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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________ 
FORM 10-Q
________________________________________________ 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
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)
_______________________________________________________
Virginia54-1701843
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
9120 Lockwood BoulevardMechanicsvilleVirginia23116
(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 (804723-7000
    Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $2 par value per shareOMINew York Stock Exchange
_________________________________________________________
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically 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       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 filerAccelerated 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  
The number of shares of Owens & Minor, Inc.’s common stock outstanding as of October 29, 2020, was 73,512,279 shares.



Table of Contents
Owens & Minor, Inc. and Subsidiaries
Index
 
Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.
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Part I. Financial Information
Item 1. Financial Statements
Owens & Minor, Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share data)2020201920202019
Net revenue$2,187,928 $2,292,752 $6,118,340 $7,020,296 
Cost of goods sold1,843,589 2,012,130 5,236,035 6,176,537 
Gross margin344,339 280,622 882,305 843,759 
Distribution, selling and administrative expenses262,538 248,661 758,320 767,986 
Acquisition-related and exit and realignment charges6,382 4,522 18,500 14,776 
Other operating (income) expense, net(134)1,329 (3,020)2,385 
Operating income75,553 26,110 108,505 58,612 
Interest expense, net20,975 24,050 65,923 75,557 
Other expense, net1,093 550 1,387 4,014 
Income (loss) from continuing operations before income taxes53,485 1,510 41,195 (20,959)
Income tax provision (benefit)7,404 (1,910)3,863 (3,726)
Income (loss) from continuing operations, net of tax46,081 3,420 37,332 (17,233)
Loss from discontinued operations, net of tax (2,196)(58,203)(6,115)
Net income (loss)$46,081 $1,224 $(20,871)$(23,348)
Income (loss) from continuing operations per common share: basic and diluted$0.76 $0.06 $0.61 $(0.28)
Loss from discontinued operations per common share: basic and diluted (0.04)(0.95)(0.11)
Net income (loss) per common share: basic and diluted$0.76 $0.02 $(0.34)$(0.39)
See accompanying notes to consolidated financial statements.
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Owens & Minor, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2020201920202019
Net income (loss)$46,081 $1,224 $(20,871)$(23,348)
Other comprehensive income (loss), net of tax:
Currency translation adjustments (net of income tax of $0 in 2020 and 2019)
5,173 (9,038)7,003 (5,793)
Change in unrecognized net periodic pension costs (net of income tax of $47 and $135 in 2020, and $61 and $187 in 2019)
167 199 932 593 
Net unrealized gain (loss) on derivative instruments (net of income tax of $831 and income tax benefit of $3,232 in 2020, and $1,225 and $4,866 in 2019)
1,681 (1,789)(9,792)(9,464)
Total other comprehensive income (loss), net of tax7,021 (10,628)(1,857)(14,664)
Comprehensive income (loss)$53,102 $(9,404)$(22,728)$(38,012)
See accompanying notes to consolidated financial statements.
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Owens & Minor, Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited)
 
September 30,December 31,
(in thousands, except per share data)20202019
Assets
Current assets
Cash and cash equivalents$77,256 $67,030 
Accounts receivable, net of allowances of $20,135 and $21,015
688,884 674,706 
Merchandise inventories1,095,410 1,146,192 
Other current assets235,983 79,372 
Current assets of discontinued operations 439,983 
Total current assets2,097,533 2,407,283 
Property and equipment, net of accumulated depreciation of $273,403 and $245,718
301,299 315,427 
Operating lease assets143,362 142,219 
Goodwill390,395 393,181 
Intangible assets, net251,615 285,018 
Other assets, net112,911 99,956 
Total assets$3,297,115 $3,643,084 
Liabilities and equity
Current liabilities
Accounts payable$946,116 $808,035 
Accrued payroll and related liabilities71,406 53,584 
Other current liabilities412,483 231,029 
Current liabilities of discontinued operations 323,511 
Total current liabilities1,430,005 1,416,159 
Long-term debt, excluding current portion1,099,645 1,508,415 
Operating lease liabilities, excluding current portion120,025 117,080 
Deferred income taxes75,009 40,550 
Other liabilities121,096 98,726 
Total liabilities2,845,780 3,180,930 
Commitments and contingencies
Equity
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 63,716 shares and 62,843 shares
127,432 125,686 
Paid-in capital262,002 251,401 
Retained earnings116,465 137,774 
Accumulated other comprehensive loss(54,564)(52,707)
Total equity451,335 462,154 
Total liabilities and equity$3,297,115 $3,643,084 
See accompanying notes to consolidated financial statements.
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Owens & Minor, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
 
