Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | WRK | |
Entity Registrant Name | WestRock CO | |
Entity Central Index Key | 1,636,023 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 254,000,527 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net sales | $ 3,695.6 | $ 3,596.5 | $ 10,799.1 | $ 10,560.1 |
Cost of goods sold | 3,000.1 | 2,869.2 | 8,836.9 | 8,520.8 |
Gross profit | 695.5 | 727.3 | 1,962.2 | 2,039.3 |
Selling, general and administrative, excluding intangible amortization | 348.1 | 341.5 | 1,033.5 | 1,019.4 |
Selling, general and administrative intangible amortization | 54.6 | 53.3 | 156.8 | 159.4 |
Pension lump sum settlement | 0 | 0 | 28.7 | 0 |
Land and Development impairment | 0 | 0 | 42.7 | 0 |
Restructuring and other costs, net | 59.4 | 43.1 | 158.7 | 317 |
Operating profit | 233.4 | 289.4 | 541.8 | 543.5 |
Interest expense | (70.4) | (64) | (201.3) | (193.2) |
Gain on extinguishment of debt | 2 | 0 | 1.9 | 0 |
Interest income and other income (expense), net | 15 | 20.9 | 41.3 | 43.2 |
Equity in income of unconsolidated entities | 16.7 | 5.8 | 36.9 | 6.8 |
Gain on sale of HH&B | 190.6 | 0 | 190.6 | 0 |
Income from continuing operations before income taxes | 387.3 | 252.1 | 611.2 | 400.3 |
Income tax expense | (60.7) | (99.7) | (107.9) | (159.1) |
Income from continuing operations | 326.6 | 152.4 | 503.3 | 241.2 |
Loss from discontinued operations, net of income tax benefit of $0, $46.2, $0 and $39.0 | 0 | (58.7) | 0 | (539.4) |
Consolidated net income (loss) | 326.6 | 93.7 | 503.3 | (298.2) |
Less: Net loss (income) attributable to noncontrolling interests | 1.5 | (1.4) | 8.8 | (6.1) |
Net income (loss) attributable to common stockholders | $ 328.1 | $ 92.3 | $ 512.1 | $ (304.3) |
Basic earnings per share from continuing operations | $ 1.30 | $ 0.60 | $ 2.04 | $ 0.94 |
Basic loss per share from discontinued operations | 0 | (0.23) | 0 | (2.13) |
Basic earnings (loss) per share attributable to common stockholders | 1.30 | 0.37 | 2.04 | (1.19) |
Diluted earnings per share from continuing operations | 1.29 | 0.59 | 2.01 | 0.93 |
Diluted loss per share from discontinued operations | 0 | (0.23) | 0 | (2.11) |
Diluted earnings (loss) per share attributable to common stockholders | 1.29 | 0.36 | 2.01 | (1.18) |
Cash dividends paid per share | $ 0.40 | $ 0.375 | $ 1.20 | $ 1.125 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Income (Parentheticals) (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income tax benefit, discontinued operations | $ 0 | $ 46.2 | $ 0 | $ 39 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Consolidated net income (loss) | $ 326.6 | $ 93.7 | $ 503.3 | $ (298.2) |
Foreign currency: | ||||
Foreign currency translation gain | 26.1 | 35.6 | 4.7 | 133.3 |
Reclassification adjustment of net loss on foreign currency translation included in earnings | 0 | 20.2 | 0 | 20.2 |
Sale of HH&B | 26.8 | 0 | 26.8 | 0 |
Derivatives: | ||||
Deferred (loss) gain on cash flow hedges | (0.3) | 0.1 | (0.4) | (0.5) |
Reclassification adjustment of net (gain) loss on cash flow hedges included in earnings | (0.1) | 0.4 | (0.1) | 1 |
Defined benefit pension plans: | ||||
Net actuarial gain arising during the period | 0.2 | 0 | 20.7 | 1.4 |
Amortization and settlement recognition of net actuarial loss, included in pension cost | 3.4 | 1.5 | 30.2 | 4.9 |
Prior service cost arising during the period | 0 | 0 | (0.9) | 0 |
Amortization and curtailment recognition of prior service (credit) cost, included in pension cost | (0.1) | 0.2 | (0.4) | 0.8 |
Sale of HH&B | 2.9 | 0 | 2.9 | 0 |
Other comprehensive income | 58.9 | 58 | 83.5 | 161.1 |
Comprehensive income (loss) | 385.5 | 151.7 | 586.8 | (137.1) |
Less: Comprehensive loss (income) attributable to noncontrolling interests | 0.8 | (1.5) | 8.3 | (6.3) |
Comprehensive income (loss) attributable to common stockholders | $ 386.3 | $ 150.2 | $ 595.1 | $ (143.4) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 | |
Current assets: | |||
Cash and cash equivalents | $ 225.2 | $ 340.9 | |
Restricted cash | 5.9 | 25.5 | |
Accounts receivable (net of allowances of $49.3 and $36.5) | 1,902.4 | 1,592.2 | |
Inventories | 1,767.1 | 1,638.2 | |
Other current assets | 257 | 263.5 | |
Assets held for sale | 200.7 | 52.3 | |
Total current assets | 4,358.3 | 3,912.6 | |
Property, plant and equipment, net | 9,077.3 | 9,294.3 | |
Goodwill | 5,466.2 | 4,778.1 | |
Intangibles, net | 3,325.3 | 2,599.3 | |
Restricted assets held by special purpose entities | 1,288.9 | 1,293.8 | |
Prepaid pension asset | 354.1 | 257.8 | |
Other assets | 999.9 | 902.3 | |
Assets | 24,870 | 23,038.2 | |
Current liabilities: | |||
Current portion of debt | 710.5 | 292.9 | |
Accounts payable | 1,452.7 | 1,054.4 | |
Accrued compensation and benefits | 388 | 405.9 | |
Other current liabilities | 507.7 | 429.8 | |
Total current liabilities | 3,058.9 | 2,183 | |
Long-term debt due after one year | 5,812.3 | 5,496.3 | |
Pension liabilities, net of current portion | 292.2 | 328.1 | |
Postretirement benefit liabilities, net of current portion | 142.9 | 140 | |
Non-recourse liabilities held by special purpose entities | 1,163.9 | 1,170.2 | |
Deferred income taxes | 3,378.4 | 3,130.7 | |
Other long-term liabilities | 812 | 746.2 | |
Commitments and contingencies (Note 16) | |||
Redeemable noncontrolling interests | 12.8 | 13.7 | |
Equity: | |||
Preferred stock, $0.01 par value; 30.0 million shares authorized; no shares outstanding | 0 | 0 | |
Common Stock, $0.01 par value; 600.0 million shares authorized; 253.9 million and 251.0 million shares outstanding at June 30, 2017 and September 30, 2016, respectively | 2.5 | 2.5 | |
Capital in excess of par value | 10,610.6 | 10,458.6 | |
Retained earnings (accumulated deficit) | 79.3 | (105.9) | |
Accumulated other comprehensive loss | [1] | (543.4) | (626.4) |
Total stockholders’ equity | 10,149 | 9,728.8 | |
Noncontrolling interests | 47.6 | 101.2 | |
Total equity | 10,196.6 | 9,830 | |
Liabilities and Equity | $ 24,870 | $ 23,038.2 | |
[1] | All amounts are net of tax and noncontrolling interests. |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Allowance for Doubtful Accounts Receivable, Current | $ 49.3 | $ 36.5 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 30,000,000 | 30,000,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 600,000,000 | 600,000,000 |
Common Stock, Shares, Outstanding | 253,900,000 | 251,000,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities: | ||
Consolidated net income (loss) | $ 503.3 | $ (298.2) |
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 814.3 | 867.7 |
Cost of real estate sold | 188.4 | 50.1 |
Deferred income tax (benefit) expense | (45.7) | 35.4 |
Share-based compensation expense | 50 | 51.8 |
Gain on extinguishment of debt | (1.9) | 0 |
(Gain) loss on disposal of plant, equipment and other, net | (5.3) | 1.9 |
Equity in income of unconsolidated entities | (36.9) | (6.8) |
Pension and other postretirement funding (more) than expense (income) | (34.1) | (69) |
Loss on contribution of subsidiary | 1.7 | 0 |
Gain on Grupo Gondi investment | 0 | (12.1) |
Gain on sale of HH&B | (190.6) | 0 |
Cash surrender value increase in excess of premiums paid | (27.6) | (23.7) |
Impairment adjustments | 50.5 | 191.3 |
Distributed earnings from equity investments | 14.6 | 7.4 |
Other non-cash items | (32.5) | (34.1) |
Land and Development impairment | 42.7 | 0 |
Impairment of Specialty Chemicals goodwill and intangibles | 0 | 579.4 |
Change in operating assets and liabilities, net of acquisitions and divestitures: | ||
Accounts receivable | (138.3) | 51 |
Inventories | (31.4) | 25.8 |
Other assets | (67.7) | (86.7) |
Accounts payable | 290.3 | (104.1) |
Income taxes | 37.9 | (13) |
Accrued liabilities and other | 24.5 | 92.7 |
Net cash provided by operating activities | 1,406.2 | 1,306.8 |
Investing activities: | ||
Capital expenditures | (536.8) | (614.7) |
Cash paid for purchase of businesses, net of cash acquired | (1,443.8) | (376.4) |
Debt purchased in connection with an acquisition | 0 | (36.5) |
Corporate-owned life insurance premium paid | (1.4) | 0 |
Investment in unconsolidated entities | (2.2) | (178.5) |
Return of capital from unconsolidated entities | 12.6 | 5.4 |
Proceeds from sale of subsidiary and affiliates | 9.3 | 10.2 |
Proceeds from the sale of HH&B | 993.5 | 0 |
Proceeds from sale of property, plant and equipment | 40.8 | 10.9 |
Net cash used for investing activities | (928) | (1,179.6) |
Financing activities: | ||
Additions to revolving credit facilities | 518 | 180.6 |
Additions to debt | 417 | 1,458.3 |
Repayments of debt | (1,121.7) | (1,012.2) |
Other financing additions | 11.2 | 2.5 |
Debt issuance costs | (2.1) | (3.6) |
Specialty Chemicals spin-off of cash and trust funding | 0 | (118.9) |
Issuances of common stock, net of related minimum tax withholdings | 22.3 | (3.8) |
Purchases of common stock | (93) | (285.1) |
Excess tax benefits from share-based compensation | 3 | 0.1 |
Advances from (repayments to) unconsolidated entity | 1.2 | (1) |
Cash dividends paid to shareholders | (301.6) | (286.3) |
Cash distributions paid to noncontrolling interests | (45.9) | (21.8) |
Net cash used for financing activities | (591.6) | (91.2) |
Effect of exchange rate changes on cash and cash equivalents | (2.3) | (5.6) |
(Decrease) increase in cash and cash equivalents | (115.7) | 30.4 |
Cash and cash equivalents from continuing operations, at beginning of period | 340.9 | 207.8 |
Cash and cash equivalents from discontinued operations, at beginning of period | 0 | 20.5 |
Balance of cash and cash equivalents at beginning of period | 340.9 | 228.3 |
Cash and cash equivalents from continuing operations, at end of period | 225.2 | 258.7 |
Cash and cash equivalents from discontinued operations, at end of period | 0 | 0 |
Cash and cash equivalents at end of period | 225.2 | 258.7 |
Supplemental disclosure of cash flow information: | ||
Income taxes, net of refunds | 112.1 | 118.5 |
Interest, net of amounts capitalized | $ 138.9 | $ 136.5 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Parentheticals) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | ||
Fair value of assets acquired, including goodwill | $ 3,197.4 | $ 583.4 | |
Cash consideration for the purchase of businesses, net of cash acquired | [1] | (1,447.3) | (376.4) |
Debt purchased in connection with an acquisition | 0 | (36.5) | |
Unreceived working capital or escrow | 4 | 0 | |
Stock issued for the purchase of a business | (136.1) | 0 | |
Fair value of share-based awards issued in the purchase of a business | (1.9) | 0 | |
Liabilities and noncontrolling interests assumed | 1,616.1 | 170.5 | |
Debt assumed | 929.1 | 15 | |
Noncash, Accounts receivable | 34.7 | ||
Noncash, Inventories | 25.8 | ||
Noncash, Other assets | 86.3 | ||
Noncash, Accounts payable | (15.4) | ||
Noncash, Income taxes | (1) | ||
Noncash, Accrued liabilities and other | (18.8) | ||
Noncash, Investment in unconsolidated entities | $ (123.7) | ||
Packaging Acquisition [Member] | |||
Collection of Escrow Receivable in Business Combination | $ 3.5 | ||
[1] | The nine months ended June 30, 2017 amount is different from the condensed consolidated statements of cash flows line item “cash paid for the purchase of businesses, net of cash acquired” as the statement of cash flow amount is net of the receipt of a $3.5 million escrow payment related to the Packaging Acquisition. |
General Discussion on Notes to
General Discussion on Notes to Consolidated Financial Statements | 9 Months Ended |
Jun. 30, 2017 | |
Nature of Operations | Unless the context otherwise requires, “ we ”, “ us ”, “ our ”, “ WestRock ” and “ the Company ” refer to the business of WestRock Company, its wholly-owned subsidiaries and its partially-owned consolidated subsidiaries. We are a multinational provider of paper and packaging solutions for consumer and corrugated packaging markets. We partner with our customers to provide differentiated paper and packaging solutions that help them win in the marketplace. Our team members support customers around the world from operating and business locations spanning North America, South America, Europe and Asia. |
Interim Financial Statements
Interim Financial Statements | 9 Months Ended |
Jun. 30, 2017 | |
Interim Financial Statements | Interim Financial Statements Our independent registered public accounting firm has not audited our accompanying interim financial statements. We derived the Condensed Consolidated Balance Sheet at September 30, 2016 from the audited Consolidated Financial Statements included in our Fiscal 2016 Form 10-K. In the opinion of our management, the Condensed Consolidated Financial Statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of our statements of operations for the three and nine months ended June 30, 2017 and June 30, 2016 , our comprehensive income (loss) for the three and nine months ended June 30, 2017 and June 30, 2016 , our financial position at June 30, 2017 and September 30, 2016 , and our cash flows for the nine months ended June 30, 2017 and June 30, 2016 . On May 15, 2016, WestRock completed the Separation. Ingevity is now an independent public company trading under the symbol “NGVT” on the New York Stock Exchange. With the completion of the Separation, we disposed of the former Specialty Chemicals segment in its entirety and ceased to consolidate its assets, liabilities and results of operations in our consolidated financial statements. Accordingly, we have presented the results of operations of the former Specialty Chemicals segment prior to the Separation as discontinued operations in the accompanying condensed consolidated financial statements. See “ Note 6. Discontinued Operations ” for more information. On January 23, 2017, we announced we had entered into an agreement with certain subsidiaries of Silgan under which Silgan would purchase HH&B. Accordingly, in the second quarter of fiscal 2017, all the assets and liabilities of HH&B were reported in the Condensed Consolidated Balance Sheet as assets and liabilities held for sale. On April 6, 2017, we sold HH&B. See “ Note 7. Assets Held For Sale ” for more information. The presentation of other current assets and assets held for sale at September 30, 2016 has been changed to conform to the current year presentation. We have condensed or omitted certain notes and other information from the interim financial statements presented in this report. Therefore, these interim statements should be read in conjunction with our Fiscal 2016 Form 10-K. The results for the three and nine months ended June 30, 2017 are not necessarily indicative of results that may be expected for the full year. |
New Accounting Standards
New Accounting Standards | 9 Months Ended |
Jun. 30, 2017 | |
New Accounting Standards | New Accounting Standards New Accounting Standards - Recently Issued In May 2017, the FASB issued ASU 2017-09, “ Compensation - Stock Compensation: Scope of Modification Accounting ”. The amendments in the ASU include guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under ASC 718, “ Compensation - Stock Compensation ” and require entities to account for the effects of a modification unless all of the following conditions are met: (a) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or value using an alternative measurement method) of the original award immediately before the original award is modified; (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. These provisions are effective for fiscal years beginning after December 15, 2017 (October 1, 2018 for us), including interim periods within those fiscal years, and should be applied prospectively. Early adoption is permitted. We are currently evaluating the impact of this ASU. I n March 2017, the FASB issued ASU 2017-07, “ Compensation: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ”. The guidance in this update requires that an employer disaggregate the service cost component from the other components of net benefit cost. Non-service cost components of net periodic pension cost are required to be presented in the income statement separately from the service cost component and outside the subtotal of operating income. The amendments in the update also allow only the service cost component to be eligible for capitalization for internally developed capital projects. The amendments in this update are effective for annual periods beginning after December 15, 2017 (October 1, 2018 for us), including interim periods within those annual periods. Early adoption is permitted. The guidance on the presentation of the components of net periodic benefit cost in the income statement will be applied retrospectively. The guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component will be applied prospectively. The guidance includes a practical expedient that permits us to estimate amounts for comparative periods using the information previously disclosed in our pension and other postretirement plan footnote. We are currently evaluating the impact of this ASU. In February 2017, the FASB issued ASU 2017-05, “ Other Income: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets ”. The ASU provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. Specifically, the ASU clarifies the scope of an “in substance nonfinancial asset”, clarifies the treatment of partial sales of nonfinancial assets and clarifies guidance on accounting for contributions of nonfinancial assets to joint ventures and equity method investees. The amendments in this update are effective for annual periods beginning after December 15, 2017 (October 1, 2018 for us) including interim reporting periods within those annual reporting periods. Early adoption is permitted. The ASU may be applied by either a full or modified retrospective approach. We are currently evaluating the impact of this ASU. In January 2017, the FASB issued ASU 2017-04, “ Simplifying the Test for Goodwill Impairment ”, which amends the guidance in ASC 350, “ Intangibles-Goodwill and Other” . The ASU eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The ASU is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019 (October 1, 2020 for us). Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The ASU will be applied prospectively. We currently do not expect that the adoption of these provisions will have a material effect on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “ Clarifying the Definition of a Business ”, which amends the guidance in ASC 805, “ Business Combinations ”. The ASU changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. Under the new guidance, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. If it is not met, the entity then evaluates whether the set meets the requirements that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The ASU defines an output as “the result of inputs and processes applied to those inputs that provide goods or services to customers, investment income (such as dividends or interest), or other revenues.” The ASU is effective for annual reporting periods beginning after December 15, 2017 (October 1, 2018 for us), including interim periods within those annual periods, and early adoption is permitted. The ASU will be applied prospectively to any transactions occurring within the period of adoption. We are currently evaluating the impact of these provisions. In November 2016, the FASB issued ASU 2016-18, “ Restricted Cash ”, which amends the guidance in ASC 230, “ Statement of Cash Flows ”. The new ASU clarifies how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. The new guidance will require entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash, and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be prepared either on the face of the statement of cash flows or in the notes to the financial statements. These provisions are effective for annual periods, and for interim periods within those annual periods, beginning after December 15, 2017 (October 1, 2018 for us), applied retrospectively for each period presented. Early adoption is permitted. We are currently evaluating the impact of these provisions. In October 2016, the FASB issued ASU 2016-17, “ Interests Held through Related Parties That Are under Common Control ”, which amends certain provisions of ASC 810, “ Consolidation”. The ASU amends the consolidation requirements that apply to a single decision maker’s evaluation of interests held through related parties that are under common control when it is determining whether it is the primary beneficiary of a variable interest entity. Under the ASU, a reporting entity considers its indirect economic interests in a variable interest entity held through related parties that are under common control on a proportionate basis, in a manner consistent with its consideration of its indirect economic interests held through related parties that are not under common control. These provisions are effective for annual periods, and for interim periods within those annual periods, beginning on or after December 15, 2016 (October 1, 2017 for us). We currently do not expect that the adoption of these provisions will have a material effect on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “ Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory”, which requires companies to recognize the income tax effects of intercompany sales and transfers of assets other than inventory (e.g., intangible assets) in the period in which the transfer occurs. Current guidance requires companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized through use. The new guidance will require companies to defer the income tax effects only of intercompany transfers of inventory. The ASU is effective for annual reporting periods beginning after December 15, 2017 (October 1, 2018 for us), including interim periods within those annual periods. The guidance requires companies to apply a modified retrospective approach with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. Early adoption is permitted. We currently do not expect that the adoption of these provisions will have a material effect on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15 “ Classification of Certain Cash Receipts and Cash Payments ”, which amends the guidance in ASC 230, “ Statement of Cash Flows ”. The ASU clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows for the following transactions: debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, distributions received from equity method investees and beneficial interest in securitization transactions. The ASU also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance requires retrospective adoption and is effective for fiscal years beginning after December 15, 2017 (October 1, 2018 for us), including interim periods within those fiscal years. Early adoption is permitted and an entity that elects early adoption must adopt all of the amendments in the period of adoption. We are currently evaluating the impact of these provisions. In June 2016, the FASB issued ASU 2016-13 “ Financial Instruments - Credit losses: Measurement of Credit Losses on Financial Instruments ”, which amends certain provisions of ASC 326, “ Financial Instruments-Credit Loss” . The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held to maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. For available for sale debt securities with unrealized losses, entities will be required to measure credit losses in a manner similar to what they do today, except that losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Additionally, entities will have to disclose significantly more information, including information used to track credit quality by year or origination for most financing receivables. The ASU is effective for annual reporting periods beginning after December 15, 2019 (October 1, 2020 for us), including interim periods within those annual periods, and will be applied as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period for which the guidance is effective. We currently do not expect that the adoption of these provisions will have a material effect on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 “ Compensation - Stock Compensation: Improvements To Employee Share Based Payment Accounting ”, which amends certain provisions of ASC 718. The ASU will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. The provisions are effective for fiscal years beginning after December 15, 2016 (October 1, 2017 for us), including interim periods within those fiscal years. Based on our current stock compensation awards, the adoption is currently not expected to have a material effect on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-07 “ Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting ”, which amends certain provisions of ASC 323 “ Investments-Equity Method and Joint Ventures ”. The ASU eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies for the equity method. The guidance will be applied prospectively and is effective for fiscal years beginning after December 15, 2016 (October 1, 2017 for us), including interim periods within those fiscal years. We currently do not expect that the adoption of these provisions will have a material effect on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-05 “ Derivatives and Hedging - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships”, which amends certain provisions of ASC 815 “ Derivatives and Hedging”. The ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under ASC 815 does not, in and of itself, require de-designation of the instrument if all other hedge criteria continue to be met. These provisions are effective for fiscal years beginning after December 15, 2016 (October 1, 2017 for us), including interim periods within those fiscal years, and can be adopted using a prospective or modified retrospective approach. Early adoption is permitted. We currently do not expect that these provisions will have a material effect on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 “ Leases”, which is codified in ASC 842 “ Leases” and supersedes current lease guidance in ASC 840. These provisions require lessees to put a right-of-use asset and lease liability on their balance sheet for operating and financing leases that have a term of more than one year. Expense will be recognized in the income statement similar to current accounting guidance. For lessors, the ASU modifies the classification criteria and the accounting for sales-type and direct financing leases. Entities will need to disclose qualitative and quantitative information about their leases, including characteristics and amounts recognized in the financial statements. These provisions are effective for fiscal years beginning after December 15, 2018 (October 1, 2019 for us), including interim periods within those fiscal years. Early adoption is permitted. Entities are required to use a modified retrospective approach upon adoption to recognize and measure leases at the beginning of the earliest comparative period presented in the financial statements. We have not completed our assessment. We currently expect that the adoption of ASC 842 as of October 1, 2019 will result in recording additional assets and liabilities not previously reflected on our consolidated balance sheets, but we do not expect the adoption to have a significant impact on the recognition, measurement, or presentation of lease expenses within the consolidated statements of operations or the consolidated statements of cash flows. In July 2015, the FASB issued ASU 2015-11 “ Simplifying the Measurement of Inventory”, which amends certain provisions of ASC 330 “ Inventory ”. The ASU requires inventory to be measured at the lower of cost and net realizable value. These provisions do not apply to inventory that is measured using LIFO or the retail inventory method. These provisions apply to all other inventory, which includes inventory that is measured using FIFO or average cost. These provisions are effective for fiscal years beginning after December 15, 2016 (October 1, 2017 for us), including interim periods within those fiscal years, applied prospectively. Early adoption is permitted as of the beginning of an interim or annual reporting period. Given that the majority of our inventory is measured using LIFO, we currently do not expect that the adoption of these provisions will have a material effect on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09 which is codified in ASC 606 “ Revenue from Contracts with Customers ” and supersedes both the revenue recognition requirement to ASC 605 “ Revenue Recognition ” and most industry-specific guidance. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the five steps set forth in ASC 606. An entity must also disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14, “ Revenue from Contracts with Customers: Deferral of the Effective Date, ” which deferred the effective date of ASU 2014-09 by one year. Therefore, these provisions are effective for annual reporting periods beginning after December 15, 2017 (October 1, 2018 for us), including interim periods within that annual period, and can be applied using a full retrospective or modified retrospective approach. The FASB has clarified this guidance in various updates (ASU 2016-08, ASU 2016-12 and ASU 2016-20) during 2015 and 2016, all of which have the same effective date as the original guidance. We are evaluating the impact of these provisions. We will adopt the revenue standard as of October 1, 2018 and currently expect to use the modified retrospective approach. We manufacture certain products that have no alternative use to us (since such products are made to specific customer orders), and we believe for certain customers we have a legally enforceable right to payment for performance completed to date on these manufactured products including a reasonable profit. For those manufactured products that meet these two criteria, we will recognize revenue “over time” upon the adoption of ASC 606. This could result in (a) revenue recognition prior to the date of shipment or title transfer for these products and (b) an increase in unbilled receivables balances and a reduction in finished goods inventory balances on our balance sheet from historic and current levels. We are continuing to evaluate the impact of the provisions of the new revenue standard on the Company's financial position, results of operations and cash flows. |
Equity and Other Comprehensive
Equity and Other Comprehensive Income | 9 Months Ended |
Jun. 30, 2017 | |
Comprehensive Income and Equity Note | Equity and Other Comprehensive Income (Loss) Equity The following is a summary of the changes in total equity for the nine months ended June 30, 2017 (in millions): WestRock Company Stockholders’ Equity Noncontrolling (1) Interests Total Equity Balance at September 30, 2016 $ 9,728.8 $ 101.2 $ 9,830.0 Net income (loss) attributable to common stockholders 512.1 (10.8 ) 501.3 Other comprehensive income, net of tax 83.0 — 83.0 Income tax benefit from share-based plans 1.0 — 1.0 Compensation expense under share-based plans 52.8 — 52.8 Cash dividends declared (per share - $1.20) (2) (304.5 ) — (304.5 ) Distributions and adjustments to noncontrolling interests — (42.8 ) (42.8 ) Issuance of common stock, net of stock received for minimum tax withholdings (3) 161.3 — 161.3 Fair value of share-based awards issued in acquisition 1.9 — 1.9 Purchases of common stock (93.0 ) — (93.0 ) Separation of Specialty Chemicals business 5.6 — 5.6 Balance at June 30, 2017 $ 10,149.0 $ 47.6 $ 10,196.6 (1) Excludes amounts related to contingently redeemable noncontrolling interests, which are separately classified outside of permanent equity in the mezzanine section of the Condensed Consolidated Balance Sheets. (2) Includes cash dividends paid, and dividends declared but unpaid, related to the shares reserved but unissued to satisfy Smurfit-Stone bankruptcy claims. (3) Includes the issuance of approximately 2.4 million shares of Common Stock valued at $136.1 million in connection with the U.S. Corrugated Acquisition. Stock Repurchase Program In July 2015, our board of directors authorized a repurchase program of up to 40.0 million shares of Common Stock, representing approximately 15% of our outstanding Common Stock as of July 1, 2015. The shares of Common Stock may be repurchased over an indefinite period of time at the discretion of management. Pursuant to the program, in the nine months ended June 30, 2017 , we repurchased approximately 1.8 million shares of Common Stock for an aggregate cost of $93.0 million . As of June 30, 2017 , we had approximately 24.7 million shares of Common Stock available for repurchase under the program. Accumulated Other Comprehensive Loss The tables below summarize the changes in accumulated other comprehensive loss, net of tax, by component for the nine months ended June 30, 2017 and June 30, 2016 (in millions): Cash Flow Hedges Defined Benefit Pension and Postretirement Plans Foreign Currency Items Total (1) Balance at September 30, 2016 $ (0.2 ) $ (523.8 ) $ (102.4 ) $ (626.4 ) Other comprehensive (loss) income before reclassifications (0.4 ) 19.7 4.7 24.0 Amounts reclassified from accumulated other comprehensive loss (income) (0.1 ) 29.4 — 29.3 Sale of HH&B — 2.9 26.8 29.7 Net current period other comprehensive (loss) income (0.5 ) 52.0 31.5 83.0 Balance at June 30, 2017 $ (0.7 ) $ (471.8 ) $ (70.9 ) $ (543.4 ) (1) All amounts are net of tax and noncontrolling interests. Cash Flow Hedges Defined Benefit Pension and Postretirement Plans Foreign Currency Items Total (1) Balance at September 30, 2015 $ (1.4 ) $ (540.7 ) $ (238.1 ) $ (780.2 ) Other comprehensive (loss) income before reclassifications (0.5 ) 1.4 133.4 134.3 Amounts reclassified from accumulated other comprehensive loss 1.0 5.4 20.2 26.6 Separation of Specialty Chemicals business 0.4 1.9 5.6 7.9 Net current period other comprehensive income 0.9 8.7 159.2 168.8 Balance at June 30, 2016 $ (0.5 ) $ (532.0 ) $ (78.9 ) $ (611.4 ) (1) All amounts are net of tax and noncontrolling interests. The net of tax amounts were determined using the jurisdictional statutory rates, and reflect effective tax rates averaging 37% to 38% for the nine months ended June 30, 2017 and 34% to 35% for the nine months ended June 30, 2016 . Although we are impacted by a number of currencies, foreign currency translation gains recorded in accumulated other comprehensive loss for the nine months ended June 30, 2017 were primarily due to the HH&B Sale as well as gains in the Canadian dollar and Mexican peso, partially offset by changes in the Yen and Brazilian Real exchange rates, each against the U.S. dollar. Foreign currency translation gains recorded in accumulated other comprehensive loss for the nine months ended June 30, 2016 were primarily due to the changes in the Brazilian Real and Canadian dollar, both against the U.S. dollar. For the nine months ended June 30, 2017 , we recorded defined benefit net actuarial gains of $19.7 million , net of $15.1 million of deferred income tax expense, in other comprehensive (loss) income, primarily due to the remeasurement of the Plan at February 28, 2017. For the nine months ended June 30, 2017, amounts reclassified from accumulated other comprehensive loss totaled $59.0 million , net of deferred income tax of $17.8 million , primarily related to the HH&B Sale and pension settlement accounting in the Plan in February 2017. For the nine months ended June 30, 2016 , we recorded defined benefit net actuarial gains of $1.4 million , net of tax of $0.8 million , in other comprehensive income (loss), primarily due to the partial settlement and curtailment of certain defined benefit plans. The following table summarizes the reclassifications out of accumulated other comprehensive loss by component (in millions): Three Months Ended Three Months Ended June 30, 2017 June 30, 2016 Pretax Tax Net of Tax Pretax Tax Net of Tax Amortization of defined benefit pension and postretirement items (1) Actuarial losses (2) $ (4.8 ) $ 1.5 $ (3.3 ) $ (1.9 ) $ 0.6 $ (1.3 ) Prior service credits (costs) (2) 0.2 (0.1 ) 0.1 (0.4 ) 0.3 (0.1 ) Sale of HH&B (3) (4.2 ) 1.3 (2.9 ) — — — Subtotal defined benefit plans (8.8 ) 2.7 (6.1 ) (2.3 ) 0.9 (1.4 ) Foreign currency translation adjustments Sale of HH&B (3) (26.8 ) — (26.8 ) — — — Sale of foreign subsidiary (4) — — — (20.2 ) — (20.2 ) Subtotal foreign currency translation adjustments (26.8 ) — (26.8 ) (20.2 ) — (20.2 ) Derivative Instruments (1) Commodity cash flow hedges (5) — — — (0.3 ) — (0.3 ) Foreign currency cash flow hedges (6) 0.3 (0.2 ) 0.1 (0.5 ) 0.2 (0.3 ) Subtotal derivative instruments 0.3 (0.2 ) 0.1 (0.8 ) 0.2 (0.6 ) Total reclassifications for the period $ (35.3 ) $ 2.5 $ (32.8 ) $ (23.3 ) $ 1.1 $ (22.2 ) (1) Amounts in parentheses indicate charges to earnings. Amounts pertaining to noncontrolling interests are excluded. (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See “ Note 14. Retirement Plans ” for additional details. (3) Included in gain on sale of HH&B. (4) Included in interest income and other income (expense), net. (5) These accumulated other comprehensive income components are included in cost of goods sold. (6) These accumulated other comprehensive income components are included in net sales. The following table summarizes the reclassifications out of accumulated other comprehensive loss by component (in millions): Nine Months Ended Nine Months Ended June 30, 2017 June 30, 2016 Pretax Tax Net of Tax Pretax Tax Net of Tax Amortization of defined benefit pension and postretirement items (1) Actuarial losses (2) $ (46.7 ) $ 16.9 $ (29.8 ) $ (6.5 ) $ 1.9 $ (4.6 ) Prior service credits (costs) (2) 0.7 (0.3 ) 0.4 (1.3 ) 0.5 (0.8 ) Sale of HH&B (3) (4.2 ) 1.3 (2.9 ) — — — Subtotal defined benefit plans (50.2 ) 17.9 (32.3 ) (7.8 ) 2.4 (5.4 ) Foreign currency translation adjustments Sale of HH&B (3) (26.8 ) — (26.8 ) — — — Sale of foreign subsidiary (4) — — — (20.2 ) — (20.2 ) Subtotal foreign currency translation adjustments (26.8 ) — (26.8 ) (20.2 ) — (20.2 ) Derivative Instruments (1) Commodity cash flow hedges (5) — — — (1.4 ) 0.5 (0.9 ) Foreign currency cash flow hedges (6) 0.2 (0.1 ) 0.1 (0.2 ) 0.1 (0.1 ) Subtotal derivative instruments 0.2 (0.1 ) 0.1 (1.6 ) 0.6 (1.0 ) Total reclassifications for the period $ (76.8 ) $ 17.8 $ (59.0 ) $ (29.6 ) $ 3.0 $ (26.6 ) (1) Amounts in parentheses indicate charges to earnings. Amounts pertaining to noncontrolling interests are excluded. (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See “Note 14 . Retirement Plans ” for additional details. (3) Included in gain on sale of HH&B. (4) Included in interest income and other income (expense), net. (5) These accumulated other comprehensive income components are included in cost of goods sold. (6) These accumulated other comprehensive income components are included in net sales. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share | Earnings per Share Restricted stock awards we grant to non-employee directors are considered participating securities as they receive non-forfeitable rights to dividends at the same rate as Common Stock. As participating securities, we include these instruments in the earnings allocation in computing earnings per share under the two-class method described in ASC 260 “ Earnings per Share ”. The following table sets forth the computation of basic and diluted earnings per share under the two-class method (in millions, except per share data): Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 Basic earnings (loss) per share: Numerator: Income from continuing operations $ 326.6 $ 152.4 $ 503.3 $ 241.2 Less: Net loss (income) from continuing operations attributable to noncontrolling interest 1.5 (0.4 ) 8.8 (1.8 ) Income available to common stockholders, before discontinued operations 328.1 152.0 512.1 239.4 Less: Distributed and undistributed income available to participating securities (0.1 ) — (0.1 ) — Distributed and undistributed income attributable to common stockholders, before discontinued operations 328.0 152.0 512.0 239.4 Loss from discontinued operations (1) — (59.7 ) — (543.7 ) Net income (loss) attributable to common stockholders $ 328.0 $ 92.3 $ 512.0 $ (304.3 ) Denominator: Basic weighted average shares outstanding 252.1 252.7 251.5 254.8 Basic earnings per share from continuing operations $ 1.30 $ 0.60 $ 2.04 $ 0.94 Basic loss per share from discontinued operations — (0.23 ) — (2.13 ) Basic earnings (loss) per share attributable to common stockholders $ 1.30 $ 0.37 $ 2.04 $ (1.19 ) Diluted earnings (loss) per share: Numerator: Income from continuing operations $ 326.6 $ 152.4 $ 503.3 $ 241.2 Less: Net loss (income) from continuing operations attributable to noncontrolling interest 1.5 (0.4 ) 8.8 (1.8 ) Income available to common stockholders, before discontinued operations 328.1 152.0 512.1 239.4 Less: Distributed and undistributed income available to participating securities (0.1 ) — (0.1 ) — Distributed and undistributed income attributable to common stockholders, before discontinued operations 328.0 152.0 512.0 239.4 Loss from discontinued operations (1) — (59.7 ) — (543.7 ) Net income (loss) attributable to common stockholders $ 328.0 $ 92.3 $ 512.0 $ (304.3 ) Denominator: Basic weighted average shares outstanding 252.1 252.7 251.5 254.8 Effect of dilutive stock options and non-participating securities 3.2 3.5 3.5 3.8 Diluted weighted average shares outstanding 255.3 256.2 255.0 258.6 Diluted earnings per share from continuing operations $ 1.29 $ 0.59 $ 2.01 $ 0.93 Diluted loss per share from discontinued operations — (0.23 ) — (2.11 ) Diluted earnings (loss) per share attributable to common stockholders $ 1.29 $ 0.36 $ 2.01 $ (1.18 ) (1) Net of income attributable to noncontrolling interests of discontinued operations of $1.0 million and $4.3 million for the three and nine months ended June 30, 2016 , respectively. Weighted average shares include approximately 0.2 million and 0.3 million of reserved, but unissued, shares at June 30, 2017 and June 30, 2016 , respectively. These reserved shares will be distributed as claims are liquidated or resolved in accordance with the Smurfit-Stone Plan of Reorganization and Confirmation Order. Stock options and restricted stock in the amount of 0.6 million and 0.6 million common shares in the three and nine months ended June 30, 2017 , respectively, were not included in computing diluted earnings per share because the effect would have been antidilutive. Stock options and restricted stock in the amount of 1.9 million and 1.8 million common shares in the three and nine months ended June 30, 2016 , respectively, were not included in computing diluted earnings per share because the effect would have been antidilutive. |
Acquisitions
Acquisitions | 9 Months Ended |
Jun. 30, 2017 | |
Business Acquisition [Line Items] | |
Business Combination Disclosure [Text Block] | Acquisitions and Investment MPS Acquisition On June 6, 2017, we completed the acquisition of MPS in a stock purchase. MPS is a global provider of print-based specialty packaging solutions and its differentiated product offering includes premium folding cartons, inserts, labels and rigid packaging. We acquired the outstanding shares of MPS for $18.00 per share in cash and the assumption of debt. In connection with the MPS Acquisition, we paid cash of $1,351.1 million , net of cash received of $47.5 million . The purchase consideration included the assumption of $929.1 million of debt and approximately $1.9 million related to MPS equity awards that were replaced with WestRock equity awards with identical terms for the pre-acquisition service. The amount related to post-acquisition service is being expensed over the remaining service period of the awards. For additional information on the converted awards see “ Note 15. Stock-Based Compensation ”. We have included the financial results of MPS since the date of the acquisition in our Consumer Packaging segment. The preliminary allocation of consideration primarily included $1,013.8 million of intangible assets, $893.2 million of goodwill, $495.1 million of property, plant and equipment and $1,564.6 million of liabilities and noncontrolling interests, including debt and deferred income taxes. The fair value assigned to goodwill is primarily attributable to buyer-specific synergies expected to arise after the acquisition (e.g., enhanced reach of the combined organization and other synergies), the assembled work force, as well as due to establishing deferred taxes for the difference between book and tax basis of the assets and liabilities acquired. The goodwill and intangibles are not amortizable for income tax purposes. We are in the process of reviewing the estimated fair values of all assets acquired and liabilities assumed, including, among other things, obtaining final third-party valuations of certain tangible and intangible assets as well as the fair value of certain contracts and the determination of certain tax balances; thus, the allocation of the purchase price is preliminary and subject to revision. The following table summarizes the weighted average life and the preliminary allocation to intangible assets recognized in the MPS Acquisition, excluding goodwill (in millions): Weighted Avg. Life Amounts Recognized as of the Acquisition Date Customer relationships 14.6 $ 996.1 Trademarks and tradenames 3.0 15.2 Photo library 10.0 2.5 Total 14.4 $ 1,013.8 None of the intangibles has significant residual value. We are amortizing the customer relationship intangibles over estimated useful lives ranging from 13.5 to 16 years based on a straight-line basis because the amortization pattern was not reliably determinable. U.S. Corrugated Acquisition On June 9, 2017, we completed the U.S. Corrugated Acquisition in a stock purchase. We acquired five corrugated converting facilities in Ohio, Pennsylvania and Louisiana that provide a comprehensive suite of products and services to customers in a variety of end markets, including food & beverage, pharmaceuticals and consumer electronics. The transaction provides the opportunity to increase the vertical integration of our Corrugated Packaging segment by approximately 105,000 tons of containerboard annually through the acquired facilities and another 50,000 tons under a long-term supply contract with another company owned by the seller. The purchase consideration for the U.S. Corrugated Acquisition was $193.7 million , net of cash received of $1.4 million and an unreceived working capital settlement of $3.4 million . The consideration included the issuance of 2.4 million shares of Common Stock valued at $136.1 million . We have included the financial results of the acquired assets since the date of the acquisition in our Corrugated Packaging segment. The preliminary allocation of consideration primarily included $76.9 million of customer relationship intangible assets, $104.1 million of goodwill, $32.4 million of property, plant and equipment and $50.6 million of liabilities, including deferred income taxes. We are amortizing the customer relationship intangibles over 7.5 years based on a straight-line basis because the amortization pattern was not reliably determinable. The fair value assigned to goodwill is primarily attributable to buyer-specific synergies expected to arise after the acquisition (e.g., enhanced reach of the combined organization and other synergies), and the assembled work force, as well as due to establishing deferred taxes for the difference between book and tax basis of the assets and liabilities acquired. The goodwill and intangibles are not amortizable for income tax purposes. We are in the process of reviewing the estimated fair values of all assets acquired and liabilities assumed, including, among other things, obtaining final third-party valuations of certain tangible and intangible assets as well as the fair value of certain contracts and the determination of certain tax balances; thus, the allocation of the purchase price is preliminary and subject to revision. Star Pizza Acquisition On March 13, 2017, we completed the purchase of certain assets and liabilities of Star Pizza Inc., a privately owned and operated corrugated pizza box distributor. The transaction provides us with a leadership position in the fast growing small-run pizza box market and increases our vertical integration. The purchase price was $34.7 million , net of a preliminary unreceived $0.6 million working capital settlement. We have included the financial results of the acquired assets since the date of the acquisition in our Corrugated Packaging segment. The preliminary purchase price allocation for the acquisition primarily included $24.8 million of customer relationship intangible assets and $2.3 million of goodwill. We are amortizing the customer relationship intangibles over 10 years based on a straight-line basis because the amortization pattern was not reliably determinable. The fair value assigned to goodwill is primarily attributable to buyer-specific synergies expected to arise after the acquisition (e.g., enhanced reach of the combined organization and other synergies), and the assembled work force. We expect the goodwill and intangibles to be amortizable for income tax purposes. We are in the process of reviewing the estimated fair values of all assets acquired and liabilities assumed; thus, the allocation of the purchase price is preliminary and subject to revision. Grupo Gondi Investment On April 1, 2016, we completed the formation of a joint venture with Grupo Gondi in Mexico. We contributed $175.0 million in cash and the stock of an entity that owns three corrugated packaging facilities in Mexico in return for a 25.0% equity participation in the joint venture together with future put and call rights. The investment was valued at approximately $0.3 billion . The joint venture operates paper machines, corrugated packaging and high graphic folding carton facilities across various production sites. The majority equity holders manage the joint venture and we provide technical and commercial resources and supply certain paperboard to the joint venture. We believe the joint venture will help grow our presence in the attractive Mexican market. As a result of the transaction, we recorded a pre-tax non-cash gain of $12.1 million included in “Interest income and other income (expense), net” on our Condensed Consolidated Statements of Operations in the third quarter of fiscal 2016. The transaction includes future put and call rights with respect to the respective parties’ ownership interest in the joint venture. We have included the financial results of the joint venture since the date of formation in our Corrugated Packaging segment, and are accounting for the investment under the equity method. In the third quarter of fiscal 2017, the joint venture entity purchased shares from a minority partner. As a result, our equity participation in the joint venture increased to approximately 27.0% . The transaction continues to include future put and call rights with respect to the respective parties’ ownership interest in the joint venture. Packaging Acquisition On January 19, 2016, we completed a stock purchase of certain legal entities formerly owned by Cenveo Inc. The entities acquired provide value-added folding carton and litho-laminated display packaging solutions. The purchase price was $94.1 million , net of cash received of $1.7 million , a working capital settlement and a $3.5 million escrow receipt in the first quarter of fiscal 2017. The transaction is subject to an election under Section 338(h)(10) of the Code that increases the U.S. tax basis in the acquired U.S. entities. We believe the transaction has provided us with attractive and complementary customers, markets and facilities. We have included the financial results of the acquired entities since the date of the acquisition in our Consumer Packaging segment. The purchase price allocation for the acquisition primarily included $55.0 million of property, plant and equipment, $10.5 million of customer relationship intangible assets, $9.3 million of goodwill and $25.8 million of liabilities, including $ 1.3 million of debt. We are amortizing the customer relationship intangibles over estimated useful lives ranging from 9 to 15 years based on a straight-line basis because the amortization pattern was not reliably determinable. The fair value assigned to goodwill is primarily attributable to buyer-specific synergies expected to arise after the acquisition (e.g., enhanced reach of the combined organization and other synergies), and the assembled work force. The goodwill and intangibles of the U.S. entities are amortizable for income tax purposes. SP Fiber On October 1, 2015, we acquired SP Fiber in a stock purchase. The transaction included the acquisition of mills located in Dublin, GA and Newberg, OR, which produce lightweight recycled containerboard and kraft and bag paper. The Newberg mill also produced newsprint. As part of the transaction, we also acquired SP Fiber's 48% interest in GPS. GPS is a joint venture providing steam to the Dublin mill and electricity to Georgia Power. The purchase price was $278.8 million , net of cash received of $9.2 million and a working capital settlement. In addition, we paid $36.5 million for debt owed by GPS and thereby own the majority of the debt issued by GPS. The Dublin mill has helped balance the fiber mix of our mill system, including our ability to serve the increasing demand for lighter weight containerboard, and the addition of kraft and bag paper has diversified our product offering. Subsequent to the transaction, we announced the permanent closure of the Newberg mill due to the decline in market conditions of the newsprint business and our need to balance supply and demand in our containerboard system. We determined GPS should be consolidated as a variable interest entity under ASC 810 “ Consolidation ”. Our evaluation concluded that WestRock is the primary beneficiary of GPS as WestRock has both the power and benefits as defined by ASC 810. We have included the financial results of SP Fiber and GPS since the date of the acquisition in our Corrugated Packaging segment. The purchase price allocation for the acquisition primarily included $324.8 million of property, plant and equipment, $13.5 million of customer relationship intangible assets, $57.3 million of goodwill and $150.3 million of liabilities and noncontrolling interests, including $13.7 million of debt primarily owed by GPS to third parties. We are amortizing the customer relationship intangibles over 20 years based on a straight-line basis because the amortization pattern was not reliably determinable. The fair value assigned to goodwill is primarily attributable to buyer-specific synergies expected to arise after the acquisition (e.g., enhanced reach of the combined organization and other synergies), the assembled work force of SP Fiber as well as due to establishing deferred taxes for the difference between the book to tax basis of the assets and liabilities acquired. The goodwill and intangibles are not amortizable for income tax purposes. |
Discontinued Operations (Notes)
Discontinued Operations (Notes) | 9 Months Ended |
Jun. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations On May 15, 2016 , WestRock completed the Separation. Since the Separation, we have not beneficially owned any shares of Ingevity common stock and Ingevity has been an independent public company trading under the symbol “NGVT” on the New York Stock Exchange. We disposed of the former Specialty Chemicals segment in its entirety and ceased to consolidate its assets, liabilities and results of operations. Accordingly, we have presented the financial position and results of operations of the former Specialty Chemicals segment as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented. In connection with the Separation, we and Ingevity entered into a separation and distribution agreement as well as various other agreements that provide a framework for the relationships between the parties going forward, including among others a tax matters agreement, a lease and ground service agreement with respect to our Covington, Virginia facility, an intellectual property agreement, a crude tall oil and black liquor soap skimming supply agreement, a trust agreement, an employee matters agreement and a transition services agreement. These agreements provided for the allocation between us and Ingevity of assets, employees, liabilities and obligations attributable to periods prior to, at and after the Separation and govern certain relationships between us and Ingevity after the Separation. Prior to the Separation, Ingevity, then a wholly-owned subsidiary of WestRock, borrowed $500.0 million in contemplation of the Separation. In addition, Ingevity assumed an $80.0 million , 7.67% capital lease obligation due January 15, 2027 owed to the City of Wickliffe, KY. In contemplation of the Separation, Ingevity also funded a trust in the amount of $68.9 million to secure the balloon principal payment of that capital lease upon the lease’s maturity. We remain a co-obligor on the capital lease obligation; therefore, the capital lease assumed by Ingevity remains recorded in our Condensed Consolidated Financial Statements in long-term debt. At the time of the Separation, we recorded a $108.2 million long-term asset for the estimated fair value of the future principal and interest payments on the capital lease obligation assumed by Ingevity. The value of the long-term asset and the long-term debt under the lease will reduce over the life of the lease using the effective interest method. The $500.0 million of debt and the $68.9 million in the trust were assumed by Ingevity, and were removed from our Condensed Consolidated Financial Statements as part of our discontinued operations reporting. The following table presents the financial results of Specialty Chemicals’ discontinued operations (in millions): Three Months Ended Nine Months Ended June 30, 2016 June 30, 2016 Net sales $ 120.0 $ 533.7 Cost of goods sold 83.8 387.5 Gross Profit 36.2 146.2 Selling, general and administrative, excluding intangible amortization 11.8 65.6 Selling, general and administrative intangible amortization 5.9 28.8 Restructuring and other costs, net 22.5 50.9 Impairment of Specialty Chemicals goodwill and intangibles 101.1 579.4 Operating loss (105.1 ) (578.5 ) Interest income (expense) and other income (expense), net 0.2 0.1 Loss from discontinued operations before income taxes (104.9 ) (578.4 ) Income tax benefit 46.2 39.0 Loss from discontinued operations $ (58.7 ) $ (539.4 ) Restructuring and other costs, net are primarily associated with costs incurred to support the Separation and consist primarily of advisory, legal, accounting and other professional fees. Additionally, restructuring and other costs, net include $10.0 million of costs associated with the closure of Ingevity’s Duque de Caxias facility in Brazil and other severance and stock-based compensation expenses. In the first quarter of fiscal 2016, as part of our evaluation of whether events or changes in circumstances had occurred that would indicate whether it was more likely than not that the goodwill of our then-owned Specialty Chemicals reporting unit was impaired, we considered factors such as, but not limited to, macroeconomic conditions, industry and market considerations, and financial performance, including the planned revenue and earnings of the reporting unit. We concluded that an impairment indicator had occurred related to the goodwill of the Specialty Chemicals reporting unit and that the indicator was driven by market factors subsequent to the Combination. Accordingly, we performed a “Step 1” goodwill impairment test where we updated the discounted cash flow analysis used to determine the reporting unit’s initial fair value on July 1, 2015. We also compared those results to the valuations performed by our investment bankers in connection with the planned separation of the Specialty Chemicals business. Based on the results of the impairment test and analysis, we concluded that the fair value of the Specialty Chemicals reporting unit was less than its carrying amount and performed a “Step 2” goodwill impairment test to determine the amount of impairment loss, if any. As part of the analysis, we determined that the carrying value of the property, plant and equipment and intangibles, all of which have finite lives, on a “held and used” basis did not exceed the estimated undiscounted future cash flows. In light of changing market conditions, expected revenue and earnings of the reporting unit, lower comparative market valuations for companies in Specialty Chemicals’ peer group and our preliminary “Step 2” test, we concluded that an impairment of the Specialty Chemicals reporting unit was probable and could be reasonably estimated. As a result, we recorded a pre-tax and after-tax non-cash goodwill impairment charge of $478.3 million . This amount is included in the line item “Loss from discontinued operations” in the Condensed Consolidated Statements of Operations. No tax benefit was recorded for the goodwill impairment. Until the completion of the Separation, GAAP required us to assess impairment of the Specialty Chemicals’ long-lived assets using the “held and used” model which is based on undiscounted future cash flows. Under this model, if the expected cash flows over the life of the primary asset of the reporting unit were in excess of the carrying amount, then there would be no impairment. At the date of the Separation, we assessed Specialty Chemical’s assets for potential impairment using the “held for sale” model. This model compares the fair value of the disposal unit to its carrying value and if the fair value less cost to sell is lower, then an impairment loss would be recorded. At the date of the Separation, we evaluated our intangibles, which consisted predominantly of customer list intangibles for impairment. Our analysis at May 15, 2016 , using the income approach (multi-period excess earnings method), indicated that there was a $101.1 million pre-tax non-cash impairment of the Specialty Chemicals customer relationships intangible. The impairment loss was recorded on the Separation and is included as a component of discontinued operations. The following table presents the significant non-cash items and capital expenditures for Specialty Chemicals’ that are included in the Condensed Consolidated Statements of Cash Flows (in millions): Nine Months Ended June 30, 2016 Depreciation, depletion and amortization $ 57.2 Impairment of Specialty Chemicals goodwill and intangibles $ 579.4 Capital expenditures $ 43.9 |
Assets Held for Sale (Notes)
Assets Held for Sale (Notes) | 9 Months Ended |
Jun. 30, 2017 | |
Assets Held for Sale [Text Block] | Assets Held For Sale During the second quarter of fiscal 2017, we committed to a plan to sell HH&B. On January 23, 2017, we announced we had entered into an agreement with certain subsidiaries of Silgan under which Silgan would purchase HH&B for approximately $1.025 billion in cash plus the assumption of approximately $25 million in foreign pension liabilities. Accordingly, in the second quarter of fiscal 2017, all the assets and liabilities of HH&B were reported in the Condensed Consolidated Balance Sheet as assets and liabilities held for sale. We discontinued recording depreciation and amortization while the assets were held for sale. On April 6, 2017, we announced that we had completed the HH&B Sale. We used the proceeds from the sale of the business in connection with the MPS Acquisition. We recorded a pre-tax gain on sale of HH&B of $190.6 million during the third quarter of fiscal 2017. Due to our accelerated monetization strategy, our Land and Development portfolio has met the held for sale criteria and is reflected as assets held for sale. Assets held for sale at June 30, 2017 of $200.7 million include $170.7 million of Land and Development portfolio assets, with the remainder primarily related to closed facilities. As of September 30, 2016 , the $52.3 million of assets held for sale were primarily related to assets under contract in our Land and Development segment. |
Restructuring and Other Costs,
Restructuring and Other Costs, Net | 9 Months Ended |
Jun. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring and Other Costs, Net | Restructuring and Other Costs, Net Summary of Restructuring and Other Initiatives We recorded pre-tax restructuring and other costs, net of $59.4 million and $158.7 million for the three and nine months ended June 30, 2017 , respectively, and $43.1 million and $317.0 million for the three and nine months ended June 30, 2016 , respectively. These amounts are not comparable since the timing and scope of the individual actions associated with a restructuring, acquisition or integration can vary. The restructuring and other costs, net exclude the Specialty Chemicals costs which are included in discontinued operations. We discuss our restructuring and other costs, net in more detail below and those charged to discontinued operations in “ Note 6. Discontinued Operations ”. When we close a facility, if necessary, we recognize an impairment charge primarily to reduce the carrying value of equipment or other property to their estimated fair value less cost to sell, and record charges for severance and other employee related costs. Any subsequent change in fair value less cost to sell prior to disposition is recognized as identified; however, no gain is recognized in excess of the cumulative loss previously recorded. At the time of each announced closure, we generally expect to record future charges for equipment relocation, facility carrying costs, costs to terminate a lease or contract before the end of its term and other employee related costs. Although specific circumstances vary, our strategy has generally been to consolidate our sales and operations into large well-equipped plants that operate at high utilization rates and take advantage of available capacity created by operational excellence initiatives. Therefore, we have transferred a substantial portion of each plant’s assets and production to our other plants. We believe these actions have allowed us to more effectively manage our business. While restructuring costs are not charged to our segments and, therefore, do not reduce segment income, we highlight the segment to which the charges relate. The following table presents a summary of restructuring and other charges, net, related to active restructuring and other initiatives that we incurred during the three and nine months ended June 30, 2017 and June 30, 2016 , the cumulative recorded amount since we started the initiative, and our estimate of the total we expect to incur (in millions): Summary of Restructuring and Other Costs, Net Segment Period Net Property, Plant and Equipment (1) Severance and Other Employee Related Costs Equipment and Inventory Relocation Costs Facility Carrying Costs Other Costs Total Corrugated Packaging (2) Current Qtr. $ 0.4 $ 0.2 $ 0.3 $ 1.4 $ (0.1 ) $ 2.2 YTD Fiscal 2017 (0.9 ) (4.5 ) 1.8 4.7 0.6 1.7 Prior Year Qtr. 1.4 0.4 — 3.4 0.4 5.6 YTD Fiscal 2016 181.3 15.6 0.3 15.9 8.8 221.9 Cumulative 218.7 35.3 6.4 35.7 22.3 318.4 Expected Total 218.7 36.4 7.0 37.7 22.9 322.7 Consumer Packaging (3) Current Qtr. 6.0 12.7 1.2 0.1 0.4 20.4 YTD Fiscal 2017 25.7 20.7 2.2 0.1 18.3 67.0 Prior Year Qtr. 1.5 3.4 0.4 0.1 — 5.4 YTD Fiscal 2016 (0.5 ) 4.0 0.9 0.5 — 4.9 Cumulative 35.0 28.7 4.3 1.8 18.8 88.6 Expected Total 35.0 28.7 4.5 2.3 18.8 89.3 Land and Development (4) Current Qtr. — 0.8 — — — 0.8 YTD Fiscal 2017 — 2.3 — — — 2.3 Prior Year Qtr. — — — — — — YTD Fiscal 2016 — — — — — — Cumulative — 12.9 — — — 12.9 Expected Total — 14.6 — — — 14.6 Other (5) Current Qtr. — 0.2 — — 35.8 36.0 YTD Fiscal 2017 0.1 0.7 — — 86.9 87.7 Prior Year Qtr. — — — — 32.1 32.1 YTD Fiscal 2016 1.2 0.9 — — 88.1 90.2 Cumulative 1.4 2.2 — — 474.0 477.6 Expected Total 1.4 2.2 — — 474.0 477.6 Total Current Qtr. $ 6.4 $ 13.9 $ 1.5 $ 1.5 $ 36.1 $ 59.4 YTD Fiscal 2017 $ 24.9 $ 19.2 $ 4.0 $ 4.8 $ 105.8 $ 158.7 Prior Year Qtr. $ 2.9 $ 3.8 $ 0.4 $ 3.5 $ 32.5 $ 43.1 YTD Fiscal 2016 $ 182.0 $ 20.5 $ 1.2 $ 16.4 $ 96.9 $ 317.0 Cumulative $ 255.1 $ 79.1 $ 10.7 $ 37.5 $ 515.1 $ 897.5 Expected Total $ 255.1 $ 81.9 $ 11.5 $ 40.0 $ 515.7 $ 904.2 (1) We have defined “ Net Property, Plant and Equipment ” as used in this Note 8 to represent property, plant and equipment impairment losses, subsequent adjustments to fair value for assets classified as held for sale, subsequent (gains) or losses on sales of property, plant and equipment and related parts and supplies, and accelerated depreciation on such assets, if any. (2) The Corrugated Packaging segment current quarter and year to date income primarily reflects on-going closure costs at previously closed facilities largely offset by the gain on sale of a previously closed recycling facility and severance adjustments. The prior year quarter charges primarily reflect charges at a recycling facility and on-going closure costs at previously closed facilities. The prior year to date charges primarily reflect charges associated with the permanent closures of the Coshocton, OH and Uncasville, CT medium mills, the Newberg, OR containerboard and newsprint mill, the Vapi, India linerboard mill, restructuring activities at a recycling facility and on-going closure costs at previously closed facilities. The cumulative charges are primarily associated with the closure of the Coshocton, Uncasville, Newberg, Vapi, India and Matane, Quebec mills, cumulative closure of corrugated container plants and recycled collection facilities and gains and losses associated with the sale of closed facilities. We have transferred a substantial portion of each closed facility's production to our other facilities. (3) The Consumer Packaging segment current quarter charges primarily reflect charges associated with the consolidation of operations following the MPS Acquisition and on-going closure costs at previously closed facilities. The current year to date charges primarily reflect the charges associated with the consolidation of operations following the MPS Acquisition, a folding carton facility including a $17.6 million impairment of a customer relationship intangible, included in other costs, beverage facilities and on-going closure costs at previously closed facilities. The prior year quarter charges primarily reflect the charges associated with a folding carton and merchandising displays facility and on-going closure costs at previously closed facilities. The prior year to date charges primarily reflect the charges associated with a folding carton and merchandising displays facility, on-going closure costs at previously closed facilities that were partially offset by the gain on sale of the Cincinnati, OH specialty recycled paperboard mill. The cumulative charges primarily reflect the consolidation of operations following the MPS Acquisition, the aforementioned customer relationship intangible impairment, our Cincinnati, OH mill and cumulative closures of folding carton, beverage and merchandising display facilities. We have transferred a substantial portion of each closed facility's production to our other facilities. (4) The Land and Development segment current quarter, year to date and cumulative charges reflect severance and other employee costs related to personnel reductions in the segment. (5) The expenses in the “Other” segment primarily reflect costs that we consider as related to Corporate that primarily consist of costs incurred as a result of acquisition, integration and divestiture expenses, excluding the fiscal 2016 Specialty Chemicals costs which are included in discontinued operations. The charges in the Net Property, Plant and Equipment column are primarily for the write-off of leasehold improvements associated with the Combination and included in integration expenses in following table. The pre-tax charges in the “Other” segment are summarized below (in millions): Acquisition Expenses Integration Expenses Divestiture Expenses Other Expenses Total Current Qtr. $ 19.6 $ 14.3 $ 1.9 $ 0.2 $ 36.0 YTD Fiscal 2017 $ 23.9 $ 51.9 $ 10.0 $ 1.9 $ 87.7 Prior Year Qtr. $ 1.4 $ 30.3 $ — $ 0.4 $ 32.1 YTD Fiscal 2016 $ 6.9 $ 82.0 $ — $ 1.3 $ 90.2 Acquisition expenses include expenses associated with mergers, acquisitions and other business combinations, whether consummated or not, as well as litigation expenses associated with mergers, acquisitions and business combinations, net of recoveries. Acquisition expenses primarily consist of advisory, legal, accounting, valuation and other professional or consulting fees. Integration expenses reflect primarily severance and other employee costs, professional services including work being performed to facilitate merger and acquisition integration, such as information systems integration costs, lease expense and other costs. Divestiture expenses in fiscal 2017 are primarily associated with the evaluation of strategic alternatives and the sale of HH&B and consist primarily of advisory, legal, accounting and other professional fees. Due to the complexity and duration of the integration activities associated with the Combination, the precise amount expected to be incurred has not been quantified in the “Expected Total” in the Summary of Restructuring and Other Costs, Net table above. We expect integration activities from the Combination to continue during fiscal 2017. The following table represents a summary of and the changes in the restructuring accrual, which is primarily composed of lease commitments, accrued severance and other employee costs, and a reconciliation of the restructuring accrual charges to the line item “ Restructuring and other costs, net ” on our Condensed Consolidated Statements of Operations (in millions): Nine Months Ended June 30, 2017 2016 Accrual at beginning of fiscal year $ 44.8 $ 21.4 Accruals acquired in acquisition 3.5 — Additional accruals 39.5 57.1 Payments (40.9 ) (41.0 ) Adjustment to accruals (6.2 ) 0.1 Accrual at June 30 $ 40.7 $ 37.6 Reconciliation of accruals and charges to restructuring and other costs, net (in millions): Nine Months Ended June 30, 2017 2016 Additional accruals and adjustments to accruals (see table above) $ 33.3 $ 57.2 Acquisition expenses 23.9 6.9 Integration expenses 35.9 50.0 Divestiture expenses 10.0 — Net property, plant and equipment 24.9 182.0 Severance and other employee expense 3.0 2.9 Equipment and inventory relocation costs 4.0 1.2 Facility carrying costs 4.8 16.4 Other expense 18.9 0.4 Total restructuring and other costs, net $ 158.7 $ 317.0 |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2017 | |
Entity Information [Line Items] | |
Tax Provision | Income Taxes The effective tax rates from continuing operations for the three and nine months ended June 30, 2017 were 15.7% and 17.7% , respectively. The effective tax rates from continuing operations for the three and nine months ended June 30, 2016 were 39.5% and 39.7% , respectively. The effective tax rate from continuing operations for the three months ended June 30, 2017 was lower than the statutory federal rate primarily due to (a) low rates of tax applicable to the HH&B Sale, (b) favorable tax items such as the domestic manufacturer’s deduction, (c) lower tax rates applied to foreign earnings, primarily in Canada, (c) an income tax benefit related to a reduction in a valuation allowance partially offset by (d) the inclusion of state taxes, (e) a net income tax expense for the establishment of certain foreign deferred tax liabilities and the annual domestic return-to-provision true ups and (f) the exclusion of tax benefits related to losses recorded by certain foreign operations. The effective tax rate from continuing operations for the nine months ended June 30, 2017 was lower than the statutory federal rate primarily due to (a) low rates of tax applicable to the HH&B Sale, (b) a $23.8 million tax benefit related to the reduction of a state deferred tax liability as a result of an internal U.S. legal entity restructuring that will simplify future operating activities within the U.S., (c) favorable tax items, such as the domestic manufacturer’s deduction, (d) lower tax rates applied to foreign earnings, primarily in Canada, partially offset by (e) the exclusion of tax benefits related to losses recorded by certain foreign operations and (f) the inclusion of state taxes. The effective tax rate from continuing operations for the three and nine months ended June 30, 2016 was higher than the statutory federal rate primarily due to the impact of (a) state taxes, (b) the exclusion of tax benefits related to losses recorded by certain foreign operations, and (c) no tax benefit being recorded for the non-deductible goodwill disposed of in connection with the contribution to the Grupo Gondi joint venture, partially offset by (d) favorable tax items such as the domestic manufacturer’s deduction and (e) a tax rate differential applied to certain foreign earnings, primarily in Canada. |
Inventories
Inventories | 9 Months Ended |
Jun. 30, 2017 | |
Inventory [Line Items] | |
Inventories | Inventories We value substantially all of our U.S. inventories at the lower of cost or market, with cost determined by LIFO, which we believe generally results in a better matching of current costs and revenues than under the FIFO inventory valuation method. In periods of increasing costs, LIFO generally results in higher cost of goods sold than under FIFO. In periods of decreasing costs, the results are generally the opposite. Since LIFO is designed for annual determinations, it is possible to make an actual valuation of inventory under LIFO only at the end of each fiscal year based on the inventory levels and costs at that time. Accordingly, we base interim LIFO estimates on management’s projection of expected year-end inventory levels and costs. We value all other inventories at the lower of cost or market, with cost determined using methods which approximate cost computed on a FIFO basis. These other inventories represent primarily foreign inventories and certain inventoried spare parts and supplies inventories. Inventories were as follows (in millions): June 30, September 30, Finished goods and work in process $ 902.8 $ 800.6 Raw materials 571.0 535.7 Spare parts and supplies 361.1 335.7 Inventories at FIFO cost 1,834.9 1,672.0 LIFO reserve (67.8 ) (33.8 ) Net inventories $ 1,767.1 $ 1,638.2 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment Disclosure [Text Block] | Property, Plant and Equipment Property, plant and equipment, net consists of the following (in millions): June 30, September 30, Property, plant and equipment at cost: Land and buildings $ 2,001.2 $ 2,307.9 Machinery and equipment 11,298.6 10,672.9 Forestlands and mineral rights 201.8 201.1 Transportation equipment 29.6 27.6 Leasehold improvements 56.3 62.4 13,587.5 13,271.9 Less accumulated depreciation and amortization (4,510.2 ) (3,977.6 ) Property, plant and equipment, net $ 9,077.3 $ 9,294.3 |
Debt
Debt | 9 Months Ended |
Jun. 30, 2017 | |
Debt Instrument [Line Items] | |
Debt Disclosure | Debt At June 30, 2017 , our Credit Facility, Farm Credit Facility and public bonds were unsecured. For more information, see “ Note 10. Debt ” of the Notes to Consolidated Financial Statements section of the Fiscal 2016 Form 10-K. The following were individual components of debt (in millions): June 30, 2017 September 30, 2016 Carrying Value Weighted Avg. Interest Rate Carrying Value Weighted Avg. Interest Rate Public bonds due fiscal 2017 to 2022 $ 1,487.8 4.1 % $ 1,651.0 3.9 % Public bonds due fiscal 2023 to 2027 378.8 4.2 % 411.8 4.3 % Public bonds due fiscal 2030 to 2033 978.2 5.2 % 987.5 4.7 % Public bonds due fiscal 2037 to 2047 178.9 6.3 % 179.2 6.0 % Term loan facilities 2,196.5 2.3 % 2,195.7 1.8 % Revolving credit and swing facilities 515.9 1.0 % — N/A Receivables-backed financing facility 415.0 2.1 % — N/A Capital lease obligations 178.5 4.3 % 184.4 4.2 % Supplier financing and commercial card programs 117.3 N/A 106.0 N/A International and other debt 75.9 6.7 % 73.6 7.3 % Total debt 6,522.8 3.3 % 5,789.2 3.3 % Less current portion of debt 710.5 292.9 Long-term debt due after one year $ 5,812.3 $ 5,496.3 A portion of the debt classified as long-term, principally our Credit Facility and Receivables Facility, may be paid down earlier than scheduled at our discretion without penalty. Certain restrictive covenants govern our maximum availability under our credit facilities. We test and report our compliance with these covenants as required and were in compliance with all of our covenants at June 30, 2017 . The carrying value of our debt includes the fair value step-up of debt acquired in mergers and acquisitions. Total debt at June 30, 2017 and September 30, 2016 includes unamortized fair market value step-up of $288.7 million and $316.3 million , respectively. The weighted average interest rate also includes the fair value step-up. Excluding the step-up, the weighted average interest rate on total debt was 3.9% . At June 30, 2017 , we had $112.9 million of outstanding letters of credit not drawn upon. At June 30, 2017 , we had approximately $2.3 billion of availability under our committed credit facilities. This liquidity may be used to provide for ongoing working capital needs and for other general corporate purposes, including acquisitions, dividends and stock repurchases. The estimated fair value of our debt was approximately $6.7 billion and $6.0 billion as of June 30, 2017 and September 30, 2016 , respectively. The fair value of our long-term debt is primarily either based on quoted prices for those or similar instruments, or approximate the carrying amount as the variable interest rates reprice frequently at observable current market rates, and are categorized as level 2 within the fair value hierarchy. Public Bonds and Other Indebtedness In connection with the Combination, the public bonds previously issued by WestRock RKT Company and WestRock MWV, LLC are guaranteed by WestRock and have cross-guarantees between the two companies. The IDBs associated with the capital lease obligations of WestRock MWV, LLC are guaranteed by WestRock. The public bonds are unsecured unsubordinated obligations that rank equally in right of payment with all of our existing and future unsecured unsubordinated obligations. The public bonds are effectively subordinated to any of our existing and future secured debt to the extent of the value of the assets securing such debt. The range of due dates on our public bonds are set forth in the table above, and our capital lease obligations are primarily due in fiscal 2026 to 2035. International and other debt, as captioned above, is primarily in Brazil and India. On March 1, 2017, we paid off $150.0 million of public bonds that matured with funds from our existing credit facilities. Term Loans and Revolving Credit Facilities In connection with the Combination, on July 1, 2015, WestRock entered into a credit agreement (the “ Credit Agreement ”) that provided for a 5 -year senior unsecured term loan in an aggregate principal amount of $2.3 billion and a 5 -year senior unsecured revolving credit facility in an aggregate committed principal amount of $2.0 billion (together the “ Credit Facility ”). On July 1, 2015, we drew $1.2 billion of the $2.3 billion unsecured term loan and $1.1 billion was available to be drawn on a delayed draw basis not later than April 1, 2016 in up to two separate draws. On March 24, 2016, we drew $600.0 million of the then available $1.1 billion delayed draw term loan facility for general corporate purposes and the balance of the delayed draw term loan facility was terminated. On June 22, 2016, we pre-paid $200.0 million of amortization payments through the second quarter of fiscal 2018. On July 1, 2016, we executed an option to extend the term of the 5 -year senior unsecured revolving credit facility for one year beyond the original term. On June 30, 2017, we executed an option to extend the term of the senior unsecured revolving credit facility for a second additional year. Approximately $1.9 billion of the original $2.0 billion aggregate committed principal amount has been extended to July 1, 2022, and the remainder will continue to mature on July 1, 2020. Up to $150.0 million under the revolving credit facility may be used for the issuance of letters of credit. In addition, up to $400.0 million of the revolving credit facility may be used to fund borrowings in non-U.S. dollar currencies, including Canadian dollars, Euro and Pound Sterling. Additionally, we may request up to $200.0 million of the revolving credit facility to be allocated to a Mexican peso revolving credit facility. At June 30, 2017 and September 30, 2016 , we had no amounts outstanding under the revolving credit facility. On July 1, 2015, three WestRock wholly-owned subsidiaries, RockTenn CP, LLC, a Delaware limited liability company, Rock-Tenn Converting Company, a Georgia corporation, and MeadWestvaco Virginia Corporation, a Delaware corporation, as borrowers, entered into a credit agreement (the “ Farm Loan Credit Agreement ”) with CoBank ACB, as administrative agent. The Farm Loan Credit Agreement provides for a 7 -year senior unsecured term loan in an aggregate principal amount of $600.0 million (the “ Farm Credit Facility ”). The Farm Credit Facility is guaranteed by WestRock, RockTenn and MWV. At June 30, 2017 and September 30, 2016 , there was $600.0 million outstanding under this facility. On December 1, 2015, we entered into a $200.0 million uncommitted and revolving line of credit with Sumitomo Mitsui Banking Corporation that matured on December 1, 2016. We renewed on February 10, 2017, and the facility now matures on February 12, 2018. At June 30, 2017 and September 30, 2016 , we had $51.0 million and no amounts outstanding under this facility, respectively. On February 11, 2016, we entered into a $100.0 million uncommitted and revolving line of credit with the Bank of Tokyo-Mitsubishi UFJ, LTD. The facility matured on February 9, 2017, and was not renewed. On March 4, 2016, we entered into a $100.0 million uncommitted and revolving line of credit with Coöperatieve Rabobank U.A., New York Branch. The facility matured on March 2, 2017 and was renewed as a Euro dollar facility on the same day. The facility is an uncommitted revolving line of credit in the amount of €100.0 million . The facility will be available in Euros only, and continues until terminated in writing by WestRock or the lender. At June 30, 2017 and September 30, 2016 , we had no amounts outstanding under this facility. On May 15, 2017, we entered into a $600.0 million European revolving credit facility with Coöperatieve Rabobank U.A., New York Branch as the administrative agent for the syndicate of banks. This facility provides for a 364-day unsecured Euro and Sterling denominated borrowing of not more than $200.0 million and $400.0 million U.S. dollar equivalent, respectively. The facility matures on May 14, 2018. At June 30, 2017, we had $464.9 million outstanding under this facility. Receivables-Backed Financing Facility We have a $700.0 million Receivables Facility. On July 22, 2016, we executed an agreement to extend the maturity of this facility from October 24, 2017 to July 22, 2019. At June 30, 2017 and September 30, 2016 , maximum available borrowings, excluding amounts outstanding under the Receivables Facility, were $570.6 million and $584.3 million , respectively. The carrying amount of accounts receivable collateralizing the maximum available borrowings at June 30, 2017 was approximately $828 million . We have continuing involvement with the underlying receivables as we provide credit and collections services pursuant to the Receivables Facility agreement. At June 30, 2017 and September 30, 2016 , we had $415.0 million and no amounts outstanding under this facility. |
Fair Value
Fair Value | 9 Months Ended |
Jun. 30, 2017 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Fair Value | Fair Value Assets and Liabilities Measured or Disclosed at Fair Value We estimate fair values in accordance with ASC 820, “Fair Value Measurement ”. ASC 820 provides a framework for measuring fair value and expands disclosures required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and a hierarchy prioritizing the inputs to valuation techniques. ASC 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Additionally, ASC 820 defines levels within the hierarchy based on the availability of quoted prices for identical items in active markets, similar items in active or inactive markets and valuation techniques using observable and unobservable inputs. We incorporate credit valuation adjustments to reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in our fair value measurements. We disclose the fair value of our long-term debt in “ Note 12. Debt ” and the fair value of our pension and postretirement assets and liabilities in “ Note 14. Retirement Plans ” of the Notes to Consolidated Financial Statements section of the Fiscal 2016 Form 10-K. We have, or from time to time may have, various assets or liabilities whose fair value are not significant, such as supplemental retirement savings plans that are nonqualified deferred compensation plans pursuant to which assets are invested primarily in mutual funds, interest rate derivatives, commodity derivatives or other similar classes of assets or liabilities. Accounts Receivable Sales Agreement In fiscal 2014, we entered into an agreement (the “ A/R Sales Agreement ”) to sell to a third-party financial institution all of the short-term receivables generated from certain customer trade accounts, on a revolving basis, until the agreement is terminated by either party. The A/R Sales Agreement has been amended periodically. On June 27, 2016, it was amended to increase the maximum amount of receivables to $400.0 million . Transfers under this agreement meet the requirements to be accounted for as sales in accordance with guidance in ASC 860, “ Transfers and Servicing” . The following table represents a summary of the activity under the A/R Sales Agreement for the nine months ended June 30, 2017 and June 30, 2016 (in millions): Nine Months Ended June 30, 2017 2016 Receivable from financial institution at beginning of fiscal year $ 13.8 $ 5.8 Receivables sold to the financial institution and derecognized 1,141.2 1,095.1 Receivables collected by financial institution (1,106.1 ) (987.0 ) Cash proceeds from financial institution (41.5 ) (97.2 ) Receivable from financial institution at June 30, $ 7.4 $ 16.7 Cash proceeds related to receivables sold are included in cash from operating activities in the Condensed Consolidated Statement of Cash Flows in the accounts receivable line item. The loss on sale is not material as it is currently less than $7 million per fiscal year, and is recorded in interest income and other income (expense), net. Although the sales are made without recourse, we maintain continuing involvement with the sold receivables as we provide collections services related to the transferred assets. The associated servicing liability is not material given the high quality of the customers underlying the receivables and the anticipated short collection period. Financial Instruments Not Recognized at Fair Value Financial instruments not recognized at fair value on a recurring or nonrecurring basis include cash and cash equivalents, accounts receivable, certain other current assets, short-term debt, accounts payable, certain other current liabilities, and long-term debt. With the exception of long-term debt, the carrying amounts of these financial instruments approximate their fair values due to their short maturities. Fair Value of Nonfinancial Assets and Nonfinancial Liabilities We measure certain nonfinancial assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities include cost and equity method investments when they are deemed to be other-than-temporarily impaired, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired. During the nine months ended June 30, 2017 and June 30, 2016 , we did not have any significant nonfinancial assets or nonfinancial liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition other than the goodwill impairment of our former Specialty Chemicals reporting unit in first quarter of fiscal 2016 and the intangible impairment in the Specialty Chemicals segment in the third quarter of fiscal 2016 following the Separation, each as discussed in “ Note 6. Discontinued Operations ”. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Jun. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |
Retirement Plans | Retirement Plans We have defined benefit pension plans and other postretirement benefit plans for certain U.S. and non-U.S. employees. Certain plans were frozen for salaried and non-union hourly employees at various times in the past, although some employees meeting certain criteria are still accruing benefits. In addition, under several labor contracts, we make payments, based on hours worked, into MEPP trusts established for the benefit of certain collective bargaining employees in facilities both inside and outside the U.S. We also have supplemental executive retirement plans and other non-qualified defined benefit pension plans that provide unfunded supplemental retirement benefits to certain of our current and former executives. The supplemental executive retirement plans provide for incremental pension benefits in excess of those offered in our principal pension plan. The other postretirement benefit plans provide certain health care and life insurance benefits for certain salaried and hourly employees who meet specified age and service requirements as defined by the plans. For more information regarding our retirement plans, see “ Note 14. Retirement Plans ” of the Notes to Consolidated Financial Statements section of the Fiscal 2016 Form 10-K. The following table represents a summary of the components of net pension cost (credit) (in millions): Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 Service cost $ 10.0 $ 8.2 $ 33.9 $ 41.7 Interest cost 48.8 78.2 145.8 232.9 Expected return on plan assets (75.3 ) (103.3 ) (232.5 ) (309.3 ) Amortization of net actuarial loss 5.8 2.9 19.8 8.2 Amortization of prior service cost 1.1 1.0 3.1 2.9 Curtailment gain recognized — — — (1.0 ) Settlement loss recognized — — 28.7 — Special termination benefits 8.0 6.5 12.7 17.6 Company defined benefit plan (credit) cost (1.6 ) (6.5 ) 11.5 (7.0 ) Multiemployer and other plans 1.1 1.6 3.5 4.4 Net pension (credit) cost $ (0.5 ) $ (4.9 ) $ 15.0 $ (2.6 ) During the three and nine months ended June 30, 2017 , we made contributions of $8.6 million and $28.1 million , respectively, to our qualified and supplemental defined benefit pension plans. During the three and nine months ended June 30, 2016 , we made contributions of $14.3 million and $39.9 million , respectively, to our qualified and supplemental defined benefit pension plans. During the second quarter of fiscal 2017, our year-to date lump sum payments to certain beneficiaries of the Plan, together with several one-time severance benefit payments out of the Plan, triggered pension settlement accounting and a remeasurement of the Plan as of February 28, 2017. As a result of settlement accounting, we recognized as a current period expense a pro-rata portion of the unamortized net actuarial loss, after remeasurement, and recorded a $28.7 million non-cash charge to our earnings in the second quarter of 2017. The lump sum payments were to certain eligible former employees who were not currently receiving a monthly benefit. Eligible former employees whose present value of future pension benefits exceeded a certain minimum threshold had the option to either voluntarily accept lump sum payments or to not accept the offer and continue to be entitled to their monthly benefit upon retirement. Lump sum and one-time severance benefits payments of $203.7 million were made out of existing plan assets of the Plan. The discount rate used in the plan remeasurement was 4.49% , an increase from 4.04% for the Plan at September 30, 2016. The expected long-term rate of return on plan assets was unchanged. As a result of the February 28, 2017 remeasurement, the funded status of the Plan increased by $73.2 million as compared to September 30, 2016. The increase in the funded status was primarily due to a reduction in the plan obligations due to the increase in the discount rate. The other postretirement benefit plans provide certain health care and life insurance benefits for certain salaried and hourly employees who meet specified age and service requirements as defined by the plans. The following table represents a summary of the components of the net postretirement (credit) cost (in millions): Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 Service cost $ 0.4 $ 0.4 $ 1.0 $ 1.7 Interest cost 1.8 1.9 5.4 6.0 Amortization of net actuarial gain (0.3 ) (0.8 ) (0.9 ) (1.4 ) Amortization of prior service credit (1.3 ) (0.5 ) (3.8 ) (1.5 ) Net postretirement cost (credit) $ 0.6 $ 1.0 $ 1.7 $ 4.8 During the three and nine months ended June 30, 2017 , we funded an aggregate of $3.5 million and $6.5 million , respectively, to our other postretirement benefit plans. During the three and nine months ended June 30, 2016 , we funded an aggregate of $2.2 million and $9.3 million , respectively, to our other postretirement benefit plans. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Stock-Based Compensation Stock Options and Stock Appreciation Rights Stock options granted under our plans generally have an exercise price equal to the closing market price on the date of grant, generally vest in three years, in either one tranche or in approximately one-third increments, and have 10 -year contractual terms. However, a portion of our grants are subject to earlier expense recognition due to retirement eligibility rules. Presently, other than circumstances such as death, disability and retirement, grants generally include a provision requiring both a change of control and termination of employment to accelerate vesting. The aggregate intrinsic value of stock options exercised during the three months ended June 30, 2017 and June 30, 2016 was $12.1 million and $2.8 million , respectively. The aggregate intrinsic value of stock options exercised during the nine months ended June 30, 2017 and June 30, 2016 was $35.4 million and $6.1 million , respectively. The table below summarizes the changes in all stock options during the nine months ended June 30, 2017 : Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in millions) Outstanding at September 30, 2016 8,065,816 $ 29.73 Granted — — Exercised (1,548,607 ) 29.71 Expired (14,535 ) 50.99 Forfeited (58,097 ) 31.02 Outstanding at June 30, 2017 6,444,577 $ 29.67 4.6 $ 174.7 Exercisable at June 30, 2017 5,452,034 $ 29.01 4.0 $ 151.5 As part of the Combination, we issued SARs to replace outstanding MWV SARs. The SARs were valued using the Black-Scholes option pricing model. We measure compensation expense related to the SAR awards at the end of each period. No additional SARs are expected to be issued. The table below summarizes the changes in all SARs during the nine months ended June 30, 2017 : SARs Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in millions) Outstanding at September 30, 2016 65,971 $ 26.07 Granted — — Exercised (12,083 ) 28.01 Expired (1,087 ) 31.87 Outstanding at June 30, 2017 52,801 $ 25.50 3.2 $ 1.6 Exercisable at June 30, 2017 52,801 $ 25.50 3.2 $ 1.6 The aggregate intrinsic value of SARs exercised during the three months ended June 30, 2017 and June 30, 2016 was $0.0 million and $0.0 million , respectively. The aggregate intrinsic value of SARs exercised during the nine months ended June 30, 2017 and June 30, 2016 was $0.3 million and $0.1 million , respectively. Equity Awards Issued in Connection with the MPS Acquisition In connection with the MPS Acquisition, we replaced certain outstanding restricted stock units granted under the MPS long-term incentive plan with WestRock restricted stock units. No additional shares will be granted under the MPS plan. The MPS equity awards were replaced with identical terms utilizing an approximately 0.33 conversion factor as described in the merger agreement. As part of the MPS Acquisition, we granted 119,373 restricted stock units, which contain service conditions and were valued at $54.24 per share. The acquisition consideration included approximately $1.9 million related to outstanding MPS equity awards related to service prior to the effective date of the merger – the balance related to service after the effective date will be expensed over the remaining service period of the awards. Restricted Stock Restricted stock is typically granted annually to non-employee directors and certain of our employees. Our non-employee director awards generally vest over a period of up to one year and are treated as issued and carry dividend and voting rights until they vest. The vesting provisions for our employee awards may vary from grant to grant; however, vesting generally is contingent upon meeting various service and/or performance or market goals, including, but not limited to, achievement of various financial targets, including Cash Flow Per Share, Cash Flow to Equity Ratio and Relative Total Shareholder Return (each as defined in the award documents). Subject to the level of performance attained, the target award for some of the grants may be increased up to 200% of target or decreased to zero depending upon the terms of the individual grant. The employee grants generally vest over a period of three years. Presently, other than circumstances such as death, disability and retirement, the grants generally include a provision requiring both a change of control and termination of employment to accelerate vesting. For certain employee grants, the grantee is entitled to receive dividend equivalent units, but will forfeit the restricted award and the dividend equivalents if the employee separates from us during the vesting period or if the predetermined goals are not accomplished. During the nine months ended June 30, 2017 , pursuant to our 2016 Incentive Stock Plan, we granted 26,521 shares of restricted stock to our non-employee directors and 1,085,040 restricted stock awards to certain of our employees. The employee grants consisted of awards that included service, performance and market conditions. The employee grants with a market condition were valued using a Monte Carlo simulation at $64.41 per share. The significant assumptions used in valuing these grants included: an expected term of 2.9 years , an expected volatility of 30.6% and a risk-free interest rate of 1.4% . We amortize these costs on a straight-line basis over the explicit service period. During the nine months ended June 30, 2017 , we issued and vested 357,438 shares for prior year awards granted with a performance condition whose performance was in excess of target. The aggregate fair value of restricted stock that vested during the three months ended June 30, 2017 and June 30, 2016 was $2.7 million and $2.1 million , respectively. The aggregate fair value of restricted stock that vested during the nine months ended June 30, 2017 and June 30, 2016 was $59.6 million and $54.0 million , respectively. The table below summarizes the changes in unvested restricted stock awards during the nine months ended June 30, 2017 : Shares / Units Weighted Average Grant Date Fair Value Unvested at September 30, 2016 2,704,904 $ 40.89 Granted (1) 1,588,372 53.61 Vested (1,117,146 ) 47.79 Forfeited (129,209 ) 30.31 Unvested at June 30, 2017 (2) 3,046,921 $ 45.44 (1) Fiscal 2017 target awards to employees included 800,165 shares that may be increased to 200% of the target or decreased to zero , subject to the level of performance attained. The awards are reflected in the table at the target award amount of 100% . In connection with the Combination, the performance condition for the fiscal 2014 grant was based on the Cash Flow to Equity Ratio (as defined in the applicable grant letter). The performance goal was subsequently determined in accordance with the applicable grant letter to be attained at 176.6% of target. Awards issued during the nine months ended June 30, 2017 also include shares accelerated for terminated employees as a result of the Combination which were achieved at between 146.5% and 200% of target. During the nine months ended June 30, 2017 , we issued and vested 357,438 shares for prior year awards granted with a performance condition whose performance was in excess of target. (2) Target awards with a performance condition, net of subsequent forfeitures, granted may be increased up to 200% of the target or decreased to zero , subject to the level of performance attained. The awards are reflected in the table at the target award amount of 100% . Based on current facts and assumptions, we are forecasting the performance of the grants to be attained at levels that would result in the issuance of approximately 1.5 million additional shares. However, it is possible that the performance attained may vary from our forecast. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2017 | |
Loss Contingencies [Line Items] | |
Commitments and Contingencies | Commitments and Contingencies Environmental and Other Matters Environmental compliance requirements are a significant factor affecting our business. We employ manufacturing processes which result in various discharges, emissions and wastes. These processes are subject to numerous federal, state, local and international environmental laws and regulations, as well as the requirements of environmental permits and similar authorizations issued by various governmental authorities. On January 31, 2013, the EPA published a set of four interrelated final rules establishing national air emissions standards for hazardous air pollutants from industrial, commercial and institutional boilers and process heaters, commonly known as “ Boiler MACT .” Boiler MACT required compliance by January 31, 2016 or January 31, 2017 for mills for which we obtained a prior compliance extension. All work required for our boilers to comply with the rule has been completed. On July 29, 2016, the U.S. Court of Appeals for the District of Columbia Circuit issued a ruling on the consolidated cases challenging Boiler MACT. The court vacated key portions of the rule, including emission limits for certain subcategories of solid fuel boilers, and remanded other issues to the EPA for further rulemaking. At this time, we cannot predict with certainty how the recent decision will impact our existing Boiler MACT strategies or whether we will incur additional costs to comply with any revised Boiler MACT standards. In addition to Boiler MACT, we are subject to a number of other federal, state, local and international environmental rules that may impact our business, including the National Ambient Air Quality Standards for nitrogen oxide, sulfur dioxide, fine particulate matter and ozone for facilities in the U.S. We are involved in various administrative proceedings relating to environmental matters that arise in the normal course of business, and may be involved in future matters. Although the ultimate outcome of such matters cannot be predicted with certainty and we cannot at this time estimate any reasonably possible losses based on available information, management does not believe that the currently expected outcome of any environmental proceedings and claims that are pending or threatened against us will have a material adverse effect on our results of operations, financial condition or cash flows. CERCLA and Other Remediation Costs We face potential liability under federal, state, local and international laws as a result of releases, or threatened releases, of hazardous substances into the environment from various sites owned and operated by third parties at which Company-generated wastes have allegedly been deposited. Generators of hazardous substances sent to off-site disposal locations at which environmental problems exist, as well as the owners of those sites and certain other classes of persons, are liable for response costs for the investigation and remediation of such sites under CERCLA and analogous laws. While joint and several liability is authorized under CERCLA, liability is typically shared with other PRPs, and costs are commonly allocated according to relative amounts of waste deposited and other factors. In addition, certain of our current or former locations are being investigated or remediated under various environmental laws, including CERCLA, and regulations. Based on information known to us and assumptions, we do not believe that the costs of these projects will have a material adverse effect on our results of operations, financial condition or cash flows. However, the discovery of contamination or the imposition of additional obligations at these or other sites in the future could result in additional costs. On January 26, 2009, Smurfit-Stone and certain of its subsidiaries filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code. Smurfit-Stone’s Canadian subsidiaries also filed to reorganize in Canada. We believe that matters relating to previously identified third party PRP sites and certain facilities formerly owned or operated by Smurfit-Stone have been or will be satisfied claims in the Smurfit-Stone bankruptcy proceedings. However, we may face additional liability for cleanup activity at sites that are not subject to the bankruptcy discharge, but are not currently identified. Some of these liabilities may be satisfied from existing bankruptcy reserves. We believe that we can assert claims for indemnification pursuant to existing rights we have under purchase and other agreements in connection with certain of our existing remediation sites. In addition, we believe that we have insurance coverage, subject to applicable deductibles/retentions, policy limits and other conditions, for certain environmental matters. However, there can be no assurance that we will be successful with respect to any claim regarding these insurance or indemnification rights, or that, if we are successful, any amounts paid pursuant to the insurance or indemnification rights will be sufficient to cover all our costs and expenses. We also cannot predict with certainty whether we will be required to perform remediation projects at other locations, and it is possible that our remediation requirements and costs could increase materially in the future and exceed current reserves. In addition, we cannot currently assess with certainty the impact that future changes in cleanup standards or federal, state or other environmental laws, regulations or enforcement practices will have on our results of operations, financial condition or cash flows. As of June 30, 2017 , we had $17.4 million reserved for environmental liabilities on an undiscounted basis, of which $9.7 million is included in other long-term liabilities and $7.7 million in other current liabilities, including amounts accrued in connection with environmental obligations relating to the manufacturing facilities that we have closed. We believe the liability for these matters was adequately reserved at June 30, 2017 . Climate Change Certain jurisdictions in which we have manufacturing facilities or other investments have taken actions to address climate change. The EPA has issued the Clean Air Act permitting regulations applicable to certain facilities that emit GHG. The EPA also has promulgated a rule requiring certain industrial facilities that emit 25,000 metric tons or more of carbon dioxide equivalent per year to file an annual report of their emissions. While we have facilities subject to existing GHG permitting and reporting requirements, the impact of these requirements has not been material to date. Additionally, the EPA has been working on a set of interrelated rulemakings aimed at cutting carbon emissions from power plants. On August 3, 2015, the EPA issued a final rule establishing GHG emission guidelines for existing electric utility generating units (known as the “ Clean Power Plan ”). On the same day, the EPA issued a second rule setting standards of performance for new, modified and reconstructed electric utility generating units. While these rules do not apply directly to the power generation facilities at our mills, they have the potential to increase the cost of purchased electricity for our manufacturing operations and change the treatment of certain types of biomass that are currently considered carbon neutral. On February 9, 2016, the U.S. Supreme Court issued a stay halting implementation of the Clean Power Plan until the pending legal challenges to the rule are resolved. As directed by Executive Order, on April 4, 2017, the EPA issued a proposed rule announcing its intention to review the Clean Power Plan, and, if appropriate, initiate proceedings to suspend, revise or rescind it. A number of states subject to the Clean Power Plan have stopped working on their implementation strategies in response to the litigation and Executive Order; however, certain states where we operate manufacturing facilities have indicated their intention to continue their carbon reduction efforts. Due to ongoing litigation and other uncertainties regarding the Clean Power Plan, the impact on us cannot be quantified with certainty at this time. In addition to national efforts to regulate climate change, some U.S. states in which we have manufacturing operations are also taking measures to reduce GHG emissions, such as requiring GHG emissions reporting or developing regional cap-and trade programs. California has enacted a cap-and-trade program that took effect in 2012, and includes enforceable compliance obligations that began on January 1, 2013. In July 2017, California passed AB 398, extending the State’s cap-and-trade program to 2030. We do not have any manufacturing facilities that are subject to the cap-and-trade requirements in California; however, we are continuing to monitor the implementation of this program as well as proposed mandatory GHG reduction efforts in other states. Also, the Washington Department of Ecology has issued a final rule, known as the Clean Air Rule, which limits GHGs from facilities that have average annual carbon dioxide equivalent emissions equal to or exceeding 100,000 metric tons/year and proposes to begin GHG emissions reduction requirements for some regulated entities in 2017. Energy intensive and trade exposed facilities and transportation fuel importers, including our Tacoma, WA mill, are subject to regulation under this program. In September 2016, various groups filed lawsuits against the Washington Department of Ecology challenging the Clean Air Rule. We are carefully monitoring this litigation to assess its potential impact on our Tacoma operations. On May 16, 2017, the Governor of Virginia issued Executive Directive 11, directing the Secretary of Natural Resources to convene a work group to study and recommend methods to reduce carbon dioxide emissions from electric power facilities and grow the clean energy economy within existing state authority. WestRock has been selected by the Virginia Department of Environmental Quality to participate in this work group. In April 2016, the U.S. and over 170 other countries signed the Paris Agreement, which establishes a framework for reducing global GHG emissions. By signing the Paris Agreement, the U.S. made a non-binding commitment to reduce economy-wide GHG emissions by 26% to 28% below 2005 levels by 2025. Other countries in which we conduct business, including China, European Union member states and India, have set similar GHG reduction targets. The Paris Agreement became effective on November 4, 2016. Although a party to the agreement may not provide the required one-year notice of withdrawal until three years after the effective date, in June 2017, President Trump announced that the U.S. intended to withdraw from the Paris Agreement. In addition, the governors of New York, California and Washington subsequently announced their intent to form a “climate alliance” to coordinate a state response to climate change. At this time, it is not possible to determine how the Paris Agreement, or any potential U.S. commitments in lieu of those under the agreement, may impact U.S. industrial facilities, including our domestic operations. Several of our international facilities are located in countries that have already adopted GHG emissions trading schemes. For example, Quebec has become a member of the Western Climate Initiative, which is a collaboration among California and certain Canadian provinces that have joined together to create a cap-and-trade program to reduce GHG emissions. In 2009, Quebec adopted a target of reducing GHG emissions by 20% below 1990 levels by 2020 and 37.5% from 1990 levels by 2030. In 2011, Quebec issued a final regulation establishing a regional cap-and-trade program that required reductions in GHG emissions from covered emitters as of January 1, 2013. Our mill in Quebec is subject to these cap-and-trade requirements, although the direct impact of this regulation has not been material to date. Compliance with this program and other similar programs may require future expenditures to meet required GHG emission reduction requirements in future years. The regulation of climate change continues to develop in the areas of the world where we conduct business. We have systems in place for tracking the GHG emissions from our energy-intensive facilities, and we carefully monitor developments in climate change laws, regulations and policies to assess the potential impact of such developments on our results of operations, financial condition, cash flows and disclosure obligations. Litigation In 2010, Smurfit-Stone was one of nine U.S. and Canadian containerboard producers named as defendants in a lawsuit, in the U.S. District Court of the Northern District of Illinois, alleging that these producers violated the Sherman Act by conspiring to limit the supply and fix the prices of containerboard and products containing containerboard from mid-2005 through November 8, 2010 (the “ Antitrust Litigation ”). Plaintiffs have since amended their complaint by alleging a class period from February 15, 2004 through November 8, 2010. WestRock CP, LLC (f/k/a RockTenn CP, LLC), as the successor to Smurfit-Stone, is a defendant with respect to the period after Smurfit-Stone’s discharge from bankruptcy on June 30, 2010 through November 8, 2010. The complaint seeks treble damages and costs, including attorney’s fees. In March 2015, the court granted the Plaintiffs’ motion for class certification and the defendants, including us, appealed that decision. On August 4, 2016, the U. S. Court of Appeals for the Seventh Circuit affirmed the District Court’s decision regarding class certification. A petition for certiorari to the U.S. Supreme Court seeking to challenge the certification was denied April 17, 2017. Defendants also filed on January 9, 2017 individual and joint Motions for Summary Judgment in the District Court. On August 3, 2017, the District Court granted our Motion for Summary Judgment with respect to all claims against us. We do not know whether the Plaintiffs will appeal the District Court’s decision to grant Summary Judgment in our favor. As with numerous other large industrial companies, we have been named a defendant in asbestos-related personal injury litigation. Typically, these suits also name many other corporate defendants. To date, the costs resulting from the litigation, including settlement costs, have not been significant. As of June 30, 2017 , there were approximately 725 lawsuits. We believe that we have substantial insurance coverage, subject to applicable deductibles and policy limits, with respect to asbestos claims. We have valid defenses to these claims and intend to continue to defend them vigorously. Should the volume of litigation grow substantially, it is possible that we could incur significant costs resolving these cases. We do not expect the resolution of pending litigation and proceedings to have a material adverse effect on our consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on our results of operations. We are a defendant in a number of other lawsuits and claims arising out of the conduct of our business. While the ultimate results of such suits or other proceedings against us cannot be predicted with certainty, management believes the resolution of these other matters will not have a material adverse effect on our results of operations, financial condition or cash flows. Guarantees We make certain guarantees in the course of conducting our operations, for compliance with certain laws and regulations, or in connection with certain business dispositions. The guarantees include items such as funding of net losses in proportion to our ownership share of certain joint ventures, debt guarantees related to certain unconsolidated entities acquired in acquisitions, indemnifications of lessors in certain facilities and equipment operating leases for items such as additional taxes being assessed due to a change in tax law, and, certain other agreements. We estimate the exposure for these matters could be approximately $50 million . As of June 30, 2017 , we have recorded $11.9 million for the estimated fair value of these guarantees. We are unable to estimate our maximum exposure under operating leases because it is dependent on potential changes in the tax law; however, we believe our exposure related to guarantees would not have a material impact on our results of operations, financial condition or cash flows. |
Segment Information
Segment Information | 9 Months Ended |
Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | |
Segment Information | Segment Information Subsequent to the Separation, we report our financial results of operations in the following three reportable segments: Corrugated Packaging, which consists of our containerboard mill and corrugated packaging operations, as well as our recycling operations; Consumer Packaging, which consists of our consumer mills, folding carton, beverage, merchandising displays, home, health and beauty dispensing, and partition operations; and Land and Development, which develops and sells real estate primarily in the Charleston, SC region. Certain income and expenses are not allocated to our segments and, thus, the information that management uses to make operating decisions and assess performance does not reflect these amounts. Items not allocated are reported as non-allocated expenses or in other line items in the table below after segment income. The following table shows selected operating data for our segments (in millions): Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 Net sales (aggregate): Corrugated Packaging $ 2,161.2 $ 1,967.7 $ 6,169.8 $ 5,864.8 Consumer Packaging 1,520.7 1,635.8 4,586.2 4,766.4 Land and Development 71.1 42.0 225.1 76.1 Total $ 3,753.0 $ 3,645.5 $ 10,981.1 $ 10,707.3 Less net sales (intersegment): Corrugated Packaging $ 39.2 $ 31.4 $ 112.3 $ 99.2 Consumer Packaging 18.2 17.6 69.7 48.0 Total $ 57.4 $ 49.0 $ 182.0 $ 147.2 Net sales (unaffiliated customers): Corrugated Packaging $ 2,122.0 $ 1,936.3 $ 6,057.5 $ 5,765.6 Consumer Packaging 1,502.5 1,618.2 4,516.5 4,718.4 Land and Development 71.1 42.0 225.1 76.1 Total $ 3,695.6 $ 3,596.5 $ 10,799.1 $ 10,560.1 Segment income: Corrugated Packaging $ 223.9 $ 192.4 $ 524.9 $ 547.5 Consumer Packaging 94.8 151.7 301.2 342.6 Land and Development 0.2 9.5 19.4 6.2 Segment income 318.9 353.6 845.5 896.3 Pension lump sum settlement — — (28.7 ) — Land and Development impairment — — (42.7 ) — Restructuring and other costs, net (59.4 ) (43.1 ) (158.7 ) (317.0 ) Non-allocated expenses (9.4 ) (15.3 ) (36.7 ) (29.0 ) Interest expense (70.4 ) (64.0 ) (201.3 ) (193.2 ) Gain on extinguishment of debt 2.0 — 1.9 — Interest income and other income (expense), net 15.0 20.9 41.3 43.2 Gain on sale of HH&B 190.6 — 190.6 — Income from continuing operations before income taxes $ 387.3 $ 252.1 $ 611.2 $ 400.3 The following table shows selected operating data for our segments (in millions): June 30, September 30, Identifiable assets: Corrugated Packaging $ 10,461.9 $ 10,046.0 Consumer Packaging 11,811.6 10,122.5 Land and Development 105.7 460.6 Assets held for sale 200.7 52.3 Corporate 2,290.1 2,356.8 Total $ 24,870.0 $ 23,038.2 The changes in the carrying amount of goodwill during the nine months ended June 30, 2017 is as follows (in millions): Corrugated Packaging Consumer Packaging Total Balance as of September 30, 2016 Goodwill $ 1,722.5 $ 3,098.4 $ 4,820.9 Accumulated impairment losses — (42.8 ) (42.8 ) 1,722.5 3,055.6 4,778.1 Goodwill acquired 106.4 893.2 999.6 Goodwill disposed of — (323.8 ) (323.8 ) Purchase price allocation adjustments (1.2 ) 9.3 8.1 Translation adjustment (1.5 ) 5.7 4.2 Balance as of June 30, 2017 Goodwill 1,826.2 3,682.8 5,509.0 Accumulated impairment losses — (42.8 ) (42.8 ) $ 1,826.2 $ 3,640.0 $ 5,466.2 The goodwill disposed of in the Consumer Packaging segment was primarily related to the HH&B Sale. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2017 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | Subsequent Events Island Container Acquisition On July 17, 2017, we completed the Island Container Acquisition. The assets acquired include a corrugator and corrugated converting operations located in Wheatley Heights, New York, and certain related fulfillment assets located in Saddle Brook, New Jersey. We expect this acquisition will enable us to integrate more than 80,000 tons of containerboard into our Corrugated Packaging segment. The estimated purchase price of $83.5 million is subject to a working capital adjustment. Hannapak Acquisition On August 1, 2017, we completed the Hannapak Acquisition. Hanna Group is based in western Sydney in North Richmond, New South Wales and is one of Australia’s leading providers of folding cartons to a variety of markets, including beverage, food, confectionary, and healthcare. We expect this acquisition will build on our established and growing packaging business in the region. The estimated purchase price of $60 million is subject to a working capital adjustment. |
Equity and Other Comprehensiv28
Equity and Other Comprehensive Income (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Schedule of Stockholders Equity | The following is a summary of the changes in total equity for the nine months ended June 30, 2017 (in millions): WestRock Company Stockholders’ Equity Noncontrolling (1) Interests Total Equity Balance at September 30, 2016 $ 9,728.8 $ 101.2 $ 9,830.0 Net income (loss) attributable to common stockholders 512.1 (10.8 ) 501.3 Other comprehensive income, net of tax 83.0 — 83.0 Income tax benefit from share-based plans 1.0 — 1.0 Compensation expense under share-based plans 52.8 — 52.8 Cash dividends declared (per share - $1.20) (2) (304.5 ) — (304.5 ) Distributions and adjustments to noncontrolling interests — (42.8 ) (42.8 ) Issuance of common stock, net of stock received for minimum tax withholdings (3) 161.3 — 161.3 Fair value of share-based awards issued in acquisition 1.9 — 1.9 Purchases of common stock (93.0 ) — (93.0 ) Separation of Specialty Chemicals business 5.6 — 5.6 Balance at June 30, 2017 $ 10,149.0 $ 47.6 $ 10,196.6 (1) Excludes amounts related to contingently redeemable noncontrolling interests, which are separately classified outside of permanent equity in the mezzanine section of the Condensed Consolidated Balance Sheets. (2) Includes cash dividends paid, and dividends declared but unpaid, related to the shares reserved but unissued to satisfy Smurfit-Stone bankruptcy claims. (3) Includes the issuance of approximately 2.4 million shares of Common Stock valued at $136.1 million in connection with the U.S. Corrugated Acquisition. |
Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The tables below summarize the changes in accumulated other comprehensive loss, net of tax, by component for the nine months ended June 30, 2017 and June 30, 2016 (in millions): Cash Flow Hedges Defined Benefit Pension and Postretirement Plans Foreign Currency Items Total (1) Balance at September 30, 2016 $ (0.2 ) $ (523.8 ) $ (102.4 ) $ (626.4 ) Other comprehensive (loss) income before reclassifications (0.4 ) 19.7 4.7 24.0 Amounts reclassified from accumulated other comprehensive loss (income) (0.1 ) 29.4 — 29.3 Sale of HH&B — 2.9 26.8 29.7 Net current period other comprehensive (loss) income (0.5 ) 52.0 31.5 83.0 Balance at June 30, 2017 $ (0.7 ) $ (471.8 ) $ (70.9 ) $ (543.4 ) (1) All amounts are net of tax and noncontrolling interests. Cash Flow Hedges Defined Benefit Pension and Postretirement Plans Foreign Currency Items Total (1) Balance at September 30, 2015 $ (1.4 ) $ (540.7 ) $ (238.1 ) $ (780.2 ) Other comprehensive (loss) income before reclassifications (0.5 ) 1.4 133.4 134.3 Amounts reclassified from accumulated other comprehensive loss 1.0 5.4 20.2 26.6 Separation of Specialty Chemicals business 0.4 1.9 5.6 7.9 Net current period other comprehensive income 0.9 8.7 159.2 168.8 Balance at June 30, 2016 $ (0.5 ) $ (532.0 ) $ (78.9 ) $ (611.4 ) (1) All amounts are net of tax and noncontrolling interests. |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | The following table summarizes the reclassifications out of accumulated other comprehensive loss by component (in millions): Three Months Ended Three Months Ended June 30, 2017 June 30, 2016 Pretax Tax Net of Tax Pretax Tax Net of Tax Amortization of defined benefit pension and postretirement items (1) Actuarial losses (2) $ (4.8 ) $ 1.5 $ (3.3 ) $ (1.9 ) $ 0.6 $ (1.3 ) Prior service credits (costs) (2) 0.2 (0.1 ) 0.1 (0.4 ) 0.3 (0.1 ) Sale of HH&B (3) (4.2 ) 1.3 (2.9 ) — — — Subtotal defined benefit plans (8.8 ) 2.7 (6.1 ) (2.3 ) 0.9 (1.4 ) Foreign currency translation adjustments Sale of HH&B (3) (26.8 ) — (26.8 ) — — — Sale of foreign subsidiary (4) — — — (20.2 ) — (20.2 ) Subtotal foreign currency translation adjustments (26.8 ) — (26.8 ) (20.2 ) — (20.2 ) Derivative Instruments (1) Commodity cash flow hedges (5) — — — (0.3 ) — (0.3 ) Foreign currency cash flow hedges (6) 0.3 (0.2 ) 0.1 (0.5 ) 0.2 (0.3 ) Subtotal derivative instruments 0.3 (0.2 ) 0.1 (0.8 ) 0.2 (0.6 ) Total reclassifications for the period $ (35.3 ) $ 2.5 $ (32.8 ) $ (23.3 ) $ 1.1 $ (22.2 ) (1) Amounts in parentheses indicate charges to earnings. Amounts pertaining to noncontrolling interests are excluded. (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See “ Note 14. Retirement Plans ” for additional details. (3) Included in gain on sale of HH&B. (4) Included in interest income and other income (expense), net. (5) These accumulated other comprehensive income components are included in cost of goods sold. (6) These accumulated other comprehensive income components are included in net sales. The following table summarizes the reclassifications out of accumulated other comprehensive loss by component (in millions): Nine Months Ended Nine Months Ended June 30, 2017 June 30, 2016 Pretax Tax Net of Tax Pretax Tax Net of Tax Amortization of defined benefit pension and postretirement items (1) Actuarial losses (2) $ (46.7 ) $ 16.9 $ (29.8 ) $ (6.5 ) $ 1.9 $ (4.6 ) Prior service credits (costs) (2) 0.7 (0.3 ) 0.4 (1.3 ) 0.5 (0.8 ) Sale of HH&B (3) (4.2 ) 1.3 (2.9 ) — — — Subtotal defined benefit plans (50.2 ) 17.9 (32.3 ) (7.8 ) 2.4 (5.4 ) Foreign currency translation adjustments Sale of HH&B (3) (26.8 ) — (26.8 ) — — — Sale of foreign subsidiary (4) — — — (20.2 ) — (20.2 ) Subtotal foreign currency translation adjustments (26.8 ) — (26.8 ) (20.2 ) — (20.2 ) Derivative Instruments (1) Commodity cash flow hedges (5) — — — (1.4 ) 0.5 (0.9 ) Foreign currency cash flow hedges (6) 0.2 (0.1 ) 0.1 (0.2 ) 0.1 (0.1 ) Subtotal derivative instruments 0.2 (0.1 ) 0.1 (1.6 ) 0.6 (1.0 ) Total reclassifications for the period $ (76.8 ) $ 17.8 $ (59.0 ) $ (29.6 ) $ 3.0 $ (26.6 ) (1) Amounts in parentheses indicate charges to earnings. Amounts pertaining to noncontrolling interests are excluded. (2) These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See “Note 14 . Retirement Plans ” for additional details. (3) Included in gain on sale of HH&B. (4) Included in interest income and other income (expense), net. (5) These accumulated other comprehensive income components are included in cost of goods sold. (6) These accumulated other comprehensive income components are included in net sales. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Schedule of earnings per share, basic and diluted | The following table sets forth the computation of basic and diluted earnings per share under the two-class method (in millions, except per share data): Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 Basic earnings (loss) per share: Numerator: Income from continuing operations $ 326.6 $ 152.4 $ 503.3 $ 241.2 Less: Net loss (income) from continuing operations attributable to noncontrolling interest 1.5 (0.4 ) 8.8 (1.8 ) Income available to common stockholders, before discontinued operations 328.1 152.0 512.1 239.4 Less: Distributed and undistributed income available to participating securities (0.1 ) — (0.1 ) — Distributed and undistributed income attributable to common stockholders, before discontinued operations 328.0 152.0 512.0 239.4 Loss from discontinued operations (1) — (59.7 ) — (543.7 ) Net income (loss) attributable to common stockholders $ 328.0 $ 92.3 $ 512.0 $ (304.3 ) Denominator: Basic weighted average shares outstanding 252.1 252.7 251.5 254.8 Basic earnings per share from continuing operations $ 1.30 $ 0.60 $ 2.04 $ 0.94 Basic loss per share from discontinued operations — (0.23 ) — (2.13 ) Basic earnings (loss) per share attributable to common stockholders $ 1.30 $ 0.37 $ 2.04 $ (1.19 ) Diluted earnings (loss) per share: Numerator: Income from continuing operations $ 326.6 $ 152.4 $ 503.3 $ 241.2 Less: Net loss (income) from continuing operations attributable to noncontrolling interest 1.5 (0.4 ) 8.8 (1.8 ) Income available to common stockholders, before discontinued operations 328.1 152.0 512.1 239.4 Less: Distributed and undistributed income available to participating securities (0.1 ) — (0.1 ) — Distributed and undistributed income attributable to common stockholders, before discontinued operations 328.0 152.0 512.0 239.4 Loss from discontinued operations (1) — (59.7 ) — (543.7 ) Net income (loss) attributable to common stockholders $ 328.0 $ 92.3 $ 512.0 $ (304.3 ) Denominator: Basic weighted average shares outstanding 252.1 252.7 251.5 254.8 Effect of dilutive stock options and non-participating securities 3.2 3.5 3.5 3.8 Diluted weighted average shares outstanding 255.3 256.2 255.0 258.6 Diluted earnings per share from continuing operations $ 1.29 $ 0.59 $ 2.01 $ 0.93 Diluted loss per share from discontinued operations — (0.23 ) — (2.11 ) Diluted earnings (loss) per share attributable to common stockholders $ 1.29 $ 0.36 $ 2.01 $ (1.18 ) (1) Net of income attributable to noncontrolling interests of discontinued operations of $1.0 million and $4.3 million for the three and nine months ended June 30, 2016 , respectively. |
Acquisitions Schedule of Finite
Acquisitions Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The following table summarizes the weighted average life and the preliminary allocation to intangible assets recognized in the MPS Acquisition, excluding goodwill (in millions): Weighted Avg. Life Amounts Recognized as of the Acquisition Date Customer relationships 14.6 $ 996.1 Trademarks and tradenames 3.0 15.2 Photo library 10.0 2.5 Total 14.4 $ 1,013.8 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table presents the financial results of Specialty Chemicals’ discontinued operations (in millions): Three Months Ended Nine Months Ended June 30, 2016 June 30, 2016 Net sales $ 120.0 $ 533.7 Cost of goods sold 83.8 387.5 Gross Profit 36.2 146.2 Selling, general and administrative, excluding intangible amortization 11.8 65.6 Selling, general and administrative intangible amortization 5.9 28.8 Restructuring and other costs, net 22.5 50.9 Impairment of Specialty Chemicals goodwill and intangibles 101.1 579.4 Operating loss (105.1 ) (578.5 ) Interest income (expense) and other income (expense), net 0.2 0.1 Loss from discontinued operations before income taxes (104.9 ) (578.4 ) Income tax benefit 46.2 39.0 Loss from discontinued operations $ (58.7 ) $ (539.4 ) The following table presents the significant non-cash items and capital expenditures for Specialty Chemicals’ that are included in the Condensed Consolidated Statements of Cash Flows (in millions): Nine Months Ended June 30, 2016 Depreciation, depletion and amortization $ 57.2 Impairment of Specialty Chemicals goodwill and intangibles $ 579.4 Capital expenditures $ 43.9 |
Restructuring and Other Costs32
Restructuring and Other Costs, Net (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of restructuring and other costs, net | The following table presents a summary of restructuring and other charges, net, related to active restructuring and other initiatives that we incurred during the three and nine months ended June 30, 2017 and June 30, 2016 , the cumulative recorded amount since we started the initiative, and our estimate of the total we expect to incur (in millions): Summary of Restructuring and Other Costs, Net Segment Period Net Property, Plant and Equipment (1) Severance and Other Employee Related Costs Equipment and Inventory Relocation Costs Facility Carrying Costs Other Costs Total Corrugated Packaging (2) Current Qtr. $ 0.4 $ 0.2 $ 0.3 $ 1.4 $ (0.1 ) $ 2.2 YTD Fiscal 2017 (0.9 ) (4.5 ) 1.8 4.7 0.6 1.7 Prior Year Qtr. 1.4 0.4 — 3.4 0.4 5.6 YTD Fiscal 2016 181.3 15.6 0.3 15.9 8.8 221.9 Cumulative 218.7 35.3 6.4 35.7 22.3 318.4 Expected Total 218.7 36.4 7.0 37.7 22.9 322.7 Consumer Packaging (3) Current Qtr. 6.0 12.7 1.2 0.1 0.4 20.4 YTD Fiscal 2017 25.7 20.7 2.2 0.1 18.3 67.0 Prior Year Qtr. 1.5 3.4 0.4 0.1 — 5.4 YTD Fiscal 2016 (0.5 ) 4.0 0.9 0.5 — 4.9 Cumulative 35.0 28.7 4.3 1.8 18.8 88.6 Expected Total 35.0 28.7 4.5 2.3 18.8 89.3 Land and Development (4) Current Qtr. — 0.8 — — — 0.8 YTD Fiscal 2017 — 2.3 — — — 2.3 Prior Year Qtr. — — — — — — YTD Fiscal 2016 — — — — — — Cumulative — 12.9 — — — 12.9 Expected Total — 14.6 — — — 14.6 Other (5) Current Qtr. — 0.2 — — 35.8 36.0 YTD Fiscal 2017 0.1 0.7 — — 86.9 87.7 Prior Year Qtr. — — — — 32.1 32.1 YTD Fiscal 2016 1.2 0.9 — — 88.1 90.2 Cumulative 1.4 2.2 — — 474.0 477.6 Expected Total 1.4 2.2 — — 474.0 477.6 Total Current Qtr. $ 6.4 $ 13.9 $ 1.5 $ 1.5 $ 36.1 $ 59.4 YTD Fiscal 2017 $ 24.9 $ 19.2 $ 4.0 $ 4.8 $ 105.8 $ 158.7 Prior Year Qtr. $ 2.9 $ 3.8 $ 0.4 $ 3.5 $ 32.5 $ 43.1 YTD Fiscal 2016 $ 182.0 $ 20.5 $ 1.2 $ 16.4 $ 96.9 $ 317.0 Cumulative $ 255.1 $ 79.1 $ 10.7 $ 37.5 $ 515.1 $ 897.5 Expected Total $ 255.1 $ 81.9 $ 11.5 $ 40.0 $ 515.7 $ 904.2 (1) We have defined “ Net Property, Plant and Equipment ” as used in this Note 8 to represent property, plant and equipment impairment losses, subsequent adjustments to fair value for assets classified as held for sale, subsequent (gains) or losses on sales of property, plant and equipment and related parts and supplies, and accelerated depreciation on such assets, if any. (2) The Corrugated Packaging segment current quarter and year to date income primarily reflects on-going closure costs at previously closed facilities largely offset by the gain on sale of a previously closed recycling facility and severance adjustments. The prior year quarter charges primarily reflect charges at a recycling facility and on-going closure costs at previously closed facilities. The prior year to date charges primarily reflect charges associated with the permanent closures of the Coshocton, OH and Uncasville, CT medium mills, the Newberg, OR containerboard and newsprint mill, the Vapi, India linerboard mill, restructuring activities at a recycling facility and on-going closure costs at previously closed facilities. The cumulative charges are primarily associated with the closure of the Coshocton, Uncasville, Newberg, Vapi, India and Matane, Quebec mills, cumulative closure of corrugated container plants and recycled collection facilities and gains and losses associated with the sale of closed facilities. We have transferred a substantial portion of each closed facility's production to our other facilities. (3) The Consumer Packaging segment current quarter charges primarily reflect charges associated with the consolidation of operations following the MPS Acquisition and on-going closure costs at previously closed facilities. The current year to date charges primarily reflect the charges associated with the consolidation of operations following the MPS Acquisition, a folding carton facility including a $17.6 million impairment of a customer relationship intangible, included in other costs, beverage facilities and on-going closure costs at previously closed facilities. The prior year quarter charges primarily reflect the charges associated with a folding carton and merchandising displays facility and on-going closure costs at previously closed facilities. The prior year to date charges primarily reflect the charges associated with a folding carton and merchandising displays facility, on-going closure costs at previously closed facilities that were partially offset by the gain on sale of the Cincinnati, OH specialty recycled paperboard mill. The cumulative charges primarily reflect the consolidation of operations following the MPS Acquisition, the aforementioned customer relationship intangible impairment, our Cincinnati, OH mill and cumulative closures of folding carton, beverage and merchandising display facilities. We have transferred a substantial portion of each closed facility's production to our other facilities. (4) The Land and Development segment current quarter, year to date and cumulative charges reflect severance and other employee costs related to personnel reductions in the segment. (5) The expenses in the “Other” segment primarily reflect costs that we consider as related to Corporate that primarily consist of costs incurred as a result of acquisition, integration and divestiture expenses, excluding the fiscal 2016 Specialty Chemicals costs which are included in discontinued operations. The charges in the Net Property, Plant and Equipment column are primarily for the write-off of leasehold improvements associated with the Combination and included in integration expenses in following table. The pre-tax charges in the “Other” segment are summarized below (in millions): Acquisition Expenses Integration Expenses Divestiture Expenses Other Expenses Total Current Qtr. $ 19.6 $ 14.3 $ 1.9 $ 0.2 $ 36.0 YTD Fiscal 2017 $ 23.9 $ 51.9 $ 10.0 $ 1.9 $ 87.7 Prior Year Qtr. $ 1.4 $ 30.3 $ — $ 0.4 $ 32.1 YTD Fiscal 2016 $ 6.9 $ 82.0 $ — $ 1.3 $ 90.2 Acquisition expenses include expenses associated with mergers, acquisitions and other business combinations, whether consummated or not, as well as litigation expenses associated with mergers, acquisitions and business combinations, net of recoveries. Acquisition expenses primarily consist of advisory, legal, accounting, valuation and other professional or consulting fees. Integration expenses reflect primarily severance and other employee costs, professional services including work being performed to facilitate merger and acquisition integration, such as information systems integration costs, lease expense and other costs. Divestiture expenses in fiscal 2017 are primarily associated with the evaluation of strategic alternatives and the sale of HH&B and consist primarily of advisory, legal, accounting and other professional fees. Due to the complexity and duration of the integration activities associated with the Combination, the precise amount expected to be incurred has not been quantified in the “Expected Total” in the Summary of Restructuring and Other Costs, Net table above. We expect integration activities from the Combination to continue during fiscal 2017. |
Schedule of Restructuring and Other Costs Reserve By Type of Cost | The following table represents a summary of and the changes in the restructuring accrual, which is primarily composed of lease commitments, accrued severance and other employee costs, and a reconciliation of the restructuring accrual charges to the line item “ Restructuring and other costs, net ” on our Condensed Consolidated Statements of Operations (in millions): Nine Months Ended June 30, 2017 2016 Accrual at beginning of fiscal year $ 44.8 $ 21.4 Accruals acquired in acquisition 3.5 — Additional accruals 39.5 57.1 Payments (40.9 ) (41.0 ) Adjustment to accruals (6.2 ) 0.1 Accrual at June 30 $ 40.7 $ 37.6 Reconciliation of accruals and charges to restructuring and other costs, net (in millions): Nine Months Ended June 30, 2017 2016 Additional accruals and adjustments to accruals (see table above) $ 33.3 $ 57.2 Acquisition expenses 23.9 6.9 Integration expenses 35.9 50.0 Divestiture expenses 10.0 — Net property, plant and equipment 24.9 182.0 Severance and other employee expense 3.0 2.9 Equipment and inventory relocation costs 4.0 1.2 Facility carrying costs 4.8 16.4 Other expense 18.9 0.4 Total restructuring and other costs, net $ 158.7 $ 317.0 |
Schedule of Restructuring Costs Included in Other Expenses | The expenses in the “Other” segment primarily reflect costs that we consider as related to Corporate that primarily consist of costs incurred as a result of acquisition, integration and divestiture expenses, excluding the fiscal 2016 Specialty Chemicals costs which are included in discontinued operations. The charges in the Net Property, Plant and Equipment column are primarily for the write-off of leasehold improvements associated with the Combination and included in integration expenses in following table. The pre-tax charges in the “Other” segment are summarized below (in millions): Acquisition Expenses Integration Expenses Divestiture Expenses Other Expenses Total Current Qtr. $ 19.6 $ 14.3 $ 1.9 $ 0.2 $ 36.0 YTD Fiscal 2017 $ 23.9 $ 51.9 $ 10.0 $ 1.9 $ 87.7 Prior Year Qtr. $ 1.4 $ 30.3 $ — $ 0.4 $ 32.1 YTD Fiscal 2016 $ 6.9 $ 82.0 $ — $ 1.3 $ 90.2 Acquisition expenses include expenses associated with mergers, acquisitions and other business combinations, whether consummated or not, as well as litigation expenses associated with mergers, acquisitions and business combinations, net of recoveries. Acquisition expenses primarily consist of advisory, legal, accounting, valuation and other professional or consulting fees. Integration expenses reflect primarily severance and other employee costs, professional services including work being performed to facilitate merger and acquisition integration, such as information systems integration costs, lease expense and other costs. Divestiture expenses in fiscal 2017 are primarily associated with the evaluation of strategic alternatives and the sale of HH&B and consist primarily of advisory, legal, accounting and other professional fees. Due to the complexity and duration of the integration activities associated with the Combination, the precise amount expected to be incurred has not been quantified in the “Expected Total” in the Summary of Restructuring and Other Costs, Net table above. We expect integration activities from the Combination to continue during fiscal 2017. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Inventory [Line Items] | |
Schedule of inventories | Inventories were as follows (in millions): June 30, September 30, Finished goods and work in process $ 902.8 $ 800.6 Raw materials 571.0 535.7 Spare parts and supplies 361.1 335.7 Inventories at FIFO cost 1,834.9 1,672.0 LIFO reserve (67.8 ) (33.8 ) Net inventories $ 1,767.1 $ 1,638.2 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment [Table Text Block] | Property, plant and equipment, net consists of the following (in millions): June 30, September 30, Property, plant and equipment at cost: Land and buildings $ 2,001.2 $ 2,307.9 Machinery and equipment 11,298.6 10,672.9 Forestlands and mineral rights 201.8 201.1 Transportation equipment 29.6 27.6 Leasehold improvements 56.3 62.4 13,587.5 13,271.9 Less accumulated depreciation and amortization (4,510.2 ) (3,977.6 ) Property, plant and equipment, net $ 9,077.3 $ 9,294.3 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Debt Instrument [Line Items] | |
Components of debt | The following were individual components of debt (in millions): June 30, 2017 September 30, 2016 Carrying Value Weighted Avg. Interest Rate Carrying Value Weighted Avg. Interest Rate Public bonds due fiscal 2017 to 2022 $ 1,487.8 4.1 % $ 1,651.0 3.9 % Public bonds due fiscal 2023 to 2027 378.8 4.2 % 411.8 4.3 % Public bonds due fiscal 2030 to 2033 978.2 5.2 % 987.5 4.7 % Public bonds due fiscal 2037 to 2047 178.9 6.3 % 179.2 6.0 % Term loan facilities 2,196.5 2.3 % 2,195.7 1.8 % Revolving credit and swing facilities 515.9 1.0 % — N/A Receivables-backed financing facility 415.0 2.1 % — N/A Capital lease obligations 178.5 4.3 % 184.4 4.2 % Supplier financing and commercial card programs 117.3 N/A 106.0 N/A International and other debt 75.9 6.7 % 73.6 7.3 % Total debt 6,522.8 3.3 % 5,789.2 3.3 % Less current portion of debt 710.5 292.9 Long-term debt due after one year $ 5,812.3 $ 5,496.3 |
Fair Value Accounts Receivable
Fair Value Accounts Receivable Sales Agreement Rollforward (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Accounts Receivable Sales Agreement Rollforward [Line Items] | |
Accounts Receivable Sales Agreement Rollforward [Table Text Block] | The following table represents a summary of the activity under the A/R Sales Agreement for the nine months ended June 30, 2017 and June 30, 2016 (in millions): Nine Months Ended June 30, 2017 2016 Receivable from financial institution at beginning of fiscal year $ 13.8 $ 5.8 Receivables sold to the financial institution and derecognized 1,141.2 1,095.1 Receivables collected by financial institution (1,106.1 ) (987.0 ) Cash proceeds from financial institution (41.5 ) (97.2 ) Receivable from financial institution at June 30, $ 7.4 $ 16.7 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |
Summary of components of net pension cost and summary of components of postretirement benefit costs | The following table represents a summary of the components of the net postretirement (credit) cost (in millions): Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 Service cost $ 0.4 $ 0.4 $ 1.0 $ 1.7 Interest cost 1.8 1.9 5.4 6.0 Amortization of net actuarial gain (0.3 ) (0.8 ) (0.9 ) (1.4 ) Amortization of prior service credit (1.3 ) (0.5 ) (3.8 ) (1.5 ) Net postretirement cost (credit) $ 0.6 $ 1.0 $ 1.7 $ 4.8 The following table represents a summary of the components of net pension cost (credit) (in millions): Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 Service cost $ 10.0 $ 8.2 $ 33.9 $ 41.7 Interest cost 48.8 78.2 145.8 232.9 Expected return on plan assets (75.3 ) (103.3 ) (232.5 ) (309.3 ) Amortization of net actuarial loss 5.8 2.9 19.8 8.2 Amortization of prior service cost 1.1 1.0 3.1 2.9 Curtailment gain recognized — — — (1.0 ) Settlement loss recognized — — 28.7 — Special termination benefits 8.0 6.5 12.7 17.6 Company defined benefit plan (credit) cost (1.6 ) (6.5 ) 11.5 (7.0 ) Multiemployer and other plans 1.1 1.6 3.5 4.4 Net pension (credit) cost $ (0.5 ) $ (4.9 ) $ 15.0 $ (2.6 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Compensation, Stock Options and SARs, Activity [Table Text Block] | The table below summarizes the changes in all SARs during the nine months ended June 30, 2017 : SARs Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in millions) Outstanding at September 30, 2016 65,971 $ 26.07 Granted — — Exercised (12,083 ) 28.01 Expired (1,087 ) 31.87 Outstanding at June 30, 2017 52,801 $ 25.50 3.2 $ 1.6 Exercisable at June 30, 2017 52,801 $ 25.50 3.2 $ 1.6 The table below summarizes the changes in all stock options during the nine months ended June 30, 2017 : Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in millions) Outstanding at September 30, 2016 8,065,816 $ 29.73 Granted — — Exercised (1,548,607 ) 29.71 Expired (14,535 ) 50.99 Forfeited (58,097 ) 31.02 Outstanding at June 30, 2017 6,444,577 $ 29.67 4.6 $ 174.7 Exercisable at June 30, 2017 5,452,034 $ 29.01 4.0 $ 151.5 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | The table below summarizes the changes in unvested restricted stock awards during the nine months ended June 30, 2017 : Shares / Units Weighted Average Grant Date Fair Value Unvested at September 30, 2016 2,704,904 $ 40.89 Granted (1) 1,588,372 53.61 Vested (1,117,146 ) 47.79 Forfeited (129,209 ) 30.31 Unvested at June 30, 2017 (2) 3,046,921 $ 45.44 (1) Fiscal 2017 target awards to employees included 800,165 shares that may be increased to 200% of the target or decreased to zero , subject to the level of performance attained. The awards are reflected in the table at the target award amount of 100% . In connection with the Combination, the performance condition for the fiscal 2014 grant was based on the Cash Flow to Equity Ratio (as defined in the applicable grant letter). The performance goal was subsequently determined in accordance with the applicable grant letter to be attained at 176.6% of target. Awards issued during the nine months ended June 30, 2017 also include shares accelerated for terminated employees as a result of the Combination which were achieved at between 146.5% and 200% of target. During the nine months ended June 30, 2017 , we issued and vested 357,438 shares for prior year awards granted with a performance condition whose performance was in excess of target. (2) Target awards with a performance condition, net of subsequent forfeitures, granted may be increased up to 200% of the target or decreased to zero , subject to the level of performance attained. The awards are reflected in the table at the target award amount of 100% . Based on current facts and assumptions, we are forecasting the performance of the grants to be attained at levels that would result in the issuance of approximately 1.5 million additional shares. However, it is possible that the performance attained may vary from our forecast. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | |
Certain operating data for segments | The following table shows selected operating data for our segments (in millions): Three Months Ended Nine Months Ended June 30, June 30, 2017 2016 2017 2016 Net sales (aggregate): Corrugated Packaging $ 2,161.2 $ 1,967.7 $ 6,169.8 $ 5,864.8 Consumer Packaging 1,520.7 1,635.8 4,586.2 4,766.4 Land and Development 71.1 42.0 225.1 76.1 Total $ 3,753.0 $ 3,645.5 $ 10,981.1 $ 10,707.3 Less net sales (intersegment): Corrugated Packaging $ 39.2 $ 31.4 $ 112.3 $ 99.2 Consumer Packaging 18.2 17.6 69.7 48.0 Total $ 57.4 $ 49.0 $ 182.0 $ 147.2 Net sales (unaffiliated customers): Corrugated Packaging $ 2,122.0 $ 1,936.3 $ 6,057.5 $ 5,765.6 Consumer Packaging 1,502.5 1,618.2 4,516.5 4,718.4 Land and Development 71.1 42.0 225.1 76.1 Total $ 3,695.6 $ 3,596.5 $ 10,799.1 $ 10,560.1 Segment income: Corrugated Packaging $ 223.9 $ 192.4 $ 524.9 $ 547.5 Consumer Packaging 94.8 151.7 301.2 342.6 Land and Development 0.2 9.5 19.4 6.2 Segment income 318.9 353.6 845.5 896.3 Pension lump sum settlement — — (28.7 ) — Land and Development impairment — — (42.7 ) — Restructuring and other costs, net (59.4 ) (43.1 ) (158.7 ) (317.0 ) Non-allocated expenses (9.4 ) (15.3 ) (36.7 ) (29.0 ) Interest expense (70.4 ) (64.0 ) (201.3 ) (193.2 ) Gain on extinguishment of debt 2.0 — 1.9 — Interest income and other income (expense), net 15.0 20.9 41.3 43.2 Gain on sale of HH&B 190.6 — 190.6 — Income from continuing operations before income taxes $ 387.3 $ 252.1 $ 611.2 $ 400.3 The following table shows selected operating data for our segments (in millions): June 30, September 30, Identifiable assets: Corrugated Packaging $ 10,461.9 $ 10,046.0 Consumer Packaging 11,811.6 10,122.5 Land and Development 105.7 460.6 Assets held for sale 200.7 52.3 Corporate 2,290.1 2,356.8 Total $ 24,870.0 $ 23,038.2 |
Schedule of Goodwill [Table Text Block] | The changes in the carrying amount of goodwill during the nine months ended June 30, 2017 is as follows (in millions): Corrugated Packaging Consumer Packaging Total Balance as of September 30, 2016 Goodwill $ 1,722.5 $ 3,098.4 $ 4,820.9 Accumulated impairment losses — (42.8 ) (42.8 ) 1,722.5 3,055.6 4,778.1 Goodwill acquired 106.4 893.2 999.6 Goodwill disposed of — (323.8 ) (323.8 ) Purchase price allocation adjustments (1.2 ) 9.3 8.1 Translation adjustment (1.5 ) 5.7 4.2 Balance as of June 30, 2017 Goodwill 1,826.2 3,682.8 5,509.0 Accumulated impairment losses — (42.8 ) (42.8 ) $ 1,826.2 $ 3,640.0 $ 5,466.2 |
Equity and Other Comprehensiv40
Equity and Other Comprehensive Income (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Jun. 09, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jul. 01, 2015 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | $ 9,830 | ||||||
Net income (loss) attributable to common stockholders | 501.3 | ||||||
Other comprehensive income, net of tax | 83 | ||||||
Income tax benefit from share-based plans | 1 | ||||||
Compensation expense under share-based plans | 52.8 | ||||||
Cash dividends declared (per share - $1.20) | [1] | (304.5) | |||||
Distributions and adjustments to noncontrolling interests | (42.8) | ||||||
Issuance of common stock, net of stock received for minimum tax withholdings | [2] | 161.3 | |||||
Fair value of share-based awards issued in acquisition | $ 1.9 | 1.9 | |||||
Purchases of common stock | (93) | ||||||
Separation of Specialty Chemicals business | 5.6 | ||||||
Balance at end of period | $ 10,196.6 | $ 10,196.6 | |||||
Cash dividends paid per share | $ 0.40 | $ 0.375 | $ 1.20 | $ 1.125 | |||
Parent [Member] | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | $ 9,728.8 | ||||||
Net income (loss) attributable to common stockholders | 512.1 | ||||||
Other comprehensive income, net of tax | 83 | ||||||
Income tax benefit from share-based plans | 1 | ||||||
Compensation expense under share-based plans | 52.8 | ||||||
Cash dividends declared (per share - $1.20) | [1] | (304.5) | |||||
Distributions and adjustments to noncontrolling interests | 0 | ||||||
Issuance of common stock, net of stock received for minimum tax withholdings | [2] | 161.3 | |||||
Fair value of share-based awards issued in acquisition | $ 1.9 | 1.9 | |||||
Separation of Specialty Chemicals business | 5.6 | ||||||
Balance at end of period | 10,149 | 10,149 | |||||
Noncontrolling Interest [Member] | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Balance at beginning of period | [3] | 101.2 | |||||
Net income (loss) attributable to common stockholders | [3] | (10.8) | |||||
Other comprehensive income, net of tax | [3] | 0 | |||||
Income tax benefit from share-based plans | [3] | 0 | |||||
Compensation expense under share-based plans | [3] | 0 | |||||
Cash dividends declared (per share - $1.20) | [3] | 0 | |||||
Distributions and adjustments to noncontrolling interests | [3] | (42.8) | |||||
Issuance of common stock, net of stock received for minimum tax withholdings | [3] | 0 | |||||
Fair value of share-based awards issued in acquisition | [3] | 0 | 0 | ||||
Purchases of common stock | [3] | 0 | |||||
Separation of Specialty Chemicals business | [3] | 0 | |||||
Balance at end of period | [3] | $ 47.6 | $ 47.6 | ||||
Maximum [Member] | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Effective Tax Rate, Net of Tax Components of Other Comprehensive Income | 38.00% | 35.00% | |||||
Minimum [Member] | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Effective Tax Rate, Net of Tax Components of Other Comprehensive Income | 37.00% | 34.00% | |||||
Common Stock [Member] | |||||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 40 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Authorized Share Repurchase as a Percentage of Common Stock Outstanding | 15.00% | ||||||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 24.7 | 24.7 | |||||
Treasury Stock, Shares, Acquired | 1.8 | ||||||
U.S. Corrugated [Member] | |||||||
Shares Issued for the Purchase of a Business | 2.4 | ||||||
Value of stock issued for the purchase of a business | $ 136.1 | ||||||
[1] | Includes cash dividends paid, and dividends declared but unpaid, related to the shares reserved but unissued to satisfy Smurfit-Stone bankruptcy claims. | ||||||
[2] | Includes the issuance of approximately 2.4 million shares of Common Stock valued at $136.1 million in connection with the U.S. Corrugated Acquisition. | ||||||
[3] | Excludes amounts related to contingently redeemable noncontrolling interests, which are separately classified outside of permanent equity in the mezzanine section of the Condensed Consolidated Balance Sheets. |
Equity and Other Comprehensiv41
Equity and Other Comprehensive Income Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of period | [1] | $ (626.4) | $ (780.2) |
Other comprehensive (loss) income before reclassifications | [1] | 24 | 134.3 |
Amounts reclassified from accumulated other comprehensive loss (income) | [1] | 29.3 | 26.6 |
Separation of Business | [1] | 29.7 | 7.9 |
Net current period other comprehensive income (loss) | [1] | 83 | 168.8 |
Balance at end of period | [1] | (543.4) | (611.4) |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of period | [1] | (0.2) | (1.4) |
Other comprehensive (loss) income before reclassifications | [1] | (0.4) | (0.5) |
Amounts reclassified from accumulated other comprehensive loss (income) | [1] | (0.1) | 1 |
Separation of Business | [1] | 0 | 0.4 |
Net current period other comprehensive income (loss) | [1] | (0.5) | 0.9 |
Balance at end of period | [1] | (0.7) | (0.5) |
Accumulated Defined Benefit Plans Adjustment [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of period | [1] | (523.8) | (540.7) |
Other comprehensive (loss) income before reclassifications | [1] | 19.7 | 1.4 |
Amounts reclassified from accumulated other comprehensive loss (income) | [1] | 29.4 | 5.4 |
Separation of Business | [1] | 2.9 | 1.9 |
Net current period other comprehensive income (loss) | [1] | 52 | 8.7 |
Balance at end of period | [1] | (471.8) | (532) |
Accumulated Translation Adjustment [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of period | [1] | (102.4) | (238.1) |
Other comprehensive (loss) income before reclassifications | [1] | 4.7 | 133.4 |
Amounts reclassified from accumulated other comprehensive loss (income) | [1] | 0 | 20.2 |
Separation of Business | [1] | 26.8 | 5.6 |
Net current period other comprehensive income (loss) | [1] | 31.5 | 159.2 |
Balance at end of period | [1] | $ (70.9) | $ (78.9) |
[1] | All amounts are net of tax and noncontrolling interests. |
Equity and Other Comprehensiv42
Equity and Other Comprehensive Income Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net actuarial gain arising during the period | $ 0.2 | $ 0 | $ 20.7 | $ 1.4 | |
Amortization and settlement recognition of net actuarial loss, included in pension cost | 3.4 | 1.5 | 30.2 | 4.9 | |
Amortization of prior service (cost) credit, Net of Tax | (0.1) | 0.2 | (0.4) | 0.8 | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Sale of HH&B, Net of Tax | 2.9 | 0 | 2.9 | 0 | |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale of HH&B, Net of Tax | 26.8 | 0 | 26.8 | 0 | |
Sale of foreign subsidiary, Net of Tax | 0 | 20.2 | 0 | 20.2 | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | (0.1) | 0.4 | (0.1) | 1 | |
Parent [Member] | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net actuarial gain arising during the period | 19.7 | 1.4 | |||
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, Tax | (15.1) | (0.8) | |||
Amortization of net actuarial loss, Pre-Tax Amount | [1],[2] | (4.8) | (1.9) | (46.7) | (6.5) |
Amortization of net actuarial loss, Tax | [1],[2] | 1.5 | 0.6 | 16.9 | 1.9 |
Amortization and settlement recognition of net actuarial loss, included in pension cost | [1],[2] | (3.3) | (1.3) | (29.8) | (4.6) |
Amortization of prior service (cost) credit, Pre-Tax Amount | [1],[2] | 0.2 | (0.4) | 0.7 | (1.3) |
Amortization of prior service (cost) credit, Tax | [1],[2] | (0.1) | 0.3 | (0.3) | 0.5 |
Amortization of prior service (cost) credit, Net of Tax | [1],[2] | 0.1 | (0.1) | 0.4 | (0.8) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Sale of HH&B, before Tax | [1],[3] | (4.2) | 0 | (4.2) | 0 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Sale of HH&B, Tax | [1],[3] | 1.3 | 0 | 1.3 | 0 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Sale of HH&B, Net of Tax | [1],[3] | (2.9) | 0 | (2.9) | 0 |
Defined Benefit Plans, before Tax | [1] | (8.8) | (2.3) | (50.2) | (7.8) |
Defined Benefit Plans, Tax | [1] | 2.7 | 0.9 | 17.9 | 2.4 |
Defined Benefit Plans, Net of Tax | [1] | (6.1) | (1.4) | (32.3) | (5.4) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale of HH&B, before Tax | [1],[3] | (26.8) | 0 | (26.8) | 0 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale of HH&B, Tax | [1],[3] | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale of HH&B, Net of Tax | [1],[3] | (26.8) | 0 | (26.8) | 0 |
Sale of foreign subsidiary, Pre-Tax Amount | [1],[4] | 0 | (20.2) | 0 | (20.2) |
Sale of foreign subsidiary, Tax | [1],[4] | 0 | 0 | 0 | 0 |
Sale of foreign subsidiary, Net of Tax | [1],[4] | 0 | (20.2) | 0 | (20.2) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | [1] | (26.8) | (20.2) | (26.8) | (20.2) |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | [1] | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | [1] | (26.8) | (20.2) | (26.8) | (20.2) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | [1] | 0.3 | (0.8) | 0.2 | (1.6) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | [1] | (0.2) | 0.2 | (0.1) | 0.6 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | [1] | 0.1 | (0.6) | 0.1 | (1) |
Total Reclassifications From Other Comprehensive Income Before Tax | [1] | (35.3) | (23.3) | (76.8) | (29.6) |
Total Reclassifications From Other Comprehensive Income Tax Portion | [1] | 2.5 | 1.1 | 17.8 | 3 |
Total Reclassifications From Other Comprehensive Income Net Of Tax | [1] | (32.8) | (22.2) | (59) | (26.6) |
Commodity Contract [Member] | Parent [Member] | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | [1],[5] | 0 | (0.3) | 0 | (1.4) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | [1],[5] | 0 | 0 | 0 | 0.5 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | [1],[5] | 0 | (0.3) | 0 | (0.9) |
Foreign Exchange Contract [Member] | Parent [Member] | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | [1],[6] | 0.3 | (0.5) | (0.2) | (0.2) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | [1],[6] | (0.2) | 0.2 | 0.1 | 0.1 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | [1],[6] | $ 0.1 | $ (0.3) | $ (0.1) | $ (0.1) |
Minimum [Member] | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Effective Tax Rate, Net of Tax Components of Other Comprehensive Income | 37.00% | 34.00% | |||
Maximum [Member] | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Effective Tax Rate, Net of Tax Components of Other Comprehensive Income | 38.00% | 35.00% | |||
[1] | Amounts in parentheses indicate charges to earnings. Amounts pertaining to noncontrolling interests are excluded. | ||||
[2] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See “Note 14. Retirement Plans” for additional details. | ||||
[3] | Included in gain on sale of HH&B. | ||||
[4] | Included in interest income and other income (expense), net. | ||||
[5] | These accumulated other comprehensive income components are included in cost of goods sold. | ||||
[6] | These accumulated other comprehensive income components are included in net sales. |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||
Income from continuing operations | $ 326.6 | $ 152.4 | $ 503.3 | $ 241.2 | |
Less: Net loss (income) from continuing operations attributable to noncontrolling interest | 1.5 | (0.4) | 8.8 | (1.8) | |
Income available to common stockholders, before discontinued operations | 328.1 | 152 | 512.1 | 239.4 | |
Less: Distributed and undistributed income available to participating securities, Basic | (0.1) | 0 | (0.1) | 0 | |
Distributed and Undistributed Income Attributable to Common Stockholders, before Discontinued Operations, Basic | 328 | 152 | 512 | 239.4 | |
Less: Distributed and undistributed income available to participating securities, Diluted | (0.1) | 0 | (0.1) | 0 | |
Distributed and Undistributed Income Attributable to Common Stockholders, before Discontinued Operations, Diluted | 328 | 152 | 512 | 239.4 | |
Loss from discontinued operations | [1] | 0 | (59.7) | 0 | (543.7) |
Net income (loss) attributable to common stockholders | $ 328 | $ 92.3 | $ 512 | $ (304.3) | |
Basic weighted average shares outstanding | 252.1 | 252.7 | 251.5 | 254.8 | |
Basic earnings per share from continuing operations | $ 1.30 | $ 0.60 | $ 2.04 | $ 0.94 | |
Basic loss per share from discontinued operations | 0 | (0.23) | 0 | (2.13) | |
Basic earnings (loss) per share attributable to common stockholders | $ 1.30 | $ 0.37 | $ 2.04 | $ (1.19) | |
Net income (loss) attributable to common stockholders | $ 328 | $ 92.3 | $ 512 | $ (304.3) | |
Effect of dilutive stock options and non-participating securities | 3.2 | 3.5 | 3.5 | 3.8 | |
Diluted weighted average shares outstanding | 255.3 | 256.2 | 255 | 258.6 | |
Diluted earnings per share from continuing operations | $ 1.29 | $ 0.59 | $ 2.01 | $ 0.93 | |
Diluted loss per share from discontinued operations | 0 | (0.23) | 0 | (2.11) | |
Diluted earnings (loss) per share attributable to common stockholders | $ 1.29 | $ 0.36 | $ 2.01 | $ (1.18) | |
Less: Net loss (income) attributable to noncontrolling interest, Discontinued operations | $ (1) | $ (4.3) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.6 | 1.9 | 0.6 | 1.8 | |
Smurfit Stone [Member] | |||||
Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | |||||
Weighted average shares reserved | 0.2 | 0.3 | 0.2 | 0.3 | |
[1] | Net of income attributable to noncontrolling interests of discontinued operations of $1.0 million and $4.3 million for the three and nine months ended June 30, 2016, respectively. |
Acquisitions (Details)
Acquisitions (Details) $ / shares in Units, shares in Millions, $ in Millions | Jun. 09, 2017USD ($)sharesT | Jun. 06, 2017USD ($)$ / shares | Mar. 13, 2017USD ($) | Apr. 01, 2016USD ($) | Jan. 19, 2016USD ($) | Oct. 01, 2015USD ($) | Jun. 30, 2017USD ($) | Apr. 01, 2017 | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) |
Business Acquisition [Line Items] | ||||||||||
Debt assumed | $ 929.1 | $ 15 | ||||||||
Fair value of share-based awards issued in acquisition | 1.9 | |||||||||
Goodwill | 5,466.2 | $ 4,778.1 | ||||||||
Fair value of assets acquired, including goodwill | 3,197.4 | 583.4 | ||||||||
Liabilities and noncontrolling interests assumed | 1,616.1 | $ 170.5 | ||||||||
Star Pizza Acquisition [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Acquisition, Effective Date of Acquisition | Mar. 13, 2017 | |||||||||
Business Acquisition, Cost of Acquired Entity, Purchase Price Net of Cash Acquired | $ 34.7 | |||||||||
Estimated Working Capital Settlement | 0.6 | |||||||||
Goodwill | 2.3 | |||||||||
Grupo Gondi Investment [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to Acquire Interest in Joint Venture | $ 175 | |||||||||
Equity Method Investment, Ownership Percentage | 25.00% | 27.00% | ||||||||
Equity Method Investments | $ 300 | |||||||||
Pre-Tax Non-Cash Gain in Connection with Investment in Joint Venture | $ 12.1 | |||||||||
Investment, Date of Investment | Apr. 1, 2016 | |||||||||
Packaging Acquisition [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Acquisition, Effective Date of Acquisition | Jan. 19, 2016 | |||||||||
Business Acquisition, Cost of Acquired Entity, Purchase Price Net of Cash Acquired | $ 94.1 | |||||||||
Liabilities assumed | 25.8 | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 1.7 | |||||||||
Debt assumed | 1.3 | |||||||||
Collection of Escrow Receivable in Business Combination | $ 3.5 | |||||||||
Property, plant and equipment | 55 | |||||||||
Goodwill | 9.3 | |||||||||
MPS [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Acquisition, Share Price | $ / shares | $ 18 | |||||||||
Business Acquisition, Effective Date of Acquisition | Jun. 6, 2017 | |||||||||
Business Acquisition, Cost of Acquired Entity, Purchase Price Net of Cash Acquired | $ 1,351.1 | |||||||||
Finite-Lived Intangible Asset, Useful Life | 14 years 5 months | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | $ 47.5 | |||||||||
Debt assumed | 929.1 | |||||||||
Fair value of share-based awards issued in acquisition | 1.9 | |||||||||
Property, plant and equipment | 495.1 | |||||||||
Goodwill | 893.2 | |||||||||
Liabilities and noncontrolling interests assumed | 1,564.6 | |||||||||
Finite-Lived Intangible Assets, Gross | $ 1,013.8 | |||||||||
SP Fiber [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percent Ownership in GPS | 48.00% | |||||||||
Business Acquisition, Effective Date of Acquisition | Oct. 1, 2015 | |||||||||
Business Acquisition, Cost of Acquired Entity, Purchase Price Net of Cash Acquired | $ 278.8 | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 9.2 | |||||||||
Debt assumed | 13.7 | |||||||||
Payment for Debt Owed by GPS | 36.5 | |||||||||
Property, plant and equipment | 324.8 | |||||||||
Goodwill | 57.3 | |||||||||
Liabilities and noncontrolling interests assumed | 150.3 | |||||||||
U.S. Corrugated [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Acquisition, Effective Date of Acquisition | Jun. 9, 2017 | |||||||||
Business Acquisition, Cost of Acquired Entity, Purchase Price Net of Cash Acquired | $ 193.7 | |||||||||
Liabilities assumed | $ 50.6 | |||||||||
Increase in Containerboard Tons Due to the Vertical Integration of our Corrugated Packaging Segment | T | 105,000 | |||||||||
Increase in Containerboard Tons Due to Long-term Supply Contract | T | 50,000 | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | $ 1.4 | |||||||||
Estimated Working Capital Settlement | 3.4 | |||||||||
Property, plant and equipment | 32.4 | |||||||||
Goodwill | $ 104.1 | |||||||||
Shares Issued for the Purchase of a Business | shares | 2.4 | |||||||||
Value of stock issued for the purchase of a business | $ 136.1 | |||||||||
Customer Relationships [Member] | Star Pizza Acquisition [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 24.8 | |||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||||
Customer Relationships [Member] | Packaging Acquisition [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 10.5 | |||||||||
Customer Relationships [Member] | MPS [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 14 years 7 months | |||||||||
Finite-Lived Intangible Assets, Gross | $ 996.1 | |||||||||
Customer Relationships [Member] | SP Fiber [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 13.5 | |||||||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||||||||
Customer Relationships [Member] | U.S. Corrugated [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 7 years 6 months | |||||||||
Finite-Lived Intangible Assets, Gross | $ 76.9 | |||||||||
Trademarks and Trade Names [Member] | MPS [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | |||||||||
Finite-Lived Intangible Assets, Gross | $ 15.2 | |||||||||
Photo Library [Member] | MPS [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||||
Finite-Lived Intangible Assets, Gross | $ 2.5 | |||||||||
Maximum [Member] | Customer Relationships [Member] | Packaging Acquisition [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 15 years | |||||||||
Maximum [Member] | Customer Relationships [Member] | MPS [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 16 years | |||||||||
Minimum [Member] | Customer Relationships [Member] | Packaging Acquisition [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 9 years | |||||||||
Minimum [Member] | Customer Relationships [Member] | MPS [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 13 years 6 months |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |||
May 15, 2016 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Long-term Debt | $ 6,522.8 | $ 5,789.2 | |||
Specialty Chemicals Business [Member] | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Borrowing By Ingevity in Contemplation of Separation of Business | $ 500 | ||||
Long-Term Asset for the Estimated Fair Value of Principal and Interest Payments on Capital Lease Obligation Assumed By Ingevity | 108.2 | ||||
Trust Funded By Company and Assumed by Ingevity to Secure the Principal Payment of Capital Lease Upon Maturity | $ 68.9 | ||||
Impairment of Specialty Chemicals goodwill | $ 478.3 | ||||
Intangible Asset Impairment | $ 101.1 | ||||
Capital Lease Obligations [Member] | Secured Debt [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Long-term Debt | $ 178.5 | $ 184.4 | |||
Capital Lease Obligations [Member] | Secured Debt [Member] | Specialty Chemicals Business [Member] | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Interest rate | 7.67% | ||||
Long-term Debt | $ 80 |
Discontinued Operations (Income
Discontinued Operations (Income Statement Disclosures) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income tax benefit | $ 0 | $ 46.2 | $ 0 | $ 39 |
Loss from discontinued operations | $ 0 | (58.7) | $ 0 | (539.4) |
Specialty Chemicals Business [Member] | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net sales | 120 | 533.7 | ||
Cost of goods sold | 83.8 | 387.5 | ||
Gross Profit | 36.2 | 146.2 | ||
Selling, general and administrative, excluding intangible amortization | 11.8 | 65.6 | ||
Selling, general and administrative intangible amortization | 5.9 | 28.8 | ||
Restructuring and other costs, net | 22.5 | 50.9 | ||
Impairment of Specialty Chemicals goodwill and intangibles | 101.1 | 579.4 | ||
Operating loss | (105.1) | (578.5) | ||
Interest income (expense) and other income (expense), net | 0.2 | 0.1 | ||
Loss from discontinued operations before income taxes | (104.9) | (578.4) | ||
Income tax benefit | 46.2 | 39 | ||
Loss from discontinued operations | $ (58.7) | (539.4) | ||
Disposal Group, Including Discontinued Operation, Restructuring and Other Costs Related to Duque de Caxias Facility, Net | $ 10 |
Discontinued Operations (Deprec
Discontinued Operations (Depreciation, Amortization and Capital Expenditures) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Impairment of Specialty Chemicals goodwill and intangibles | $ 0 | $ 579.4 |
Specialty Chemicals Business [Member] | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation, depletion and amortization | 57.2 | |
Impairment of Specialty Chemicals goodwill and intangibles | 579.4 | |
Capital expenditures | $ 43.9 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) - USD ($) $ in Millions | Feb. 23, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from the sale of HH&B | $ 993.5 | $ 0 | ||||
Gain on sale of HH&B | $ 190.6 | $ 0 | 190.6 | $ 0 | ||
Total current assets held for sale | 200.7 | 200.7 | $ 52.3 | |||
Home, Health and Beauty Business [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from the sale of HH&B | $ 1,025 | |||||
Foreign Pension Liabilities Divested Due to Sale of Business | $ 25 | |||||
Gain on sale of HH&B | 190.6 | |||||
Land and Development Portfolio Assets [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Total current assets held for sale | $ 170.7 | $ 170.7 |
Restructuring and Other Costs49
Restructuring and Other Costs, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | $ 59.4 | $ 43.1 | $ 158.7 | $ 317 | |
Restructuring and Related Cost, Cost Incurred to Date | 897.5 | ||||
Restructuring and Related Cost, Expected Cost | 904.2 | ||||
Acquisition Expenses | 23.9 | 6.9 | |||
Integration expenses | 35.9 | 50 | |||
Divestiture expenses | 10 | 0 | |||
Net Property, Plant and Equipment [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [1] | 6.4 | 2.9 | 24.9 | 182 |
Restructuring and Related Cost, Cost Incurred to Date | [1] | 255.1 | |||
Restructuring and Related Cost, Expected Cost | [1] | 255.1 | |||
Employee severance and other EE costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | 13.9 | 3.8 | 19.2 | 20.5 | |
Restructuring and Related Cost, Cost Incurred to Date | 79.1 | ||||
Restructuring and Related Cost, Expected Cost | 81.9 | ||||
Equipment and Inventory Relocation Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | 1.5 | 0.4 | 4 | 1.2 | |
Restructuring and Related Cost, Cost Incurred to Date | 10.7 | ||||
Restructuring and Related Cost, Expected Cost | 11.5 | ||||
Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | 1.5 | 3.5 | 4.8 | 16.4 | |
Restructuring and Related Cost, Cost Incurred to Date | 37.5 | ||||
Restructuring and Related Cost, Expected Cost | 40 | ||||
Other Costs Related to Restructuring and Other Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | 36.1 | 32.5 | 105.8 | 96.9 | |
Restructuring and Related Cost, Cost Incurred to Date | 515.1 | ||||
Restructuring and Related Cost, Expected Cost | 515.7 | ||||
Corrugated Packaging [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [2] | 2.2 | 5.6 | 1.7 | 221.9 |
Restructuring and Related Cost, Cost Incurred to Date | [2] | 318.4 | |||
Restructuring and Related Cost, Expected Cost | [2] | 322.7 | |||
Corrugated Packaging [Member] | Net Property, Plant and Equipment [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [1],[2] | 0.4 | 1.4 | (0.9) | 181.3 |
Restructuring and Related Cost, Cost Incurred to Date | [1],[2] | 218.7 | |||
Restructuring and Related Cost, Expected Cost | [1],[2] | 218.7 | |||
Corrugated Packaging [Member] | Employee severance and other EE costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [2] | 0.2 | 0.4 | (4.5) | 15.6 |
Restructuring and Related Cost, Cost Incurred to Date | [2] | 35.3 | |||
Restructuring and Related Cost, Expected Cost | [2] | 36.4 | |||
Corrugated Packaging [Member] | Equipment and Inventory Relocation Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [2] | 0.3 | 0 | 1.8 | 0.3 |
Restructuring and Related Cost, Cost Incurred to Date | [2] | 6.4 | |||
Restructuring and Related Cost, Expected Cost | [2] | 7 | |||
Corrugated Packaging [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [2] | 1.4 | 3.4 | 4.7 | 15.9 |
Restructuring and Related Cost, Cost Incurred to Date | [2] | 35.7 | |||
Restructuring and Related Cost, Expected Cost | [2] | 37.7 | |||
Corrugated Packaging [Member] | Other Costs Related to Restructuring and Other Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [2] | (0.1) | 0.4 | 0.6 | 8.8 |
Restructuring and Related Cost, Cost Incurred to Date | [2] | 22.3 | |||
Restructuring and Related Cost, Expected Cost | [2] | 22.9 | |||
Consumer Packaging [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [3] | 20.4 | 5.4 | 67 | 4.9 |
Restructuring and Related Cost, Cost Incurred to Date | [3] | 88.6 | |||
Restructuring and Related Cost, Expected Cost | [3] | 89.3 | |||
Consumer Packaging [Member] | Net Property, Plant and Equipment [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [1],[3] | 6 | 1.5 | 25.7 | (0.5) |
Restructuring and Related Cost, Cost Incurred to Date | [1],[3] | 35 | |||
Restructuring and Related Cost, Expected Cost | [1],[3] | 35 | |||
Consumer Packaging [Member] | Employee severance and other EE costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [3] | 12.7 | 3.4 | 20.7 | 4 |
Restructuring and Related Cost, Cost Incurred to Date | [3] | 28.7 | |||
Restructuring and Related Cost, Expected Cost | [3] | 28.7 | |||
Consumer Packaging [Member] | Equipment and Inventory Relocation Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [3] | 1.2 | 0.4 | 2.2 | 0.9 |
Restructuring and Related Cost, Cost Incurred to Date | [3] | 4.3 | |||
Restructuring and Related Cost, Expected Cost | [3] | 4.5 | |||
Consumer Packaging [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [3] | 0.1 | 0.1 | 0.1 | 0.5 |
Restructuring and Related Cost, Cost Incurred to Date | [3] | 1.8 | |||
Restructuring and Related Cost, Expected Cost | [3] | 2.3 | |||
Consumer Packaging [Member] | Other Costs Related to Restructuring and Other Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [3] | 0.4 | 0 | 18.3 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | [3] | 18.8 | |||
Restructuring and Related Cost, Expected Cost | [3] | 18.8 | |||
Land and Development [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [4] | 0.8 | 0 | 2.3 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | [4] | 12.9 | |||
Restructuring and Related Cost, Expected Cost | [4] | 14.6 | |||
Land and Development [Member] | Net Property, Plant and Equipment [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [1],[4] | 0 | 0 | 0 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | [1],[4] | 0 | |||
Restructuring and Related Cost, Expected Cost | [1],[4] | 0 | |||
Land and Development [Member] | Employee severance and other EE costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [4] | 0.8 | 0 | 2.3 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | [4] | 12.9 | |||
Restructuring and Related Cost, Expected Cost | [4] | 14.6 | |||
Land and Development [Member] | Equipment and Inventory Relocation Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [4] | 0 | 0 | 0 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | [4] | 0 | |||
Restructuring and Related Cost, Expected Cost | [4] | 0 | |||
Land and Development [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [4] | 0 | 0 | 0 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | [4] | 0 | |||
Restructuring and Related Cost, Expected Cost | [4] | 0 | |||
Land and Development [Member] | Other Costs Related to Restructuring and Other Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [4] | 0 | 0 | 0 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | [4] | 0 | |||
Restructuring and Related Cost, Expected Cost | [4] | 0 | |||
Other Segments [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [5] | 36 | 32.1 | 87.7 | 90.2 |
Restructuring and Related Cost, Cost Incurred to Date | [5] | 477.6 | |||
Restructuring and Related Cost, Expected Cost | [5] | 477.6 | |||
Restructuring and Other Costs, Other | 0.2 | 0.4 | 1.9 | 1.3 | |
Acquisition Expenses | 19.6 | 1.4 | 23.9 | 6.9 | |
Integration expenses | 14.3 | 30.3 | 51.9 | 82 | |
Divestiture expenses | 1.9 | 0 | 10 | 0 | |
Other Segments [Member] | Net Property, Plant and Equipment [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [1],[5] | 0 | 0 | 0.1 | 1.2 |
Restructuring and Related Cost, Cost Incurred to Date | [1],[5] | 1.4 | |||
Restructuring and Related Cost, Expected Cost | [1],[5] | 1.4 | |||
Other Segments [Member] | Employee severance and other EE costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [5] | 0.2 | 0 | 0.7 | 0.9 |
Restructuring and Related Cost, Cost Incurred to Date | [5] | 2.2 | |||
Restructuring and Related Cost, Expected Cost | [5] | 2.2 | |||
Other Segments [Member] | Equipment and Inventory Relocation Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [5] | 0 | 0 | 0 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | [5] | 0 | |||
Restructuring and Related Cost, Expected Cost | [5] | 0 | |||
Other Segments [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [5] | 0 | 0 | 0 | 0 |
Restructuring and Related Cost, Cost Incurred to Date | [5] | 0 | |||
Restructuring and Related Cost, Expected Cost | [5] | 0 | |||
Other Segments [Member] | Other Costs Related to Restructuring and Other Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other costs, net | [5] | $ 35.8 | $ 32.1 | 86.9 | $ 88.1 |
Restructuring and Related Cost, Cost Incurred to Date | [5] | 474 | |||
Restructuring and Related Cost, Expected Cost | [5] | 474 | |||
Customer Relationships [Member] | Consumer Packaging [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Impairment of Intangible Assets, Finite-lived | $ 17.6 | ||||
[1] | We have defined “Net Property, Plant and Equipment” as used in this Note 8 to represent property, plant and equipment impairment losses, subsequent adjustments to fair value for assets classified as held for sale, subsequent (gains) or losses on sales of property, plant and equipment and related parts and supplies, and accelerated depreciation on such assets, if any. | ||||
[2] | The Corrugated Packaging segment current quarter and year to date income primarily reflects on-going closure costs at previously closed facilities largely offset by the gain on sale of a previously closed recycling facility and severance adjustments. The prior year quarter charges primarily reflect charges at a recycling facility and on-going closure costs at previously closed facilities. The prior year to date charges primarily reflect charges associated with the permanent closures of the Coshocton, OH and Uncasville, CT medium mills, the Newberg, OR containerboard and newsprint mill, the Vapi, India linerboard mill, restructuring activities at a recycling facility and on-going closure costs at previously closed facilities. The cumulative charges are primarily associated with the closure of the Coshocton, Uncasville, Newberg, Vapi, India and Matane, Quebec mills, cumulative closure of corrugated container plants and recycled collection facilities and gains and losses associated with the sale of closed facilities. We have transferred a substantial portion of each closed facility's production to our other facilities. | ||||
[3] | The Consumer Packaging segment current quarter charges primarily reflect charges associated with the consolidation of operations following the MPS Acquisition and on-going closure costs at previously closed facilities. The current year to date charges primarily reflect the charges associated with the consolidation of operations following the MPS Acquisition, a folding carton facility including a $17.6 million impairment of a customer relationship intangible, included in other costs, beverage facilities and on-going closure costs at previously closed facilities. The prior year quarter charges primarily reflect the charges associated with a folding carton and merchandising displays facility and on-going closure costs at previously closed facilities. The prior year to date charges primarily reflect the charges associated with a folding carton and merchandising displays facility, on-going closure costs at previously closed facilities that were partially offset by the gain on sale of the Cincinnati, OH specialty recycled paperboard mill. The cumulative charges primarily reflect the consolidation of operations following the MPS Acquisition, the aforementioned customer relationship intangible impairment, our Cincinnati, OH mill and cumulative closures of folding carton, beverage and merchandising display facilities. We have transferred a substantial portion of each closed facility's production to our other facilities. | ||||
[4] | The Land and Development segment current quarter, year to date and cumulative charges reflect severance and other employee costs related to personnel reductions in the segment. | ||||
[5] | The expenses in the “Other” segment primarily reflect costs that we consider as related to Corporate that primarily consist of costs incurred as a result of acquisition, integration and divestiture expenses, excluding the fiscal 2016 Specialty Chemicals costs which are included in discontinued operations. The charges in the Net Property, Plant and Equipment column are primarily for the write-off of leasehold improvements associated with the Combination and included in integration expenses in following table. The pre-tax charges in the “Other” segment are summarized below (in millions): AcquisitionExpenses IntegrationExpenses Divestiture Expenses Other Expenses TotalCurrent Qtr.$19.6 $14.3 $1.9 $0.2 $36.0YTD Fiscal 2017$23.9 $51.9 $10.0 $1.9 $87.7Prior Year Qtr.$1.4 $30.3 $— $0.4 $32.1YTD Fiscal 2016$6.9 $82.0 $— $1.3 $90.2Acquisition expenses include expenses associated with mergers, acquisitions and other business combinations, whether consummated or not, as well as litigation expenses associated with mergers, acquisitions and business combinations, net of recoveries. Acquisition expenses primarily consist of advisory, legal, accounting, valuation and other professional or consulting fees. Integration expenses reflect primarily severance and other employee costs, professional services including work being performed to facilitate merger and acquisition integration, such as information systems integration costs, lease expense and other costs. Divestiture expenses in fiscal 2017 are primarily associated with the evaluation of strategic alternatives and the sale of HH&B and consist primarily of advisory, legal, accounting and other professional fees. Due to the complexity and duration of the integration activities associated with the Combination, the precise amount expected to be incurred has not been quantified in the “Expected Total” in the Summary of Restructuring and Other Costs, Net table above. We expect integration activities from the Combination to continue during fiscal 2017. |
Restructuring and Other Costs50
Restructuring and Other Costs, Net Restructuring Accrual (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Restructuring Reserve [Roll Forward] | ||
Accrual at beginning of period | $ 44.8 | $ 21.4 |
Accruals acquired in acquisition | 3.5 | 0 |
Additional accruals | 39.5 | 57.1 |
Payments | (40.9) | (41) |
Adjustment to accruals | (6.2) | 0.1 |
Accrual at end of period | $ 40.7 | $ 37.6 |
Restructuring and Other Costs51
Restructuring and Other Costs, Net Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Restructuring Cost and Reserve [Line Items] | |||||
Additional accruals and adjustments to accruals (see table above) | $ 33.3 | $ 57.2 | |||
Acquisition expenses | 23.9 | 6.9 | |||
Integration expenses | 35.9 | 50 | |||
Divestiture expenses | 10 | 0 | |||
Net property, plant and equipment | 24.9 | 182 | |||
Severance and other employee expense | 3 | 2.9 | |||
Equipment and inventory relocation costs | 4 | 1.2 | |||
Facility carrying costs | 4.8 | 16.4 | |||
Other expense | 18.9 | 0.4 | |||
Restructuring and other costs, net | $ 59.4 | $ 43.1 | 158.7 | 317 | |
Other Segments [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Acquisition expenses | 19.6 | 1.4 | 23.9 | 6.9 | |
Integration expenses | 14.3 | 30.3 | 51.9 | 82 | |
Divestiture expenses | 1.9 | 0 | 10 | 0 | |
Restructuring and Other Costs, Other | 0.2 | 0.4 | 1.9 | 1.3 | |
Restructuring and other costs, net | [1] | $ 36 | $ 32.1 | $ 87.7 | $ 90.2 |
[1] | The expenses in the “Other” segment primarily reflect costs that we consider as related to Corporate that primarily consist of costs incurred as a result of acquisition, integration and divestiture expenses, excluding the fiscal 2016 Specialty Chemicals costs which are included in discontinued operations. The charges in the Net Property, Plant and Equipment column are primarily for the write-off of leasehold improvements associated with the Combination and included in integration expenses in following table. The pre-tax charges in the “Other” segment are summarized below (in millions): AcquisitionExpenses IntegrationExpenses Divestiture Expenses Other Expenses TotalCurrent Qtr.$19.6 $14.3 $1.9 $0.2 $36.0YTD Fiscal 2017$23.9 $51.9 $10.0 $1.9 $87.7Prior Year Qtr.$1.4 $30.3 $— $0.4 $32.1YTD Fiscal 2016$6.9 $82.0 $— $1.3 $90.2Acquisition expenses include expenses associated with mergers, acquisitions and other business combinations, whether consummated or not, as well as litigation expenses associated with mergers, acquisitions and business combinations, net of recoveries. Acquisition expenses primarily consist of advisory, legal, accounting, valuation and other professional or consulting fees. Integration expenses reflect primarily severance and other employee costs, professional services including work being performed to facilitate merger and acquisition integration, such as information systems integration costs, lease expense and other costs. Divestiture expenses in fiscal 2017 are primarily associated with the evaluation of strategic alternatives and the sale of HH&B and consist primarily of advisory, legal, accounting and other professional fees. Due to the complexity and duration of the integration activities associated with the Combination, the precise amount expected to be incurred has not been quantified in the “Expected Total” in the Summary of Restructuring and Other Costs, Net table above. We expect integration activities from the Combination to continue during fiscal 2017. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Effective tax rates | 15.70% | 39.50% | 17.70% | 39.70% |
Effective Income Tax Rate Reconciliation, Release of State Deferred Tax Liability as a Result of Equity Restructuring, Amount | $ 23.8 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Finished goods and work in process | $ 902.8 | $ 800.6 |
Raw materials | 571 | 535.7 |
Spare parts and supplies | 361.1 | 335.7 |
Inventories at FIFO cost | 1,834.9 | 1,672 |
LIFO reserve | (67.8) | (33.8) |
Net inventories | $ 1,767.1 | $ 1,638.2 |
Property, Plant and Equipment54
Property, Plant and Equipment (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Sep. 30, 2016 |
Property, plant and equipment at cost: | ||
Land and buildings | $ 2,001.2 | $ 2,307.9 |
Machinery and equipment | 11,298.6 | 10,672.9 |
Forestlands and mineral rights | 201.8 | 201.1 |
Transportation equipment | 29.6 | 27.6 |
Leasehold improvements | 56.3 | 62.4 |
Property, plant and equipment, at cost | 13,587.5 | 13,271.9 |
Less accumulated depreciation and amortization | (4,510.2) | (3,977.6) |
Property, plant and equipment, net | $ 9,077.3 | $ 9,294.3 |
Debt (Details)
Debt (Details) € in Millions, $ in Millions | Mar. 01, 2017USD ($) | Jun. 22, 2016USD ($) | Jul. 01, 2015USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2017EUR (€) | May 15, 2017USD ($) | Mar. 02, 2017EUR (€) | Sep. 30, 2016USD ($) | Mar. 24, 2016USD ($) | Mar. 04, 2016USD ($) | Feb. 11, 2016USD ($) | Dec. 01, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 6,522.8 | $ 5,789.2 | ||||||||||
Unamortized Fair Market Value Step-Up | $ 288.7 | 316.3 | ||||||||||
Weighted Average Interest Rate Excluding Fair Value Step-Up | 3.90% | 3.90% | ||||||||||
Current portion of debt | $ 710.5 | 292.9 | ||||||||||
Long-term debt due after one year | 5,812.3 | $ 5,496.3 | ||||||||||
Letters of credit outstanding, amount | $ 112.9 | |||||||||||
Debt, Weighted Average Interest Rate | 3.30% | 3.30% | 3.30% | |||||||||
Fair value of debt | $ 6,700 | $ 6,000 | ||||||||||
Notes Due Fiscal 2017 to 2022 [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 1,487.8 | $ 1,651 | ||||||||||
Debt, Weighted Average Interest Rate | 4.10% | 4.10% | 3.90% | |||||||||
Committed Credit Facilities [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Maximum Borrowing Capacity, Amount | $ 2,300 | |||||||||||
Notes Due Fiscal 2017 to 2022 [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of Unsecured Debt | $ 150 | |||||||||||
Term Loan Facilities [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 2,196.5 | $ 2,195.7 | ||||||||||
Debt, Weighted Average Interest Rate | 2.30% | 2.30% | 1.80% | |||||||||
Revolving Credit Facility [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 0 | $ 0 | ||||||||||
Credit Facility, maximum borrowing capacity | $ 2,000 | |||||||||||
Debt Instrument, Term, in Years | 5 years | |||||||||||
Committed Principal Amount Extended to July 1, 2022 | 1,900 | |||||||||||
Revolving Credit Facility [Member] | Letter of Credit [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases | $ 150 | |||||||||||
Revolving Credit Facility [Member] | Canadian Dollar Borrowing [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases | 400 | |||||||||||
Revolving Credit Facility [Member] | Future Mexican Peso Sub-Facility [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit Facility, maximum borrowing capacity | 200 | |||||||||||
Term Loan Facility [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit Facility, maximum borrowing capacity | 2,300 | |||||||||||
Amount Drawn on Unsecured Term Loan | $ 1,200 | |||||||||||
Amount Which Can Be Drawn On A Delayed Draw Basis Not Later Than Nine Months After the Closing of the Credit Agreement, Amount Drawn Down During Period | $ 600 | |||||||||||
Debt Instrument, Term, in Years | 5 years | |||||||||||
Amount Which Can Be Drawn On A Delayed Draw Basis Not Later Than Nine Months After the Closing of the Credit Agreement | $ 1,100 | |||||||||||
Prepayment of Amortization Payments | $ 200 | |||||||||||
Revolving Credit and Swing Facilities [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 515.9 | 0 | ||||||||||
Debt, Weighted Average Interest Rate | 1.00% | 1.00% | ||||||||||
Farm Credit Facility [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 600 | 600 | ||||||||||
Credit Facility, maximum borrowing capacity | $ 600 | |||||||||||
Debt Instrument, Term, in Years | 7 years | |||||||||||
Receivables Facility [Member] | Secured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | 415 | 0 | ||||||||||
Receivables backed financing, maximum borrowing amount | 700 | |||||||||||
Debt Instrument, Maximum Borrowing Capacity, Amount | 570.6 | 584.3 | ||||||||||
Loans and Leases Receivable, Collateral for Secured Borrowings | $ 828 | |||||||||||
Debt, Weighted Average Interest Rate | 2.10% | 2.10% | ||||||||||
Notes Due Fiscal 2023 to 2027 [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 378.8 | $ 411.8 | ||||||||||
Debt, Weighted Average Interest Rate | 4.20% | 4.20% | 4.30% | |||||||||
Notes Due Fiscal 2030 to 2033 [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 978.2 | $ 987.5 | ||||||||||
Debt, Weighted Average Interest Rate | 5.20% | 5.20% | 4.70% | |||||||||
Notes Due Fiscal 2037 to 2047 [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 178.9 | $ 179.2 | ||||||||||
Debt, Weighted Average Interest Rate | 6.30% | 6.30% | 6.00% | |||||||||
Capital Lease Obligations [Member] | Secured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 178.5 | $ 184.4 | ||||||||||
Debt, Weighted Average Interest Rate | 4.30% | 4.30% | 4.20% | |||||||||
Supplier Financing and Commercial Card Programs [Member] | Unsecured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 117.3 | $ 106 | ||||||||||
International and Other Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term Debt | $ 75.9 | $ 73.6 | ||||||||||
Debt, Weighted Average Interest Rate | 6.70% | 6.70% | 7.30% | |||||||||
Unsecured Debt [Member] | Sumitomo Revolving Line of Credit [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Current portion of debt | $ 51 | $ 0 | ||||||||||
Credit Facility, maximum borrowing capacity | $ 200 | |||||||||||
Unsecured Debt [Member] | Cooperatieve Rabobank U.A., New York Branch Revolving Line of Credit [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Current portion of debt | € 0 | $ 0 | ||||||||||
Credit Facility, maximum borrowing capacity | € 100 | $ 100 | ||||||||||
Unsecured Debt [Member] | Cooperatieve Rabobank U.A., New York Branch European Revolving Credit Facility [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Current portion of debt | $ 464.9 | |||||||||||
Credit Facility, maximum borrowing capacity | $ 600 | |||||||||||
Line of Credit Facility, Maximum Euro Denominated Borrowing Capacity | 200 | |||||||||||
Line of Credit Facility, Maximum Sterling Denominated Borrowing Capacity | $ 400 | |||||||||||
Unsecured Debt [Member] | Bank of Tokyo-Mitsubishi UFJ, LTD Line of Credit [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit Facility, maximum borrowing capacity | $ 100 |
Fair Value Fair Value by Balanc
Fair Value Fair Value by Balance Sheet Grouping (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 27, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Maximum Eligible Receivables That May Be Sold | $ 400 | ||
Receivable from financial institution at beginning of fiscal year | $ 13.8 | $ 5.8 | |
Receivables sold to the financial institution and derecognized | 1,141.2 | 1,095.1 | |
Receivables collected by financial institution | (1,106.1) | (987) | |
Cash proceeds from financial institution | (41.5) | (97.2) | |
Receivable from financial institution at June 30, | 7.4 | $ 16.7 | |
Estimated Loss on Sale of Accounts Receivable in a Fiscal Year | $ 7 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Feb. 28, 2017 | Sep. 30, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Pension lump sum settlement | $ 0 | $ 28.7 | $ 0 | $ 28.7 | $ 0 | ||
Lump Sum Payment Related to Pension Settlement Made Out of Existing Plan Assets | $ 203.7 | ||||||
Pension Plans, Defined Benefit [Member] | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Service cost | 10 | 8.2 | 33.9 | 41.7 | |||
Interest cost | 48.8 | 78.2 | 145.8 | 232.9 | |||
Expected return on plan assets | (75.3) | (103.3) | (232.5) | (309.3) | |||
Amortization of net actuarial (gain) loss | 5.8 | 2.9 | 19.8 | 8.2 | |||
Amortization of prior service (credit) cost | 1.1 | 1 | 3.1 | 2.9 | |||
Curtailment gain recognized | 0 | 0 | 0 | (1) | |||
Settlement loss recognized | 0 | 0 | 28.7 | 0 | |||
Special termination benefits | 8 | 6.5 | 12.7 | 17.6 | |||
Company defined benefit plan (credit) cost | (1.6) | (6.5) | 11.5 | (7) | |||
Multiemployer and other plans | 1.1 | 1.6 | 3.5 | 4.4 | |||
Net pension (credit) cost | (0.5) | (4.9) | 15 | (2.6) | |||
Contributions by employer to pension and supplemental retirement plans | 8.6 | 14.3 | 28.1 | 39.9 | |||
Other Postretirement Benefit Plans, Defined Benefit [Member] | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Service cost | 0.4 | 0.4 | 1 | 1.7 | |||
Interest cost | 1.8 | 1.9 | 5.4 | 6 | |||
Amortization of net actuarial (gain) loss | (0.3) | (0.8) | (0.9) | (1.4) | |||
Amortization of prior service (credit) cost | (1.3) | (0.5) | (3.8) | (1.5) | |||
Net postretirement cost (credit) | 0.6 | 1 | 1.7 | 4.8 | |||
Contributions by employer to pension and supplemental retirement plans | $ 3.5 | $ 2.2 | $ 6.5 | $ 9.3 | |||
Domestic Plan [Member] | |||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 4.49% | 4.04% | |||||
Defined Benefit Plan, Increase in Funded Status | $ 73.2 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 06, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Stock Appreciation Rights, Exercises in Period, Intrinsic Value | $ 0 | $ 0 | $ 0.3 | $ 0.1 | ||
Fair value of share-based awards issued in acquisition | 1.9 | $ 1.9 | ||||
Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Contractual Term, Maximum | 10 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value | $ 12.1 | $ 2.8 | $ 35.4 | $ 6.1 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 6,444,577 | 6,444,577 | 8,065,816 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 29.67 | $ 29.67 | $ 29.73 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (1,548,607) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 29.71 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (14,535) | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ 50.99 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (58,097) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 31.02 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 4 years 7 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 174.7 | $ 174.7 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 5,452,034 | 5,452,034 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 29.01 | $ 29.01 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 4 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 151.5 | $ 151.5 | ||||
Stock Appreciation Rights (SARs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 52,801 | 52,801 | 65,971 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 25.50 | $ 25.50 | $ 26.07 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (12,083) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 28.01 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (1,087) | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price | $ 31.87 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 3 years 2 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 1.6 | $ 1.6 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 52,801 | 52,801 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 25.50 | $ 25.50 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 3 years 2 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 1.6 | $ 1.6 | ||||
MPS [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Ratio of MPS Shares to WestRock Shares | 33.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 54.24 | |||||
Fair value of share-based awards issued in acquisition | $ 1.9 | |||||
MPS [Member] | Restricted Stock with Service Condition [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 119,373 |
Share-Based Compensation Restri
Share-Based Compensation Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | ||||
Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 2.7 | $ 2.1 | $ 59.6 | $ 54 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 3,046,921 | [1] | 3,046,921 | [1] | 2,704,904 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 45.44 | [1] | $ 45.44 | [1] | $ 40.89 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | [2] | 1,588,372 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | [2] | $ 53.61 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (1,117,146) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 47.79 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (129,209) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 30.31 | |||||||
Percentage of Performance Based Awards Reflected | 100.00% | |||||||
Additional Shares Expected to Be Issued Based on Current Projection of Performance Target Levels | 1,500,000 | |||||||
Restricted Stock, Target Awards, 2017 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 800,165 | |||||||
Restricted Stock, Non-Employee Directors [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 26,521 | |||||||
Restricted Stock, Employee Grants [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,085,040 | |||||||
Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||||
Percentage of Award Based on Level of Performance Attained, Maximum | 200.00% | |||||||
Percentage of Award Based on Level of Performance Attained, Minimum | 0.00% | |||||||
Restricted Stock, Target Awards, 2014 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of Awarded Based on Performance Level Achieved | 176.60% | |||||||
Restricted Stock Accelerated in Connection with the Combination [Member] | Minimum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of Awarded Based on Performance Level Achieved | 146.50% | |||||||
Restricted Stock Accelerated in Connection with the Combination [Member] | Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of Awarded Based on Performance Level Achieved | 200.00% | |||||||
Restricted Stock, Total Shareholder Return Grant, 2017 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 64.41 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 2 years 11 months | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 30.60% | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.40% | |||||||
Restricted Stock, Attainment of Performance Condition in Excess of Target [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 357,438 | |||||||
[1] | Target awards with a performance condition, net of subsequent forfeitures, granted may be increased up to 200% of the target or decreased to zero, subject to the level of performance attained. The awards are reflected in the table at the target award amount of 100%. Based on current facts and assumptions, we are forecasting the performance of the grants to be attained at levels that would result in the issuance of approximately 1.5 million additional shares. However, it is possible that the performance attained may vary from our forecast. | |||||||
[2] | Fiscal 2017 target awards to employees included 800,165 shares that may be increased to 200% of the target or decreased to zero, subject to the level of performance attained. The awards are reflected in the table at the target award amount of 100%. In connection with the Combination, the performance condition for the fiscal 2014 grant was based on the Cash Flow to Equity Ratio (as defined in the applicable grant letter). The performance goal was subsequently determined in accordance with the applicable grant letter to be attained at 176.6% of target. Awards issued during the nine months ended June 30, 2017 also include shares accelerated for terminated employees as a result of the Combination which were achieved at between 146.5% and 200% of target. During the nine months ended June 30, 2017, we issued and vested 357,438 shares for prior year awards granted with a performance condition whose performance was in excess of target. |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2017USD ($) |
Commitments and Contingencies [Line Items] | |
Accrual for Environmental Loss Contingencies | $ 17.4 |
Guarantor Obligations, Estimated Exposure, Undiscounted | $ 50 |
Number of Lawsiuts the Company Has Been Named a Defendant in Asbestos-related Personal Injury Litigation | 725 |
Guarantor Obligations, Current Carrying Value | $ 11.9 |
Other Long Term Liabilities [Member] | |
Commitments and Contingencies [Line Items] | |
Accrual for Environmental Loss Contingencies | 9.7 |
Other Current Liabilities [Member] | |
Commitments and Contingencies [Line Items] | |
Accrual for Environmental Loss Contingencies | $ 7.7 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | ||
Segment Reporting Information [Line Items] | |||||||
Net sales | $ 3,695.6 | $ 3,596.5 | $ 10,799.1 | $ 10,560.1 | |||
Pension lump sum settlement | 0 | $ (28.7) | 0 | (28.7) | 0 | ||
Land and Development impairment | 0 | 0 | (42.7) | 0 | |||
Restructuring and other costs, net | (59.4) | (43.1) | (158.7) | (317) | |||
Interest expense | (70.4) | (64) | (201.3) | (193.2) | |||
Gain on extinguishment of debt | 2 | 0 | 1.9 | 0 | |||
Interest income and other income (expense), net | 15 | 20.9 | 41.3 | 43.2 | |||
Gain on sale of HH&B | 190.6 | 0 | 190.6 | 0 | |||
Income from continuing operations before income taxes | 387.3 | 252.1 | 611.2 | 400.3 | |||
Assets | 24,870 | 24,870 | $ 23,038.2 | ||||
Operating Segments [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 3,753 | 3,645.5 | 10,981.1 | 10,707.3 | |||
Net sales | 3,695.6 | 3,596.5 | 10,799.1 | 10,560.1 | |||
Segment Reporting Information, Segment Income | 318.9 | 353.6 | 845.5 | 896.3 | |||
Intersegment Eliminations [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 57.4 | 49 | 182 | 147.2 | |||
Corporate, Non-Segment [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Pension lump sum settlement | 0 | 0 | (28.7) | 0 | |||
Land and Development impairment | 0 | 0 | (42.7) | 0 | |||
Non-allocated expenses | (9.4) | (15.3) | (36.7) | (29) | |||
Interest expense | (70.4) | (64) | (201.3) | (193.2) | |||
Gain on extinguishment of debt | 2 | 0 | 1.9 | 0 | |||
Interest income and other income (expense), net | 15 | 20.9 | 41.3 | 43.2 | |||
Gain on sale of HH&B | 190.6 | 0 | 190.6 | 0 | |||
Corrugated Packaging [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Restructuring and other costs, net | [1] | (2.2) | (5.6) | (1.7) | (221.9) | ||
Assets | 10,461.9 | 10,461.9 | 10,046 | ||||
Corrugated Packaging [Member] | Operating Segments [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 2,161.2 | 1,967.7 | 6,169.8 | 5,864.8 | |||
Net sales | 2,122 | 1,936.3 | 6,057.5 | 5,765.6 | |||
Segment Reporting Information, Segment Income | 223.9 | 192.4 | 524.9 | 547.5 | |||
Corrugated Packaging [Member] | Intersegment Eliminations [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 39.2 | 31.4 | 112.3 | 99.2 | |||
Consumer Packaging [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Restructuring and other costs, net | [2] | (20.4) | (5.4) | (67) | (4.9) | ||
Assets | 11,811.6 | 11,811.6 | 10,122.5 | ||||
Consumer Packaging [Member] | Operating Segments [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 1,520.7 | 1,635.8 | 4,586.2 | 4,766.4 | |||
Net sales | 1,502.5 | 1,618.2 | 4,516.5 | 4,718.4 | |||
Segment Reporting Information, Segment Income | 94.8 | 151.7 | 301.2 | 342.6 | |||
Consumer Packaging [Member] | Intersegment Eliminations [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 18.2 | 17.6 | 69.7 | 48 | |||
Land and Development [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Restructuring and other costs, net | [3] | (0.8) | 0 | (2.3) | 0 | ||
Assets | 105.7 | 105.7 | 460.6 | ||||
Land and Development [Member] | Operating Segments [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 71.1 | 42 | 225.1 | 76.1 | |||
Net sales | 71.1 | 42 | 225.1 | 76.1 | |||
Segment Reporting Information, Segment Income | 0.2 | $ 9.5 | 19.4 | $ 6.2 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Assets | 200.7 | 200.7 | 52.3 | ||||
Corporate Segment [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Assets | $ 2,290.1 | $ 2,290.1 | $ 2,356.8 | ||||
[1] | The Corrugated Packaging segment current quarter and year to date income primarily reflects on-going closure costs at previously closed facilities largely offset by the gain on sale of a previously closed recycling facility and severance adjustments. The prior year quarter charges primarily reflect charges at a recycling facility and on-going closure costs at previously closed facilities. The prior year to date charges primarily reflect charges associated with the permanent closures of the Coshocton, OH and Uncasville, CT medium mills, the Newberg, OR containerboard and newsprint mill, the Vapi, India linerboard mill, restructuring activities at a recycling facility and on-going closure costs at previously closed facilities. The cumulative charges are primarily associated with the closure of the Coshocton, Uncasville, Newberg, Vapi, India and Matane, Quebec mills, cumulative closure of corrugated container plants and recycled collection facilities and gains and losses associated with the sale of closed facilities. We have transferred a substantial portion of each closed facility's production to our other facilities. | ||||||
[2] | The Consumer Packaging segment current quarter charges primarily reflect charges associated with the consolidation of operations following the MPS Acquisition and on-going closure costs at previously closed facilities. The current year to date charges primarily reflect the charges associated with the consolidation of operations following the MPS Acquisition, a folding carton facility including a $17.6 million impairment of a customer relationship intangible, included in other costs, beverage facilities and on-going closure costs at previously closed facilities. The prior year quarter charges primarily reflect the charges associated with a folding carton and merchandising displays facility and on-going closure costs at previously closed facilities. The prior year to date charges primarily reflect the charges associated with a folding carton and merchandising displays facility, on-going closure costs at previously closed facilities that were partially offset by the gain on sale of the Cincinnati, OH specialty recycled paperboard mill. The cumulative charges primarily reflect the consolidation of operations following the MPS Acquisition, the aforementioned customer relationship intangible impairment, our Cincinnati, OH mill and cumulative closures of folding carton, beverage and merchandising display facilities. We have transferred a substantial portion of each closed facility's production to our other facilities. | ||||||
[3] | The Land and Development segment current quarter, year to date and cumulative charges reflect severance and other employee costs related to personnel reductions in the segment. |
Segment Information Changes in
Segment Information Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | |
Goodwill [Line Items] | ||
Goodwill | $ 5,466.2 | $ 4,778.1 |
Corrugated Packaging [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 1,826.2 | 1,722.5 |
Goodwill, Impaired, Accumulated Impairment Loss | 0 | 0 |
Goodwill | 1,826.2 | 1,722.5 |
Goodwill, Acquired During Period | 106.4 | |
Goodwill, Amount Disposed Of | 0 | |
Goodwill, Purchase Accounting Adjustments | (1.2) | |
Goodwill, Foreign Currency Translation Gain (Loss) | (1.5) | |
Consumer Packaging [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 3,682.8 | 3,098.4 |
Goodwill, Impaired, Accumulated Impairment Loss | (42.8) | (42.8) |
Goodwill | 3,640 | 3,055.6 |
Goodwill, Acquired During Period | 893.2 | |
Goodwill, Amount Disposed Of | (323.8) | |
Goodwill, Purchase Accounting Adjustments | 9.3 | |
Goodwill, Foreign Currency Translation Gain (Loss) | 5.7 | |
Operating Segments [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 5,509 | 4,820.9 |
Goodwill, Impaired, Accumulated Impairment Loss | (42.8) | (42.8) |
Goodwill | 5,466.2 | $ 4,778.1 |
Goodwill, Acquired During Period | 999.6 | |
Goodwill, Amount Disposed Of | (323.8) | |
Goodwill, Purchase Accounting Adjustments | 8.1 | |
Goodwill, Foreign Currency Translation Gain (Loss) | $ 4.2 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] $ in Millions | Jul. 17, 2017USD ($)T | Aug. 01, 2017USD ($) |
Island Container [Member] | ||
Subsequent Event [Line Items] | ||
Expected Integration of Containerboard Into Corrugated Packaging Business | T | 80,000 | |
Business Acquisition, Cost of Acquired Entity, Preliminary Purchase Price | $ 83.5 | |
Hannapak [Member] | ||
Subsequent Event [Line Items] | ||
Business Acquisition, Cost of Acquired Entity, Preliminary Purchase Price | $ 60 |