What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-02-23 compared with 2021-02-24 · 303 added, 330 removed, 1089 unchanged (37% of the section changed)

Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

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

Based upon that evaluation, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2020.

There has been no change in our internal control over financial reporting during our last fiscal quarter ended December 31, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2021.

Management’s Report on Internal Control over Financial Reporting

6 unchanged sentences

Based on management’s assessment and the COSO criteria, management believes that our internal control over financial reporting was effective as of December 31, 2021.

The effectiveness of our internal control over financial reporting as of December 31, 2020, has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included in this annual report.

The effectiveness of our internal control over financial reporting as of December 31, 2021, has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their unqualified report which is included in this annual report.

/s/ Edward A.

2 unchanged sentences

Long, Executive Vice President & Chief Financial Officer

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during our last quarter ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information

6 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for the years then ended and the related notes (collectively, the consolidated financial statements), and our report dated February 24, 2021 expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the consolidated financial statements), and our report dated February 23, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

29 unchanged sentences

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm 64

Report of Independent Registered Public Accounting Firm ( KPMG, LLP , Richmond, VA , Auditor Firm ID:

See Index to Exhibits on page 70.

12 unchanged sentences

Interest expense, net 48,090 83,398 98,113

Other expense, net 10,812 3,757

Loss on extinguishment of debt 40,433 11,219 830

Other expense (income), net 3,196 ( 407 ) 2,927

Income (loss) from continuing operations before income taxes 276,754 109,908 ( 28,719 )

3 unchanged sentences

Net income (loss) $ 221,589 $ 29,871 $ ( 62,371 )

Income (loss) from continuing operations per common share:

basic and diluted $ 1.39 $ ( 0.37 )

Loss from discontinued operations per common share:

basic and diluted ( 0.92 ) ( 0.66 )

Net income (loss) per common share:

basic and diluted $ 0.47 $ ( 1.03 )

Basic income (loss) per common share:

Income (loss) from continuing operations $ 3.05 $ 1.39 $ ( 0.37 )

Loss from discontinued operations — ( 0.92 ) ( 0.66 )

Net income (loss) $ 3.05 $ 0.47 $ ( 1.03 )

Diluted income (loss) per common share:

Income (loss) from continuing operations $ 2.94 $ 1.39 $ ( 0.37 )

Loss from discontinued operations — ( 0.92 ) ( 0.66 )

Net income (loss) $ 2.94 $ 0.47 $ ( 1.03 )

See accompanying notes to consolidated financial statements.

7 unchanged sentences

Currency translation adjustments ( 25,976 ) 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 )

Change in unrecognized net periodic pension costs 3,850 ( 3,756 ) ( 6,545 )

Change in gains and losses on derivative instruments 20,044 ( 7,329 ) ( 7,800 )

Total other comprehensive income (loss), net of tax ( 2,082 ) 14,198 ( 7,095 )

Comprehensive income (loss) $ 219,507 $ 44,069 $ ( 69,466 )

10 unchanged sentences

Other current assets 88,564 118,264

Current assets of discontinued operations — 439,983

Total current assets 2,321,812 2,135,865

10 unchanged sentences

Other current liabilities 226,204 236,094

Current liabilities of discontinued operations — 323,511

Total current liabilities 1,344,021 1,345,727

4 unchanged sentences

Total liabilities 2,598,050 2,623,585

Commitments and contingencies

Commitments and contingencies (Note 18)

Common stock, par value $ 2 per share;

20 unchanged sentences

Loss on divestiture — 65,472 —

Deferred income tax expense (benefit) 15,564 ( 17,402 )

Loss on extinguishment and modification of debt 40,433 11,219 830

Deferred income tax (benefit) expense ( 29,736 ) 15,564 ( 17,402 )

Provision for losses on accounts receivable 21,158 11,292 12,914

11 unchanged sentences

Additions to computer software ( 8,705 ) ( 8,769 ) ( 9,809 )

Proceeds from sale of property and equipment 234 331

Proceeds from cash surrender value of life insurance policies 6,032 —

Cash provided by (used for) investing activities 80,073 ( 51,897 )

Other, net ( 3,940 ) 6,266 331

Cash (used for) provided by investing activities ( 53,630 ) 80,073 ( 51,897 )

Financing activities:

1 unchanged sentence

Proceeds from issuance of common stock — 189,971 —

Repayments of revolving credit facility ( 74,700 ) ( 32,200 )

Repayment of debt ( 617,271 ) ( 85,592 )

Repayments of revolving credit facility, net ( 103,200 ) ( 74,700 ) ( 32,200 )

Repayments of debt ( 553,140 ) ( 617,271 ) ( 85,592 )

Financing costs paid ( 13,912 ) ( 10,367 ) ( 4,313 )

1 unchanged sentence

Senior Notes make-whole premium paid — ( 4,980 ) —

Payment for termination of interest rate swaps ( 15,434 ) — —

Other, net ( 17,961 ) ( 16,491 ) ( 2,866 )

Cash used for financing activities ( 129,478 ) ( 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 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 3,540 ) 9,909 ( 2,671 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 62,471 ) 49,819 ( 18,680 )

Cash, cash equivalents and restricted cash at beginning of year 134,506 84,687 103,367

2 unchanged sentences

Supplemental disclosure of cash flow information:

Income taxes received, net of payments $ ( 17,455 ) $ ( 6,198 )

Income taxes paid (received), net of refunds $ 99,400 $ ( 17,455 ) $ ( 6,198 )

Interest paid $ 38,717 $ 89,961 $ 95,413

25 unchanged sentences

Balance, December 31, 2020 73,472 146,944 436,597 167,022 ( 38,509 ) 712,054

Net income 221,589 221,589

Other comprehensive loss ( 2,082 ) ( 2,082 )

Dividends declared ($ 0.01 per share)

( 992 ) ( 992 )

Share-based compensation expense, exercises and other 1,961 3,921 4,011 7,932

Balance, December 31, 2021 75,433 $ 150,865 $ 440,608 $ 387,619 $ ( 40,591 ) $ 938,501

See accompanying notes to consolidated financial statements.

5 unchanged sentences

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.

and subsidiaries (we, us, our or the Company), a Fortune 500 company headquartered in Richmond, Virginia, is a global healthcare solutions company that incorporates product manufacturing, distribution support and innovative technology services to deliver significant and sustained value across the breadth of the industry – from acute care to patients in their home.