Nine Months Ended September 30,
(in thousands)20202019
Operating activities:
Net loss$(20,871)$(23,348)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization69,494 88,204 
Share-based compensation expense15,275 12,057 
Loss on divestiture65,472  
Provision for losses on accounts receivable9,583 9,759 
Deferred income tax expense (benefit)25,017 (11,989)
Changes in operating lease right-of-use assets and lease liabilities(1,328)(1,280)
Changes in operating assets and liabilities:
Accounts receivable(20,173)73,986 
Merchandise inventories52,605 136,021 
Accounts payable136,156 (221,381)
Net change in other assets and liabilities(69,117)69,756 
Other, net6,083 7,320 
Cash provided by operating activities268,196 139,105 
Investing activities:
Proceeds from divestiture133,000  
Additions to property and equipment(21,678)(31,224)
Additions to computer software(4,702)(6,928)
Proceeds from sale of property and equipment178 220 
Proceeds from cash surrender value of life insurance policies6,032  
Cash provided by (used for) investing activities112,830 (37,932)
Financing activities:
Proceeds from issuance of debt150,000  
Repayments under revolving credit facility(107,900)(36,100)
Repayments of debt(270,399)(40,700)
Financing costs paid(10,367)(4,313)
Cash dividends paid(467)(5,072)
Other, net(5,822)(3,109)
Cash used for financing activities(244,955)(89,294)
Effect of exchange rate changes on cash and cash equivalents6,721 (2,243)
Net increase in cash, cash equivalents and restricted cash142,792 9,636 
Cash, cash equivalents and restricted cash at beginning of period84,687 103,367 
Cash, cash equivalents and restricted cash at end of period$227,479 $113,003 
Supplemental disclosure of cash flow information:
Income taxes received, net of payments$(1,892)$(12,085)
Interest paid$61,271 $76,470 

See accompanying notes to consolidated financial statements.
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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 Loss
Total
Equity
Balance, December 31, 201962,843 $125,686 $251,401 $137,774 $(52,707)$462,154 
Net loss(11,324)(11,324)
Other comprehensive loss(39,405)(39,405)
Dividends declared ($0.0025 per share)
(127)(127)
Share-based compensation expense, exercises and other42 84 4,956 5,040 
Balance, March 31, 202062,885 125,770 256,357 126,323 (92,112)416,338 
Net loss(55,627)(55,627)
Other comprehensive income30,527 30,527 
Dividends declared ($0.0025 per share)
(156)(156)
Share-based compensation expense, exercises and other852 1,704 2,376 4,080 
Balance, June 30, 202063,737 127,474258,73370,540(61,585)395,162
Net income46,081 46,081 
Other comprehensive income7,021 7,021 
Dividends declared ($0.0025 per share)
(156)(156)
Share-based compensation expense, exercises and other(21)(42)3,269 3,227 
Balance, September 30, 202063,716 $127,432 $262,002 $116,465 $(54,564)$451,335 
Balance, December 31, 201862,294 $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 other642 1,284 2,774 4,058 
Balance, March 31, 201962,936 125,872 241,547 186,455 (52,035)501,839 
Net loss(10,476)(10,476)
Other comprehensive income2,387 2,387 
Dividends declared ($0.0025 per share)
(114)(114)
Share-based compensation expense, exercises and other28 56 3,209 3,265 
Balance, June 30, 201962,964 125,928244,756175,865(49,648)496,901
Net income1,224 1,224 
Other comprehensive loss(10,628)(10,628)
Dividends declared ($0.0025 per share)
(175)(175)
Share-based compensation expense, exercises and other(102)(204)4,160 3,956 
Balance, September 30, 201962,862 $125,724 $248,916 $176,914 $(60,276)$491,278 
See accompanying notes to consolidated financial statements.
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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 Movianto business represents a component that met accounting requirements to be classified as discontinued operations and held-for-sale beginning December 31, 2019. In accordance with GAAP, the results of operations and financial position of the Movianto business are presented as discontinued operations through June 18, 2020 (the Divestiture Date) and, as such, have been excluded from continuing operations for all periods presented. With the exception of Note 3, the Notes to Consolidated Financial Statements reflect the continuing operations of Owens & Minor, Inc. and its subsidiaries. See Note 3 for additional information regarding discontinued operations. 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 the 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.
Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash includes cash and marketable securities with an original maturity or maturity at acquisition of three months or less. Cash, cash equivalents and restricted cash are stated at cost. Nearly all of our cash, cash equivalents and restricted cash are held in cash depository accounts in major banks in the United States, Europe, and Asia. Cash that is held by a major bank and has restrictions on its availability to us is classified as restricted cash. Restricted cash included in other current assets represents cash held in a designated account as of September 30, 2020 as required by the Fifth Amendment to the Credit Agreement, which stipulates that the cash held within this account is to be used to repay the 2021 Notes or the Term Loans. Restricted cash included in Other assets, net as of September 30, 2020 represents cash held in an escrow account as required by the Centers for Medicare & Medicaid Services (CMS) in conjunction with the Bundled Payments for Care Improvement (BPCI) Advanced Program.
    The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying consolidated balance sheets that sum to the total of those same amounts presented in the accompanying consolidated statements of cash flows.
September 30, 2020December 31, 2019
Cash and cash equivalents$77,256 $67,030 
Restricted cash included in Other current assets133,899  
Restricted cash included in Other assets, net16,324 16,261 
Cash of discontinued operations 1,396 
Total cash, cash equivalents and restricted cash$227,479 $84,687 

