Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2018 | Jul. 23, 2018 | |
Document And Entity Information Abstract | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Entity Registrant Name | Hill-Rom Holdings, Inc. | |
Entity Central Index Key | 47,518 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 66,404,832 | |
Trading Symbol | HRC |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Product sales and service revenue | $ 617.6 | $ 593.1 | $ 1,803.5 | $ 1,714.6 |
Net Revenue | ||||
Product sales and service | 708.6 | 689.1 | 2,088.8 | 2,005.4 |
Rental revenue | 91 | 96 | 285.3 | 290.8 |
Cost of Revenue | ||||
Rental expenses | 43.1 | 46.5 | 135.5 | 141.7 |
Cost of Revenue | 360.6 | 358 | 1,070.8 | 1,047.3 |
Total cost of revenue | 317.5 | 311.5 | 935.3 | 905.6 |
Gross Profit | 348 | 331.1 | 1,018 | 958.1 |
Research and development expenses | 33.6 | 34.9 | 100.6 | 102.2 |
Selling and administrative expenses | 221.9 | 221 | 676.3 | 652.2 |
Special charges (Note 8) | 14 | 34.8 | 64.4 | 43.7 |
Operating Profit | 78.5 | 40.4 | 176.7 | 160 |
Interest expense | (24.2) | (23.8) | (71.5) | (65.2) |
Investment income and other, net | 1.2 | (0.5) | 2.6 | (2.1) |
Income Before Income Taxes | 55.5 | 16.1 | 107.8 | 92.7 |
Income tax expense (benefit) (Note 9) | 10.3 | 10.4 | (54.2) | 29.5 |
Net Income | 45.2 | 5.7 | 162 | 63.2 |
Less: Net loss attributable to noncontrolling interests | 0 | (0.3) | 0 | (1) |
Net Income Attributable to Common Shareholders | $ 45.2 | $ 6 | $ 162 | $ 64.2 |
Net Income Attributable to Common Shareholders per Common Share - Basic (usd per share) | $ 0.68 | $ 0.09 | $ 2.45 | $ 0.98 |
Net Income Attributable to Common Shareholders per Common Share - Diluted (usd per share) | 0.67 | 0.09 | 2.40 | 0.95 |
Dividends per Common Share (usd per share) | $ 0.2 | $ 0.18 | $ 0.58 | $ 0.53 |
Average Common Shares Outstanding - Basic (thousands) (Note 10) (in shares) | 66,299 | 65,795 | 66,121 | 65,567 |
Average Common Shares Outstanding - Diluted (thousands) (Note 10) (in shares) | 67,646 | 67,688 | 67,550 | 67,300 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 45.2 | $ 5.7 | $ 162 | $ 63.2 |
Other Comprehensive (Loss) Income, net of tax (Note 7): | ||||
Derivative instruments and hedges | 2.2 | (2.4) | 13.5 | 7.6 |
Foreign currency translation adjustment | (43.9) | 38.1 | (21.3) | 12.6 |
Change in pension and postretirement defined benefit plans | 1 | 0.6 | 2.6 | 2.7 |
Total Other Comprehensive Income (Loss), net of tax | (40.7) | 36.3 | (5.2) | 22.9 |
Total Comprehensive Income | 4.5 | 42 | 156.8 | 86.1 |
Net Income (Loss) Attributable to Noncontrolling Interest | 0 | (0.3) | 0 | (1) |
Total Comprehensive Income Attributable to Common Shareholders | $ 4.5 | $ 42.3 | $ 156.8 | $ 87.1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 246.5 | $ 231.8 |
Trade accounts receivable, net of allowances (Note 2) | 555.5 | 579.3 |
Inventories (Note 2) | 309.4 | 284.5 |
Other current assets | 109.6 | 70.6 |
Total current assets | 1,221 | 1,166.2 |
Property, plant and equipment, net (Note 2) | 335.9 | 355.4 |
Goodwill (Note 4) | 1,739.6 | 1,759.6 |
Other intangible assets and software, net (Note 2) | 1,054.5 | 1,144 |
Deferred income taxes (Notes 1 and 9) | 39.2 | 40.9 |
Other assets | 75.2 | 62.6 |
Total Assets | 4,465.4 | 4,528.7 |
Current Liabilities | ||
Trade accounts payable | 163.4 | 167.9 |
Short-term borrowings (Note 5) | 304.8 | 188.9 |
Accrued compensation | 127.2 | 126.9 |
Accrued product warranties (Note 12) | 23.3 | 25.5 |
Accrued rebates | 36.6 | 39.7 |
Other current liabilities | 115.6 | 109.8 |
Total current liabilities | 770.9 | 658.7 |
Long-term debt (Note 5) | 1,865.3 | 2,120.4 |
Accrued pension and postretirement benefits (Note 6) | 77.5 | 78.1 |
Deferred income taxes (Notes 1 and 9) | 179.9 | 266.2 |
Other long-term liabilities | 62.9 | 39.7 |
Total Liabilities | 2,956.5 | 3,163.1 |
Commitments and Contingencies (Note 14) | ||
SHAREHOLDERS' EQUITY | ||
Common Stock (Note 2) | 4.4 | 4.4 |
Additional paid-in capital | 600.6 | 584.4 |
Retained earnings | 1,799.4 | 1,676.2 |
Accumulated other comprehensive loss (Note 7) | (115.2) | (110) |
Treasury stock, at cost (Note 2) | (780.3) | (796.8) |
Total Shareholders' Equity Attributable to Common Shareholders | 1,508.9 | 1,358.2 |
Noncontrolling interests | 0 | 7.4 |
Total Shareholders' Equity | 1,508.9 | 1,365.6 |
Total Liabilities and Shareholders' Equity | $ 4,465.4 | $ 4,528.7 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities | ||
Net income | $ 162 | $ 63.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 58.5 | 60.5 |
Amortization | 13.7 | 15.3 |
Acquisition-related intangible asset amortization | 80.5 | 80.2 |
Provision (benefit) for deferred income taxes | (89.4) | (23.3) |
(Gain) loss on disposal of property, equipment leased to others, intangible assets, and impairments | 1.1 | 23.5 |
(Gain) loss on disposition of businesses | 22.4 | (1) |
Stock compensation | 21.6 | 17.5 |
Change in working capital excluding cash, current debt, acquisitions and dispositions: | ||
Trade accounts receivable | 20.5 | 13.7 |
Inventories | (27.4) | (1.8) |
Other current assets | (38.5) | 13.2 |
Trade accounts payable | (2.6) | 1 |
Accrued expenses and other liabilities | 1 | (29.9) |
Other, net | 26.4 | 7.6 |
Net cash provided by operating activities | 249.8 | 239.7 |
Investing Activities | ||
Capital expenditures and purchases of intangible assets | (71.9) | (73.8) |
Proceeds on sale of property and equipment leased to others | 4 | 13.7 |
Payment for acquisition of businesses, net of cash acquired | 0 | (311.4) |
Proceeds on sale of businesses | 1 | 4.5 |
Other | 2.2 | (2.1) |
Net cash used in investing activities | (64.7) | (369.1) |
Financing Activities | ||
Proceeds from borrowings on long-term debt | 1 | 300 |
Payments of long-term debt | (137.4) | (54.9) |
Borrowings on Revolving Credit Facility | 75 | 108 |
Payments on Revolving Credit Facility | (165) | (248.8) |
Borrowings on Securitization Program | 68.2 | 101.3 |
Payments on Securitization Program | (40.7) | (14.5) |
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement | 61 | 0 |
Debt issuance costs | (0.4) | (5.1) |
Payments of cash dividends | (38.4) | (34.8) |
Proceeds on exercise of stock options | 13.6 | 17.5 |
Proceeds from stock issuance | 4.5 | 3.5 |
Treasury stock acquired | (7.4) | (34.3) |
Net cash provided by (used in) financing activities | (166) | 137.9 |
Effect of exchange rate changes on cash | (4.4) | 2.5 |
Net Cash Flows | 14.7 | 11 |
Cash and Cash Equivalents: | ||
At beginning of period | 231.8 | 232.2 |
At end of period | $ 246.5 | $ 243.2 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation Unless the context otherwise requires, the terms “Hill-Rom,” “the Company,” “we,” “our,” and “us” refer to Hill-Rom Holdings, Inc. and its wholly-owned subsidiaries. The unaudited Condensed Consolidated Financial Statements appearing in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in Hill-Rom’s latest Annual Report on Form 10-K for the fiscal year ended September 30, 2017 (“ 2017 Form 10-K ”) as filed with the United States (“U.S.”) Securities and Exchange Commission. The September 30, 2017 Condensed Consolidated Balance Sheet was derived from audited Consolidated Financial Statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. In the opinion of management, the Condensed Consolidated Financial Statements herein include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the interim periods presented. Quarterly results are not necessarily indicative of annual results. The Condensed Consolidated Financial Statements include the accounts of Hill-Rom and its wholly-owned subsidiaries. In addition, we also consolidate variable interest entities (“VIEs”) where Hill-Rom is considered to have a controlling financial interest. Intercompany accounts and transactions have been eliminated in consolidation, including any intercompany transactions with consolidated VIEs. Where our ownership interest is less than 100%, the noncontrolling interests are reported in our Condensed Consolidated Financial Statements. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the period. Actual results could differ from those estimates and such differences could be material. Examples of such estimates include, but are not limited to, income taxes (Notes 1 and 9), accounts receivable reserves (Note 2), accrued warranties (Note 12), the impairment of intangibles and goodwill (Note 4), pension expense (Note 6), and commitments and contingencies (Note 14). Fair Value Measurements Fair value measurements of our financial assets and liabilities are classified and disclosed in one of the following three categories: • Level 1: Financial instruments with unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities. • Level 2: Financial instruments with observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3: Financial instruments with unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs reflect our own assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances, which might include our own data. We record cash and cash equivalents, as disclosed on our Condensed Consolidated Balance Sheets, as Level 1 instruments and certain other derivatives and investments as either Level 2 or 3 instruments. Investments measured at Net Asset Value as a practical expedient are not categorized in the fair value hierarchy. Refer to Note 5 for disclosure of our debt instrument and interest rate swap fair values. There have not been significant changes in our classification of assets and liabilities during the fiscal quarter. Taxes Collected from Customers and Remitted to Governmental Units Taxes assessed by a governmental authority that are directly imposed on a revenue producing transaction between us and our customers, including but not limited to sales taxes, use taxes and value added taxes, are accounted for on a net (excluded from revenue and costs) basis. Income Taxes Hill-Rom and its eligible subsidiaries file a consolidated U.S. income tax return. Foreign operations file income tax returns in a number of jurisdictions. We have a variety of deferred tax assets in numerous tax jurisdictions which are computed using an asset and liability approach to reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. These deferred tax assets are subject to periodic assessment as to recoverability. If it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recognized. In evaluating whether it is more likely than not that we would recover these deferred tax assets, future taxable income, the reversal of existing temporary differences and tax planning strategies are considered. As of June 30, 2018 , we had $57.7 million of valuation allowances on deferred tax assets, on a tax-effected basis, primarily related to certain foreign deferred tax attributes that are not expected to be utilized. The valuation allowance total was not materially impacted by the Tax Cuts and Jobs Act (the “Tax Act”) enacted in the United States in December 2017. We believe that our estimates for the valuation allowances recorded against deferred tax assets are appropriate based on current facts and circumstances. We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The difference between the tax benefit recognized in the financial statements for an uncertain income tax position and the tax benefit claimed in the tax return is referred to as an unrecognized tax benefit. During the third quarter of fiscal 2018, the Company recorded a reserve of $2.3 million related to an unrecognized tax benefit in a non-US jurisdiction that the Company believes is not more likely than not of being sustained on audit. Dispositions During the second quarter of fiscal 2018, we entered into an agreement to convey certain net assets related to the Company’s third-party rental business, which is comprised of purchased moveable medical equipment that can be rented to customers, to Universal Hospital Services, Inc. (“UHS”) in exchange for UHS’s agreement to dismiss its previously disclosed litigation against the Company (“Settlement Agreement”). The third-party rental business was part of our Patient Support Systems segment. As a result, during the second quarter of fiscal 2018, we recorded a loss of $23.4 million in Special charges, which included $20.4 million related to the non-cash loss reserve for the assets to be conveyed, and other Settlement Agreement related costs of approximately $3.0 million . During the third quarter of fiscal 2018, we recorded an additional loss of $0.6 million in Special charges related to additional Settlement Agreement costs. During the third quarter of fiscal 2018, the transaction closed subject to potential purchase price adjustments. During the fourth quarter of fiscal 2017, we sold our Völker business. During the first quarter of fiscal 2018, we recorded a gain of $1.0 million attributable to the final working capital settlement associated with the Völker transaction. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which delayed the effective date of the new revenue guidance by one year, while permitting companies to early adopt the new standard as of the original effective date. As a result, the provisions of ASU 2014-09 and subsequent amendments, are effective for us in the first quarter of fiscal 2019 using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. We plan to adopt the new standard effective October 1, 2018 and are continuing to evaluate the impact of adoption on our Consolidated Financial Statements and the implementation approach to be used. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). From the lessee’s perspective, the new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for a lessee. From the lessor’s perspective, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks and rewards or control, an operating lease results. ASU 2016-02 is effective for our first quarter of fiscal 2020. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently in the process of evaluating the impact of the amended guidance on our Consolidated Financial Statements. In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (Topic 740). This standard requires immediate recognition of the income tax consequences of intercompany asset transfers other than inventory. ASU 2016-16 is effective for our first quarter of fiscal 2019 and requires a modified retrospective transition method. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In February 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This standard requires employers to include only the service cost component of net periodic pension cost in operating expenses, together with other employee compensation costs. The other components of net periodic pension cost, including interest cost, expected return on plan assets, amortization of prior service cost and settlement and curtailment effects, are to be included in non-operating expenses. The ASU is effective for our first quarter of fiscal 2019 and requires a retrospective transition method. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This standard amends and simplifies hedge accounting guidance, as well as improves presentation and disclosure to align the economic effects of risk management strategies in the financial statements. More specifically, this update expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this update. ASU 2017-12 is effective for our first quarter of fiscal 2019 and requires a prospective transition method. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220). The standard allows entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. ASU 2018-02 is effective for our first quarter of fiscal 2020. The amendments in this standard should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. Federal corporate income tax rate in the Tax Act is recognized. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In February 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The standard issued six technical corrections and improvements to clarify guidance in ASU 2016-01, which primarily impacted the accounting for equity investments, financial liabilities under fair value option, and the presentation and disclosure requirements of financial instruments. ASU 2018-03 is effective for our first quarter of fiscal 2019 and generally requires a modified retrospective transition method but requires prospective transition for equity investments without a readily determinable fair value. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update). The standard is for companies that are not able to complete their accounting for the income tax effects of the Tax Cuts and Jobs Act in the period of enactment. The changes were effective when issued. See Note 9, Income Taxes, for additional information of how ASU 2018-05 impacts our Consolidated Financial Statements. Except as noted above, there have been no significant changes to our assessment of the impact of recently issued accounting standards included in Note 1 of our Consolidated Financial Statements in our 2017 Form 10-K . |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Unless the context otherwise requires, the terms “Hill-Rom,” “the Company,” “we,” “our,” and “us” refer to Hill-Rom Holdings, Inc. and its wholly-owned subsidiaries. The unaudited Condensed Consolidated Financial Statements appearing in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in Hill-Rom’s latest Annual Report on Form 10-K for the fiscal year ended September 30, 2017 (“ 2017 Form 10-K ”) as filed with the United States (“U.S.”) Securities and Exchange Commission. The September 30, 2017 Condensed Consolidated Balance Sheet was derived from audited Consolidated Financial Statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. In the opinion of management, the Condensed Consolidated Financial Statements herein include all adjustments, consisting only of normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the interim periods presented. Quarterly results are not necessarily indicative of annual results. The Condensed Consolidated Financial Statements include the accounts of Hill-Rom and its wholly-owned subsidiaries. In addition, we also consolidate variable interest entities (“VIEs”) where Hill-Rom is considered to have a controlling financial interest. Intercompany accounts and transactions have been eliminated in consolidation, including any intercompany transactions with consolidated VIEs. Where our ownership interest is less than 100%, the noncontrolling interests are reported in our Condensed Consolidated Financial Statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the period. Actual results could differ from those estimates and such differences could be material. Examples of such estimates include, but are not limited to, income taxes (Notes 1 and 9), accounts receivable reserves (Note 2), accrued warranties (Note 12), the impairment of intangibles and goodwill (Note 4), pension expense (Note 6), and commitments and contingencies (Note 14). |
Fair Value Measurements | Fair Value Measurements Fair value measurements of our financial assets and liabilities are classified and disclosed in one of the following three categories: • Level 1: Financial instruments with unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities. • Level 2: Financial instruments with observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3: Financial instruments with unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs reflect our own assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances, which might include our own data. We record cash and cash equivalents, as disclosed on our Condensed Consolidated Balance Sheets, as Level 1 instruments and certain other derivatives and investments as either Level 2 or 3 instruments. Investments measured at Net Asset Value as a practical expedient are not categorized in the fair value hierarchy. Refer to Note 5 for disclosure of our debt instrument and interest rate swap fair values. |
Taxes Collected from Customers and Remitted to Governmental Units | Taxes Collected from Customers and Remitted to Governmental Units Taxes assessed by a governmental authority that are directly imposed on a revenue producing transaction between us and our customers, including but not limited to sales taxes, use taxes and value added taxes, are accounted for on a net (excluded from revenue and costs) basis. |
Income Taxes | Income Taxes Hill-Rom and its eligible subsidiaries file a consolidated U.S. income tax return. Foreign operations file income tax returns in a number of jurisdictions. We have a variety of deferred tax assets in numerous tax jurisdictions which are computed using an asset and liability approach to reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. These deferred tax assets are subject to periodic assessment as to recoverability. If it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recognized. In evaluating whether it is more likely than not that we would recover these deferred tax assets, future taxable income, the reversal of existing temporary differences and tax planning strategies are considered. As of June 30, 2018 , we had $57.7 million of valuation allowances on deferred tax assets, on a tax-effected basis, primarily related to certain foreign deferred tax attributes that are not expected to be utilized. The valuation allowance total was not materially impacted by the Tax Cuts and Jobs Act (the “Tax Act”) enacted in the United States in December 2017. We believe that our estimates for the valuation allowances recorded against deferred tax assets are appropriate based on current facts and circumstances. We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The difference between the tax benefit recognized in the financial statements for an uncertain income tax position and the tax benefit claimed in the tax return is referred to as an unrecognized tax benefit. During the third quarter of fiscal 2018, the Company recorded a reserve of $2.3 million related to an unrecognized tax benefit in a non-US jurisdiction that the Company believes is not more likely than not of being sustained on audit. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which delayed the effective date of the new revenue guidance by one year, while permitting companies to early adopt the new standard as of the original effective date. As a result, the provisions of ASU 2014-09 and subsequent amendments, are effective for us in the first quarter of fiscal 2019 using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. We plan to adopt the new standard effective October 1, 2018 and are continuing to evaluate the impact of adoption on our Consolidated Financial Statements and the implementation approach to be used. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). From the lessee’s perspective, the new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for a lessee. From the lessor’s perspective, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks and rewards or control, an operating lease results. ASU 2016-02 is effective for our first quarter of fiscal 2020. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently in the process of evaluating the impact of the amended guidance on our Consolidated Financial Statements. In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (Topic 740). This standard requires immediate recognition of the income tax consequences of intercompany asset transfers other than inventory. ASU 2016-16 is effective for our first quarter of fiscal 2019 and requires a modified retrospective transition method. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In February 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This standard requires employers to include only the service cost component of net periodic pension cost in operating expenses, together with other employee compensation costs. The other components of net periodic pension cost, including interest cost, expected return on plan assets, amortization of prior service cost and settlement and curtailment effects, are to be included in non-operating expenses. The ASU is effective for our first quarter of fiscal 2019 and requires a retrospective transition method. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This standard amends and simplifies hedge accounting guidance, as well as improves presentation and disclosure to align the economic effects of risk management strategies in the financial statements. More specifically, this update expands and refines hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this update. ASU 2017-12 is effective for our first quarter of fiscal 2019 and requires a prospective transition method. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220). The standard allows entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings. ASU 2018-02 is effective for our first quarter of fiscal 2020. The amendments in this standard should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. Federal corporate income tax rate in the Tax Act is recognized. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In February 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The standard issued six technical corrections and improvements to clarify guidance in ASU 2016-01, which primarily impacted the accounting for equity investments, financial liabilities under fair value option, and the presentation and disclosure requirements of financial instruments. ASU 2018-03 is effective for our first quarter of fiscal 2019 and generally requires a modified retrospective transition method but requires prospective transition for equity investments without a readily determinable fair value. We are currently in the process of evaluating the impact of it on our Consolidated Financial Statements. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update). The standard is for companies that are not able to complete their accounting for the income tax effects of the Tax Cuts and Jobs Act in the period of enactment. The changes were effective when issued. See Note 9, Income Taxes, for additional information of how ASU 2018-05 impacts our Consolidated Financial Statements. Except as noted above, there have been no significant changes to our assessment of the impact of recently issued accounting standards included in Note 1 of our Consolidated Financial Statements in our 2017 Form 10-K . |
Supplementary Balance Sheet Inf
Supplementary Balance Sheet Information | 9 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplementary Balance Sheet Information | Supplementary Balance Sheet Information June 30, September 30, Allowance for possible losses and discounts on trade receivables $ 21.4 $ 25.1 Inventories: Finished products $ 147.5 $ 147.5 Raw materials and work in process 161.9 137.0 Total inventory $ 309.4 $ 284.5 Accumulated depreciation of property, plant and equipment $ 661.9 $ 624.2 Accumulated amortization of software and other intangible assets $ 576.2 $ 492.3 Preferred stock, without par value: Shares authorized 1,000,000 1,000,000 Shares issued None None Common stock, without par value: Shares authorized 199,000,000 199,000,000 Shares issued 88,457,634 88,457,634 Shares outstanding 66,383,659 65,813,794 Treasury shares 22,073,975 22,643,840 |
Acquisitions
Acquisitions | 9 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Mortara Instrument On February 14, 2017, we completed the acquisition of Mortara Instrument, Inc. (“Mortara”) for consideration of $330.0 million in cash ( $311.2 million , net of cash acquired), primarily financed through a private offering of $300.0 million of senior unsecured notes (Note 5). Mortara provides a portfolio of diagnostic cardiology devices designed to serve the full continuum of clinical care, from acute care to primary care and clinical research organizations. The results of Mortara are included in the Condensed Consolidated Financial Statements since the date of acquisition. The impact to our comparable quarter and year to date fiscal 2017 revenue and net income on an unaudited proforma basis, as if the Mortara acquisition had been consummated at the beginning of our fiscal 2017 year, would not have been significant. The following summarizes the fair value of assets acquired and liabilities assumed at the date of the Mortara acquisition. The results are considered final. Amount Trade receivables $ 16.4 Inventory 21.5 Other current assets 2.8 Property, plant and equipment 18.2 Goodwill 165.5 Trade names (7-year weighted average useful life) 15.8 Customer relationships (8-year useful life) 37.9 Developed technology (7-year useful life) 52.3 Other noncurrent assets 4.8 Current liabilities (22.8 ) Noncurrent liabilities (1.2 ) Total purchase price, net of cash acquired $ 311.2 Goodwill in connection with the Mortara acquisition was allocated entirely to our Front Line Care segment. A majority of the goodwill is attributable to the acquired U.S. operations which is deductible for tax purposes. |
Goodwill
Goodwill | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill and Indefinite-Lived Intangible Assets The following summarizes goodwill activity by reportable segment: Patient Support Systems Front Line Care Surgical Solutions Total Balances at September 30, 2017 Goodwill $ 545.0 $ 1,375.6 $ 311.8 $ 2,232.4 Accumulated impairment losses (472.8 ) — — (472.8 ) Goodwill, net at September 30, 2017 72.2 1,375.6 311.8 1,759.6 Changes in Goodwill during the period: Goodwill related to acquisitions — 0.8 — 0.8 Deconsolidation of VIE — — (13.2 ) (13.2 ) Currency translation effect (0.5 ) (5.5 ) (1.6 ) (7.6 ) Balances at June 30, 2018 Goodwill 544.5 1,370.9 297.0 2,212.4 Accumulated impairment losses (472.8 ) — — (472.8 ) Goodwill, net at June 30, 2018 $ 71.7 $ 1,370.9 $ 297.0 $ 1,739.6 During the second fiscal quarter of 2018, the Company deconsolidated a VIE as a result of no longer having a controlling financial interest in such entity upon the termination of an exclusive distribution agreement. The portion of this entity’s assets, including goodwill, liabilities and operating results that are not attributable to the Company are excluded from our Condensed Consolidated Financial Statements as of the effective date of the termination. The impact of this transaction was not significant to our Condensed Consolidated Financial Statements. As discussed in Note 13, we operate in three reportable business segments. Goodwill impairment testing is performed at the reporting unit level. Goodwill is assigned to reporting units at the date the goodwill is initially recorded and is reallocated as necessary based on the restructuring of reporting units over time. Once goodwill is assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or organically grown, are available to support the value of the goodwill. Testing for goodwill impairment is performed annually, or on an interim basis upon the occurrence of a triggering event or change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual evaluation of goodwill performed during the third quarter of fiscal 2018 and 2017 did not result in any impairments. Indefinite-lived intangible assets We have various indefinite-lived intangible assets representing trade names with a carrying value of $466.9 million as of June 30, 2018 and September 30, 2017. Testing for indefinite-lived intangible asset impairment is performed annually, or on an interim basis upon the occurrence of a triggering event or change in circumstances that would more likely than not reduce the fair value of an indefinite-lived intangible asset below its carrying amount. The annual evaluation of indefinite-lived intangible assets performed during the third quarter of fiscal 2018 and 2017 did not result in any impairments. |
Financing Agreements
Financing Agreements | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Financing Agreements | Financing Agreements Total debt consists of the following: June 30, September 30, Revolving credit facility $ — $ 90.0 Current portion of long-term debt 137.2 109.8 Senior secured Term Loan A, long-term portion 1,104.9 1,266.7 Senior unsecured 5.75% notes due on September 1, 2023 420.6 419.9 Senior unsecured 5.00% notes due on February 14, 2025 296.2 295.8 Unsecured 7.00% debentures due on February 15, 2024 13.6 13.6 Unsecured 6.75% debentures due on December 15, 2027 29.6 29.6 Securitization Program 106.6 79.1 Note Securitization Facility 61.0 — Other 0.4 4.8 Total debt 2,170.1 2,309.3 Less Short-term borrowings 304.8 188.9 Total Long-term debt $ 1,865.3 $ 2,120.4 In May 2018, we renewed our 364 -day accounts receivable securitization program (the “Securitization Program”) with certain financial institutions for borrowings up to $110.0 million . We also entered into an additional 364 -day facility for borrowings up to $90.0 million (the “Note Securitization Facility”) in May 2018. Under the terms of each of the Securitization Program and Note Securitization Facility, certain of our accounts receivable secure the amounts borrowed and cannot be used to pay our other debts or liabilities. The amount that we may borrow at a given point in time is determined based on the amount of qualifying accounts receivable that are present at such point in time. As of June 30, 2018 , $106.6 million and $61.0 million was borrowed under the Securitization Program and Note Securitization Facility, respectively. Borrowings outstanding under the Securitization Program and Note Securitization Facility bear interest at the London Interbank Offered Rate (“LIBOR”) plus the applicable margin of 0.8% and 1.0% , respectively, and are included as a component of Short-term borrowings, while the accounts receivable securing these obligations remain as a component of Trade accounts receivable, net of allowances in our Condensed Consolidated Balance Sheets. In addition, the agreements governing the Securitization Program and Note Securitization Facility contain various customary affirmative and negative covenants, and customary default and termination provisions. As of June 30, 2018 , we were in compliance with these covenants and provisions. In February 2017, we entered into $300.0 million of senior unsecured notes maturing February 2025 for purposes of financing the Mortara acquisition. These notes bear interest at a fixed rate of 5.00% annually. We also have outstanding senior unsecured notes of $425.0 million maturing in September 2023 that bear interest at a fixed rate of 5.75% annually (collectively, the “Senior Notes”). These Senior Notes were issued at par in private placement offerings and are not registered securities on any public market. All of the notes were outstanding as of June 30, 2018 . We are not required to make any mandatory redemption or sinking fund payments with respect to the Senior Notes, other than in certain circumstances such as a change in control or material sale of assets. We may redeem the 5.75% and 5.00% notes in whole or in part prior to maturity, but doing so prior to September 1, 2021 and February 15, 2023, respectively, would require payment of a premium on any amounts redeemed, the amount of which varies based on the timing of the redemption. The indentures governing the Senior Notes contain certain covenants which impose limitations on the amount of dividends we may pay and the amount of common shares we may repurchase in the open market, but we do not expect these covenants to affect our current dividend policy or open share repurchase program. The terms of these indentures also impose certain restrictions on the amount and type of additional indebtedness we may obtain in the future, as well as the types of liens and guarantees we may provide. Our Senior Credit Agreement consists of two facilities as follows: • $1,462.5 million senior secured Term Loan A facility (“TLA Facility”), maturing in September 2021 • Revolving Credit Facility, providing borrowing capacity of up to $700.0 million , maturing in September 2021 The TLA Facility and Revolving Credit Facility bear interest at variable rates which currently approximate 3.6% . These interest rates are based primarily on LIBOR, but under certain conditions could also be based on the U.S. Federal Funds Rate or the U.S. Prime Rate, at our option. The TLA Facility requires minimum principal payments of $109.7 million in fiscal 2018 and $146.3 million annually thereafter, with the remaining unpaid principal balance due at maturity. We are able to voluntarily prepay outstanding loans under the TLA Facility at any time. During the year to date period ended June 30, 2018 , we made payments of $137.3 million on the TLA Facility. As of June 30, 2018 , there were no borrowings on the Revolving Credit Facility, and available borrowing capacity was $692.0 million after giving effect to $8.0 million of outstanding standby letters of credit. The availability of borrowings under our Revolving Credit Facility is subject to our ability at the time of borrowing to meet certain specified conditions, including compliance with covenants contained in the Senior Credit Agreement. The facilities provided by the Senior Credit Agreement are held with a syndicate of banks, which includes over 30 institutions. Our general corporate assets, including those of our subsidiaries, collateralize these obligations. The credit agreement governing these facilities contains financial covenants which specify a maximum secured net leverage ratio and a minimum interest coverage ratio, as such terms are defined in the credit agreement. These financial covenants are measured at the end of each fiscal quarter. The required ratios vary providing a gradually decreasing maximum secured net leverage ratio and a gradually increasing minimum interest coverage ratio, as set forth in the table below: Any Fiscal Quarter Ended During the Calendar Year Ending: Maximum Minimum December 31, 2018 3.50x 3.75x December 31, 2019 and thereafter 3.00x 4.00x We were in compliance with all financial covenants under our financing agreements as of June 30, 2018 . We are exposed to market risk from fluctuations in interest rates. We sometimes manage our exposure to interest rate fluctuations through the use of interest rate swaps. As of June 30, 2018 , we had seven interest rate swap agreements, with notional amounts of $750.0 million , in aggregate, to hedge the variability of cash flows associated with a portion of the variable interest rate payments through September 2021 on the Senior Secured Credit Facilities. The interest rate swaps have effective start dates ranging between December 31, 2017 and September 8, 2020 and were designated as cash flow hedges. As of June 30, 2018 , these swaps were in a net asset position with an aggregate fair value of $23.7 million , all of which were classified as Other assets. As of September 30, 2017, these swaps were in a net asset position with an aggregate fair value of $7.3 million , of which $8.5 million were classified as Other assets and $1.2 million were classified as Other current liabilities. We classify fair value measurements on our interest rate swaps as Level 2, as described in Note 1. The fair value of our debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. The book values of our short-term debt instruments and Revolving Credit Facility approximate fair value. The estimated fair values of our long-term debt instruments, including the current portion, are described in the table below: June 30, September 30, Senior secured Term Loan A $ 1,191.4 $ 1,364.8 Senior unsecured 5.75% notes due on September 1, 2023 436.3 449.3 Senior unsecured 5.00% notes due on February 14, 2025 294.3 311.9 Unsecured debentures 42.9 46.8 Total $ 1,964.9 $ 2,172.8 The estimated fair values of our long-term unsecured debentures were based on observable inputs such as quoted prices in markets that are not active. The estimated fair values of our term loans and the Senior Notes were based on quoted prices for similar liabilities. These fair value measurements are classified as Level 2, as described in Note 1. |
Retirement and Postretirement P
Retirement and Postretirement Plans | 9 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Retirement and Postretirement Plans | Retirement and Postretirement Plans We sponsor five defined benefit retirement plans. Those plans include: a master defined benefit retirement plan, a nonqualified supplemental executive defined benefit retirement plan, and three defined benefit retirement plans covering employees in Germany and France. Benefits for such plans are based primarily on years of service and the employee’s level of compensation during specific periods of employment. We contribute funds to trusts as necessary to provide for current service and for any unfunded projected future benefit obligation over a reasonable period of time. All of our plans have a September 30 measurement date. The following table details the components of net pension expense for our defined benefit retirement plans. Quarter Ended June 30 Year to Date Ended June 30 2018 2017 2018 2017 Service cost $ 1.2 $ 1.4 $ 3.6 $ 4.3 Interest cost 2.7 2.5 8.2 7.4 Expected return on plan assets (3.9 ) (3.7 ) (11.8 ) (11.0 ) Amortization of unrecognized prior service cost, net 0.1 — 0.1 0.1 Amortization of net loss 1.1 1.5 3.3 4.6 Net pension expense $ 1.2 $ 1.7 $ 3.4 $ 5.4 In addition to defined benefit retirement plans, we also offer two postretirement health care plans in the United States that provide health care benefits to qualified retirees and their dependents. The plans are closed to new participants and include retiree cost sharing provisions. Annual costs related to these plans are not significant. We have defined contribution savings plans that cover substantially all U.S. employees and certain non-U.S. employees. The general purpose of these plans is to provide additional financial security during retirement by providing employees with an incentive to make regular savings. Our contributions to the plans are based on eligibility and, in some cases, employee contributions. Expense under these plans was $7.0 million and $6.7 million in each of the quarterly periods ended June 30, 2018 and 2017 , and $ 20.9 million and $ 19.8 million in the year to date periods ended June 30, 2018 and 2017 . |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 9 Months Ended |
Jun. 30, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following table represents the changes in accumulated other comprehensive loss by component: Quarter Ended June 30, 2018 Other comprehensive income (loss) Accumulated other comprehensive income (loss) Prior to reclassification Reclassification from Pre-tax Tax effect Net of tax Beginning balance Net activity Ending balance Derivative instruments and hedges $ 4.8 $ (1.9 ) $ 2.9 $ (0.7 ) $ 2.2 $ 15.6 $ 2.2 $ 17.8 Foreign currency translation adjustment (43.9 ) — (43.9 ) — (43.9 ) (58.7 ) (43.9 ) (102.6 ) Change in pension and postretirement defined benefit plans 0.3 1.1 1.4 (0.4 ) 1.0 (31.4 ) 1.0 (30.4 ) Total $ (38.8 ) $ (0.8 ) $ (39.6 ) $ (1.1 ) $ (40.7 ) $ (74.5 ) $ (40.7 ) $ (115.2 ) Quarter Ended June 30, 2017 Other comprehensive income (loss) Accumulated other comprehensive income (loss) Prior to reclassification Reclassification from Pre-tax Tax effect Net of tax Beginning balance Net activity Ending balance Derivative instruments and hedges $ (3.5 ) $ (0.2 ) $ (3.7 ) $ 1.3 $ (2.4 ) $ 6.9 $ (2.4 ) $ 4.5 Foreign currency translation adjustment 37.1 1.0 38.1 — 38.1 (140.7 ) 38.1 (102.6 ) Change in pension and postretirement defined benefit plans (0.5 ) 1.5 1.0 (0.4 ) 0.6 (48.7 ) 0.6 (48.1 ) Total $ 33.1 $ 2.3 $ 35.4 $ 0.9 $ 36.3 $ (182.5 ) $ 36.3 $ (146.2 ) Year to Date Ended June 30, 2018 Other comprehensive income (loss) Accumulated other comprehensive income (loss) Prior to Reclassification Pre-tax Tax effect Net of tax Beginning Net activity Ending Derivative instruments and hedges $ 20.3 $ (2.8 ) $ 17.5 $ (4.0 ) $ 13.5 $ 4.3 $ 13.5 $ 17.8 Foreign currency translation adjustment (21.3 ) — (21.3 ) — (21.3 ) (81.3 ) (21.3 ) (102.6 ) Change in pension and postretirement defined benefit plans 0.1 3.3 3.4 (0.8 ) 2.6 (33.0 ) 2.6 (30.4 ) Total $ (0.9 ) $ 0.5 $ (0.4 ) $ (4.8 ) $ (5.2 ) $ (110.0 ) $ (5.2 ) $ (115.2 ) Year to Date Ended June 30, 2017 Other comprehensive income (loss) Accumulated other comprehensive income (loss) Prior to Reclassification Pre-tax Tax effect Net of tax Beginning Net activity Ending Derivative instruments and hedges $ 13.1 $ (0.9 ) $ 12.2 $ (4.6 ) $ 7.6 $ (3.1 ) $ 7.6 $ 4.5 Foreign currency translation adjustment 11.6 1.0 12.6 — 12.6 (115.2 ) 12.6 (102.6 ) Change in pension and postretirement defined benefit plans (0.1 ) 4.4 4.3 (1.6 ) 2.7 (50.8 ) 2.7 (48.1 ) Total $ 24.6 $ 4.5 $ 29.1 $ (6.2 ) $ 22.9 $ (169.1 ) $ 22.9 $ (146.2 ) The following table represents the items reclassified out of accumulated other comprehensive loss and the related tax effects: Quarter Ended June 30 2018 2017 Amount Tax effect Net of tax Amount reclassified Tax effect Net of tax Derivative instruments and hedges (a) $ (1.9 ) $ 0.4 $ (1.5 ) $ (0.2 ) $ — $ (0.2 ) Foreign currency translation adjustment (b) $ — $ — $ — $ 1.0 $ — $ 1.0 Change in pension and postretirement defined benefit plans (c) $ 1.1 $ (0.4 ) $ 0.7 $ 1.5 $ (0.5 ) $ 1.0 Year to Date Ended June 30 2018 2017 Amount Tax effect Net of tax Amount Tax effect Net of tax Derivative instruments and hedges (a) $ (2.8 ) $ 0.6 $ (2.2 ) $ (0.9 ) $ 0.2 $ (0.7 ) Foreign currency translation adjustment (b) $ — $ — $ — $ 1.0 $ — $ 1.0 Change in pension and postretirement defined benefit plans (c) $ 3.3 $ (0.8 ) $ 2.5 $ 4.4 $ (1.6 ) $ 2.8 (a) Reclassified from accumulated other comprehensive income (loss) into Interest expense . (b) Reclassified from accumulated other comprehensive income (loss) into Special charges. (c) Reclassified from accumulated other comprehensive income (loss) into Cost of goods sold and Selling and administrative expenses . These components are included in the computation of net periodic pension expense. |
Special Charges
Special Charges | 9 Months Ended |
Jun. 30, 2018 | |
Special Charges [Abstract] | |
Special Charges | Special Charges In connection with various organizational changes to improve our business alignment and cost structure, we recognized Special charges of $ 14.0 million and $ 34.8 million for the quarters ended June 30, 2018 and 2017 , and $ 64.4 million and $ 43.7 million for the year to date periods ended June 30, 2018 and 2017 . We continue to evaluate additional actions related to these programs and expect additional Special charges to be incurred. However, it is not practicable to estimate the amount of these future expected costs until such time as the evaluations are complete. Special charges are summarized as follows: Legal Claim Recovery During the third quarter of fiscal 2018, we received a settlement payment for a legal claim and recorded a gain of $1.2 million in Special charges. Dispositions During the second quarter of fiscal 2018, we entered into an agreement to convey certain assets related to the Company’s third-party rental business to UHS and recorded a loss of $23.4 million in Special charges. During the third quarter of fiscal 2018, we recorded an additional loss of $0.6 million in Special charges related to additional Settlement Agreement costs. During the third quarter of fiscal 2017, we entered into an agreement to sell our Völker business and recorded a loss of $26.8 million in Special charges, which includes (i) the impairment charges of $25.4 million relating mainly to non-cash write-downs of long-lived assets and working capital associated with the Völker brand portfolio; and (ii) transaction related costs of approximately $1.4 million . The sale took place during the fourth quarter of fiscal 2017. Business Optimization During the first quarter of fiscal 2018, we initiated a global transformation program focused on reducing complexity, increasing efficiency, improving our cost structure and accelerating growth with targeted investments that align with our strategic priorities. For the quarter and year to date periods ended June 30, 2018 , this program resulted in charges of $7.0 million and $25.7 million , of which $1.9 million and $12.7 million were severance and benefit costs. Site Consolidation In the third quarter of fiscal 2015, we initiated a plan to streamline our operations and simplify our supply chain by consolidating certain manufacturing and distribution operations (“Site Consolidation”). As part of this action, we have announced the closure of five sites. During the quarter and year to date periods ended June 30, 2018 , we recorded charges of $7.5 million and $15.3 million , related to these efforts, of which $1.3 million and $2.0 million were severance and benefit costs. These amounts compare to charges of $4.9 million and $14.7 million , during the quarter and year to date periods ended June 30, 2017 , of which $0.4 million and $2.1 million were severance and benefit costs for the quarter and year to dates periods ended June 30, 2017 . During the second quarter of fiscal 2017, we sold our Charleston property for $6.1 million in cash proceeds and recorded a gain of $5.2 million . Since the inception of the Site Consolidation program through June 30, 2018 , we have recognized aggregate Special charges of $50.3 million . Integration and Business Realignment As we acquire businesses, we initiate integration activities and position our existing businesses to capitalize on opportunities for growth. We also incur costs, including severance and benefit costs, associated with other business realignment and integration activities. During the quarter and year to date periods ended June 30, 2018 , we incurred integration and business realignment charges of approximately $0.1 million and $0.6 million . These amounts compare to charges of $3.1 million and $5.4 million during the quarter and year to date periods ended June 30, 2017 , of which $1.8 million and $3.2 million were severance and benefit costs for the quarter and year to date periods ended June 30, 2017 . For all accrued severance and other benefit charges described above, we record restructuring reserves within Other current liabilities. The reserve activity for severance and other benefits during the year to date period ended June 30, 2018 was as follows: Balance at September 30, 2017 $ 9.0 Expenses 14.7 Cash Payments (16.7 ) Reversals (0.2 ) Balance at June 30, 2018 $ 6.8 |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate for the quarter ended June 30, 2018 was 18.6% compared to 64.6% for the comparable period in the prior year. The effective tax rate for the current quarter is lower than the comparable period in fiscal 2017 due primarily to the lower corporate tax rate attributable to the new tax legislation in the U.S. The comparable prior year period also included the unfavorable impact of the non-deductible loss related to the agreement to sell our Völker business. The effective tax rate for the year to date period ended June 30, 2018 was (50.3)% compared to 31.8% for the prior year to date period. The effective tax rate for the current year to date period is lower than the comparable period in fiscal 2017 due primarily to the lower corporate tax rate and a larger amount of period tax benefits in fiscal 2018. We have recorded current year to date tax benefits of $78.3 million primarily related to the new tax legislation in the U.S. as described below and the change in tax accounting method resulting in a reduction in U.S. tax for prior year currency exchange losses. The comparable prior year period included period tax benefits of $5.0 million primarily related to the adoption of ASU 2016-09 - Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting partially offset by the expense to revalue the France deferred tax assets due to the enactment of a lower future corporate income tax rate in France. The comparable prior year period also included the unfavorable impact of the non-deductible loss related to the agreement to sell our Völker business. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code which will impact our fiscal year ended September 30, 2018 including, but not limited to (1) reducing the U.S. Federal corporate tax rate, (2) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that may electively be paid over eight years, and (3) accelerated first year expensing of certain capital expenditures. The Tax Act reduces the federal corporate tax rate from 35.0% to 21.0% effective January 1, 2018 for calendar year tax filers. Internal Revenue Code Section 15 provides that our fiscal year ended September 30, 2018 will have a blended corporate tax rate of 24.5% , which is based on a proration of the applicable tax rates before and after the effective date of the Tax Act. The statutory tax rate of 21.0% will apply for fiscal 2019 and beyond. The Tax Act also puts in place new tax laws that will impact our taxable income beginning in fiscal 2019, which include, but are not limited to (1) creating a Base Erosion Anti-abuse Tax (“BEAT”), which is a new minimum tax, (2) generally eliminating U.S. Federal income taxes on dividends from foreign subsidiaries, (3) a new provision designed to tax currently global intangible low-taxed income (“GILTI”), which allows for the possibility of utilizing foreign tax credits and a deduction equal to 50.0% to offset the income tax liability (subject to some limitations), (4) a provision that could limit the amount of deductible interest expense, (5) the repeal of the domestic production activity deduction, (6) limitations on the deductibility of certain executive compensation, and (7) limitations on the utilization of foreign tax credits to reduce the U.S. income tax liability. Shortly after the Tax Act was enacted, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) which provides guidance on accounting for the Tax Act’s impact. SAB 118 provides a measurement period, which in no case should extend beyond one year from the Tax Act enactment date, during which a company acting in good faith may complete the accounting for the impacts of the Tax Act under ASC Topic 740. In accordance with SAB 118, the Company must reflect the income tax effects of the Tax Act in the reporting period in which the accounting under ASC Topic 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, the Company can determine a reasonable estimate for those effects and record a provisional estimate in the financial statements in the first reporting period in which a reasonable estimate can be determined. If a Company cannot determine a provisional estimate to be included in the financial statements, the Company should continue to apply ASC 740 based on the provisions of the tax laws that were in effect immediately prior to the Tax Act being enacted. If a Company is unable to provide a reasonable estimate of the impacts of the Tax Act in a reporting period, a provisional amount must be recorded in the first reporting period in which a reasonable estimate can be determined. We have recorded a provisional discrete net tax benefit of $61.4 million related to the Tax Act in the year to date period ending June 30, 2018 . No additional adjustments were recorded in the current quarter. This net benefit primarily consists of a net benefit of $93.8 million due to the remeasurement of our deferred tax accounts to reflect the corporate rate reduction impact to our net deferred tax balances and a net expense for the transition tax of $32.4 million . Reduction in U.S. Corporate Rate: The Tax Act reduces the U.S. Federal statutory corporate tax rate to 24.5% in fiscal year ending September 30, 2018 and 21.0% for fiscal year ending September 30, 2019 and beyond. We have recorded a provisional adjustment to our net deferred tax balances, with a corresponding discrete net tax benefit of $93.8 million in the current year to date period. In our annual effective tax rate we have reflected the tax effect of the temporary differences that will originate subsequent to the Tax Act and are required to be remeasured at the 21.0% tax rate. While we are able to make a reasonable estimate of the impact of the reduction in corporate rate, we are continuing to analyze the temporary differences that existed on the date of enactment, and the temporary differences originating in the current fiscal year. Transition Tax: The transition tax is a fiscal 2018 tax on the previously untaxed accumulated and current earnings and profits (“E&P”) of certain of our foreign subsidiaries. In order to determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. E&P is similar to retained earnings of the subsidiary, but requires other adjustments to conform to U.S. tax rules. We were able to make a reasonable estimate of the transition tax and recorded a provisional transition tax obligation of $32.4 million which we expect to elect to pay, net of certain tax credit carryforwards, over eight years beginning in fiscal 2019. Of this amount, $30.5 million is presented in Other long-term liabilities and $1.9 million is presented in Other current liabilities. However, we are awaiting further interpretative guidance, continuing to assess available tax methods and elections, and continuing to gather additional information to more precisely compute the amount of the transition tax. GILTI: The Tax Act includes a provision designed to currently tax global intangible low-taxed income starting in fiscal 2019. Due to the complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the Tax Act, the application of ASC 740, and are considering available accounting policy alternatives to adopt to either record the U.S. income tax effect of future GILTI inclusions in the period in which they arise or establish deferred taxes with respect to the expected future tax liabilities associated with future GILTI inclusions. Our accounting policies depend, in part, on analyzing our global income to determine whether we expect a tax liability resulting from the application of this provision, and, if so, whether and when to record related current and deferred income taxes. Whether we intend to recognize deferred tax liabilities related to the GILTI provisions is dependent, in part, on our assessment of the Company's future operating structure. In addition, we are awaiting further interpretive guidance in connection with the computation of the GILTI tax. For these reasons, we are not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, we have not made any adjustments relating to potential GILTI tax in our financial statements and have not made a policy decision regarding our accounting for GILTI. As of September 30, 2017, our practice and intention was to reinvest the earnings in our non-U.S. subsidiaries outside of the U.S., and no U.S. deferred income taxes or foreign withholding taxes were recorded. The transition tax noted above will result in the previously untaxed foreign earnings being included in the federal and state fiscal 2018 taxable income. We are currently analyzing our global working capital requirements and the potential tax liabilities that would be incurred if the non-U.S. subsidiaries distribute cash to the U.S. parent, which include local country withholding tax and potential U.S. state taxation. Furthermore, the transition tax will close a majority of the outside basis differences in our foreign corporations and any remaining temporary difference will potentially have some interaction with the GILTI tax noted above. For these reasons, we are not yet able to reasonably estimate the effect of this provision of the Tax Act and have not recorded any withholding or state tax liabilities, any deferred taxes attributable to GILTI (as noted above) or any deferred taxes attributable to our investment in our foreign subsidiaries. We are also currently analyzing other provisions of the Tax Act that come into effect for tax years starting October 1, 2018 to determine if these items would impact the effective tax rate. These provisions include BEAT, eliminating U.S. Federal income taxes on dividends from foreign subsidiaries, the treatment of amounts in accumulated other comprehensive income, the new provision that could limit the amount of deductible interest expense, and the limitations on the deductibility of certain executive compensation. |
Earnings per Common Share
Earnings per Common Share | 9 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share Basic earnings per share is calculated based upon the weighted average number of outstanding common shares for the period, plus the effect of deferred vested shares. Diluted earnings per share is calculated consistent with the basic earnings per share calculation plus the effect of dilutive unissued common shares related to stock-based employee compensation programs. For all periods presented, anti-dilutive stock options were excluded from the calculation of diluted earnings per share. Cumulative treasury stock acquired, less cumulative shares reissued, have been excluded in determining the average number of shares outstanding. Earnings per share are calculated as follows (share information in thousands): Quarter Ended June 30 Year to Date Ended June 30 2018 2017 2018 2017 Net income attributable to common shareholders $ 45.2 $ 6.0 $ 162.0 $ 64.2 Average shares outstanding - Basic 66,299 65,795 66,121 65,567 Add potential effect of exercise of stock options and other unvested equity awards 1,347 1,893 1,429 1,733 Average shares outstanding - Diluted 67,646 67,688 67,550 67,300 Net income attributable to common shareholders per common share - Basic $ 0.68 $ 0.09 $ 2.45 $ 0.98 Net income attributable to common shareholders per common share - Diluted $ 0.67 $ 0.09 $ 2.40 $ 0.95 Shares with anti-dilutive effect excluded from the computation of Diluted EPS 273 2 249 225 |
Common Stock
Common Stock | 9 Months Ended |
Jun. 30, 2018 | |
Class of Stock Disclosures [Abstract] | |
Common Stock | Common Stock The stock-based compensation cost that was charged against income, net of tax, for all plans was $4.3 million and $3.4 million in the quarterly periods ended June 30, 2018 and 2017 , and $ 15.9 million and $ 11.1 million in the year to date periods ended June 30, 2018 and 2017 . In connection with employee payroll tax withholding for restricted and deferred stock distributions, we purchased 0.1 million shares of our common stock for $7.4 million in the year to date period ended June 30, 2018 , and 0.1 million shares for $4.3 million in the comparable prior year period. We did not purchase any shares of our common stock in the open market under our share repurchase program in the year to date period ended June 30, 2018 . In the comparable year to date period, we repurchased 0.6 million shares of our common stock in the for $30.0 million . As of June 30, 2018 , a cumulative total of $175.3 million of our share repurchase program had been used, leaving us with the ability to repurchase shares with a value of $164.7 million . This program does not have an expiration date and there are no plans to terminate this program in the future. |
Guarantees
Guarantees | 9 Months Ended |
Jun. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
Guarantees | Guarantees We routinely grant limited warranties on our products with respect to defects in material and workmanship. The terms of these warranties are generally one year, however, certain components and products have substantially longer warranty periods. We recognize a reserve with respect to these obligations at the time of product sale, with subsequent warranty claims recorded directly against the reserve. The amount of the warranty reserve is determined based on historical trend experience for the covered products. For more significant warranty-related matters which might require a broad-based correction, separate reserves are established when such events are identified and the cost of correction can be reasonably estimated. A reconciliation of changes in the warranty reserve for the periods covered in this report is as follows: Quarter Ended June 30 Year to Date Ended June 30 2018 2017 2018 2017 Balance at beginning of period $ 25.0 $ 27.4 $ 25.5 $ 27.5 Provision for warranties during the period 2.1 4.0 9.6 10.3 Warranty reserves acquired — — — 1.9 Warranty claims during the period (3.8 ) (4.5 ) (11.8 ) (12.8 ) Balance at end of period $ 23.3 $ 26.9 $ 23.3 $ 26.9 In the normal course of business, we enter into various other guarantees and indemnities in our relationships with suppliers, service providers, customers, business partners and others. Examples of these arrangements would include guarantees of product performance, indemnifications to service providers and indemnifications of our actions to business partners. These guarantees and indemnifications have not historically had, nor do we expect them to have, a material impact on our financial condition or results of operations, although indemnifications associated with our actions generally have no dollar limitations. In conjunction with our acquisition and divestiture activities, we have entered into select guarantees and indemnifications of performance with respect to the fulfillment of commitments under applicable purchase and sale agreements. The arrangements generally indemnify the buyer or seller for damages associated with breach of contract, inaccuracies in representations and warranties surviving the closing date and satisfaction of liabilities and commitments retained under the applicable contract. With respect to sale transactions, we also routinely enter into non-competition agreements for varying periods of time. Guarantees and indemnifications with respect to acquisition and divestiture activities, if triggered, could have a materially adverse impact on our financial condition and results of operations. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We disclose segment information that is consistent with the way in which management operates and views the business. Our operating structure contains the following reporting segments: • Patient Support Systems – globally provides our specialty bed frames and surfaces and mobility solutions, as well as our clinical workflow solutions which specializes in software and information technologies to improve care and deliver actionable insight to caregivers and patients. • Front Line Care – globally provides and sells patient monitoring and diagnostic technologies, including a diversified portfolio of physical assessment tools that help diagnose, treat and manage a wide variety of illnesses and diseases, as well as a portfolio of respiratory care devices. • Surgical Solutions – globally provides products that improve surgical safety and efficiency in the operating room including tables, lights, pendants, positioning devices and various other surgical products and accessories. Our performance within each reportable segment continues to be measured on a divisional income basis before non-allocated operating and administrative costs, litigation, special charges, acquisition and integration costs, acquisition-related intangible asset amortization, and other unusual events. Divisional income generally represents the division’s gross profit less its direct operating costs along with an allocation of manufacturing and distribution costs, research and development and certain corporate functional expenses. Non-allocated operating costs, administrative costs, and other includes functional expenses that support the entire organization such as administration, finance, legal and human resources, expenses associated with strategic developments, acquisition-related intangible asset amortization, and other events that are not indicative of operating trends. We exclude such amounts from divisional income to allow management to evaluate and understand divisional operating trends. The chief operating decision maker does not receive any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Quarter Ended Year to Date Ended June 30 2018 2017 2018 2017 Revenue: Patient Support Systems $ 359.7 $ 354.7 $ 1,049.1 $ 1,052.8 Front Line Care 239.0 227.1 701.5 639.9 Surgical Solutions 109.9 107.3 338.2 312.7 Total revenue $ 708.6 $ 689.1 $ 2,088.8 $ 2,005.4 Divisional income: Patient Support Systems $ 71.3 $ 62.8 $ 191.9 $ 174.1 Front Line Care 62.2 56.4 178.1 160.3 Surgical Solutions 11.4 8.7 36.6 26.0 Other operating costs: Non-allocated operating costs, administrative costs, and other 52.4 52.7 165.5 156.7 Special charges 14.0 34.8 64.4 43.7 Operating profit 78.5 40.4 176.7 160.0 Interest expense (24.2 ) (23.8 ) (71.5 ) (65.2 ) Investment income and other, net 1.2 (0.5 ) 2.6 (2.1 ) Income before income taxes $ 55.5 $ 16.1 $ 107.8 $ 92.7 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies General We are subject to various claims and contingencies arising out of the normal course of business, including those relating to governmental investigations and proceedings, commercial transactions, product liability, employee related matters, antitrust, safety, health, taxes, environmental and other matters. Litigation is subject to many uncertainties and the outcome of individual litigated matters is not predictable with assurance. It is possible that some litigation matters for which reserves have not been established could be decided unfavorably to us, and that any such unfavorable decisions could have a material adverse effect on our financial condition, results of operations, and cash flows. Self Insurance We are also involved in other possible claims, including product and general liability, workers’ compensation, auto liability and employment related matters. Such claims in the United States have deductibles and self-insured retentions at various limits up to $1.0 million per occurrence or per claim, depending upon the type of coverage and policy period. International deductibles and self-insured retentions are lower. We are also generally self-insured up to certain stop-loss limits for certain employee health benefits, including medical, drug and dental. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims and outside actuarial analysis, which are based on historical information along with certain assumptions about future events. Such estimated reserves are classified as Other Current Liabilities and Other Long-Term Liabilities within the Condensed Consolidated Balance Sheets. Universal Hospital Services, Inc. - Dismissal of Litigation On March 7, 2018, we entered into a Settlement Agreement with UHS related to previously disclosed litigation which, among other things, provided for the conveyance of certain net assets relating to our third-party rental business (Note 1). On May 15, 2018, the Company and UHS entered into a motion for dismissal with prejudice whereby UHS agreed to drop its lawsuit against the Company as part of the Settlement Agreement. On June 1, 2018, the United States District Court - Western District of Texas dismissed the case with prejudice. |
Supplementary Balance Sheet I20
Supplementary Balance Sheet Information (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplementary Balance Sheet Information | June 30, September 30, Allowance for possible losses and discounts on trade receivables $ 21.4 $ 25.1 Inventories: Finished products $ 147.5 $ 147.5 Raw materials and work in process 161.9 137.0 Total inventory $ 309.4 $ 284.5 Accumulated depreciation of property, plant and equipment $ 661.9 $ 624.2 Accumulated amortization of software and other intangible assets $ 576.2 $ 492.3 Preferred stock, without par value: Shares authorized 1,000,000 1,000,000 Shares issued None None Common stock, without par value: Shares authorized 199,000,000 199,000,000 Shares issued 88,457,634 88,457,634 Shares outstanding 66,383,659 65,813,794 Treasury shares 22,073,975 22,643,840 |
Acquisitions Acquisitions (Tabl
Acquisitions Acquisitions (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following summarizes the fair value of assets acquired and liabilities assumed at the date of the Mortara acquisition. The results are considered final. Amount Trade receivables $ 16.4 Inventory 21.5 Other current assets 2.8 Property, plant and equipment 18.2 Goodwill 165.5 Trade names (7-year weighted average useful life) 15.8 Customer relationships (8-year useful life) 37.9 Developed technology (7-year useful life) 52.3 Other noncurrent assets 4.8 Current liabilities (22.8 ) Noncurrent liabilities (1.2 ) Total purchase price, net of cash acquired $ 311.2 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Activity | The following summarizes goodwill activity by reportable segment: Patient Support Systems Front Line Care Surgical Solutions Total Balances at September 30, 2017 Goodwill $ 545.0 $ 1,375.6 $ 311.8 $ 2,232.4 Accumulated impairment losses (472.8 ) — — (472.8 ) Goodwill, net at September 30, 2017 72.2 1,375.6 311.8 1,759.6 Changes in Goodwill during the period: Goodwill related to acquisitions — 0.8 — 0.8 Deconsolidation of VIE — — (13.2 ) (13.2 ) Currency translation effect (0.5 ) (5.5 ) (1.6 ) (7.6 ) Balances at June 30, 2018 Goodwill 544.5 1,370.9 297.0 2,212.4 Accumulated impairment losses (472.8 ) — — (472.8 ) Goodwill, net at June 30, 2018 $ 71.7 $ 1,370.9 $ 297.0 $ 1,739.6 |
Financing Agreements (Tables)
Financing Agreements (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Total Debt | Total debt consists of the following: June 30, September 30, Revolving credit facility $ — $ 90.0 Current portion of long-term debt 137.2 109.8 Senior secured Term Loan A, long-term portion 1,104.9 1,266.7 Senior unsecured 5.75% notes due on September 1, 2023 420.6 419.9 Senior unsecured 5.00% notes due on February 14, 2025 296.2 295.8 Unsecured 7.00% debentures due on February 15, 2024 13.6 13.6 Unsecured 6.75% debentures due on December 15, 2027 29.6 29.6 Securitization Program 106.6 79.1 Note Securitization Facility 61.0 — Other 0.4 4.8 Total debt 2,170.1 2,309.3 Less Short-term borrowings 304.8 188.9 Total Long-term debt $ 1,865.3 $ 2,120.4 |
Schedule of Facilities Covenants | The required ratios vary providing a gradually decreasing maximum secured net leverage ratio and a gradually increasing minimum interest coverage ratio, as set forth in the table below: Any Fiscal Quarter Ended During the Calendar Year Ending: Maximum Minimum December 31, 2018 3.50x 3.75x December 31, 2019 and thereafter 3.00x 4.00x |
Schedule of Fair Values of Long-Term Debt Instruments | The estimated fair values of our long-term debt instruments, including the current portion, are described in the table below: June 30, September 30, Senior secured Term Loan A $ 1,191.4 $ 1,364.8 Senior unsecured 5.75% notes due on September 1, 2023 436.3 449.3 Senior unsecured 5.00% notes due on February 14, 2025 294.3 311.9 Unsecured debentures 42.9 46.8 Total $ 1,964.9 $ 2,172.8 |
Retirement and Postretirement24
Retirement and Postretirement Plans (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Pension Expense | The following table details the components of net pension expense for our defined benefit retirement plans. Quarter Ended June 30 Year to Date Ended June 30 2018 2017 2018 2017 Service cost $ 1.2 $ 1.4 $ 3.6 $ 4.3 Interest cost 2.7 2.5 8.2 7.4 Expected return on plan assets (3.9 ) (3.7 ) (11.8 ) (11.0 ) Amortization of unrecognized prior service cost, net 0.1 — 0.1 0.1 Amortization of net loss 1.1 1.5 3.3 4.6 Net pension expense $ 1.2 $ 1.7 $ 3.4 $ 5.4 |
Other Comprehensive Income (L25
Other Comprehensive Income (Loss) (Tables) | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Schedule of Changes in AOCL by Component | The following table represents the changes in accumulated other comprehensive loss by component: Quarter Ended June 30, 2018 Other comprehensive income (loss) Accumulated other comprehensive income (loss) Prior to reclassification Reclassification from Pre-tax Tax effect Net of tax Beginning balance Net activity Ending balance Derivative instruments and hedges $ 4.8 $ (1.9 ) $ 2.9 $ (0.7 ) $ 2.2 $ 15.6 $ 2.2 $ 17.8 Foreign currency translation adjustment (43.9 ) — (43.9 ) — (43.9 ) (58.7 ) (43.9 ) (102.6 ) Change in pension and postretirement defined benefit plans 0.3 1.1 1.4 (0.4 ) 1.0 (31.4 ) 1.0 (30.4 ) Total $ (38.8 ) $ (0.8 ) $ (39.6 ) $ (1.1 ) $ (40.7 ) $ (74.5 ) $ (40.7 ) $ (115.2 ) Quarter Ended June 30, 2017 Other comprehensive income (loss) Accumulated other comprehensive income (loss) Prior to reclassification Reclassification from Pre-tax Tax effect Net of tax Beginning balance Net activity Ending balance Derivative instruments and hedges $ (3.5 ) $ (0.2 ) $ (3.7 ) $ 1.3 $ (2.4 ) $ 6.9 $ (2.4 ) $ 4.5 Foreign currency translation adjustment 37.1 1.0 38.1 — 38.1 (140.7 ) 38.1 (102.6 ) Change in pension and postretirement defined benefit plans (0.5 ) 1.5 1.0 (0.4 ) 0.6 (48.7 ) 0.6 (48.1 ) Total $ 33.1 $ 2.3 $ 35.4 $ 0.9 $ 36.3 $ (182.5 ) $ 36.3 $ (146.2 ) Year to Date Ended June 30, 2018 Other comprehensive income (loss) Accumulated other comprehensive income (loss) Prior to Reclassification Pre-tax Tax effect Net of tax Beginning Net activity Ending Derivative instruments and hedges $ 20.3 $ (2.8 ) $ 17.5 $ (4.0 ) $ 13.5 $ 4.3 $ 13.5 $ 17.8 Foreign currency translation adjustment (21.3 ) — (21.3 ) — (21.3 ) (81.3 ) (21.3 ) (102.6 ) Change in pension and postretirement defined benefit plans 0.1 3.3 3.4 (0.8 ) 2.6 (33.0 ) 2.6 (30.4 ) Total $ (0.9 ) $ 0.5 $ (0.4 ) $ (4.8 ) $ (5.2 ) $ (110.0 ) $ (5.2 ) $ (115.2 ) Year to Date Ended June 30, 2017 Other comprehensive income (loss) Accumulated other comprehensive income (loss) Prior to Reclassification Pre-tax Tax effect Net of tax Beginning Net activity Ending Derivative instruments and hedges $ 13.1 $ (0.9 ) $ 12.2 $ (4.6 ) $ 7.6 $ (3.1 ) $ 7.6 $ 4.5 Foreign currency translation adjustment 11.6 1.0 12.6 — 12.6 (115.2 ) 12.6 (102.6 ) Change in pension and postretirement defined benefit plans (0.1 ) 4.4 4.3 (1.6 ) 2.7 (50.8 ) 2.7 (48.1 ) Total $ 24.6 $ 4.5 $ 29.1 $ (6.2 ) $ 22.9 $ (169.1 ) $ 22.9 $ (146.2 ) | |
Schedule of Items Reclassified out of AOCL | The following table represents the items reclassified out of accumulated other comprehensive loss and the related tax effects: Quarter Ended June 30 2018 2017 Amount Tax effect Net of tax Amount reclassified Tax effect Net of tax Derivative instruments and hedges (a) $ (1.9 ) $ 0.4 $ (1.5 ) $ (0.2 ) $ — $ (0.2 ) Foreign currency translation adjustment (b) $ — $ — $ — $ 1.0 $ — $ 1.0 Change in pension and postretirement defined benefit plans (c) $ 1.1 $ (0.4 ) $ 0.7 $ 1.5 $ (0.5 ) $ 1.0 Year to Date Ended June 30 2018 2017 Amount Tax effect Net of tax Amount Tax effect Net of tax Derivative instruments and hedges (a) $ (2.8 ) $ 0.6 $ (2.2 ) $ (0.9 ) $ 0.2 $ (0.7 ) Foreign currency translation adjustment (b) $ — $ — $ — $ 1.0 $ — $ 1.0 Change in pension and postretirement defined benefit plans (c) $ 3.3 $ (0.8 ) $ 2.5 $ 4.4 $ (1.6 ) $ 2.8 (a) Reclassified from accumulated other comprehensive income (loss) into Interest expense . (b) Reclassified from accumulated other comprehensive income (loss) into Special charges. (c) Reclassified from accumulated other comprehensive income (loss) into Cost of goods sold and Selling and administrative expenses . These components are included in the computation of net periodic pension expense. |
Special Charges (Tables)
Special Charges (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Special Charges [Abstract] | |
Restructuring Activity | The reserve activity for severance and other benefits during the year to date period ended June 30, 2018 was as follows: Balance at September 30, 2017 $ 9.0 Expenses 14.7 Cash Payments (16.7 ) Reversals (0.2 ) Balance at June 30, 2018 $ 6.8 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Calculated Earnings per Share | Earnings per share are calculated as follows (share information in thousands): Quarter Ended June 30 Year to Date Ended June 30 2018 2017 2018 2017 Net income attributable to common shareholders $ 45.2 $ 6.0 $ 162.0 $ 64.2 Average shares outstanding - Basic 66,299 65,795 66,121 65,567 Add potential effect of exercise of stock options and other unvested equity awards 1,347 1,893 1,429 1,733 Average shares outstanding - Diluted 67,646 67,688 67,550 67,300 Net income attributable to common shareholders per common share - Basic $ 0.68 $ 0.09 $ 2.45 $ 0.98 Net income attributable to common shareholders per common share - Diluted $ 0.67 $ 0.09 $ 2.40 $ 0.95 Shares with anti-dilutive effect excluded from the computation of Diluted EPS 273 2 249 225 |
Guarantees (Tables)
Guarantees (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
Reconciliation of Changes in the Warranty Reserve | A reconciliation of changes in the warranty reserve for the periods covered in this report is as follows: Quarter Ended June 30 Year to Date Ended June 30 2018 2017 2018 2017 Balance at beginning of period $ 25.0 $ 27.4 $ 25.5 $ 27.5 Provision for warranties during the period 2.1 4.0 9.6 10.3 Warranty reserves acquired — — — 1.9 Warranty claims during the period (3.8 ) (4.5 ) (11.8 ) (12.8 ) Balance at end of period $ 23.3 $ 26.9 $ 23.3 $ 26.9 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of Segment Information to Consolidated Financial Information | Quarter Ended Year to Date Ended June 30 2018 2017 2018 2017 Revenue: Patient Support Systems $ 359.7 $ 354.7 $ 1,049.1 $ 1,052.8 Front Line Care 239.0 227.1 701.5 639.9 Surgical Solutions 109.9 107.3 338.2 312.7 Total revenue $ 708.6 $ 689.1 $ 2,088.8 $ 2,005.4 Divisional income: Patient Support Systems $ 71.3 $ 62.8 $ 191.9 $ 174.1 Front Line Care 62.2 56.4 178.1 160.3 Surgical Solutions 11.4 8.7 36.6 26.0 Other operating costs: Non-allocated operating costs, administrative costs, and other 52.4 52.7 165.5 156.7 Special charges 14.0 34.8 64.4 43.7 Operating profit 78.5 40.4 176.7 160.0 Interest expense (24.2 ) (23.8 ) (71.5 ) (65.2 ) Investment income and other, net 1.2 (0.5 ) 2.6 (2.1 ) Income before income taxes $ 55.5 $ 16.1 $ 107.8 $ 92.7 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details) $ in Millions | Jun. 30, 2018USD ($) |
Accounting Policies [Abstract] | |
Deferred Tax Assets, Valuation Allowance | $ 57.7 |
Unrecognized Tax Benefits | $ 2.3 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Other Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sale of businesses | $ 1 | $ 4.5 | ||||
Gain (Loss) on Disposition of Business | $ 1 | $ 26.8 | ||||
Professional Fees | $ 1.4 | |||||
MEMS [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain (Loss) on Disposition of Business | $ 23.4 | |||||
Non-Cash Loss Reserve for Assets | 20.4 | |||||
Professional Fees | $ 0.6 | $ 3 |
Supplementary Balance Sheet I32
Supplementary Balance Sheet Information (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Allowance for possible losses and discounts on trade receivables | $ 21.4 | $ 25.1 |
Inventories: | ||
Finished products | 147.5 | 147.5 |
Raw materials and work in process | 161.9 | 137 |
Total inventory | 309.4 | 284.5 |
Accumulated depreciation of property, plant and equipment | 661.9 | 624.2 |
Accumulated amortization of software and other intangible assets | $ 576.2 | $ 492.3 |
Preferred stock, without par value: | ||
Shares authorized | 1,000,000 | 1,000,000 |
Shares issued | 0 | 0 |
Common stock, without par value: | ||
Shares authorized | 199,000,000 | 199,000,000 |
Shares issued (in shares) | 88,457,634 | 88,457,634 |
Shares outstanding (in shares) | 66,383,659 | 65,813,794 |
Treasury shares (in shares) | 22,073,975 | 22,643,840 |
Acquisitions Acquisition (Morta
Acquisitions Acquisition (Mortara Instruments) (Details) - USD ($) | Feb. 14, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Feb. 28, 2017 |
Business Acquisition [Line Items] | ||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 0 | $ 311,400,000 | ||
Goodwill | $ 1,739,600,000 | |||
Mortara [Member] | ||||
Business Acquisition [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 330,000,000 | |||
Payments to Acquire Businesses, Net of Cash Acquired | 311,200,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 16,400,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 21,500,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other | 2,800,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 18,200,000 | |||
Goodwill | 165,500,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 4,800,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | (22,800,000) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other | (1,200,000) | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | 311,200,000 | |||
Trade names (7-year weighted average useful life) | Mortara [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 15,800,000 | |||
Customer relationships (8-year useful life) | Mortara [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 37,900,000 | |||
Developed technology (7-year useful life) | Mortara [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 52,300,000 | |||
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member] | ||||
Business Acquisition [Line Items] | ||||
Aggregate value of debt | $ 300,000,000 |
Goodwill (Schedule of Goodwill
Goodwill (Schedule of Goodwill Activity) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2018 | Sep. 30, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill | $ 2,212.4 | $ 2,232.4 |
Accumulated impairment losses | (472.8) | (472.8) |
Goodwill, net | 1,739.6 | 1,759.6 |
Goodwill related to acquisitions | 0.8 | |
Goodwill, Written Off Related to Deconsolidation of VIE | (13.2) | |
Currency translation effect | (7.6) | |
Patient Support Systems [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 544.5 | 545 |
Accumulated impairment losses | (472.8) | (472.8) |
Goodwill, net | 71.7 | 72.2 |
Goodwill, Acquired During Period And Purchase Accounting Adjustments | 0 | |
Goodwill, Written Off Related to Deconsolidation of VIE | 0 | |
Currency translation effect | (0.5) | |
Front Line Care [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 1,370.9 | 1,375.6 |
Accumulated impairment losses | 0 | 0 |
Goodwill, net | 1,370.9 | 1,375.6 |
Goodwill, Acquired During Period And Purchase Accounting Adjustments | 0.8 | |
Goodwill, Written Off Related to Deconsolidation of VIE | 0 | |
Currency translation effect | (5.5) | |
Surgical Solutions [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 297 | 311.8 |
Accumulated impairment losses | 0 | 0 |
Goodwill, net | 297 | $ 311.8 |
Goodwill, Acquired During Period And Purchase Accounting Adjustments | 0 | |
Goodwill, Written Off Related to Deconsolidation of VIE | (13.2) | |
Currency translation effect | $ (1.6) |
Goodwill Goodwill and Indefinit
Goodwill Goodwill and Indefinite-Lived Intangible Assets (Details) $ in Millions | Jun. 30, 2018USD ($) |
Goodwill [Line Items] | |
Indefinite-Lived Trade Names | $ 466.9 |
Financing Agreements (Schedule
Financing Agreements (Schedule of Total Debt) (Details) | 9 Months Ended | ||||
Jun. 30, 2018USD ($)derivative | Jun. 30, 2017USD ($) | May 31, 2018USD ($) | Sep. 30, 2017USD ($) | Feb. 28, 2017USD ($) | |
Debt Instrument [Line Items] | |||||
Repayments of Long-term Debt | $ 137,400,000 | $ 54,900,000 | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Current portion of long-term debt | 137,200,000 | $ 109,800,000 | |||
Total debt | 2,170,100,000 | 2,309,300,000 | |||
Less Short-term borrowings | 304,800,000 | 188,900,000 | |||
Total Long-term debt | 1,865,300,000 | 2,120,400,000 | |||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Letters of Credit Outstanding, Amount | 8,000,000 | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Revolving credit facility | 0 | 90,000,000 | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 700,000,000 | ||||
Debt instrument, maturity date | Sep. 30, 2021 | ||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 692,000,000 | ||||
Senior Secured Credit Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Interest Rate During Period | 3.60% | ||||
Senior Secured Term Loan A [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, Maturities, Repayments of Principal in Year Three | $ 146,300,000 | ||||
Repayments of Long-term Debt | $ 137,300,000 | ||||
Line of Credit Facility, Interest Rate During Period | 0.00% | ||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,462,500,000 | ||||
Debt instrument, maturity date | Sep. 30, 2021 | ||||
Total Long-term debt | $ 1,104,900,000 | 1,266,700,000 | |||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 0 | ||||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 109,700,000 | ||||
Senior Unsecured 5.75% Notes due on September 1, 2023 [Member] | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Unsecured debenture interest rate | 5.75% | ||||
Debt Instrument, Face Amount | $ 425,000,000 | ||||
Debt instrument, maturity date | Sep. 1, 2023 | ||||
Total Long-term debt | $ 420,600,000 | 419,900,000 | |||
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member] | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Unsecured debenture interest rate | 5.00% | ||||
Debt Instrument, Face Amount | $ 300,000,000 | ||||
Debt instrument, maturity date | Feb. 14, 2025 | ||||
Total Long-term debt | $ 296,200,000 | 295,800,000 | |||
Unsecured 7.00% Debentures Due on February 15, 2024 [Member] | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Unsecured debenture interest rate | 7.00% | ||||
Debt instrument, maturity date | Feb. 15, 2024 | ||||
Total debt | $ 13,600,000 | 13,600,000 | |||
Unsecured 6.75% Debentures Due on December 15, 2027 [Member] | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Unsecured debenture interest rate | 6.75% | ||||
Debt instrument, maturity date | Dec. 15, 2027 | ||||
Total debt | $ 29,600,000 | 29,600,000 | |||
Securitization Program [Member] | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Unsecured debenture interest rate | 0.675% | ||||
Debt Instrument, Face Amount | $ 110,000,000 | ||||
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement | $ 106,600,000 | 79,100,000 | |||
Note Securitization Facility [Member] | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Debt Instrument, Face Amount | $ 90,000,000 | ||||
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement | 61,000,000 | 0 | |||
Other Financing Agreements [Member] | |||||
Long-term Debt, by Current and Noncurrent [Abstract] | |||||
Total debt | $ 400,000 | $ 4,800,000 | |||
Interest Rate Swap [Member] | |||||
Debt Instrument [Line Items] | |||||
Derivative, Number of Instruments Held | derivative | 7 |
Financing Agreements (Future Pr
Financing Agreements (Future Principal Payments of Long-Term Debt) (Details) - Interest Rate Swap [Member] - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Debt Instrument [Line Items] | ||
Derivative, Notional Amount | $ 750,000,000 | |
Interest Rate Derivatives, at Fair Value, Net | $ 23,700,000 | $ 7,300,000 |
Financing Agreements (Narrative
Financing Agreements (Narrative) (Details) | 1 Months Ended | 9 Months Ended | |||
May 31, 2018USD ($) | Jun. 30, 2018USD ($)derivative | Jun. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Feb. 28, 2017USD ($) | |
Debt Instrument [Line Items] | |||||
Payment of long-term debt | $ 137,400,000 | $ 54,900,000 | |||
Interest Rate Swap [Member] | |||||
Debt Instrument [Line Items] | |||||
Number of derivative agreements | derivative | 7 | ||||
Interest rate swap agreement, notional amount | $ 750,000,000 | ||||
Interest rate swap, fair value | 23,700,000 | $ 7,300,000 | |||
Securitization Program [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Term | 364 days | ||||
Aggregate value of debt | $ 110,000,000 | ||||
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement | $ 106,600,000 | 79,100,000 | |||
Unsecured debenture interest rate | 0.675% | ||||
Note Securitization Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Term | 364 days | ||||
Aggregate value of debt | $ 90,000,000 | ||||
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement | $ 61,000,000 | 0 | |||
Senior Secured Term Loan A [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 146,300,000 | ||||
Senior revolving credit facility, maximum borrowing amount | $ 1,462,500,000 | ||||
Debt instrument, maturity date | Sep. 30, 2021 | ||||
Maximum interest rate during period | 0.00% | ||||
Payment of long-term debt | $ 137,300,000 | ||||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | 109,700,000 | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior revolving credit facility, maximum borrowing amount | $ 700,000,000 | ||||
Debt instrument, maturity date | Sep. 30, 2021 | ||||
Revolving credit facility | $ 0 | 90,000,000 | |||
Current borrowing capacity under the facility | 692,000,000 | ||||
Outstanding letters of credit | $ 8,000,000 | ||||
Senior Secured Credit Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum interest rate during period | 3.60% | ||||
Senior Unsecured 5.75% Notes due on September 1, 2023 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Sep. 1, 2023 | ||||
Aggregate value of debt | $ 425,000,000 | ||||
Unsecured debenture interest rate | 5.75% | ||||
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | Feb. 14, 2025 | ||||
Aggregate value of debt | $ 300,000,000 | ||||
Unsecured debenture interest rate | 5.00% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Securitization Program [Member] | |||||
Debt Instrument [Line Items] | |||||
Unsecured debenture interest rate | 0.80% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Note Securitization Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Unsecured debenture interest rate | 1.00% | ||||
Other Assets [Member] | Interest Rate Swap [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate swap, fair value | 8,500,000 | ||||
Other Current Liabilities [Member] | Interest Rate Swap [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate swap, fair value | $ 1,200,000 |
Financing Agreements (Schedul39
Financing Agreements (Schedule of Covenants) (Details) - Scenario, Forecast [Member] | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Secured Net Leverage Ratio | 3 | 3.50 |
Interest Coverage Ratio | 4 | 3.75 |
Financing Agreements (Schedul40
Financing Agreements (Schedule of Fair Value) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Debt Instrument [Line Items] | ||
Total | $ 1,964.9 | $ 2,172.8 |
Unsecured Debentures [Member] | ||
Debt Instrument [Line Items] | ||
Fair value of unsecured notes | 42.9 | 46.8 |
Senior Secured Term Loan A [Member] | ||
Debt Instrument [Line Items] | ||
Senior secured Term Loan A | 1,191.4 | 1,364.8 |
Senior Unsecured 5.75% Notes due on September 1, 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Fair value of unsecured notes | 436.3 | 449.3 |
Senior Unsecured 5.00% Notes due on February 14, 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Fair value of unsecured notes | $ 294.3 | $ 311.9 |
Retirement and Postretirement41
Retirement and Postretirement Plans (Defined Benefit Plans) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 1.2 | $ 1.4 | $ 3.6 | $ 4.3 |
Interest cost | 2.7 | 2.5 | 8.2 | 7.4 |
Expected return on plan assets | (3.9) | (3.7) | (11.8) | (11) |
Amortization of unrecognized prior service cost, net | 0.1 | 0 | 0.1 | 0.1 |
Amortization of net loss | 1.1 | 1.5 | 3.3 | 4.6 |
Net pension expense | $ 1.2 | $ 1.7 | $ 3.4 | $ 5.4 |
Retirement and Postretirement42
Retirement and Postretirement Plans (Defined Contribution Plans) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Retirement Benefits [Abstract] | ||||
Defined contribution savings plans expense | $ 7 | $ 6.7 | $ 20.9 | $ 19.8 |
Other Comprehensive Income (L43
Other Comprehensive Income (Loss) (Schedule of Changes in AOCL by Component) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other comprehensive income (loss) | ||||
Total Other Comprehensive Income (Loss), net of tax | $ (40.7) | $ 36.3 | $ (5.2) | $ 22.9 |
Accumulated other comprehensive loss | ||||
Beginning balance | 1,358.2 | |||
Net activity | (40.7) | 36.3 | (5.2) | 22.9 |
Ending balance | 1,508.9 | 1,508.9 | ||
Available-for-sale Securities and Hedges [Member] | ||||
Other comprehensive income (loss) | ||||
Prior to reclassification | 4.8 | (3.5) | 20.3 | 13.1 |
Reclassification from | (1.9) | (0.2) | (2.8) | (0.9) |
Pre-tax | 2.9 | (3.7) | 17.5 | 12.2 |
Tax effect | (0.7) | 1.3 | (4) | (4.6) |
Total Other Comprehensive Income (Loss), net of tax | 2.2 | (2.4) | 13.5 | 7.6 |
Accumulated other comprehensive loss | ||||
Beginning balance | 15.6 | 6.9 | 4.3 | (3.1) |
Net activity | 2.2 | (2.4) | 13.5 | 7.6 |
Ending balance | 17.8 | 4.5 | 17.8 | 4.5 |
Foreign Currency Translation Adjustment [Member] | ||||
Other comprehensive income (loss) | ||||
Prior to reclassification | (43.9) | 37.1 | (21.3) | 11.6 |
Reclassification from | 0 | 1 | 0 | 1 |
Pre-tax | (43.9) | 38.1 | (21.3) | 12.6 |
Tax effect | 0 | 0 | 0 | 0 |
Total Other Comprehensive Income (Loss), net of tax | (43.9) | 38.1 | (21.3) | 12.6 |
Accumulated other comprehensive loss | ||||
Beginning balance | (58.7) | (140.7) | (81.3) | (115.2) |
Net activity | (43.9) | 38.1 | (21.3) | 12.6 |
Ending balance | (102.6) | (102.6) | (102.6) | (102.6) |
Change in Pension and Postretirement Defined Benefit Plans [Member] | ||||
Other comprehensive income (loss) | ||||
Prior to reclassification | 0.3 | (0.5) | 0.1 | (0.1) |
Reclassification from | 1.1 | 1.5 | 3.3 | 4.4 |
Pre-tax | 1.4 | 1 | 3.4 | 4.3 |
Tax effect | (0.4) | (0.4) | (0.8) | (1.6) |
Total Other Comprehensive Income (Loss), net of tax | 1 | 0.6 | 2.6 | 2.7 |
Accumulated other comprehensive loss | ||||
Beginning balance | (31.4) | (48.7) | (33) | (50.8) |
Net activity | 1 | 0.6 | 2.6 | 2.7 |
Ending balance | (30.4) | (48.1) | (30.4) | (48.1) |
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Other comprehensive income (loss) | ||||
Prior to reclassification | (38.8) | 33.1 | (0.9) | 24.6 |
Reclassification from | (0.8) | 2.3 | 0.5 | 4.5 |
Pre-tax | (39.6) | 35.4 | (0.4) | 29.1 |
Tax effect | (1.1) | 0.9 | (4.8) | (6.2) |
Total Other Comprehensive Income (Loss), net of tax | (40.7) | 36.3 | (5.2) | 22.9 |
Accumulated other comprehensive loss | ||||
Beginning balance | (74.5) | (182.5) | (110) | (169.1) |
Net activity | (40.7) | 36.3 | (5.2) | 22.9 |
Ending balance | $ (115.2) | $ (146.2) | $ (115.2) | $ (146.2) |
Other Comprehensive Income (L44
Other Comprehensive Income (Loss) (Schedule of Items Reclassified out of AOCL) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amount reclassified | $ (55.5) | $ (16.1) | $ (107.8) | $ (92.7) |
Tax effect | 10.3 | 10.4 | (54.2) | 29.5 |
Net of tax | (45.2) | (6) | (162) | (64.2) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Available-for-sale Securities and Hedges [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amount reclassified | (1.9) | (0.2) | (2.8) | (0.9) |
Tax effect | 0.4 | 0 | 0.6 | 0.2 |
Net of tax | (1.5) | (0.2) | (2.2) | (0.7) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amount reclassified | 0 | 1 | 0 | 1 |
Tax effect | 0 | 0 | 0 | 0 |
Net of tax | 0 | 1 | 0 | 1 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amount reclassified | 1.1 | 1.5 | 3.3 | 4.4 |
Tax effect | (0.4) | (0.5) | (0.8) | (1.6) |
Net of tax | $ 0.7 | $ 1 | $ 2.5 | $ 2.8 |
Special Charges (Narrative) (De
Special Charges (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2015site | |
Restructuring Cost and Reserve [Line Items] | |||||||
Special charges | $ 14 | $ 34.8 | $ 64.4 | $ 43.7 | |||
Indefinite-Lived Trade Names | 1.2 | ||||||
Proceeds from Sale of Buildings | $ 6.1 | ||||||
Gain (Loss) on Sale of Properties | $ 5.2 | ||||||
Gain (Loss) on Disposition of Business | $ 1 | 26.8 | |||||
Professional Fees | 1.4 | ||||||
Restructuring charges | 14.7 | ||||||
Number of site closures | site | 5 | ||||||
Integration and Business Realignment [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Special charges | 0.1 | 3.1 | 0.6 | 5.4 | |||
Integration and Business Realignment [Member] | Employee Severance [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Special charges | 1.8 | 3.2 | |||||
Site Consolidation [Member] | Employee Severance [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Special charges | 1.3 | 0.4 | 2 | 2.1 | |||
Site Consolidation [Member] | Facility Closing [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Special charges | 7.5 | 4.9 | 15.3 | $ 14.7 | |||
Aggregate special charges recognized | 50.3 | 50.3 | |||||
Business Optimization [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Special charges | 7 | 25.7 | |||||
Business Optimization [Member] | Employee Severance [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Special charges | $ 1.9 | $ 12.7 | |||||
Volker [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Discontinued Operation, Provision for Loss (Gain) on Disposal, before Income Tax | $ 25.4 |
Special Charges (Schedule of Re
Special Charges (Schedule of Restructuring Activity) (Details) $ in Millions | 9 Months Ended |
Jun. 30, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Reserve, Accrual Adjustment | $ (0.2) |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 9 |
Expenses | 14.7 |
Cash Payments | (16.7) |
Ending Balance | $ 6.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2018 | |
Effective tax rate | 18.60% | 64.60% | (50.30%) | 31.80% | |||
Other Tax Expense (Benefit) | $ 78,300,000 | ||||||
Federal Corporate tax rate | 35.00% | 35.00% | 21.00% | ||||
Blended Corporate Tax rate | 24.50% | 24.50% | |||||
Global intangible low-taxed income- foreign tax deduction | 50.00% | 50.00% | |||||
Discrete net tax benefit- Tax Act | $ 61,400,000 | ||||||
Income tax expense (benefit) (Note 9) | $ 10,300,000 | $ 10,400,000 | (54,200,000) | $ 29,500,000 | |||
DTA Corporate Rate Reduction Net Benefit | 93,800,000 | ||||||
Transition tax obligation | 32,400,000 | ||||||
Foreign Tax Authority [Member] | France [Member] | |||||||
Current period tax expense | $ 5,000,000 | ||||||
Scenario, Forecast [Member] | |||||||
Federal Corporate tax rate | 24.50% | ||||||
Federal statutory income tax rate | 21.00% | ||||||
Other Noncurrent Liabilities [Member] | |||||||
Transition tax obligation | 30,500,000 | ||||||
Other Current Liabilities [Member] | |||||||
Transition tax obligation | $ 1,900,000 |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net Income (Loss) Attributable to Parent | $ 45.2 | $ 6 | $ 162 | $ 64.2 |
Average Common Shares Outstanding - Basic (in shares) | 66,299 | 65,795 | 66,121 | 65,567 |
Add potential effect of exercise of stock options and other unvested equity awards (in shares) | 1,347 | 1,893 | 1,429 | 1,733 |
Average shares outstanding - Diluted (in shares) | 67,646 | 67,688 | 67,550 | 67,300 |
Net income attributable to common shareholders per common share - Basic (usd per share) | $ 0.68 | $ 0.09 | $ 2.45 | $ 0.98 |
Net income attributable to common shareholders per common share - Diluted (usd per share) | $ 0.67 | $ 0.09 | $ 2.40 | $ 0.95 |
Shares with anti-dilutive effect excluded from the computation of Diluted EPS (in shares) | 273 | 2 | 249 | 225 |
Common Stock (Details)
Common Stock (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Class of Stock Disclosures [Abstract] | ||||
Stock based compensation cost charged against income, net of tax | $ 4.3 | $ 3.4 | $ 15.9 | $ 11.1 |
Common Stock Common Stock (Shar
Common Stock Common Stock (Share Repurchase Program) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |
Dec. 31, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | |
Equity, Class of Treasury Stock [Line Items] | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 164.7 | ||
Shares acquired through share repurchase program | 0.6 | ||
Payments for Repurchase of Common Stock | $ 7.4 | $ 34.3 | |
Value of shares repurchased under share repuchase program | $ 30 | ||
Employee Tax Withholding For Restricted and Deferred Stock Distributions [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares acquired through share repurchase program | 0.1 | 0.1 | |
Payments for Repurchase of Common Stock | $ 4.3 |
Common Stock Common Stock (Narr
Common Stock Common Stock (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 55 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payments for Repurchase of Common Stock | $ 7.4 | $ 34.3 | |
Common Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Repurchased During Period, Value | $ 175.3 | ||
Employee Tax Withholding For Restricted and Deferred Stock Distributions [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payments for Repurchase of Common Stock | $ 4.3 |
Guarantees (Details)
Guarantees (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance at beginning of period | $ 25 | $ 27.4 | $ 25.5 | $ 27.5 |
Provision for warranties during the period | 2.1 | 4 | 9.6 | 10.3 |
Standard Product Warranty Accrual, Additions from Business Acquisition | 0 | 0 | 0 | 1.9 |
Warranty claims during the period | (3.8) | (4.5) | (11.8) | (12.8) |
Balance at end of period | $ 23.3 | $ 26.9 | $ 23.3 | $ 26.9 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 708.6 | $ 689.1 | $ 2,088.8 | $ 2,005.4 |
Operating profit | 78.5 | 40.4 | 176.7 | 160 |
Special charges | 14 | 34.8 | 64.4 | 43.7 |
Interest expense | (24.2) | (23.8) | (71.5) | (65.2) |
Investment income and other, net | 1.2 | (0.5) | 2.6 | (2.1) |
Income Before Income Taxes | 55.5 | 16.1 | 107.8 | 92.7 |
Corporate and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating profit | 165.5 | 156.7 | ||
Non-Allocated operating costs, administrative and other | 52.4 | 52.7 | ||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 708.6 | 689.1 | 2,088.8 | 2,005.4 |
Operating Segments [Member] | Patient Support Systems [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 359.7 | 354.7 | 1,049.1 | 1,052.8 |
Operating profit | 71.3 | 62.8 | 191.9 | 174.1 |
Operating Segments [Member] | Front Line Care [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 239 | 227.1 | 701.5 | 639.9 |
Operating profit | 62.2 | 56.4 | 178.1 | 160.3 |
Operating Segments [Member] | Surgical Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 109.9 | 107.3 | 338.2 | 312.7 |
Operating profit | $ 11.4 | $ 8.7 | $ 36.6 | $ 26 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Loss Contingencies [Line Items] | ||||
Professional Fees | $ 1.4 | |||
Gain (Loss) on Disposition of Business | $ 1 | $ 26.8 | ||
Uninsured Risk [Member] | Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Deductibles and self-insured retentions | $ 1 | |||
MEMS [Member] | ||||
Loss Contingencies [Line Items] | ||||
Professional Fees | $ 0.6 | $ 3 | ||
Gain (Loss) on Disposition of Business | 23.4 | |||
Non-Cash Loss Reserve for Assets | $ 20.4 |