Our teammates serve healthcare industry customers in approximately 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.

3 unchanged sentences

Unless otherwise indicated, information in these notes to consolidated financial statements relates to continuing operations.

Reclassifications.

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

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.

Estimates are used for, but are not limited to, the allowances for losses on accounts receivable, inventory valuation allowances, customer discounts and 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.

4 unchanged sentences

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.

Restricted cash included in other assets, net as of December 31, 2021 and 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) initiatives related to wind-down costs of Fusion5.

As of December 31, 2020, restricted cash included in other current assets represents cash held in a designated account 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.

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.

3 unchanged sentences

Restricted cash included in Other assets, net 16,323 16,322

Cash of discontinued operations — 1,396

Total cash, cash equivalents and restricted cash $ 72,035 $ 134,506

6 unchanged sentences

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.

For our Patient Direct business, accounts receivable are recorded net of a contractual allowance.

We maintain valuation allowances based upon the expected collectability of accounts receivable.

19 unchanged sentences

We also lease some of our transportation and material handling equipment for terms generally ranging from three to 11 years.

Leases with a term of 12 months or less are not recorded on the balance sheet;

Leases with a term of 12 months or less are not recorded on the consolidated balance sheets;

we recognize lease expense for these leases on a straight-line basis over the lease term.

2 unchanged sentences

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.

We elected the practical expedient to not separate lease and non-lease components for our leases.

Operating lease assets and liabilities are recognized at commencement date based on the present value of unpaid lease payments over the lease term.

15 unchanged sentences

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.

Intangible assets, consisting primarily of customer relationships, customer contracts, 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.

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.

3 unchanged sentences

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.

We also develop software for external use.

Costs related to the research and development of software for external use are expensed as incurred until the technological feasibility of the product is established.

After technological feasibility is established, costs are capitalized until the product is available for sale.

Capitalized computer software costs are amortized over the estimated useful life of the software, usually between three and 10 years.

1 unchanged sentence

Unamortized software at December 31, 2021 and 2020 was $ 34.0 million and $ 38.0 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.

Depreciation and amortization expense includes $ 10.3 million, $ 10.2 million, and $ 9.3 million of software amortization for the years ended December 31, 2021, 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.

Our SaaS subscription revenue is generated from granting customers the right to use our software products and were not material to our consolidated financial statements for 2021, 2020 and 2019.

Long-Lived Assets.

3 unchanged sentences

Self-Insurance Liabilities.

We are self-insured for certain employee healthcare, workers’ compensation and automobile liability costs;

We are self-insured for certain teammate healthcare, workers’ compensation and automobile liability costs;

however, we maintain insurance for individual losses exceeding certain limits.

2 unchanged sentences

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.

Self-insurance liabilities are included in other current liabilities in the consolidated balance sheets and were not material as of December 31, 2021 and 2020.

Revenue Recognition.

7 unchanged sentences

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.

The amount accrued for rebates and discounts due to customers was $ 118.1 million and $ 74.0 million at December 31, 2021 and 2020.

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.

3 unchanged sentences

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.

For our Patient Direct 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.

16 unchanged sentences

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.

Shipping and handling costs totaled $ 445 million, $ 389 million, and $ 422 million for the years ended December 31, 2021, 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.

The fair value of nonvested performance shares is dependent upon our assessment of the probability of achievement of financial targets for the performance period.

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 are directly and indirectly affected by changes in foreign currency, which may adversely impact our financial performance and are referred to as “market risks.” When deemed appropriate, we use derivatives as a risk management tool to mitigate the potential impact of certain market risks.

We use forward contracts, which are agreements to buy or sell a quantity at a predetermined future date and at a predetermined rate or price.

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.

17 unchanged sentences

We have no specific plans to indefinitely reinvest the unremitted earnings of our foreign subsidiary located in Thailand as of December 31, 2021.

As such, we have recorded withholding tax liabilities that would be incurred upon future distribution to the U.S.

As such, we have recorded withholding tax liabilities that would be incurred upon future distribution to the United States.

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 2022 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.

Our policy election for global intangible low-taxed income (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.

1 unchanged sentence

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 amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued payroll and related liabilities 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.

1 unchanged sentence

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.

The fair value of our derivative contracts are 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.

3 unchanged sentences

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.

Exit and realignment charges consist of costs associated with optimizing our operations which includes the consolidation of certain distribution centers, warehouses, our client engagement center and IT restructuring charges.

These charges also include costs associated with our strategic organizational realignment which include reorganization costs, certain professional fees, costs to streamline administrative functions and processes, divestiture related costs, and other items.

Costs associated with exit and realignment activities are recorded at their fair value when incurred.

1 unchanged sentence

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.

The current portion of contractual termination costs are included in other current liabilities in our 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, 2021 and 2020.

Severance benefits are recorded when payment is considered probable and reasonably estimable.

1 unchanged sentence

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.

Diluted income per share reflects the potential dilution that could occur if restricted awards were exercised or converted into common stock.

Foreign Currency Translation.

4 unchanged sentences

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.

Realized gains and losses from foreign currency transactions are recorded in other operating (income) expense, net in the consolidated statements of operations and were not material to our consolidated results of operations in 2021, 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.

The Movianto business represented a component that met accounting requirements to be classified as discontinued operations through June 18, 2020 (the Divestiture Date).

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.

4 unchanged sentences

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.

Our acquisitions may include contingent consideration as part of the purchase price.

The fair value of the contingent consideration is estimated as of the acquisition date based on the present value of the contingent payments to be made using a weighted probability of possible payments.

Each reporting period thereafter, we revalue these obligations and record changes in their fair value as an adjustment to Acquisition-related and exit and realignment charges within the consolidated statements of operations.

Recent Accounting Pronouncements .

During 2021, 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.

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.

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 adopted ASU No.

2 unchanged sentences

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):

2 unchanged sentences

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 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.

Our current debt agreements contemplate a transition from LIBOR to another benchmark rate when LIBOR ceases to exist.

We do not expect the transition to have a material impact on our consolidated financial statements.

In October 2020, the FASB issued ASU No.

2 unchanged sentences

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 adopted ASU No.

2020-10 effective beginning January 1, 2021.

Its adoption did not have a material impact on our consolidated financial statements.

Recently issued accounting pronouncements not yet adopted as of December 31, 2021:

On June 16, 2016, the FASB issued ASU No.