Note 2—Fair Value
The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable reported in the consolidated balance sheets approximate fair value due to the short-term nature of these instruments. The carrying amount of restricted cash also approximates fair value due to its nature. The fair value of 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). See Note 6 for the fair value of debt. 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,
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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. See Note 8 for the fair value of derivatives.

Note 3—Discontinued Operations
On June 18, 2020, we completed the previously announced divestiture of our European logistics business, Movianto (the Divestiture), as well as certain support functions in our Dublin office, to Walden Group SAS (the Buyer) and EHDH (as Buyer’s guarantor) for cash consideration of $133 million. We concluded that the Movianto business met the criteria for discontinued operations as of December 31, 2019 and through the Divestiture Date, as the intention to sell represented a strategic shift and the criteria for held-for-sale were met. Movianto was previously reported in the Global Solutions segment.
Accordingly, the results of operations from the Movianto business are reported in the accompanying consolidated statements of operations as Loss from discontinued operations, net of tax for the three and nine months ended September 30, 2020 and 2019, and the related assets and liabilities are classified as held-for-sale as of December 31, 2019 in the accompanying balance sheet. We are working with the Buyer on a final working capital adjustment that could result in a benefit in an amount up to $42 million. There is no benefit of any such adjustment reflected in our consolidated financial statements as of September 30, 2020.    

The following table summarizes the financial results of our discontinued operations for the three and nine months ended September 30, 2020 and 2019:

Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Net revenue$ $106,265 $226,759 $324,308 
Cost of goods sold 24,399 53,923 78,729 
Gross margin 81,866 172,836 245,579 
Distribution, selling, and administrative expenses 81,565 157,512 245,562 
Loss on divestiture  65,472  
Acquisition-related and exit and realignment charges 383 4,825 774 
Other operating income, net (20)(388)(492)
Operating loss (62)(54,585)(265)
Interest expense, net 1,887 3,144 5,162 
Loss from discontinued operations before income taxes (1,949)(57,729)(5,427)
Income tax provision from discontinued operations 247 474 688 
Loss from discontinued operations, net of tax$ $(2,196)$(58,203)$(6,115)

We suspended depreciation and amortization on assets that are held-for-sale, including right-of-use assets recorded in accordance with ASU No. 2016-02, for the nine months ended September 30, 2020.

All revenue and expense included in discontinued operations during the nine months ended September 30, 2020 relates to activity through the Divestiture Date. No revenue or expense have been recorded in discontinued operations related to the disposal group subsequent to the Divestiture Date.

We have entered into transition services agreements with a subsidiary of the Buyer, pursuant to which we and a subsidiary of the Buyer will provide to each other various transitional services. Certain transition service arrangement costs and reimbursements were recorded during the three and nine months ended September 30, 2020. These amounts were immaterial for the three and nine months ended September 30, 2020.

