Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2017 | Oct. 27, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Rexnord Corp | |
Entity Central Index Key | 1,439,288 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 103,925,122 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Mar. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 531.3 | $ 490.1 |
Receivables, net | 333.5 | 322.9 |
Inventories | 349.6 | 314.9 |
Other current assets | 48.9 | 50.2 |
Total current assets | 1,263.3 | 1,178.1 |
Property, plant and equipment, net | 395.3 | 400.9 |
Intangible assets, net | 546.9 | 558.6 |
Goodwill | 1,325.9 | 1,318.2 |
Other assets | 83.8 | 83.5 |
Total assets | 3,615.2 | 3,539.3 |
Current liabilities: | ||
Current maturities of debt | 16.3 | 16.5 |
Trade payables | 202.3 | 197.8 |
Compensation and benefits | 54.1 | 54.3 |
Current portion of pension and postretirement benefit obligations | 4.4 | 4.3 |
Other current liabilities | 133.2 | 127.4 |
Total current liabilities | 410.3 | 400.3 |
Long-term debt | 1,599.4 | 1,606.2 |
Pension and postretirement benefit obligations | 171.6 | 174.4 |
Deferred income taxes | 199.2 | 208.8 |
Other liabilities | 69.4 | 79 |
Total liabilities | 2,449.9 | 2,468.7 |
Stockholders' equity: | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; shares issued and outstanding: 103,870,152 at September 30, 2017 and 103,600,540 at March 31, 2017 | 1 | 1 |
Preferred stock, $0.01 par value; 10,000,000 shares authorized; shares of 5.75% Series A Mandatory Convertible Preferred Stock issued and outstanding: 402,500 at September 30, 2017 and March 31, 2017 | 0 | 0 |
Additional paid-in capital | 1,264.9 | 1,262.1 |
Retained deficit | 0 | (55.5) |
Accumulated other comprehensive loss | (100.6) | (137) |
Total stockholders' equity | 1,165.3 | 1,070.6 |
Total liabilities and stockholders' equity | $ 3,615.2 | $ 3,539.3 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 6 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Mar. 31, 2017 | |
Common Stock | ||
Par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares authorized (in shares) | 200,000,000 | 200,000,000 |
Shares issued (in shares) | 103,870,152 | 103,600,540 |
Shares outstanding (in shares) | 103,870,152 | 103,600,540 |
Redeemable Convertible Preferred Stock | ||
Preferred Stock | ||
Par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares authorized (in shares) | 10,000,000 | 10,000,000 |
Shares issued (in shares) | 402,500 | 402,500 |
Shares outstanding (in shares) | 402,500 | 402,500 |
Dividend rate, percentage | 5.75% | 5.75% |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 510.8 | $ 491 | $ 998.5 | $ 962.8 |
Cost of sales | 322.5 | 317 | 634.2 | 623.4 |
Gross profit | 188.3 | 174 | 364.3 | 339.4 |
Selling, general and administrative expenses | 109.4 | 106.6 | 219.3 | 213.2 |
Restructuring and other similar charges | 5.1 | 4.4 | 7.8 | 10 |
Amortization of intangible assets | 8 | 10.5 | 16.2 | 25.1 |
Income from operations | 65.8 | 52.5 | 121 | 91.1 |
Non-operating expense: | ||||
Interest expense, net | (20.2) | (22.8) | (40.2) | (46.5) |
Other expense, net | (1) | (0.7) | (1.5) | (2.6) |
Income before income taxes | 44.6 | 29 | 79.3 | 42 |
Provision (benefit) for income taxes | 14.8 | 4.4 | 23 | (1.5) |
Net income | 29.8 | 24.6 | 56.3 | 43.5 |
Dividends on preferred stock | (5.8) | 0 | (11.6) | 0 |
Net income attributable to Rexnord common stockholders | $ 24 | $ 24.6 | $ 44.7 | $ 43.5 |
Net income per share attributable to Rexnord common stockholders: | ||||
Basic (in dollars per share) | $ 0.23 | $ 0.24 | $ 0.43 | $ 0.43 |
Diluted (in dollars per share) | $ 0.23 | $ 0.24 | $ 0.42 | $ 0.42 |
Weighted-average number of shares outstanding (in thousands): | ||||
Basic (in shares) | 103,812 | 102,728 | 103,753 | 102,207 |
Effect of dilutive equity awards (in shares) | 1,728 | 1,880 | 1,690 | 2,222 |
Diluted (in shares) | 105,540 | 104,608 | 105,443 | 104,429 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 29.8 | $ 24.6 | $ 56.3 | $ 43.5 |
Other comprehensive income: | ||||
Foreign currency translation adjustments | 16.2 | 4.9 | 34.1 | 0.1 |
Change in unrealized losses on interest rate derivatives, net of tax | 1.7 | 2 | 2.9 | 2.3 |
Change in pension and postretirement defined benefit plans, net of tax | (0.3) | (0.3) | (0.6) | (0.6) |
Other comprehensive income, net of tax | 17.6 | 6.6 | 36.4 | 1.8 |
Total comprehensive income | $ 47.4 | $ 31.2 | $ 92.7 | $ 45.3 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net income | $ 56.3 | $ 43.5 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation | 27.4 | 28.2 |
Amortization of intangible assets | 16.2 | 25.1 |
Amortization of deferred financing costs | 1 | 1.2 |
Deferred income taxes | (11.2) | (13.5) |
Other non-cash charges | 2.7 | 0.4 |
Stock-based compensation expense | 10.8 | 6 |
Changes in operating assets and liabilities: | ||
Receivables | (13) | 12.4 |
Inventories | (29.3) | (16.3) |
Other assets | 1.6 | (10.4) |
Accounts payable | (0.6) | (16.1) |
Accruals and other | (1.4) | (1.5) |
Cash provided by operating activities | 60.5 | 59 |
Investing activities | ||
Expenditures for property, plant and equipment | (15.9) | (28.9) |
Acquisitions, net of cash acquired | 0 | (213.7) |
Proceeds from dispositions of long-lived assets | 1.8 | 1.9 |
Cash used for investing activities | (14.1) | (240.7) |
Financing activities | ||
Repayments of debt | (8.2) | (99.9) |
Proceeds from exercise of stock options | 2.8 | 6.4 |
Deferred acquisition payment | 0 | (0.3) |
Payments of dividend on preferred stock | (11.6) | 0 |
Cash used for financing activities | (17) | (93.8) |
Effect of exchange rate changes on cash and cash equivalents | 11.8 | (0.6) |
Increase (decrease) in cash and cash equivalents | 41.2 | (276.1) |
Cash and cash equivalents at beginning of period | 490.1 | 484.6 |
Cash and cash equivalents at end of period | $ 531.3 | $ 208.5 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies The unaudited condensed consolidated financial statements included herein have been prepared by Rexnord Corporation ("Rexnord" or the "Company") in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the condensed consolidated financial statements include all adjustments necessary for a fair presentation of the results of operations for the interim periods. Results for the interim periods are not necessarily indicative of results that may be expected for the fiscal year ending March 31, 2018 . These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company's fiscal 2017 Annual Report on Form 10-K. The Company Rexnord is a growth-oriented, multi-platform industrial company with what it believes to be leading market shares and highly-trusted brands that serve a diverse array of global end markets. The Company's heritage of innovation and specification have allowed it to provide highly-engineered, mission-critical solutions to customers for decades and affords it the privilege of having long-term, valued relationships with market leaders. The Company operates in a disciplined way and the Rexnord Business System (“RBS”) is its operating philosophy. Grounded in the spirit of continuous improvement, RBS creates a scalable, process-based framework that focuses on driving superior customer satisfaction and financial results by targeting world-class operating performance throughout all aspects of its business. The Process & Motion Control platform designs, manufactures, markets and services a comprehensive range of specified, highly-engineered mechanical components used within complex systems where our customers' reliability requirements and costs of failure or downtime are high. The Process & Motion Control portfolio includes motion control products, shaft management products, aerospace components, and related value-added services. The Water Management platform designs, procures, manufactures, and markets products that provide and enhance water quality, safety, flow control and conservation. The Water Management product portfolio includes professional grade water control and safety, water distribution and drainage, finish plumbing, and site works products for primarily nonresidential buildings and flow control products for water and wastewater treatment infrastructure markets. Recent Accounting Pronouncements In August 2017, the the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities , which expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. ASU 2017-12 is effective for the beginning of the Company's fiscal 2020, with early adoption permitted, and must be applied prospectively. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption. In January 2017, the the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). The amendments in ASU 2017-04 allow companies to apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for the beginning of the Company's fiscal 2021, with early adoption permitted, and must be applied prospectively. The Company is currently evaluating the timing of adoption; however, it does not believe the adoption of ASU 2017-04 will have material impact on the Company's consolidated financial statements. In February 2015, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02''), which requires lessees to recognize lease assets and lease liabilities for all leases on the balance sheets. ASU 2016-02 is effective beginning for the Company's fiscal 2020 and interim periods included therein on a modified retrospective basis. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11"). ASU 2015-11 requires inventory to be measured at the lower of cost and net realizable value, which is defined as the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. Under existing guidance, net realizable value is one of several calculations needed to measure inventory at lower of cost or market and as such, the new guidance reduces the complexity in measurement. The Company adopted ASU No. 2015-11 prospectively effective April 1, 2017 and there was no impact to the Company's condensed consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The new guidance requires the service cost component of net periodic benefit cost to be presented in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period with only the service cost component eligible for capitalization in assets. Other components of the net periodic benefit cost are to be stated separately from the line item(s) that includes the service cost and outside of operating income. The standard is required to be adopted for annual periods beginning after December 15, 2017, including interim periods within that annual period, which is the Company's fiscal year 2019. The amendment is to be applied retrospectively. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), now referred to as Accounting Standards Codification Topic 606 ("ASC 606"), in order to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The guidance specifies revenue should be recognized in an amount that reflects the consideration the company expects to be entitled to in exchange for the transfer of promised goods or services to customers. The guidance provides a five-step process that entities should follow in order to achieve that core principal. ASC 606 will be effective for the Company on April 1, 2018. Companies can use either a full retrospective or modified retrospective method to adopt the standard. Under the full retrospective method, the requirements of the new standard are applied to contracts for each prior reporting period presented and the cumulative effective of applying the standard is recognized in the earliest period presented. Under the modified retrospective method, prior periods are not updated to be presented on an accounting basis that is consistent with information for fiscal 2019. Rather, a cumulative adjustment for the effects of applying the new standard to periods prior to fiscal 2019 is recorded to retained earnings as of April 1, 2018. The Company expects to adopt the new standard using the modified retrospective approach. The Company is assessing the impact of the new standard on its consolidated financial statements by reviewing its current accounting policies and practices, including detailed reviews of customer contracts, to identify potential differences that would result from applying the requirements of the new standard to its revenue contracts. In addition, ASC 606 will require more comprehensive disclosures about revenue streams and contracts with customers. The Company is currently evaluating potential changes to its processes, information systems and internal controls related to the preparation of disclosures required under ASC 606. The Company will provide additional disclosure as its ongoing assessment progresses. |
Acquisitions
Acquisitions | 6 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Fiscal Year 2017 Acquisitions On June 1, 2016, the Company acquired Cambridge International Holdings Corp. ("Cambridge") for a cash purchase price of $213.4 million . The purchase price consisted of an enterprise value of $210.0 million , excluding transaction costs and net of cash acquired, plus additional consideration of $3.4 million related to the acquisition of certain tax benefits and real property classified as held for sale at the acquisition date. Cambridge, with operations in Cambridge, Maryland and Matamoros, Mexico, is one of the world's largest suppliers of metal conveying and engineered woven metal solutions, primarily used in food processing end markets, as well as in architectural, packaging and filtration applications. The acquisition of Cambridge expanded the Company's presence in consumer-driven end markets in the Process & Motion Control platform. The Company's results of operations include the acquired operations subsequent to June 1, 2016. Pro-forma results of operations and certain other U.S. GAAP disclosures related to the Cambridge acquisition have not been presented because they are not material to the Company's condensed consolidated statements of operations and condensed consolidated balance sheets. The acquisition of Cambridge was accounted for as a business combination and recorded by allocating the purchase price to the fair value of assets acquired and liabilities assumed at the acquisition date. The excess of the acquisition purchase price over the fair value assigned to the assets acquired and liabilities assumed was recorded as goodwill. The purchase price allocation resulted in non-tax deductible goodwill of $129.4 million , other intangible assets of $80.6 million (includes tradenames of $16.8 million , customer relationships of $58.3 million and patents of $5.5 million ) and other net assets of $3.4 million . In fiscal 2017 , the Company acquired the remaining non-controlling interest in a Water Management joint venture for a cash purchase price of approximately $0.3 million , net of cash acquired and excluding transaction costs. The acquisition of the remaining minority interest was not material to the Company's condensed consolidated statements of operations or financial position. |
Restructuring and Other Similar