2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings.

This standard will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted.

We are still evaluating the impact the adoption of ASU No.

2016-13 will have on our consolidated financial statements and related disclosures;

however, we do not expect this to have a material impact.

Subsequent to the issuance of ASU No.

2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses and ASU No.

2019-05, Financial Instruments - Credit Losses (Topic 326) Targeted Transition Relief.

These ASUs do not change the core principle of the guidance in ASU No.

Instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard.

These ASUs will have the same effective date and transition requirements as ASU No.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance, which requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy.

The amendments are effective for fiscal years beginning after December 15, 2021.

We do not expect this to have a material impact on our consolidated financial statements.

6 unchanged sentences

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:

For 2021, net revenue from hospitals under contract with these GPOs represented the following approximate percentages of our consolidated net revenue:

Vizient— 34 %;

6 unchanged sentences

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:

15 unchanged sentences

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.

All revenue and expense included in discontinued operations during the year ended December 31, 2020 related 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.

We entered into transition services agreements with a subsidiary of the Buyer, pursuant to which we and a subsidiary of the Buyer provided to each other various transitional services.

Certain transition service arrangement costs and reimbursements were recorded during the years ended December 31, 2021 and 2020.

These amounts were immaterial for the years ended December 31, 2021 and 2020.

These arrangements were substantially completed as of December 31, 2021.

We had no assets and liabilities associated with the discontinued Movianto business reflected on the consolidated balance sheet as of December 31, 2021 and 2020.

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

22 unchanged sentences

Property and equipment, net $ 317,235 $ 315,662

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.

Depreciation expense for property and equipment and assets under finance leases was $ 40.5 million, $ 41.5 million, and $ 43.5 million for the years ended December 31, 2021, 2020, and 2019.

Note 7— Goodwill and Intangible Assets, Net

As of October 1, 2021 , we performed our annual impairment test and concluded that there were no impairments of goodwill.

In December 2021, we closed on an acquisition of a small kitting business, the impact of which was immaterial to our financial results.

The following table summarizes the changes in the carrying amount of goodwill through December 31, 2021:

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, 2019 $ 283,905 $ 109,276 $ 393,181

Currency translation adjustments — 905 905

Measurement period acquisition adjustments — ( 23,877 ) ( 23,877 )

Net carrying amount of goodwill, December 31, 2020 283,905 110,181 394,086

Currency translation adjustments — ( 6,717 ) ( 6,717 )

Acquisition — 2,816 2,816

Net carrying amount of goodwill, December 31, 2021 $ 283,905 $ 106,280 $ 390,185

8 unchanged sentences

At December 31, 2021 and 2020, $ 47.3 million and $ 63.2 million in net intangible assets were held in the Global Solutions segment and $ 162 million and $ 180 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.

Amortization expense for intangible assets was $ 39.8 million for 2021, $ 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 $ 39.9 million for 2022, $ 39.7 million for 2023, $ 34.9 million for 2024, $ 29.1 million for 2025, and $ 27.7 million for 2026 .

Note 8— 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:

24 unchanged sentences

Years ended December 31,

2021 2020 2019

Supplemental cash flow information

21 unchanged sentences

Note 9— 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.

We periodically incur exit and realignment and other charges associated with optimizing our operations which includes the consolidation of certain distribution centers, warehouses, our client engagement center and IT restructuring charges.

Exit and realignment charges by segment for the years ended December 31, 2021, 2020 and 2019 were as follows:

16 unchanged sentences

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.

Provision for exit and realignment activities:

Severance 9,191

Information system restructuring costs 4,752

Lease obligations 440

Cash payments ( 14,787 )

Accrued exit and realignment charges, December 31, 2021 $ 8,306

In addition to the exit and realignment accruals in the preceding table, we also incurred $ 11.2 million of costs that were expensed as incurred for the year ended December 31, 2021, which primarily includes $ 9.6 million of wind-down costs related to Fusion5.

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 expect material additional costs in 2022 for activities that were initiated through December 31, 2021.

Additionally, we anticipate new actions will be taken in 2022 that will incur costs similar to prior years.

Acquisition-related and exit and realignment charges presented in our consolidated statements of operations includes acquisition-related charges of $ 3.0 million, $ 11.8 million and $ 15.7 million for the years ended December 31, 2021, 2020 and 2019.

Acquisition-related charges in 2021 consisted primarily of costs related to the pending Apria transaction.

Acquisition-related charges in 2020 and 2019 consisted primarily of transition costs for the Halyard acquisition.

Note 10— Debt

4 unchanged sentences

Amount Estimated

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-2 $ — $ — $ 33,865 $ 34,390

Term Loan A-2 33,865 34,390 170,899 173,675

Term Loan B — — 477,525 486,614

Receivables Securitization Program 197,026 200,000 152,929 155,100

4.375 % Senior Notes, due December 2024

245,086 263,263 244,780 253,241

Revolver — — 103,200 103,200

Receivable Securitization 152,929 155,100 — —

4.500 % Senior Notes, due March 2029

491,656 515,225 — —

Finance leases and other 15,809 15,809 13,668 13,668

2 unchanged sentences

Long-term debt $ 947,540 $ 992,260 $ 986,018 $ 1,005,760

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 %.

We have $ 246 million, excluding deferred financing costs and third party fees, of 4.375 % senior notes due in 2024 (the 2024 Notes), with interest payable semi-annually.

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.

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 applicable Benchmark Treasury Rate (as defined) plus 30 basis points.

In March 2021, we issued $ 500 million, excluding deferred financing costs and third party fees, of 4.500 % senior unsecured notes due in 2029 (the 2029 Unsecured Notes), with interest payable semi-annually (the Notes Offering).

The 2029 Unsecured Notes were sold at 100 % of the principal amount with an effective yield of 4.500 %.

We used a portion of the net proceeds from the Notes Offering to repay our Term B Loan and borrowings under our revolving credit facility.

In connection with these repayments, we recorded $ 15.3 million in write-offs of deferred financing costs and third party fees within loss on extinguishment of debt for the year ended December 31, 2021.

We may redeem all or part of the 2029 Unsecured Notes prior to March 31, 2024, at a price equal to 100 % of the principal amount of the 2029 Unsecured Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make-whole” premium, as described in the Indenture dated March 10, 2021 (the Indenture).