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    The assets and liabilities of the discontinued Movianto business reflected on the consolidated balance sheet at December 31, 2019 were as follows:
December 31, 2019
Assets of discontinued operations
Cash and cash equivalents$1,396 
Accounts receivable, net78,643 
Merchandise inventories16,058 
Other current assets188,853 
Current assets of discontinued operations284,950 
Property and equipment, net65,710 
Intangible assets, net6,579 
Other assets, net27,431 
Operating lease assets87,425 
Valuation allowance on disposal group classified as held-for-sale(32,112)
Total assets of discontinued operations$439,983 
Liabilities of discontinued operations
Accounts payable$53,981 
Other current liabilities182,980 
Current liabilities of discontinued operations236,961 
Long-term debt, excluding current portion5,523 
Operating lease liabilities, excluding current portion76,270 
Other liabilities4,757 
Total liabilities of discontinued operations$323,511 
    
    Assets and liabilities held-for-sale as of December 31, 2019 were classified as current since we expected the Divestiture to be completed within one year of the balance sheet date.

    The following table provides operating and investing cash flow information for our discontinued operations:

September 30, 2020September 30, 2019
Operating Activities:
Depreciation and amortization$ $15,466 
Loss on divestiture65,472  
Investing Activities:
Capital expenditures3,027 17,298 

Note 4—Goodwill and Intangible Assets
The following table summarizes the goodwill balances by segment and the changes in the carrying amount of goodwill through September 30, 2020:
Global SolutionsGlobal ProductsConsolidated
Carrying amount of goodwill, December 31, 2019$283,905 $109,276 $393,181 
Currency translation adjustments (2,786)(2,786)
Carrying amount of goodwill, September 30, 2020$283,905 $106,490 $390,395 
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Intangible assets at September 30, 2020 and December 31, 2019 were as follows:
September 30, 2020December 31, 2019
Customer
Relationships
TradenamesOther
Intangibles
Customer
Relationships
TradenamesOther
Intangibles
Gross intangible assets$268,179 $90,000 $43,238 $270,693 $90,000 $43,055 
Accumulated amortization(113,999)(22,791)(13,012)(92,947)(16,520)(9,263)
Net intangible assets$154,180 $67,209 $30,226 $177,746 $73,480 $33,792 
Weighted average useful life10 years11 years8 years10 years11 years8 years

At September 30, 2020, $67.2 million in net intangible assets were held in the Global Solutions segment and $184.4 million were held in the Global Products segment. Amortization expense for intangible assets was $10.2 million and $10.6 million for the three months ended September 30, 2020 and 2019, respectively, and $31.5 million and $33.4 million for the nine months ended September 30, 2020 and 2019, respectively.
Based on the current carrying value of intangible assets subject to amortization, estimated amortization expense is $10.4 million for the remainder of 2020, $39.8 million for 2021, $38.9 million for 2022, $38.7 million for 2023, $33.9 million for 2024 and $28.2 million for 2025.

Note 5—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 outsourced logistics centers, administrative offices and warehouses, our client engagement center and IT restructuring charges. 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 nine months ended September 30, 2020 and 2019 were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Global Solutions segment$2,714 $969 $6,255 $3,149 
Global Products segment2,877 11 3,364 252 
Total exit and realignment charges$5,591 $980 $9,619 $3,401 


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The following table summarizes the activity related to exit and realignment cost accruals through September 30, 2020 and 2019:
Total
Accrued exit and realignment costs, December 31, 2019$8,162 
Provision for exit and realignment activities:
Severance1,391 
Information system restructuring costs183 
Other255 
Cash payments(5,799)
Accrued exit and realignment costs, March 31, 20204,192 
Provision for exit and realignment activities:
Severance809 
Information system restructuring costs671 
Other720 
Cash payments(2,072)
Accrued exit and realignment costs, June 30, 20204,320 
Provision for exit and realignment activities:
Severance1,950 
Information system restructuring costs77 
Other3,564 
Cash payments(7,083)
Accrued exit and realignment costs, September 30, 2020$2,828 
Accrued exit and realignment costs, December 31, 2018$7,477 
Provision for exit and realignment activities:
Severance360 
Information system restructuring costs261 
Other83 
Cash payments(2,206)
Accrued exit and realignment costs, March 31, 20195,975 
Provision for exit and realignment activities:
Severance1,008 
Information system restructuring costs705 
Other4 
Cash payments(2,301)
Accrued exit and realignment costs, June 30, 20195,391 
Provision for exit and realignment activities:
Severance305 
Information system restructuring costs664 
Other11 
Cash payments(2,586)
Accrued exit and realignment costs, September 30, 2019$3,785 
    
Acquisition-related and exit and realignment charges presented in our consolidated statements of operations includes acquisition-related charges of $0.8 million and $8.9 million for the three and nine months ended September 30, 2020 and $3.5 million and $11.4 million for the three and nine months ended September 30, 2019, respectively, and consisted primarily of transition costs for the Halyard acquisition.