Restructuring and Other Similar Charges | 6 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Similar Charges | Restructuring and Other Similar Charges During fiscal 2018 , the Company has continued to execute various restructuring actions. These initiatives were implemented to drive efficiencies and reduce operating costs while also modifying the Company's footprint to reflect changes in the markets it serves, the impact of acquisitions on the Company's overall manufacturing capacity and the refinement of its overall product portfolio. These restructuring actions primarily resulted in workforce reductions, lease termination costs, and other facility rationalization costs. Management expects to continue executing initiatives to optimize its operating margin and manufacturing footprint, as well as select product-line rationalizations. As such, the Company expects further expenses related to workforce reductions, potential impairment or accelerated depreciation of assets, lease termination costs, and other facility rationalization costs. The Company's restructuring plans are preliminary and related expenses are not yet estimable. The following table summarizes the Company's restructuring and other similar charges during the three and six months ended September 30, 2017 and September 30, 2016 by operating segment (in millions): Restructuring and Other Similar Charges Three Months Ended September 30, 2017 Process & Motion Control Water Management Consolidated Employee termination benefits $ 1.4 $ 2.3 $ 3.7 Contract termination and other associated costs 1.1 0.3 1.4 Total restructuring and other similar charges $ 2.5 $ 2.6 $ 5.1 Restructuring and Other Similar Charges Six Months Ended September 30, 2017 Process & Motion Control Water Management Consolidated Employee termination benefits $ 1.9 $ 2.7 $ 4.6 Contract termination and other associated costs 2.8 0.4 3.2 Total restructuring and other similar charges $ 4.7 $ 3.1 $ 7.8 Restructuring and Other Similar Charges Three Months Ended September 30, 2016 Process & Motion Control Water Management Consolidated Employee termination benefits $ 2.1 $ 1.2 $ 3.3 Contract termination and other associated costs (1) 1.5 (0.4 ) 1.1 Total restructuring and other similar charges $ 3.6 $ 0.8 $ 4.4 Restructuring and Other Similar Charges Six Months Ended September 30, 2016 Process & Motion Control Water Management Consolidated Employee termination benefits $ 4.5 $ 3.7 $ 8.2 Contract termination and other associated costs (1) 1.5 0.3 1.8 Total restructuring and other similar charges $ 6.0 $ 4.0 $ 10.0 ____________________ (1) During the second quarter of fiscal 2017, the Company received a $1.0 million cash payment in connection with the execution of an agreement to sell certain Rodney Hunt® Fontaine® ("RHF") related intellectual property, which was fully impaired during fiscal 2016 when the Company announced its decision to exit this product line. The gain on the disposition of this intellectual property was recorded as a reduction of restructuring and other similar charges in the second quarter of fiscal 2017 within the Water Management platform. The following table summarizes the activity in the Company's restructuring accrual for the six months ended September 30, 2017 (in millions): Employee termination benefits Contract termination and other associated costs Total Restructuring accrual, March 31, 2017 (1) $ 11.0 $ 1.0 $ 12.0 Charges 4.6 3.2 7.8 Cash payments (7.3 ) (3.7 ) (11.0 ) Restructuring accrual, September 30, 2017 (1) $ 8.3 $ 0.5 $ 8.8 ____________________ (1) The restructuring accrual is included in Other current liabilities in the condensed consolidated balance sheets. In connection with the ongoing supply chain optimization and footprint repositioning initiatives, the Company has taken several actions to consolidate existing manufacturing facilities and rationalize its product offerings. These actions require the Company to assess whether the carrying amount of impacted long-lived assets will be recoverable as well as whether the remaining useful lives require adjustment. As a result, the Company recognized accelerated depreciation of zero and $1.0 million during the three and six months ended ended September 30, 2017 , respectively. The Company recognized accelerated depreciation of $0.8 million and $1.4 million during the three and six months ended September 30, 2016 , respectively. Accelerated depreciation is recorded within Cost of sales in the condensed consolidated statements of operations. During fiscal 2016, the Company decided to exit product lines sold under the RHF tradename and the Company completed the exit of the RHF product line in fiscal 2017. The Company evaluated the requirements for the presentation of discontinued operations in connection with the decision to exit its flow-control gate product line and determined the product line did not meet the definition provided within the authoritative literature as discontinued operations. Pre-tax loss from operations associated with this non-strategic RHF product line was $2.2 million and $6.7 million in the three and six months ended September 30, 2016 , respectively. Pre-tax loss included restructuring and other similar charges of $0.3 million and $1.9 million in the three and six months ended September 30, 2016 , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision (benefit) for income taxes for all periods presented is based on an estimated effective income tax rate for the respective full fiscal years. The estimated annual effective income tax rate is determined excluding the effect of significant discrete items or items that are reported net of their related tax effects. The tax effect of significant discrete items is reflected in the period in which they occur. The Company's income tax expense is impacted by a number of factors, including the amount of taxable earnings derived in foreign jurisdictions with tax rates that are generally lower than the U.S. federal statutory rate, state tax rates in the jurisdictions where the Company does business and the Company's ability to utilize various tax credits and net operating loss (“NOL”) carryforwards. The Company regularly reviews its deferred tax assets for recoverability and establishes valuation allowances based on historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences, as deemed appropriate. In addition, all other available positive and negative evidence is taken into consideration for purposes of determining the proper balances of such valuation allowances. As a result of this review, the Company continues to maintain valuation allowances against the deferred tax assets relating to certain foreign and state net operating loss carryforwards. Future changes to the balances of these valuation allowances, as a result of this continued review and analysis by the Company, could result in a material impact to the financial statements for such period of change. The income tax provision was $14.8 million in the second quarter of fiscal 2018 compared to an income tax provision of $4.4 million in the second quarter of fiscal 2017. The effective income tax rate for the second quarter of fiscal 2018 was 33.2% versus 15.2% in the second quarter of fiscal 2017. The effective income tax rate for the second quarter of fiscal 2018 was below the U.S. federal statutory rate of 35% primarily due to the recognition of net tax benefits associated with an accrual for the Domestic Production Activities Deduction (DPAD) and the recognition of certain foreign branch-related losses for U.S. income tax purposes, partially offset by an increase in valuation allowances relating to certain foreign net operating losses. The effective income tax rate for the second quarter of fiscal 2017 was below the U.S. federal statutory rate of 35% primarily due to the recognition of net tax benefits associated with U.S. research and development credits, the recognition of a bad debt deduction for U.S. income tax purposes relating to an insolvent foreign subsidiary and the recognition of certain foreign branch-related losses for U.S. income tax purposes. The income tax provision recorded in the first six months of fiscal 2018 was $23.0 million compared to an income tax benefit of $1.5 million in the first six months of fiscal 2017. The effective income tax rate for the first six months of fiscal 2018 was 29.0% versus (3.6)% in the first six months of fiscal 2017. The effective income tax rate for the first six months of fiscal 2018 was below the U.S. federal statutory rate of 35% primarily due to the recognition of net tax benefits associated with an accrual for the DPAD, the recognition of excess U.S. foreign tax credits, the recognition of certain foreign branch-related losses for U.S. income tax purposes and the recognition of certain previously unrecognized tax benefits due to the lapse of the applicable statutes of limitations, partially offset by an increase in valuation allowances related to certain foreign net operating losses. The income tax benefit recognized on income before income taxes for the first six months of fiscal 2017 was primarily due to excess tax benefits associated with share-based payments (in conjunction with the early adoption of ASU 2016-09), the recognition of net tax benefits associated with U.S. research and development credits, the recognition of a worthless stock and bad debt deduction for U.S. income tax purposes relating to an insolvent foreign subsidiary and the recognition of excess U.S. foreign tax credits. At September 30, 2017, the Company had an $18.5 million liability for unrecognized net income tax benefits. At March 31, 2017, the Company’s total liability for unrecognized net income tax benefits was $18.1 million . The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in income tax expense. As of September 30, 2017 and March 31, 2017, the total amount of gross, unrecognized income tax benefits included $5.1 million and $4.7 million of accrued interest and penalties, respectively. The Company recognized $0.3 million of net interest and penalties as income tax expense during both the six months ended September 30, 2017 and September 30, 2016. The Company conducts business in multiple locations within and outside the U.S. Consequently, the Company is subject to periodic income tax examinations by domestic and foreign income tax authorities. Currently, the Company is undergoing routine, periodic income tax examinations in both domestic and foreign jurisdictions (including a review of a few specific items on certain corporate income tax returns of the Company’s Netherlands subsidiaries for the tax years ended March 31, 2011 through 2015). In addition, the U.S. Internal Revenue Service is currently examining the Company’s U.S. consolidated federal income tax return and related amended return for the tax year ended March 31, 2015. During the third quarter of fiscal 2017, the Company completed an examination of certain of its Italian subsidiaries’ corporate income tax returns for the tax years ended March 31, 2014 through 2016 and paid approximately $0.7 million upon the conclusion of such examination. In addition, during the fourth quarter of fiscal 2017, the Company completed an examination of certain of its German subsidiaries’ corporate income and trade tax returns for the tax years ended March 31, 2011 through 2014 and paid approximately $0.4 million upon conclusion of such examination. It appears reasonably possible that the amounts of unrecognized income tax benefits could change in the next twelve months upon conclusion of the Company’s current ongoing examinations; however, any potential payments of income tax, interest and penalties are not expected to be significant to the Company's consolidated financial statements. With certain exceptions, the Company is no longer subject to U.S. federal income tax examinations for tax years ending prior to March 31, 2014, state and local income tax examinations for years ending prior to fiscal 2013 or significant foreign income tax examinations for years ending prior to fiscal 2012. With respect to the Company's U.S. federal NOL carryforward (which was fully utilized for the tax year ended March 31, 2015), the short tax period from July 21, 2006 to March 31, 2007 (due to the change in control when Apollo Management, L.P. acquired the Company) and the tax years ended March 31, 2008 through March 31, 2013 are open under statutes of limitations; whereby, the Internal Revenue Service may not adjust the income tax liability for these years, but may reduce the NOL carryforward and any other tax attribute carryforwards to currently open tax years. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table presents the basis for income per share computations (in millions, except share amounts): Three Months Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Numerator: Net income $ 29.8 $ 24.6 $ 56.3 $ 43.5 Less: Dividends on preferred stock (5.8 ) — (11.6 ) — Net income attributable to Rexnord common stockholders $ 24.0 $ 24.6 $ 44.7 $ 43.5 Denominator: Weighted-average common shares outstanding, basic 103,812 102,728 103,753 102,207 Effect of dilutive equity awards 1,728 1,880 1,690 2,222 Weighted-average common shares outstanding, dilutive 105,540 104,608 105,443 104,429 The computation of diluted net income per share for the three and six months ended September 30, 2017 excludes 2.8 million and 5.1 million shares, respectively, related to equity awards due to their anti-dilutive effects. The computation of diluted net income per share for both the three and six months ended September 30, 2016 excludes 5.2 million shares related to equity awards due to their anti-dilutive effects. The computation for diluted net income per share also does not include shares of preferred stock that are convertible into a weighted average of 16.7 million and 17.0 million common shares for the three and six months ended September 30, 2017 , respectively, because to do so would have been anti-dilutive. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Stockholders' equity consists of the following (in millions): Preferred Stock Common Stock Additional Paid-In Capital Retained Deficit Accumulated Other Comprehensive (Loss) Income Total Stockholders’ Equity Balance at March 31, 2017 $ 0.0 $ 1.0 $ 1,262.1 $ (55.5 ) $ (137.0 ) $ 1,070.6 Total comprehensive income — — — 56.3 36.4 92.7 Stock-based compensation expense — — 10.8 — — 10.8 Exercise of stock options — — 2.8 — — 2.8 Preferred stock dividends — — (10.8 ) (0.8 ) — (11.6 ) Balance at September 30, 2017 $ 0.0 $ 1.0 $ 1,264.9 $ — $ (100.6 ) $ 1,165.3 Preferred Stock During the third quarter of fiscal 2017, the Company issued 8,050,000 depositary shares, each of which represents a 1/20th interest in a share of 5.75% Series A Mandatory Convertible Preferred Stock (the "Series A Preferred Stock"), for an offering price of $50 per depository share. The Company issued an aggregate of 402,500 shares of Series A Preferred Stock in connection therewith. Unless converted earlier, each share of Series A Preferred Stock will convert automatically on the mandatory conversion date, which is November 15, 2019, into between 39.702 and 47.642 shares of the Company’s common stock, subject to customary anti-dilution adjustments. The number of shares of common stock issuable upon conversion will be determined based on a defined average volume weighted average price per share of the Company’s common stock preceding November 15, 2019. Holders of the Series A Preferred Stock may elect on a voluntary basis to convert their shares into common stock at the minimum exchange ratio at any time prior to the mandatory conversion date. Dividends accumulate from the issuance date. Rexnord may pay such dividends in cash or, subject to certain limitations, by delivery of shares of the Company's common stock or through any combination of cash and shares of the Company's common stock as determined by the Company in its sole discretion. Any unpaid dividends will continue to accumulate. Dividends are payable quarterly, ending on November 15, 2019. The shares of Series A Preferred Stock have a liquidation preference of $1,000 per share, plus accrued but unpaid dividends. With respect to dividend and liquidation rights, the Series A Preferred Stock ranks senior to the Company's common stock and junior to all existing and future indebtedness. The net proceeds from the offering were approximately $389.7 million . The Company used $195.0 million of the proceeds to prepay a portion of the then-outstanding term loan indebtedness under its credit agreement, with the remainder retained for general corporate purposes. During the three and six months ended September 30, 2017 , the Company paid $5.8 million and $11.6 million of dividends, respectively. As of September 30, 2017, there were no dividends in arrears on the Series A Preferred Stock. Common Stock Repurchase Program In fiscal 2015, the Company's Board of Directors approved a stock repurchase program (the "Repurchase Program") authorizing the repurchase of up to $200.0 million of the Company's common stock from time to time on the open market or in privately negotiated transactions. The Repurchase Program does not require the Company to acquire any particular amount of common stock and does not specify the timing of purchases or the prices to be paid; however, the program will continue until the maximum amount of dollars authorized have been expended or until it is modified or terminated by the Board. No shares were repurchased during the six months ended September 30, 2017 or September 30, 2016 . A total of approximately $160.0 million remained of the existing repurchase authority at September 30, 2017 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss, net of tax, for the six months ended September 30, 2017 are as follows (in millions): Interest Rate Derivatives Foreign Currency Translation Pension and Postretirement Plans Total Balance at March 31, 2017 $ (9.5 ) $ (99.3 ) $ (28.2 ) $ (137.0 ) Other comprehensive (loss) income before reclassifications (0.4 ) 34.1 — 33.7 Amounts reclassified from accumulated other comprehensive loss 3.3 — (0.6 ) 2.7 Net current period other comprehensive income (loss) 2.9 34.1 (0.6 ) 36.4 Balance at September 30, 2017 $ (6.6 ) $ (65.2 ) $ (28.8 ) $ (100.6 ) The following table summarizes the amounts reclassified from accumulated other comprehensive loss to net income during the three and six months ended September 30, 2017 and September 30, 2016 (in millions): Three Months Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Income Statement Line Pension and other postretirement plans Amortization of prior service credit $ (0.5 ) $ (0.4 ) $ (1.0 ) $ (0.9 ) Selling, general and administrative expenses Provision for income taxes 0.2 0.1 0.4 0.3 Total net of tax $ (0.3 ) $ (0.3 ) $ (0.6 ) $ (0.6 ) Interest rate derivatives Net realized losses on interest rate hedges $ 2.6 $ 2.6 $ 5.4 $ 5.2 Interest expense, net Benefit for income taxes (1.0 ) (1.0 ) (2.1 ) (2.0 ) Total net of tax $ 1.6 $ 1.6 $ 3.3 $ 3.2 |