On or after March 31, 2024, we may redeem all or part of the 2029 Unsecured Notes at the applicable redemption prices described in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

We may also redeem up to 40 % of the aggregate principal amount of the 2029 Unsecured Notes at any time prior to March 31, 2024, at a redemption price equal to 104.5 % with an amount equal to or less than the net cash proceeds from certain equity offerings, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

On March 10, 2021, we terminated our then existing credit agreement and all obligations thereunder were repaid.

On that same date, we entered into a new credit agreement with Bank of America, N.A.

and a syndicate of lenders (the Credit Agreement) with a $ 300 million revolving credit facility.

The interest rate on our revolving credit facility is based on a spread over a benchmark rate (as described in the Credit Agreement).

The Credit Agreement matures in March 2026.

At December 31, 2021, we had no borrowings and letters of credit of $ 9.4 million outstanding under our revolving credit facilities.

At December 31, 2020, we had borrowings of $ 103 million and letters of credit of $ 13.9 million outstanding under our revolving credit facilities.

At December 31, 2021 and 2020, we had $ 291 million and $ 283 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 $ 2.2 million and $ 1.6 million as of December 31, 2021 and 2020, 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.

These letters of credit and guarantees were issued outside of the revolving credit facility.

We entered into a Security and Pledge Agreement (the Security Agreement), dated March 10, 2021, pursuant to which we granted collateral on behalf of 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, subject to certain customary exceptions, and (b) all present and future personal property and assets of the Credit Parties, subject to certain exceptions.

On March 10, 2021, we entered into an amendment to our accounts receivable securitization program (the Receivables Securitization Program).

Pursuant to the amended Receivables Securitization Program, the aggregate principal amount of the loans made by the Lenders (as defined) will not exceed $ 450 million outstanding at any time.

The interest rate under the

Receivables Securitization Program is based on a spread over a benchmark rate (as described in the Third Amendment to the Receivables Financing Agreement).

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 Receivables Securitization Program matures in March 2024.

The Credit Agreement, Receivables Securitization Program, 2024 Notes and 2029 Unsecured Notes contain cross-default provisions which could result in the acceleration of payments due in the event of default of any of the related agreements.

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, 2021.

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.

As of December 31, 2021, scheduled future principal payments of debt, excluding finance leases and other, were $ 446 million in 2024 and $ 500 million in 2029.

Current maturities at December 31, 2021 include $ 2.0 million in current portion of finance leases.

Note 11— 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 maintain a share-based compensation plan (the Plan) that is administered by the Our People & Culture Committee of the Board of Directors.

The Plan allows us to award or grant to officers, directors and teammates 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.

1 unchanged sentence

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 no t 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.

1 unchanged sentence

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.

Total share-based compensation expense for December 31, 2021, 2020 and 2019 was $ 25.0 million, $ 19.7 million and $ 15.2 million with recognized tax benefits of $ 6.5 million, $ 5.1 million and $ 4.0 million.

Unrecognized compensation cost related to nonvested restricted stock awards, net of estimated forfeitures, was $ 30.8 million at December 31, 2021.

This amount is expected to be recognized over a weighted-average period of 2.0 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.

Unrecognized compensation cost related to nonvested performance share awards as of December 31, 2021 was $ 14.3 million and will be recognized primarily in 2022 and 2023 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, 2021, 2020 and 2019:

2021 2020 2019

Shares Weighted

1 unchanged sentence

Shares Weighted

Per Share Number of

Shares Weighted

Nonvested awards at beginning of year 4,816 $ 7.64 4,515 $ 9.69 2,585 $ 19.94

3 unchanged sentences

Nonvested awards at end of year 4,325 11.57 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.

The total fair value of restricted stock vesting during the years ended December 31, 2021, 2020 and 2019 was $ 16.8 million, $ 17.8 million and $ 13.8 million.

Note 12— Retirement Plans

4 unchanged sentences

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 incurred $ 23.2 million, $ 21.6 million and $ 10.5 million of expense related to this plan in 2021, 2020 and 2019.

We also maintain defined contribution plans in some countries outside of the United States in which we operate.

1 unchanged sentence

Retirement Plans.

We have a noncontributory, unfunded retirement plan for certain retirees in the United States (U.S.

We have a frozen 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.

4 unchanged sentences

Interest cost 1,080 1,420

Actuarial loss 6,632 7,075

Actuarial loss (gain) ( 4,462 ) 6,632

Benefits paid ( 3,758 ) ( 4,270 )

28 unchanged sentences

Discount rate 1.95 % 2.75 % 4.00 %

Rate of increase in future compensation levels N/A N/A

Rate of increase in future compensation levels N/A N/A N/A

Amounts recognized for the U.S.

11 unchanged sentences

As of December 31, 2021 and 2020, the accumulated benefit obligation under these plans was $ 12.3 million and $ 11.5 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.

We recorded $ 3.6 million, $ 2.3 million and $ 1.0 million in net periodic benefit cost in other expense (income), net for the years ended December 31, 2021, 2020 and 2019.

Note 13— Derivatives

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.

1 unchanged sentence

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 determine the fair value of our foreign currency derivatives 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.

All derivatives are carried at fair value in our consolidated balance sheets in other current assets and other current 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.

2 unchanged sentences

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 $ 9,700 January 2022 Other current assets $ 81 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.

In March 2021, we terminated the remaining $ 300 million in notional value of interest rate swaps concurrent with the debt financing transaction.

In September 2020, we terminated $ 150 million in notional value of interest rate swaps.

The remaining balance of the fair value adjustments of $ 25.1 million, which related to these terminated interest rate swaps, within accumulated other comprehensive loss was reclassified to loss on extinguishment of debt within our consolidated statements of operations for the year ended December 31, 2021.

The following table summarizes the terms and fair value of our outstanding derivative financial instruments as of December 31, 2020:

3 unchanged sentences

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 $ —

The following table summarizes the effect of cash flow hedge accounting on our consolidated statements of operations for the year ended December 31, 2021:

Amount of Gain Recognized in Other Comprehensive Income (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 $ 2,426 Loss on extinguishment of debt $ ( 40,433 ) $ ( 25,518 )

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, 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

5 unchanged sentences

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.

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

For the years ended December 31, 2021, 2020 and 2019 we recognized a loss of $ 2.3 million, 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.

