0000075252-21-000034 | 10-K | XBRL Viewer

Print Document View Excel Document

Cover Page - USD ($)	12 Months Ended
Cover Page - USD ($)	Dec. 31, 2020	Feb. 16, 2021	Jun. 30, 2020
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	1-9810
Entity Registrant Name	OWENS & MINOR, INC
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
Trading Symbol	OMI
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Smaller reporting company	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Shell Company	false
Entity Public Float			$ 468,364,603
Entity Common Stock, Shares Outstanding		73,498,525
Documents Incorporated by Reference	The proxy statement for the annual meeting of shareholders to be held on April 29, 2021, is incorporated by reference for Item 5 of Part II and Part III.
Entity Central Index Key	0000075252
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2020
Amendment Flag	false

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Net revenue	$ 8,480,177	$ 9,210,939
Cost of goods sold	7,199,343	8,082,448
Gross margin	1,280,834	1,128,491
Distribution, selling and administrative expenses	1,041,336	1,023,065
Acquisition-related and exit and realignment charges	37,752	30,050
Other operating (income) expense, net	(2,372)	2,225
Operating income	204,118	73,151
Interest expense, net	83,398	98,113
Other expense, net	10,812	3,757
Income (loss) from continuing operations before income taxes	109,908	(28,719)
Income tax provision (benefit)	21,834	(6,135)
Income (loss) from continuing operations	88,074	(22,584)
Loss from discontinued operations, net of tax	(58,203)	(39,787)
Net income (loss)	$ 29,871	$ (62,371)
Continuing operations per basic and diluted (in usd per share)	$ 1.39	$ (0.37)
Discontinued operations per basic and diluted (in usd per share)	(0.92)	(0.66)
Basic and diluted (in usd per share)	$ 0.47	$ (1.03)

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 29,871	$ (62,371)
Other comprehensive income (loss), net of tax:
Currency translation adjustments	25,283	7,250
Change in unrecognized net periodic pension costs (net of income tax benefit of $1,579 in 2020 and $2,299 in 2019)	(3,756)	(6,545)
Net unrealized loss on derivative instruments and other (net of income tax benefit of $3,180 in 2020 and $3,305 in 2019)	(7,329)	(7,800)
Other comprehensive income (loss)	14,198	(7,095)
Comprehensive income (loss)	$ 44,069	$ (69,466)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669619-108580

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22595-107794

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669625-108580

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=121586364&loc=d3e3602-108585

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22499-107794

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22663-107794

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=75031198&loc=d3e14064-108612

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22658-107794

+ Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

+ Details

Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Change in unrecognized net periodic pension costs, income tax (benefit)	$ 1,579	$ 2,299
Change in net unrealized loss on derivative instruments and other, income tax (benefit)	$ 3,180	$ 3,305

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 83,058	$ 67,030
Accounts receivable, net	700,792	674,706
Merchandise inventories	1,233,751	1,146,192
Other current assets	118,264	79,372
Current assets of discontinued operations	0	439,983
Total current assets	2,135,865	2,407,283
Property and equipment, net	315,662	315,427
Operating lease assets	144,755	142,219
Goodwill	394,086	393,181
Intangible assets, net	243,351	285,018
Other assets, net	101,920	99,956
Total assets	3,335,639	3,643,084
Current liabilities
Accounts payable	1,000,186	808,035
Accrued payroll and related liabilities	109,447	53,584
Other current liabilities	236,094	231,029
Current liabilities of discontinued operations	0	323,511
Total current liabilities	1,345,727	1,416,159
Long-term debt, excluding current portion	986,018	1,508,415
Operating lease liabilities, excluding current portion	119,932	117,080
Deferred income taxes	50,641	40,550
Other liabilities	121,267	98,726
Total liabilities	2,623,585	3,180,930
Commitments and contingencies
Equity
Common stock, par value $2 per share; authorized—200,000 shares; issued and outstanding— 73,472 shares and 62,843 shares	146,944	125,686
Paid-in capital	436,597	251,401
Retained earnings	167,022	137,774
Accumulated other comprehensive loss	(38,509)	(52,707)
Total equity	712,054	462,154
Total liabilities and equity	$ 3,335,639	$ 3,643,084

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 2	$ 2
Common stock, authorized (shares)	200,000	200,000
Common stock, issued (shares)	73,472	62,843
Commons stock, outstanding (shares)	73,472	62,843

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating activities:
Net income (loss)	$ 29,871	$ (62,371)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization	93,336	116,678
Share-based compensation expense	20,010	15,803
Asset impairment charges	8,724	32,112
Loss on divestiture	65,472	0
Deferred income tax expense (benefit)	15,564	(17,402)
Provision for losses on accounts receivable	11,292	12,914
Changes in operating lease right-of-use assets and lease liabilities	(1,676)	(2,599)
Changes in operating assets and liabilities:
Accounts receivable	(34,818)	63,526
Merchandise inventories	(85,154)	127,921
Accounts payable	193,240	(235,631)
Net change in other assets and liabilities	5,278	104,801
Other, net	18,084	10,333
Cash provided by operating activities	339,223	166,085
Investing activities:
Proceeds from divestiture	133,000	0
Additions to property and equipment	(50,424)	(42,419)
Additions to computer software	(8,769)	(9,809)
Proceeds from sale of property and equipment	234	331
Proceeds from cash surrender value of life insurance policies	6,032	0
Cash provided by (used for) investing activities	80,073	(51,897)
Financing activities:
Proceeds from issuance of debt	155,100	0
Proceeds from issuance of common stock	189,971	0
Repayments of revolving credit facility	(74,700)	(32,200)
Repayment of debt	(617,271)	(85,592)
Financing costs paid	(10,367)	(4,313)
Cash dividends paid	(648)	(5,226)
Senior Notes make-whole premium paid	(4,980)	0
Other, net	(16,491)	(2,866)
Cash provided by (used for) financing activities	(379,386)	(130,197)
Effect of exchange rate changes on cash and cash equivalents	9,909	(2,671)
Net increase (decrease) in cash, cash equivalents and restricted cash	49,819	(18,680)
Cash, cash equivalents and restricted cash at beginning of year	84,687	103,367
Cash, cash equivalents and restricted cash at end of year	134,506	84,687
Supplemental disclosure of cash flow information:
Income taxes received, net of payments	(17,455)	(6,198)
Interest paid	$ 89,961	$ 95,413

Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, par value (in usd per share)	$ 2
Beginning Balance (in shares) at Dec. 31, 2018		62,294
Beginning Balance at Dec. 31, 2018	$ 518,419	$ 124,588	$ 238,773	$ 200,670	$ (45,612)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(62,371)			(62,371)
Other comprehensive loss	(7,095)				(7,095)
Dividends declared	(525)			(525)
Share-based compensation expense, exercises and other (in shares)		549
Share-based compensation expense, exercises and other	$ 13,726	$ 1,098	12,628
Ending Balance (in shares) at Dec. 31, 2019	62,843	62,843
Ending Balance at Dec. 31, 2019	$ 462,154	$ 125,686	251,401	137,774	(52,707)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, par value (in usd per share)	$ 2
Net income (loss)	$ 29,871			29,871
Other comprehensive loss	14,198				14,198
Dividends declared	(623)			(623)
Issuance of common stock, net of issuance costs (in shares)		9,746
Issuance of common stock, net of issuance costs	189,971	$ 19,493	170,478
Share-based compensation expense, exercises and other (in shares)		883
Share-based compensation expense, exercises and other	$ 16,483	$ 1,765	14,718
Ending Balance (in shares) at Dec. 31, 2020	73,472	73,472
Ending Balance at Dec. 31, 2020	$ 712,054	$ 146,944	$ 436,597	$ 167,022	$ (38,509)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, par value (in usd per share)	$ 2

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Statement of Stockholders' Equity [Abstract]
Common stock, par value (in usd per share)	$ 2	$ 2
Dividends declared, per share (in usd per share)	$ 0.01	$ 0.01

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Owens & Minor, Inc. and subsidiaries (we, us, our or the Company), a Fortune 500 company headquartered in Richmond, Virginia, 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. Our teammates serve healthcare industry customers in over 70 countries, by producing quality products and helping to reduce total costs across the healthcare supply chain by optimizing point-of care performance, freeing up capital and clinical resources and managing contracts to optimize financial performance.