Inventories
Inventories | 6 Months Ended |
Sep. 30, 2017 | |
Inventory, Net [Abstract] | |
Inventories | Inventories The major classes of inventories are summarized as follows (in millions): September 30, 2017 March 31, 2017 Finished goods $ 160.2 $ 139.9 Work in progress 43.5 44.4 Purchased components 80.8 74.0 Raw materials 56.7 47.7 Inventories at First-in, First-Out ("FIFO") cost 341.2 306.0 Adjustment to state inventories at Last-in, First-Out ("LIFO") cost 8.4 8.9 $ 349.6 $ 314.9 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the net carrying value of goodwill for the six months ended September 30, 2017 by operating segment are presented below (in millions): Process & Motion Control Water Management Consolidated Net carrying amount as of March 31, 2017 $ 1,068.8 $ 249.4 $ 1,318.2 Currency translation adjustment and other 1.9 5.8 7.7 Net carrying amount as of September 30, 2017 $ 1,070.7 $ 255.2 $ 1,325.9 The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of September 30, 2017 and March 31, 2017 are as follows (in millions): September 30, 2017 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Patents 10 years $ 47.5 $ (38.6 ) $ 8.9 Customer relationships (including distribution network) 13 years 688.3 (490.5 ) 197.8 Tradenames 12 years 29.9 (6.9 ) 23.0 Intangible assets not subject to amortization - tradenames 317.2 — 317.2 Total intangible assets, net 13 years $ 1,082.9 $ (536.0 ) $ 546.9 March 31, 2017 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Patents 10 years $ 47.0 $ (37.7 ) $ 9.3 Customer relationships (including distribution network) 13 years 685.8 (475.2 ) 210.6 Tradenames 12 years 29.5 (5.3 ) 24.2 Intangible assets not subject to amortization - tradenames 314.5 — 314.5 Total intangible assets, net 13 years $ 1,076.8 $ (518.2 ) $ 558.6 Intangible asset amortization expense totaled $8.0 million and $16.2 million for the three and six months ended September 30, 2017 , respectively. Intangible asset amortization expense totaled $10.5 million and $25.1 million for the three and six months ended September 30, 2016 , respectively. The Company expects to recognize amortization expense on the intangible assets subject to amortization of $32.4 million in fiscal year 2018 (inclusive of $16.2 million of amortization expense recognized in the six months ended September 30, 2017 ), $32.2 million in fiscal year 2019, $32.0 million in fiscal year 2020, $30.6 million in fiscal year 2021 and $26.2 million in fiscal year 2022. |
Other Current Liabilities
Other Current Liabilities | 6 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities are summarized as follows (in millions): September 30, 2017 March 31, 2017 Customer advances $ 12.0 $ 10.9 Sales rebates 26.0 25.5 Commissions 6.7 6.3 Restructuring and other similar charges (1) 8.8 12.0 Product warranty (2) 7.2 7.5 Risk management (3) 9.2 8.9 Legal and environmental 4.4 4.4 Taxes, other than income taxes 8.4 10.5 Income tax payable 17.5 17.8 Interest payable 6.3 5.7 Other 26.7 17.9 $ 133.2 $ 127.4 ____________________ (1) See more information related to the restructuring obligations within Note 3 , Restructuring and Other Similar Charges. (2) See more information related to the product warranty obligations within Note 14 , Commitments and Contingencies. (3) Includes projected liabilities related to losses arising from automobile, general and product liability claims. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt is summarized as follows (in millions): September 30, 2017 March 31, 2017 Term loan (1) $ 1,577.8 $ 1,584.5 Other subsidiary debt (2) 37.9 38.2 Total 1,615.7 1,622.7 Less current maturities 16.3 16.5 Long-term debt $ 1,599.4 $ 1,606.2 ____________________ (1) Includes an unamortized original issue discount and debt issuance costs of $16.5 million and $17.9 million at September 30, 2017 and March 31, 2017 , respectively. (2) Other subsidiary debt consists primarily of a $36.9 million loan payable associated with the New Market Tax Credit incentive program as of September 30, 2017 and March 31, 2017 . The Company also invested an aggregate of $27.6 million in the form of a loan receivable. The aggregate loan receivable is presented within Other assets on the condensed consolidated balance sheets as of both September 30, 2017 and March 31, 2017. Also includes unamortized debt issuance costs of $0.5 million as of both September 30, 2017 and March 31, 2017 . Senior Secured Credit Facility The Company’s Third Amended and Restated First Lien Credit Agreement (the “Credit Agreement”) is funded by a syndicate of banks and other financial institutions and provides for (i) a $1,606.4 million term loan facility that matures on August 21, 2023 ( the“Term Loan”) and (ii) a $265.0 million revolving credit facility that matures on March 15, 2019. At September 30, 2017 , the borrowings under the Term Loan had a weighted-average effective interest rate of 4.06% , determined as the London Interbank Offered Rate (“LIBOR”) (subject to a 1.00% floor) plus an applicable margin of 2.75% . The weighted-average interest rate for the period ended September 30, 2017, was 4.02% , determined as LIBOR (subject to a 1.0% floor) plus an applicable margin of 2.75% . No amounts were borrowed under the revolving credit facility at September 30, 2017 or March 31, 2017 ; however, $9.3 million and $14.6 million of the revolving credit facility was considered utilized in connection with outstanding letters of credit at September 30, 2017 and March 31, 2017 , respectively. As of September 30, 2017 , the Company was in compliance with all applicable covenants under its Credit Agreement, including compliance with a maximum permitted total net leverage ratio (the sole financial maintenance covenant under the revolving credit facility) of 6.75 to 1.0. The Company's total net leverage ratio was 3.1 to 1.0 as of September 30, 2017 . Accounts Receivable Securitization Program The Company maintains an accounts receivable securitization facility (the “Securitization”) with Wells Fargo Bank, N.A. Pursuant to the Securitization, Rexnord Funding (a wholly owned bankruptcy-remote special purpose subsidiary) has granted the lender under the Securitization a security interest in all of its current and future receivables and related assets in exchange for a credit facility permitting borrowings of up to a maximum aggregate amount of $100.0 million outstanding from time to time. Such borrowings will be used by Rexnord Funding to finance purchases of accounts receivable. The Securitization constitutes a “Permitted Receivables Financing” under Article 1 and Article 6 of the Credit Agreement. Any borrowings under the Securitization are accounted for as secured borrowings on the Company's condensed consolidated balance sheets. As of both September 30, 2017 and March 31, 2017 , the Company's available borrowing capacity under the Securitization was $100.0 million , based on the then-current accounts receivables. No amounts were borrowed under the Securitization at September 30, 2017 or March 31, 2017 ; however, $9.9 million and $4.6 million was considered utilized in connection with outstanding letters of credit at September 30, 2017 and March 31, 2017 , respectively. As of September 30, 2017 , the Company was in compliance with all applicable covenants and performance ratios contained in the Securitization. See Note 11 to the audited consolidated financial statements of the Company's fiscal 2017 Annual Report on Form 10-K for further information regarding long-term debt. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company is exposed to certain financial risks relating to fluctuations in foreign currency exchange rates. The Company currently selectively uses foreign currency forward exchange contracts to manage its foreign currency risk. All hedging transactions are authorized and executed pursuant to defined policies and procedures that prohibit the use of financial instruments for speculative purposes. Foreign Exchange Contracts The Company periodically enters into foreign currency forward contracts to mitigate the foreign currency volatility relative to certain intercompany and external cash flows expected to occur. These foreign currency forward contracts were not accounted for as cash flow hedges in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), and as such were marked to market through earnings. The amounts recorded on the condensed consolidated balance sheets and recognized within the condensed consolidated statements of operations related to the Company's foreign currency forward contracts are set forth within the tables below. Interest Rate Derivatives The Company utilizes three interest rate swaps to hedge the variability in future cash flows associated with a portion of the Company’s variable-rate term loans. The interest rate swaps, which became effective in fiscal 2016, convert $650.0 million of the Company’s variable-rate term loans to a weighted average fixed interest rate of 2.55% plus the applicable margin (inclusive of a 1% LIBOR floor). The interest rate swaps have been designated as cash flow hedges in accordance with ASC 815 and will mature on September 27, 2018. In addition, the Company utilizes two interest rate caps to further mitigate the Company's exposure to increasing interest rates on its variable-rate interest loans. Those interest rate caps were effective beginning in fiscal 2015, with a maturity of October 24, 2018, and they cap the interest on $750.0 million of the Company's variable-rate interest loans at 3% , plus the applicable margin. In executing the interest rate caps, the Company paid a premium of $5.8 million. The interest rate caps have been designated as cash flow hedges in accordance with ASC 815. When combined with the Company's existing interest rate swaps, the Company has hedged approximately 88% of its outstanding variable rate term loans with a weighted average interest rate that cannot exceed 2.79% plus the applicable margin of 2.75% . The fair values of the Company's interest rate derivatives are recorded on the condensed consolidated balance sheets with the corresponding offset recorded as a component of accumulated other comprehensive loss, net of tax. See the amounts recorded on the condensed consolidated balance sheets related to the Company's interest rate derivatives within the tables below. The Company's derivatives are measured at fair value in accordance with ASC 820, Fair Value Measurements and Disclosure (“ASC 820”). See Note 13 for more information as it relates to the fair value measurement of the Company's derivative financial instruments. The following tables indicate the location and the fair value of the Company's derivative instruments within the condensed consolidated balance sheets segregated between designated, qualifying ASC 815 hedging instruments and non-qualifying, non-designated hedging instruments. Fair value of derivatives designated as hedging instruments under ASC 815 (in millions): September 30, 2017 March 31, 2017 Balance Sheet Classification Asset Derivatives Interest rate caps $ — $ 0.0 Other assets Liability Derivatives Interest rate swaps $ 6.6 $ — Other current liabilities Interest rate swaps $ — $ 10.3 Other liabilities Fair value of derivatives not designated as hedging instruments under ASC 815 (in millions): September 30, 2017 March 31, 2017 Balance Sheet Classification Liability Derivatives Foreign currency forward contracts $ 0.6 $ 0.1 Other current liabilities The following table segregates the location and the amount of gains or losses associated with the Company's derivative instruments, net of tax, within the condensed consolidated balance sheets (for qualifying ASC 815 instruments) and recognized within the condensed consolidated statements of operations (for non-qualifying ASC 815 instruments). Amount of loss recognized in accumulated other comprehensive loss on derivatives Derivative instruments designated as cash flow hedging relationships under ASC 815 (in millions) September 30, 2017 March 31, 2017 Interest rate swaps $ 4.1 $ 6.4 Interest rate caps $ 2.5 $ 3.1 Amount recognized as expense Derivative instruments not designated as hedging instruments under ASC 815 (in millions) Condensed Consolidated Statements of Operations Classification Second Quarter Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Foreign currency forward contracts Other expense, net $ 0.6 $ 0.2 $ 0.4 $ 0.5 As of September 30, 2017 , there was no ineffectiveness on the Company's designated hedging instruments. The Company expects to reclassify approximately $10.3 million of losses related to its interest rate derivatives recorded within accumulated other comprehensive loss into earnings as interest expense during the next twelve months. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. ASC 820 also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed assumptions about the assumptions a market participant would use. In accordance with ASC 820, fair value measurements are classified under the following hierarchy: • Level 1- Quoted prices for identical instruments in active markets. • Level 2- Quoted prices for similar instruments; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable. • Level 3- Model-derived valuations in which one or more inputs or value-drivers are both significant to the fair value measurement and unobservable. If applicable, the Company uses quoted market prices in active markets to determine fair value, and therefore classifies such measurements within Level 1. In some cases where market prices are not available, the Company makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters. These measurements are classified within Level 3 if they use significant unobservable inputs. Fair Value of Derivative Instruments The Company transacts in foreign currency forward contracts, interest rate swaps, and interest rate caps. The fair value of foreign currency forward contracts is based on a pricing model that utilizes the differential between the contract price and the market-based forward rate as applied to fixed future deliveries of currency at pre-designated settlement dates. The fair value of interest rate swaps and interest rate caps is based on pricing models. These models use discounted cash flows that utilize the appropriate market-based forward swap curves and interest rates. The Company endeavors to utilize the best available information in measuring fair value. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Foreign currency forward contracts and interest rate swaps reside within Level 2 of the fair value hierarchy. There were no transfers of assets or liabilities between levels for the periods presented. The following table provides a summary of the Company's assets and liabilities recognized at fair value on a recurring basis as of September 30, 2017 and March 31, 2017 (in millions): Fair Value as of September 30, 2017 Level 1 Level 2 Level 3 Total Liabilities: Interest rate derivatives $ — $ 6.6 $ — $ 6.6 Foreign currency forward contracts — 0.6 — 0.6 Total liabilities at fair value $ — $ 7.2 $ — $ 7.2 Fair Value as of March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Interest rate caps $ — $ 0.0 $ — $ — Total assets at fair value $ — $ — $ — $ — Liabilities: Interest rate swaps $ — $ 10.3 $ — $ 10.3 Foreign currency forward contracts — 0.1 — 0.1 Total liabilities at fair value $ — $ 10.4 $ — $ 10.4 Fair Value of Non-Derivative Financial Instruments The carrying amounts of cash, receivables, payables and accrued liabilities approximated fair value at September 30, 2017 and March 31, 2017 due to the short-term nature of those instruments. The fair value of long-term debt as of September 30, 2017 and March 31, 2017 was approximately $1,640.2 million and $1,644.6 million , respectively. The fair value is based on quoted market prices for the same issues. Long-lived Assets and Intangible Assets Long-lived assets (which includes property, plant and equipment and real estate) may be measured at fair value if such assets are held-for-sale or when there is a determination that the asset is impaired. Intangible assets (which include patents, tradenames, customer relationships, and non-compete agreements) also may be measured at fair value when there is a determination that the asset is impaired. The determination of fair value for these assets is based on the best information available that resides within Level 3 of the fair value hierarchy, including internal cash flow estimates discounted at an appropriate interest rate, quoted market prices when available, market prices for similar assets and independent appraisals, as appropriate. For real estate, cash flow estimates are based on current market estimates that reflect current and projected lease profiles and available industry information about expected trends in rental, occupancy and capitalization rates. In connection with the ongoing supply chain optimization and footprint repositioning initiatives, the Company has taken several actions to consolidate existing manufacturing facilities and rationalize its product offerings. These actions require the Company to assess whether the carrying amount of impacted long-lived assets will be recoverable as well as whether the remaining useful lives require adjustment. During fiscal 2017 and 2018, the Company recognized both impairment charges and accelerated depreciation of certain assets to place the assets at net realizable value. Net realizable value of these assets was determined using independent appraisals, classified as Level 3 inputs within the fair value hierarchy. As of September 30, 2017 and March 31, 2017 , these assets were recorded at net realizable value on the condensed consolidated balance sheets within property, plant and equipment in the amount of $10.1 million and $7.0 million , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Warranties: The Company offers warranties on the sales of certain products and records an accrual for estimated future claims. Such accruals are based upon historical experience and management's estimate of the level of future claims. The following table presents changes in the Company's product warranty liability (in millions): Six Months Ended September 30, 2017 September 30, 2016 Balance at beginning of period $ 7.5 $ 6.8 Acquired obligations — 0.4 Charged to operations 2.2 2.0 Claims settled (2.5 ) (2.4 ) Balance at end of period $ 7.2 $ 6.8 Contingencies: The Company's subsidiaries are involved in various unresolved legal actions, administrative proceedings and claims in the ordinary course of business involving, among other things, product liability, commercial, employment, workers' compensation, intellectual property claims and environmental matters. The Company establishes accruals in a manner that is consistent with accounting principles generally accepted in the United States for costs associated with such matters when liability is probable and those costs are capable of being reasonably estimated. Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss or recovery, based upon current information, management believes the eventual outcome of these unresolved legal actions, either individually or in the aggregate, will not have a material adverse effect on the financial position, results of operations or cash flows of the Company. In connection with its sale of the Company, Invensys plc ("Invensys") provided the Company with indemnification against certain contingent liabilities, including certain pre-closing environmental liabilities. The Company believes that, pursuant to such indemnity obligations, Invensys is obligated to defend and indemnify the Company with respect to the matters described below relating to the Ellsworth Industrial Park Site and to various asbestos claims. The indemnity obligations relating to the matters described below are subject, together with indemnity obligations relating to other matters, to an overall dollar cap equal to the purchase price, which is an amount in excess of $900 million . The following paragraphs summarize the most significant actions and proceedings: • In 2002, Rexnord Industries, LLC (“Rexnord Industries”) was named as a potentially responsible party (“PRP”), together with at least ten other companies, at the Ellsworth Industrial Park Site, Downers Grove, DuPage County, Illinois (the “Site”), by the United States Environmental Protection Agency (“USEPA”), and the Illinois Environmental Protection Agency (“IEPA”). Rexnord Industries' Downers Grove property is situated within the Ellsworth Industrial Complex. The USEPA and IEPA allege there have been one or more releases or threatened releases of chlorinated solvents and other hazardous substances, pollutants or contaminants, allegedly including but not limited to a release or threatened release on or from the Company's property, at the Site. The relief sought by the USEPA and IEPA includes further investigation and potential remediation of the Site and reimbursement of USEPA's past costs. Rexnord Industries' allocated share of past and future costs related to the Site, including for investigation and/or remediation, could be significant. All previously pending property damage and personal injury lawsuits against the Company related to the Site have been settled or dismissed. Pursuant to its indemnity obligation, Invensys continues to defend the Company in known matters related to the Site and has paid 100% of the costs to date. • Multiple lawsuits (with approximately 300 claimants) are pending in state or federal court in numerous jurisdictions relating to alleged personal injuries due to the alleged presence of asbestos in certain brakes and clutches previously manufactured by the Company's Stearns division and/or its predecessor owners. Invensys and FMC, prior owners of the Stearns business, have paid 100% of the costs to date related to the Stearns lawsuits. Similarly, the Company's Prager subsidiary is a defendant in two pending multi-defendant lawsuits relating to alleged personal injuries due to the alleged presence of asbestos in a product allegedly manufactured by Prager. Additionally, there are numerous individuals who have filed asbestos related claims against Prager; however, these claims are currently on the Texas Multi-district Litigation inactive docket. The ultimate outcome of these asbestos matters cannot presently be determined. To date, the Company's insurance providers have paid 100% of the costs related to the Prager asbestos matters. The Company believes that the combination of its insurance coverage and the Invensys indemnity obligations will cover any future costs of these matters. In connection with the Company's acquisition of The Falk Corporation (“Falk”), Hamilton Sundstrand provided the Company with indemnification against certain products-related asbestos exposure liabilities. The Company believes that, pursuant to such indemnity obligations, Hamilton Sundstrand is obligated to defend and indemnify the Company with respect to the asbestos claims described below, and that, with respect to these claims, such indemnity obligations are not subject to any time or dollar limitations. The following paragraph summarizes the most significant actions and proceedings for which Hamilton Sundstrand has accepted responsibility: • Falk, through its successor entity, is a defendant in multiple lawsuits pending in state or federal court in numerous jurisdictions relating to alleged personal injuries due to the alleged presence of asbestos in certain clutches and drives previously manufactured by Falk. There are approximately 100 claimants in these suits. The ultimate outcome of these lawsuits cannot presently be determined. Hamilton Sundstrand is defending the Company in these lawsuits pursuant to its indemnity obligations and has paid 100% of the costs to date. Certain Water Management subsidiaries are also subject to asbestos litigation. As of September 30, 2017 , Zurn and numerous other unrelated companies were defendants in approximately 7,000 asbestos related lawsuits representing approximately 17,000 claims. Plaintiffs' claims allege personal injuries caused by exposure to asbestos used primarily in industrial boilers formerly manufactured by a segment of Zurn. Zurn did not manufacture asbestos or asbestos components. Instead, Zurn purchased them from suppliers. These claims are being handled pursuant to a defense strategy funded by insurers. As of September 30, 2017 , the Company estimates the potential liability for the asbestos-related claims described above as well as the claims expected to be filed in the next ten years to be approximately $37.0 million , of which Zurn expects its insurance carriers to pay approximately $28.0 million in the next ten years on such claims, with the balance of the estimated liability being paid in subsequent years. The $37.0 million was developed based on actuarial studies and represents the projected indemnity payout for current and future claims. There are inherent uncertainties involved in estimating the number of future asbestos claims, future settlement costs, and the effectiveness of defense strategies and settlement initiatives. As a result, actual liability could differ from the estimate described herein and could be substantial. The liability for the asbestos-related claims is recorded in Other liabilities within the condensed consolidated balance sheets. Management estimates that its available insurance to cover this potential asbestos liability as of September 30, 2017 , is approximately $241.8 million , and believes that all current claims are covered by insurance. However, principally as a result of the past insolvency of certain of the Company's insurance carriers, certain coverage gaps will exist if and after the Company's other carriers have paid the first $165.8 million of aggregate liabilities. As of September 30, 2017 , the Company had a recorded receivable from its insurance carriers of $37.0 million , which corresponds to the amount of this potential asbestos liability that is covered by available insurance and is currently determined to be probable of recovery. However, there is no assurance that $241.8 million of insurance coverage will ultimately be available or that this asbestos liability will not ultimately exceed $241.8 million . Factors that could cause a decrease in the amount of available coverage include: changes in law governing the policies, potential disputes with the carriers regarding the scope of coverage, and insolvencies of one or more of the Company's carriers. The receivable for probable asbestos-related recoveries is recorded in Other assets within the condensed consolidated balance sheets. Certain Company subsidiaries were named as defendants in a number of individual and class action lawsuits in various United States courts claiming damages due to the alleged failure or anticipated failure of Zurn brass fittings on the PEX plumbing systems in homes and other structures. In fiscal 2013, the Company reached a court-approved agreement to settle the liability underlying this litigation. The settlement is designed to resolve, on a national basis, the Company's overall exposure for both known and unknown claims related to the alleged failure or anticipated failure of such fittings, subject to the right of eligible class members to opt-out of the settlement and pursue their claims independently. The settlement utilizes a seven year claims fund, which is capped at $20.0 million , and is funded in installments over the seven year period based on claim activity and minimum funding criteria. The settlement also covers class action plaintiffs' attorneys' fees and expenses. Historically, the Company's insurance carrier had funded the Company's defense in the above referenced proceedings. The Company, however, reached a settlement agreement with its insurer, whereby the insurer paid the Company a lump sum in exchange for a release of future exposure related to this liability. The Company has recorded an accrual related to this brass fittings liability, which takes into account, in pertinent part, the insurance carrier contribution, as well as exposure from the claims fund, opt-outs and the waiver of future insurance coverage. |
Retirement Benefits
Retirement Benefits | 6 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Retirement Benefits | Retirement Benefits The components of net periodic benefit cost are as follows (in millions): Three Months Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Pension Benefits: Service cost $ 0.2 $ 0.4 $ 0.4 $ 0.9 Interest cost 6.1 6.3 12.2 12.6 Expected return on plan assets (6.6 ) (6.5 ) (13.2 ) (13.2 ) Amortization: Prior service cost — 0.1 — 0.1 Net periodic benefit (credit) cost $ (0.3 ) $ 0.3 $ (0.6 ) $ 0.4 Other Postretirement Benefits: Interest cost $ 0.2 $ 0.3 $ 0.4 $ 0.6 Amortization: Prior service credit (0.5 ) (0.5 ) (1.0 ) (1.0 ) Net periodic benefit credit $ (0.3 ) $ (0.2 ) $ (0.6 ) $ (0.4 ) During the first six months of fiscal 2018 and 2017 , the Company made contributions of $2.9 million and $4.6 million , respectively, to its U.S. qualified pension plan trusts. In accordance with the Company's accounting policy for defined benefit pension and other postretirement benefit plans, actuarial gains and losses above the corridor are immediately recognized in the Company's operating results. The corridor is 10% of the higher of the pension benefit obligation or the fair value of the plan assets. This adjustment is typically recorded annually in the fourth quarter in connection with the Company's required year-end re-measurement of plan assets and benefit obligations, or upon any off-cycle re-measurement event. See Note 16 to the audited consolidated financial statements of the Company's fiscal 2017 Annual Report on Form 10-K for further information regarding retirement benefits. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Sep. 30, 2017 | |
