	(729)	167	1,017	(75)
Intersegment Eliminations | Global Products
Segment Reporting, Revenue Reconciling Item [Line Items]
Net revenue	(121,654)	(111,490)	(241,498)	(201,320)
Segment Reconciling Items
Segment Reporting, Revenue Reconciling Item [Line Items]
Goodwill and intangible asset impairment charges	0	(165,447)	0	(165,447)
Amortization of Intangible Assets	(13,106)	(9,374)	(23,466)	(15,781)
Acquisition-related and exit and realignment charges	(5,655)	(24,930)	(10,645)	(39,690)
Other
Segment Reporting, Revenue Reconciling Item [Line Items]
Operating earnings (loss):	$ (1,769)	$ (18,933)	$ (2,268)	$ (21,151)

XML

Segment Information Consolidated Total Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 3,896,071	$ 3,773,788
Cash and cash equivalents	91,339	103,367
Operating Segments
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	3,804,732	3,670,421
Operating Segments | Global Solutions
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	2,695,167	2,618,759
Operating Segments | Global Products
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	1,109,565	1,051,662
Segment Reconciling Items
Segment Reporting, Asset Reconciling Item [Line Items]
Cash and cash equivalents	$ 91,339	$ 103,367

XML

Segment Information Net revenue by geographic area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Segment Reporting Information [Line Items]
Net revenue	$ 2,484,200	$ 2,458,271	$ 4,945,587	$ 4,830,850
United States
Segment Reporting Information [Line Items]
Net revenue	2,270,768	2,248,728	4,574,680	4,494,564
International
Segment Reporting Information [Line Items]
Net revenue	$ 213,432	$ 209,543	$ 370,907	$ 336,286