Basis of Presentation. The consolidated financial statements include the accounts of Owens & Minor, Inc. and the subsidiaries it controls, in conformity with U.S generally accepted accounting principles (GAAP). All significant intercompany accounts and transactions have been eliminated. Unless otherwise indicated, information in these notes to consolidated financial statements relates to continuing operations.

Use of Estimates. The preparation of the consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect reported amounts and related disclosures. Estimates are used for, but are not limited to, the allowances for losses on accounts receivable, inventory valuation allowances, supplier incentives, depreciation and amortization, goodwill valuation, valuation of intangible assets and other long-lived assets, self-insurance liabilities, tax liabilities, defined benefit obligations, share-based compensation and other contingencies. Actual results may differ from these estimates.

Cash, Cash Equivalents and Restricted Cash. Cash, cash equivalents and restricted cash include 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 December 31, 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, which were fully repaid as of December 31, 2020, or the Term A Loans. Restricted cash included in Other assets, net as of December 31, 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.


	December 31, 2020		December 31, 2019
Cash and cash equivalents	$	83,058	$	67,030
Restricted cash included in Other current assets	35,126		—
Restricted cash included in Other assets, net	16,322		16,261
Cash of discontinued operations	—		1,396
Total cash, cash equivalents and restricted cash	$	134,506	$	84,687

Book overdrafts represent the amount of outstanding checks issued in excess of related bank balances and are included in accounts payable in our consolidated balance sheets, as they are similar to trade payables and are not subject to finance charges or interest. Changes in book overdrafts are classified as operating activities in our consolidated statements of cash flows.

Accounts Receivable, Net. In general, accounts receivable from customers are recorded at the invoiced amount and are reduced by any rebates due to the customer, which are estimated based on contractual terms or historical experience. We assess finance charges on overdue accounts receivable that are recognized as other operating income based on their estimated ultimate collectability. We have arrangements with certain customers under which they make deposits on account. Customer deposits in excess of outstanding receivable balances are classified as other current liabilities. For our direct to patient business, accounts receivable are recorded net of a contractual allowance.

We maintain valuation allowances based upon the expected collectability of accounts receivable. Our allowances include specific amounts for accounts that are likely to be uncollectible, such as customer bankruptcies and disputed amounts and general allowances for accounts that may become uncollectible. Allowances are estimated based on a number of factors, including industry trends, current economic conditions, creditworthiness of customers, age of the receivables, changes in customer payment patterns, and historical experience. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Merchandise Inventories. Merchandise inventories are valued at the lower of cost or market, with cost determined by the last-in, first-out (LIFO) method for distribution inventories in the U.S. Cost of remaining inventories are determined using the first-in, first out (FIFO) or weighted-average cost method.

Property and Equipment. Property and equipment are stated at cost less accumulated depreciation. Depreciation and amortization expense for financial reporting purposes is computed on a straight-line method over the estimated useful lives of the assets or, for capital leases and leasehold improvements, over the term of the lease, if shorter. In general, the estimated useful lives for computing depreciation and amortization are three to 15 years for machinery and equipment, five to 40 years for buildings, and up to 15 years for leasehold and land improvements. Straight-line and accelerated methods of depreciation are used for income tax purposes. Normal maintenance and repairs are expensed as incurred, and renovations and betterments are capitalized. We suspend depreciation and amortization on assets that are held for sale. In addition, we record capital-related government grants earned as reductions to the cost of property and equipment; and associated unpaid liabilities and grant proceeds receivable are considered non-cash changes in such balances for purposes of preparation of our consolidated statements of cash flows.

Leases. We enter into non-cancelable agreements to lease most of our office and warehouse facilities with remaining terms generally ranging from one to 10 years. Certain leases include renewal options, generally for one to five-year increments. The exercise of lease renewal options is at our sole discretion. We include options to renew (or terminate) in our lease term, and as part of our right-of-use assets and lease liabilities, 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 unpaid 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 right-of-use assets also include adjustments for any lease payments made and lease incentives received.

Goodwill. We account for acquired businesses using the acquisition method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

We evaluate goodwill for impairment annually, as of October 1, and whenever events occur or changes in circumstance indicate that the carrying amount of goodwill may not be recoverable. Qualitative factors are first assessed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined that it is more likely than not that the fair value does not exceed the carrying amount, then a quantitative test is performed. The quantitative goodwill impairment test involves a comparison of the estimated fair value of the reporting unit to the respective carrying amount.

We determine the estimated fair value of our reporting units by using an income (discounted cash flow analysis) approach. The income approach is dependent upon several assumptions regarding future periods, including assumptions with respect to future sales growth and a terminal growth rate. In addition, a weighted average cost of capital (WACC) is used to discount future estimated cash flows to their present values. The WACC is based on externally observable data considering market participants’ cost of equity and debt, optimal capital structure and risk factors specific to our company.

Intangible Assets. Intangible assets acquired through purchases or business combinations are stated at fair value at the acquisition date and net of accumulated amortization in the consolidated balance sheets. Intangible assets, consisting primarily of customer relationships, customer contracts, non-competition agreements, trademarks, and tradenames are amortized over their estimated useful lives. In determining the useful life of an intangible asset, we consider our historical experience in renewing or extending similar arrangements. Customer relationships are generally amortized over three to 15 years and other

intangible assets are amortized generally for periods between one and 15 years, based on their pattern of economic benefit or on a straight-line basis. We suspend amortization on assets that are held for sale.

Computer Software. We develop and purchase software for internal use. Software development costs incurred during the application development stage are capitalized. Once the software has been installed and tested, and is ready for use, additional costs incurred in connection with the software are expensed as incurred. Capitalized computer software costs are amortized over the estimated useful life of the software, usually between three and 10 years. Capitalized computer software costs are included in other assets, net, in the consolidated balance sheets. Unamortized software at December 31, 2020 and 2019 was $38.0 million and $43.6 million. Depreciation and amortization expense includes $10.2 million and $9.3 million of software amortization for the years ended December 31, 2020 and 2019.

Beginning in 2020, implementation costs incurred for a cloud computing arrangement that is considered a service contract (software as a service or SaaS) are capitalized consistent with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. In 2019, these costs were expensed as incurred.

Long-Lived Assets. Long-lived assets, which include property and equipment, finite-lived intangible assets, right-of-use assets, and unamortized software costs, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable. We assess long-lived assets for potential impairment by comparing the carrying value of an asset, or group of related assets, to their estimated undiscounted future cash flows. We suspend depreciation and amortization on assets that are held for sale.

Self-Insurance Liabilities. We are self-insured for certain employee healthcare, workers’ compensation and automobile liability costs; however, we maintain insurance for individual losses exceeding certain limits. Liabilities are estimated for healthcare costs using current and historical claims data. Liabilities for workers’ compensation and automobile liability claims are estimated using historical claims data and loss development factors. If the underlying facts and circumstances of existing claims change or historical trends are not indicative of future trends, then we may be required to adjust the liability and related expense accordingly. Self-insurance liabilities are included in other current liabilities on the consolidated balance sheets.

Revenue Recognition. Our revenue is primarily generated from sales contracts with customers. Under most of our distribution and product sales arrangements, our performance obligations are limited to delivery of products to a customer upon receipt of a purchase order. For these arrangements, we recognize revenue at the point in time when shipment is completed, as control passes to the customer upon product receipt.