Note 14— Income Taxes

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

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

Year ended December 31, 2021 2020 2019

Income (loss) before income taxes:

Income (loss) from continuing operations before income taxes:

$ 231,424 $ 80,632 $ ( 32,953 )

Foreign 45,330 29,276 4,234

Income (loss) before income taxes $ 109,908 $ ( 28,719 )

Income (loss) from continuing operations before income taxes $ 276,754 $ 109,908 $ ( 28,719 )

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

23 unchanged sentences

Restricted stock vestings ( 2.1 ) % 1.0 % ( 6.7 ) %

Nondeductible compensation 1.0 % — % — %

Foreign derived intangible income (FDII) ( 3.2 ) % — % — %

Other 1.6 % 1.0 % 0.8 %

10 unchanged sentences

Capital loss carryover 30,323 27,624

Outside basis difference — 12,408

Interest limitation 206 1,502

21 unchanged sentences

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, 2021.

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.

Cash payments for income taxes, including interest, for 2021, 2020 and 2019 were $ 102 million, $ 15.4 million and $ 18.1 million.

Cash tax refunds received for 2021, 2020 and 2019 were $ 2.5 million, $ 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:

4 unchanged sentences

Unrecognized tax benefits at December 31, $ 21,385 $ 20,770

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.

Included in the liability for unrecognized tax benefits at December 31, 2021 and 2020, were $ 2.7 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.

1 unchanged sentence

Unrecognized tax benefits of $ 18.7 million and $ 18.0 million at December 31, 2021 and 2020 would impact our effective tax rate if recognized.

We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

We recognize accrued interest and penalties related to unrecognized tax benefits.

Accrued interest at December 31, 2021 and 2020 was $ 2.9 million and $ 2.6 million.

The amounts recognized in interest expense for the years ended December 31, 2020 and 2019 were $ 1.3 million and $ 0.7 million.

The amounts recognized in interest expense for the years ended December 31, 2021, 2020 and 2019 were $ 0.3 million, $ 1.3 million and $ 0.7 million.

There were no penalties accrued at December 31, 2021 and 2020 or recognized in 2021, 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.

On August 26, 2020, we received a Notice of Proposed Adjustment (NOPA) from the Internal Revenue Service (IRS) regarding our 2015 and 2016 consolidated income tax returns.

On June 30, 2021, we received a NOPA from the IRS regarding our 2017 and 2018 consolidated income tax returns.

Within the NOPAs, the IRS has asserted that our taxable income for the aforementioned years 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.

6 unchanged sentences

federal and various state and foreign jurisdictions.

federal income tax returns for the years 2015, 2016, 2017, 2018 and 2019 are subject to examination.

federal income tax returns for the years 2015 through 2020 are subject to examination.

Our income tax returns for U.S.

5 unchanged sentences

Year ended December 31, 2021 2020 2019

Income (loss) from continuing operations, net of tax $ 221,589 $ 88,074 $ ( 22,584 )

Loss from discontinued operations, net of tax — ( 58,203 ) ( 39,787 )

Net income (loss) $ 221,589 $ 29,871 $ ( 62,371 )

Weighted average shares outstanding - basic 72,744 63,368 60,574

1 unchanged sentence

Weighted average shares outstanding - diluted 75,486 63,512 60,574

Basic income (loss) per common share:

Income (loss) from continuing operations $ 3.05 $ 1.39 $ ( 0.37 )

Basic and diluted per share $ 1.39 $ ( 0.37 )

Loss from discontinued operations — ( 0.92 ) ( 0.66 )

Basic and diluted per share $ ( 0.92 ) $ ( 0.66 )

Net income (loss) $ 3.05 $ 0.47 $ ( 1.03 )

Basic and diluted per share $ 0.47 $ ( 1.03 )

Diluted income (loss) per common share:

Income (loss) from continuing operations $ 2.94 $ 1.39 $ ( 0.37 )

Loss from discontinued operations — ( 0.92 ) ( 0.66 )

Net income (loss) $ 2.94 $ 0.47 $ ( 1.03 )

Note 16— Shareholders’ Equity

10 unchanged sentences

Accumulated other comprehensive loss, December 31, 2020 $ ( 18,447 ) $ ( 18 ) $ ( 20,044 ) $ ( 38,509 )

$ ( 14,691 ) $ ( 25,301 ) $ ( 12,715 ) $ ( 52,707 )

Other comprehensive income (loss) before reclassifications 4,462 ( 25,976 ) 2,426 ( 19,088 )

1 unchanged sentence

Other comprehensive income (loss) before reclassifications, net of tax 3,034 ( 25,976 ) 1,815 ( 21,127 )

Amounts reclassified from accumulated other comprehensive income 1,297 15,580 9,232 26,109

Amounts reclassified from accumulated other comprehensive loss 1,199 — 25,518 26,717

Income tax ( 383 ) — ( 7,289 ) ( 7,672 )

Amounts reclassified from accumulated other comprehensive income, net of tax 931 15,580 6,623 23,134

Amounts reclassified from accumulated other comprehensive loss, net of tax 816 — 18,229 19,045

Other comprehensive income (loss) 3,850 ( 25,976 ) 20,044 ( 2,082 )

Accumulated other comprehensive loss, December 31, 2021 $ ( 14,597 ) $ ( 25,994 ) $ — $ ( 40,591 )

$ ( 18,447 ) $ ( 18 ) $ ( 20,044 ) $ ( 38,509 )

Retirement Plans Currency Translation Adjustments Derivatives Total

Accumulated other comprehensive loss, December 31, 2019 $ ( 14,691 ) $ ( 25,301 ) $ ( 12,715 ) $ ( 52,707 )

$ ( 8,146 ) $ ( 32,551 ) $ ( 4,915 ) $ ( 45,612 )

Other comprehensive income (loss) before reclassifications ( 6,632 ) 9,703 ( 19,741 ) ( 16,670 )

1 unchanged sentence

Other comprehensive income (loss) before reclassifications, net of tax ( 4,687 ) 9,703 ( 13,952 ) ( 8,936 )

Amounts reclassified from accumulated other comprehensive income 1,196 — 1,906 3,102

Amounts reclassified from accumulated other comprehensive loss 1,297 15,580 9,232 26,109

Income tax ( 366 ) — ( 2,609 ) ( 2,975 )

Amounts reclassified from accumulated other comprehensive income, net of tax 885 — 1,296 2,181

Amounts reclassified from accumulated other comprehensive loss, net of tax 931 15,580 6,623 23,134

Other comprehensive income (loss) ( 3,756 ) 25,283 ( 7,329 ) 14,198

Accumulated other comprehensive loss, December 31, 2020 $ ( 18,447 ) $ ( 18 ) $ ( 20,044 ) $ ( 38,509 )

$ ( 14,691 ) $ ( 25,301 ) $ ( 12,715 ) $ ( 52,707 )

We include amounts reclassified out of accumulated other comprehensive loss related to defined benefit pension plans as a component of net periodic pension cost recorded in Other expense, net.

For the years ended December 31, 2020 and 2019, we reclassified $ 1.3 million, which included $ 0.4 million as a result of the Divestiture, and $ 1.2 million of actuarial net losses.

Amounts reclassified from accumulated other comprehensive loss for the year ended December 31, 2020 include currency translation adjustments released as a result of the Divestiture.

Retirement Plans Currency Translation Adjustments Derivatives Total

Accumulated other comprehensive loss, December 31, 2018 $ ( 8,146 ) $ ( 32,551 ) $ ( 4,915 ) $ ( 45,612 )

Other comprehensive income (loss) before reclassifications ( 10,040 ) 7,250 ( 13,011 ) ( 15,801 )

Income tax 2,610 — 3,915 6,525

Other comprehensive income (loss) before reclassifications, net of tax ( 7,430 ) 7,250 ( 9,096 ) ( 9,276 )

Amounts reclassified from accumulated other comprehensive loss 1,196 — 1,906 3,102

Income tax ( 311 ) — ( 610 ) ( 921 )

Amounts reclassified from accumulated other comprehensive loss, net of tax 885 — 1,296 2,181

Other comprehensive income (loss) ( 6,545 ) 7,250 ( 7,800 ) ( 7,095 )

Accumulated other comprehensive loss, December 31, 2019 $ ( 14,691 ) $ ( 25,301 ) $ ( 12,715 ) $ ( 52,707 )

We include amounts reclassified out of accumulated other comprehensive loss related to defined benefit pension plans as a component of net periodic pension cost recorded in Other expense (income), net.

Note 18— Commitments and Contingencies

3 unchanged sentences

We pay scheduled fees under the agreement, which can vary based on changes in the level of support required.

Assuming no early termination of the contract, our estimated remaining annual obligations under this agreement are $ 30.5 million in 2021, $ 33.6 million in 2022, $ 32.6 million in 2023, $ 32.1 million in 2024, and $ 15.9 million in 2025.

In 2018, we transitioned the management of our U.S.

private fleet transportation and drivers to a third party company, which provides a robust technology platform that includes customer tracking and additional delivery capabilities.

Assuming no early termination of the contract, our estimated remaining annual obligations under this agreement are $ 33.6 million in 2022, $ 32.6 million in 2023, $ 32.1 million in 2024, and $ 15.9 million in 2025.

We use a third party company for the management of our U.S.

private fleet transportation that provides a robust technology platform, which includes customer tracking and additional delivery capabilities.

Under this contractual commitment, we pay scheduled fees which can vary based on changes in the level of support required.

Assuming no early termination of this contract, our estimated remaining annual obligations under this agreement are $ 2.3 million in 2021, $ 2.3 million in 2022, $ 2.3 million in 2023, and $ 2.1 million in 2024.

Assuming no early termination of this contract, our estimated remaining annual obligations under this agreement are $ 2.3 million in 2022, $ 2.3 million in 2023, and $ 2.1 million in 2024.

In addition to these fixed annual obligations disclosed herein, we are also contractually obligated to reimburse the third party company for variable costs including, but not limited to, vehicle costs, driver wages and fringe benefits, fuel, and insurance premiums.

On January 7, 2022, we entered into an Agreement and Plan of Merger to acquire Apria, Inc.

(Apria) for $ 37.50 in cash per share of common stock, representing an equity value of approximately $ 1.45 billion, as well as the assumption of debt and cash for a total transaction value of approximately $ 1.6 billion.

See Note 21 for additional information.

Note 19— Legal Proceedings

8 unchanged sentences

Global Solutions and Global Products.

The Global Solutions segment includes our United States distribution, outsourced logistics and value-added services business.

The Global Solutions segment includes our United States distribution businesses (Medical Distribution and Patient Direct), outsourced logistics and value-added services business.

Global Products manufactures and sources medical surgical products through our production and kitting operations.

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

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

Segment assets exclude inter-segment account balances as we believe their inclusion would be misleading and not meaningful.

16 unchanged sentences

Acquisition-related and exit and realignment charges ( 34,076 ) ( 37,752 ) ( 30,050 )

— — ( 1,481 )

Consolidated operating income $ 368,473 $ 204,118 $ 73,151

16 unchanged sentences

Segment assets 3,480,839 3,252,581

Discontinued operations — 439,983

Cash and cash equivalents 55,712 83,058

11 unchanged sentences

Consolidated long-lived assets $ 754,993 $ 741,746

Note 21— Subsequent Events

On January 7, 2022, we entered into an Agreement and Plan of Merger to acquire Apria for $ 37.50 in cash per share of common stock, representing an equity value of approximately $ 1.45 billion, as well as the assumption of debt and cash for a total transaction value of approximately $ 1.6 billion.

Apria is a provider of integrated home healthcare equipment and related services in the United States.

The Agreement and Plan of Merger contains certain termination rights for the Company and Apria.

In the event that Apria terminates the contract for a superior proposal, Apria will be required to pay the Company a termination fee of $ 42.0 million.

The transaction, which has been approved by the board of directors of both companies, is subject to customary closing conditions, including the Hart Scott Rodino Act and other regulatory approvals and the approval of Apria’s stockholders, and is expected to close during the first half of 2022.

Beginning with the first quarter of 2022, we began operating our company through two new segments:

Patient Direct and Products & Healthcare Services.

These segments align more closely with the way we go to market.

Report of Independent Registered Public Accounting Firm

3 unchanged sentences

We have audited the accompanying consolidated balance sheets of Owens & Minor, Inc.

and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for the years then ended and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2021, in conformity with U.S.

generally accepted accounting principles.

22 unchanged sentences

We identified the evaluation of the goodwill impairment assessment of the Global Products reporting unit as a critical audit matter.

A higher degree of auditor judgment was required to evaluate the outlook of general economic conditions and market demand for the Company’s medical surgical products, which are inherently uncertain.

A higher degree of auditor judgment was required to evaluate the outlook of general economic conditions

and market demand for the Company’s medical surgical products, which are inherently uncertain.

These qualitative factors could have a significant effect on the Company’s determination of whether a further quantitative test is performed.

14 unchanged sentences

(incorporated herein by reference to our Current Report on Form 8-K/A Exhibit 2.1, dated January 16, 2020)**

2.4 Agreement and Plan of Merger, dated as of January 7, 2022, by and among the Company, Apria and Merger Sub (incorporated herein by reference to the Company's Current Report on For 8-K, Exhibit 2.01, dated January 10, 2022)

3.1 Amended and Restated Articles of Incorporation of Owens & Minor, Inc.

(incorporated herein by reference to our Current Report on Form 8-K, Exhibit 3.1, dated July 29, 2008)

3.2 Amended and Restated Bylaws of Owens & Minor, Inc., as adopted April 3, 2020 (incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed April 6, 2020)

3.2 Amended and Restated Bylaws of the Company effective January 31, 2022 (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 3.1, dated January 31, 2022)

4.1 Indenture, dated September 16, 2014, by and among Owens & Minor, Inc., Owens and Minor Distribution, Inc., Owens & Minor Medical, Inc.

10 unchanged sentences

(incorporated herein by reference to our Current Report on Form 8-K, Exhibit 4.1, dated February 19, 2019)

4.7 Indenture, dated March 10, 2021, among Owens & Minor, Inc., the guarantors named therein and Regions Bank, as Trustee (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.1, dated March 11, 2021)

4.8 Form of Global Note for the 4.500% Senior Notes due 2029 (included as Exhibit A to Exhibit 4.1 hereto) (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.2, dated March 11, 2021)

4.9 Sixth Supplemental Indenture, dated as of March 10, 2021, by and among Owens & Minor, Inc., the guarantors signatory thereto and U.S.

Bank National Association, as trustee (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.3, dated March 11, 2021).

4.10 Description of Securities - filed herewith

41 unchanged sentences

2018 Stock Incentive Plan (incorporated herein by reference to our Registration Statement on Form S-8, Registration number 333-224787)*

10.26 Employment Term Sheet Effective May 20, 2015 for P.

Cody Phipps (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.2, for the quarter ended June 30, 2015)*

10.27 Restricted Stock Grant Agreement dated July 1, 2015 between the Company and P.

Cody Phipps (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.3, for the quarter ended June 30, 2015)*

10.26 Credit Agreement dated as of June 5, 2012 by and among Owens & Minor Distribution, Inc.

9 unchanged sentences

( as Administrative Agent), to the Credit Agreement dated as of June 5, 2012 by and among the Borrowers, the Guarantors, a syndicate of financial institutions party thereto, the Administrative Agent, and the other agents party thereto (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated September 18, 2014)

10.30 Share Purchase Agreement dated August 31, 2012 between Celesio AG, Admenta Deutschland GmbH, Admenta Denmark ApS, Admenta France S.A.

and OCP Portugal Produtos Farmaceuticos, S.A.

(as Sellers) and O&M-Movianto Nederland B.V., O&M-Movianto UK Holdings Ltd, O&M-Movianto France Holdings SAS (as Purchasers) and Owens & Minor, Inc.

(as Purchasers’ Guarantor) (incorporated herein by reference to our Current Report on Form 8-K, Exhibit10.1, dated September 4, 2012)

10.28 Interest Purchase Agreement, dated as of May 2, 2017, by and among Owens & Minor, Inc., Barista Acquisition I, LLC, Barista Acquisition II, LLC , Mediq B.V.

8 unchanged sentences

10.31 Restated Guaranty Agreement, dated as of the February 12, 2019, by and among Owens & Minor, Inc., the other Guarantors party thereto and Bank of America, N.A., as administrative agent for the Pro Rata Facilities and the Term B Facility (incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.1, dated February 19, 2019)

10.35 Executive Separation Agreement and General Release, dated as of August 16, 2018, by and between Richard A.

Meier and Owens & Minor Medical, Inc.

(incorporated herein by reference to our Current Report on Form 8-K/A, Exhibit 10.1, dated August 23, 2018) *

10.36 Executive Separation Agreement and General Release, dated as of August 3, 2018, by and between Rony Kordahi and Owens & Minor Medical, Inc.

(incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.10, for the quarter ended June 30, 2018)*

10.37 Executive Separation Agreement and General Release, dated as of January 10th, 2020, by and between Robert K.

Snead, and Owens & Minor, Inc.

(incorporated herein by reference to our Annual Report on Form 10-K, Exhibit 10.36, for the year ended December 31, 2019)*

10.32 Security and Pledge Agreement, dated as of April 30, 2018, by and among Owens & Minor, Inc., O&M Halyard, Inc., Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC and Barista Acquisition II, LLC, Bank of America, N.A., U.S.

16 unchanged sentences

Directors’ Deferred Compensation Plan, as Amended and Restated Effective May 10, 2019 ((Incorporated herein by reference to our Current Report on Form 8-K, Exhibit 10.2, dated May 10, 2019*

10.45 Executive Separation Agreement and General Release, dated as of June 26, 2019, by and between Stuart Morris-Hipkins and Owens & Minor, Inc.

(incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.1, for the quarter ended June 30, 2019)*

10.39 Fifth Amendment to Credit Agreement, dated as of February 13, 2020, by and among O&M Halyard, Inc., Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC and Barista Acquisition II, LLC, Owens & Minor, Inc.

12 unchanged sentences

10.45 Second Amendment to the Receivables Financing Agreement, dated as of July 1, 2020, by and among Owens & Minor Medical, Inc., as the initial servicer, O&M Funding LLC, as borrower, the lenders from time to time party thereto, PNC Bank, National Association, as administrative agent, and PNC Capital Markets LLC, as structuring agent (incorporated herein by reference to our Quarterly Report on Form 10-Q, Exhibit 10.2, for the quarter ended June 30, 2020)

10.46 Form of Restricted Stock Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated February 26, 2021)*

10.47 Form of Restricted Stock Unit Award Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.2, dated February 26, 2021)*

10.48 Form of 2021 Performance Stock Unit Award Agreement (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.3, dated February 26, 2021)*

10.49 Credit Agreement, dated as of March 10, 2021, by and among Owens & Minor, Inc, and certain subsidiaries of Owens & Minor, Inc, as borrowers, Bank of America, N.A., as an administrative agent and collateral agent, and a syndicate of financial institutions, as lenders (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.1, dated March 11, 2021)

10.50 Third Amendment to Receivables Financing Agreement, dated as of March 10, 2021, by and among Owens & Minor Medical, Inc., as the initial servicer, O&M Funding LLC, as borrower, the lenders from time to time party thereto, PNC Bank, National Association, as administrative agent, and PNC Capital Markets LLC, as structuring agent (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.2, dated March 11, 2021)

10.51 Amendment to Purchase and Sale Agreement, dated as of March 10, 2021, by and among Owens & Minor Distribution, Inc., as the originator, Owens & Minor Medical, Inc., as servicer, and O&M Funding LLC, as buyer (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 10.3, dated March 11, 2021).

10.52 Owens & Minor, Inc.

2021 Teammate Stock Purchase Plan (incorporated by reference to Appendix C to the Company’s definitive Proxy Statement filed March 19, 2020 (File No.

10.53 Agreement of Resignation, Appointment, and Acceptance, dated as September 10, 2021, by and among Owens & Minor, Inc., U.S.

Bank National Association, as Prior Trustee, and Regions Bank, as Successor Trustee(incorporated herein by reference to our Form 10-Q, Exhibit 10.

1 , dated Nove mber 3 , 20 21 )

10.54 Form of Owens & Minor, Inc.

Restricted Stock Agreement under the Company's 2018 Stock Incentive Plan (incorporated herein by reference to our Form 10-Q, Exhibit 10.2, dated November 3, 2021)*

10.55 Form of Owens & Minor, Inc.

Restricted Stock Unit Award Agreement under the Company's 2018 Stock Incentive Plan (incorporated herein by reference to our Form 10-Q, Exhibit 10.3, dated November 3, 2021)*

10.56 Amendment No.

1 to Credit Agreement, among Owens & Minor Distribution, Inc., Owens & Minor Medical, Inc., Barista Acquisition I, LLC, Barista Acquisition II, LLC, O&M Halyard, Inc., Byram Healthcare Centers, Inc., Owens & Minor, Inc., and Bank Of America - filed herewith

10.57 Executive Separation Agreement and General Release, dated as of January 9, 2022, by and between Christopher Lowery and Owens & Minor Medical, Inc.

- filed herewith*,**

11.1 Calculation of Net Income (Loss) per Common Share.

10 unchanged sentences

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Management contract or compensatory plan or arrangement.

** Certain exhibits and schedules to the Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

** Certain exhibits and schedules to these agreements have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

We hereby undertake to furnish copies of such omitted materials supplementally upon request by the SEC.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 24th day of February, 2021.

OWENS & MINOR, INC.

1 unchanged sentence

President, Chief Executive Officer & Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 24th day of February, 2021:

/s/ Edward A.

Pesicka Mark F.

Pesicka /s/ Gwendolyn M.

Pesicka Gwendolyn M.

President, Chief Executive Officer & Director Director

/s/ Andrew G.

Long Eddie N.

Long /s/ Robert J.

Long Robert J.

Executive Vice President & Chief Financial Officer

/s/ Michael C.

Beck Michael C.

Chairman of the Board of Directors Director

/s/ Gwendolyn M.

/s/ Robert C.

Bingham Robert C.

Beck /s/ Stephen W.

Beck Stephen W.

Chair of the Board of Directors Director

/s/ Aster Angagaw /s/ Mark F.

Aster Angagaw Mark F.

Director Director

/s/ Robert J.

Corporate Officers

32 unchanged sentences

Prior to joining Kimberly-Clark Health Care, he held several senior marketing and sales roles at Covidien, a global health care products company.

Executive Vice President, Chief Operating Officer & President, Medical Distribution

Executive Vice President & Chief Operating Officer since November 1, 2019.

Lowery will leave the Company effective March 31, 2022 by mutual agreement.

During his remaining employment with the Company, Mr.

Lowery will report to the Company’s Chief Executive Officer and assist with the transition of his leadership duties as part of this planned transition.

Jeffrey Jochims, the Company’s Chief Operating Officer, and President, Products & Healthcare Services, will assume Mr.

Lowery’s duties and responsibilities.

Executive Vice President, Chief Operating Officer & President, Products & Healthcare Services

Executive Vice President & Chief Operating Officer (COO) since November 1, 2019, and Executive Vice President, COO and President Products & Healthcare Services since January 2022.

In his capacities as COO and President, Products & Healthcare Services, Mr.

Jochims is responsible for the performance and operations of our global product manufacturing and sourcing activities, medical-surgical product distribution and supply, and healthcare services supporting perioperative activities.

Jochims retains oversight responsibility for the company’s strategic planning and corporate communications.

From February 2021 to January 2022, Mr.

Jochims was COO and President, Medical Distribution.

Jochims joined Owens & Minor in April 2019 and served as Executive Vice President, Strategy & Solutions prior to becoming COO.

Jochims recently assumed the additional duties of President, Medical Distribution.

In his capacities as COO and President, Medical Distribution, Mr.

Jochims is responsible for the performance and operations of our Medical Distribution business unit as well as the Company’s, specialty services, IT, marketing, strategy and continuous improvement functions.

Prior to joining Owens & Minor, Mr.

22 unchanged sentences

Prior to that role, he served as Executive Vice President, General Counsel & Secretary of Amerigroup Corporation, where he worked from 2006-2013 until its sale to Anthem, Inc.

Executive Vice President, Chief Commercial Officer

Executive Vice President & Chief Commercial Officer since November 1, 2019.

Zacur joined Owens & Minor in June 2019 and served as Senior Vice President & Chief Procurement Officer until November 2019.

Prior to joining the company, Mr.

Zacur served as Vice President & General Manager of Fisher Healthcare, a national diagnostics laboratory distributor and operating division of Thermo Fisher Scientific, from November 2014 to May 2019.

Previously, he held a variety of marketing, product management, procurement and operations leadership roles at Thermo Fisher Scientific, Bayer Corporation and Reichhold Chemicals.

Mark currently serves on the Board of Directors at St.

Clair Hospital, a 330-bed independent, non-profit hospital located in Mt.

Senior Vice President, Corporate Treasurer

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures