2017 Form 10-K Financial Statement

#000160649818000016 Filed on February 27, 2018

View on sec.gov

Income Statement

Concept 2017 2016 Q4 2016
Revenue $611.6M -$616.1M $566.2M
YoY Change 8.02% -7.21% 11.24%
Cost Of Revenue $274.7M -$498.1M $269.0M
YoY Change 2.12% -4.91% 7.09%
Gross Profit $336.9M -$118.0M $297.2M
YoY Change 13.36% -15.83% 15.28%
Gross Profit Margin 55.09% 52.49%
Selling, General & Admin $321.7M $45.20M $346.2M
YoY Change -7.08% -8.69% -1.0%
% of Gross Profit 95.49% 116.49%
Research & Development $38.20M $9.300M $38.40M
YoY Change -0.52% 82.35% 39.13%
% of Gross Profit 11.34% 12.92%
Depreciation & Amortization $59.50M $16.80M $65.20M
YoY Change -8.74% 0.0% -0.31%
% of Gross Profit 17.66% 21.94%
Operating Expenses $359.9M $60.70M $384.6M
YoY Change -6.42% -115.07% 1.93%
Operating Profit -$43.10M -$178.7M -$107.1M
YoY Change -59.76% -168.08% -21.08%
Interest Expense $31.60M -$7.900M $32.70M
YoY Change -3.36% -1.25% -1.21%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$72.20M -$186.6M -$139.2M
YoY Change -48.13% -173.32% -17.39%
Income Tax -$40.10M -$73.50M -$55.90M
% Of Pretax Income
Net Earnings $79.30M $10.00M $39.80M
YoY Change 99.25% -31.03% -109.34%
Net Earnings / Revenue 12.97% 7.03%
Basic Earnings Per Share $1.69 $0.85
Diluted Earnings Per Share $1.69 $215.1K $0.85
COMMON SHARES
Basic Shares Outstanding 46.80M shares 46.67M shares 46.60M shares
Diluted Shares Outstanding 46.80M shares 46.60M shares

Balance Sheet

Concept 2017 2016 Q4 2016
SHORT-TERM ASSETS
Cash & Short-Term Investments $219.7M $113.7M $113.7M
YoY Change 93.23% -12.2% -12.2%
Cash & Equivalents $219.7M $113.7M $113.7M
Short-Term Investments
Other Short-Term Assets $646.9M $17.20M $17.20M
YoY Change 3661.05% -7.53% -7.53%
Inventory $91.10M $80.70M $272.5M
Prepaid Expenses
Receivables $203.0M $188.5M $190.1M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $1.161B $593.5M $593.5M
YoY Change 95.57% -12.2% -12.2%
LONG-TERM ASSETS
Property, Plant & Equipment $109.9M $109.3M $260.8M
YoY Change -57.86% -60.89% -6.69%
Goodwill $762.3M
YoY Change 12.37%
Intangibles $168.2M
YoY Change 103.63%
Long-Term Investments $0.00
YoY Change
Other Assets $11.70M $3.000M $18.70M
YoY Change -37.43% 50.0% 10.65%
Total Long-Term Assets $1.035B $1.478B $1.478B
YoY Change -29.97% 11.64% 11.64%
TOTAL ASSETS
Total Short-Term Assets $1.161B $593.5M $593.5M
Total Long-Term Assets $1.035B $1.478B $1.478B
Total Assets $2.196B $2.072B $2.072B
YoY Change 5.99% 3.58% 3.58%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $171.2M $160.6M $173.1M
YoY Change -1.1% -1.59% 6.07%
Accrued Expenses $144.9M $138.4M $151.3M
YoY Change -4.23% -8.95% -0.46%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $39.80M $0.00
YoY Change
Total Short-Term Liabilities $389.8M $324.4M $324.4M
YoY Change 20.16% 2.92% 2.92%
LONG-TERM LIABILITIES
Long-Term Debt $541.1M $579.0M $579.0M
YoY Change -6.55% 0.16% 0.16%
Other Long-Term Liabilities $31.80M $23.80M $30.10M
YoY Change 5.65% -14.39% 8.27%
Total Long-Term Liabilities $572.9M $602.8M $609.1M
YoY Change -5.94% 1068.22% 0.53%
TOTAL LIABILITIES
Total Short-Term Liabilities $389.8M $324.4M $324.4M
Total Long-Term Liabilities $572.9M $602.8M $609.1M
Total Liabilities $980.5M $969.3M $969.3M
YoY Change 1.16% 2.58% 2.58%
SHAREHOLDERS EQUITY
Retained Earnings -$379.2M
YoY Change -9.5%
Common Stock $500.0K
YoY Change 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost) $1.900M
YoY Change 90.0%
Treasury Stock Shares
Shareholders Equity $1.215B $1.103B $1.103B
YoY Change
Total Liabilities & Shareholders Equity $2.196B $2.072B $2.072B
YoY Change 5.99% 3.58% 3.58%

Cashflow Statement

Concept 2017 2016 Q4 2016
OPERATING ACTIVITIES
Net Income $79.30M $10.00M $39.80M
YoY Change 99.25% -31.03% -109.34%
Depreciation, Depletion And Amortization $59.50M $16.80M $65.20M
YoY Change -8.74% 0.0% -0.31%
Cash From Operating Activities $144.2M $44.90M $188.8M
YoY Change -23.62% 95.22% 93.44%
INVESTING ACTIVITIES
Capital Expenditures -$43.20M -$7.400M -$29.10M
YoY Change 48.45% 23.33% -58.66%
Acquisitions $0.00 $175.0M
YoY Change -100.0%
Other Investing Activities $100.0K $3.200M -$171.8M
YoY Change -100.06% -2302.56%
Cash From Investing Activities -$43.10M -$4.200M -$200.9M
YoY Change -78.55% -30.0% 220.93%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $2.500M $900.0K
YoY Change 177.78% -10.0%
Debt Paid & Issued, Net $0.00 $0.00
YoY Change -100.0%
Cash From Financing Activities $2.200M -10.70M -$1.400M
YoY Change -257.14% -5450.0% -97.23%
NET CHANGE
Cash From Operating Activities $144.2M 44.90M $188.8M
Cash From Investing Activities -$43.10M -4.200M -$200.9M
Cash From Financing Activities $2.200M -10.70M -$1.400M
Net Change In Cash $106.0M 30.00M -$15.80M
YoY Change -770.89% 74.42% 1.28%
FREE CASH FLOW
Cash From Operating Activities $144.2M $44.90M $188.8M
Capital Expenditures -$43.20M -$7.400M -$29.10M
Free Cash Flow $187.4M $52.30M $217.9M
YoY Change -14.0% 80.34% 29.7%

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5300000 USD
CY2017Q4 us-gaap Deferred Tax Assets Equity Method Investments
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5000000 USD
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51200000 USD
CY2017Q4 us-gaap Deferred Tax Assets Gross
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43800000 USD
CY2016Q4 us-gaap Deferred Tax Assets Net
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50700000 USD
CY2017Q4 us-gaap Deferred Tax Assets Net
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42500000 USD
CY2016Q4 us-gaap Deferred Tax Assets Other
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8400000 USD
CY2017Q4 us-gaap Deferred Tax Assets Other
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6700000 USD
CY2016Q4 us-gaap Deferred Tax Assets Tax Deferred Expense Compensation And Benefits Share Based Compensation Cost
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8700000 USD
CY2017Q4 us-gaap Deferred Tax Assets Tax Deferred Expense Compensation And Benefits Share Based Compensation Cost
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7300000 USD
CY2016Q4 us-gaap Deferred Tax Assets Tax Deferred Expense Reserves And Accruals Accrued Liabilities
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34100000 USD
CY2017Q4 us-gaap Deferred Tax Assets Tax Deferred Expense Reserves And Accruals Accrued Liabilities
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18700000 USD
CY2016Q4 us-gaap Deferred Tax Assets Valuation Allowance
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500000 USD
CY2017Q4 us-gaap Deferred Tax Assets Valuation Allowance
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1300000 USD
CY2016Q4 us-gaap Deferred Tax Liabilities
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26800000 USD
CY2017Q4 us-gaap Deferred Tax Liabilities
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10200000 USD
CY2016Q4 us-gaap Deferred Tax Liabilities Deferred Expense Capitalized Inventory Costs
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13000000 USD
CY2017Q4 us-gaap Deferred Tax Liabilities Deferred Expense Capitalized Inventory Costs
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12800000 USD
CY2016Q4 us-gaap Deferred Tax Liabilities Goodwill And Intangible Assets Intangible Assets
DeferredTaxLiabilitiesGoodwillAndIntangibleAssetsIntangibleAssets
17700000 USD
CY2017Q4 us-gaap Deferred Tax Liabilities Goodwill And Intangible Assets Intangible Assets
DeferredTaxLiabilitiesGoodwillAndIntangibleAssetsIntangibleAssets
10200000 USD
CY2016Q4 us-gaap Deferred Tax Liabilities Other
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1000000 USD
CY2017Q4 us-gaap Deferred Tax Liabilities Other
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300000 USD
CY2016Q4 us-gaap Deferred Tax Liabilities Property Plant And Equipment
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45800000 USD
CY2017Q4 us-gaap Deferred Tax Liabilities Property Plant And Equipment
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29400000 USD
CY2016Q4 us-gaap Defined Benefit Plan Benefit Obligation
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2000000 USD
CY2017Q4 us-gaap Defined Benefit Plan Benefit Obligation
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3000000 USD
CY2017Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Five Fiscal Years Thereafter
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1000000 USD
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1000000 USD
CY2016 us-gaap Defined Benefit Plan Net Periodic Benefit Cost
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1000000 USD
CY2017 us-gaap Defined Benefit Plan Net Periodic Benefit Cost
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1000000 USD
CY2015 us-gaap Defined Contribution Plan Cost Recognized
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7000000 USD
CY2016 us-gaap Defined Contribution Plan Cost Recognized
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7000000 USD
CY2017 us-gaap Defined Contribution Plan Cost Recognized
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7000000 USD
CY2015 us-gaap Depreciation
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17000000 USD
CY2016 us-gaap Depreciation
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20000000 USD
CY2017 us-gaap Depreciation
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19000000 USD
CY2015 us-gaap Depreciation Depletion And Amortization
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65400000 USD
CY2016 us-gaap Depreciation Depletion And Amortization
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65200000 USD
CY2017 us-gaap Depreciation Depletion And Amortization
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59500000 USD
CY2015 us-gaap Discontinued Operation Income Loss From Discontinued Operation Net Of Tax Per Basic Share
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-6.98
CY2016 us-gaap Discontinued Operation Income Loss From Discontinued Operation Net Of Tax Per Basic Share
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2.64
CY2017 us-gaap Discontinued Operation Income Loss From Discontinued Operation Net Of Tax Per Basic Share
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2.38
CY2015 us-gaap Discontinued Operation Income Loss From Discontinued Operation Net Of Tax Per Diluted Share
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-6.98
CY2016 us-gaap Discontinued Operation Income Loss From Discontinued Operation Net Of Tax Per Diluted Share
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2.64
CY2017 us-gaap Discontinued Operation Income Loss From Discontinued Operation Net Of Tax Per Diluted Share
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2.38
CY2016Q4 us-gaap Disposal Group Including Discontinued Operation Assets Noncurrent
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426900000 USD
CY2017Q4 us-gaap Disposal Group Including Discontinued Operation Assets Noncurrent
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CY2015 us-gaap Earnings Per Share Basic
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0.85
CY2017 us-gaap Earnings Per Share Basic
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1.69
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CY2016 us-gaap Earnings Per Share Diluted
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0.85
CY2017 us-gaap Earnings Per Share Diluted
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1.69
CY2015 us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
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CY2016 us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
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-2300000 USD
CY2017 us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
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2700000 USD
CY2015 us-gaap Effective Income Tax Rate Continuing Operations
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0.399
CY2016 us-gaap Effective Income Tax Rate Continuing Operations
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0.402
CY2017 us-gaap Effective Income Tax Rate Continuing Operations
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0.556
CY2015 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.35
CY2016 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.35
CY2017 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.35
CY2017Q4 us-gaap Finite Lived Intangible Assets Gross
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422000000 USD
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0.000
CY2016 us-gaap Effective Income Tax Rate Reconciliation Change In Deferred Tax Assets Valuation Allowance
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0.000
CY2017 us-gaap Effective Income Tax Rate Reconciliation Change In Deferred Tax Assets Valuation Allowance
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0.142
CY2015 us-gaap Effective Income Tax Rate Reconciliation Foreign Income Tax Rate Differential
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0.000
CY2016 us-gaap Effective Income Tax Rate Reconciliation Foreign Income Tax Rate Differential
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0.004
CY2017 us-gaap Effective Income Tax Rate Reconciliation Foreign Income Tax Rate Differential
EffectiveIncomeTaxRateReconciliationForeignIncomeTaxRateDifferential
0.001
CY2015 us-gaap Effective Income Tax Rate Reconciliation Other Adjustments
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0.019
CY2016 us-gaap Effective Income Tax Rate Reconciliation Other Adjustments
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-0.007
CY2017 us-gaap Effective Income Tax Rate Reconciliation Other Adjustments
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-0.012
CY2015 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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0.020
CY2016 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes
0.028
CY2017 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes
0.045
CY2015 us-gaap Effective Income Tax Rate Reconciliation Tax Credits Research
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-0.010
CY2016 us-gaap Effective Income Tax Rate Reconciliation Tax Credits Research
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-0.015
CY2017 us-gaap Effective Income Tax Rate Reconciliation Tax Credits Research
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-0.030
CY2016Q4 us-gaap Equity Method Investments
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0 USD
CY2017Q4 us-gaap Equity Method Investments
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0 USD
CY2016Q4 us-gaap Finite Lived Intangible Assets Accumulated Amortization
FiniteLivedIntangibleAssetsAccumulatedAmortization
258100000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Accumulated Amortization
FiniteLivedIntangibleAssetsAccumulatedAmortization
278800000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Amortization Expense After Year Five
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75300000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Amortization Expense Next Twelve Months
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18200000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Amortization Expense Year Five
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10400000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Amortization Expense Year Four
FiniteLivedIntangibleAssetsAmortizationExpenseYearFour
10900000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Amortization Expense Year Three
FiniteLivedIntangibleAssetsAmortizationExpenseYearThree
13100000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Amortization Expense Year Two
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15300000 USD
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162500000 USD
CY2017Q4 us-gaap Finite Lived Intangible Assets Net
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6700000 USD
CY2016 us-gaap Gain Loss On Disposition Of Assets1
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CY2017 us-gaap Gain Loss On Disposition Of Assets1
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CY2015Q4 us-gaap Goodwill
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CY2017 us-gaap Goodwill Foreign Currency Translation Gain Loss
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2400000 USD
CY2015 us-gaap Goodwill Impairment Loss
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474000000 USD
CY2016 us-gaap Goodwill Impairment Loss
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0 USD
CY2017 us-gaap Goodwill Impairment Loss
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CY2016 us-gaap Gross Profit
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CY2017 us-gaap Gross Profit
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CY2017 us-gaap Income Loss From Continuing Operations
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CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Domestic
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CY2017 us-gaap Income Loss From Continuing Operations Before Income Taxes Domestic
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CY2015 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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-168500000 USD
CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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CY2017 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Foreign
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1300000 USD
CY2017 us-gaap Income Loss From Continuing Operations Before Income Taxes Foreign
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4000000 USD
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-2.17
CY2016 us-gaap Income Loss From Continuing Operations Per Basic Share
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CY2017 us-gaap Income Loss From Continuing Operations Per Basic Share
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-0.69
CY2015 us-gaap Income Loss From Continuing Operations Per Diluted Share
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-2.17
CY2016 us-gaap Income Loss From Continuing Operations Per Diluted Share
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CY2017 us-gaap Income Loss From Continuing Operations Per Diluted Share
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-0.69
CY2015 us-gaap Income Loss From Discontinued Operations Net Of Tax Attributable To Reporting Entity
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CY2016 us-gaap Income Loss From Discontinued Operations Net Of Tax Attributable To Reporting Entity
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123100000 USD
CY2017 us-gaap Income Loss From Discontinued Operations Net Of Tax Attributable To Reporting Entity
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111400000 USD
CY2015 us-gaap Income Loss From Subsidiaries Net Of Tax
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0 USD
CY2016 us-gaap Income Loss From Subsidiaries Net Of Tax
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0 USD
CY2017 us-gaap Income Loss From Subsidiaries Net Of Tax
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0 USD
CY2015 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
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CY2016 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
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CY2017 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
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CY2015 us-gaap Income Taxes Paid
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43300000 USD
CY2016 us-gaap Income Taxes Paid
IncomeTaxesPaid
29100000 USD
CY2017 us-gaap Income Taxes Paid
IncomeTaxesPaid
21400000 USD
CY2015 us-gaap Increase Decrease In Accounts Payable Trade
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14700000 USD
CY2016 us-gaap Increase Decrease In Accounts Payable Trade
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6500000 USD
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18800000 USD
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-8400000 USD
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15300000 USD
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34000000 USD
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11300000 USD
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20200000 USD
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CY2017 us-gaap Increase Decrease In Inventories
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16800000 USD
CY2015 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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6000000 USD
CY2016 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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CY2017 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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2300000 USD
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168200000 USD
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28700000 USD
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45300000 USD
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33100000 USD
CY2016 us-gaap Interest Expense
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32700000 USD
CY2017 us-gaap Interest Expense
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31600000 USD
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32600000 USD
CY2016 us-gaap Interest Paid
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29900000 USD
CY2017Q4 us-gaap Liabilities Of Disposal Group Including Discontinued Operation Noncurrent
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0 USD
CY2016Q4 us-gaap Liabilities Other Than Longterm Debt Noncurrent
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59200000 USD
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49600000 USD
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92700000 USD
CY2017Q4 us-gaap Inventory Gross
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104100000 USD
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12000000 USD
CY2017Q4 us-gaap Inventory Lifo Reserve
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13000000 USD
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80700000 USD
CY2017Q4 us-gaap Inventory Net
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91100000 USD
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25300000 USD
CY2017Q4 us-gaap Inventory Raw Materials
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28100000 USD
CY2016Q4 us-gaap Inventory Work In Process
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16300000 USD
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20700000 USD
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300000 USD
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600000 USD
CY2017 us-gaap Investment Income Interest
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2500000 USD
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CY2017Q4 us-gaap Liabilities
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980500000 USD
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2071800000 USD
CY2017Q4 us-gaap Liabilities And Stockholders Equity
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2195900000 USD
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324400000 USD
CY2017Q4 us-gaap Liabilities Current
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389800000 USD
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25400000 USD
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33900000 USD
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6700000 USD
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49600000 USD
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589000000 USD
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589000000 USD
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0 USD
CY2017Q4 us-gaap Long Term Debt Current
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39800000 USD
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40000000 USD
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250000000 USD
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299000000 USD
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0 USD
CY2017Q4 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Two
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0 USD
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579000000 USD
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541100000 USD
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2200000 USD
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CY2016 us-gaap Net Cash Provided By Used In Investing Activities
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-200900000 USD
CY2017 us-gaap Net Cash Provided By Used In Investing Activities
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CY2015 us-gaap Net Cash Provided By Used In Operating Activities
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97600000 USD
CY2016 us-gaap Net Cash Provided By Used In Operating Activities
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188800000 USD
CY2017 us-gaap Net Cash Provided By Used In Operating Activities
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144200000 USD
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39800000 USD
CY2017 us-gaap Net Income Loss
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79300000 USD
CY2017 us-gaap Number Of Operating Segments
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1 segment
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-135700000 USD
CY2016 us-gaap Operating Income Loss
OperatingIncomeLoss
-107100000 USD
CY2017 us-gaap Operating Income Loss
OperatingIncomeLoss
-43100000 USD
CY2017Q4 us-gaap Operating Leases Future Minimum Payments Due
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103200000 USD
CY2017Q4 us-gaap Operating Leases Future Minimum Payments Due Current
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18000000 USD
CY2017Q4 us-gaap Operating Leases Future Minimum Payments Due In Five Years
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9200000 USD
CY2017Q4 us-gaap Operating Leases Future Minimum Payments Due In Four Years
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10000000 USD
CY2017Q4 us-gaap Operating Leases Future Minimum Payments Due In Three Years
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11200000 USD
CY2017Q4 us-gaap Operating Leases Future Minimum Payments Due In Two Years
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15600000 USD
CY2017Q4 us-gaap Operating Leases Future Minimum Payments Due Thereafter
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39200000 USD
CY2015 us-gaap Operating Leases Rent Expense Net
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22000000 USD
CY2016 us-gaap Operating Leases Rent Expense Net
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22000000 USD
CY2017 us-gaap Operating Leases Rent Expense Net
OperatingLeasesRentExpenseNet
24000000 USD
CY2017Q4 us-gaap Operating Loss Carryforwards
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12000000 USD
CY2016Q4 us-gaap Other Accrued Liabilities Current
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28400000 USD
CY2017Q4 us-gaap Other Accrued Liabilities Current
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29200000 USD
CY2016Q4 us-gaap Other Assets Noncurrent
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3000000 USD
CY2017Q4 us-gaap Other Assets Noncurrent
OtherAssetsNoncurrent
4100000 USD
CY2015 us-gaap Other Comprehensive Income Defined Benefit Plans Adjustment Before Tax Portion Attributable To Parent
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1900000 USD
CY2016 us-gaap Other Comprehensive Income Defined Benefit Plans Adjustment Before Tax Portion Attributable To Parent
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1000000 USD
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558000 shares
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37.42
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15000000 USD
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34.80
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1670000 shares
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9400000 USD
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40.38
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1
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0 USD
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0 USD
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1500000 USD
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100000 USD
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100000 USD
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2000000 USD
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0 shares
CY2016 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
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0 shares
CY2017 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
0 shares
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46600000 shares
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WeightedAverageNumberOfDilutedSharesOutstanding
46800000 shares
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46600000 shares
CY2016 us-gaap Weighted Average Number Of Shares Outstanding Basic
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46600000 shares
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Use of Estimates</font></div><div style="line-height:120%;padding-top:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Preparation of consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Estimates are used in accounting for, among other things, distributor rebate accruals, future cash flows associated with impairment testing for goodwill and long-lived assets, loss contingencies, and deferred tax assets and potential income tax assessments. Actual results could differ from these estimates, and the effect of the change could be material to our financial statements. Changes in these estimates are recorded when known.</font></div></div>

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