Revenue for activity-based fees and other services is recognized over time as activities are performed. Depending on the specific contractual provisions and nature of the performance obligation, revenue from services may be recognized on a straight-line basis over the term of the service, on a proportional performance model, based on level of effort, or when final deliverables have been provided.

Our contracts sometimes allow for forms of variable consideration including rebates, discounts and performance guarantees. In these cases, we estimate the amount of consideration to which we will be entitled in exchange for transferring the product or service to the customer. Rebates and customer discounts are estimated based on contractual terms or historical experience and we maintain an accrual for rebates or discounts that have been earned but are unpaid. The amount accrued for rebates and discounts due to customers was $74.0 million at December 31, 2020 and $49.5 million at December 31, 2019.

Additionally, we generate fees from arrangements that include performance targets related to cost-saving initiatives for customers that result from our supply-chain management services. Achievement against performance targets, measured in accordance with contractual terms, may result in additional fees paid to us or, if performance targets are not achieved, we may be obligated to refund or reduce a portion of our fees or to provide credits toward future purchases by the customer. For these arrangements, contingent revenue is deferred and recognized as the performance target is achieved and the applicable contingency is released. When we determine that a loss is probable under a contract, the estimated loss is accrued. The amount deferred under these arrangements is not material.

For our direct to patient sales, revenues are recorded based upon the estimated amounts due from patients and third-party payors. Third-party payors include federal and state agencies (under Medicare and Medicaid programs), managed care health plans and commercial insurance companies. Estimates of contractual allowances are based upon historical collection rates for the related payor agreements. The estimated reimbursement amounts are made on a payor-specific basis and are recorded based on the best information available regarding management’s interpretation of the applicable laws, regulations and reimbursement terms.

In most cases, we record revenue gross, as we are the primary obligor in the arrangement and we obtain control of the products before they are transferred to the customer. When we act as an agent in a sales arrangement and do not bear a significant portion of inventory risks, primarily for our outsourced logistics business, we record revenue net of product cost. Sales taxes collected from customers and remitted to governmental authorities are excluded from revenues.

See Note 20 for disaggregation of revenue by segment and geography as we believe that best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Cost of Goods Sold. 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, bear the risk of general and physical inventory loss and carry all credit risk associated with sales. Cost of goods sold also includes direct and certain indirect labor, material and overhead costs associated with our Global Products business. We have contractual arrangements with certain suppliers that provide incentives, including cash discounts for prompt payment, operational efficiency and performance-based incentives. These incentives are recognized as a reduction in cost of goods sold as targets become probable of achievement.

In situations where we act as an agent in a sales arrangement and do not bear a significant portion of these risks, primarily for our outsourced logistics business, there is no cost of goods sold and all costs to provide the service to the customer are recorded in distribution, selling and administrative expenses.

As a result of different practices of categorizing costs and different business models throughout our industry, our gross margins may not necessarily be comparable to other companies in our industry.

Distribution, Selling and Administrative (DS&A) Expenses. DS&A expenses include shipping and handling costs, labor, depreciation, amortization and other costs for selling and administrative functions and all costs associated with our fee-for-service arrangements.

Shipping and Handling. Shipping and handling costs are primarily included in DS&A expenses on the consolidated statements of operations and include costs to store, to move, and to prepare products for shipment, as well as costs to deliver products to customers. Shipping and handling costs totaled $389 million and $422 million for the years ended December 31, 2020 and 2019.

Share-Based Compensation. We account for share-based payments to teammates at fair value and recognize the related expense in distribution, selling and administrative expenses over the service period for awards expected to vest.

Derivative Financial Instruments. We are directly and indirectly affected by changes in foreign currency and interest rates, 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 these market risks. We use forward contracts, which are agreements to buy or sell a quantity at a predetermined future date and at a predetermined rate or price, and interest rate swaps. We do not enter into derivative financial instruments for trading purposes.

All derivatives are carried at fair value in our consolidated balance sheets. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how we record the change in fair value of the derivative instrument in our financial statements. A derivative qualifies for hedge accounting if, at inception, we expect the derivative will be highly effective in offsetting the underlying hedged cash flows and we fulfill the hedge documentation standards at the time we enter into the derivative contract. We designate a hedge as a cash flow hedge, fair value hedge, or a net investment hedge based on the exposure we are hedging. For the effective portion of qualifying cash flow hedges, we record changes in fair value in other comprehensive income (“OCI”). We release the derivative’s gain or loss from OCI to match the timing of the underlying hedged items’ effect on earnings. We review the effectiveness of our hedging instruments quarterly, recognize current period hedge ineffectiveness immediately in earnings, and discontinue hedge accounting for any hedge that we no longer consider to be highly effective. We recognize changes in fair value for derivatives not designated as hedges or those not qualifying for hedge accounting in current period earnings. The cash flow impacts of the derivative instruments are primarily included in our consolidated statements of cash flows as a component of operating or financing activities.

Income Taxes. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are provided if it is more likely than not that a deferred tax asset will not be realized. When we have claimed tax benefits that may be challenged by a tax authority, an estimate of the effect of these uncertain tax positions is recorded. It is our policy to provide for uncertain tax positions and the related interest and penalties based upon an assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent that the tax outcome of these uncertain tax positions changes, based on our assessment, such changes in estimate may impact the income tax provision in the period in which such determination is made.

We earn a portion of our operating income in foreign jurisdictions outside the United States. We continue to remain permanently reinvested in our foreign subsidiaries, with the exception of a subsidiary in Thailand. We have no specific plans to indefinitely reinvest the unremitted earnings of our foreign subsidiary located in Thailand as of December 31, 2020. 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. We will continue to evaluate our foreign earnings repatriation policy in 2021 for all our foreign subsidiaries. Our policy election for GILTI is that we will record such taxes as a current period expense once incurred and will follow the tax law ordering approach.

Fair Value Measurements. Fair value is determined based on assumptions that a market participant would use in pricing an asset or liability. The assumptions used are in accordance with a three-tier hierarchy, defined by GAAP, that draws a distinction between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the use of present value and other valuation techniques in the determination of fair value (Level 3).

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 10 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, 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 13 for the fair value of derivatives.

Acquisition-Related and Exit and Realignment Charges. We present costs incurred in connection with acquisitions in acquisition-related and exit and realignment charges in our consolidated statements of operations. Acquisition-related charges consist primarily of transaction costs incurred to perform due diligence and to analyze, negotiate and consummate an acquisition, costs to perform post-closing activities to establish the organizational structure, and costs to transition the acquired company’s information technology and other operations and administrative functions from the former owner.

Exit and realignment charges consist of costs associated with optimizing our operations which include the closure and 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 the sale of certain assets of Fusion5, our strategic organizational realignment which include management changes, certain professional fees, costs to streamline administrative functions and processes and divestiture related costs. Costs associated with exit and realignment activities are recorded at their fair value when incurred. Liabilities are established at the cease-use date for remaining contractual obligations discounted using a credit-adjusted risk-free rate of interest. We evaluate these assumptions quarterly and adjust the liability accordingly. The current portion of contractual termination costs are included in other current liabilities on the consolidated balance sheets, and the non-current portion is included in other liabilities, which were not material to our consolidated balance sheets as of December 31, 2020 and 2019. Severance benefits are recorded when payment is considered probable and reasonably estimable.

Income (Loss) Per Share. Basic and diluted income (loss) per share are calculated pursuant to the two-class method, under which unvested share-based payment awards containing non-forfeitable rights to dividends are participating securities.

