OSHKOSH CORP, 10-Q filed on 7/31/2018
Quarterly Report
v3.10.0.1
Document and Entity Information - shares
9 Months Ended
Jun. 30, 2018
Jul. 24, 2018
Document and Entity Information [Abstract]    
Entity Registrant Name OSHKOSH CORP  
Entity Central Index Key 0000775158  
Current Fiscal Year End Date --09-30  
Entity Filer Category Large Accelerated Filer  
Document Type 10-Q  
Document Period End Date Jun. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Entity Common Stock, Shares Outstanding   73,103,190
v3.10.0.1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Income Statement [Abstract]        
Revenues $ 2,175.8 $ 2,036.9 $ 5,648.5 $ 4,866.6
Cost of sales 1,772.9 1,650.0 4,668.0 4,018.7
Gross income 402.9 386.9 980.5 847.9
Operating expenses:        
Selling, general and administrative 171.2 163.9 499.3 484.7
Amortization of purchased intangibles 9.3 11.1 29.1 34.7
Total operating expenses 180.5 175.0 528.4 519.4
Operating income 222.4 211.9 452.1 328.5
Other income (expense):        
Interest expense (25.4) (15.3) (56.9) (45.1)
Interest income 1.9 1.4 11.7 3.2
Miscellaneous, net (1.8) 0.6 (2.1) 3.1
Income before income taxes and earnings of unconsolidated affiliates 197.1 198.6 404.8 289.7
Provision for income taxes 44.6 70.1 85.5 98.9
Income before earnings of unconsolidated affiliates 152.5 128.5 319.3 190.8
Equity in earnings of unconsolidated affiliates 0.9 0.1 1.3 1.3
Net income $ 153.4 $ 128.6 $ 320.6 $ 192.1
Earnings per share:        
Basic earnings per share (in dollars per share) $ 2.08 $ 1.72 $ 4.31 $ 2.57
Diluted earnings per share (in dollars per share) 2.05 1.69 4.25 2.54
Cash dividends declared per share on common stock (in dollars per share) $ 0.24 $ 0.21 $ 0.72 $ 0.63
v3.10.0.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - 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 $ 153.4 $ 128.6 $ 320.6 $ 192.1
Other comprehensive income (loss), net of tax:        
Employee pension and postretirement benefits 0.6 0.8 1.6 2.4
Currency translation adjustments (35.4) 27.0 (16.8) 7.3
Change in fair value of derivative instruments 0.2 (0.2) 0.5 (0.2)
Total other comprehensive income (loss), net of tax (34.6) 27.6 (14.7) 9.5
Comprehensive income $ 118.8 $ 156.2 $ 305.9 $ 201.6
v3.10.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Jun. 30, 2018
Sep. 30, 2017
Current assets:    
Cash and cash equivalents $ 371.9 $ 447.0
Receivables, net 1,567.2 1,306.3
Inventories, net 1,246.8 1,198.4
Other current assets 79.8 88.1
Total current assets 3,265.7 3,039.8
Property, plant and equipment, net 453.0 469.9
Goodwill 1,009.6 1,013.0
Purchased intangible assets, net 476.5 507.8
Other long-term assets 69.1 68.4
Total assets 5,273.9 5,098.9
Current liabilities:    
Revolving credit facilities and current maturities of long-term debt 0.0 23.0
Accounts payable 751.7 651.0
Customer advances 498.8 513.4
Payroll-related obligations 178.2 191.8
Other current liabilities 308.7 303.9
Total current liabilities 1,737.4 1,683.1
Long-term debt, less current maturities 817.8 807.9
Other long-term liabilities 298.3 300.5
Commitments and contingencies
Shareholders' equity:    
Preferred Stock ($0.01 par value; 2,000,000 shares authorized; none issued and outstanding) 0.0 0.0
Common Stock ($0.01 par value; 300,000,000 shares authorized; 92,101,465 shares issued) 0.9 0.9
Additional paid-in capital 811.4 802.2
Retained earnings 2,666.8 2,399.8
Accumulated other comprehensive loss (139.7) (125.0)
Common Stock in treasury, at cost (18,693,395 and 17,088,224 shares, respectively) (919.0) (770.5)
Total shareholders’ equity 2,420.4 2,307.4
Total liabilities and shareholders' equity $ 5,273.9 $ 5,098.9
v3.10.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Jun. 30, 2018
Sep. 30, 2017
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract]    
Preferred Stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred Stock, shares authorized 2,000,000 2,000,000
Preferred Stock, shares issued 0 0
Preferred Stock, shares outstanding 0 0
Common Stock, par value (in dollars per share) $ 0.01 $ 0.01
Common Stock, shares authorized 300,000,000 300,000,000
Common Stock, shares issued 92,101,465 92,101,465
Common Stock in treasury, shares 18,693,395 17,088,224
v3.10.0.1
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)
$ in Millions
Total
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Common Stock in Treasury, at Cost
Balance at Sep. 30, 2016 $ 1,976.5 $ 0.9 $ 782.3 $ 2,177.0 $ (175.0) $ (808.7)
Changes in Equity            
Net income 192.1     192.1    
Employee pension and postretirement benefits, net of tax 2.4       2.4  
Currency translation adjustments 7.3       7.3  
Cash dividends (47.1)     (47.1)    
Exercise of stock options 34.2   4.2     30.0
Stock-based compensation expense 16.8   16.8      
Payment of earned performance shares 0.0   (1.3)     1.3
Shares tendered for taxes on stock-based compensation (3.0)         (3.0)
Other (0.1)   (3.5)   (0.2) 3.6
Balance at Jun. 30, 2017 2,179.1 0.9 798.5 2,322.0 (165.5) (776.8)
Balance at Sep. 30, 2017 2,307.4 0.9 802.2 2,399.8 (125.0) (770.5)
Changes in Equity            
Net income 320.6     320.6    
Employee pension and postretirement benefits, net of tax 1.6       1.6  
Currency translation adjustments (16.8)       (16.8)  
Cash dividends (53.6)     (53.6)    
Repurchases of Common Stock (166.8)         (166.8)
Exercise of stock options 13.2   (3.1)     16.3
Stock-based compensation expense 20.9   20.9      
Payment of earned performance shares 0.0   (2.7)     2.7
Shares tendered for taxes on stock-based compensation (7.5)         (7.5)
Other 1.4   (5.9)   0.5 6.8
Balance at Jun. 30, 2018 $ 2,420.4 $ 0.9 $ 811.4 $ 2,666.8 $ (139.7) $ (919.0)
v3.10.0.1
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($)
$ in Millions
9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Statement of Stockholders' Equity [Abstract]    
Employee pension and postretirement benefits, net of tax $ 0.6 $ 1.4
Cash dividends declared per share on common stock (in dollars per share) $ 0.72 $ 0.63
v3.10.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
9 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Operating activities:    
Net income $ 320.6 $ 192.1
Depreciation and amortization 91.1 97.3
Stock-based compensation expense 20.9 16.8
Deferred income taxes (7.6) 3.8
Gain on sale of assets (0.3) (5.2)
Foreign currency transaction (gains) losses (0.3) 2.1
Gain (Loss) on Extinguishment of Debt 9.9 0.0
Other non-cash adjustments 2.5 0.4
Changes in operating assets and liabilities (216.6) (183.4)
Net cash provided by operating activities 220.2 123.9
Investing activities:    
Additions to property, plant and equipment (56.0) (45.2)
Additions to equipment held for rental (3.5) (26.3)
Proceeds from sale of equipment held for rental 4.8 42.3
Other investing activities (0.6) (1.4)
Net cash used by investing activities (55.3) (30.6)
Financing activities:    
Net increase in short-term debt 0.0 3.0
Proceeds from issuance of debt (original maturities greater than three months) 639.4 0.0
Repayments of debt (original maturities greater than three months) (653.8) (20.0)
Payments of Debt Issuance Costs (12.9) 0.0
Repurchases of Common Stock (174.3) (3.0)
Dividends paid (53.6) (47.1)
Proceeds from exercise of stock options 13.2 34.2
Net cash used by financing activities (242.0) (32.9)
Effect of exchange rate changes on cash 2.0 (9.1)
Increase (decrease) in cash and cash equivalents (75.1) 51.3
Cash and cash equivalents at beginning of period 447.0 321.9
Cash and cash equivalents at end of period 371.9 373.2
Supplemental disclosures:    
Cash paid for interest 48.8 36.5
Cash paid for income taxes $ 47.5 $ 40.3
v3.10.0.1
Basis of Presentation
9 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments (which include normal recurring adjustments, unless otherwise noted) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. These Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K of Oshkosh Corporation for the year ended September 30, 2017. The interim results are not necessarily indicative of results for the full year. “Oshkosh” refers to Oshkosh Corporation not including its subsidiaries and “the Company” refers to Oshkosh Corporation and its subsidiaries.
v3.10.0.1
New Accounting Standards
9 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
New Accounting Standards
New Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), and the FASB has since issued several amendments to this standard, which clarifies the principles for recognizing revenue. This guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard supersedes all existing U.S. GAAP guidance on revenue recognition and is expected to require the use of more judgment and result in additional disclosures. The new standard is effective for annual reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company will be required to adopt the standard as of October 1, 2018. The Company has elected to adopt the new revenue recognition standard following the modified retrospective approach, as permitted by the standard. This approach will result in an adjustment to retained earnings for the cumulative effect of initially applying the new standard on its adoption date.

The Company has assembled a cross-functional team with representation from all segments that is dedicated to the implementation of this new accounting standard. The team, with the support of a project management office, is focused on executing a multi-phase plan that will culminate with the adoption of the standard. The cross-functional team continued its focus on concluding and documenting key accounting positions during the three months ended June 30, 2018. Primary differences identified to-date include the changing from a point-in-time method to an over time method for certain defense contracts, the exclusion of unexercised options from the estimate to complete calculation used to measure progress on contracts accounted for under the cost-to-cost method of percentage of completion and the deferral of margin on service-type warranties. The Company's Audit Committee has been receiving regular briefings on the implementation team's progress and potential implications related to adoption of the new standard. The internal control and process changes necessary to comply with the requirements of the new standard as well as its financial impact remain under evaluation.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory. ASU 2015-11 is part of the FASB’s initiative to simplify accounting standards. The guidance requires an entity to recognize inventory within the scope of the standard at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted ASU 2015-11 on October 1, 2017. The adoption of ASU 2015-11 did not have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to reflect most leases on their balance sheet as lease liabilities with a corresponding right-of-use asset, while leaving presentation of lease expense in the statement of income largely unchanged. The standard also eliminates the real-estate specific provisions that exist under current U.S. GAAP and modifies the classification criteria and accounting lessors must apply to sales-type and direct financing leases. The Company will be required to adopt ASU 2016-02 and related amendments to the standard as of October 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-02 on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard requires a change in the measurement approach for credit losses on financial assets measured on an amortized cost basis from an incurred loss method to an expected loss method, thereby eliminating the requirement that a credit loss be considered probable to impact the valuation of a financial asset measured on an amortized cost basis. The standard requires the measurement of expected credit losses to be based on relevant information about past events, including historical experience, current conditions, and a reasonable and supportable forecast that affects the collectibility of the related financial asset. The Company will be required to adopt ASU 2016-13 as of October 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-13 on the Company's consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory. The standard requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset when the transfer occurs as opposed to when the asset is transferred to an outside party as required under current U.S. GAAP. The standard does not apply to intra-entity transfers of inventory, which will continue to follow current U.S. GAAP. The Company will be required to adopt ASU 2016-16 as of October 1, 2018. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-16 on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. The standard simplifies the measurement of goodwill impairment by eliminating the requirement that an entity compute the implied fair value of goodwill based on the fair values of its assets and liabilities to measure impairment. Instead, goodwill impairment will be measured as the difference between the fair value of the reporting unit and the carrying value of the reporting unit. The standard also clarifies the treatment of the income tax effect of tax deductible goodwill when measuring goodwill impairment loss. The Company will be required to adopt ASU 2017-04 as of October 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2017-04 on the Company's consolidated financial statements.

In March 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. The standard requires that an entity report the service cost component of net periodic pension and postretirement cost in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The remaining components of net benefit costs are required to be presented in the income statement separately from the service component and outside a subtotal of income from operations, if one is presented. The amendment further allows only the service cost component of net periodic pension and postretirement costs to be eligible for capitalization, when applicable. The Company will be required to adopt ASU 2017-07 as of October 1, 2018. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2017-07 on the Company's consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The standard more closely aligns hedge accounting with risk management strategies, simplifies the application of hedge accounting, and increases transparency as to the scope and results of hedging programs. The standard expands and refines hedge accounting for both nonfinancial 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. The Company adopted ASU 2017-12 on October 1, 2017. The adoption of ASU 2017-12 did not have a material impact on the Company's consolidated financial statements.
v3.10.0.1
Receivables
9 Months Ended
Jun. 30, 2018
Receivables [Abstract]  
Receivables
    Receivables

Receivables consisted of the following (in millions):
 
June 30,
 
September 30,
 
2018
 
2017
U.S. government:
 
 
 
Amounts billed
$
55.6

 
$
137.8

Costs and profits not billed
229.4

 
137.9

 
285.0

 
275.7

Other trade receivables
1,243.5

 
985.4

Finance receivables
25.0

 
5.8

Notes receivable
3.1

 
34.2

Other receivables
44.2

 
46.3

 
1,600.8

 
1,347.4

Less allowance for doubtful accounts
(8.7
)
 
(18.3
)
 
$
1,592.1

 
$
1,329.1



Classification of receivables in the Condensed Consolidated Balance Sheets consisted of the following (in millions):
 
June 30,
 
September 30,
 
2018
 
2017
Current receivables
$
1,567.2

 
$
1,306.3

Long-term receivables (included in “Other long-term assets”)
24.9

 
22.8

 
$
1,592.1

 
$
1,329.1


Finance and notes receivable accrual status consisted of the following (in millions):
 
Finance Receivables
 
Notes Receivable
 
June 30,
2018
 
September 30,
 2017
 
June 30,
2018
 
September 30,
 2017
Receivables on nonaccrual status
$
3.4

 
$
3.7

 
$

 
$
21.3

Receivables past due 90 days or more and still accruing

 

 

 

 
 
 
 
 
 
 
 
Receivables subject to general reserves
15.2

 
2.1

 

 

Allowance for doubtful accounts
(0.3
)
 

 

 

Receivables subject to specific reserves
9.8

 
3.7

 
3.1

 
34.2

Allowance for doubtful accounts
(1.6
)
 
(1.5
)
 

 
(10.0
)


Finance Receivables: Finance receivables represent sales-type leases resulting from the sale of the Company's products and the purchase of finance receivables from lenders pursuant to customer defaults under program agreements with finance companies. As of June 30, 2018, approximately 94% of the outstanding finance receivables balance was due from three parties. Finance receivables originated by the Company generally include a residual value component. Residual values are determined based on the expectation that the underlying equipment will have a minimum fair market value at the end of the lease term. This residual value accrues to the Company at the end of the lease. The Company uses its experience and knowledge as an original equipment manufacturer and participant in end markets for the related products along with third-party studies to estimate residual values. The Company monitors these values for impairment on a periodic basis and reflects any resulting reductions in value in current earnings.

Delinquency is the primary indicator of credit quality of finance receivables. The Company maintains a general allowance for finance receivables considered doubtful of future collection based upon historical experience. Additional allowances are established based upon the Company’s perception of the quality of the finance receivables, including the length of time the receivables are past due, past experience of collectibility and underlying economic conditions. In circumstances where the Company believes collectibility is no longer reasonably assured, a specific allowance is recorded to reduce the net recognized receivable to the amount reasonably expected to be collected. Finance receivables are written off if management determines that the specific borrower does not have the ability to repay the loan amounts due in full. The terms of the finance agreements generally give the Company the ability to take possession of the underlying collateral. The Company may incur losses in excess of recorded allowances if the financial condition of its customers were to deteriorate or the full amount of any anticipated proceeds from the sale of the collateral supporting its customers’ financial obligations is not realized.

Notes Receivable: Notes receivable include amounts related to refinancing of trade accounts and finance receivables. As of June 30, 2018, approximately 97% of the outstanding notes receivable balance was due from two parties. The Company routinely evaluates the creditworthiness of its customers and establishes reserves where the Company believes collectibility is no longer reasonably assured. Certain notes receivable are collateralized by a security interest in the underlying assets and/or other assets owned by the debtor. The Company may incur losses in excess of recorded allowances if the financial condition of its customers were to deteriorate or the full amount of any anticipated proceeds from the sale of the collateral supporting its customers' financial obligations is not realized.

During the second quarter of fiscal 2018, the Company received $19.6 million from a customer that had previously been accounted for under the cost recovery method of accounting and on non-accrual status. The payment resulted in the recognition of $11.5 million of margin, the reversal of $2.4 million of bad debt expense and the recognition of $6.6 million of interest income for the nine months ended June 30, 2018.

Quality of Finance and Notes Receivable: The Company does not accrue interest income on finance and notes receivable in circumstances where the Company believes collectibility is no longer reasonably assured. Any cash payments received on nonaccrual finance and notes receivable are applied first to the principal balances. The Company does not resume accrual of interest income until the customer has shown that it is capable of meeting its financial obligations by making timely payments over a sustained period of time. The Company determines past due or delinquency status based upon the due date of the receivable.

Receivables subject to specific reserves also include loans that the Company has modified in troubled debt restructurings as a concession to customers experiencing financial difficulty. To minimize the economic loss, the Company may modify certain finance and notes receivable. Modifications generally consist of restructured payment terms and time frames in which no payments are required. Losses on troubled debt restructurings were not significant during the three and nine months ended June 30, 2018 and 2017.

Changes in the Company’s allowance for doubtful accounts by type of receivable were as follows (in millions):
 
Three Months Ended June 30, 2018
 
Three Months Ended June 30, 2017
 
Finance
 
Notes
 
Trade and Other
 
Total
 
Finance
 
Notes
 
Trade and Other
 
Total
Allowance for doubtful accounts at beginning of period
$
1.7

 
$
3.8

 
$
7.4

 
$
12.9

 
$
2.5

 
$
11.3

 
$
5.7

 
$
19.5

Provision for doubtful accounts, net of recoveries
0.2

 
0.2

 
(0.4
)
 

 

 
(0.6
)
 
0.7

 
0.1

Charge-off of accounts

 
(3.7
)
 
(0.1
)
 
(3.8
)
 
(0.8
)
 
(0.5
)
 
(0.1
)
 
(1.4
)
Foreign currency translation

 
(0.3
)
 
(0.1
)
 
(0.4
)
 

 
0.7

 
0.1

 
0.8

Allowance for doubtful accounts at end of period
$
1.9

 
$

 
$
6.8

 
$
8.7

 
$
1.7

 
$
10.9

 
$
6.4

 
$
19.0


 
Nine Months Ended June 30, 2018
 
Nine Months Ended June 30, 2017
 
Finance
 
Notes
 
Trade and Other
 
Total
 
Finance
 
Notes
 
Trade and Other
 
Total
Allowance for doubtful accounts at beginning of period
$
1.5

 
$
10.0

 
$
6.8

 
$
18.3

 
$
1.0

 
$
13.0

 
$
7.2

 
$
21.2

Provision for doubtful accounts, net of recoveries
0.4

 
(8.3
)
 
0.4

 
(7.5
)
 
1.5

 
(1.3
)
 
0.3

 
0.5

Charge-off of accounts

 
(1.7
)
 
(0.3
)
 
(2.0
)
 
(0.8
)
 
(1.0
)
 
(1.1
)
 
(2.9
)
Foreign currency translation

 

 
(0.1
)
 
(0.1
)
 

 
0.2

 

 
0.2

Allowance for doubtful accounts at end of period
$
1.9

 
$

 
$
6.8

 
$
8.7

 
$
1.7

 
$
10.9

 
$
6.4

 
$
19.0




v3.10.0.1
Inventories
9 Months Ended
Jun. 30, 2018
Inventory Disclosure [Abstract]  
Inventories
Inventories

Inventories consisted of the following (in millions):
 
June 30,
 
September 30,
 
2018
 
2017
Raw materials
$
637.2

 
$
578.1

Partially finished products
346.1

 
336.6

Finished products
366.1

 
398.1

Inventories at FIFO cost
1,349.4

 
1,312.8

Less: Progress/performance-based payments on U.S. government contracts
(12.5
)
 
(31.6
)
          Excess of FIFO cost over LIFO cost
(90.1
)
 
(82.8
)
 
$
1,246.8

 
$
1,198.4



Title to all inventories related to U.S. government contracts, which provide for progress or performance-based payments, vests with the U.S. government to the extent of unliquidated progress or performance-based payments.
v3.10.0.1
Property, Plant and Equipment
9 Months Ended
Jun. 30, 2018
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
Property, Plant and Equipment

Property, plant and equipment consisted of the following (in millions):
 
June 30,
 
September 30,
 
2018
 
2017
Land and land improvements
$
58.5

 
$
58.5

Buildings
295.9

 
298.5

Machinery and equipment
661.2

 
652.2

Software and related costs
158.5

 
149.6

Equipment on operating lease to others
28.0

 
30.0

Construction in progress
5.0

 

 
1,207.1

 
1,188.8

Less accumulated depreciation
(754.1
)
 
(718.9
)
 
$
453.0

 
$
469.9



Depreciation expense was $20.0 million and $21.1 million for the three months ended June 30, 2018 and 2017, respectively. Depreciation expense was $60.0 million and $60.4 million for the nine months ended June 30, 2018 and 2017, respectively. Capitalized interest was insignificant for all reported periods.

Equipment on operating lease to others represents the cost of equipment shipped to customers for whom the Company has guaranteed the residual value and equipment on short-term leases. These transactions are accounted for as operating leases with the related assets capitalized and depreciated over their estimated economic lives of five to ten years. Cost less accumulated depreciation for equipment on operating lease at June 30, 2018 and September 30, 2017 was $17.9 million and $21.6 million, respectively.
v3.10.0.1
Goodwill and Purchased Intangible Assets
9 Months Ended
Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Purchased Intangible Assets
Goodwill and Purchased Intangible Assets

Goodwill and other indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually or more frequently if potential interim indicators exist that could result in impairment. The Company performs its annual impairment test in the fourth quarter of its fiscal year.

The following table presents changes in goodwill during the nine months ended June 30, 2018 (in millions):
 
Access
Equipment
 
Fire &
Emergency
 
Commercial
 
Total
Net goodwill at September 30, 2017
$
885.9

 
$
106.1

 
$
21.0

 
$
1,013.0

Foreign currency translation
(3.2
)
 

 
(0.2
)
 
(3.4
)
Net goodwill at June 30, 2018
$
882.7

 
$
106.1

 
$
20.8

 
$
1,009.6



The following table presents details of the Company’s goodwill allocated to the reportable segments (in millions):
 
June 30, 2018
 
September 30, 2017
 
Gross
 
Accumulated
Impairment
 
Net
 
Gross
 
Accumulated
Impairment
 
Net
Access equipment
$
1,814.8

 
$
(932.1
)
 
$
882.7

 
$
1,818.0

 
$
(932.1
)
 
$
885.9

Fire & emergency
108.1

 
(2.0
)
 
106.1

 
108.1

 
(2.0
)
 
106.1

Commercial
196.7

 
(175.9
)
 
20.8

 
196.9

 
(175.9
)
 
21.0

 
$
2,119.6

 
$
(1,110.0
)
 
$
1,009.6

 
$
2,123.0

 
$
(1,110.0
)
 
$
1,013.0



Details of the Company’s total purchased intangible assets are as follows (in millions):
 
June 30, 2018
 
Weighted-
Average
Life (in years)
 
Gross
 
Accumulated
Amortization
 
Net
Amortizable intangible assets:
 
 
 
 
 
 
 
Distribution network
39.1
 
$
55.4

 
$
(30.5
)
 
$
24.9

Technology-related
11.9
 
104.7

 
(101.6
)
 
3.1

Customer relationships
12.8
 
555.0

 
(493.6
)
 
61.4

Other
16.3
 
16.5

 
(14.9
)
 
1.6

 
14.7
 
731.6

 
(640.6
)
 
91.0

Non-amortizable trade names
 
 
385.5

 

 
385.5

 
 
 
$
1,117.1

 
$
(640.6
)
 
$
476.5


 
September 30, 2017
 
Weighted-
Average
Life (in years)
 
Gross
 
Accumulated
Amortization
 
Net
Amortizable intangible assets:
 
 
 
 
 
 
 
Distribution network
39.1
 
$
55.4

 
$
(29.5
)
 
$
25.9

Technology-related
11.9
 
104.7

 
(99.7
)
 
5.0

Customer relationships
12.8
 
555.0

 
(467.6
)
 
87.4

Other
16.3
 
16.4

 
(14.7
)
 
1.7

 
14.4
 
731.5

 
(611.5
)
 
120.0

Non-amortizable trade names
 
 
387.8

 

 
387.8

 
 
 
$
1,119.3

 
$
(611.5
)
 
$
507.8



The estimated future amortization expense of purchased intangible assets for the remainder of fiscal 2018 and the five years succeeding September 30, 2018 are as follows: 2018 (remaining three months) - $9.2 million; 2019 - $36.9 million; 2020 - $11.0 million; 2021 - $5.3 million; 2022 - $4.9 million; and 2023 - $3.5 million.
v3.10.0.1
Credit Agreements
9 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
Credit Agreements
Credit Agreements

The Company was obligated under the following debt instruments (in millions):
 
June 30, 2018
 
Principal
 
Debt Issuance Costs
 
Debt, Net
Senior Term Loan
$
275.0

 
$
(0.8
)
 
$
274.2

5.375% Senior Notes due March 2025
250.0

 
(2.5
)
 
247.5

4.600% Senior Notes due May 2028
300.0

 
(3.9
)
 
296.1

 
$
825.0

 
$
(7.2
)
 
$
817.8



 
September 30, 2017
 
Principal
 
Debt Issuance Costs
 
Debt, Net
Senior Secured Term Loan
$
335.0

 
$
(0.8
)
 
$
334.2

5.375% Senior Notes due March 2022
250.0

 
(3.5
)
 
246.5

5.375% Senior Notes due March 2025
250.0

 
(2.8
)
 
247.2

 
$
835.0

 
$
(7.1
)
 
827.9

Less current maturities
 
 
 
 
(20.0
)
 
 
 
 
 
$
807.9

 
 
 
 
 
 
Other short-term debt
 
 
 
 
$
3.0

Current maturities of long-term debt
 
 
 
 
20.0

 
 
 
 
 
$
23.0



On April 3, 2018, the Company entered into a Second Amended and Restated Credit Agreement with various lenders (the “Credit Agreement”). The Credit Agreement provides for (i) an unsecured revolving credit facility (the “Revolving Credit Facility”) that matures in April 2023 with an initial maximum aggregate amount of availability of $850 million and (ii) an unsecured $325 million term loan (the “Term Loan”) due in quarterly principal installments of $4.1 million commencing September 30, 2019 with a balloon payment of $264.1 million due at maturity in April 2023. As a result of the amendment, the Company accelerated the expensing of $0.2 million of debt issuance costs previously capitalized with the former credit agreement. In addition, $2.9 million of new debt issuance costs were capitalized and will be amortized over the term of the Credit Agreement. During the third quarter of fiscal 2018, the Company prepaid all required quarterly principal installments on the Term Loan through June 2022. At June 30, 2018, outstanding letters of credit of $87.4 million reduced available capacity under the Revolving Credit Facility to $762.6 million.

Effective April 3, 2018, to transition from the secured facilities under the previous credit agreement to unsecured facilities under the Credit Agreement, (i) the guaranties made pursuant to the previous credit agreement and the related loan documents were terminated (other than the Company's guaranty under the previous credit agreement of certain obligations of its subsidiaries, which guaranty was superseded and replaced by a similar guaranty made by the Company under the Credit Agreement), and (ii) the collateral documents executed by the Company and/or its subsidiaries in connection with the previous credit agreement and the related loan documents and the liens created under such collateral documents were terminated, released and discharged.

Under the Credit Agreement, the Company is obligated to pay (i) an unused commitment fee ranging from 0.125% to 0.275% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Credit Agreement and (ii) a fee ranging from 0.563% to 1.75% per annum of the maximum amount available to be drawn for each letter of credit issued and outstanding under the Credit Agreement.

Borrowings under the Credit Agreement bear interest at a variable rate equal to (i) LIBOR plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied, or (ii) for dollar-denominated loans only, the base rate (which is the highest of (a) the administrative agent’s prime rate, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR) plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied. At June 30, 2018, the interest spread on the Revolving Credit Facility and Term Loan was 125 basis points. The weighted-average interest rate on borrowings outstanding under the Term Loan at June 30, 2018 was 3.34%.

The Credit Agreement contains various restrictions and covenants, including requirements that the Company maintain certain financial ratios at prescribed levels and restrictions, subject to certain exceptions, on the ability of the Company and certain of its subsidiaries to consolidate or merge, create liens, incur additional indebtedness, dispose of assets, consummate acquisitions and make investments in joint ventures and foreign subsidiaries.

The Credit Agreement contains the following financial covenants:
Leverage Ratio: A maximum leverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated indebtedness to consolidated net income before interest, taxes, depreciation, amortization, non-cash charges and certain other items (EBITDA)) as of the last day of any fiscal quarter of 3.75 to 1.00.
Interest Coverage Ratio: A minimum interest coverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated EBITDA to the Company’s consolidated cash interest expense) as of the last day of any fiscal quarter of 2.50 to 1.00.

With certain exceptions, the Credit Agreement limits the ability of the Company to pay dividends and other distributions, including repurchases of shares of its Common Stock. However, so long as no event of default exists under the Credit Agreement or would result from such payment, the Company may pay dividends and other distributions after April 3, 2018, in an aggregate amount not exceeding the sum of:
i.
$1.46 billion;
ii.
50% of the consolidated net income of the Company and its subsidiaries (or if such consolidated net income is a deficit, minus 100% of such deficit), accrued on a cumulative basis during the period beginning on April 3, 2018 and ending on the last day of the fiscal quarter immediately preceding the date of the applicable proposed dividend or distribution; and
iii.
100% of the aggregate net proceeds received by the Company subsequent to April 3, 2018 either as a contribution to its common equity capital or from the issuance and sale of its Common Stock.

The Company was in compliance with the financial covenants contained in the Credit Agreement as of June 30, 2018.

In February 2014, the Company issued $250.0 million of 5.375% unsecured senior notes due March 1, 2022 (the “2022 Senior Notes”). In March 2015, the Company issued $250.0 million of 5.375% unsecured senior notes due March 1, 2025 (the “2025 Senior Notes”).The proceeds of both note issuances were used to repay existing outstanding notes of the Company. On May 17, 2018, the Company issued $300.0 million of 4.600% unsecured senior notes due May 15, 2028 (the “2028 Senior Notes”) at a $1.0 million discount. The Company used the net proceeds from the sale of the 2028 Senior Notes to redeem all of the outstanding 2022 Senior Notes at a price of 102.688% and to pre-pay $49.2 million of quarterly principal installment payments under the Term Loan. The Company recognized $9.7 million of expense associated with the 2028 Senior Notes transaction in the three and nine months ended June 30, 2018, respectively, comprised of unamortized debt issuance costs and the call premium on the 2022 Senior Notes. Expenses related to the transaction are included in interest expense. In addition, $2.9 million of debt issuance costs were capitalized and will be amortized over the term of the 2028 Senior Notes. The 2025 Senior Notes and the 2028 Senior Notes were issued pursuant to separate indentures (the “Indentures”) between the Company and a trustee. The Indentures contain customary affirmative and negative covenants. The Company has the option to redeem the 2025 Senior Notes for a premium after March 1, 2020. The Company has the option to redeem the 2028 Senior Notes at any time for a premium.

On April 3, 2018, the Company also entered into a First Supplemental Indenture to the 2025 Senior Notes, which amended and supplemented the 2025 Senior Notes indenture to release and discharge all note guaranties made by subsidiaries of the Company pursuant thereto as a result of the termination of all guaranties of the subsidiaries of the Company made pursuant to the Credit Agreement and the related loan documents.

The fair value of the long-term debt is estimated based upon Level 2 inputs to reflect market rate of the Company’s debt. At June 30, 2018, the fair value of the 2025 Senior Notes and the 2028 Senior Notes was estimated to be $258 million ($264 million at September 30, 2017) and $300 million, respectively. The fair value of the Term Loan approximated book value at both June 30, 2018 and September 30, 2017. See Note 11 of the Notes to Condensed Consolidated Financial Statements for the definition of a Level 2 input.
v3.10.0.1
Warranties
9 Months Ended
Jun. 30, 2018
Product Warranties Disclosures [Abstract]  
Warranties
Warranties

The Company’s products generally carry explicit warranties that extend from six months to five years, based on terms that are generally accepted in the marketplace. Selected components (such as engines, transmissions, tires, etc.) included in the Company’s end products may include manufacturers’ warranties. These manufacturers’ warranties are generally passed on to the end customer of the Company’s products, and the customer would generally deal directly with the component manufacturer.

The Company offers a variety of extended warranty programs. The premiums received for an extended warranty are deferred until after the expiration of the standard warranty period. The unearned premium is then recognized in income over the term of the extended warranty period in proportion to the costs that are expected to be incurred. Unamortized extended warranty premiums totaled $32.7 million and $30.2 million at June 30, 2018 and 2017, respectively.

Changes in the Company’s warranty liability and unearned extended warranty premiums were as follows (in millions):
 
Nine Months Ended 
 June 30,
 
2018
 
2017
Balance at beginning of period
$
98.8

 
$
89.6

Warranty provisions
41.8

 
38.0

Settlements made
(36.7
)
 
(37.7
)
Changes in liability for pre-existing warranties, net
(0.1
)
 
4.8

Premiums received
9.1

 
9.2

Amortization of premiums received
(7.3
)
 
(8.9
)
Foreign currency translation
(0.4
)
 
0.2

Balance at end of period
$
105.2

 
$
95.2



Provisions for estimated warranty and other related costs are recorded at the time of sale and are periodically adjusted to reflect actual experience. Certain warranty and other related claims involve matters of dispute that ultimately are resolved by negotiation, arbitration or litigation. At times, warranty issues arise that are beyond the scope of the Company's historical experience. It is reasonably possible that additional warranty and other related claims could arise from disputes or other matters in excess of amounts accrued; however, the Company does not expect that any such amounts, while not determinable, would have a material effect on the Company's consolidated financial condition, results of operations or cash flows.
v3.10.0.1
Guarantee Arrangements
9 Months Ended
Jun. 30, 2018
Guarantees [Abstract]  
Guarantee Arrangements
Guarantee Arrangements

The Company is party to multiple agreements whereby at June 30, 2018 it guaranteed an aggregate of $670.2 million in indebtedness of customers. The Company estimated that its maximum loss exposure under these contracts at June 30, 2018 was $115.4 million. Under the terms of these and various related agreements and upon the occurrence of certain events, the Company generally has the ability to, among other things, take possession of the underlying collateral. If the financial condition of the customers were to deteriorate and result in their inability to make payments, then loss provisions in excess of amounts provided for at inception may be required. While the Company does not expect to experience losses under these agreements that are materially in excess of the amounts reserved, it cannot provide any assurance that the financial condition of the third parties will not deteriorate resulting in the third partiesinability to meet their obligations. In the event that this occurs, the Company cannot guarantee that the collateral underlying the agreements will be sufficient to avoid losses materially in excess of the amounts reserved. Any losses under these guarantees would generally be mitigated by the value of any underlying collateral, including financed equipment, and are generally subject to the finance company's ability to provide the Company clear title to foreclosed equipment and other conditions. During periods of economic weakness, collateral values generally decline and can contribute to higher exposure to losses.

Changes in the Company’s credit guarantee liability were as follows (in millions):
 
Three Months Ended 
 June 30,
 
Nine Months Ended 
 June 30,
 
2018
 
2017
 
2018
 
2017
Balance at beginning of period
$
9.1

 
$
9.1

 
$
9.1

 
$
8.4

Provision for new credit guarantees
2.5

 
0.8

 
4.2

 
2.3

Changes for pre-existing guarantees, net
(0.1
)
 

 
(0.7
)
 
0.5

Amortization of previous guarantees
(1.6
)
 
(1.1
)
 
(2.8
)
 
(2.4
)
Foreign currency translation
(0.2
)
 

 
(0.1
)
 

Balance at end of period
$
9.7

 
$
8.8

 
$
9.7

 
$
8.8

v3.10.0.1
Shareholders' Equity
9 Months Ended
Jun. 30, 2018
Stockholders' Equity Note [Abstract]  
Shareholders' Equity
Shareholders' Equity

On August 31, 2015, the Company's Board of Directors increased the Company's Common Stock repurchase authorization by 10,000,000 shares, increasing the repurchase authorization to 10,299,198 shares. The Company repurchased 2,110,307 shares of Common Stock under this authorization during the nine months ended June 30, 2018 at a cost of $166.8 million. The Company did not repurchase any shares under this authorization during the nine months ended June 30, 2017. As of June 30, 2018, the Company repurchased 4,896,931 shares under this authorization at a cost of $278.8 million. The Company had 5,402,267 shares of Common Stock remaining under this repurchase authorization as of June 30, 2018. The Company is restricted by its Credit Agreement from repurchasing shares in certain situations. See Note 7 of the Notes to Condensed Consolidated Financial Statements for information regarding these restrictions.
v3.10.0.1
Fair Value Measurement
9 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurement
Fair Value Measurement

FASB Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. FASB ASC Topic 820 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment.

The three levels are defined as follows:
Level 1:
Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2:
Observable inputs other than quoted prices in active markets for identical assets or liabilities, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3:
Unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability.

There were no transfers of assets between levels during the three and nine months ended June 30, 2018.

The fair values of the Company’s financial assets and liabilities were as follows (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
June 30, 2018
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
SERP plan assets (a)
$
21.7

 
$

 
$

 
$
21.7

Foreign currency exchange derivatives (b)

 
0.8

 

 
0.8

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Foreign currency exchange derivatives (b)
$

 
$
0.5

 
$

 
$
0.5

 
 
 
 
 
 
 
 

 
Level 1
 
Level 2
 
Level 3
 
Total
September 30, 2017
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
SERP plan assets (a)
$
21.7

 
$

 
$

 
$
21.7

Foreign currency exchange derivatives (b)

 
0.5

 

 
0.5

Interest rate contracts (c)

 
0.3

 

 
0.3

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Foreign currency exchange derivatives (b)
$

 
$
1.2

 
$

 
$
1.2

Interest rate contracts (c)

 
0.7

 

 
0.7

_____________________________
(a) 
Represents investments in a rabbi trust for the Company's non-qualified supplemental executive retirement plan (SERP). The fair values of these investments are determined using a market approach. Investments include mutual funds for which quoted prices in active markets are available. The Company records changes in the fair value of investments in “Miscellaneous, net” in the Condensed Consolidated Statements of Income.
(b) 
Based on observable market transactions of forward currency prices.
(c) 
Based on observable market transactions of interest rate swap prices.
v3.10.0.1
Stock-Based Compensation
9 Months Ended
Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation

In February 2017, the Company’s shareholders approved the 2017 Incentive Stock and Awards Plan (the “2017 Stock Plan”). The 2017 Stock Plan replaced the 2009 Incentive Stock and Awards Plan (as amended, the “2009 Stock Plan”). While no new awards will be granted under the 2009 Stock Plan or its predecessor, the 2004 Incentive Stock and Awards Plan, awards previously made under these two plans that were outstanding as of the approval date of the 2017 Stock Plan will remain outstanding and continue to be governed by the provisions of the respective stock plan under which they were issued. At June 30, 2018, the Company had reserved 8,046,856 shares of Common Stock available for issuance to provide for the exercise of outstanding stock options and the issuance of Common Stock under incentive compensation awards, including awards issued prior to the effective date of the 2017 Stock Plan.

The Company recognizes stock-based compensation expense over the requisite service period for vesting of an award, or to an employee's eligible retirement date, if earlier and applicable. Total stock-based compensation expense, including cash-based liability awards, for the three and nine months ended June 30, 2018 was $6.7 million ($5.3 million net of tax) and $20.9 million ($16.3 million net of tax), respectively. Total stock-based compensation expense, including cash-based liability awards, for the three and nine months ended June 30, 2017 was $4.8 million ($3.0 million net of tax) and $19.2 million ($12.1 million net of tax), respectively.
v3.10.0.1
Restructuring and Other Charges
9 Months Ended
Jun. 30, 2018
Restructuring and Related Activities [Abstract]  
Restructuring and Other Charges
Restructuring and Other Charges

In September 2016, the Company committed to transition its access equipment aftermarket parts distribution network to a third party logistics company. This initiative is intended to improve customer service levels, increase operational efficiency and allow the Company to reallocate resources to invest in future growth. The Company expected to incur cash charges related to severance costs and other employment-related benefits of approximately $3.0 million related to this decision. Of this amount, $0.2 million was incurred in the nine months ended June 30, 2018, and $0.5 million and $1.6 million was incurred in the three and nine months ended June 30, 2017, respectively. The Company did not incur any costs under this program during the three months ended June 30, 2018.

In January 2017, the access equipment segment announced it had committed to certain restructuring plans as part of simplification activities in support of the Company’s MOVE strategy. The plans include the closure of its manufacturing plant and pre-delivery inspection facilities in Belgium, the streamlining of telehandler product offerings to a reduced range in Europe, the transfer of remaining European telehandler manufacturing to the Company’s facility in Romania and reductions in engineering staff supporting European telehandlers, including the closure of the UK-based engineering facility. The announced plans also include the move of North American telehandler production from Ohio to facilities in Pennsylvania. The Company recognized restructuring costs under this program of $2.3 million and $5.4 million during the three and nine months ended June 30, 2018, respectively, and $6.6 million and $22.9 million during the three and nine months ended June 30, 2017, respectively. The Company expects another $1 million of restructuring costs under this program to be recognized in fiscal 2018.

The Company had originally expected total implementation costs for the September 2016 and January 2017 restructuring actions in the access equipment segment to be between $48 million and $53 million. The Company made significant progress implementing these actions in fiscal 2017; however, during the nine months ended June 30, 2018, the Company experienced issues that caused operational inefficiencies resulting in additional costs. The Company expects total costs for these actions to be approximately $78 million, including approximately $35 million of operating costs and inefficiencies, consistent with expectations at March 31, 2018. The access equipment segment recognized operational costs and inefficiencies related to these actions of $4.6 million and $22.8 million during the three and nine months ended June 30, 2018, respectively, and $4.0 million and $4.9 million during the three and nine months ended June 30, 2017, respectively. The Company expects to recognize another $2 million of operational costs and inefficiencies in the remainder of fiscal 2018.

In December 2017, the commercial segment announced it was undertaking certain restructuring actions to realign a portion of the business under three product platforms. The Company recognized a benefit of $0.3 million and expense of $4.0 million in the three and nine months ended June 30, 2018, respectively, related to these actions. The Company has substantially completed this program and does not anticipate significant future costs related to these actions.

Pre-tax restructuring charges were as follows (in millions):
 
Three Months Ended June 30, 2018
 
Three Months Ended June 30, 2017
 
Cost of Sales
 
Selling, General and Administrative Expenses
 
Total
 
Cost of Sales
 
Selling, General and Administrative Expenses
 
Total
Access equipment
$
2.3

 
$

 
$
2.3

 
$
7.1

 
$

 
$
7.1

Commercial
(0.1
)
 
(0.2
)
 
(0.3
)
 

 

 

Total
$
2.2

 
$
(0.2
)
 
$
2.0

 
$
7.1

 
$

 
$
7.1


 
Nine Months Ended June 30, 2018
 
Nine Months Ended June 30, 2017
 
Cost of Sales
 
Selling, General and Administrative Expenses
 
Total
 
Cost of Sales
 
Selling, General and Administrative Expenses
 
Total
Access equipment
$
5.6

 
$

 
$
5.6

 
$
24.5

 
$

 
$
24.5

Commercial
1.3

 
2.7

 
4.0

 

 
0.4

 
0.4

Total
$
6.9

 
$
2.7

 
$
9.6

 
$
24.5

 
$
0.4

 
$
24.9


Changes in the Company's restructuring reserves, included within Other current liabilities in the Condensed Consolidated Balance Sheets, were as follows (in millions):

 
Employee Severance and Termination Benefits
 
Property, Plant and Equipment Impairment
 
Other Costs
 
Total
Balance at September 30, 2017
$
19.8

 
$

 
$
1.0

 
$
20.8

Restructuring provision
3.4

 
0.8

 
5.4

 
9.6

Utilized - cash
(16.2
)
 

 
(4.4
)
 
(20.6
)
Utilized - noncash

 
(0.8
)
 

 
(0.8
)
Foreign currency translation
0.1

 

 
0.1

 
0.2

Balance at June 30, 2018
$
7.1


$

 
$
2.1


$
9.2


 
Employee Severance and Termination Benefits
 
Property, Plant and Equipment Impairment
 
Other Costs
 
Total
Balance at September 30, 2016
$
0.9

 
$

 
$

 
$
0.9

Restructuring provision
20.2

 
2.9

 
1.8

 
24.9

Utilized - cash
(3.0
)
 

 
(0.9
)
 
(3.9
)
Utilized - noncash

 
(2.9
)
 

 
(2.9
)
Foreign currency translation
0.8

 

 
0.1

 
0.9

Balance at June 30, 2017
$
18.9

 
$

 
$
1.0

 
$
19.9

v3.10.0.1
Employee Benefit Plans
9 Months Ended
Jun. 30, 2018
Defined Benefit Plan [Abstract]  
Employee Benefit Plans
Employee Benefit Plans

Components of net periodic pension benefit cost were as follows (in millions):
 
Three Months Ended 
 June 30,
 
Nine Months Ended 
 June 30,
 
2018
 
2017
 
2018
 
2017
Components of net periodic benefit cost
 
 
 
 
 
 
 
Service cost
$
3.1

 
$
3.3

 
$
9.3

 
$
9.8

Interest cost
4.5

 
4.4

 
13.5

 
13.2

Expected return on plan assets
(5.0
)
 
(4.5
)
 
(15.1
)
 
(13.6
)
Amortization of prior service cost
0.5

 
0.4

 
1.4

 
1.3

Amortization of net actuarial loss
0.5

 
1.0

 
1.4

 
3.0

Net periodic benefit cost
$
3.6

 
$
4.6

 
$
10.5

 
$
13.7



The Company made a $6.0 million contribution to its defined benefit pension plans in July 2018. No other material contributions are expected to be made in fiscal 2018.

Components of net periodic other post-employment benefit cost were as follows (in millions):
 
Three Months Ended 
 June 30,
 
Nine Months Ended 
 June 30,
 
2018
 
2017
 
2018
 
2017
Components of net periodic benefit cost
 
 
 
 
 
 
 
Service cost
$
0.9

 
$
0.6

 
$
2.7

 
$
1.9

Interest cost
0.5

 
0.4

 
1.4

 
1.2

Amortization of prior service cost
(0.2
)
 
(0.2
)
 
(0.7
)
 
(0.7
)
Amortization of net actuarial loss

 
0.1

 
0.1

 
0.2

Net periodic benefit cost
$
1.2

 
$
0.9

 
$
3.5

 
$
2.6

v3.10.0.1
Income Taxes
9 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The Company recorded income tax expense of $44.6 million for the three months ended June 30, 2018, or 22.6% of pre-tax income, compared to $70.1 million, or 35.3% of pre-tax income, for the three months ended June 30, 2017. Results for the three months ended June 30, 2018 were favorably impacted by $2.9 million of net discrete tax benefits, including a $4.2 million tax benefit related to state tax matters, a $2.2 million net tax benefit related to adjustments to provisional amounts recorded for tax reform legislation enacted in the United States on December 22, 2017, and a $0.6 million tax benefit due to a provision-to-return adjustment on the Company's 2017 federal income tax return, offset in part by a $4.0 million tax charge related to a foreign provision-to-return adjustment. Results for the three months ended June 30, 2017 were favorably impacted by $3.9 million of net discrete tax benefits, including a $2.1 million federal provision-to-return adjustment and a $1.4 million tax benefit related to state tax matters.

The Company recorded income tax expense of $85.5 million for the nine months ended June 30, 2018, or 21.1% of pre-tax income, compared to $98.9 million, or 34.1% of pre-tax income for the nine months ended June 30, 2017. Tax expense included net discrete tax benefits of $14.3 million and $8.7 million for the nine months ended June 30, 2018 and 2017, respectively. Discrete tax benefits recorded in the nine months ended June 30, 2018 included $4.5 million of tax benefits related to employee share-based payments, a $8.7 million net tax benefit related to tax reform legislation in the United States and a $4.3 million tax benefit related to state tax matters, offset in part by a $4.0 million tax charge related to a foreign provision-to-return adjustment. Discrete tax benefits recorded in the nine months ended June 30, 2017 included $2.2 million of tax benefits related to employee share-based payments, $3.3 million of net tax benefits related to the release of valuation allowances on federal capital loss carryforwards and state net operating losses, a $2.1 million tax benefit related to the federal provision-to-return adjustment and a $1.4 million tax benefit related to state tax matters.

On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law by President Trump. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, while also repealing the deduction for domestic production activities, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. During the third quarter of fiscal 2018, the Company updated the provisional amounts previously recorded based on recent IRS guidance regarding the Tax Reform Act and its completed fiscal year 2017 federal income tax return. This resulted in an additional tax benefit of $6.3 million related to the remeasurement of deferred tax assets and liabilities and an additional tax charge of $4.1 million related to the transition tax on deemed repatriation of deferred foreign income for the three months ended June 30, 2018. For the nine months ended June 30, 2018, amounts recorded related to the Tax Reform Act included a tax benefit of $30.2 million for remeasurement of deferred tax assets and liabilities and a tax charge of $21.5 million due to the transition tax on deemed repatriation of deferred foreign income.

The above cumulative tax benefits and tax charges represent provisional amounts and the Company's best estimates as of June 30, 2018. Adjustments recorded to the provisional amounts are and will be included in income from operations as an adjustment to tax expense. The provisional amounts incorporate assumptions made based upon the Company's current interpretation of the Tax Reform Act and may change as the Company receives additional clarification and implementation guidance.

Because of the complexity of the new Global Intangible Low-Taxed Income (GILTI) tax rules, the Company continues to evaluate this provision of the Tax Reform Act and the application of FASB ASC 740, Income Taxes. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company's measurement of its deferred taxes (the “deferred method”). The Company's selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing its global income to determine whether it expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends on not only the Company's current structure and estimated future results of global operations but also its intent and ability to modify its structure. The Company is currently in the process of analyzing its structure and, as a result, is not yet able to reasonably estimate the effect of this provision of the Tax Reform Act. Therefore, the Company has not made any adjustments related to potential GILTI tax in its financial statements and has not made a policy decision regarding whether to use the period cost method or the deferred method.

The Company’s liability for gross unrecognized tax benefits, excluding related interest and penalties, was $31.8 million and $37.2 million as of June 30, 2018 and September 30, 2017, respectively. As of June 30, 2018, net unrecognized tax benefits, excluding interest and penalties, of $16.4 million would affect the Company’s net income if recognized.

The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in the “Provision for income taxes” in the Condensed Consolidated Statements of Income. During the nine months ended June 30, 2018 and 2017, the Company recognized a benefit of $1.3 million and expense of $1.3 million, respectively, related to interest and penalties. At June 30, 2018, the Company had accruals for the payment of interest and penalties of $8.5 million. During the next twelve months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce net unrecognized tax benefits by approximately $2.5 million because the Company’s tax positions are sustained on audit, the Company agrees to their disallowance or the statutes of limitations close.
v3.10.0.1
Accumulated Other Comprehensive Income (Loss)
9 Months Ended
Jun. 30, 2018
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component were as follows (in millions):
 
Three Months Ended June 30, 2018
 
Employee
Pension and Postretirement Benefits, Net of Tax
 
Cumulative Translation Adjustments
 
Derivative Instruments
 
Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period
$
(45.2
)
 
$
(60.0
)
 
$
0.1

 
$