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Note 6—Debt
Debt consists of the following:
September 30, 2020December 31, 2019
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
3.875% Senior Notes, due September 2021
$178,485 $180,307 $236,234 $229,356 
4.375% Senior Notes, due December 2024
244,697 245,122 273,978 212,086 
Term A Loans, due July 2022196,489 199,619 377,420 383,050 
Term B Loan, due April 2025478,127 475,913 480,337 442,217 
Revolver70,000 70,000 177,900 177,900 
Receivables Securitization Program147,580 150,000   
Finance leases and other13,371 13,371 13,783 13,783 
Total debt1,328,749 1,334,332 1,559,652 1,458,392 
Less current maturities(229,104)(230,784)(51,237)(51,237)
Long-term debt$1,099,645 $1,103,548 $1,508,415 $1,407,155 
We have $178 million of 3.875% senior notes due in 2021 (the 2021 Notes) and $245 million of 4.375% senior notes due in 2024 (the 2024 Notes), with interest payable semi-annually. The 2021 Notes were sold at 99.5% of the principal amount with an effective yield of 3.951%. The 2024 Notes were sold at 99.6% of the principal amount with an effective yield of 4.422%. We have the option to redeem the 2021 Notes and 2024 Notes in part or in whole prior to maturity at a redemption price equal to the greater of 100% of the principal amount or the present value of the remaining scheduled payments discounted at the applicable Benchmark Treasury Rate plus 25 basis points for the 2021 Notes and the applicable Benchmark Treasury Rate plus 30 basis points for the 2024 Notes. In June 2020, we announced cash tender offers for up to $240 million aggregate principal amount of our outstanding 2021 Notes and 2024 Notes. As of the Early Settlement Date of June 22, 2020, $54.1 million of the 2021 Notes and $29.0 million of the 2024 Notes were repaid. On the Early Settlement Date, the 2021 Notes were redeemed at 100% of par, and the 2024 Notes were redeemed at 90% of par, resulting in a net gain on extinguishment of debt of $2.9 million. The tender offers remained open through July 2, 2020, and an additional $0.1 million of the 2021 Notes were redeemed at the Base Consideration price of 95% of par by the time the offers closed. Including the tender offer, we used $83.3 million of cash to repurchase $87.9 million aggregate principal amount of the 2021 Notes and 2024 Notes during the first nine months of 2020. Consistent with the terms of the Fifth Amendment to the Credit Agreement, we used $54.1 million of the proceeds from the sale of Movianto to fund the repayment of the 2021 Notes, which were retired in the second quarter as part of the tender offer. As required by the Fifth Amendment to the Credit Agreement, the remaining $78.9 million of proceeds from the sale of Movianto were placed in a designated account and will be used to repurchase a portion of the outstanding 2021 Notes within 210 days of the Divestiture Date or repay a portion of our Term Loans.
We have a Credit Agreement (last amended February 13, 2020) with a $400 million revolving credit facility and $675 million in outstanding term loans. The interest rate on our revolving credit facility and Term A Loans is based on 1) either the Eurocurrency Rate or the Base Rate plus 2) an Applicable Percentage which varies depending on Consolidated Total Leverage Ratio (each as defined in the Credit Agreement). Our credit spread on the revolving credit facility and Term A Loans at September 30, 2020 was Eurocurrency Rate plus 4.25%. Our Term B Loan accrues interest based on 1) either the Eurocurrency Rate or the Base Rate plus 2) an Applicable Percentage of 3.50% per annum for Base Rate Loans and 4.50% per annum for Eurocurrency Rate Loans (each as defined in the Credit Agreement). Our credit spread on the Term B Loan at September 30, 2020 was Eurocurrency Rate plus 4.50%. We are charged a commitment fee of between 12.5 and 25.0 basis points on the unused portion of the revolving credit facility. Our Credit Agreement has a “springing maturity date” with respect to the revolving credit facility, the Term A Loans, and the Term B Loan. If the outstanding balance of the 2021 Notes has not been paid in full as of the date 91 days prior to the maturity date of the 2021 Notes, then the Termination Date (as defined in the Credit Agreement) of the revolving credit facility, the Term A Loans, and the Term B Loan shall be the date that is 91 days prior to the maturity date of the 2021 Notes. Likewise, if the outstanding balance of the 2024 Notes has not been paid in full as of the date 91 days prior to the maturity date of the 2024 Notes, the Termination Date of the Term B Loan shall be the date that is 91 days prior to the maturity date of the 2024 Notes.
At September 30, 2020 and December 31, 2019, we had borrowings of $70.0 million and $177.9 million, respectively, under the revolver and letters of credit of $13.9 million and $11.7 million, respectively, outstanding under the Credit Agreement. At September 30, 2020 and December 31, 2019, we had $316.1 million and $209.3 million, respectively, available for borrowing. The December 31, 2019 availability reflected letters of credit associated with discontinued operations of $1.1 million. There were no letters of credit associated with discontinued operations as of September 30, 2020. We also had letters of credit and bank guarantees outstanding for $2.4 million, of which $0.8 million are in process of being transferred to
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the buyer of Movianto, and $1.6 million and $1.5 million as of September 30, 2020 and December 31, 2019, respectively, which supports certain leased facilities as well as other normal business activities in the United States and Europe. These letters of credit and guarantees were issued independent of the Credit Agreement.
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, the holders of the 2024 Notes, and the parties secured under 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 of each Credit Party and (b) all present and future personal property and assets of the Credit Parties, subject to certain exceptions. The Fifth Amendment to the Credit Agreement included additional collateral requirements if the Credit Parties, including an obligation to pledge our owned U.S. real estate and the remaining equity interests in foreign subsidiaries.
On February 19, 2020, we entered into an accounts receivable securitization program (the Receivables Securitization Program). Pursuant to the Receivables Securitization Program the aggregate principal amount of the loans made by the Lenders (as defined) will not exceed $325 million outstanding at any time. The interest rate under the Receivables Securitization Program is based on a spread over the London Interbank Offered Rate (LIBOR) dependent on the tranche period thereto and any breakage fees accrued. Under the Receivables Securitization Program, certain of our subsidiaries sell substantially all of their accounts receivable balances to our wholly owned special purpose entity, O&M Funding LLC. The Receivables Securitization Program matures on February 17, 2023. Our Receivables Securitization Program has a “springing maturity date” with respect to the Term A Loans. If the outstanding balance of the Term A loans have not been paid in full as of the date 91 days prior to the maturity date of the Term A Loans, then the Scheduled Termination Date (as defined in the Receivables Financing Agreement) of the Receivables Securitization Program shall be the date that is 91 days prior to the maturity date of the Term A Loans. In February 2020, we drew $150 million from the Receivables Securitization Program to repay portions of the Term A Loans, consistent with the terms of the Fifth Amendment to the Credit Agreement. The Fifth Amendment to the Credit Agreement requires that any additional draws on the Receivables Securitization Program are restricted for use to repay the 2021 Notes or Term A loans to the extent those instruments are outstanding.
The Credit Agreement, Receivables Securitization Program, and Senior Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of either agreement. The terms of the Credit Agreement also require the company to maintain ratios for leverage and interest coverage, including on a pro forma basis in the event of an acquisition or divestiture. We were in compliance with our debt covenants at September 30, 2020.
As of September 30, 2020, scheduled future principal payments of debt were $12.4 million in 2020, $228.5 million in 2021, $218.8 million in 2022, $155.0 million in 2023, $251.0 million in 2024, and $468.8 million thereafter. Current maturities include scheduled principal payments within the next 12 months of $44.6 million and $5.0 million for our Term A and Term B Loans, respectively, $1.0 million in short-term finance leases, and $178.5 million related to our 2021 Notes.

Note 7—Retirement Plans
We have a noncontributory, unfunded retirement plan for certain 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 for the three and nine months ended September 30, 2020 and 2019, respectively, were as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Service cost$362 $332 $1,073 $991 
Interest cost498 601 1,488 1,801 
Recognized net actuarial loss214 260 642 780 
Net periodic benefit cost$1,074 $1,193 $3,203