Foreign Currency Translation. Our foreign subsidiaries generally consider their local currency to be their functional currency. Assets and liabilities of these foreign subsidiaries are translated into U.S. dollars at period-end exchange rates and revenues, cost of goods sold and expenses are translated at average exchange rates during the period. Cumulative currency translation adjustments are included in accumulated other comprehensive income (loss) in shareholders’ equity. Gains and losses on intercompany foreign currency transactions that are long-term in nature and which we do not intend to settle in the foreseeable future are also recognized in other comprehensive income (loss) in shareholders’ equity. Realized gains and losses from foreign currency transactions are recorded in other operating income, net in the consolidated statements of operations and were not material to our consolidated results of operations in 2020 and 2019.

Discontinued Operations. The Movianto business represented a component that met accounting requirements to be classified as discontinued operations through June 18, 2020 (the Divestiture Date) and held for sale as of December 31, 2019. In accordance with GAAP, the financial position and results of operations of the Movianto business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented. With the exception of Note 3, the Notes to the Consolidated Financial Statements reflect the continuing operations of Owens & Minor, Inc. See Note 3 for additional information regarding discontinued operations.

Contingent Consideration. Consideration for the sale of certain assets of Fusion5 included contingent earn-outs. The earn-outs were excluded from the initial loss on the divestiture and will be recognized in income when realized and earned, consistent with the accounting guidance for gain contingencies.

Recent Accounting Pronouncements. During 2020, we adopted Accounting Standard Updates (ASU’s) issued by the Financial Accounting Standards Board (FASB).

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This ASU modifies the disclosure requirements for fair value measurements by removing the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. This ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income (loss). We adopted ASU No. 2018-13 effective beginning January 1, 2020. Its adoption did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans— General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 removes disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant for companies with defined benefit retirement plans. The amendments in ASU No. 2018-14 are effective for fiscal years ending after December 15, 2020 and its adoption did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other (Topic 350): Internal-Use Software. This standard aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We adopted ASU No. 2018-15 effective beginning January 1, 2020. Its adoption did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments. The standard is part of FASB’s ongoing project to improve and clarify its Accounting Standards Codification and avoid unintended application. The items addressed are not expected to significantly affect current practice or create a significant administrative cost for most entities. The amendment is divided into issues with different effective dates as follows: The amendments related to Issue 1, Issue 2, Issue 4, and Issue 5 are conforming amendments. The amendments are effective upon issuance of this update. The amendment related to Issue 3 is a conforming amendment that affects the guidance related to the amendments in ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The effective date of this update for the amendments to ASU No. 2016-01 is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted ASU No. 2020-03 effective beginning January 1, 2020 for Issues 1 through 5. Its adoption did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. At the present time, none of our lenders have requested that we transition away from LIBOR for our borrowings that bear interest based on LIBOR and we will continue to evaluate the impact through transition.

In October 2020, the FASB issued ASU No. 2020-09, Debt (Topic 470), to amend and supersede SEC paragraphs in the FASB Accounting Standards Codification to reflect the issuance of SEC Release No. 33-10762 related to financial disclosure requirements for subsidiary issuers and guarantors of registered debt securities and affiliates whose securities are pledged as collateral for registered securities. This new guidance, issued under new Rules 13-01 and 13-02, narrows the circumstances that require separate financial statements of subsidiary issuers and guarantors and affiliates whose securities are pledged as collateral and streamlines the alternative disclosures required in lieu of those statements. This rule is effective January 4, 2021 with earlier adoption permitted. We adopted this new standard in the fourth quarter of 2020. Accordingly, summarized financial information has been presented only for the issuer and guarantors of the our registered debt securities and affiliates whose securities are pledged as collateral for registered securities for the most recent fiscal year, and the location of the required disclosures has been moved outside the Notes to Consolidated Financial Statements and is provided in the “Guarantor and Collateral Group Summarized Financial Information” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Recently Issued Accounting Pronouncements Not Yet Adopted as of December 31, 2020:

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU No. 2019-12 is effective for fiscal years beginning after December 15, 2020. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We do not expect this to have a material impact on our consolidated financial statements.

In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, to improve consistency by amending the FASB Accounting Standards Codification (the Codification) to include all disclosure guidance in the appropriate disclosure sections. This ASU also clarifies application of various provisions in the Codification by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology. The amendments in this ASU do not change GAAP and, therefore, are not expected to result in a significant change in practice. The amendments of this ASU are effective for annual periods beginning after December 15, 2020. Early application of the amendments in this ASU is permitted. The amendments in this ASU should be applied retrospectively. We do not expect this to have a material impact on our consolidated financial statements.

Significant Risks and Uncertainties	12 Months Ended
Significant Risks and Uncertainties	Dec. 31, 2020
Risks and Uncertainties [Abstract]
Significant Risks and Uncertainties	Significant Risks and Uncertainties Many of our hospital customers in the U.S. are represented by group purchasing organizations (GPOs) that contract with us for services on behalf of the GPO members. GPOs representing a significant portion of our business are Vizient, Premier, Inc. (Premier) and Health Trust Purchasing Group (HPG). Members of these GPOs have incentives to purchase from their primary selected distributor; however, they operate independently and are free to negotiate directly with distributors and manufacturers. For 2020, net revenue from hospitals under contract with these GPOs represented the following approximate percentages of our net revenue annually: Vizient—36%; Premier—21%; and HPG—15%. In 2020 and 2019, no sales of products of any individual suppliers exceeded 10% of our consolidated net revenue.

Discontinued Operations

12 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

On June 18, 2020, we completed the 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 were reported in the accompanying consolidated statements of operations as Loss from discontinued operations, net of tax for the years ended December 31, 2020 and 2019, and the related assets and liabilities were classified as held-for-sale as of December 31, 2019 in the accompanying consolidated 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 $41.5 million. There is no benefit of any such adjustment reflected in our consolidated financial statements as of December 31, 2020.

The following table summarizes the financial results of our discontinued operations:


Year ended December 31,	2020		2019
Net revenue	$	226,759	$	439,104
Cost of goods sold	53,923		106,896
Gross margin	172,836		332,208
Distribution, selling, and administrative expenses	157,512		330,737
Asset impairment charges	—		32,112
Loss on divestiture	65,472		—
Acquisition-related and exit and realignment charges	4,825		2,856
Other operating income, net	(388)		(1,325)
Operating loss	(54,585)		(32,172)
Interest expense, net	3,144		6,752
Loss from discontinued operations before income taxes	(57,729)		(38,924)
Income tax provision from discontinued operations	474		863
Loss from discontinued operations, net of taxes	$	(58,203)	$	(39,787)

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 year ended December 31, 2020.

All revenue and expense included in discontinued operations during the year ended December 31, 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 year ended December 31, 2020. These amounts were immaterial for the year ended December 31, 2020.

We had no assets and liabilities associated with the discontinued Movianto business reflected on the consolidated balance sheet as of December 31, 2020. The assets and liabilities of the discontinued Movianto business reflected on the consolidated balance sheet as of December 31, 2019 were as follows:


	December 31, 2019
Assets of discontinued operations
Cash and cash equivalents	$	1,396
Accounts receivable, net	78,643
Merchandise inventories	16,058
Other current assets	188,853
Current assets of discontinued operations	284,950
Property and equipment, net	65,710
Intangible assets, net	6,579
Other assets, net	27,431
Operating lease assets	87,425
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 liabilities	182,980
Current liabilities of discontinued operations	236,961
Long-term debt, excluding current portion	5,523
Operating lease liabilities, excluding current portion	76,270
Other liabilities	4,757
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:


Year ended December 31,	2020		2019
Operating Activities:
Depreciation and amortization	$	—	$	17,111
Asset impairment charges	—		32,112
Loss on divestiture	65,472		—
Investing Activities:
Capital expenditures	(3,027)		(18,952)

Accounts Receivable, Net	12 Months Ended
Accounts Receivable, Net	Dec. 31, 2020
Receivables [Abstract]
Accounts Receivable, Net	Accounts Receivable, NetAllowances for losses on accounts receivable of $19.1 million and $21.0 million have been applied as reductions of accounts receivable at December 31, 2020 and 2019.

