Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Jun. 30, 2018 | Jul. 30, 2018 | |
Entity [Abstract] | ||
Entity Registrant Name | ENERGIZER HOLDINGS, INC. | |
Entity Central Index Key | 1,632,790 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | ENR | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common stock outstanding, shares | 59,769,793 |
COMBINED STATEMENTS OF EARNINGS
COMBINED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (Condensed) (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 392.8 | $ 372 | $ 1,340.5 | $ 1,290.6 |
Cost of products sold | 216.7 | 214 | 717.6 | 693.1 |
Gross profit | 176.1 | 158 | 622.9 | 597.5 |
Selling, general and administrative expense | 111.9 | 86.3 | 315.3 | 263.4 |
Advertising and sales promotion expense | 22.9 | 20.2 | 81.1 | 71.1 |
Research and development expense | 5.2 | 5.1 | 15.9 | 16 |
Amortization of intangible assets | 2.8 | 2.8 | 8.4 | 8.4 |
Spin restructuring | 0 | 0 | 0 | (3.8) |
Gain on sale of real estate | 4.6 | 1.7 | 4.6 | 16.9 |
Interest expense | 17.7 | 13.3 | 47.6 | 39.7 |
Other items, net | (11.3) | 1.5 | (9.1) | (4.3) |
Earnings before income taxes | 31.5 | 30.5 | 168.3 | 223.9 |
Income tax provision | 7.7 | 5.6 | 76.3 | 56.5 |
Net earnings | $ 23.8 | $ 24.9 | $ 92 | $ 167.4 |
Basic earnings per common share (dollars per share) | $ 0.40 | $ 0.40 | $ 1.54 | $ 2.71 |
Diluted earnings per common share (dollars per share) | $ 0.39 | $ 0.40 | $ 1.50 | $ 2.67 |
Weighted average shares of common stock - Basic (shares) | 59.7 | 61.8 | 59.9 | 61.8 |
Weighted average shares of common stock - Diluted (shares) | 61.4 | 62.8 | 61.4 | 62.8 |
Dividends per common share (in dollars per share) | $ 0.29 | $ 0.275 | $ 0.87 | $ 0.825 |
Statements of Comprehensive Income: | ||||
Net earnings | $ 23.8 | $ 24.9 | $ 92 | $ 167.4 |
Other comprehensive income/(loss), net of tax expense/(benefit) | ||||
Foreign currency translation adjustments | (31.5) | 11.9 | (14.9) | (4.5) |
Pension activity, net of tax of $0.4 and $1.2, for the quarter and nine months ended June 30, 2018, respectively, and $0.6 and $1.9 for the quarter and nine months ended June 30, 2017, respectively. | 3 | (0.5) | 4.8 | 3.9 |
Deferred gain/(loss) on hedging activity, net of tax of $2.1 and $4.7 for the quarter and nine months ended June 30, 2018, respectively, and ($1.2) and $1.9 for the quarter and nine months ended June 30, 2017, respectively. | 6.7 | (4.7) | 13 | 1.4 |
Total comprehensive income | $ 2 | $ 31.6 | $ 94.9 | $ 168.2 |
COMBINED STATEMENTS OF EARNING3
COMBINED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (Condensed) Parenthetical - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Pension/postretirement activity, tax | $ 0.4 | $ 0.6 | $ 1.2 | $ 1.9 |
Deferred (loss)/gain on hedging activity, tax | $ 2.1 | $ (1.2) | $ 4.7 | $ 1.9 |
COMBINED BALANCE SHEETS (Conden
COMBINED BALANCE SHEETS (Condensed) (Unaudited) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Current assets | ||
Cash and cash equivalents | $ 510.9 | $ 378 |
Trade receivables, less allowance for doubtful accounts of $4.9 and $5.8, respectively | 165.6 | 230.2 |
Inventories | 307.8 | 317.1 |
Other current assets | 106.6 | 94.9 |
Total current assets | 1,090.9 | 1,020.2 |
Property, plant and equipment, net | 166.9 | 176.5 |
Goodwill | 229.8 | 230 |
Other intangible assets, net | 214.4 | 223.8 |
Deferred tax asset | 33.8 | 47.7 |
Other assets | 69 | 125.4 |
Total assets | 1,804.8 | 1,823.6 |
Current liabilities | ||
Current maturities of long-term debt | 4 | 4 |
Notes payable | 174.6 | 104.1 |
Accounts payable | 194.4 | 219.3 |
Other current liabilities | 226.3 | 254.6 |
Total current liabilities | 599.3 | 582 |
Long-term debt | 976.7 | 978.5 |
Other liabilities | 181 | 178 |
Total liabilities | 1,757 | 1,738.5 |
Shareholders' equity | ||
Common stock | 0.6 | 0.6 |
Additional paid-in capital | 224.4 | 196.7 |
Retained earnings | 196.4 | 198.7 |
Treasury stock | (117.7) | (72.1) |
Accumulated other comprehensive loss | (255.9) | (238.8) |
Total shareholders' equity | 47.8 | 85.1 |
Total liabilities and shareholders' equity | $ 1,804.8 | $ 1,823.6 |
COMBINED BALANCE SHEETS (Conde5
COMBINED BALANCE SHEETS (Condensed) (Unaudited) Parenthetical - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 4.9 | $ 5.8 |
COMBINED STATEMENTS OF CASH FLO
COMBINED STATEMENTS OF CASH FLOWS (Condensed) (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flow from Operating Activities | ||
Net earnings | $ 92 | $ 167.4 |
Non-cash restructuring costs | 0 | (2.5) |
Depreciation and amortization | 33.8 | 38.3 |
Deferred income taxes | 11.1 | 2.1 |
Share-based compensation expense | 21 | 17.8 |
Gain on sale of real estate | (4.6) | (16.9) |
Mandatory transition tax | 28.2 | 0 |
Non-cash items included in income, net | (2.1) | 5.8 |
Other, net | (7.8) | (19.6) |
Changes in current assets and liabilities used in operations | 16.4 | (46.8) |
Net cash from operating activities | 188 | 145.6 |
Cash Flow from Investing Activities | ||
Capital expenditures | (17.2) | (17.5) |
Proceeds from sale of assets | 6.1 | 27.2 |
Net cash (used by)/from investing activities | (11.1) | 9.7 |
Cash Flow from Financing Activities | ||
Payments on debt with maturities greater than 90 days | (3) | (3) |
Net increase in debt with original maturities of 90 days or less | 70.6 | 40.7 |
Debt issuance costs | (1.4) | (0.8) |
Dividends paid | (52.3) | (52.1) |
Common stock purchased | (50) | (9.3) |
Taxes paid for withheld share-based payments | (1.8) | (8.2) |
Net cash used by financing activities | (37.9) | (32.7) |
Effect of exchange rate changes on cash | (6.1) | (5.5) |
Net increase in cash and cash equivalents | 132.9 | 117.1 |
Cash and cash equivalents, beginning of period | 378 | $ 287.3 |
Cash and cash equivalents, end of period | $ 510.9 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business - Energizer Holdings, Inc. and its subsidiaries (Energizer or the Company) is a global manufacturer, marketer and distributer of household batteries, specialty batteries and portable lights under the Energizer® and Eveready® brand names. Energizer offers batteries using lithium, alkaline, carbon zinc, nickel metal hydride, zinc air and silver oxide constructions. On July 1, 2016, Energizer expanded its offering of brands with an acquisition of a leading designer and marketer of automotive fragrance and appearance products. The Company's brands now include Refresh Your Car!®, California Scents®, Driven®, Bahama & Co.®, LEXOL® and Eagle One®. Subsequent to the end of the quarter, on July 2, 2018, the Company acquired Nu Finish® and Scratch Doctor® to add to its automotive appearance offerings as well. Basis of Presentation - The accompanying unaudited Consolidated Condensed Financial Statements include the accounts of Energizer and its subsidiaries. All significant intercompany transactions are eliminated. Energizer has no material equity method investments, variable interests or non-controlling interests. The accompanying unaudited Consolidated Condensed Financial Statements have been prepared in accordance with Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The year-end condensed Consolidated Balance Sheet was derived from the audited financial statements included in Energizer's Report on Form 10-K, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of our operations, financial position and cash flows have been included. Certain reclassifications have been made to the prior year financial statements to conform to the current presentation. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for the full year. These statements should be read in conjunction with the financial statements and notes thereto for Energizer for the year ended September 30, 2017 included in the Annual Report on Form 10-K dated November 14, 2017. Recently Adopted Accounting Pronouncements - During the quarter ended March 31, 2018, the Company early adopted ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) . This update allows for the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the Act) from accumulated other comprehensive income (AOCI) to retained earnings. The amount of the reclassification is calculated as the difference between the historical and newly enacted tax rates on deferred taxes originally recorded through AOCI. The Company reclassified $20.0 of stranded tax from AOCI to Retained earnings in the second quarter. Tax effects unrelated to the Act are released from AOCI using either the specific identification approach or the portfolio approach based on the nature of the underlying item. During the quarter ended December 31, 2017, the Company adopted ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This update requires the service component of the net periodic pension cost to be reported in the same income statement line item as similar compensation costs, while all other pension cost components should be reported separately from the service cost component on the income statement. The adoption of this update resulted in $1.7 and $5.1 of non-compensation related pension benefit in Other items, net in the quarter and nine months ended June 30, 2018, respectively, and a reclassification of $3.1 and $9.3 of pension benefit out of Selling, general and administrative expense and into Other items, net for the quarter and nine months ended June 30, 2017. All non-compensation related pension costs will be recorded in Other items, net going forward. During the quarter ended December 31, 2017, the Company adopted ASU 2015-11, Inventory (Topic 330) , which aligns the measurement of inventory under GAAP more closely with International Financial Reporting Standards. Under the new guidance, an entity that measures inventory using the first-in, first-out or average cost should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The impact of adoption was immaterial. During the quarter ended December 31, 2017, the Company early adopted ASU 2016-16, Intra-entity Transfers of Assets Other Than Inventory . This update requires tax expense to be recognized from the sale of intra-entity assets, other than inventory, when the transfer occurs, even though the effects of the transaction are eliminated in consolidation. Under the previous guidance, the tax effects of transfers would have been deferred until the transferred asset was sold or otherwise recovered through use. Upon adoption, any deferred charge previously established upon the intra-company transfer is recorded as a cumulative effect adjustment to retained earnings. During the quarter ended December 31, 2017, a deferred charge of $59.2 was removed from Other assets and recorded as an adjustment to retained earnings. Any future tax impacts will be recognized as incurred. During the quarter ended December 31, 2017, the Company early adopted ASU 2017-01, Clarifying the Definition of a Business . This update creates a more practical definition and guidelines to determine whether a set of assets and activities is a business. This simplifies the decision making process of determining whether a purchase constitutes a business combination or an acquisition of assets and the Company will apply this definition for future acquisitions. During the quarter ended December 31, 2017, the Company early adopted ASU 2017-04, Simplifying the Test for Goodwill Impairment . This update eliminates the need to assign the fair value of a reporting unit to each of its assets and liabilities when quantifying an impairment charge. The impairment charge is now determined based on the comparison of the fair value of a reporting unit to its carrying amount. The Company will apply the new guidance when completing its goodwill testing procedures in the current year. Recently Issued Accounting Pronouncements - On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides a single comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. On August 12, 2015, the FASB issued a one-year deferral of the effective date. This update is effective for Energizer beginning October 1, 2018 and will be adopted on a modified retrospective basis. The Company has substantially completed its assessment of the new guidance against its current accounting policies and procedures, through activities that included analysis of standard sales transactions and terms, coordination and discussion with our commercial teams and reviewing contracts with customers. Based on its assessment, the new guidance will not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. The Company is still assessing the overall impact on the Company’s disclosures and controls. On February 25, 2016, the FASB issued ASU 2016-02, Leases . This update aligns the measurement of leases under GAAP more closely with International Financial Reporting Standards by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this update will be effective for Energizer beginning October 1, 2019 with early adoption permitted. Energizer is in the process of evaluating the impact the guidance will have on its financial statements. On August 26, 2016, the FASB issued ASU 2016-15, Statement of Cash Flows- Classification of Certain Cash Receipts and Cash Payments , which is intended to reduce diversity in practice in how certain transactions are classified in the statements of cash flows. This update will be effective for Energizer beginning October 1, 2018. The Company is currently assessing the impact the revised guidance will have on our current classification on the Statement of Cash Flows. On August 28, 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities . This update intends to simplify hedge accounting and decrease complexity for both the preparation and understanding of hedging disclosures in the financial statements. This update is effective for the Company beginning October 1, 2019 with early adoption permitted. The Company is currently assessing the impact the revised guidance will have on its accounting practices and financial statements. |
Spin Costs
Spin Costs | 9 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Spin Costs | Spin Costs On July 1, 2015, Energizer completed its legal separation from Edgewell Personal Care Company (Edgewell) via a tax free spin-off (the spin-off or spin). The Company incurred costs associated with the evaluation, planning and execution of the spin transaction. For the quarter and nine months ended June 30, 2018, the Company recorded no activity related to spin. During the nine months ended June 30, 2017, the Company recorded income of $3.8 in spin restructuring which included $2.5 of income in the second quarter reflecting the true up of previously accrued contract termination costs related to the fiscal 2016 right-sizing of the corporate headquarters and the first quarter sale of a facility in North America that was previously closed as a part of the spin for a gain of $1.3 . The total costs incurred or allocated to Energizer for the spin were $197.6 , inclusive of the costs of early debt retirement recorded in fiscal 2015. We do not expect any additional costs related to spin. The following table represents the spin restructuring accrual activity and ending accrual balance as of June 30, 2017 recorded in Other current liabilities on the Consolidated Condensed Balance Sheet. There were no liabilities outstanding at September 30, 2017 or June 30, 2018. Utilized October 1, 2016 Charge to Income Cash June 30, 2017 Severance and termination related costs $ 2.8 $ — $ (2.1 ) $ 0.7 Contract termination costs 3.6 (2.5 ) (1.1 ) — Net gain on asset sales — (1.3 ) 1.3 — Total $ 6.4 $ (3.8 ) $ (1.9 ) $ 0.7 |
Acquisition
Acquisition | 9 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition | Acquisitions On January 15, 2018, the Company entered into a definitive acquisition agreement with Spectrum Brands Holdings, Inc. to acquire its global battery, lighting, and portable power business (Spectrum acquisition) for a purchase price of $2,000.0 in cash, subject to certain purchase price adjustments. Energizer will fund this acquisition through the net proceeds from the issuance of new senior notes maturing in 2026, term loans and cash on hand. In addition, Energizer intends to maintain its existing senior notes, maturing in 2025. Refer to Note 9, Debt, for additional discussion on the new senior notes associated with this acquisition which were issued and placed into escrow on July 6, 2018. The closing of this transaction is subject to various conditions and regulatory approvals, but is expected to close by the end of calendar year 2018. The Company is also committed to pay a $100.0 termination fee to Spectrum if the transaction does not close by July 15, 2019, and all conditions precedent to the Company’s obligation to consummate the acquisition have otherwise been satisfied except for one or more of the regulatory approval conditions specified in the acquisition agreement. Success fees of $11.0 are due to the financial adviser, subject to the closing of the transaction. In addition, $2.0 was paid in January 2018 to the financial adviser for services rendered on the transaction. The Company incurred $25.8 and $50.9 of pre-tax acquisition and integration costs in the quarter and nine months ended June 30, 2018, respectively. Included in the quarter and nine month pre-tax acquisition and integration costs were $3.4 and $6.3 , respectively, of debt commitment fees related to the Spectrum acquisition that were recorded in Interest expense. The remaining pre-tax acquisition and integration costs were recorded in SG&A and primarily related to legal, consulting and advisory fees to assist with obtaining regulatory approval around the globe and to plan for the closing and integration of the Spectrum acquisition. The Company also recorded a gain in Other items, net of $9.9 on foreign currency contracts which were entered into in June 2018 and locked in the U.S. dollar (USD) value of the Euro notes related to the Spectrum acquisition. These contracts were terminated when the funds were placed into escrow on July 6, 2018. The Company also incurred $0.5 and $6.0 of tax withholding costs in the quarter and nine months ending June 30, 2018, related to anticipated cash movement to fund the acquisition. Subsequent to the end of the quarter, on July 2, 2018, the Company acquired all of Reed-Union Corporation's automotive appearance business, including Nu Finish Car Polish and Nu Finish Scratch Doctor brands. The acquisition purchase price of $37.7 , subject to working capital adjustments, was funded through a combination of cash on hand and committed debt facilities. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The nine month effective tax rate was 45.3% as compared to 25.2% for the prior year comparative period. The provision includes the impact of the new U.S. tax legislation discussed below and $0.5 and $6.0 of tax withholding costs incurred in the quarter and nine months, respectively, related to anticipated cash movement to fund the Spectrum acquisition. In addition, on December 22, 2017, H.R. 1, formally known as the Tax Cuts and Jobs Act (the Act) was enacted into law. The Act provides for numerous significant tax law changes and modifications with varying effective dates, which include reducing the corporate income tax rate from 35% to 21% , creating a territorial tax system (with a mandatory transition tax on previously deferred foreign earnings) and allowing for immediate capital expensing of certain qualified property. As a fiscal year end taxpayer, certain provisions of the Act began to impact us in our fiscal first quarter ended December 31, 2017, while other provisions will impact us beginning in fiscal year 2019. The corporate tax rate reduction is effective for Energizer as of January 1, 2018 and, accordingly, will reduce our current fiscal year federal statutory rate to a blended rate of approximately 24.5% for fiscal year 2018. The changes included in the Act are broad and complex. The final transition impacts of the Act may differ from our current estimates, possibly materially, due to, among other things, changes in interpretations of the Act, any legislative action to address questions that arise because of the Act, any changes in accounting standards for income taxes or related interpretations in response to the Act, or any updates or changes to estimates the Company has utilized to calculate the transition impacts, including impacts from changes to current year earnings estimates and foreign exchange rates of foreign subsidiaries. The Securities and Exchange Commission has issued rules that would allow for a measurement period of up to one year after the enactment date of the Act to finalize the recording of the related tax impacts. As a result of the reduction of the Federal corporate income tax rate, we have remeasured certain deferred tax assets and liabilities at the rate which they are expected to reverse in the future. We are still analyzing certain aspects of the Act, including the future impacts of the Global Intangible Low-Taxed Income provision, and refining our calculations, which could potentially affect the remeasurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of our deferred tax balance was tax expense of approximately $0.6 . The mandatory transition tax is based on our total post-1986 earnings and profits (E&P) that we previously deferred from U.S. income taxes. We recorded a provisional amount for our mandatory transition tax liability, resulting in an increase in income tax expense of approximately $30 . We have not yet completed our calculation of the total post-1986 E&P for these foreign subsidiaries. Further, the mandatory transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when we finalize the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets. |
Share-Based Payments
Share-Based Payments | 9 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Payments | Share-Based Payments Total compensation cost for Energizer’s share-based compensation arrangements was $7.0 and $21.0 for the quarter and nine months ended June 30, 2018 , respectively, and $5.9 and $17.8 for the quarter and nine months ended June 30, 2017 , respectively, and was recorded in SG&A expense. Restricted Stock Equivalents (RSE)—(in whole dollars and total shares) In November 2017, the Company granted RSE awards to a group of key employees of approximately 100,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 68,000 shares that vest on the third anniversary of the date of grant. In addition, the Company granted approximately 238,000 performance shares to a group of key employees and key executives that will vest subject to meeting target amounts for both cumulative adjusted earnings per share and cumulative free cash flow as a percentage of sales over the three year performance period. These performance measures are equally weighted in determining the final share award with the maximum award payout of approximately 476,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $44.20 . In November 2016, the Company granted RSE awards to a group of key employees of approximately 92,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 73,000 shares that vest on the third anniversary of the date of the grant. In addition, the Company granted approximately 249,000 performance shares to a group of key employees and key executives that will vest subject to meeting targeted amounts for both cumulative adjusted earnings per share and cumulative free cash flow as a percentage of sales over the three year performance period. These performance measures are equally weighted in determining the final share award with the maximum award payout of approximately 498,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $43.84 . In November 2015, the Company granted RSE awards to a group of key employees of approximately 106,000 shares that vest ratably over four years and granted RSE awards to a group of key executives of approximately 87,000 shares that vest on the third anniversary of the date of the grant. In addition, the Company granted approximately 290,000 performance shares to a group of key employees and key executives that will vest subject to meeting targeted amounts for both cumulative adjusted earnings per share and cumulative free cash flow as a percentage of sales over the three year performance period. These performance measures are equally weighted in determining the final share award with the maximum award payout of approximately 580,000 shares. The closing stock price on the date of the grant used to determine the award fair value was $37.34 . |
Earnings per share
Earnings per share | 9 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share Basic earnings per share is based on the average number of common shares outstanding during the period. Diluted earnings per share is based on the average number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of restricted stock equivalents, performance share awards and deferred compensation equity plans. June 30, 2018 and 2017 : (in millions, except per share data) For the Quarter Ended June 30, For the Nine Months Ended June 30, 2018 2017 2018 2017 Net earnings $ 23.8 $ 24.9 $ 92.0 $ 167.4 Basic average shares outstanding 59.7 61.8 59.9 61.8 Effect of dilutive restricted stock equivalents 0.5 0.5 0.4 0.5 Effect of dilutive performance shares 1.0 0.5 0.9 0.5 Effect of stock based deferred compensation plan 0.2 — 0.2 — Diluted average shares outstanding 61.4 62.8 61.4 62.8 Basic earnings per common share $ 0.40 $ 0.40 $ 1.54 $ 2.71 Diluted earnings per common share $ 0.39 $ 0.40 $ 1.50 $ 2.67 For the quarter and nine months ended June 30, 2018 and 2017, all restricted stock equivalents and performance shares were dilutive and included in the diluted net earnings per share calculations. During the quarter, a portion of the Company's unfunded deferred compensation plan was modified to be paid out in shares rather than cash payment. As a result of the modification, $11.9 was reclassified from a liability based plan to an equity compensation plan. This modification resulted in approximately 200,000 additional dilutive shares for the quarter and nine months ended June 30, 2018. |
Segments
Segments | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segments | Segments Operations for Energizer are managed via two major geographic reportable segments: Americas and International. Prior to January 1, 2018, the International segment was reported as two separate geographic reportable segments: Europe, Middle East and Africa (EMEA) and Asia Pacific. The Company changed its reporting structure to reflect how the Company is managing the operations as well as what the chief operating decision maker is reviewing to make organizational decisions about resource allocation. The prior period segment information has been recast to reflect the current reportable segment structure of the Company. Segment performance is evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation costs, costs associated with restructuring initiatives, acquisition and integration activities, amortization costs, business realignment activities, research & development costs, gain on sale of real estate and other items determined to be corporate in nature. Financial items, such as interest income and expense, are managed on a global basis at the corporate level. The exclusion of substantially all acquisition, integration, restructuring and realignment costs from segment results reflects management’s view on how it evaluates segment performance. Energizer’s operating model includes a combination of standalone and shared business functions between the geographic segments, varying by country and region of the world. Shared functions include, but are not limited to, IT, procurement and finance. Energizer applies a fully allocated cost basis, in which shared business functions are allocated between segments. Such allocations are estimates, and do not represent the costs of such services if performed on a standalone basis. Segment sales and profitability for the quarter and nine months ended June 30, 2018 and 2017 , respectively, are presented below: For the Quarter Ended June 30, For the Nine Months Ended June 30, 2018 2017 2018 2017 Net Sales Americas $ 241.3 $ 228.6 $ 838.5 $ 812.2 International 151.5 143.4 502.0 478.4 Total net sales $ 392.8 $ 372.0 $ 1,340.5 $ 1,290.6 Segment Profit Americas $ 60.4 $ 53.6 $ 239.2 $ 237.2 International 32.6 25.7 115.9 109.8 Total segment profit 93.0 79.3 355.1 347.0 General corporate and other expenses (1) (2) (24.7 ) (19.4 ) (71.0 ) (66.1 ) Global marketing expense (4.6 ) (5.0 ) (13.0 ) (12.0 ) Research and development expense (5.2 ) (5.1 ) (15.9 ) (16.0 ) Amortization of intangible assets (2.8 ) (2.8 ) (8.4 ) (8.4 ) Acquisition and integration costs (3) (22.4 ) (6.7 ) (44.6 ) (9.2 ) Spin restructuring — — — 3.8 Gain on sale of real estate 4.6 1.7 4.6 16.9 Acquisition debt commitment fee (4) (3.4 ) — (6.3 ) — Gain on acquisition foreign currency contracts (5) 9.9 — 9.9 — Interest expense (4) (14.3 ) (13.3 ) (41.3 ) (39.7 ) Other items, net (2) (5) (6) 1.4 1.8 (0.8 ) 7.6 Total earnings before income taxes $ 31.5 $ 30.5 $ 168.3 $ 223.9 (1) Included in SG&A in the unaudited Consolidated Condensed Statement of Earnings and Comprehensive Income. (2) As a result of the adoption of ASU 2017-07 in the first quarter of 2018, a $3.1 and $9.3 benefit was reclassified from SG&A to Other items, net for the quarter and nine months ended June 30, 2017, respectively. (3) The quarter and nine months ended June 30, 2017 included $0.9 and $1.1 , respectively, recorded in Cost of products sold and $3.3 recorded in Other items, net. All other costs were included in SG&A. (4) Acquisition debt commitment fee represents the amortization of financing commitment fees related to the Spectrum acquisition which are recorded in Interest expense on the unaudited Consolidated Statement of Earnings. (5) Gain on acquisition foreign currency contracts was recorded in Other items, net on the unaudited Consolidated Statement of Earnings. These contracts, which were entered into in June 2018, locked in the USD value of the future Euro Notes related to the Spectrum Acquisition and were terminated when the funds from the Euro Notes offering were placed into escrow on July 6, 2018. (6) The amounts for the quarter and the nine months ended June 30, 2017 on the Consolidated Statement of Earnings included $3.3 million of acquisition and integration costs which have been reclassified for purposes of the reconciliation above. Supplemental product information is presented below for revenues from external customers: For the Quarter Ended June 30, For the Nine Months Ended June 30, Net Sales 2018 2017 2018 2017 Batteries $ 350.1 $ 325.8 $ 1,204.9 $ 1,138.8 Other 42.7 46.2 135.6 151.8 Total net sales $ 392.8 $ 372.0 $ 1,340.5 $ 1,290.6 Corporate assets shown in the following table include all financial instruments, deferred tax assets and deferred charges that are managed outside of operating segments. Total assets by segment are presented below: June 30, 2018 September 30, 2017 Americas $ 466.1 $ 533.9 International 794.5 698.2 Total segment assets $ 1,260.6 $ 1,232.1 Corporate 100.0 137.7 Goodwill and other intangible assets 444.2 453.8 Total assets $ 1,804.8 $ 1,823.6 |
Goodwill and intangible assets
Goodwill and intangible assets | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | Goodwill and intangible assets Goodwill and intangible assets deemed to have an indefinite life are not amortized, but are evaluated annually for impairment as part of our annual business planning cycle in the fourth fiscal quarter, or when indicators of a potential impairment are present. The following table sets forth goodwill by segment as of October 1, 2017 and June 30, 2018 : Americas International Total Balance at October 1, 2017 $ 213.8 $ 16.2 $ 230.0 Cumulative translation adjustment (0.2 ) — (0.2 ) Balance at June 30, 2018 $ 213.6 $ 16.2 $ 229.8 Energizer had indefinite-lived intangible assets of $77.3 at June 30, 2018 and $78.3 at September 30, 2017. Changes in indefinite-lived intangible assets are due to changes in foreign currency translation. Total amortizable intangible assets at June 30, 2018 are as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 40.1 $ 5.4 $ 34.7 Customer relationships 84.4 11.7 72.7 Patents 34.5 5.1 29.4 Non-compete 0.5 0.2 0.3 Total intangible assets at June 30, 2018 $ 159.5 $ 22.4 $ 137.1 Total amortizable intangible assets at September 30, 2017 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 40.1 $ 3.4 $ 36.7 Customer relationships 84.4 7.3 77.1 Patents 34.5 3.2 31.3 Non-compete 0.5 0.1 0.4 Total intangible assets at September 30, 2017 $ 159.5 $ 14.0 $ 145.5 |
Debt
Debt | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt The detail of long-term debt was as follows: June 30, 2018 September 30, 2017 Senior Secured Term Loan B Facility, net of discount due 2022 $ 389.0 $ 392.0 5.50% Senior Notes due 2025 600.0 600.0 Total long-term debt, including current maturities 989.0 992.0 Less current portion (4.0 ) (4.0 ) Less unamortized debt discount and debt issuance fees (8.3 ) (9.5 ) Total long-term debt $ 976.7 $ 978.5 The Company's $600.0 of 5.50% Senior Notes due 2025 (2025 Notes) were sold to qualified institutional buyers and will not be registered under federal or applicable state securities laws. Interest is payable semi-annually on the 2025 Notes in December and June. The 2025 Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by each of the Company's domestic restricted subsidiaries that is a borrower or guarantor under the Revolving Facility and Term Loan. The Company has a credit agreement which provides for a five -year $350.0 senior secured revolving credit facility (Revolving Facility) which matures in June 2020 and a seven -year $400.0 senior secured term loan B facility (Term Loan) which is due in June 2022. Borrowings under the Revolving Facility will bear interest at LIBOR or the Base Rate (as defined) plus the applicable margin based on total Company leverage. As of June 30, 2018 , the Company had $165.0 of outstanding borrowings under the Revolving Facility and had $6.7 of outstanding letters of credit. Taking into account outstanding letters of credit, $178.3 remains available as of June 30, 2018 . As of June 30, 2018 and September 30, 2017, our weighted average interest rate on short-term borrowings was 4.15% and 2.98% , respectively. The $400.0 Term Loan was issued at a $1.0 discount which is amortized with a corresponding charge to interest expense over the remaining life of the loan. The original interest rate was LIBOR subject to a 75 basis points floor, plus 250 basis points. In March 2017, the Company completed the repricing of its Term Loan reducing the interest to LIBOR plus 200 basis points and eliminating the 75 basis points floor. The loans and commitments under the Term Loan require quarterly principal payments at a rate of 0.25% , or $1.0 , of the original principal balance. Obligations under the Revolving Facility and Term Loan are jointly and severally guaranteed by certain of its existing and future direct and indirectly wholly-owned U.S. subsidiaries. There is a first priority perfected lien on substantially all of the assets and property of the Company and guarantors and proceeds therefrom excluding certain excluded assets. No other terms were changed as result of the Term Loan repricing. In March 2017, the Company entered into an interest rate swap agreement with one major financial institution that fixed the variable benchmark component (LIBOR) on $200.0 of Energizer's variable rate debt through June 2022 at an interest rate of 2.03% . The notes payable balance was $174.6 at June 30, 2018 and $104.1 at September 30, 2017. The June 30, 2018 balance was comprised of $165.0 outstanding borrowings on the Revolving Facility as well as $9.6 of other borrowings, including those from foreign affiliates. The September 30, 2017 balance was comprised of $95.0 outstanding borrowings on the Revolving facility as well as $9.1 of other borrowings, including those from foreign affiliates. On June 21, 2018, the Company finalized the pricing of two senior note offerings due in 2026 of $500.0 at 6.375% (USD Notes) and €650.0 at 4.625% (Euro Notes and collectively with the USD Notes, the 2026 Notes), which were issued by wholly-owned subsidiaries. The 2026 Notes priced at 100% of the principal amount and the offering closed subsequent to the quarter on July 6, 2018, with the funds held in escrow until certain conditions are met. Interest on the 2026 Notes began to accrue in July 2018. If the escrow conditions (which include conditions relating to the completion of the Spectrum acquisition) are not satisfied on or prior to July 15, 2019 or in certain other circumstances, the 2026 Notes will be redeemed at a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption. The 2026 Notes will be jointly and severally guaranteed on an unsecured basis by the Company's domestic restricted subsidiaries that guarantee indebtedness of the Company under its expected new revolving credit facility and the Euro Notes will also be guaranteed by the Company. In connection with the closing of the Spectrum acquisition, the Company expects to enter into a new senior secured first lien credit agreement, which would include a new 5 -year $400 undrawn revolving credit facility and also provide for $1,200 of borrowings under a $200 3 -year term loan A facility and $1,000 7 -year term loan B facility. The borrowings are expected to bear interest at a rate per annum equal to, at the option of the Company, LIBOR or the Base Rate (as defined) plus the applicable margin based on total Company leverage. The new credit agreement is expected to contain customary affirmative and restrictive covenants. The new term loans began to accrue financing fees in July 2018. Energizer intends to use the net proceeds from the offerings of the 2026 Notes, together with borrowings under the new term loans, to fund the previously announced Spectrum acquisition, to repay the debt outstanding under its existing credit agreement, and to pay related fees, costs and expenses. Debt Covenants The agreements governing the Company's debt contain certain customary representations and warranties, affirmative, negative and financial covenants and provisions relating to events of default. If the Company fails to comply with these covenants or with other requirements of these debt agreements, the lenders may have the right to accelerate the maturity of the debt. Acceleration under one of these facilities would trigger cross defaults to other borrowings. As of June 30, 2018 , the Company was, and expects to remain, in compliance with the provisions and covenants associated with its debt agreements. Aggregate maturities of long-term debt, including current maturities, at June 30, 2018 were as follows: $4.0 in one year, $4.0 in two years, $4.0 in three years, $4.0 in four years, $373.0 in five years and $600.0 thereafter. The counterparties to long-term committed borrowings consist of a number of major financial institutions. The Company consistently monitors positions with, and credit ratings of, counterparties both internally and by using outside ratings agencies. |
Pension Plans
Pension Plans | 9 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pension Plans | Pension Plans The Company has several defined benefit pension plans covering many of its employees in the U.S. and certain employees in other countries. The plans provide retirement benefits based on various factors including years of service and in certain circumstances, earnings. The U.S. plan was frozen in fiscal year 2015. The Company’s net periodic pension (benefit)/cost for these plans are as follows: For the Quarter Ended June 30, U.S. International 2018 2017 2018 2017 Service Cost $ — $ — $ 0.1 $ 0.4 Interest Cost 4.7 4.6 1.1 0.8 Expected return on plan assets (7.5 ) (8.6 ) (1.6 ) (2.0 ) Amortization of unrecognized net losses 1.1 1.2 0.5 0.9 Net periodic (benefit)/cost $ (1.7 ) $ (2.8 ) $ 0.1 $ 0.1 For the Nine Months Ended June 30, U.S. International 2018 2017 2018 2017 Service Cost $ — $ — $ 0.4 $ 1.2 Interest Cost 14.1 13.7 3.2 2.5 Expected return on plan assets (22.6 ) (25.8 ) (4.8 ) (6.0 ) Amortization of unrecognized net losses 3.3 3.6 1.6 2.7 Settlement charge 0.1 — — — Net periodic (benefit)/cost $ (5.1 ) $ (8.5 ) $ 0.4 $ 0.4 The Company adopted ASU 2017-07 in the quarter ended December 31, 2017. The service cost component of the net periodic (benefit)/cost above is recorded in Selling, general and administrative expense on the Consolidated Statement of Earnings and Comprehensive Income, while the remaining components are recorded to Other items, net. The prior year amounts have been reclassified to provide comparable presentation in line with the guidance. The Company also sponsors or participates in a number of other non-U.S. pension arrangements, including various retirement and termination benefit plans, some of which are required by local law or coordinated with government-sponsored plans, which are not significant in the aggregate and, therefore, are not included in the information presented above. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholder's Equity In July 2015, the Company's Board of Directors approved an authorization for the Company to acquire up to 7.5 million shares of its common stock. During the nine months ended June 30, 2018 , the Company repurchased 1,126,379 shares for $50.0 , at an average price of $44.41 per share, under this authorization. There were no shares repurchased during the third quarter of fiscal 2018. Future share repurchases, if any, will be determined by the Company based on its evaluation of the market conditions, capital allocation objectives, legal and regulatory requirements and other factors. On November 13, 2017, the Board of Directors declared a dividend for the first quarter of fiscal 2018 of $0.29 per share of common stock. The dividend was paid on December 14, 2017, to all shareholders of record as of November 30, 2017 and totaled $17.3 . On January 29, 2018, the Board of Directors declared a dividend for the second quarter of 2018 of $0.29 per share of common stock. The dividend was paid on March 13, 2018, to all shareholders of record as of February 20, 2018 and totaled $17.3 . On April 30, 2018, the Board of Directors declared a dividend for the third quarter of 2018 or $0.29 per share of common stock. The dividend was paid on June 13, 2018, to all shareholders of record as of May 21, 2018 and totaled $17.3 . In addition, dividend payments of $ 0.4 were made in fiscal 2018 related to restricted stock awards that vested during November 2017. Subsequent to the end of the fiscal quarter, on July 27, 2018, the Board of Directors declared a dividend for the fourth quarter of 2018 of $0.29 per share of common stock, payable on September 12, 2018, to all shareholders of record as of the close of business August 16, 2018. |
Financial Instruments and Risk
Financial Instruments and Risk Management | 9 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Risk Management | Financial Instruments and Risk Management The market risk inherent in the Company's operations creates potential earnings volatility arising from changes in currency rates, interest rates and commodity prices. The Company's policy allows derivatives to be used only for identifiable exposures and, therefore, the Company does not enter into hedges for trading or speculative purposes where the sole objective is to generate profits. Concentration of Credit Risk —The counterparties to derivative contracts consist of a number of major financial institutions and are generally institutions with which the Company maintains lines of credit. The Company does not enter into derivative contracts through brokers nor does it trade derivative contracts on any other exchange or over-the-counter markets. Risk of currency positions and mark-to-market valuation of positions are strictly monitored. The Company continually monitors positions with, and credit ratings of, counterparties both internally and by using outside rating agencies. While nonperformance by these counterparties exposes Energizer to potential credit losses, such losses are not anticipated. In the ordinary course of business, the Company may enter into contractual arrangements (derivatives) to reduce its exposure to commodity price and foreign currency risks. The section below outlines the types of derivatives that existed at June 30, 2018 and September 30, 2017, as well as the Company's objectives and strategies for holding these derivative instruments. Commodity Price Risk —Energizer uses raw materials that are subject to price volatility. The Company has used, and may in the future use, hedging instruments to reduce exposure to variability in cash flows associated with future purchases of certain materials and commodities. At June 30, 2018 and September 30, 2017, there were no open derivative or hedging instruments for future purchases of raw materials or commodities. Foreign Currency Risk —A significant portion of Energizer’s product cost is more closely tied to the U.S. dollar than to the local currencies in which the product is sold. As such, a weakening of currencies relative to the U.S. dollar results in margin declines unless mitigated through pricing actions, which are not always available due to the economic or competitive environment. Conversely, a strengthening in currencies relative to the U.S. dollar can improve margins. The primary currencies to which Energizer is exposed include the Euro, the British pound, the Canadian dollar and the Australian dollar. However, the Company also has significant exposures in many other currencies which, in the aggregate, may have a material impact on the Company's operations. Additionally, Energizer’s foreign subsidiaries enter into internal and external transactions that create nonfunctional currency balance sheet positions at the foreign subsidiary level. These exposures are generally the result of intercompany purchases, intercompany loans and, to a lesser extent, external purchases, and are revalued in the foreign subsidiary’s local currency at the end of each period. Changes in the value of the non-functional currency balance sheet positions in relation to the foreign subsidiary’s local currency results in a transaction gain or loss recorded in Other items, net on the Consolidated Statements of Earnings and Comprehensive Income. The primary currency to which Energizer’s foreign subsidiaries are exposed is the U.S. dollar. Interest Rate Risk —Energizer has interest rate risk with respect to interest expense on variable rate debt. At June 30, 2018 , Energizer had variable rate debt outstanding with an original principal balance of $400.0 under the Term Loan. In March 2017, the Company entered into an interest rate swap agreement with one major financial institution that fixed the variable benchmark component (LIBOR) on $200.0 of Energizer's variable rate debt through June 2022 at an interest rate of 2.03% . In February 2018, the Company entered into a forward starting interest rate swap with an effective date of October 1, 2018, with one major financial institution that will fix the variable benchmark component (LIBOR) on additional variable rate debt at an interest rate of 2.47% . At the effective date, the swap will have a notional value of $400.0 . Beginning April 1, 2019, the notional amount decreases $50.0 each quarter until its termination date of December 31, 2020. These hedging instruments are considered cash flow hedges for accounting purposes. At June 30, 2018 and September 30, 2017, Energizer recorded an unrecognized pre-tax gain and unrecognized pre-tax loss of $6.2 and $1.3 , respectively, on these interest rate swap contracts, both of which were included in Accumulated other comprehensive loss on the Consolidated Balance Sheet. Cash Flow Hedges - The Company has entered into a series of forward currency contracts to hedge the cash flow uncertainty of forecasted inventory purchases due to short term currency fluctuations. Energizer’s foreign affiliates, which have the largest exposure to U.S. dollar purchases, have the Euro, the British pound, the Canadian dollar and the Australian dollar as their local currencies. These foreign currencies represent a significant portion of Energizer's foreign currency exposure. At June 30, 2018 and September 30, 2017, Energizer had an unrealized pre-tax gain of $4.1 and loss of $5.8 , respectively, on these forward currency contracts accounted for as cash flow hedges included in Accumulated other comprehensive loss on the unaudited Condensed Consolidated Balance Sheets. Assuming foreign exchange rates versus the U.S. dollar remain at June 30, 2018 levels, over the next 12 months, $4.0 of the pre-tax gain included in Accumulated other comprehensive loss is expected to be recognized in earnings. Contract maturities for these hedges extend into fiscal year 2020. There were 64 open foreign currency contracts at June 30, 2018 , with a total notional value of approximately $143 . Derivatives not Designated in Hedging Relationships - Energizer enters into foreign currency derivative contracts which are not designated as cash flow hedges for accounting purposes, to hedge existing balance sheet exposures. Any gains or losses on these contracts are expected to be offset by corresponding exchange losses or gains on the underlying exposures; and as such are not subject to significant market risk. There were 11 open foreign currency derivative contracts which are not designated as cash flow hedges at June 30, 2018 , with a total notional value of approximately $858 . At June 30, 2018, included in the above, were two foreign currency derivative contracts with a notional value of $774 which locked in the USD value of future Euro Notes related to the Spectrum acquisition. These contracts were entered into in June 2018 and terminated on July 6, 2018 when the funds from the Euro Notes offering were placed into escrow. At June 30, 2018, these contracts had a gain of $9.9 recorded in Other items, net. The following table provides the Company's estimated fair values as of June 30, 2018 and September 30, 2017, and the amounts of gains and losses on derivative instruments classified as cash flow hedges for the quarter and nine months ended June 30, 2018 and 2017 , respectively: At June 30, 2018 For the Quarter Ended June 30, 2018 For the Nine Months Ended June 30, 2018 Derivatives designated as Cash Flow Hedging Relationships Estimated Fair Value Asset (1) (2) Gain Recognized in OCI (3) Loss Reclassified From OCI into Income (Effective Portion) (4) (5) Gain Recognized in OCI (3) Loss Reclassified From OCI into Income (Effective Portion) (4) (5) Foreign currency contracts $ 4.1 $ 5.6 $ (0.8 ) $ 4.8 $ (5.1 ) Interest rate contracts 6.2 2.2 (0.2 ) 6.7 (1.0 ) Total $ 10.3 $ 7.8 $ (1.0 ) $ 11.5 $ (6.1 ) At September 30, 2017 For the Quarter Ended June 30, 2017 For the Nine Months Ended June 30, 2017 Derivatives designated as Cash Flow Hedging Relationships Estimated Fair Value Liability (1) (2) Loss Recognized in OCI (3) Gain/(Loss) Reclassified From OCI into Income (Effective Portion) (4) (5) (Loss)/Gain Recognized in OCI (3) Gain/(Loss) Reclassified From OCI into Income (Effective Portion) (4) (5) Foreign currency contracts $ (5.8 ) $ (4.8 ) $ 0.4 $ (1.6 ) $ 1.6 Interest rate contracts (1.3 ) (1.2 ) (0.5 ) 4.6 (1.9 ) Total $ (7.1 ) $ (6.0 ) $ (0.1 ) $ 3.0 $ (0.3 ) (1) All derivative assets are presented in Other current assets or Other assets. (2) All derivative liabilities are presented in Other current liabilities or Other liabilities. (3) OCI is defined as other comprehensive income. (4) Gain/(loss) reclassified to Income was recorded as follows: Foreign currency contracts in Other items, net and interest rate contracts in Interest expense. (5) Each of these hedging relationships has derivative instruments with a high correlation to the underlying exposure being hedged and has been deemed highly effective in offsetting the underlying risk. The following table provides estimated fair values as of June 30, 2018 and September 30, 2017 and the gains and losses on derivative instruments not classified as cash flow hedges for the quarter and nine months ended June 30, 2018 and 2017 , respectively: At June 30, 2018 For the Quarter Ended June 30, 2018 For the Nine Months Ended June 30, 2018 Estimated Fair Value Asset (1) Gain Recognized in Income (1) (2) Gain Recognized in Income (1) (2) Foreign currency contracts $ 9.5 $ 8.7 $ 10.0 At September 30, 2017 For the Quarter Ended June 30, 2017 For the Nine Months Ended June 30, 2017 Estimated Fair Value Asset Loss Recognized in Income (2) Loss Recognized in Income (2) Foreign currency contracts $ 0.9 $ (0.2 ) $ (1.5 ) (1) Includes the foreign currency contracts, which were entered into in June 2018, to lock in the USD value of future Euro Notes related to the Spectrum acquisition. These contracts were terminated when the funds from the Euro Notes offering were placed into escrow on July 6, 2018. (2) Gain/(loss) recognized in Income was recorded as foreign currency in Other items, net. Energizer has the following recognized financial assets resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting. Offsetting of derivative assets At June 30, 2018 At September 30, 2017 Description Balance Sheet location Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet Foreign Currency Contracts Other Current Assets, Other Assets $ 14.9 $ (0.4 ) $ 14.5 $ 1.1 $ — $ 1.1 Offsetting of derivative liabilities At June 30, 2018 At September 30, 2017 Description Balance Sheet location Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet Foreign Currency Contracts Other Current Liabilities, Other Liabilities $ (0.9 ) $ — $ (0.9 ) $ (6.4 ) $ 0.4 $ (6.0 ) Fair Value Hierarchy —Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets. Under the fair value accounting guidance hierarchy, an entity is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The following table sets forth the Company's financial assets and liabilities, which are carried at fair value, as of June 30, 2018 and September 30, 2017 that are measured on a recurring basis during the period, segregated by level within the fair value hierarchy: Level 2 Assets/(Liabilities) at estimated fair value: June 30, September 30, Deferred Compensation $ (28.5 ) $ (41.0 ) Derivatives - Foreign Currency Contracts 13.6 (4.9 ) Derivatives - Interest Rate Contracts 6.2 (1.3 ) Exit lease liability — (0.3 ) Net Liabilities at estimated fair value $ (8.7 ) $ (47.5 ) Energizer had no Level 1 financial assets or liabilities, other than pension plan assets, and no Level 3 financial assets or liabilities at June 30, 2018 and at September 30, 2017. Due to the nature of cash and cash equivalents, carrying amounts on the balance sheets approximate estimated fair value. The estimated fair value of cash and cash equivalents has been determined based on level 1 and level 2 inputs, respectively. At June 30, 2018 , the estimated fair value of the Company's unfunded deferred compensation liability is determined based upon the quoted market prices of investment options that are offered under the plan. During the quarter, a portion of the Company's unfunded deferred compensation plan was modified to be paid out in shares rather than cash payment. As a result of the modification, $11.9 was reclassified from a liability based plan to an equity compensation plan. The estimated fair value of foreign currency contracts and interest rate swap as described above is the amount that the Company would receive or pay to terminate the contracts, considering first, quoted market prices of comparable agreements, or in the absence of quoted market prices, such factors as interest rates, currency exchange rates and remaining maturities. The estimated fair value of the exit lease liability was determined based on the discounted cash flows of the remaining lease rentals reduced by estimated sublease rentals that could be reasonably obtained for the property. At June 30, 2018 and September 30, 2017, the fair market value of fixed rate long-term debt was $596.0 and $615.7 , respectively, compared to its carrying value of $600.0 . The estimated fair value of the long-term debt is estimated using yields obtained from independent pricing sources for similar types of borrowing arrangements. The estimated fair value of fixed rate long-term debt has been determined based on Level 2 inputs. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss)/Income | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss)/Income | Accumulated Other Comprehensive (Loss)/Income The following table presents the changes in accumulated other comprehensive (loss)/income (AOCI), net of tax by component: Foreign Currency Translation Adjustments Pension Activity Hedging Activity Interest Rate Contracts Total Balance at September 30, 2017 $ (93.1 ) $ (139.4 ) $ (4.5 ) $ (1.8 ) $ (238.8 ) OCI before reclassifications (14.9 ) 1.1 3.6 4.7 (5.5 ) Reclassifications to earnings — 3.7 4.0 0.7 8.4 Reclassifications to retained earnings (1) — (19.9 ) — (0.1 ) (20.0 ) Balance at June 30, 2018 $ (108.0 ) $ (154.5 ) $ 3.1 $ 3.5 $ (255.9 ) (1) Refer to Note 1- Description of Business and Basis of Presentation for additional information on our adoption of ASU 2018-02. The following table presents the reclassifications out of AOCI to earnings: For the Quarter Ended June 30, For the Nine Months Ended June 30, 2018 2017 2018 2017 Details of AOCI Components Amount Reclassified from AOCI (1) Amount Reclassified from AOCI (1) Affected Line Item in the Combined Statements of Earnings Gains and losses on cash flow hedges Foreign exchange contracts $ (0.8 ) $ 0.4 $ (5.1 ) $ 1.6 Other items, net Interest rate contracts (0.2 ) (0.5 ) (1.0 ) (1.9 ) Interest expense (1.0 ) (0.1 ) (6.1 ) (0.3 ) Earnings before income taxes 0.2 0.2 1.4 0.5 Income tax provision $ (0.8 ) $ 0.1 $ (4.7 ) $ 0.2 Net earnings Amortization of defined benefit pension items Actuarial loss (1.6 ) (2.1 ) (4.9 ) (6.2 ) (2) Settlement loss — — (0.1 ) — (2) (1.6 ) (2.1 ) (5.0 ) (6.2 ) Earnings before income taxes 0.5 0.6 1.3 1.9 Income tax provision $ (1.1 ) $ (1.5 ) $ (3.7 ) $ (4.3 ) Net earnings Total reclassifications to earnings $ (1.9 ) $ (1.4 ) $ (8.4 ) $ (4.1 ) Net earnings (1) Amounts in parentheses indicate debits to Consolidated Statement of Earnings. (2) This AOCI component is included in the computation of net periodic pension (benefit)/cost (see Note 10, Pension Plans, for further details). |
Supplemental Financial Statemen
Supplemental Financial Statement Information | 9 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Suplemental Financial Statement Information | Supplemental Financial Statement Information June 30, 2018 September 30, 2017 Inventories Raw materials and supplies $ 44.5 $ 36.6 Work in process 96.1 84.8 Finished products 167.2 195.7 Total inventories $ 307.8 $ 317.1 Other Current Assets Miscellaneous receivables $ 8.3 $ 13.7 Prepaid expenses 53.8 52.7 Value added tax collectible from customers 19.3 23.4 Other 25.2 5.1 Total other current assets $ 106.6 $ 94.9 Property, Plant and Equipment Land $ 4.6 $ 4.6 Buildings 110.9 122.4 Machinery and equipment 691.8 697.9 Construction in progress 16.0 19.4 Total gross property 823.3 844.3 Accumulated depreciation (656.4 ) (667.8 ) Total property, plant and equipment, net $ 166.9 $ 176.5 Other Current Liabilities Accrued advertising, sales promotion and allowances $ 11.6 $ 21.8 Accrued trade allowances 37.4 51.1 Accrued salaries, vacations and incentive compensation 41.8 54.4 Income taxes payable 30.0 21.6 Other 105.5 105.7 Total other current liabilities $ 226.3 $ 254.6 Other Liabilities Pensions and other retirement benefits $ 73.1 $ 87.7 Deferred compensation 28.5 41.0 Mandatory transition tax 25.8 — Other non-current liabilities 53.6 49.3 Total other liabilities $ 181.0 $ 178.0 |
Legal proceedings_contingencies
Legal proceedings/contingencies | 9 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal proceedings/contingencies | Legal proceedings/contingencies and other obligations Legal proceedings/contingencies - The Company and its affiliates are subject to a number of legal proceedings in various jurisdictions arising out of its operations. Many of these legal matters are in preliminary stages and involve complex issues of law and fact, and may proceed for protracted periods of time. The amount of liability, if any, from these proceedings cannot be determined with certainty. We are a party to legal proceedings and claims that arise during the ordinary course of business. We review our legal proceedings and claims, regulatory reviews and inspections and other legal proceedings on an ongoing basis and follow appropriate accounting guidance when making accrual and disclosure decisions. We establish accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements to not be misleading. We do not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company believes that its liability, if any, arising from such pending legal proceedings, asserted legal claims and known potential legal claims which are likely to be asserted, is not reasonably likely to be material to the Company's financial position, results of operations, or cash flows, when taking into account established accruals for estimated liabilities. Other obligations - In the ordinary course of business, the Company also enters into supply and service contracts. These contracts can include either volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations. At June 30, 2018, the Company had approximately $72 of purchase obligations. |
Description of Business and B22
Description of Business and Basis of Presentation (Policies) | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation - The accompanying unaudited Consolidated Condensed Financial Statements include the accounts of Energizer and its subsidiaries. All significant intercompany transactions are eliminated. Energizer has no material equity method investments, variable interests or non-controlling interests. The accompanying unaudited Consolidated Condensed Financial Statements have been prepared in accordance with Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The year-end condensed Consolidated Balance Sheet was derived from the audited financial statements included in Energizer's Report on Form 10-K, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of our operations, financial position and cash flows have been included. Certain reclassifications have been made to the prior year financial statements to conform to the current presentation. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for the full year. These statements should be read in conjunction with the financial statements and notes thereto for Energizer for the year ended September 30, 2017 included in the Annual Report on Form 10-K dated November 14, 2017. |
Recently adopted accounting pronouncements | Recently Adopted Accounting Pronouncements - During the quarter ended March 31, 2018, the Company early adopted ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02) . This update allows for the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the Act) from accumulated other comprehensive income (AOCI) to retained earnings. The amount of the reclassification is calculated as the difference between the historical and newly enacted tax rates on deferred taxes originally recorded through AOCI. The Company reclassified $20.0 of stranded tax from AOCI to Retained earnings in the second quarter. Tax effects unrelated to the Act are released from AOCI using either the specific identification approach or the portfolio approach based on the nature of the underlying item. During the quarter ended December 31, 2017, the Company adopted ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This update requires the service component of the net periodic pension cost to be reported in the same income statement line item as similar compensation costs, while all other pension cost components should be reported separately from the service cost component on the income statement. The adoption of this update resulted in $1.7 and $5.1 of non-compensation related pension benefit in Other items, net in the quarter and nine months ended June 30, 2018, respectively, and a reclassification of $3.1 and $9.3 of pension benefit out of Selling, general and administrative expense and into Other items, net for the quarter and nine months ended June 30, 2017. All non-compensation related pension costs will be recorded in Other items, net going forward. During the quarter ended December 31, 2017, the Company adopted ASU 2015-11, Inventory (Topic 330) , which aligns the measurement of inventory under GAAP more closely with International Financial Reporting Standards. Under the new guidance, an entity that measures inventory using the first-in, first-out or average cost should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The impact of adoption was immaterial. During the quarter ended December 31, 2017, the Company early adopted ASU 2016-16, Intra-entity Transfers of Assets Other Than Inventory . This update requires tax expense to be recognized from the sale of intra-entity assets, other than inventory, when the transfer occurs, even though the effects of the transaction are eliminated in consolidation. Under the previous guidance, the tax effects of transfers would have been deferred until the transferred asset was sold or otherwise recovered through use. Upon adoption, any deferred charge previously established upon the intra-company transfer is recorded as a cumulative effect adjustment to retained earnings. During the quarter ended December 31, 2017, a deferred charge of $59.2 was removed from Other assets and recorded as an adjustment to retained earnings. Any future tax impacts will be recognized as incurred. During the quarter ended December 31, 2017, the Company early adopted ASU 2017-01, Clarifying the Definition of a Business . This update creates a more practical definition and guidelines to determine whether a set of assets and activities is a business. This simplifies the decision making process of determining whether a purchase constitutes a business combination or an acquisition of assets and the Company will apply this definition for future acquisitions. During the quarter ended December 31, 2017, the Company early adopted ASU 2017-04, Simplifying the Test for Goodwill Impairment . This update eliminates the need to assign the fair value of a reporting unit to each of its assets and liabilities when quantifying an impairment charge. The impairment charge is now determined based on the comparison of the fair value of a reporting unit to its carrying amount. The Company will apply the new guidance when completing its goodwill testing procedures in the current year. Recently Issued Accounting Pronouncements - On May 28, 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides a single comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. On August 12, 2015, the FASB issued a one-year deferral of the effective date. This update is effective for Energizer beginning October 1, 2018 and will be adopted on a modified retrospective basis. The Company has substantially completed its assessment of the new guidance against its current accounting policies and procedures, through activities that included analysis of standard sales transactions and terms, coordination and discussion with our commercial teams and reviewing contracts with customers. Based on its assessment, the new guidance will not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. The Company is still assessing the overall impact on the Company’s disclosures and controls. On February 25, 2016, the FASB issued ASU 2016-02, Leases . This update aligns the measurement of leases under GAAP more closely with International Financial Reporting Standards by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this update will be effective for Energizer beginning October 1, 2019 with early adoption permitted. Energizer is in the process of evaluating the impact the guidance will have on its financial statements. On August 26, 2016, the FASB issued ASU 2016-15, Statement of Cash Flows- Classification of Certain Cash Receipts and Cash Payments , which is intended to reduce diversity in practice in how certain transactions are classified in the statements of cash flows. This update will be effective for Energizer beginning October 1, 2018. The Company is currently assessing the impact the revised guidance will have on our current classification on the Statement of Cash Flows. On August 28, 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities . This update intends to simplify hedge accounting and decrease complexity for both the preparation and understanding of hedging disclosures in the financial statements. This update is effective for the Company beginning October 1, 2019 with early adoption permitted. The Company is currently assessing the impact the revised guidance will have on its accounting practices and financial statements. |
Spin Costs (Tables)
Spin Costs (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The following table represents the spin restructuring accrual activity and ending accrual balance as of June 30, 2017 recorded in Other current liabilities on the Consolidated Condensed Balance Sheet. There were no liabilities outstanding at September 30, 2017 or June 30, 2018. Utilized October 1, 2016 Charge to Income Cash June 30, 2017 Severance and termination related costs $ 2.8 $ — $ (2.1 ) $ 0.7 Contract termination costs 3.6 (2.5 ) (1.1 ) — Net gain on asset sales — (1.3 ) 1.3 — Total $ 6.4 $ (3.8 ) $ (1.9 ) $ 0.7 |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | he following table sets forth the computation of basic and diluted earnings per share for the quarter and nine months ended June 30, 2018 and 2017 : (in millions, except per share data) For the Quarter Ended June 30, For the Nine Months Ended June 30, 2018 2017 2018 2017 Net earnings $ 23.8 $ 24.9 $ 92.0 $ 167.4 Basic average shares outstanding 59.7 61.8 59.9 61.8 Effect of dilutive restricted stock equivalents 0.5 0.5 0.4 0.5 Effect of dilutive performance shares 1.0 0.5 0.9 0.5 Effect of stock based deferred compensation plan 0.2 — 0.2 — Diluted average shares outstanding 61.4 62.8 61.4 62.8 Basic earnings per common share $ 0.40 $ 0.40 $ 1.54 $ 2.71 Diluted earnings per common share $ 0.39 $ 0.40 $ 1.50 $ 2.67 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Segment sales and profitability for the quarter and nine months ended June 30, 2018 and 2017 , respectively, are presented below: For the Quarter Ended June 30, For the Nine Months Ended June 30, 2018 2017 2018 2017 Net Sales Americas $ 241.3 $ 228.6 $ 838.5 $ 812.2 International 151.5 143.4 502.0 478.4 Total net sales $ 392.8 $ 372.0 $ 1,340.5 $ 1,290.6 Segment Profit Americas $ 60.4 $ 53.6 $ 239.2 $ 237.2 International 32.6 25.7 115.9 109.8 Total segment profit 93.0 79.3 355.1 347.0 General corporate and other expenses (1) (2) (24.7 ) (19.4 ) (71.0 ) (66.1 ) Global marketing expense (4.6 ) (5.0 ) (13.0 ) (12.0 ) Research and development expense (5.2 ) (5.1 ) (15.9 ) (16.0 ) Amortization of intangible assets (2.8 ) (2.8 ) (8.4 ) (8.4 ) Acquisition and integration costs (3) (22.4 ) (6.7 ) (44.6 ) (9.2 ) Spin restructuring — — — 3.8 Gain on sale of real estate 4.6 1.7 4.6 16.9 Acquisition debt commitment fee (4) (3.4 ) — (6.3 ) — Gain on acquisition foreign currency contracts (5) 9.9 — 9.9 — Interest expense (4) (14.3 ) (13.3 ) (41.3 ) (39.7 ) Other items, net (2) (5) (6) 1.4 1.8 (0.8 ) 7.6 Total earnings before income taxes $ 31.5 $ 30.5 $ 168.3 $ 223.9 (1) Included in SG&A in the unaudited Consolidated Condensed Statement of Earnings and Comprehensive Income. (2) As a result of the adoption of ASU 2017-07 in the first quarter of 2018, a $3.1 and $9.3 benefit was reclassified from SG&A to Other items, net for the quarter and nine months ended June 30, 2017, respectively. (3) The quarter and nine months ended June 30, 2017 included $0.9 and $1.1 , respectively, recorded in Cost of products sold and $3.3 recorded in Other items, net. All other costs were included in SG&A. |
Revenue from External Customers by Products and Services | Supplemental product information is presented below for revenues from external customers: For the Quarter Ended June 30, For the Nine Months Ended June 30, Net Sales 2018 2017 2018 2017 Batteries $ 350.1 $ 325.8 $ 1,204.9 $ 1,138.8 Other 42.7 46.2 135.6 151.8 Total net sales $ 392.8 $ 372.0 $ 1,340.5 $ 1,290.6 |
Reconciliation of Assets from Segment to Consolidated | Total assets by segment are presented below: June 30, 2018 September 30, 2017 Americas $ 466.1 $ 533.9 International 794.5 698.2 Total segment assets $ 1,260.6 $ 1,232.1 Corporate 100.0 137.7 Goodwill and other intangible assets 444.2 453.8 Total assets $ 1,804.8 $ 1,823.6 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table sets forth goodwill by segment as of October 1, 2017 and June 30, 2018 : Americas International Total Balance at October 1, 2017 $ 213.8 $ 16.2 $ 230.0 Cumulative translation adjustment (0.2 ) — (0.2 ) Balance at June 30, 2018 $ 213.6 $ 16.2 $ 229.8 |
Schedule of Finite-Lived Intangible Assets | Total amortizable intangible assets at June 30, 2018 are as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 40.1 $ 5.4 $ 34.7 Customer relationships 84.4 11.7 72.7 Patents 34.5 5.1 29.4 Non-compete 0.5 0.2 0.3 Total intangible assets at June 30, 2018 $ 159.5 $ 22.4 $ 137.1 Total amortizable intangible assets at September 30, 2017 were as follows: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 40.1 $ 3.4 $ 36.7 Customer relationships 84.4 7.3 77.1 Patents 34.5 3.2 31.3 Non-compete 0.5 0.1 0.4 Total intangible assets at September 30, 2017 $ 159.5 $ 14.0 $ 145.5 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The detail of long-term debt was as follows: June 30, 2018 September 30, 2017 Senior Secured Term Loan B Facility, net of discount due 2022 $ 389.0 $ 392.0 5.50% Senior Notes due 2025 600.0 600.0 Total long-term debt, including current maturities 989.0 992.0 Less current portion (4.0 ) (4.0 ) Less unamortized debt discount and debt issuance fees (8.3 ) (9.5 ) Total long-term debt $ 976.7 $ 978.5 |
Pension Plans (Tables)
Pension Plans (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The Company’s net periodic pension (benefit)/cost for these plans are as follows: For the Quarter Ended June 30, U.S. International 2018 2017 2018 2017 Service Cost $ — $ — $ 0.1 $ 0.4 Interest Cost 4.7 4.6 1.1 0.8 Expected return on plan assets (7.5 ) (8.6 ) (1.6 ) (2.0 ) Amortization of unrecognized net losses 1.1 1.2 0.5 0.9 Net periodic (benefit)/cost $ (1.7 ) $ (2.8 ) $ 0.1 $ 0.1 For the Nine Months Ended June 30, U.S. International 2018 2017 2018 2017 Service Cost $ — $ — $ 0.4 $ 1.2 Interest Cost 14.1 13.7 3.2 2.5 Expected return on plan assets (22.6 ) (25.8 ) (4.8 ) (6.0 ) Amortization of unrecognized net losses 3.3 3.6 1.6 2.7 Settlement charge 0.1 — — — Net periodic (benefit)/cost $ (5.1 ) $ (8.5 ) $ 0.4 $ 0.4 |
Financial Instruments and Ris29
Financial Instruments and Risk Management (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following table provides the Company's estimated fair values as of June 30, 2018 and September 30, 2017, and the amounts of gains and losses on derivative instruments classified as cash flow hedges for the quarter and nine months ended June 30, 2018 and 2017 , respectively: At June 30, 2018 For the Quarter Ended June 30, 2018 For the Nine Months Ended June 30, 2018 Derivatives designated as Cash Flow Hedging Relationships Estimated Fair Value Asset (1) (2) Gain Recognized in OCI (3) Loss Reclassified From OCI into Income (Effective Portion) (4) (5) Gain Recognized in OCI (3) Loss Reclassified From OCI into Income (Effective Portion) (4) (5) Foreign currency contracts $ 4.1 $ 5.6 $ (0.8 ) $ 4.8 $ (5.1 ) Interest rate contracts 6.2 2.2 (0.2 ) 6.7 (1.0 ) Total $ 10.3 $ 7.8 $ (1.0 ) $ 11.5 $ (6.1 ) At September 30, 2017 For the Quarter Ended June 30, 2017 For the Nine Months Ended June 30, 2017 Derivatives designated as Cash Flow Hedging Relationships Estimated Fair Value Liability (1) (2) Loss Recognized in OCI (3) Gain/(Loss) Reclassified From OCI into Income (Effective Portion) (4) (5) (Loss)/Gain Recognized in OCI (3) Gain/(Loss) Reclassified From OCI into Income (Effective Portion) (4) (5) Foreign currency contracts $ (5.8 ) $ (4.8 ) $ 0.4 $ (1.6 ) $ 1.6 Interest rate contracts (1.3 ) (1.2 ) (0.5 ) 4.6 (1.9 ) Total $ (7.1 ) $ (6.0 ) $ (0.1 ) $ 3.0 $ (0.3 ) (1) All derivative assets are presented in Other current assets or Other assets. (2) All derivative liabilities are presented in Other current liabilities or Other liabilities. (3) OCI is defined as other comprehensive income. (4) Gain/(loss) reclassified to Income was recorded as follows: Foreign currency contracts in Other items, net and interest rate contracts in Interest expense. (5) Each of these hedging relationships has derivative instruments with a high correlation to the underlying exposure being hedged and has been deemed highly effective in offsetting the underlying risk. |
Derivative Instruments, Gain (Loss) | The following table provides estimated fair values as of June 30, 2018 and September 30, 2017 and the gains and losses on derivative instruments not classified as cash flow hedges for the quarter and nine months ended June 30, 2018 and 2017 , respectively: At June 30, 2018 For the Quarter Ended June 30, 2018 For the Nine Months Ended June 30, 2018 Estimated Fair Value Asset (1) Gain Recognized in Income (1) (2) Gain Recognized in Income (1) (2) Foreign currency contracts $ 9.5 $ 8.7 $ 10.0 At September 30, 2017 For the Quarter Ended June 30, 2017 For the Nine Months Ended June 30, 2017 Estimated Fair Value Asset Loss Recognized in Income (2) Loss Recognized in Income (2) Foreign currency contracts $ 0.9 $ (0.2 ) $ (1.5 ) (1) Includes the foreign currency contracts, which were entered into in June 2018, to lock in the USD value of future Euro Notes related to the Spectrum acquisition. These contracts were terminated when the funds from the Euro Notes offering were placed into escrow on July 6, 2018. (2) Gain/(loss) recognized in Income was recorded as foreign currency in Other items, net. |
Offsetting Liabilities | Offsetting of derivative assets At June 30, 2018 At September 30, 2017 Description Balance Sheet location Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet Foreign Currency Contracts Other Current Assets, Other Assets $ 14.9 $ (0.4 ) $ 14.5 $ 1.1 $ — $ 1.1 Offsetting of derivative liabilities At June 30, 2018 At September 30, 2017 Description Balance Sheet location Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet Foreign Currency Contracts Other Current Liabilities, Other Liabilities $ (0.9 ) $ — $ (0.9 ) $ (6.4 ) $ 0.4 $ (6.0 ) |
Offsetting Assets | Offsetting of derivative assets At June 30, 2018 At September 30, 2017 Description Balance Sheet location Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet Foreign Currency Contracts Other Current Assets, Other Assets $ 14.9 $ (0.4 ) $ 14.5 $ 1.1 $ — $ 1.1 Offsetting of derivative liabilities At June 30, 2018 At September 30, 2017 Description Balance Sheet location Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet Foreign Currency Contracts Other Current Liabilities, Other Liabilities $ (0.9 ) $ — $ (0.9 ) $ (6.4 ) $ 0.4 $ (6.0 ) |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table sets forth the Company's financial assets and liabilities, which are carried at fair value, as of June 30, 2018 and September 30, 2017 that are measured on a recurring basis during the period, segregated by level within the fair value hierarchy: Level 2 Assets/(Liabilities) at estimated fair value: June 30, September 30, Deferred Compensation $ (28.5 ) $ (41.0 ) Derivatives - Foreign Currency Contracts 13.6 (4.9 ) Derivatives - Interest Rate Contracts 6.2 (1.3 ) Exit lease liability — (0.3 ) Net Liabilities at estimated fair value $ (8.7 ) $ (47.5 ) |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive (Loss)/Income (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in accumulated other comprehensive (loss)/income (AOCI), net of tax by component: Foreign Currency Translation Adjustments Pension Activity Hedging Activity Interest Rate Contracts Total Balance at September 30, 2017 $ (93.1 ) $ (139.4 ) $ (4.5 ) $ (1.8 ) $ (238.8 ) OCI before reclassifications (14.9 ) 1.1 3.6 4.7 (5.5 ) Reclassifications to earnings — 3.7 4.0 0.7 8.4 Reclassifications to retained earnings (1) — (19.9 ) — (0.1 ) (20.0 ) Balance at June 30, 2018 $ (108.0 ) $ (154.5 ) $ 3.1 $ 3.5 $ (255.9 ) (1) Refer to Note 1- Description of Business and Basis of Presentation for additional information on our adoption of ASU 2018-02. |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the reclassifications out of AOCI to earnings: For the Quarter Ended June 30, For the Nine Months Ended June 30, 2018 2017 2018 2017 Details of AOCI Components Amount Reclassified from AOCI (1) Amount Reclassified from AOCI (1) Affected Line Item in the Combined Statements of Earnings Gains and losses on cash flow hedges Foreign exchange contracts $ (0.8 ) $ 0.4 $ (5.1 ) $ 1.6 Other items, net Interest rate contracts (0.2 ) (0.5 ) (1.0 ) (1.9 ) Interest expense (1.0 ) (0.1 ) (6.1 ) (0.3 ) Earnings before income taxes 0.2 0.2 1.4 0.5 Income tax provision $ (0.8 ) $ 0.1 $ (4.7 ) $ 0.2 Net earnings Amortization of defined benefit pension items Actuarial loss (1.6 ) (2.1 ) (4.9 ) (6.2 ) (2) Settlement loss — — (0.1 ) — (2) (1.6 ) (2.1 ) (5.0 ) (6.2 ) Earnings before income taxes 0.5 0.6 1.3 1.9 Income tax provision $ (1.1 ) $ (1.5 ) $ (3.7 ) $ (4.3 ) Net earnings Total reclassifications to earnings $ (1.9 ) $ (1.4 ) $ (8.4 ) $ (4.1 ) Net earnings (1) Amounts in parentheses indicate debits to Consolidated Statement of Earnings. (2) This AOCI component is included in the computation of net periodic pension (benefit)/cost (see Note 10, Pension Plans, for further details). |
Supplemental Financial Statem31
Supplemental Financial Statement Information (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Information | June 30, 2018 September 30, 2017 Inventories Raw materials and supplies $ 44.5 $ 36.6 Work in process 96.1 84.8 Finished products 167.2 195.7 Total inventories $ 307.8 $ 317.1 Other Current Assets Miscellaneous receivables $ 8.3 $ 13.7 Prepaid expenses 53.8 52.7 Value added tax collectible from customers 19.3 23.4 Other 25.2 5.1 Total other current assets $ 106.6 $ 94.9 Property, Plant and Equipment Land $ 4.6 $ 4.6 Buildings 110.9 122.4 Machinery and equipment 691.8 697.9 Construction in progress 16.0 19.4 Total gross property 823.3 844.3 Accumulated depreciation (656.4 ) (667.8 ) Total property, plant and equipment, net $ 166.9 $ 176.5 Other Current Liabilities Accrued advertising, sales promotion and allowances $ 11.6 $ 21.8 Accrued trade allowances 37.4 51.1 Accrued salaries, vacations and incentive compensation 41.8 54.4 Income taxes payable 30.0 21.6 Other 105.5 105.7 Total other current liabilities $ 226.3 $ 254.6 Other Liabilities Pensions and other retirement benefits $ 73.1 $ 87.7 Deferred compensation 28.5 41.0 Mandatory transition tax 25.8 — Other non-current liabilities 53.6 49.3 Total other liabilities $ 181.0 $ 178.0 |
Description of Business and B32
Description of Business and Basis of Presentation - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Reclassification of stranded tax | $ 20 | |||||
Deferred charge | $ 59,200,000 | |||||
Accounting Standards Update 2017-07 | Other Items, Net | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Pension benefit | $ (1,700,000) | $ (5,100,000) | ||||
Accounting Standards Update 2017-07 | Selling, General and Administrative Expenses | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Pension benefit | $ 3,100,000 | $ 9,300,000 |
Spin Costs - Narrative (Details
Spin Costs - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | ||
Spin-off costs | $ 0 | |
Costs incurred and allocated for the spin-off | $ 197.6 |
Spin Costs - Schedule of Restru
Spin Costs - Schedule of Restructuring Reserve by Type of Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring Reserve, Beginning Balance | $ 6.4 | |||
Spin restructuring | $ 0 | $ 0 | $ 0 | (3.8) |
Cash | (1.9) | |||
Restructuring Reserve, Ending Balance | 0.7 | 0.7 | ||
Severance and termination related costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Reserve, Beginning Balance | 2.8 | |||
Spin restructuring | 0 | |||
Cash | (2.1) | |||
Restructuring Reserve, Ending Balance | 0.7 | 0.7 | ||
Contract termination costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Reserve, Beginning Balance | 3.6 | |||
Spin restructuring | (2.5) | |||
Cash | (1.1) | |||
Restructuring Reserve, Ending Balance | 0 | 0 | ||
Net gain on asset sales | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Reserve, Beginning Balance | 0 | |||
Spin restructuring | (1.3) | |||
Cash | (1.3) | |||
Restructuring Reserve, Ending Balance | $ 0 | $ 0 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - USD ($) $ in Millions | Jul. 02, 2018 | Jan. 15, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Jan. 31, 2018 |
Spectrum Brands Holdings | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire business | $ 2,000 | ||||
Termination fee | 100 | ||||
Success fees | $ 11 | $ 2 | |||
Acquisition costs | $ 25.8 | $ 50.9 | |||
Acquisition tax withholding costs | 0.5 | 6 | |||
Spectrum Brands Holdings | Foreign Exchange Forward | Not Designated as Hedging Instrument | |||||
Business Acquisition [Line Items] | |||||
Gain on acquisition foreign currency contracts | 9.9 | ||||
Reed-Union Corporation | Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Acquisition purchase price | $ 37.7 | ||||
Interest Expense | Spectrum Brands Holdings | |||||
Business Acquisition [Line Items] | |||||
Acquisition costs | $ 3.4 | $ 6.3 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | Dec. 22, 2017 | Dec. 21, 2017 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 |
Business Acquisition [Line Items] | |||||
Effective tax rate, percent | 45.30% | 25.20% | |||
Corporate tax rate | 21.00% | 35.00% | 24.50% | ||
Tax expense | $ 0 | ||||
Increase in tax expense | 30 | ||||
Spectrum Brands Holdings | |||||
Business Acquisition [Line Items] | |||||
Acquisition tax withholding costs | $ 500,000 | $ 6,000,000 |
Share-Based Payments - Narrativ
Share-Based Payments - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Nov. 30, 2017 | Nov. 30, 2016 | Nov. 30, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
ParentCo | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
Closing stock price (in dollars per share) | $ 44.20 | $ 43.84 | $ 37.34 | ||||
Selling, General and Administrative Expenses | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
Share-based compensation cost | $ 7 | $ 5.9 | $ 21 | $ 17.8 | |||
Key Employees | Restricted Stock Equivalents | ParentCo | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
RSE awards granted, shares | 100 | 92 | 106 | ||||
Vesting period, years | 4 years | 4 years | 4 years | ||||
Key Employees | Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
Maximum award payout (in shares) | 476 | 498 | 580 | ||||
Key Executives | Restricted Stock Equivalents | ParentCo | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
RSE awards granted, shares | 68 | 73 | 87 | ||||
Key Employees and Key Executives | Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
RSE awards granted, shares | 238 | 249 | 290 | ||||
Vesting period, years | 3 years | 3 years | 3 years |
Earnings per share - Schedule o
Earnings per share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net earnings | $ 23.8 | $ 24.9 | $ 92 | $ 167.4 |
Basic average shares outstanding (shares) | 59,700 | 61,800 | 59,900 | 61,800 |
Effect of dilutive restricted stock equivalents (shares) | 500 | 500 | 400 | 500 |
Effect of dilutive performance shares (shares) | 200 | 0 | 200 | 0 |
Diluted average shares outstanding (shares) | 61,400 | 62,800 | 61,400 | 62,800 |
Basic earnings per common share (dollars per share) | $ 0.40 | $ 0.40 | $ 1.54 | $ 2.71 |
Diluted earnings per common share (dollars per share) | $ 0.39 | $ 0.40 | $ 1.50 | $ 2.67 |
Amount reclassified from liability based plan to equity compensation plan | $ 11.9 | |||
Additional dilutive shares from plan modification (in shares) | 200 | |||
Performance Shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Effect of dilutive performance shares (shares) | 1,000 | 500 | 900 | 500 |
Segments - Narrative (Details)
Segments - Narrative (Details) - Segment | Feb. 28, 2018 | Jun. 30, 2018 |
Segment Reporting [Abstract] | ||
Number of reportable segments | 2 | 2 |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 392.8 | $ 372 | $ 1,340.5 | $ 1,290.6 |
Segment Profit | 176.1 | 158 | 622.9 | 597.5 |
Research and development expense | (5.2) | (5.1) | (15.9) | (16) |
Amortization of intangible assets | (2.8) | (2.8) | (8.4) | (8.4) |
Spin restructuring | 0 | 0 | 0 | 3.8 |
Gain on sale of real estate | 4.6 | 1.7 | 4.6 | 16.9 |
Other items, net | 1.4 | 1.8 | (0.8) | 7.6 |
Earnings before income taxes | 31.5 | 30.5 | 168.3 | 223.9 |
Reclassification of acquisition and integration costs | 3.3 | |||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment Profit | 93 | 79.3 | 355.1 | 347 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
General corporate and other expenses | (24.7) | (19.4) | (71) | (66.1) |
Global marketing expense | (4.6) | (5) | (13) | (12) |
Research and development expense | (5.2) | (5.1) | (15.9) | (16) |
Amortization of intangible assets | (2.8) | (2.8) | (8.4) | (8.4) |
Acquisition and integration costs | 22.4 | 6.7 | 44.6 | 9.2 |
Spin restructuring | 0 | 0 | 0 | 3.8 |
Gain on sale of real estate | 4.6 | 1.7 | 4.6 | 16.9 |
Acquisition debt commitment fee | (3.4) | 0 | (6.3) | 0 |
Gain on acquisition foreign currency contracts | 9.9 | 0 | 9.9 | 0 |
Interest and other financing items | (14.3) | (13.3) | (41.3) | (39.7) |
Americas | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 241.3 | 228.6 | 838.5 | 812.2 |
Segment Profit | 60.4 | 53.6 | 239.2 | 237.2 |
International | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 151.5 | 143.4 | 502 | 478.4 |
Segment Profit | 32.6 | 25.7 | 115.9 | 109.8 |
Cost of Products Sold | ||||
Segment Reporting Information [Line Items] | ||||
Acquisition and integration costs | $ 0.9 | 1.1 | ||
Other Items, Net | ||||
Segment Reporting Information [Line Items] | ||||
Acquisition and integration costs | $ 3.3 | |||
Accounting Standards Update 2017-07 | Selling, General and Administrative Expenses | ||||
Segment Reporting Information [Line Items] | ||||
Pension benefit | $ 3.1 | $ 9.3 |
Segments - Revenue from Externa
Segments - Revenue from External Customers by Products and Services (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue from External Customer [Line Items] | ||||
Net sales | $ 392.8 | $ 372 | $ 1,340.5 | $ 1,290.6 |
Batteries | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 350.1 | 325.8 | 1,204.9 | 1,138.8 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 42.7 | $ 46.2 | $ 135.6 | $ 151.8 |
Segments, Reconciliation of Ass
Segments, Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Goodwill and other intangible assets | $ 444.2 | $ 453.8 |
Total assets | 1,804.8 | 1,823.6 |
Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Tangible assets | 1,260.6 | 1,232.1 |
Corporate | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Tangible assets | 100 | 137.7 |
Americas | Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Tangible assets | 466.1 | 533.9 |
International | Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Tangible assets | $ 794.5 | $ 698.2 |
Goodwill and intangible asset43
Goodwill and intangible assets - Schedule of Goodwill (Details) $ in Millions | 9 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 230 |
Cumulative translation adjustment | (0.2) |
Ending balance | 229.8 |
Americas | |
Goodwill [Roll Forward] | |
Beginning balance | 213.8 |
Cumulative translation adjustment | (0.2) |
Ending balance | 213.6 |
International | |
Goodwill [Roll Forward] | |
Beginning balance | 16.2 |
Cumulative translation adjustment | 0 |
Ending balance | $ 16.2 |
Goodwill and intangible asset44
Goodwill and intangible assets - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Indefinite-lived intangible assets | $ 0 | $ 78.3 |
Goodwill and intangible asset45
Goodwill and intangible assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 159.5 | $ 159.5 |
Accumulated Amortization | 22.4 | 14 |
Net Carrying Amount | 137.1 | 145.5 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 40.1 | 40.1 |
Accumulated Amortization | 5.4 | 3.4 |
Net Carrying Amount | 34.7 | 36.7 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 84.4 | 84.4 |
Accumulated Amortization | 11.7 | 7.3 |
Net Carrying Amount | 72.7 | 77.1 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 34.5 | 34.5 |
Accumulated Amortization | 5.1 | 3.2 |
Net Carrying Amount | 29.4 | 31.3 |
Non-Compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 0.5 | 0.5 |
Accumulated Amortization | 0.2 | 0.1 |
Net Carrying Amount | $ 0.3 | $ 0.4 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Debt Instrument [Line Items] | ||
Long-term debt including current maturities | $ 989 | $ 992 |
Less current portion | (4) | (4) |
Less unamortized debt discount and debt issuance fees | (8.3) | (9.5) |
Total long-term debt | 976.7 | 978.5 |
Secured Debt | Senior Secured Term Loan B Facility, Due 2022 | ||
Debt Instrument [Line Items] | ||
Long-term debt including current maturities | 389 | 392 |
Senior Notes | 5.50% Senior Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt including current maturities | $ 600 | $ 600 |
Stated interest rate of debt | 5.50% |
Debt - Narrative (Details)
Debt - Narrative (Details) € in Millions | Jun. 21, 2018USD ($)debt_instrument | Mar. 13, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 21, 2018EUR (€) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||||
Maturities of long term debt in five years | $ 0 | |||||
Number of senior note offerings | debt_instrument | 2 | |||||
Short term borrowing interest rate | 4.15% | 2.98% | ||||
Notes payable | $ 174,600,000 | $ 104,100,000 | ||||
Senior Secured Term Loan B Facility, Due 2022 | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | $ 400,000,000 | |||||
Term of debt | 7 years | |||||
Discount amount | $ 1,000,000 | |||||
Principal payments as a percentage of the original principal balance | 0.25% | |||||
Debt Instrument, Periodic Payment, Principal | $ 1,000,000 | |||||
Senior Secured Term Loan B Facility, Due 2022 | Secured Debt | Interest Rate Contracts | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate debt hedged | $ 200,000,000 | |||||
Fixed interest rate | 2.034% | |||||
5.50% Senior Notes due 2025 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | $ 600 | |||||
Stated interest rate of debt | 5.50% | |||||
6.375% Senior Notes due 2026 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | $ 500,000,000 | |||||
Stated interest rate of debt | 6.375% | 6.375% | ||||
4.625% Senior Notes due 2026 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | € | € 650 | |||||
Stated interest rate of debt | 4.625% | 4.625% | ||||
Term Loan A Facility and Term Loan B Facility | Spectrum Brands Holdings | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | $ 1,200,000,000 | |||||
Term Loan A Facility | Spectrum Brands Holdings | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | $ 200,000,000 | |||||
Term of debt | 3 years | |||||
Term Loan B Facility | Spectrum Brands Holdings | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | $ 1,000,000,000 | |||||
Term of debt | 7 years | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Term of debt | 5 years | |||||
Maximum amount for line of credit | $ 350,000,000 | |||||
Outstanding letters of credit | 165,000,000 | 95,000,000 | ||||
Amount available remaining | $ 178,300,000 | |||||
Revolving Credit Facility | Spectrum Brands Holdings | ||||||
Debt Instrument [Line Items] | ||||||
Term of debt | 5 years | |||||
Maximum amount for line of credit | $ 400,000,000 | |||||
Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding letters of credit | 6,700,000 | |||||
Non-US | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding letters of credit | $ 9,600,000 | $ 9,100,000 | ||||
LIBOR | Senior Secured Term Loan B Facility, Due 2022 | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Basis points | 2.00% | 2.50% | ||||
Basis points floor | 0.75% |
Debt, Long-term Debt Maturities
Debt, Long-term Debt Maturities (Details) $ in Millions | Jun. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
Maturities of long term debt in one year | $ 4 |
Maturities of long term debt in two years | 4 |
Maturities of long term debt in three years | 4 |
Maturities of long term debt in four years | 4 |
Maturities of long term debt in five years | 0 |
Maturities of long term debt thereafter | $ 600 |
Pension Plans - Schedule of Net
Pension Plans - Schedule of Net Benefit Costs (Details) - Pension Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
U.S. | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service Cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest Cost | 4.7 | 4.6 | 14.1 | 13.7 |
Expected return on plan assets | (7.5) | (8.6) | (22.6) | (25.8) |
Amortization of unrecognized net losses | 1.1 | 1.2 | 3.3 | 3.6 |
Settlement charge | 0.1 | 0 | ||
Net periodic (benefit)/cost | (1.7) | (2.8) | (5.1) | (8.5) |
International | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service Cost | 0.1 | 0.4 | 0.4 | 1.2 |
Interest Cost | 1.1 | 0.8 | 3.2 | 2.5 |
Expected return on plan assets | (1.6) | (2) | (4.8) | (6) |
Amortization of unrecognized net losses | 0.5 | 0.9 | 1.6 | 2.7 |
Settlement charge | 0 | 0 | ||
Net periodic (benefit)/cost | $ 0.1 | $ 0.1 | $ 0.4 | $ 0.4 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 27, 2018 | May 21, 2018 | Apr. 30, 2018 | Jan. 29, 2018 | Nov. 13, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jul. 31, 2015 |
Class of Stock [Line Items] | ||||||||||
Number of shares repurchased (shares) | 1,126,379 | |||||||||
Shares repurchased | $ 50 | |||||||||
Average purchase price (in dollars per share) | $ 44.41 | |||||||||
Dividend declared (in dollars per share) | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.29 | $ 0.275 | $ 0.87 | $ 0.825 | |||
Dividends paid | $ 0 | $ 17.3 | $ 17.3 | $ 52.3 | $ 52.1 | |||||
Incremental dividend payment | $ (0.4) | |||||||||
Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares authorized to be acquired (shares) | 7,500,000 | |||||||||
Subsequent Event | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend declared (in dollars per share) | $ 0.29 |
Financial Instruments and Ris51
Financial Instruments and Risk Management - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2018USD ($)derivative_instrument | Jun. 30, 2018USD ($)derivative_instrument | Sep. 30, 2017USD ($) | Apr. 01, 2019USD ($) | Feb. 28, 2018USD ($) | Mar. 31, 2017USD ($) | |
Derivative [Line Items] | ||||||
Unrecognized pre-tax loss | $ 6,200,000 | $ (1,300,000) | ||||
Unrealized pre-tax gain | 4,100,000 | 5,800,000 | ||||
Portion or pre-tax gain included in AOCI expected to be included in earnings | $ 4,000,000 | 4,000,000 | ||||
Amount reclassified from liability based plan to equity compensation plan | 11,900,000 | |||||
Interest Rate Contracts | ||||||
Derivative [Line Items] | ||||||
Forward interest rate | 2.47% | |||||
Notional value | $ 400,000,000 | |||||
Line of Credit | Senior Secured Term Loan B Facility, net of discount, due 2022 | ||||||
Derivative [Line Items] | ||||||
Face amount of debt | 400,000,000 | 400,000,000 | ||||
Estimate of Fair Value | ||||||
Derivative [Line Items] | ||||||
Fair market value of fixed rate long-term debt | 0 | 0 | $ 0 | |||
Reported Value Measurement | ||||||
Derivative [Line Items] | ||||||
Fair market value of fixed rate long-term debt | 600,000,000 | 600,000,000 | ||||
Senior Secured Term Loan B Facility, Due 2022 | Senior Secured Term Loan B Facility, net of discount, due 2022 | ||||||
Derivative [Line Items] | ||||||
Face amount of debt | $ 400,000,000 | $ 400,000,000 | ||||
Senior Secured Term Loan B Facility, Due 2022 | Senior Secured Term Loan B Facility, net of discount, due 2022 | Interest Rate Contracts | ||||||
Derivative [Line Items] | ||||||
Variable rate debt hedged | $ 200,000,000 | |||||
Fixed interest rate | 2.034% | |||||
Designated as Hedging Instrument | Cash Flow Hedging | Foreign Exchange Forward | ||||||
Derivative [Line Items] | ||||||
Number of open contracts | derivative_instrument | 64,000,000 | 64,000,000 | ||||
Notional value | $ 143,000,000 | $ 143,000,000 | ||||
Not Designated as Hedging Instrument | Foreign Exchange Forward | ||||||
Derivative [Line Items] | ||||||
Number of open contracts | derivative_instrument | 11,000,000 | 11,000,000 | ||||
Notional value | $ 857,700,000 | $ 857,700,000 | ||||
Not Designated as Hedging Instrument | Foreign Exchange Forward | Spectrum Brands Holdings | ||||||
Derivative [Line Items] | ||||||
Number of open contracts | derivative_instrument | 2 | 2 | ||||
Notional value | $ 774 | $ 774 | ||||
Gain Recognized in Income | $ 9,900,000 | |||||
Scenario, Forecast | Interest Rate Contracts | ||||||
Derivative [Line Items] | ||||||
Notional value | $ 50,000,000 |
Financial Instruments and Ris52
Financial Instruments and Risk Management - Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) (Details) - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivatives - Foreign Currency Contracts | $ 10.3 | $ 10.3 | $ (7.1) | ||
(Loss)/Gain Recognized in OCI | 7.8 | $ (6) | 11.5 | $ 3 | |
Loss Reclassified From OCI into Income(Effective Portion) | (1) | (0.1) | (6.1) | (0.3) | |
Foreign currency contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivatives - Foreign Currency Contracts | 4.1 | 4.1 | (5.8) | ||
(Loss)/Gain Recognized in OCI | 5.6 | (4.8) | 4.8 | (1.6) | |
Loss Reclassified From OCI into Income(Effective Portion) | (0.8) | 0.4 | (5.1) | 1.6 | |
Interest rate contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivatives - Foreign Currency Contracts | 6.2 | 6.2 | $ (1.3) | ||
(Loss)/Gain Recognized in OCI | 2.2 | (1.2) | 6.7 | 4.6 | |
Loss Reclassified From OCI into Income(Effective Portion) | $ (0.2) | $ (0.5) | $ (1) | $ (1.9) |
Financial Instruments and Ris53
Financial Instruments and Risk Management - Derivative Instruments, Gain (Loss) (Details) - Not Designated as Hedging Instrument - Foreign currency contracts - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Estimated Fair Value Asset (1) | $ 9.5 | $ 9.5 | $ 0.9 | ||
Gain Recognized in Income | $ 8.7 | $ (0.2) | $ 10 | $ (1.5) |
Financial Instruments and Ris54
Financial Instruments and Risk Management - Offsetting Assets and Liabilities (Details) - Foreign currency contracts - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Derivatives, Fair Value [Line Items] | ||
Gross amounts of recognized assets | $ 14.9 | $ 1.1 |
Gross amounts offset in the Balance Sheet | (0.4) | 0 |
Net amounts of assets presented in the Balance Sheet | 14.5 | 1.1 |
Gross amounts of recognized liabilities | (0.9) | (6.4) |
Gross amounts offset in the Balance Sheet | 0 | (0.4) |
Net amounts of liabilities presented in the Balance Sheet | $ (0.9) | $ (6) |
Financial Instruments and Ris55
Financial Instruments and Risk Management - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation | $ (28.5) | $ (41) |
Derivatives - Foreign Currency Contracts | 13.6 | (4.9) |
Exit lease liability | 0 | (0.3) |
Net Liabilities at estimated fair value | (8.7) | (47.5) |
Interest rate contracts | Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives - Foreign Currency Contracts | 6.2 | (1.3) |
Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term Debt, Percentage Bearing Fixed Interest, Fair Value Amount | $ 0 | $ 0 |
Schedule of Accumulated Other C
Schedule of Accumulated Other Comprehensive Income (Loss) (Details) $ in Millions | 9 Months Ended |
Jun. 30, 2018USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Balance at September 30, 2017 | $ (238.8) |
OCI before reclassifications | (5.5) |
Reclassifications to earnings | 8.4 |
Balance at June 30, 2018 | (255.9) |
Foreign Currency Translation Adjustments | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Balance at September 30, 2017 | (93.1) |
OCI before reclassifications | (14.9) |
Reclassifications to earnings | 0 |
Balance at June 30, 2018 | (108) |
Pension Activity | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Balance at September 30, 2017 | (139.4) |
OCI before reclassifications | 1.1 |
Reclassifications to earnings | 3.7 |
Balance at June 30, 2018 | (154.5) |
Hedging Activity | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Balance at September 30, 2017 | (4.5) |
OCI before reclassifications | 3.6 |
Reclassifications to earnings | 4 |
Balance at June 30, 2018 | 3.1 |
Interest Rate Contracts | Hedging Activity | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Balance at September 30, 2017 | (1.8) |
OCI before reclassifications | 4.7 |
Reclassifications to earnings | 0.7 |
Balance at June 30, 2018 | 3.5 |
Retained Earnings | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Reclassifications to earnings | (20) |
Retained Earnings | Foreign Currency Translation Adjustments | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Reclassifications to earnings | 0 |
Retained Earnings | Pension Activity | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Reclassifications to earnings | (19.9) |
Retained Earnings | Hedging Activity | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Reclassifications to earnings | 0 |
Retained Earnings | Interest Rate Contracts | Hedging Activity | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Reclassifications to earnings | $ (0.1) |
Reclassification out of Accumul
Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other items, net | $ 11.3 | $ (1.5) | $ 9.1 | $ 4.3 |
Interest expense | (17.7) | (13.3) | (47.6) | (39.7) |
Earnings before income taxes | 31.5 | 30.5 | 168.3 | 223.9 |
Income tax provision | (7.7) | (5.6) | (76.3) | (56.5) |
Net earnings | 23.8 | 24.9 | 92 | 167.4 |
Amount Reclassified from AOCI | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net earnings | (1.9) | (1.4) | (8.4) | (4.1) |
Gains and losses on cash flow hedges | Amount Reclassified from AOCI | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other items, net | (0.8) | 0.4 | (5.1) | 1.6 |
Interest expense | (0.2) | (0.5) | (1) | (1.9) |
Earnings before income taxes | (1) | (0.1) | (6.1) | (0.3) |
Income tax provision | 0.2 | 0.2 | 1.4 | 0.5 |
Net earnings | (0.8) | 0.1 | (4.7) | 0.2 |
Amortization of defined benefit pension items | Amount Reclassified from AOCI | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Actuarial loss | (1.6) | (2.1) | (4.9) | (6.2) |
Settlement loss | 0 | 0 | (0.1) | 0 |
Earnings before income taxes | (1.6) | (2.1) | (5) | (6.2) |
Income tax provision | 0.5 | 0.6 | 1.3 | 1.9 |
Net earnings | $ (1.1) | $ (1.5) | $ (3.7) | $ (4.3) |
Supplemental Financial Statem58
Supplemental Financial Statement Information, Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Inventories | ||
Raw materials and supplies | $ 44.5 | $ 36.6 |
Work in process | 96.1 | 84.8 |
Finished products | 167.2 | 195.7 |
Total inventories | 307.8 | 317.1 |
Other Current Assets | ||
Miscellaneous receivables | 8.3 | 13.7 |
Prepaid expenses | 53.8 | 52.7 |
Value added tax collectible from customers | 19.3 | 23.4 |
Other | 25.2 | 5.1 |
Total other current assets | 106.6 | 94.9 |
Property, Plant and Equipment | ||
Land | 4.6 | 4.6 |
Buildings | 110.9 | 122.4 |
Machinery and equipment | 691.8 | 697.9 |
Construction in progress | 16 | 19.4 |
Total gross property | 823.3 | 844.3 |
Accumulated depreciation | (656.4) | (667.8) |
Total property, plant and equipment, net | 166.9 | 176.5 |
Other Current Liabilities | ||
Accrued advertising, sales promotion and allowances | 11.6 | 21.8 |
Accrued trade allowances | 37.4 | 51.1 |
Accrued salaries, vacations and incentive compensation | 41.8 | 54.4 |
Income taxes payable | 30 | 21.6 |
Other | 105.5 | 105.7 |
Total other current liabilities | 226.3 | 254.6 |
Other Liabilities | ||
Pensions and other retirement benefits | 73.1 | 87.7 |
Deferred compensation | 28.5 | 41 |
Mandatory transition tax | 25.8 | 0 |
Other non-current liabilities | 53.6 | 49.3 |
Total other liabilities | $ 181 | $ 178 |
Legal proceedings_contingenci59
Legal proceedings/contingencies (Details) $ in Millions | Jun. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase obligations | $ 0 |