Share-based Compensation [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Rexnord Corporation Performance Incentive Plan (the "Plan") is utilized to provide performance incentives to the Company's officers, employees, directors and certain others by permitting grants of equity awards (for common stock), as well as performance-based cash awards, to such persons to encourage them to maximize Rexnord's performance and create value for Rexnord's stockholders. ASC 718, Compensation-Stock Compensation (“ASC 718”), requires compensation costs related to share-based payment transactions to be recognized in the financial statements. Generally, compensation cost is measured based on the estimated grant-date fair value of the equity instruments issued. Compensation cost is recognized over the requisite service period, generally as the awards vest. For the three and six months ended September 30, 2017 , the Company recognized $5.4 million and $10.8 million of stock-based compensation expense, respectively. For the three and six months ended September 30, 2016 , the Company recognized $3.7 million and $6.0 million of stock-based compensation expense, respectively. As of September 30, 2017 , there was $34.7 million of total unrecognized compensation cost related to non-vested equity awards that is expected to be recognized over a weighted-average period of 2.0 years. Stock Options During the six months ended September 30, 2017 and September 30, 2016 , the Company granted stock options to executive officers and certain other employees, which vest over a weighted-average term of three years. The fair value of each option granted under the Plan during the six months ended September 30, 2017 was estimated on the grant date using the Black-Scholes valuation model utilizing the following weighted-average assumptions: Six Months Ended September 30, 2017 Expected option term (in years) 6.5 Expected volatility factor 31% Weighted-average risk-free interest rate 1.99% Expected dividend rate 0.0% The Company estimates the expected term of stock options granted based on the midpoint between when the options vest and when they expire. The Company uses the simplified method to determine the expected term, as management does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its common stock shares has been publicly traded. The Company’s expected volatility assumption is based on its historical volatility. The weighted-average risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. Management assumes expected dividends of zero . The weighted-average grant date fair value of options granted under the Plan during the six months ended September 30, 2017 was $8.11 . A summary of stock option activity during the first six months of fiscal 2018 and 2017 is as follows: Six Months Ended September 30, 2017 September 30, 2016 Shares Weighted Avg. Exercise Price Shares Weighted Avg. Exercise Price Number of common shares under option: Outstanding at beginning of period 7,770,670 $ 18.73 7,854,685 $ 15.10 Granted 1,164,713 23.14 2,591,028 19.72 Exercised (212,783 ) 12.54 (1,284,775 ) 5.06 Canceled/Forfeited (101,985 ) 23.35 (338,233 ) 23.70 Outstanding at end of period (1) 8,620,615 $ 19.42 8,822,705 $ 17.58 Exercisable at end of period (2) 5,029,677 $ 17.72 3,950,120 $ 13.00 ______________________ (1) The weighted average remaining contractual life of options outstanding at September 30, 2017 is 6.6 years. (2) The weighted average remaining contractual life of options exercisable at September 30, 2017 is 5.2 years. Restricted Stock Units During the six months ended September 30, 2017 and 2016, the Company granted restricted stock units ("RSUs") to its non-employee directors and certain employees. RSUs granted during the six months ended September 30, 2017 and 2016 generally vest ratably over three years. The fair value of each award is determined based on the Company's closing stock price on the date of grant. A summary of RSU activity during the six months ended September 30, 2017 and 2016 is as follows: Six Months Ended September 30, 2017 September 30, 2016 Shares Weighted Avg. Grant Date Fair Value Shares Weighted Avg. Grant Date Fair Value Nonvested RSUs at beginning of period 322,142 $ 20.59 125,307 $ 24.67 Granted 242,581 23.10 168,695 19.78 Vested (57,644 ) 22.80 (33,579 ) 25.96 Canceled/Forfeited (19,716 ) 22.59 (21,026 ) 22.11 Nonvested RSUs at end of period 487,363 $ 21.50 239,397 $ 21.26 Performance Stock Units The Company grants performance stock units (“PSUs”) to its executive officers and certain other employees. PSUs have a three -year performance period and are earned and vest, subject to continued employment, based in part on performance relative to metrics determined by the Compensation Committee. The number of PSUs earned, which can range between 0% and 200% of the target awards granted depending on the Company's actual performance during the three -year performance period, will be satisfied with Rexnord common stock. A summary of PSU activity during the six months ended September 30, 2017 and 2016 is as follows: Six Months Ended September 30, 2017 September 30, 2016 Shares Weighted Avg. Grant Date Fair Value Shares Weighted Avg. Grant Date Fair Value Nonvested PSUs at beginning of period 259,930 $ 24.74 49,136 $ 28.57 Granted 193,071 26.58 219,266 23.95 Vested — — — — Canceled/Forfeited — — (4,200 ) 28.57 Nonvested PSUs at end of period 453,001 $ 25.53 264,202 $ 24.74 The fair value of the portion of PSUs with vesting based on free cash flow conversion is determined based on the Company's closing common stock price on the date of grant. The fair value of the portion of PSUs with vesting based on relative total shareholder return is determined utilizing the Monte Carlo simulation model and the weighted-average fair value of awards granted during the six months ended September 30, 2017 was $31.25 . Assumptions used to determine the fair value of each PSU were based on historical data and standard industry valuation practices and methodology. The following weighted-average assumptions were used for the PSUs granted during the six months ended September 30, 2017 : Six Months Ended September 30, 2017 Expected volatility factor 31% Weighted-average risk-free interest rate 1.45% Expected dividend rate 0.0% |
Business Segment Information
Business Segment Information | 6 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information The Company's results of operations are reported in two business segments, consisting of the Process & Motion Control platform and the Water Management platform. The Process & Motion Control platform designs, manufactures, markets and services a comprehensive range of specified, highly-engineered mechanical components used within complex systems where customers' reliability requirements and costs of failure or downtime are high. The Process & Motion Control portfolio includes motion control products, shaft management products, aerospace components, and related value-added services. Products and services are marketed and sold globally under widely recognized brand names, including Rexnord, Rex, FlatTop, Falk, Link-Belt and Cambridge. Process & Motion Control products and services are sold into a diverse group of attractive end markets, including food and beverage, aerospace, mining, petrochemical, energy and power generation, cement and aggregates, forest and wood products, agriculture, and general industrial and automation applications. The Water Management platform designs, procures, manufactures, and markets products that provide and enhance water quality, safety, flow control and conservation. The Water Management product portfolio includes professional grade water control and safety, water distribution and drainage, finish plumbing, and site works products for primarily nonresidential buildings and flow control products for water and wastewater treatment infrastructure markets. Products are marketed and sold under widely recognized brand names, including Zurn, Wilkins, and VAG. The financial information of the Company's segments is regularly evaluated by the chief operating decision maker in determining resource allocation and assessing performance. Management evaluates the performance of each business segment based on its operating results. The same accounting policies are used throughout the organization (see Note 1 ). Business Segment Information (in millions): Three Months Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Net sales Process & Motion Control $ 300.4 $ 286.9 $ 588.1 $ 550.6 Water Management 210.4 204.1 410.4 412.2 Consolidated net sales $ 510.8 $ 491.0 $ 998.5 $ 962.8 Income (loss) from operations Process & Motion Control $ 44.7 $ 37.1 $ 84.4 $ 62.7 Water Management 32.5 26.0 60.1 48.7 Corporate (11.4 ) (10.6 ) (23.5 ) (20.3 ) Consolidated income from operations $ 65.8 $ 52.5 $ 121.0 $ 91.1 Non-operating expense: Interest expense, net $ (20.2 ) $ (22.8 ) $ (40.2 ) $ (46.5 ) Other expense, net (1.0 ) (0.7 ) (1.5 ) (2.6 ) Income before income taxes 44.6 29.0 79.3 42.0 Provision (benefit) for income taxes 14.8 4.4 23.0 (1.5 ) Net income 29.8 24.6 56.3 43.5 Dividends on preferred stock (5.8 ) — (11.6 ) — Net income attributable to Rexnord common stockholders $ 24.0 $ 24.6 $ 44.7 $ 43.5 Depreciation and amortization Process & Motion Control $ 13.0 $ 15.5 $ 27.4 $ 34.8 Water Management 8.1 8.8 16.2 18.5 Consolidated $ 21.1 $ 24.3 $ 43.6 $ 53.3 Capital expenditures Process & Motion Control $ 7.8 $ 12.8 $ 13.2 $ 20.9 Water Management 1.2 4.1 2.7 8.0 Consolidated $ 9.0 $ 16.9 $ 15.9 $ 28.9 |
Subsequent Event
Subsequent Event | 6 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On October 4, 2017, the Company acquired World Dryer Corporation (“World Dryer”) for a preliminary cash purchase price of $50.0 million , excluding transaction costs and net of cash acquired. The preliminary cash purchase price is subject to customary post-closing adjustments for variances between estimated working capital targets and actual acquisition date working capital. World Dryer is a leading global manufacturer of commercial electric hand dryers. The combination of World Dryer’s eco-friendly hand dryers and Zurn's water-efficient plumbing products is expected to bring even greater value to commercial building owners in the form of lower operating costs. As of the date of this filing, the Company has not completed the preliminary allocation of the purchase price to the assets acquired and liabilities assumed. The Company’s financial position and results from operations will include World Dryer as part of its Water Management platform subsequent to October 4, 2017. This acquisition is not expected to have a material impact on the Company's condensed consolidated financial statements. |
Basis of Presentation and Sig25
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities , which expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. ASU 2017-12 is effective for the beginning of the Company's fiscal 2020, with early adoption permitted, and must be applied prospectively. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption. In January 2017, the the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). The amendments in ASU 2017-04 allow companies to apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for the beginning of the Company's fiscal 2021, with early adoption permitted, and must be applied prospectively. The Company is currently evaluating the timing of adoption; however, it does not believe the adoption of ASU 2017-04 will have material impact on the Company's consolidated financial statements. In February 2015, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02''), which requires lessees to recognize lease assets and lease liabilities for all leases on the balance sheets. ASU 2016-02 is effective beginning for the Company's fiscal 2020 and interim periods included therein on a modified retrospective basis. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11"). ASU 2015-11 requires inventory to be measured at the lower of cost and net realizable value, which is defined as the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. Under existing guidance, net realizable value is one of several calculations needed to measure inventory at lower of cost or market and as such, the new guidance reduces the complexity in measurement. The Company adopted ASU No. 2015-11 prospectively effective April 1, 2017 and there was no impact to the Company's condensed consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The new guidance requires the service cost component of net periodic benefit cost to be presented in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period with only the service cost component eligible for capitalization in assets. Other components of the net periodic benefit cost are to be stated separately from the line item(s) that includes the service cost and outside of operating income. The standard is required to be adopted for annual periods beginning after December 15, 2017, including interim periods within that annual period, which is the Company's fiscal year 2019. The amendment is to be applied retrospectively. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), now referred to as Accounting Standards Codification Topic 606 ("ASC 606"), in order to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The guidance specifies revenue should be recognized in an amount that reflects the consideration the company expects to be entitled to in exchange for the transfer of promised goods or services to customers. The guidance provides a five-step process that entities should follow in order to achieve that core principal. ASC 606 will be effective for the Company on April 1, 2018. Companies can use either a full retrospective or modified retrospective method to adopt the standard. Under the full retrospective method, the requirements of the new standard are applied to contracts for each prior reporting period presented and the cumulative effective of applying the standard is recognized in the earliest period presented. Under the modified retrospective method, prior periods are not updated to be presented on an accounting basis that is consistent with information for fiscal 2019. Rather, a cumulative adjustment for the effects of applying the new standard to periods prior to fiscal 2019 is recorded to retained earnings as of April 1, 2018. The Company expects to adopt the new standard using the modified retrospective approach. The Company is assessing the impact of the new standard on its consolidated financial statements by reviewing its current accounting policies and practices, including detailed reviews of customer contracts, to identify potential differences that would result from applying the requirements of the new standard to its revenue contracts. In addition, ASC 606 will require more comprehensive disclosures about revenue streams and contracts with customers. The Company is currently evaluating potential changes to its processes, information systems and internal controls related to the preparation of disclosures required under ASC 606. The Company will provide additional disclosure as its ongoing assessment progresses. |
Restructuring and Other Simil26
Restructuring and Other Similar Charges (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table summarizes the Company's restructuring and other similar charges during the three and six months ended September 30, 2017 and September 30, 2016 by operating segment (in millions): Restructuring and Other Similar Charges Three Months Ended September 30, 2017 Process & Motion Control Water Management Consolidated Employee termination benefits $ 1.4 $ 2.3 $ 3.7 Contract termination and other associated costs 1.1 0.3 1.4 Total restructuring and other similar charges $ 2.5 $ 2.6 $ 5.1 Restructuring and Other Similar Charges Six Months Ended September 30, 2017 Process & Motion Control Water Management Consolidated Employee termination benefits $ 1.9 $ 2.7 $ 4.6 Contract termination and other associated costs 2.8 0.4 3.2 Total restructuring and other similar charges $ 4.7 $ 3.1 $ 7.8 Restructuring and Other Similar Charges Three Months Ended September 30, 2016 Process & Motion Control Water Management Consolidated Employee termination benefits $ 2.1 $ 1.2 $ 3.3 Contract termination and other associated costs (1) 1.5 (0.4 ) 1.1 Total restructuring and other similar charges $ 3.6 $ 0.8 $ 4.4 Restructuring and Other Similar Charges Six Months Ended September 30, 2016 Process & Motion Control Water Management Consolidated Employee termination benefits $ 4.5 $ 3.7 $ 8.2 Contract termination and other associated costs (1) 1.5 0.3 1.8 Total restructuring and other similar charges $ 6.0 $ 4.0 $ 10.0 ____________________ (1) During the second quarter of fiscal 2017, the Company received a $1.0 million cash payment in connection with the execution of an agreement to sell certain Rodney Hunt® Fontaine® ("RHF") related intellectual property, which was fully impaired during fiscal 2016 when the Company announced its decision to exit this product line. The gain on the disposition of this intellectual property was recorded as a reduction of restructuring and other similar charges in the second quarter of fiscal 2017 within the Water Management platform. |
Summary of Activity in Restructuring Accrual | The following table summarizes the activity in the Company's restructuring accrual for the six months ended September 30, 2017 (in millions): Employee termination benefits Contract termination and other associated costs Total Restructuring accrual, March 31, 2017 (1) $ 11.0 $ 1.0 $ 12.0 Charges 4.6 3.2 7.8 Cash payments (7.3 ) (3.7 ) (11.0 ) Restructuring accrual, September 30, 2017 (1) $ 8.3 $ 0.5 $ 8.8 ____________________ (1) The restructuring accrual is included in Other current liabilities in the condensed consolidated balance sheets. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the basis for income per share computations (in millions, except share amounts): Three Months Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Numerator: Net income $ 29.8 $ 24.6 $ 56.3 $ 43.5 Less: Dividends on preferred stock (5.8 ) — (11.6 ) — Net income attributable to Rexnord common stockholders $ 24.0 $ 24.6 $ 44.7 $ 43.5 Denominator: Weighted-average common shares outstanding, basic 103,812 102,728 103,753 102,207 Effect of dilutive equity awards 1,728 1,880 1,690 2,222 Weighted-average common shares outstanding, dilutive 105,540 104,608 105,443 104,429 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders' Equity | Stockholders' equity consists of the following (in millions): Preferred Stock Common Stock Additional Paid-In Capital Retained Deficit Accumulated Other Comprehensive (Loss) Income Total Stockholders’ Equity Balance at March 31, 2017 $ 0.0 $ 1.0 $ 1,262.1 $ (55.5 ) $ (137.0 ) $ 1,070.6 Total comprehensive income — — — 56.3 36.4 92.7 Stock-based compensation expense — — 10.8 — — 10.8 Exercise of stock options — — 2.8 — — 2.8 Preferred stock dividends — — (10.8 ) (0.8 ) — (11.6 ) Balance at September 30, 2017 $ 0.0 $ 1.0 $ 1,264.9 $ — $ (100.6 ) $ 1,165.3 |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss, net of tax, for the six months ended September 30, 2017 are as follows (in millions): Interest Rate Derivatives Foreign Currency Translation Pension and Postretirement Plans Total Balance at March 31, 2017 $ (9.5 ) $ (99.3 ) $ (28.2 ) $ (137.0 ) Other comprehensive (loss) income before reclassifications (0.4 ) 34.1 — 33.7 Amounts reclassified from accumulated other comprehensive loss 3.3 — (0.6 ) 2.7 Net current period other comprehensive income (loss) 2.9 34.1 (0.6 ) 36.4 Balance at September 30, 2017 $ (6.6 ) $ (65.2 ) $ (28.8 ) $ (100.6 ) |
Reclassification out of Accumulated Other Comprehensive Loss | The following table summarizes the amounts reclassified from accumulated other comprehensive loss to net income during the three and six months ended September 30, 2017 and September 30, 2016 (in millions): Three Months Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Income Statement Line Pension and other postretirement plans Amortization of prior service credit $ (0.5 ) $ (0.4 ) $ (1.0 ) $ (0.9 ) Selling, general and administrative expenses Provision for income taxes 0.2 0.1 0.4 0.3 Total net of tax $ (0.3 ) $ (0.3 ) $ (0.6 ) $ (0.6 ) Interest rate derivatives Net realized losses on interest rate hedges $ 2.6 $ 2.6 $ 5.4 $ 5.2 Interest expense, net Benefit for income taxes (1.0 ) (1.0 ) (2.1 ) (2.0 ) Total net of tax $ 1.6 $ 1.6 $ 3.3 $ 3.2 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Inventory, Net [Abstract] | |
Summary of Major Classes of Inventories | The major classes of inventories are summarized as follows (in millions): September 30, 2017 March 31, 2017 Finished goods $ 160.2 $ 139.9 Work in progress 43.5 44.4 Purchased components 80.8 74.0 Raw materials 56.7 47.7 Inventories at First-in, First-Out ("FIFO") cost 341.2 306.0 Adjustment to state inventories at Last-in, First-Out ("LIFO") cost 8.4 8.9 $ 349.6 $ 314.9 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The changes in the net carrying value of goodwill for the six months ended September 30, 2017 by operating segment are presented below (in millions): Process & Motion Control Water Management Consolidated Net carrying amount as of March 31, 2017 $ 1,068.8 $ 249.4 $ 1,318.2 Currency translation adjustment and other 1.9 5.8 7.7 Net carrying amount as of September 30, 2017 $ 1,070.7 $ 255.2 $ 1,325.9 |
Schedule of Gross Carrying Amount and Accumulated Amortization for Finite-Lived Intangible Assets | The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of September 30, 2017 and March 31, 2017 are as follows (in millions): September 30, 2017 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Patents 10 years $ 47.5 $ (38.6 ) $ 8.9 Customer relationships (including distribution network) 13 years 688.3 (490.5 ) 197.8 Tradenames 12 years 29.9 (6.9 ) 23.0 Intangible assets not subject to amortization - tradenames 317.2 — 317.2 Total intangible assets, net 13 years $ 1,082.9 $ (536.0 ) $ 546.9 March 31, 2017 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Patents 10 years $ 47.0 $ (37.7 ) $ 9.3 Customer relationships (including distribution network) 13 years 685.8 (475.2 ) 210.6 Tradenames 12 years 29.5 (5.3 ) 24.2 Intangible assets not subject to amortization - tradenames 314.5 — 314.5 Total intangible assets, net 13 years $ 1,076.8 $ (518.2 ) $ 558.6 |
Schedule of Gross Carrying Amount and Accumulated Amortization for Infinite-Lived Intangible Assets | The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of September 30, 2017 and March 31, 2017 are as follows (in millions): September 30, 2017 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Patents 10 years $ 47.5 $ (38.6 ) $ 8.9 Customer relationships (including distribution network) 13 years 688.3 (490.5 ) 197.8 Tradenames 12 years 29.9 (6.9 ) 23.0 Intangible assets not subject to amortization - tradenames 317.2 — 317.2 Total intangible assets, net 13 years $ 1,082.9 $ (536.0 ) $ 546.9 March 31, 2017 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to amortization: Patents 10 years $ 47.0 $ (37.7 ) $ 9.3 Customer relationships (including distribution network) 13 years 685.8 (475.2 ) 210.6 Tradenames 12 years 29.5 (5.3 ) 24.2 Intangible assets not subject to amortization - tradenames 314.5 — 314.5 Total intangible assets, net 13 years $ 1,076.8 $ (518.2 ) $ 558.6 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities are summarized as follows (in millions): September 30, 2017 March 31, 2017 Customer advances $ 12.0 $ 10.9 Sales rebates 26.0 25.5 Commissions 6.7 6.3 Restructuring and other similar charges (1) 8.8 12.0 Product warranty (2) 7.2 7.5 Risk management (3) 9.2 8.9 Legal and environmental 4.4 4.4 Taxes, other than income taxes 8.4 10.5 Income tax payable 17.5 17.8 Interest payable 6.3 5.7 Other 26.7 17.9 $ 133.2 $ 127.4 ____________________ (1) See more information related to the restructuring obligations within Note 3 , Restructuring and Other Similar Charges. (2) See more information related to the product warranty obligations within Note 14 , Commitments and Contingencies. (3) Includes projected liabilities related to losses arising from automobile, general and product liability claims. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt is summarized as follows (in millions): September 30, 2017 March 31, 2017 Term loan (1) $ 1,577.8 $ 1,584.5 Other subsidiary debt (2) 37.9 38.2 Total 1,615.7 1,622.7 Less current maturities 16.3 16.5 Long-term debt $ 1,599.4 $ 1,606.2 ____________________ (1) Includes an unamortized original issue discount and debt issuance costs of $16.5 million and $17.9 million at September 30, 2017 and March 31, 2017 , respectively. (2) Other subsidiary debt consists primarily of a $36.9 million loan payable associated with the New Market Tax Credit incentive program as of September 30, 2017 and March 31, 2017 . The Company also invested an aggregate of $27.6 million in the form of a loan receivable. The aggregate loan receivable is presented within Other assets on the condensed consolidated balance sheets as of both September 30, 2017 and March 31, 2017. Also includes unamortized debt issuance costs of $0.5 million as of both September 30, 2017 and March 31, 2017 . |
Derivative Financial Instrume34
Derivative Financial Instruments (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value Schedule of Derivatives Designated as Hedging Instruments | Fair value of derivatives designated as hedging instruments under ASC 815 (in millions): September 30, 2017 March 31, 2017 Balance Sheet Classification Asset Derivatives Interest rate caps $ — $ 0.0 Other assets Liability Derivatives Interest rate swaps $ 6.6 $ — Other current liabilities Interest rate swaps $ — $ 10.3 Other liabilities |
Fair Value Schedule of Derivatives Not Designated as Hedging Instruments | Fair value of derivatives not designated as hedging instruments under ASC 815 (in millions): September 30, 2017 March 31, 2017 Balance Sheet Classification Liability Derivatives Foreign currency forward contracts $ 0.6 $ 0.1 Other current liabilities |
Schedules of Gains and Losses Associated with Derivative Instruments | The following table segregates the location and the amount of gains or losses associated with the Company's derivative instruments, net of tax, within the condensed consolidated balance sheets (for qualifying ASC 815 instruments) and recognized within the condensed consolidated statements of operations (for non-qualifying ASC 815 instruments). Amount of loss recognized in accumulated other comprehensive loss on derivatives Derivative instruments designated as cash flow hedging relationships under ASC 815 (in millions) September 30, 2017 March 31, 2017 Interest rate swaps $ 4.1 $ 6.4 Interest rate caps $ 2.5 $ 3.1 Amount recognized as expense Derivative instruments not designated as hedging instruments under ASC 815 (in millions) Condensed Consolidated Statements of Operations Classification Second Quarter Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Foreign currency forward contracts Other expense, net $ 0.6 $ 0.2 $ 0.4 $ 0.5 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets Recognized at Fair Value on a Recurring Basis | The following table provides a summary of the Company's assets and liabilities recognized at fair value on a recurring basis as of September 30, 2017 and March 31, 2017 (in millions): Fair Value as of September 30, 2017 Level 1 Level 2 Level 3 Total Liabilities: Interest rate derivatives $ — $ 6.6 $ — $ 6.6 Foreign currency forward contracts — 0.6 — 0.6 Total liabilities at fair value $ — $ 7.2 $ — $ 7.2 Fair Value as of March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Interest rate caps $ — $ 0.0 $ — $ — Total assets at fair value $ — $ — $ — $ — Liabilities: Interest rate swaps $ — $ 10.3 $ — $ 10.3 Foreign currency forward contracts — 0.1 — 0.1 Total liabilities at fair value $ — $ 10.4 $ — $ 10.4 |
Summary of Liabilities Recognized at Fair Value on a Recurring Basis | The following table provides a summary of the Company's assets and liabilities recognized at fair value on a recurring basis as of September 30, 2017 and March 31, 2017 (in millions): Fair Value as of September 30, 2017 Level 1 Level 2 Level 3 Total Liabilities: Interest rate derivatives $ — $ 6.6 $ — $ 6.6 Foreign currency forward contracts — 0.6 — 0.6 Total liabilities at fair value $ — $ 7.2 $ — $ 7.2 Fair Value as of March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Interest rate caps $ — $ 0.0 $ — $ — Total assets at fair value $ — $ — $ — $ — Liabilities: Interest rate swaps $ — $ 10.3 $ — $ 10.3 Foreign currency forward contracts — 0.1 — 0.1 Total liabilities at fair value $ — $ 10.4 $ — $ 10.4 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The following table presents changes in the Company's product warranty liability (in millions): Six Months Ended September 30, 2017 September 30, 2016 Balance at beginning of period $ 7.5 $ 6.8 Acquired obligations — 0.4 Charged to operations 2.2 2.0 Claims settled (2.5 ) (2.4 ) Balance at end of period $ 7.2 $ 6.8 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The components of net periodic benefit cost are as follows (in millions): Three Months Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Pension Benefits: Service cost $ 0.2 $ 0.4 $ 0.4 $ 0.9 Interest cost 6.1 6.3 12.2 12.6 Expected return on plan assets (6.6 ) (6.5 ) (13.2 ) (13.2 ) Amortization: Prior service cost — 0.1 — 0.1 Net periodic benefit (credit) cost $ (0.3 ) $ 0.3 $ (0.6 ) $ 0.4 Other Postretirement Benefits: Interest cost $ 0.2 $ 0.3 $ 0.4 $ 0.6 Amortization: Prior service credit (0.5 ) (0.5 ) (1.0 ) (1.0 ) Net periodic benefit credit $ (0.3 ) $ (0.2 ) $ (0.6 ) $ (0.4 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Share-based Compensation [Abstract] | |
Schedule of Share-based Compensation Arrangements | The fair value of each option granted under the Plan during the six months ended September 30, 2017 was estimated on the grant date using the Black-Scholes valuation model utilizing the following weighted-average assumptions: Six Months Ended September 30, 2017 Expected option term (in years) 6.5 Expected volatility factor 31% Weighted-average risk-free interest rate 1.99% Expected dividend rate 0.0% |
Schedule of Stock Option Activity | A summary of stock option activity during the first six months of fiscal 2018 and 2017 is as follows: Six Months Ended September 30, 2017 September 30, 2016 Shares Weighted Avg. Exercise Price Shares Weighted Avg. Exercise Price Number of common shares under option: Outstanding at beginning of period 7,770,670 $ 18.73 7,854,685 $ 15.10 Granted 1,164,713 23.14 2,591,028 19.72 Exercised (212,783 ) 12.54 (1,284,775 ) 5.06 Canceled/Forfeited (101,985 ) 23.35 (338,233 ) 23.70 Outstanding at end of period (1) 8,620,615 $ 19.42 8,822,705 $ 17.58 Exercisable at end of period (2) 5,029,677 $ 17.72 3,950,120 $ 13.00 ______________________ (1) The weighted average remaining contractual life of options outstanding at September 30, 2017 is 6.6 years. (2) The weighted average remaining contractual life of options exercisable at September 30, 2017 is 5.2 years. |
Schedule of Nonvested Restricted Stock Units Activity | A summary of RSU activity during the six months ended September 30, 2017 and 2016 is as follows: Six Months Ended September 30, 2017 September 30, 2016 Shares Weighted Avg. Grant Date Fair Value Shares Weighted Avg. Grant Date Fair Value Nonvested RSUs at beginning of period 322,142 $ 20.59 125,307 $ 24.67 Granted 242,581 23.10 168,695 19.78 Vested (57,644 ) 22.80 (33,579 ) 25.96 Canceled/Forfeited (19,716 ) 22.59 (21,026 ) 22.11 Nonvested RSUs at end of period 487,363 $ 21.50 239,397 $ 21.26 |
Schedule of Nonvested Performance-based Units Activity | A summary of PSU activity during the six months ended September 30, 2017 and 2016 is as follows: Six Months Ended September 30, 2017 September 30, 2016 Shares Weighted Avg. Grant Date Fair Value Shares Weighted Avg. Grant Date Fair Value Nonvested PSUs at beginning of period 259,930 $ 24.74 49,136 $ 28.57 Granted 193,071 26.58 219,266 23.95 Vested — — — — Canceled/Forfeited — — (4,200 ) 28.57 Nonvested PSUs at end of period 453,001 $ 25.53 264,202 $ 24.74 |
Schedule of Weighted-Average Assumptions Used, Performance-based Units | The following weighted-average assumptions were used for the PSUs granted during the six months ended September 30, 2017 : Six Months Ended September 30, 2017 Expected volatility factor 31% Weighted-average risk-free interest rate 1.45% Expected dividend rate 0.0% |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Business Segment Information (in millions): Three Months Ended Six Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Net sales Process & Motion Control $ 300.4 $ 286.9 $ 588.1 $ 550.6 Water Management 210.4 204.1 410.4 412.2 Consolidated net sales $ 510.8 $ 491.0 $ 998.5 $ 962.8 Income (loss) from operations Process & Motion Control $ 44.7 $ 37.1 $ 84.4 $ 62.7 Water Management 32.5 26.0 60.1 48.7 Corporate (11.4 ) (10.6 ) (23.5 ) (20.3 ) Consolidated income from operations $ 65.8 $ 52.5 $ 121.0 $ 91.1 Non-operating expense: Interest expense, net $ (20.2 ) $ (22.8 ) $ (40.2 ) $ (46.5 ) Other expense, net (1.0 ) (0.7 ) (1.5 ) (2.6 ) Income before income taxes 44.6 29.0 79.3 42.0 Provision (benefit) for income taxes 14.8 4.4 23.0 (1.5 ) Net income 29.8 24.6 56.3 43.5 Dividends on preferred stock (5.8 ) — (11.6 ) — Net income attributable to Rexnord common stockholders $ 24.0 $ 24.6 $ 44.7 $ 43.5 Depreciation and amortization Process & Motion Control $ 13.0 $ 15.5 $ 27.4 $ 34.8 Water Management 8.1 8.8 16.2 18.5 Consolidated $ 21.1 $ 24.3 $ 43.6 $ 53.3 Capital expenditures Process & Motion Control $ 7.8 $ 12.8 $ 13.2 $ 20.9 Water Management 1.2 4.1 2.7 8.0 Consolidated $ 9.0 $ 16.9 $ 15.9 $ 28.9 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | Jun. 01, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 |
Business Acquisition [Line Items] | ||||
Cash purchase price, net | $ 0 | $ 213.7 | ||
Goodwill | 1,325.9 | $ 1,318.2 | ||
Cambridge | ||||
Business Acquisition [Line Items] | ||||
Business acquisition cash purchase price | $ 213.4 | |||
Cash purchase price, net | 210 | |||
Additional consideration transferred | $ 3.4 | |||
Goodwill | 129.4 | |||
Other intangible assets | 80.6 | |||
Other net assets | 3.4 | |||
Cambridge | Tradenames | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | 16.8 | |||
Cambridge | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | 58.3 | |||
Cambridge | Patents | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | $ 5.5 | |||
Water Management | ||||
Business Acquisition [Line Items] | ||||
Cash purchase price, net | $ 0.3 |
Restructuring and Other Simil41
Restructuring and Other Similar Charges - Costs to Date by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar charges | $ 5.1 | $ 4.4 | $ 7.8 | $ 10 |
Tradenames | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Proceeds from sale of RHF intellectual property | 1 | |||
Employee termination benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar charges | 3.7 | 3.3 | 4.6 | 8.2 |
Contract termination and other associated costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar charges | 1.4 | 1.1 | 3.2 | 1.8 |
Operating Segments | Process & Motion Control | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar charges | 2.5 | 3.6 | 4.7 | 6 |
Operating Segments | Process & Motion Control | Employee termination benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar charges | 1.4 | 2.1 | 1.9 | 4.5 |
Operating Segments | Process & Motion Control | Contract termination and other associated costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar charges | 1.1 | 1.5 | 2.8 | 1.5 |
Operating Segments | Water Management | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar charges | 2.6 | 0.8 | 3.1 | 4 |
Operating Segments | Water Management | Employee termination benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar charges | 2.3 | 1.2 | 2.7 | 3.7 |
Operating Segments | Water Management | Contract termination and other associated costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other similar charges | $ 0.3 | $ (0.4) | $ 0.4 | $ 0.3 |
Restructuring and Other Simil42
Restructuring and Other Similar Charges - Reserve Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring accrual, beginning period | $ 12 | |||
Charges | $ 5.1 | $ 4.4 | 7.8 | $ 10 |
Cash payments | (11) | |||
Restructuring accrual, ending period | 8.8 | 8.8 | ||
Employee termination benefits | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accrual, beginning period | 11 | |||
Charges | 3.7 | 3.3 | 4.6 | 8.2 |
Cash payments | (7.3) | |||
Restructuring accrual, ending period | 8.3 | 8.3 | ||
Contract termination and other associated costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accrual, beginning period | 1 | |||
Charges | 1.4 | $ 1.1 | 3.2 | $ 1.8 |
Cash payments | (3.7) | |||
Restructuring accrual, ending period | $ 0.5 | $ 0.5 |
Restructuring and Other Simil43
Restructuring and Other Similar Charges - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Accelerated depreciation | $ 0 | $ 800,000 | $ 1,000,000 | $ 1,400,000 |
Restructuring and other similar charges | $ 5,100,000 | 4,400,000 | $ 7,800,000 | 10,000,000 |
RHF Product Line | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Pre-tax Loss | 2,200,000 | 6,700,000 | ||
Restructuring and other similar charges | $ 300,000 | $ 1,900,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Examination [Line Items] | ||||||
Provision (benefit) for income taxes | $ 14.8 | $ 4.4 | $ 23 | $ (1.5) | ||
Effective income tax rate | 33.20% | 15.20% | 29.00% | (3.60%) | ||
Federal statutory rate | 35.00% | 35.00% | 35.00% | |||
Unrecognized net income tax benefits | $ 18.5 | $ 18.5 | ||||
Unrecognized net income tax benefits, total liability | $ 18.1 | |||||
Interest and penalties included in unrecognized tax benefits | $ 5.1 | 4.7 | 5.1 | |||
Interest and penalties recognized as income tax expense | $ 0.3 | $ 0.3 | ||||
Foreign Tax Authority | Ministry of Economic Affairs and Finance, Italy | ||||||
Income Tax Examination [Line Items] | ||||||
Interest and penalties recognized as income tax expense | $ 0.7 | |||||
Foreign Tax Authority | Federal Ministry of Finance, Germany | ||||||
Income Tax Examination [Line Items] | ||||||
Interest and penalties recognized as income tax expense | $ 0.4 |
Earnings per Share - Earnings p
Earnings per Share - Earnings per Share Computation (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net income | $ 29.8 | $ 24.6 | $ 56.3 | $ 43.5 |
Less: Dividends on preferred stock | (5.8) | 0 | (11.6) | 0 |
Net income attributable to Rexnord common stockholders | $ 24 | $ 24.6 | $ 44.7 | $ 43.5 |
Denominator: | ||||
Weighted-average common shares outstanding, basic (in shares) | 103,812 | 102,728 | 103,753 | 102,207 |
Effect of dilutive equity awards (in shares) | 1,728 | 1,880 | 1,690 | 2,222 |
Diluted (in shares) | 105,540 | 104,608 | 105,443 | 104,429 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2.8 | 5.2 | 5.1 | 5.2 |
Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 16.7 | 17 |
Stockholders' Equity - Roll For
Stockholders' Equity - Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ 1,070.6 | |||
Total comprehensive income | $ 47.4 | $ 31.2 | 92.7 | $ 45.3 |
Stock-based compensation expense | 10.8 | |||
Exercise of stock options | 2.8 | |||
Preferred stock dividends | (11.6) | |||
Ending Balance | 1,165.3 | 1,165.3 | ||
Preferred Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 0 | |||
Ending Balance | 0 | 0 | ||
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 1 | |||
Ending Balance | 1 | 1 | ||
Additional Paid-In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 1,262.1 | |||
Stock-based compensation expense | 10.8 | |||
Exercise of stock options | 2.8 | |||
Preferred stock dividends | (10.8) | |||
Ending Balance | 1,264.9 | 1,264.9 | ||
Retained Deficit | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (55.5) | |||
Total comprehensive income | 56.3 | |||
Preferred stock dividends | (0.8) | |||
Ending Balance | 0 | 0 | ||
Accumulated Other Comprehensive (Loss) Income | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (137) | |||
Total comprehensive income | 36.4 | |||
Ending Balance | $ (100.6) | $ (100.6) |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2017USD ($)shares | Dec. 31, 2016USD ($)$ / sharesshares | Sep. 30, 2017USD ($)shares | Sep. 30, 2016shares | Mar. 31, 2017shares | Mar. 31, 2015USD ($) | |
Class of Stock [Line Items] | ||||||
Dividends on preferred stock | $ 5,800,000 | $ 11,600,000 | ||||
Stock repurchase program, existing repurchase authority | $ 160,000,000 | $ 160,000,000 | ||||
Term loan | Credit Facility | ||||||
Class of Stock [Line Items] | ||||||
Voluntary prepayment | $ 195,000,000 | |||||
Depositary Shares | ||||||
Class of Stock [Line Items] | ||||||
Shares issued (in shares) | shares | 8,050,000 | |||||
Preferred stock, conversion ratio | 0.05 | |||||
Redeemable Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Shares issued (in shares) | shares | 402,500 | 402,500 | 402,500 | 402,500 | ||
Dividend rate, percentage | 5.75% | 5.75% | 5.75% | |||
Offering price (in dollars per share) | $ / shares | $ 50 | |||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1,000 | |||||
Proceeds from offering | $ 389,700,000 | |||||
Dividends in arrears | $ 0 | |||||
Redeemable Convertible Preferred Stock | Minimum | ||||||
Class of Stock [Line Items] | ||||||
Convertible preferred stock, shares issued upon conversion (in shares) | shares | 39.702 | |||||
Redeemable Convertible Preferred Stock | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Convertible preferred stock, shares issued upon conversion (in shares) | shares | 47.642 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program, authorized amount (up to) | $ 200,000,000 | |||||
Stock repurchased during the period (in shares) | shares | 0 | 0 |
Accumulated Other Comprehensi49
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 1,070.6 | |||
Other comprehensive (loss) income before reclassifications | 33.7 | |||
Amounts reclassified from accumulated other comprehensive loss | 2.7 | |||
Other comprehensive income, net of tax | $ 17.6 | $ 6.6 | 36.4 | $ 1.8 |
Ending Balance | 1,165.3 | 1,165.3 | ||
Interest Rate Derivatives | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (9.5) | |||
Other comprehensive (loss) income before reclassifications | (0.4) | |||
Amounts reclassified from accumulated other comprehensive loss | 3.3 | |||
Other comprehensive income, net of tax | 2.9 | |||
Ending Balance | (6.6) | (6.6) | ||
Foreign Currency Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (99.3) | |||
Other comprehensive (loss) income before reclassifications | 34.1 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Other comprehensive income, net of tax | 34.1 | |||
Ending Balance | (65.2) | (65.2) | ||
Pension and Postretirement Plans | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (28.2) | |||
Other comprehensive (loss) income before reclassifications | 0 | |||
Amounts reclassified from accumulated other comprehensive loss | (0.6) | |||
Other comprehensive income, net of tax | (0.6) | |||
Ending Balance | (28.8) | (28.8) | ||
AOCI Attributable to Parent | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (137) | |||
Ending Balance | $ (100.6) | $ (100.6) |
Accumulated Other Comprehensi50
Accumulated Other Comprehensive Loss - Reclassifications out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension and other postretirement plans | ||||
Selling, general and administrative expenses | $ 109.4 | $ 106.6 | $ 219.3 | $ 213.2 |
Provision for income taxes | 14.8 | 4.4 | 23 | (1.5) |
Total net of tax | 29.8 | 24.6 | 56.3 | 43.5 |
Interest rate derivatives | ||||
Benefit for income taxes | 14.8 | 4.4 | 23 | (1.5) |
Total net of tax | (29.8) | (24.6) | (56.3) | (43.5) |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent | ||||
Pension and other postretirement plans | ||||
Selling, general and administrative expenses | (0.5) | (0.4) | (1) | (0.9) |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment | ||||
Pension and other postretirement plans | ||||
Provision for income taxes | 0.2 | 0.1 | 0.4 | 0.3 |
Total net of tax | (0.3) | (0.3) | (0.6) | (0.6) |
Interest rate derivatives | ||||
Benefit for income taxes | 0.2 | 0.1 | 0.4 | 0.3 |
Total net of tax | 0.3 | 0.3 | 0.6 | 0.6 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest | ||||
Pension and other postretirement plans | ||||
Total net of tax | (1.6) | (1.6) | (3.3) | (3.2) |
Interest rate derivatives | ||||
Total net of tax | 1.6 | 1.6 | 3.3 | 3.2 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest | Interest rate derivatives | ||||
Pension and other postretirement plans | ||||
Provision for income taxes | (1) | (1) | (2.1) | (2) |
Interest rate derivatives | ||||
Net realized losses on interest rate hedges | 2.6 | 2.6 | 5.4 | 5.2 |
Benefit for income taxes | $ (1) | $ (1) | $ (2.1) | $ (2) |
Inventories - Inventory by Cate
Inventories - Inventory by Category (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Mar. 31, 2017 |
Inventory, Net [Abstract] | ||
Finished goods | $ 160.2 | $ 139.9 |
Work in progress | 43.5 | 44.4 |
Purchased components | 80.8 | 74 |
Raw materials | 56.7 | 47.7 |
Inventories at First-in, First-Out (FIFO) cost | 341.2 | 306 |
Adjustment to state inventories at Last-in, First-Out (LIFO) cost | 8.4 | 8.9 |
Inventories | $ 349.6 | $ 314.9 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Changes in Net Carrying Value (Details) $ in Millions | 6 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Net carrying amount, beginning of period | $ 1,318.2 |
Currency translation adjustment and other | 7.7 |
Net carrying amount, end of period | 1,325.9 |
Operating Segments | Process & Motion Control | |
Goodwill [Roll Forward] | |
Net carrying amount, beginning of period | 1,068.8 |
Currency translation adjustment and other | 1.9 |
Net carrying amount, end of period | 1,070.7 |
Operating Segments | Water Management | |
Goodwill [Roll Forward] | |
Net carrying amount, beginning of period | 249.4 |
Currency translation adjustment and other | 5.8 |
Net carrying amount, end of period | $ 255.2 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets - Gross Carrying Amount and Accumulated Amortization (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Mar. 31, 2017 | |
Intangible assets subject to amortization: | ||
Weighted Average Useful Life | 13 years | 13 years |
Accumulated Amortization | $ (536) | $ (518.2) |
Intangible assets not subject to amortization - tradenames | ||
Gross Carrying Amount | 1,082.9 | 1,076.8 |
Net Carrying Amount | $ 546.9 | $ 558.6 |
Patents | ||
Intangible assets subject to amortization: | ||
Weighted Average Useful Life | 10 years | 10 years |
Gross Carrying Amount | $ 47.5 | $ 47 |
Accumulated Amortization | (38.6) | (37.7) |
Net Carrying Amount | $ 8.9 | $ 9.3 |
Customer relationships (including distribution network) | ||
Intangible assets subject to amortization: | ||
Weighted Average Useful Life | 13 years | 13 years |
Gross Carrying Amount | $ 688.3 | $ 685.8 |
Accumulated Amortization | (490.5) | (475.2) |
Net Carrying Amount | $ 197.8 | $ 210.6 |
Tradenames | ||
Intangible assets subject to amortization: | ||
Weighted Average Useful Life | 12 years | 12 years |
Gross Carrying Amount | $ 29.9 | $ 29.5 |
Accumulated Amortization | (6.9) | (5.3) |
Net Carrying Amount | 23 | 24.2 |
Intangible assets not subject to amortization - tradenames | ||
Intangible assets not subject to amortization - tradenames | $ 317.2 | $ 314.5 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible asset amortization expense | $ 8 | $ 10.5 | $ 16.2 | $ 25.1 |
Amortization expense in fiscal year 2018 | 32.4 | 32.4 | ||
Amortization expense in fiscal year 2019 | 32.2 | 32.2 | ||
Amortization expense in fiscal year 2020 | 32 | 32 | ||
Amortization expense in fiscal year 2021 | 30.6 | 30.6 | ||
Amortization expense in fiscal year 2022 | $ 26.2 | $ 26.2 |
Other Current Liabilities - By
Other Current Liabilities - By Category (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Mar. 31, 2017 |
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | $ 133.2 | $ 127.4 |
Customer advances | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 12 | 10.9 |
Sales rebates | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 26 | 25.5 |
Commissions | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 6.7 | 6.3 |
Restructuring and other similar charges | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 8.8 | 12 |
Product warranty | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 7.2 | 7.5 |
Risk management | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 9.2 | 8.9 |
Legal and environmental | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 4.4 | 4.4 |
Taxes, other than income taxes | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 8.4 | 10.5 |
Income tax payable | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 17.5 | 17.8 |
Interest payable | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | 6.3 | 5.7 |
Other | ||
Components of Other Current Liabilities [Line Items] | ||
Other liabilities | $ 26.7 | $ 17.9 |
Long-Term Debt - Summary of Deb
Long-Term Debt - Summary of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Mar. 31, 2017 |
Debt Instrument [Line Items] | ||
Total | $ 1,615.7 | $ 1,622.7 |
Less current maturities | 16.3 | 16.5 |
Long-term debt | 1,599.4 | 1,606.2 |
Unamortized debt issuance costs | 0.5 | 0.5 |
Term loan | Credit Facility | ||
Debt Instrument [Line Items] | ||
Total | 1,577.8 | 1,584.5 |
Unamortized debt issuance costs | 16.5 | 17.9 |
Other subsidiary debt | Other Debt | ||
Debt Instrument [Line Items] | ||
Total | 37.9 | 38.2 |
New Market Tax Credit | Loan Receivable | ||
Debt Instrument [Line Items] | ||
Loan receivable | 27.6 | 27.6 |
New Market Tax Credit | Other Debt | ||
Debt Instrument [Line Items] | ||
Loan payable | $ 36.9 | $ 36.9 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 16, 2016USD ($) |
Accounts Receivable Securitization Program | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 100,000,000 | ||
Available borrowing capacity | $ 100,000,000 | $ 100,000,000 | |
Term Refinancing Loan Facility | Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 1,606,400,000 | ||
Weighted-average effective interest rate | 4.06% | ||
LIBOR floor | 1.00% | ||
Weighted-average interest rate | 4.02% | ||
Term Refinancing Loan Facility | Senior Secured Credit Facility | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Applicable margin | 2.75% | ||
Revolving Credit Facility | Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 265,000,000 | ||
Amounts borrowed | $ 0 | 0 | |
Utilized in connection with outstanding letters of credit | 9,300,000 | 14,600,000 | |
Revolving Credit Facility | Accounts Receivable Securitization Program | |||
Debt Instrument [Line Items] | |||
Amounts borrowed | 0 | 0 | |
Utilized in connection with outstanding letters of credit | $ 9,900,000 | $ 4,600,000 | |
Credit Facility | Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Company's total net leverage ratio | 3.1 | ||
Credit Facility | Senior Secured Credit Facility | Maximum | Senior Secured Leverage Ratio (Numerator) | |||
Debt Instrument [Line Items] | |||
Maximum permitted total net leverage ratio | 6.75 |
Derivative Financial Instrume58
Derivative Financial Instruments - Narrative (Details) | 6 Months Ended | 12 Months Ended | |
Sep. 30, 2017USD ($)derivative | Mar. 31, 2015USD ($) | Mar. 31, 2016USD ($) | |
Derivatives, Fair Value [Line Items] | |||
Derivative, effectiveness of hedge | 88.00% | ||
Expected reclassification of loss into earnings as interest expense | $ 10,300,000 | ||
Designated as Hedging Instrument | |||
Derivatives, Fair Value [Line Items] | |||
Ineffectiveness, net | $ 0 | ||
Maximum | |||
Derivatives, Fair Value [Line Items] | |||
Weighted average interest rate (cannot exceed) | 2.79% | ||
London Interbank Offered Rate (LIBOR) | |||
Derivatives, Fair Value [Line Items] | |||
Applicable margin | 2.75% | ||
Interest rate swaps | |||
Derivatives, Fair Value [Line Items] | |||
Number of interest rate derivatives | derivative | 3 | ||
Derivative, notional amount | $ 650,000,000 | ||
Weighted average fixed interest rate | 2.55% | ||
Interest rate swaps | London Interbank Offered Rate (LIBOR) | |||
Derivatives, Fair Value [Line Items] | |||
LIBOR floor | 1.00% | ||
Interest rate caps | |||
Derivatives, Fair Value [Line Items] | |||
Number of interest rate derivatives | derivative | 2 | ||
Derivative liability, notional amount | $ 750,000,000 | ||
Variable rate interest | 3.00% | ||
Derivative, cost of hedge | $ 5,800,000 |
Derivative Financial Instrume59
Derivative Financial Instruments - Foreign Currency Forward Contracts Asset Position (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Mar. 31, 2017 |
Designated as Hedging Instrument | Other assets | Interest rate caps | ||
Derivative [Line Items] | ||
Asset Derivatives | $ 0 | $ 0 |
Designated as Hedging Instrument | Other current liabilities | Interest rate swaps | ||
Derivative [Line Items] | ||
Liability Derivatives | 6.6 | 0 |
Designated as Hedging Instrument | Other liabilities | Interest rate swaps | ||
Derivative [Line Items] | ||
Liability Derivatives | 0 | 10.3 |
Not Designated as Hedging Instrument | Other current liabilities | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Liability Derivatives | $ 0.6 | $ 0.1 |
Derivative Financial Instrume60
Derivative Financial Instruments - Gains/Losses in AOCI (Details) - Designated as Hedging Instrument - USD ($) $ in Millions | Sep. 30, 2017 | Mar. 31, 2017 |
Interest rate swaps | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Amount of loss recognized in accumulated other comprehensive loss on derivatives | $ 4.1 | $ 6.4 |
Interest rate caps | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Amount of loss recognized in accumulated other comprehensive loss on derivatives | $ 2.5 | $ 3.1 |
Derivative Financial Instrume61
Derivative Financial Instruments - Gain or Loss Recognized in Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other expense, net | Foreign currency forward contracts | ||||
Trading Activity, Gains and Losses, Net [Line Items] | ||||
Amount recognized as expense | $ 0.6 | $ 0.2 | $ 0.4 | $ 0.5 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured on Recurring and Nonrecurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Sep. 30, 2017 | Mar. 31, 2017 |
Liabilities: | ||
Total liabilities at fair value | $ 7.2 | $ 10.4 |
Assets: | ||
Total assets at fair value | 0 | |
Interest rate derivatives | ||
Liabilities: | ||
Interest rate derivatives and swaps | 6.6 | |
Foreign currency forward contracts | ||
Liabilities: | ||
Foreign currency forward contracts | 0.6 | 0.1 |
Interest rate caps | ||
Assets: | ||
Interest rate caps | 0 | |
Interest rate swaps | ||
Liabilities: | ||
Interest rate derivatives and swaps | 10.3 | |
Level 1 | ||
Liabilities: | ||
Total liabilities at fair value | 0 | 0 |
Assets: | ||
Total assets at fair value | 0 | |
Level 1 | Interest rate derivatives | ||
Liabilities: | ||
Interest rate derivatives and swaps | 0 | |
Level 1 | Foreign currency forward contracts | ||
Liabilities: | ||
Foreign currency forward contracts | 0 | 0 |
Level 1 | Interest rate caps | ||
Assets: | ||
Interest rate caps | 0 | |
Level 1 | Interest rate swaps | ||
Liabilities: | ||
Interest rate derivatives and swaps | 0 | |
Level 2 | ||
Liabilities: | ||
Total liabilities at fair value | 7.2 | 10.4 |
Assets: | ||
Total assets at fair value | 0 | |
Level 2 | Interest rate derivatives | ||
Liabilities: | ||
Interest rate derivatives and swaps | 6.6 | |
Level 2 | Foreign currency forward contracts | ||
Liabilities: | ||
Foreign currency forward contracts | 0.6 | 0.1 |
Level 2 | Interest rate caps | ||
Assets: | ||
Interest rate caps | 0 | |
Level 2 | Interest rate swaps | ||
Liabilities: | ||
Interest rate derivatives and swaps | 10.3 | |
Level 3 | ||
Liabilities: | ||
Total liabilities at fair value | 0 | 0 |
Assets: | ||
Total assets at fair value | 0 | |
Level 3 | Interest rate derivatives | ||
Liabilities: | ||
Interest rate derivatives and swaps | 0 | |
Level 3 | Foreign currency forward contracts | ||
Liabilities: | ||
Foreign currency forward contracts | $ 0 | 0 |
Level 3 | Interest rate caps | ||
Assets: | ||
Interest rate caps | 0 | |
Level 3 | Interest rate swaps | ||
Liabilities: | ||
Interest rate derivatives and swaps | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Mar. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of long-term debt | $ 1,640.2 | $ 1,644.6 |
Net realizable value, property, plant and equipment | 395.3 | 400.9 |
Facility Closing | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net realizable value, property, plant and equipment | $ 10.1 | $ 7 |
Commitments and Contingencies -
Commitments and Contingencies - Warranty Roll Forward (Details) - USD ($) $ in Millions | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Movement in Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 7.5 | $ 6.8 |
Acquired obligations | 0 | 0.4 |
Charged to operations | 2.2 | 2 |
Claims settled | (2.5) | (2.4) |
Balance at end of period | $ 7.2 | $ 6.8 |
Commitments and Contingencies65
Commitments and Contingencies - Narrative (Details) $ in Millions | Sep. 30, 2017USD ($)lawsuitclaimantcarrier | Mar. 31, 2013USD ($) | Dec. 31, 2002defendant |
Loss Contingencies [Line Items] | |||
Indemnification resulting from business acquisition, amount (in excess of) | $ 900 | ||
Insurance policy coverage | $ 241.8 | ||
Number of carriers, if insolvent, could impact coverage (or more) | carrier | 1 | ||
Layer 1 | |||
Loss Contingencies [Line Items] | |||
Insurance policy coverage | $ 165.8 | ||
Environmental Issue | Ellsworth Industrial Park Site | |||
Loss Contingencies [Line Items] | |||
Indemnification resulting from business acquisition, percentage of costs paid to date by seller | 100.00% | ||
Asbestos Issue | Stearns | |||
Loss Contingencies [Line Items] | |||
Indemnification resulting from business acquisition, percentage of costs paid to date by seller | 100.00% | ||
Number of claimants | claimant | 300 | ||
Asbestos Issue | Prager | |||
Loss Contingencies [Line Items] | |||
Number of lawsuits | lawsuit | 2 | ||
Insurance coverage, percentage of costs paid to date by insurance providers | 100.00% | ||
Asbestos Issue | Falk | |||
Loss Contingencies [Line Items] | |||
Indemnification resulting from business acquisition, percentage of costs paid to date by seller | 100.00% | ||
Number of claimants | claimant | 100 | ||
Asbestos Issue | Zurn | |||
Loss Contingencies [Line Items] | |||
Number of claimants | claimant | 17,000 | ||
Number of lawsuits | lawsuit | 7,000 | ||
Time frame of claims expected to be filed | 10 years | ||
Estimate of possible loss | $ 37 | ||
Estimated claim payments made over specified period | $ 28 | ||
Time frame of estimated claims disbursements | 10 years | ||
Estimated insurance recoveries | $ 37 | ||
Damages from Product Defects | Zurn | |||
Loss Contingencies [Line Items] | |||
Claim settlement funding period | 7 years | ||
Litigation settlement | $ 20 | ||
Minimum | Environmental Issue | Ellsworth Industrial Park Site | |||
Loss Contingencies [Line Items] | |||
Number of defendants | defendant | 10 |
Retirement Benefits - Schedule
Retirement Benefits - Schedule of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0.2 | $ 0.4 | $ 0.4 | $ 0.9 |
Interest cost | 6.1 | 6.3 | 12.2 | 12.6 |
Expected return on plan assets | (6.6) | (6.5) | (13.2) | (13.2) |
Amortization: | ||||
Prior service credit | 0 | 0.1 | 0 | 0.1 |
Net periodic benefit (credit) cost | (0.3) | 0.3 | (0.6) | 0.4 |
Other Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 0.2 | 0.3 | 0.4 | 0.6 |
Amortization: | ||||
Prior service credit | (0.5) | (0.5) | (1) | (1) |
Net periodic benefit (credit) cost | $ (0.3) | $ (0.2) | $ (0.6) | $ (0.4) |
Retirement Benefits - Narrative
Retirement Benefits - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Retirement Benefits [Abstract] | ||
Contributions by employer | $ 2.9 | $ 4.6 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 5.4 | $ 3.7 | $ 10.8 | $ 6 |
Total unrecognized compensation cost | $ 34.7 | $ 34.7 | ||
Unrecognized compensation cost, period for recognition | 2 years | |||
Stock options granted (in shares) | 1,164,713 | 2,591,028 | ||
Weighted-average vesting period | 3 years | 3 years | ||
Expected dividend rate | 0.00% | |||
Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend rate | 0.00% | |||
Weighted average grant date fair value (in dollars per share) | $ 8.11 | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average vesting period | 3 years | 3 years | ||
Performance Shares (PSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average vesting period | 3 years | |||
Expected dividend rate | 0.00% | |||
Weighted average grant date fair value (in dollars per share) | $ 31.25 | |||
Performance Shares (PSUs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 0.00% | |||
Performance Shares (PSUs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 200.00% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - $ / shares | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected dividend rate | 0.00% | |
Shares | ||
Outstanding at beginning of period (in shares) | 7,770,670 | 7,854,685 |
Granted (in shares) | 1,164,713 | 2,591,028 |
Exercised (in shares) | (212,783) | (1,284,775) |
Canceled/Forfeited (in shares) | (101,985) | (338,233) |
Outstanding at end of period (in shares) | 8,620,615 | 8,822,705 |
Exercisable at end of period (in shares) | 5,029,677 | 3,950,120 |
Weighted Avg. Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 18.73 | $ 15.10 |
Granted (in dollars per share) | 23.14 | 19.72 |
Exercised (in dollars per share) | 12.54 | 5.06 |
Canceled/Forfeited (in dollars per share) | 23.35 | 23.70 |
Outstanding at end of period (in dollars per share) | 19.42 | 17.58 |
Exercisable at end of period (in dollars per share) | $ 17.72 | $ 13 |
Weighted average remaining contractual life of options outstanding | 6 years 7 months | |
Weighted average remaining contractual life of options exercisable | 5 years 2 months | |
Options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected option term (in years) | 6 years 6 months | |
Expected volatility factor | 31.00% | |
Weighted-average risk-free interest rate | 1.99% | |
Expected dividend rate | 0.00% |
Stock-Based Compensation - Nonv
Stock-Based Compensation - Nonvested Stock Unit Activity (Details) - $ / shares | 6 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Restricted Stock Units (RSUs) | ||
Shares | ||
Non-vested units beginning of period (in shares) | 322,142 | 125,307 |
Granted (in shares) | 242,581 | 168,695 |
Vested (in shares) | (57,644) | (33,579) |
Canceled/Forfeited (in shares) | (19,716) | (21,026) |
Non-vested units end of period (in shares) | 487,363 | 239,397 |
Weighted Avg. Grant Date Fair Value | ||
Non-vested units beginning of period (in dollars per share) | $ 20.59 | $ 24.67 |
Granted (in dollars per share) | 23.10 | 19.78 |
Vested (in dollars per share) | 22.80 | 25.96 |
Canceled/Forfeited (in dollars per share) | 22.59 | 22.11 |
Non-vested units end of period (in dollars per share) | $ 21.50 | $ 21.26 |
Performance Shares (PSUs) | ||
Shares | ||
Non-vested units beginning of period (in shares) | 259,930 | 49,136 |
Granted (in shares) | 193,071 | 219,266 |
Vested (in shares) | 0 | 0 |
Canceled/Forfeited (in shares) | 0 | (4,200) |
Non-vested units end of period (in shares) | 453,001 | 264,202 |
Weighted Avg. Grant Date Fair Value | ||
Non-vested units beginning of period (in dollars per share) | $ 24.74 | $ 28.57 |
Granted (in dollars per share) | 26.58 | 23.95 |
Vested (in dollars per share) | 0 | 0 |
Canceled/Forfeited (in dollars per share) | 0 | 28.57 |
Non-vested units end of period (in dollars per share) | $ 25.53 | $ 24.74 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units (Details) | 6 Months Ended |
Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend rate | 0.00% |
Performance Shares (PSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility factor | 31.00% |
Weighted-average risk-free interest rate | 1.45% |
Expected dividend rate | 0.00% |
Business Segment Information -
Business Segment Information - Narrative (Details) | 6 Months Ended |
Sep. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of business segments | 2 |
Business Segment Information 73
Business Segment Information - Schedule of Segment Reporting Information, By Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract] | ||||
Net sales | $ 510.8 | $ 491 | $ 998.5 | $ 962.8 |
Income (loss) from operations | 65.8 | 52.5 | 121 | 91.1 |
Non-operating expense: | ||||
Interest expense, net | (20.2) | (22.8) | (40.2) | (46.5) |
Other expense, net | (1) | (0.7) | (1.5) | (2.6) |
Income before income taxes | 44.6 | 29 | 79.3 | 42 |
Provision (benefit) for income taxes | 14.8 | 4.4 | 23 | (1.5) |
Net income | 29.8 | 24.6 | 56.3 | 43.5 |
Dividends on preferred stock | (5.8) | 0 | (11.6) | 0 |
Net income attributable to Rexnord common stockholders | 24 | 24.6 | 44.7 | 43.5 |
Segment Reporting Information, Additional Information [Abstract] | ||||
Depreciation and amortization | 21.1 | 24.3 | 43.6 | 53.3 |
Capital expenditures | 9 | 16.9 | 15.9 | 28.9 |
Process & Motion Control | ||||
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract] | ||||
Net sales | 300.4 | 286.9 | 588.1 | 550.6 |
Segment Reporting Information, Additional Information [Abstract] | ||||
Depreciation and amortization | 13 | 15.5 | 27.4 | 34.8 |
Capital expenditures | 7.8 | 12.8 | 13.2 | 20.9 |
Water Management | ||||
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract] | ||||
Net sales | 210.4 | 204.1 | 410.4 | 412.2 |
Segment Reporting Information, Additional Information [Abstract] | ||||
Depreciation and amortization | 8.1 | 8.8 | 16.2 | 18.5 |
Capital expenditures | 1.2 | 4.1 | 2.7 | 8 |
Operating Segments | Process & Motion Control | ||||
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract] | ||||
Income (loss) from operations | 44.7 | 37.1 | 84.4 | 62.7 |
Operating Segments | Water Management | ||||
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract] | ||||
Income (loss) from operations | 32.5 | 26 | 60.1 | 48.7 |
Corporate | ||||
Segment Reporting Information, Income (Loss) before Income Taxes [Abstract] | ||||
Income (loss) from operations | $ (11.4) | $ (10.6) | $ (23.5) | $ (20.3) |
Subsequent Event - Narrative (D
Subsequent Event - Narrative (Details) - USD ($) $ in Millions | Oct. 04, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Subsequent Event [Line Items] | |||
Preliminary cash purchase price | $ 0 | $ 213.7 | |
World Dryer | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Preliminary cash purchase price | $ 50 |