Merchandise Inventories	12 Months Ended
Merchandise Inventories	Dec. 31, 2020
Inventory Disclosure [Abstract]
Merchandise Inventories	Merchandise InventoriesAt December 31, 2020 and 2019 we had inventory of $1.2 billion and $1.1 billion, of which $807 million and $867 million were valued under LIFO. If LIFO inventories had been valued on a current cost or FIFO basis, they would have been greater by $170 million and $155 million as of December 31, 2020 and 2019. At December 31, 2020 and 2019, included in our inventory was $66.7 million and $37.4 million in raw materials, $59.2 million and $61.8 million in work in process and the remainder was finished goods.

Property and Equipment, Net

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, NetProperty and equipment, net, consists of the following:


December 31,	2020		2019
Land and land improvements	$	22,292	$	22,269
Buildings and leasehold improvements	155,576		156,184
Machinery and equipment	377,225		371,324
Construction in progress	44,695		11,368
Property and equipment, gross	599,788		561,145
Accumulated depreciation and amortization	(284,126)		(245,718)
Property and equipment, net	$	315,662	$	315,427

Depreciation expense for property and equipment and assets under finance leases was $41.5 million and $43.5 million for the years ended December 31, 2020 and 2019.

Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

As of October 1, 2020, we performed our annual impairment test and concluded that there were no impairments of goodwill.

The following table summarizes the changes in the carrying amount of goodwill through December 31, 2020:


	Global Solutions		Global Products		Consolidated
Carrying amount of goodwill, December 31, 2018	$	464,080	$	347,678	$	811,758
Accumulated goodwill impairment, December 31, 2018	(180,175)		(217,461)		(397,636)
Net carrying amount of goodwill, December 31, 2018	283,905		130,217		414,122
Currency translation adjustments	—		2,936		2,936
Measurement period acquisition adjustments	—		(23,877)		(23,877)
Net carrying amount of goodwill, December 31, 2019	283,905		109,276		393,181
Currency translation adjustments	—		905		905
Net carrying amount of goodwill, December 31, 2020	$	283,905	$	110,181	$	394,086

Intangible assets at December 31, 2020 and 2019 were as follows:


	2020						2019
	Customer Relationships		Tradenames		Other Intangibles		Customer Relationships		Tradenames		Other Intangibles
Gross intangible assets	$	270,505	$	90,000	$	43,245	$	270,693	$	90,000	$	43,055
Accumulated amortization	(121,209)		(24,881)		(14,309)		(92,947)		(16,520)		(9,263)
Net intangible assets	$	149,296	$	65,119	$	28,936	$	177,746	$	73,480	$	33,792
Weighted average useful life	10 years		11 years		8 years		10 years		11 years		8 years

At December 31, 2020 and 2019, $63.2 million and $80.7 million in net intangible assets were held in the Global Solutions segment and $180 million and $204 million were held in the Global Products segment. Amortization expense for intangible assets was $41.5 million for 2020 and $44.0 million for 2019.

Based on the current carrying value of intangible assets subject to amortization, estimated amortization expense is $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.

Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

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 as of January 1, 2019. The standard did not materially impact our consolidated net income (loss) and had no impact on cash flows.

The components of lease expense were as follows:


		Years ended December 31,
	Classification	2020		2019
Operating lease cost	DS&A Expenses	$	53,675	$	53,588
Finance lease cost:
Amortization of lease assets	DS&A Expenses	963		1,322
Interest on lease liabilities	Interest expense, net	1,283		1,189
Total finance lease cost		2,246		2,511
Short-term lease cost	DS&A Expenses	1,081		348
Variable lease cost	DS&A Expenses	15,611		16,415
Total lease cost		$	72,613	$	72,862

Variable lease cost consists primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities which are paid as incurred.

Supplemental balance sheet information is as follows:


		As of December 31,
	Classification	2020		2019
Assets:
Operating lease assets	Operating lease assets	$	144,755	$	142,219
Finance lease assets	Property and equipment, net	7,222		7,948
Total lease assets		$	151,977	$	150,167
Liabilities:
Current
Operating	Other current liabilities	$	33,412	$	31,568
Finance	Other current liabilities	1,085		1,014
Noncurrent
Operating	Operating lease liabilities, excluding current portion	119,932		117,080
Finance	Long-term debt, excluding current portion	10,124		11,692
Total lease liabilities		$	164,553	$	161,354

The gross value recorded under finance leases was $17.4 million and $15.9 million with associated accumulated depreciation of $10.2 million and $8.0 million as of December 31, 2020 and 2019.

Other information related to leases was as follows:


	Years ended December 31,
	2020			2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	54,541		$	54,300
Financing cash flows from finance leases	$	879		$	1,205

Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	41,616		$	33,933

Weighted average remaining lease term (years)
Operating leases	5.2			5.1
Finance leases	7.9			8.8

Weighted average discount rate
Operating leases	11.8		%	11.9		%
Finance leases	12.3		%	9.7		%

Maturities of lease liabilities as of December 31, 2020 were as follows:


	Operating Leases		Finance Leases		Total
2021	$	47,930	$	2,077	$	50,007
2022	42,382		2,008		44,390
2023	34,053		1,961		36,014
2024	26,964		1,919		28,883
2025	18,348		1,916		20,264
Thereafter	41,101		6,492		47,593
Total lease payments	210,778		16,373		227,151
Less: Interest	(57,434)		(5,164)		(62,598)
Present value of lease liabilities	$	153,344	$	11,209	$	164,553

Leases

The components of lease expense were as follows:


		Years ended December 31,
	Classification	2020		2019
Operating lease cost	DS&A Expenses	$	53,675	$	53,588
Finance lease cost:
Amortization of lease assets	DS&A Expenses	963		1,322
Interest on lease liabilities	Interest expense, net	1,283		1,189
Total finance lease cost		2,246		2,511
Short-term lease cost	DS&A Expenses	1,081		348
Variable lease cost	DS&A Expenses	15,611		16,415
Total lease cost		$	72,613	$	72,862

Variable lease cost consists primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities which are paid as incurred.

Supplemental balance sheet information is as follows:


		As of December 31,
	Classification	2020		2019
Assets:
Operating lease assets	Operating lease assets	$	144,755	$	142,219
Finance lease assets	Property and equipment, net	7,222		7,948
Total lease assets		$	151,977	$	150,167
Liabilities:
Current
Operating	Other current liabilities	$	33,412	$	31,568
Finance	Other current liabilities	1,085		1,014
Noncurrent
Operating	Operating lease liabilities, excluding current portion	119,932		117,080
Finance	Long-term debt, excluding current portion	10,124		11,692
Total lease liabilities		$	164,553	$	161,354

The gross value recorded under finance leases was $17.4 million and $15.9 million with associated accumulated depreciation of $10.2 million and $8.0 million as of December 31, 2020 and 2019.

Other information related to leases was as follows:


	Years ended December 31,
	2020			2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	54,541		$	54,300
Financing cash flows from finance leases	$	879		$	1,205

Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	41,616		$	33,933

Weighted average remaining lease term (years)
Operating leases	5.2			5.1
Finance leases	7.9			8.8

Weighted average discount rate
Operating leases	11.8		%	11.9		%
Finance leases	12.3		%	9.7		%

Maturities of lease liabilities as of December 31, 2020 were as follows:


	Operating Leases		Finance Leases		Total
2021	$	47,930	$	2,077	$	50,007
2022	42,382		2,008		44,390
2023	34,053		1,961		36,014
2024	26,964		1,919		28,883
2025	18,348		1,916		20,264
Thereafter	41,101		6,492		47,593
Total lease payments	210,778		16,373		227,151
Less: Interest	(57,434)		(5,164)		(62,598)
Present value of lease liabilities	$	153,344	$	11,209	$	164,553

Exit and Realignment Costs

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

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 the sale of certain assets of Fusion5, our strategic organizational realignment which include management changes, certain professional fees, costs to streamline administrative functions and processes and divestiture related costs.

Exit and realignment charges by segment for the years ended December 31, 2020 and 2019 were as follows:


Year ended December 31,	2020		2019
Global Solutions	$	22,093	$	9,133
Global Products	3,839		5,264
Total exit and realignment charges	$	25,932	$	14,397

The following table summarizes the activity related to exit and realignment cost accruals through December 31, 2020:


	Total
Accrued exit and realignment charges, December 31, 2018	$	7,477
Provision for exit and realignment activities:
Severance	6,008
Information system restructuring costs	2,531
Other	5,858
Cash payments	(13,712)
Accrued exit and realignment charges, December 31, 2019	8,162
Provision for exit and realignment activities:
Severance	5,623
Information system restructuring costs	2,119
Lease obligations	1,051
Other	6,519
Cash payments	(20,328)
Accrued exit and realignment charges, December 31, 2020	$	3,146

In addition to the exit and realignment accruals in the preceding table, we also incurred $10.6 million of costs that were expensed as incurred for the year ended December 31, 2020, including $4.9 million in impairment charges related to our client engagement center right-of-use asset, $3.7 million in loss on the sale of certain Fusion5 assets and $2.0 million in other asset charges.

We do not expect material additional costs in 2021 for activities that were initiated through December 31, 2020.

Acquisition-related and exit and realignment charges presented in our consolidated statements of operations includes acquisition-related charges of $11.8 million and $15.7 million for the years ended December 31, 2020 and 2019, and consisted primarily of transition costs for the Halyard acquisition.

Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt

Debt consists of the following:


	2020				2019
December 31,	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
3.875% Senior Notes	$	—	$	—	$	236,234	$	229,356
4.375% Senior Notes, due December 2024	244,780		253,241		273,978		212,086
Term Loan A-1	—		—		206,521		209,375
Term Loan A-2	33,865		34,390		170,899		173,675
Term Loan B	477,525		486,614		480,337		442,217
Revolver	103,200		103,200		177,900		177,900
Receivable Securitization	152,929		155,100		—		—
Finance leases and other	13,668		13,668		13,783		13,783
Total debt	1,025,967		1,046,213		1,559,652		1,458,392
Less current maturities	(39,949)		(40,453)		(51,237)		(51,237)
Long-term debt	$	986,018	$	1,005,760	$	1,508,415	$	1,407,155

We have $245 million, net of debt issuance costs and deferred fees, of 4.375% senior notes due in 2024 (the 2024 Notes), with interest payable semi-annually. The 3.875% Senior Notes (2021 Notes), which were fully repaid as of December 31, 2020, 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 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 Treasury Rate plus 30 basis points.

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. 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 pending their application to either the outstanding 2021 Notes or Term A Loans within 210 days of the Divestiture Date. On November 30, 2020 (Redemption Date), we elected to redeem all of our outstanding 2021 Notes. As required by the Fourth Supplemental Indenture, the redemption price included accrued and unpaid interest to, but not including, the Redemption Date, and a redemption premium of $5.0 million, which reflected the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points. Including the tender offer, we used $269 million of cash to repurchase $267 million aggregate principal amount of the 2021 Notes and 2024 Notes during 2020. We used $36.2 million of cash to repurchase $37.3 million aggregate principal amount of the 2021 Notes during 2019.

We have a Credit Agreement (last amended February 13, 2020) with a $400 million revolving credit facility and $511 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 interest rate on the revolving credit facility at December 31, 2020 was Eurocurrency Rate plus 2.75%. 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 interest rate on the Term B Loan at December 31, 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 Term B Loan. 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. The revolving credit facility matures in July 2022 and the Term B Loan matures in April 2025.

We used the proceeds from the follow-on equity offering completed on October 6, 2020 to repay the remaining $109 million outstanding balance of Term Loan A-1 at par on October 8, 2020, to repay $51.7 million of our Term Loan A-2 at par on October 15, 2020, and to repay $30.0 million of borrowings under the revolving credit facility. See Note 16 for additional information regarding the follow-on equity offering.

At December 31, 2020 and 2019, we had borrowings of $103 million and $178 million and letters of credit of $13.9 million and $11.7 million outstanding under the revolving credit facility. At December 31, 2020 and 2019, we had $283 million and $209 million available for borrowing. There were no letters of credit associated with discontinued operations as of December 31, 2020. The December 31, 2019 availability reflected letters of credit associated with discontinued operations of $1.1 million. We also had letters of credit and bank guarantees outstanding for $1.6 million and $1.5 million as of December 31, 2020 and 2019, 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 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 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 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 of 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. 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 us 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 December 31, 2020.

As of December 31, 2020, scheduled future principal payments of debt were $24.7 million in 2021, $123 million in 2022, $160 million in 2023, $251 million in 2024, and $469 million in 2025. Maturities in 2021 and 2022 include $19.7 million and $14.7 million related to the Term A-2 Loans, which were fully repaid on January 4, 2021.

Share-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

We maintain a share-based compensation plan (the Plan) that is administered by the Compensation and Benefits Committee of the Board of Directors. The Plan allows us to award or grant to officers, directors and employees incentive, non-qualified and deferred compensation stock options, stock appreciation rights (SARs), performance shares, and restricted and unrestricted stock. We use authorized and unissued common shares for grants of restricted stock or for stock option exercises. At December 31, 2020, approximately 4.2 million common shares were available for issuance under the Plan.

Restricted stock awarded under the Plan generally vests over one, three or five years. Certain restricted stock grants contain accelerated vesting provisions, based on the satisfaction of certain performance criteria related to the achievement of certain financial and operational results. Performance shares awarded under the Plan are issuable as restricted stock upon meeting performance goals and generally have a total performance and vesting period of three years. Stock options awarded under the Plan are generally subject to graded vesting over three years and expire seven to ten years from the date of grant. The options are granted at a price equal to fair market value at the date of grant. We did not grant any stock options in 2020 or 2019.

We recognize the fair value of stock-based compensation awards, which is based upon the market price of the underlying common stock at the grant date, on a straight-line basis over the estimated requisite service period, which may be based on a service condition, a performance condition, a market condition, or any combination of these. The fair value of performance shares as of the date of grant is estimated assuming that performance goals will be achieved at target levels. If such goals are not probable of being met, or are probable of being met at different levels, recognized compensation cost is adjusted to reflect the change in estimated fair value of restricted stock to be issued at the end of the performance period.

Total share-based compensation expense for December 31, 2020 and 2019 was $19.7 million and $15.2 million with recognized tax benefits of $5.1 million and $4.0 million. Unrecognized compensation cost related to nonvested restricted stock awards, net of estimated forfeitures, was $25.3 million at December 31, 2020. This amount is expected to be recognized over a weighted-average period of 1.9 years, based on the maximum remaining vesting period required under the awards. Unrecognized compensation cost related to nonvested performance share awards as of December 31, 2020 was $9.7 million and will be recognized primarily in 2021 if the related performance targets are met.

The following table summarizes the activity and value of nonvested restricted stock and performance share awards for the years ended December 31, 2020 and 2019:


	2020			2019
	Number of Shares	Weighted Average Grant-date Value Per Share		Number of Shares	Weighted Average Grant-date Value Per Share
Nonvested awards at beginning of year	4,515	$	9.69	2,585	$	19.94
Granted	2,289	7.29		3,624	5.29
Vested	(1,487)	11.94		(729)	18.90
Forfeited	(501)	7.69		(965)	11.86
Nonvested awards at end of year	4,816	7.64		4,515	9.69

The total fair value of restricted stock vesting during the years ended December 31, 2020 and 2019 was $17.8 million and $13.8 million.

Retirement Plans

12 Months Ended

Dec. 31, 2020

Retirement Benefits [Abstract]

Retirement Plans

Savings and Retirement Plans. We maintain a voluntary 401(k) savings and retirement plan covering substantially all full-time and certain part-time teammates in the United States who have completed one month of service and have attained age 18. We match a certain percentage of each teammates’ contribution. The plan also provides for a discretionary contribution by us to the plan for all eligible teammates, subject to certain limits, and discretionary profit-sharing contributions. We may increase or decrease our contributions at our discretion, on a prospective basis. We incurred $21.6 million and $10.5 million of expense related to this plan in 2020 and 2019. We also maintain defined contribution plans in some countries outside of the United States in which we operate. Expenses related to these plans were not material in 2020 and 2019.

U.S. Retirement Plans. We have a noncontributory, unfunded retirement plan for certain retirees in the United States (U.S. Retirement Plan). In February 2012, our Board of Directors amended the U.S. Retirement Plan to freeze benefit levels and modify vesting provisions under the plan effective as of March 31, 2012.

The following table sets forth the U.S. Retirement Plan’s financial status and the amounts recognized in our consolidated balance sheets:


December 31,	2020			2019
Change in benefit obligation
Benefit obligation, beginning of year	$	53,602		$	48,163

Interest cost	1,420			1,858
Actuarial loss	6,632			7,075
Benefits paid	(4,270)			(3,494)

Benefit obligation, end of year	$	57,384		$	53,602
Change in plan assets
Fair value of plan assets, beginning of year	$	—		$	—
Employer contribution	4,270			3,494
Benefits paid	(4,270)			(3,494)
Fair value of plan assets, end of year	$	—		$	—
Funded status, end of year	$	(57,384)		$	(53,602)
Amounts recognized in the consolidated balance sheets
Other current liabilities	$	(3,933)		$	(3,929)
Other liabilities	(53,451)			(49,672)
Accumulated other comprehensive loss	25,492			19,732
Net amount recognized	$	(31,892)		$	(33,869)
Accumulated benefit obligation	$	57,384		$	53,602
Weighted average assumptions used to determine benefit obligation
Discount rate	1.95		%	2.75		%
Rate of increase in compensation levels	N/A			N/A

Plan benefit obligations of the U.S. Retirement Plan were measured as of December 31, 2020 and 2019. Plan benefit obligations are determined using assumptions developed at the measurement date. The weighted average discount rate, which is used to calculate the present value of plan liabilities, is an estimate of the interest rate at which the plan liabilities could be effectively settled at the measurement date. When estimating the discount rate, we review yields available on high-quality, fixed-income debt instruments and use a yield curve model from which the discount rate is derived by applying the projected benefit payments under the plan to points on a published yield curve.

The components of net periodic benefit cost for the U.S. Retirement Plan were as follows:


Year ended December 31,	2020			2019

Interest cost	$	1,420		$	1,858

Recognized net actuarial loss	872			1,065

Net periodic benefit cost	$	2,292		$	2,923
Weighted average assumptions used to determine net periodic benefit cost
Discount rate	2.75		%	4.00		%
Rate of increase in future compensation levels	N/A			N/A

Amounts recognized for the U.S. Retirement Plan as a component of accumulated other comprehensive loss as of the end of the year that have not been recognized as a component of the net periodic benefit cost are presented in the following table. We expect to recognize approximately $1.2 million of the net actuarial loss reported in the following table as of December 31, 2020, as a component of net periodic benefit cost during 2021.


Year ended December 31,	2020		2019
Net actuarial loss	$	(25,492)	$	(19,732)

Deferred tax benefit	9,552		7,866
Amounts included in accumulated other comprehensive loss, net of tax	$	(15,940)	$	(11,866)

As of December 31, 2020, the expected benefit payments required for each of the next five years and the five-year period thereafter for the U.S. Retirement Plan were as follows:


Year
2021	$	3,914
2022	3,794
2023	3,674
2024	3,545
2025	3,417
2026-2030	14,962

International Retirement Plans. Certain of our foreign subsidiaries have defined benefit pension plans covering substantially all of their respective teammates. As of December 31, 2020 and 2019, the accumulated benefit obligation under these plans was $11.5 million and $7.3 million. We recorded $2.3 million and $1.0 million in net periodic benefit cost in Other expense, net for the years ended December 31, 2020 and 2019.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 55
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=118257860&loc=d3e4179-114921

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section S99
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (o)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (p)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 70
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 60
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (q)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (l)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

+ Details

Derivatives

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

We are directly and indirectly affected by changes in foreign currency and interest rates, 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 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 and Receivables Securitization Program which fluctuate based on changes in our benchmark interest rates. In order to mitigate the risk of increases in benchmark rates, from time to time we enter into interest rate swaps 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. All derivatives are carried at fair value in our consolidated balance sheets in other assets, net 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 December 31, 2020:


				Derivative Assets			Derivative Liabilities
	Notional Amount		Maturity Date	Classification	Fair Value		Classification	Fair Value
Cash flow hedges
Interest rate swaps	$	300,000	May 2022 and May 2025	Other assets, net	$	—	Other liabilities	$	17,872

Economic (non-designated) hedges
Foreign currency contracts	$	30,300	January 2021	Other current assets	$	151	Other current liabilities	$	—

We terminated $150 million in notional value of interest rate swaps on September 30, 2020. The remaining December 31, 2020 balance of the fair value adjustments of $10.1 million, which related to these terminated interest rate swaps within accumulated other comprehensive loss, will be recognized in interest expense ratably over the remaining life of the Term B Loan.

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 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 May 2025

Other assets, net

—

Other liabilities

17,436

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the year ended December 31, 2020:


	Amount of Loss Recognized in Other Comprehensive Income		Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income	Total Amount of Expense Line Items Presented in the Consolidated Statement of Operations in Which the Effects are Recorded		Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
Interest rate swaps	$	(19,741)	Interest expense, net	$	(83,398)	$	(9,232)

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

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the year ended December 31, 2019:


	Amount of Loss Recognized in Other Comprehensive Loss		Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income	Total Amount of Expense Line Items Presented in the Consolidated Statement of Operations in Which the Effects are Recorded		Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
Interest rate swaps	$	(12,983)	Interest expense, net	$	(98,113)	$	(2,423)
Foreign currency contracts	$	(28)	Cost of goods sold	$	(8,082,448)	$	517

For the years ended December 31, 2020 and 2019, we recognized a loss of $0.7 million and a gain of $1.0 million, associated with our economic (non-designated) foreign currency contracts.

We recorded the change in fair value of derivative instruments and the remeasurement adjustment of the foreign currency denominated asset or liability in other operating (income) expense, net for our foreign exchange contracts.

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

The components of income (loss) before income taxes consist of the following:


Year ended December 31,	2020		2019
Income (loss) before income taxes:
U.S.	$	80,632	$	(32,953)
Foreign	29,276		4,234
Income (loss) before income taxes	$	109,908	$	(28,719)

The income tax provision (benefit) consists of the following:


Year ended December 31,	2020		2019
Current tax provision (benefit):
Federal	$	(4,430)	$	2,501
State	6,527		197
Foreign	4,172		8,569
Total current tax provision	6,269		11,267
Deferred tax provision (benefit):
Federal	16,512		(6,150)
State	(1,132)		(1,575)
Foreign	185		(9,677)
Total deferred tax provision (benefit)	15,565		(17,402)
Total income tax provision (benefit)	$	21,834	$	(6,135)

A reconciliation of the federal statutory rate to our effective income tax rate is shown below:


Year ended December 31,	2020		2019
Federal statutory rate	21.0	%	21.0	%
Increases (decreases) in the rate resulting from:
Net capital loss on Divestiture	(24.8)	%	—	%
Tax reform	(11.4)	%	—	%
Unrecognized tax benefits	5.0	%	(5.0)	%
State income taxes, net of federal income tax impact	3.2	%	6.6	%
Research and development credit	(2.9)	%	9.8	%
Foreign income taxes	0.7	%	(3.7)	%
Valuation allowance	27.1	%	(1.4)	%
Restricted stock vestings	1.0	%	(6.7)	%
Other	1.0	%	0.8	%
Effective income tax rate	19.9	%	21.4	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:


December 31,	2020		2019
Deferred tax assets:
Employee benefit plans	$	28,546	$	26,401
Accrued liabilities not currently deductible	23,872		24,441
Finance charges	1,928		2,678
Lease liabilities	43,342		42,077
Allowance for losses on accounts receivable	3,629		4,157
Net operating loss carryforwards	4,924		8,394
Capital loss carryover	27,624		—
Outside basis difference	—		12,408
Interest limitation	1,502		12,905
Derivatives	7,920		5,057
Other	5,733		10,611
Total deferred tax assets	149,020		149,129
Less: valuation allowances	(31,709)		(14,282)
Net deferred tax assets	117,311		134,847
Deferred tax liabilities:
Merchandise inventories	42,509		42,872
Goodwill	1,603		296
Property and equipment	34,005		32,689
Right-of-use assets	39,514		39,043
Computer software	7,447		9,032
Insurance	1,108		1,082
Intangible assets	27,349		35,451
Withholding tax liabilities	7,451		6,965
Other	344		697
Total deferred tax liabilities	161,330		168,127
Net deferred tax liability	$	(44,019)	$	(33,280)

The valuation allowances relate to deferred tax assets for U.S. federal and state capital loss carryforwards and net operating loss carryforwards in various state jurisdictions. The U.S. capital loss carryforward, which has a full valuation allowance, has an expiration date of five years. The capital loss and net operating loss carryforwards in various state jurisdictions have various expiration dates ranging from five years to an unlimited carryforward period. Based on management’s judgment using available evidence about historical and expected future taxable earnings, management believes it is more likely than not that we will realize the benefit of the existing deferred tax assets, net of valuation allowances, at December 31, 2020.

Cash payments for income taxes, including interest, for 2020 and 2019 were $15.4 million and $18.1 million. Cash tax refunds received for 2020 and 2019 were $32.8 million and $24.3 million.

A summary of the changes in the liability for unrecognized tax benefits from the beginning to the end of the reporting period is as follows:


	2020		2019
Unrecognized tax benefits at January 1,	$	11,520	$	9,568
Increases for positions taken during current period	1,488		394
Increases for positions taken during prior periods	9,073		1,629
Lapse of statute of limitations	(1,311)		(71)
Unrecognized tax benefits at December 31,	20,770		11,520

Included in the liability for unrecognized tax benefits at December 31, 2020 and 2019, were $2.7 million and $3.1 million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the

timing of such deductibility. These tax positions are temporary differences which do not impact the annual effective tax rate under deferred tax accounting. Any change in the deductibility period of these tax positions would impact the timing of cash payments to taxing jurisdictions. Unrecognized tax benefits of $18.0 million and $8.4 million at December 31, 2020 and 2019 would impact our effective tax rate if recognized.

We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. Accrued interest at December 31, 2020 and 2019 was $2.6 million and $1.3 million. The amounts recognized in interest expense for the years ended December 31, 2020 and 2019 were $1.3 million and $0.7 million. There were no penalties accrued at December 31, 2020 and 2019 or recognized in 2020 and 2019.

On August 26, 2020, we received a Notice of Proposed Adjustment (NOPA) from the Internal Revenue Services (IRS) regarding our 2015 and 2016 Consolidated Income Tax Returns. Within the NOPA, the IRS has asserted that our taxable income for 2015 and 2016 should be higher based on their assessment of the appropriate amount of taxable income that we should report in the United States in connection with our sourcing of products by our foreign subsidiaries for sale in the United States by our domestic subsidiaries. Our amount of taxable income in the United States is based on our transfer pricing methodology, which has been consistently applied through the current date. We strongly disagree with the IRS position and will pursue all available administrative and judicial remedies including those available under the U.S. - Ireland Income Tax Treaty to alleviate double taxation. We regularly assess the likelihood of adverse outcomes resulting from examinations such as this to determine the adequacy of our tax reserves. We believe that we have adequately reserved for this matter and that the final adjudication of this matter will not have a material impact on our consolidated financial position, results of operations or cash flows. However, the ultimate outcome of disputes of this nature is uncertain, and if the IRS were to prevail on its assertions, the additional tax, interest, and any potential penalties could have a material adverse impact on our financial position, results of operations or cash flows.

We file income tax returns in the U.S. federal and various state and foreign jurisdictions. Our U.S. federal income tax returns for the years 2015, 2016, 2017, 2018 and 2019 are subject to examination. Our income tax returns for U.S. state and local jurisdictions are generally open for the years 2017 through 2019; however, certain returns may be subject to examination for differing periods. The former owners are contractually obligated to indemnify us for all income tax liabilities incurred by Byram entities prior to its acquisition on August 1, 2017, and for all income tax liabilities incurred by the Halyard foreign entities located in Thailand, Mexico, and Honduras prior to its acquisition on April 30, 2018.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Net Income (Loss) per Common Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Net Income (Loss) per Common Share

The following table summarizes the calculation of net income (loss) per share attributable to common shareholders for the years ended December 31, 2020 and 2019:


Year ended December 31,	2020		2019
Weighted average shares outstanding - basic	63,368		60,574
Dilutive shares	144		—
Weighted average shares outstanding - diluted	63,512		60,574

Income (loss) from continuing operations	$	88,074	$	(22,584)
Basic and diluted per share	$	1.39	$	(0.37)

Loss from discontinued operations	$	(58,203)	$	(39,787)
Basic and diluted per share	$	(0.92)	$	(0.66)

Net income (loss)	$	29,871	$	(62,371)
Basic and diluted per share	$	0.47	$	(1.03)

Shareholders' Equity	12 Months Ended
Shareholders' Equity	Dec. 31, 2020
Equity [Abstract]
Shareholders' Equity	Shareholders’ Equity In May 2020, we entered into an equity distribution agreement, pursuant to which we may offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $50.0 million. We intend to use the net proceeds from the sale of our securities offered by this program for the repayment of indebtedness and/or for general corporate and working capital purposes. As of December 31, 2020, no shares were issued and $50.0 million of common stock remained available under the at-the-market equity financing program. On October 6, 2020, we completed a follow-on equity offering wherein we sold an aggregate of 8,475,000 shares of our common stock at an offering price of $20.50, resulting in net proceeds to us of approximately $165 million, after deducting expenses relating to the follow-on equity offering, including the underwriters’ discounts and commissions. Pursuant to the underwriting agreement, we granted the underwriters an option to purchase up to an additional 1,271,250 shares of our common stock, which the underwriters exercised in full. Inclusive of this exercised option, net proceeds to us were approximately $190 million, after deducting expenses relating to the follow-on equity offering, including the underwriters’ discounts and commissions. We used the proceeds from the follow-on equity offering to repay the remaining $109 million outstanding balance of Term Loan A-1 at par on October 8, 2020, to repay $51.7 million of our Term Loan A-2 at par on October 15, 2020, and to repay $30.0 million of borrowings under the revolving credit facility.

Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Loss

The following tables show the changes in accumulated other comprehensive loss by component for the years ended December 31, 2020 and 2019: