HILLENBRAND, INC., 10-K filed on 11/15/2017
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Sep. 30, 2017
Nov. 10, 2017
Mar. 31, 2017
Document and Entity Information
 
 
 
Entity Registrant Name
Hillenbrand, Inc. 
 
 
Entity Central Index Key
0001417398 
 
 
Current Fiscal Year End Date
--09-30 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Sep. 30, 2017 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Common Stock, Shares Outstanding
 
63,023,245 
 
Entity Public Float
 
 
$ 2,259,976 
CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Income Statement [Abstract]
 
 
 
Net revenue
$ 1,590.2 
$ 1,538.4 
$ 1,596.8 
Cost of goods sold
998.9 
967.8 
1,026.4 
Gross profit
591.3 
570.6 
570.4 
Operating expenses
344.4 
346.5 
330.6 
Amortization expense
29.2 
33.0 
28.1 
Pension settlement charge
0 
0 
17.7 
Interest expense
25.2 
25.3 
23.8 
Other (expense) income, net
(4.2)
(1.7)
(7.9)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest
188.3 
164.1 
162.3 
Income tax expense
59.9 
47.3 
49.1 
Consolidated net income
128.4 
116.8 
113.2 
Less: Net income attributable to noncontrolling interests
2.2 
4.0 
1.8 
Net income
$ 126.2 1
$ 112.8 1
$ 111.4 1
Net income - per share of common stock:
 
 
 
Basic earnings per share (in dollars per share)
$ 1.99 1
$ 1.78 1
$ 1.76 1
Diluted earnings per share (in dollars per share)
$ 1.97 1
$ 1.77 1
$ 1.74 1
Weighted-average shares outstanding-basic (in shares)
63.6 
63.3 
63.2 
Weighted-average shares outstanding-diluted (in shares)
64.0 
63.8 
63.9 
Cash dividends per share (in dollars per share)
$ 0.82 
$ 0.8100 
$ 0.8 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
Consolidated net income
$ 128.4 
$ 116.8 
$ 113.2 
Other comprehensive (loss) income, net of tax
 
 
 
Currency translation
24.9 
(9.8)
(47.6)
Pension and postretirement (net of tax of $10.9, $4.8, and $2.1)
22.2 
(13.1)
(8.4)
Net unrealized (loss) gain on derivative instruments (net of tax of $1.0, $0.2, and $0.4)
1.7 
0.7 
(0.1)
Total other comprehensive income (loss), net of tax
48.8 
(22.2)
(56.1)
Consolidated comprehensive income
177.2 
94.6 
57.1 
Less: Comprehensive income attributable to noncontrolling interests
2.4 
3.7 
1.4 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
$ 174.8 1
$ 90.9 1
$ 55.7 1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
Pension and postretirement, tax
$ (10.9)
$ (4.8)
$ (2.1)
Net unrealized (loss) gain on derivative instruments, tax
$ 1.0 
$ 0.2 
$ (0.4)
CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Sep. 30, 2016
Current Assets
 
 
Cash and cash equivalents
$ 66.0 
$ 52.0 
Trade receivables, net
206.1 
205.0 
Receivables from long-term manufacturing contracts
125.2 
125.8 
Inventories
151.6 
153.1 
Deferred income taxes
0 
23.9 
Prepaid expenses
28.2 
18.2 
Other current assets
16.5 
22.3 
Total current assets
593.6 
600.3 
Property, plant, and equipment, net
150.4 
152.5 
Intangible assets, net
523.9 
541.5 
Goodwill
647.5 
634.3 
Other assets
41.1 
31.1 
Total Assets
1,956.5 
1,959.7 
Current Liabilities
 
 
Trade accounts payable
158.0 
135.7 
Liabilities from long-term manufacturing contracts and advances
132.3 
78.6 
Current portion of long-term debt
18.8 
13.8 
Accrued compensation
66.9 
57.3 
Deferred income taxes
0 
22.8 
Other current liabilities
135.7 
125.5 
Total current liabilities
511.7 
433.7 
Long-term debt
446.9 
595.1 
Accrued pension and postretirement healthcare
129.6 
232.7 
Deferred income taxes
75.7 
22.6 
Other long-term liabilities
26.7 
29.4 
Total Liabilities
1,190.6 
1,313.5 
Commitments and contingencies (Note 11)
   
   
SHAREHOLDERS’ EQUITY
 
 
Common stock, no par value (63.8 and 63.7 shares issued, 63.1 and 63.0 shares outstanding)
0 
0 
Additional paid-in capital
349.9 
348.7 
Retained earnings
507.1 
433.3 
Treasury stock (0.7 and 0.7 shares)
(24.4)
(19.9)
Accumulated other comprehensive loss
(81.2)
(129.8)
Hillenbrand Shareholders’ Equity
751.4 
632.3 
Noncontrolling interests
14.5 
13.9 
Total Shareholders’ Equity
765.9 
646.2 
Total Liabilities and Equity
$ 1,956.5 
$ 1,959.7 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Per Share data, unless otherwise specified
Sep. 30, 2017
Sep. 30, 2016
Statement of Financial Position [Abstract]
 
 
Common stock, par value (in dollars per share)
$ 0 
$ 0 
Common stock, shares issued
63.8 
63.7 
Common stock, shares outstanding
63.1 
63.0 
Treasury stock, shares
0.7 
0.7 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Operating Activities
 
 
 
Consolidated net income
$ 128.4 
$ 116.8 
$ 113.2 
Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
Depreciation and amortization
56.6 
60.4 
54.3 
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)
0 
2.2 
0 
Pension settlement charge
0 
0 
17.7 
Deferred income taxes
37.1 
(4.7)
(0.5)
Net loss (gain) on disposal or impairment of property
(4.6)
0.3 
(2.1)
Equity in net (income) loss from affiliates
0.4 
(0.3)
2.1 
Share-based compensation
10.5 
8.5 
12.0 
Trade accounts receivable and receivables on long-term manufacturing contracts
10.7 
9.7 
(15.4)
Inventories
5.4 
11.3 
5.2 
Prepaid expenses and other current assets
(6.2)
5.5 
(8.5)
Trade accounts payable
17.2 
30.2 
(76.6)
Accrued expenses and other current liabilities
64.6 
(10.7)
1.0 
Income taxes payable
4.8 
3.8 
13.5 
Defined benefit plan funding
(90.6)
(15.5)
(15.4)
Defined benefit plan expense
6.4 
11.9 
14.5 
Other, net
5.5 
8.8 
(10.0)
Net cash provided by operating activities
246.2 
238.2 
105.0 
Investing Activities
 
 
 
Capital expenditures
(22.0)
(21.2)
(31.0)
Proceeds from sales of property, plant, and equipment
5.7 
2.0 
2.8 
Acquisitions of businesses, net of cash acquired
0 
(235.4)
0 
Return of investment capital from affiliates
3.2 
1.1 
1.5 
Other, net
(0.4)
0 
(2.8)
Net cash used in investing activities
(13.5)
(253.5)
(29.5)
Financing Activities
 
 
 
Repayments on term loan
(13.5)
(9.0)
(9.0)
Proceeds from revolving credit facility
819.3 
719.8 
430.2 
Repayments on revolving credit facility
(953.0)
(627.2)
(547.0)
Proceeds from unsecured Series A Notes, net of financing costs
0 
0 
99.6 
Payment of dividends on common stock
(51.9)
(51.1)
(50.4)
Repurchases of common stock
(28.0)
(21.2)
(11.2)
Net proceeds on stock plans
13.7 
11.1 
3.4 
Other, net
(1.7)
(0.8)
1.2 
Net cash provided by (used in) financing activities
(215.1)
21.6 
(83.2)
Effect of exchange rate changes on cash and cash equivalents
(3.6)
(2.6)
(2.0)
Net cash flows
14.0 
3.7 
(9.7)
Cash and cash equivalents:
 
 
 
At beginning of period
52.0 
48.3 
58.0 
At end of period
66.0 
52.0 
48.3 
Cash paid for interest
20.3 
22.7 
20.0 
Cash paid for income taxes
$ 18.2 
$ 48.0 
$ 36.4 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)
In Millions, except Share data, unless otherwise specified
Total
USD ($)
Common Stock
Additional Paid-in Capital
USD ($)
Retained Earnings
USD ($)
Treasury Stock
USD ($)
Accumulated Other Comprehensive Loss
USD ($)
Noncontrolling Interests
USD ($)
Balance at Sep. 30, 2014
$ 593.8 
 
$ 342.1 
$ 311.7 
$ (18.3)
$ (52.2)
$ 10.5 
Balance (in shares) at Sep. 30, 2014
 
63,500,000 
 
 
600,000 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Total other comprehensive income, net of tax
(56.1)
 
 
 
 
(55.7)
(0.4)
Net income
113.2 
 
 
111.4 
 
 
1.8 
Issuance/retirement of stock for stock awards/options
3.4 
 
(5.1)
 
8.5 
 
 
Issuance/retirement of stock for stock awards/options (in shares)
 
(100,000)
 
 
(300,000)
 
 
Share-based compensation
12.0 
 
12.0 
 
 
 
 
Purchases of common stock
11.2 
 
 
 
11.2 
 
 
Purchases of common stock (in shares)
 
 
 
 
400,000 
 
 
Dividends
(50.4)
 
(0.6)
(51.0)
 
 
0 
Other
1.1 
 
1.3 
0 
 
 
(0.2)
Balance at Sep. 30, 2015
605.8 
 
350.9 
372.1 
(21.0)
(107.9)
11.7 
Balance (in shares) at Sep. 30, 2015
 
63,600,000 
 
 
700,000 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Total other comprehensive income, net of tax
(22.2)
 
 
 
 
(21.9)
(0.3)
Net income
116.8 
 
 
112.8 
 
 
4.0 
Issuance/retirement of stock for stock awards/options
11.1 
 
(11.2)
 
22.3 
 
 
Issuance/retirement of stock for stock awards/options (in shares)
(800,000)
(100,000)
 
 
(700,000)
 
 
Share-based compensation
8.5 
 
8.5 
 
 
 
 
Purchases of common stock
21.2 
 
 
 
21.2 
 
 
Purchases of common stock (in shares)
 
 
 
 
700,000 
 
 
Dividends
(52.6)
 
(0.5)
(51.6)
 
 
(1.5)
Balance at Sep. 30, 2016
646.2 
 
348.7 
433.3 
(19.9)
(129.8)
13.9 
Balance (in shares) at Sep. 30, 2016
 
63,700,000 
 
 
700,000 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Total other comprehensive income, net of tax
48.8 
 
 
 
 
48.6 
0.2 
Net income
128.4 
 
 
126.2 
 
 
2.2 
Issuance/retirement of stock for stock awards/options
13.7 
 
(9.8)
 
23.5 
 
 
Issuance/retirement of stock for stock awards/options (in shares)
(700,000)
(100,000)
 
 
(700,000)
 
 
Share-based compensation
10.5 
 
10.5 
 
 
 
 
Purchases of common stock
28.0 
 
 
 
28.0 
 
 
Purchases of common stock (in shares)
3,600,000 
 
 
 
700,000 
 
 
Dividends
(53.7)
 
(0.5)
(52.4)
 
 
(1.8)
Balance at Sep. 30, 2017
$ 765.9 
 
$ 349.9 
$ 507.1 
$ (24.4)
$ (81.2)
$ 14.5 
Balance (in shares) at Sep. 30, 2017
 
63,800,000 
 
 
700,000 
 
 
Background
Background
Background
 
Hillenbrand, Inc. (“Hillenbrand”) is a global diversified industrial company with multiple market-leading brands that serve a wide variety of industries around the world.  We strive to provide superior return for our shareholders, exceptional value for our customers, and great professional opportunities for our employees through deployment of the Hillenbrand Operating Model (“HOM”). The HOM is a consistent and repeatable framework designed to produce sustainable and predictable results.  The HOM describes our mission, vision, values and mindset as leaders; applies our management practices in Strategy Management, Segmentation, Lean, Talent Development, and Acquisitions; and prescribes three steps (Understand, Focus, and Grow) designed to make our businesses both bigger and better.  Our goal is to continue developing Hillenbrand as a world-class global diversified industrial company through the deployment of the HOM.

Our strategy is to leverage our historically strong financial foundation and the implementation of the HOM to deliver sustainable profit growth, revenue expansion and substantial free cash flow and then reinvest available cash in new growth initiatives that are focused on building leadership positions in our core markets and near adjacencies, both organically and inorganically, in order to create shareholder value.

Hillenbrand is composed of two business segments:  the Process Equipment Group and Batesville®.  The Process Equipment Group businesses design, develop, manufacture, and service highly engineered industrial equipment around the world.  Batesville is a recognized leader in the North American death care industry.  Hillenbrand was incorporated on November 1, 2007, in the state of Indiana and began trading on the New York Stock Exchange under the symbol “HI” on April 1, 2008.  “Hillenbrand,” “the Company,” “we,” “us,” “our,” and similar words refer to Hillenbrand and its subsidiaries.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
 
Basis of presentation — The accompanying consolidated financial statements include the accounts of Hillenbrand and its subsidiaries.  They also include two subsidiaries where the Company’s ownership percentage is less than 100%.  The portion of the business that is not owned by the Company is presented as noncontrolling interests within equity in the balance sheets.  Income attributable to the noncontrolling interests is separately reported within the statements of income.  All significant intercompany accounts and transactions have been eliminated. 
 
Use of estimates — We prepared the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”).  GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 
Foreign currency translation — The financial statements of our foreign subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for operating results.  Unrealized translation gains and losses are included in accumulated other comprehensive loss in shareholders’ equity.  When a transaction is denominated in a currency other than the subsidiary’s functional currency, we recognize a transaction gain or loss in “other (expense) income, net” when the transaction is settled.
 
Cash and cash equivalents include short-term investments with original maturities of three months or less.  The carrying amounts reported in the balance sheet for cash and cash equivalents are valued at cost, which approximates their fair value.
 
Trade receivables are recorded at the invoiced amount and generally do not bear interest, unless they become past due.  The allowance for doubtful accounts is a best estimate of the amount of probable credit losses and collection risk in the existing accounts receivable portfolio.  The allowance for cash discounts and sales returns reserve are based upon historical experience and trends.  Account balances are charged against the allowance when we believe it is probable the receivable will not be recovered. We generally hold trade accounts receivable until they are collected.  At September 30, 2017 and 2016, we had reserves against trade receivables of $21.6 and $21.0.
 
Inventories are valued at the lower of cost or market.  Inventory costs are determined by the last-in, first-out (“LIFO”) method for approximately 32% of inventories at September 30, 2017 and 2016.  Costs of remaining inventories have been determined principally by the first-in, first-out (“FIFO”) and average cost methods.  If the FIFO method of inventory accounting, which approximates current cost, had been used for inventory accounted for using the LIFO method, that inventory would have been approximately $15.0 and $15.2 higher than reported at September 30, 2017 and 2016.
 
September 30,
 
2017
 
2016
Raw materials and components
$
52.6

 
$
51.4

Work in process
55.4

 
54.0

Finished goods
43.6

 
47.7

Total inventories
$
151.6

 
$
153.1


 
Property, plant, and equipment are carried at cost less accumulated depreciation. Depreciation is computed using principally the straight-line method based on estimated useful lives of three to 50 years for buildings and improvements and three to 25 years for machinery and equipment. Maintenance and repairs are expensed as incurred. Upon disposal or retirement, the cost and accumulated depreciation of assets are eliminated. Any gain or loss is reflected in the Company’s income from operations. We review these assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows relating to the asset are less than its carrying amount. The impairment loss is measured as the amount by which the carrying amount of an asset exceeds its fair value. Total depreciation expense for 2017, 2016, and 2015 was $25.4, $25.6, and $26.2.
 
 
September 30, 2017
 
September 30, 2016
 
Cost
 
Accumulated
Depreciation
 
Cost
 
Accumulated
Depreciation
Land and land improvements
$
15.9

 
$
(3.5
)
 
$
17.3

 
$
(3.6
)
Buildings and building equipment
110.5

 
(68.0
)
 
105.6

 
(64.3
)
Machinery and equipment
335.8

 
(240.3
)
 
329.0

 
(231.5
)
Total
$
462.2

 
$
(311.8
)
 
$
451.9

 
$
(299.4
)

 
Intangible assets are stated at the lower of cost or fair value.  With the exception of certain trade names, intangible assets are amortized on a straight-line basis over periods ranging from three to 21 years, representing the period over which we expect to receive future economic benefits from these assets.  We assess the carrying value of trade names annually, or more often if events or changes in circumstances indicate there may be impairment. Estimated amortization expense related to intangible assets for the next five years is: $32.2 in 2018, $32.0 in 2019, $31.4 in 2020, $30.4 in 2021, and $29.3 in 2022.
 
 
September 30, 2017
 
September 30, 2016
 
Cost
 
Accumulated
Amortization
 
Cost
 
Accumulated
Amortization
Finite-lived assets:
 

 
 

 
 

 
 

Trade names
$
0.2

 
$
(0.1
)
 
$
0.2

 
$
(0.1
)
Customer relationships
468.7

 
(125.9
)
 
459.5

 
(100.7
)
Technology, including patents
80.7

 
(39.9
)
 
77.9

 
(33.3
)
Software
48.3

 
(41.5
)
 
47.4

 
(39.8
)
Other
0.2

 
(0.2
)
 
0.4

 
(0.3
)
 
598.1

 
(207.6
)
 
585.4

 
(174.2
)
Indefinite-lived assets:
 

 
 

 
 

 
 

Trade names
133.4

 
—

 
130.3

 
—

 
 
 
 
 
 
 
 
Total
$
731.5

 
$
(207.6
)
 
$
715.7

 
$
(174.2
)


In the third quarter of 2016, the Company recorded a trade name impairment charge of $2.2, included in operating expenses, on two trade names related to the Process Equipment Group segment. The decline in the estimated fair value of these trade names was largely driven by the decreased demand for equipment and parts used in coal mining and coal power. As of September 30, 2017, we had approximately $13 of trade name book value in the Process Equipment Group segment’s reporting units most significantly impacted by demand for coal mining and coal power.

As a result of the required annual impairment assessment performed in the third quarter of 2017, the fair value of trade names was determined to meet or exceed the carrying value for all trade names, resulting in no impairment to trade names.

Goodwill is not amortized, but is subject to annual impairment tests.  Goodwill has been assigned to reporting units.  We assess the carrying value of goodwill annually, or more often if events or changes in circumstances indicate there may be impairment.  Impairment testing is performed at a reporting unit level.
 
Process
Equipment
Group
 
Batesville
 
Total
Balance September 30, 2015
$
535.7

 
$
8.3

 
$
544.0

Acquisitions
96.4

 
—

 
96.4

Adjustments
(0.3
)
 
—

 
(0.3
)
Foreign currency adjustments
(5.8
)
 
—

 
(5.8
)
Balance September 30, 2016
626.0

 
8.3

 
634.3

Acquisitions, including purchase price adjustments
(0.9
)
 
—

 
(0.9
)
Foreign currency adjustments
14.1

 
—

 
14.1

Balance September 30, 2017
$
639.2

 
$
8.3

 
$
647.5



As a result of the required annual impairment assessment performed in the third quarter of 2017, the Company tested the recoverability of its goodwill, and in all reporting units, the fair value of goodwill was determined to exceed the carrying value, resulting in no impairment of goodwill. Since the fair value of each reporting unit exceeded its carrying value, the second step of the goodwill impairment test was not necessary. The fair value of the reporting unit in the Process Equipment Group segment that is most directly impacted by demand in domestic coal mining and coal power exceeded its carrying value by less than 10%. The carrying value of goodwill at September 30, 2017 for this reporting unit was $71.3. In the event that the assumptions used (e.g., order backlog, revenue and profit growth rates, discount rate, industry valuation multiples) for this reporting unit are not consistent with actual performance in 2018, we may be required to perform an interim impairment analysis with respect to the carrying value of goodwill for this reporting unit prior to our annual test, and based on the outcome of that analysis, could be required to take a non-cash impairment charge as a result of any such test.

Investments — Our investment portfolio consists of investments in private equity limited partnerships.  The carrying value of the portfolio was $1.4 and $7.6 at September 30, 2017 and 2016 and is included in other assets on the balance sheets.  The fair value of these investments is not readily available. We use the equity method of accounting for substantially all private equity limited partnerships, with earnings or losses reported in “other (expense) income, net” in the income statements. We regularly evaluate all investments for possible impairment.
 
Environmental liabilities — Expenditures that relate to an existing condition caused by past operations which do not contribute to current or future revenue generation are expensed.  A reserve is established when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.  These reserves are determined without consideration of possible loss recoveries.  Based on consultations with an environmental engineer, the range of liability is estimated based on current interpretations of environmental laws and regulations.  A determination is made of the specific measures that are believed to be required to remediate the site, the estimated total cost to carry out the remediation plan, and the periods in which we will make payments toward the remediation plan.  We do not make an estimate of inflation for environmental matters because the number of sites is small, the magnitude of costs to execute remediation plans is not significant, and the estimated time frames to remediate sites are not believed to be lengthy.
 
Specific costs included in environmental expense and reserves include site assessment, remediation plan development, clean-up costs, post-remediation expenditures, monitoring, fines, penalties, and legal fees.  The amount reserved represents the expected undiscounted future cash outflows associated with such plans and actions and is not significant to Hillenbrand.
 
Self-insurance — We are self-funded up to certain limits for product and general liability, workers compensation, and auto liability insurance programs, as well as certain employee health benefits including medical, drug, and dental.  These policies have deductibles and self-funded retentions up to $0.5 per occurrence, depending upon the type of coverage and policy period.  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.  The outside actuarial analysis is based on historical information along with certain assumptions about future events.  These reserves are classified as other current and other long-term liabilities within the balance sheets.
 
Treasury stock consists of our common shares that have been issued but subsequently reacquired.  We account for treasury stock purchases under the cost method.  When these shares are reissued, we use an average-cost method to determine cost.  Proceeds in excess of cost are credited to additional paid-in capital.
 
On July 24, 2008, our Board of Directors approved a stock repurchase program for the repurchase of up to $100.0 of our common stock. On February 23, 2017, our Board of Directors approved an increase of $100.0 to the existing stock repurchase program. The authorization brings the maximum cumulative repurchase authorization up to $200.0. The repurchase program has no expiration date, but may be terminated by the Board of Directors at any time. As of September 30, 2017, we had repurchased approximately 3,600,000 shares for approximately $99.4 in the aggregate. Such shares were classified as treasury stock. We repurchased approximately 778,000 shares of our common stock during 2017, at a total cost of approximately $28.0. In 2017 and 2016, approximately 700,000 shares and 800,000 shares were issued from treasury stock under our stock compensation programs.  At September 30, 2017, we had approximately $100.6 remaining for share repurchases under the existing Board authorization.
 
Preferred stock — The Company has authorized 1,000,000 shares of preferred stock (no par value), of which no shares were issued at September 30, 2017 and 2016.
 
Accumulated other comprehensive loss included all changes in Hillenbrand shareholders’ equity during a period except those that resulted from investments by or distributions to our shareholders.
 
September 30,
 
2017
 
2016
Currency translation
$
(36.9
)
 
$
(61.6
)
Pension and postretirement (net of taxes of $23.4 and $34.1)
(45.3
)
 
(67.5
)
Unrealized gain (loss) on derivative instruments (net of taxes of $0.8 and $0.5)
1.0

 
(0.7
)
Accumulated other comprehensive loss
$
(81.2
)
 
$
(129.8
)

 
Revenue recognition — Net revenue includes gross revenue less sales discounts, customer rebates, sales incentives, and product returns, all of which require us to make estimates for the portion of these allowances that have yet to be credited or paid to our customers.  We estimate these allowances based upon historical rates and projections of customer purchases toward contractual rebate thresholds.
 
A portion of Hillenbrand’s revenue is derived from long-term manufacturing contracts.  The majority of this revenue is recognized based on the percentage-of-completion method. Under this method, revenue is recognized based upon the costs incurred to date as compared to the total estimated project costs.  Approximately 25%, 24%, and 25% of Hillenbrand’s revenue was attributable to these long-term manufacturing contracts for 2017, 2016, and 2015.
 
Accounting for these contracts involves management judgment in estimating total contract revenue and cost.  Contract revenues are largely determined by negotiated contract prices and quantities, modified by our assumptions regarding contract options, change orders, and incentive and award provisions associated with technical performance clauses.  Contract costs are incurred over longer periods of time and, accordingly, the estimation of these costs requires management judgment.  Cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance trends, and other economic projections.  Significant factors that influence these estimates include inflationary trends, technical and schedule risk, internal and subcontractor performance trends, business volume assumptions, asset utilization, and anticipated labor agreements.  Revenue and cost estimates are regularly monitored and revised based on changes in circumstances.  Anticipated losses on long-term contracts are recognized immediately when such losses become evident.  We maintain financial controls over the customer qualification, contract pricing, and estimation processes to reduce the risk of contract losses.
 
Revenue for components, most replacement parts, and service is recognized when title and risk of loss passes to the customer.
 
Cost of goods sold consists primarily of purchased material costs, fixed manufacturing expense, variable direct labor, and overhead costs.  It also includes costs associated with the distribution and delivery of products.
 
Research and development costs are expensed as incurred as a component of operating expenses and were $11.9, $12.6, and $12.7 for 2017, 2016, and 2015.
 
Warranty costs — We provide for the estimated warranty cost of a product at the time revenue is recognized.  Warranty expense is accrued based upon historical information and may also include specific provisions for known conditions.  Warranty obligations are affected by actual product performance and by material usage and service costs incurred in making product corrections.  Our warranty provision takes into account the best estimate of amounts necessary to settle future and existing claims on products sold.  The Process Equipment Group generally offers a one to two-year warranty on a majority of its products.  It engages in extensive product quality programs and processes in an effort to minimize warranty obligations, including active monitoring and evaluation of the quality of component suppliers.  Warranty reserves were $15.8 and $16.6 for 2017 and 2016.  Warranty costs were $4.1, $4.3, and $4.0 for 2017, 2016, and 2015.
 
Income taxes — We establish deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.  Deferred tax assets and liabilities are determined based on the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.  The majority of the cash at our foreign subsidiaries represents earnings considered to be permanently reinvested for which deferred taxes have not been provided, as we do not intend, nor do we foresee a need, to repatriate these funds.
 
We have a variety of deferred income tax assets in numerous tax jurisdictions.  The recoverability of these deferred income tax assets is assessed periodically and valuation allowances are recognized if it is determined that it is more likely than not that the benefits will not be realized.  When performing this assessment, we consider future taxable income, the reversal of existing temporary differences, and tax planning strategies.  We account for accrued interest and penalties related to unrecognized tax benefits in income tax expense.

Derivative financial instruments — The Company has hedging programs in place to manage its currency exposures.  The objectives of our hedging programs are to mitigate exposures in gross margin and non-functional-currency-denominated assets and liabilities. Under these programs, we use derivative financial instruments to manage the economic impact of fluctuations in currency exchange rates.  These include foreign currency exchange forward contracts, which generally have terms up to 24 months.   

The Company has interest rate and cross currency swaps in place to manage or hedge the risks associated with our indebtedness and interest payments. Our objectives in using these swaps are to add stability to interest expense and to manage our exposure to interest rate movements.

We require that hedging derivative instruments be highly effective in reducing the risk exposure that they are designated to hedge. As a result, there was no significant ineffectiveness from any of our derivative activities during the period. We formally designate any instrument that meets these hedging criteria as a hedge.

The aggregate notional amount of all derivative instruments was $262.4 and $208.3 at September 30, 2017 and 2016.

We measure all derivative instruments at fair value and report them on our balance sheets as assets or liabilities.  Contracts designated as hedges for customer orders or intercompany purchases have an offsetting tax-adjusted amount in accumulated other comprehensive gain (loss).  Foreign exchange contracts designated to hedge foreign currency exposures within our balance sheet have an offsetting amount recorded in “Other (expense) income, net”. 

The carrying value of all of derivative instruments at fair value resulted in assets of $3.8 and $1.4 (included in other current assets and other assets) and liabilities of $2.3 and $3.3 (included in other current liabilities) at September 30, 2017 and 2016.  See Note 13 for additional information on the fair value of our derivative instruments.
 
Changes in the fair value of derivatives are accounted for depending on the intended use of the derivative, designation of the hedging relationship, and whether or not the criteria to apply hedge accounting has been satisfied.  Gains and losses on derivative instruments reported in accumulated other comprehensive gain (loss) are subsequently included in earnings in the periods in which earnings are affected by the hedged item.  The amounts recognized in accumulated other comprehensive income (loss) and subsequently through earnings were not significant from 2015 through 2017.  Net gains and losses on foreign exchange contracts offset foreign exchange effects on the hedged items.  The Company does not enter into derivative contracts for purposes of speculation.
 
Business acquisitions and related business acquisition and integration costs — Assets and liabilities associated with business acquisitions are recorded at fair value, using the acquisition method of accounting.  We allocate the purchase price of acquisitions based upon the fair value of each component, which may be derived from observable or unobservable inputs and assumptions.  We may utilize third-party valuation specialists to assist us in this allocation.  Initial purchase price allocations are preliminary and subject to revision within the measurement period, generally not to exceed one year from the date of acquisition.
 
Business acquisition and integration costs are expensed as incurred and are reported as a component of cost of goods sold, operating expenses, interest expense, and “other (expense) income, net,” depending on the nature of the cost.  We define these costs to include finder’s fees, advisory, legal, accounting, valuation, and other professional or consulting fees, as well as travel associated with the evaluation and effort to acquire specific businesses.  Business acquisition and integration costs also include costs associated with acquisition tax planning, retention bonuses, and related integration costs.  These costs exclude the ongoing expenses of our business development department.
 
Restructuring costs may occur when we take action to exit or significantly curtail a part of our operations or change the deployment of assets or personnel.  A restructuring charge can consist of an impairment or accelerated depreciation of effected assets, severance costs associated with reductions to the workforce, costs to terminate an operating lease or contract, and charges for legal obligations for which no future benefit will be derived.
 
Recently adopted accounting standards — In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.  ASU 2014-12 states that a performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition.  ASU 2014-12 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. ASU 2014-15 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have an impact on our consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01, Income Statement—Extraordinary and Unusual Items. ASU 2015-01 eliminates from GAAP the concept of extraordinary items. ASU 2015-01 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis. The new standard amends the consolidation guidance in ASC 810 and significantly changes the consolidation analysis required under current generally accepted accounting principles. ASU 2015-02 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest. ASU 2015-03 simplifies the presentation of debt issuance costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. This standard permits an entity to defer and present debt issuance costs related to line-of-credit arrangements as an asset and to subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. These new standards do not affect the recognition and measurement of debt issuance costs. ASU 2015-03 and ASU 2015-15 became effective and were retrospectively adopted for our fiscal year beginning October 1, 2016. The retrospective adoption resulted in $1.2 of debt issuance costs being reclassified from other assets to a reduction of the carrying value of long-term debt as of September 30, 2016. Debt issuance costs related to line-of-credit arrangements were not reclassified.

In April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software. ASU 2015-05 helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance as to whether an arrangement includes the sale or license of software. ASU 2015-05 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, Business Combinations. ASU 2015-16 simplifies the accounting for adjustments made to provisional amounts. The amendments in ASU 2015-16 require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is also required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition, an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes. ASU 2015-17 requires that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position in order to simplify the presentation of deferred income taxes. ASU 2015-17 was early adopted for our fiscal year beginning October 1, 2016.  The adoption of this standard resulted in a reclassification of $7.4 from current deferred income taxes to non-current deferred income taxes on the Consolidated Balance Sheets as of September 30, 2017. No periods prior to adoption were retrospectively adjusted.

Recently issued accounting standards — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires entities to recognize revenue in a way that depicts 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 FASB has also issued several updates to ASU 2014-09. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires significant disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. ASU 2014-09 will be effective for our fiscal year beginning October 1, 2018, including interim periods within that reporting period, and allows for either full retrospective adoption or modified retrospective adoption, with early adoption permitted on October 1, 2017.

We have begun the assessment process and continue to evaluate the impact that ASU 2014-09 will have on our consolidated financial statements and financial reporting processes, including evaluating new disclosure requirements. Based on our initial assessment, which included a comparison of our existing accounting policies and practices against the new standard and a review of contracts active during and through the end of 2016, we believe the key areas of consideration for our financial statements include percentage-of-completion accounting, separate performance obligations, and related revenue recognized over time. Based on our initial assessment, we also expect to adopt this new standard using the modified retrospective method, which will result in a cumulative effect adjustment as of the date of adoption, and we currently do not expect the adoption of ASU 2014-09 to have a material impact on our results of operations, financial condition, or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires lessees to recognize a right of use asset and related lease liability for leases that have terms of more than twelve months. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance, with the classifications based on criteria that are similar to those applied under the current lease guidance, without the explicit bright lines. ASU 2016-02 will be effective for our fiscal year beginning on October 1, 2019, with early adoption permitted. We are currently evaluating the impact that ASU 2016-02 will have on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Statements." ASU 2016-13 replaces the current incurred loss impairment model with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. ASU 2016-13 will be effective for our fiscal year beginning on October 1, 2020, with early adoption permitted for our fiscal year beginning October 1, 2019. We are currently evaluating the impact that ASU 2016-13 will have on our consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-17 will be effective for our fiscal year beginning on October 1, 2018, with early adoption permitted. We expect the adoption of ASU 2016-18 to have a financial statement presentation and disclosure impact only.

In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business. ASU 2017-01 assists entities in determining whether a transaction involves an asset or a business. Specifically, it states that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. If this initial test is not met, a set cannot be considered a business unless it includes an input and a substantive process that together significantly contribute to the ability to create output.  ASU 2017-01 will be effective for our fiscal year beginning on October 1, 2018, with early adoption permitted. We are currently evaluating ASU 2017-01, but do not expect a significant impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 from the goodwill impairment test and modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value.  ASU 2017-04 will be effective for our fiscal year beginning on October 1, 2020, with early adoption permitted. We are currently evaluating the impact that ASU 2017-04 will have on our consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 states that an employer must report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period and present the other components of net benefit cost (as defined in paragraphs 715-30-35-4 and 715-60-35-9) in the income statement separately from the service cost component and outside a subtotal of income from operations (if one is presented). In addition, ASU 2017-07 limits the capitalization of compensation costs to the service cost component only (if capitalization is appropriate). ASU 2017-07 will be effective for our fiscal year beginning on October 1, 2018, with early adoption permitted. We are currently evaluating the impact that ASU 2017-07 will have on our consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications (in accordance with Topic 718). The new guidance will provide relief to entities that make non-substantive changes to share-based payment awards. ASU 2017-09 will be effective for our fiscal year beginning on October 1, 2018, with early adoption permitted. The amendment would be applied prospectively to an award modified on or after the adoption date. We do not expect ASU 2017-09 to have a significant impact on our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both nonfinancial and financial risk components, and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. In addition, this ASU makes certain targeted improvements to simplify the application of hedge accounting guidance.  ASU 2017-12 will be effective for our fiscal year beginning on October 1, 2019, with early adoption permitted. The amendment would be applied to hedging relationships existing on the date of adoption and the effect of adoption would be reflected as of the beginning of the fiscal year of adoption (that is, the initial application date). We are currently evaluating the impact that ASU 2017-12 will have on our consolidated financial statements.
Business Acquisitions
Business Acquisitions
Business Acquisitions
 
We incurred $1.1 and $3.7 of business acquisition and integration costs during 2017 and 2016, recorded in operating expenses.

Abel
 
We completed the acquisition of Abel Pumps LP and Abel GmbH & Co. KG and certain of their affiliates (collectively “Abel”) on October 2, 2015, for €95 in cash.  We utilized borrowings under our $700.0 revolving credit facility and $180.0 term loan (together, the “Facility”) to fund this acquisition. Based in Büchen, Germany, Abel is a globally-recognized leader in positive displacement pumps. Abel specializes in designing, developing, and manufacturing piston and piston diaphragm pumps as well as pumping solutions and in providing related parts and service. This equipment is sold under the ABEL® Pump Technology brand in the power generation, wastewater treatment, mining, general industry, and marine markets. The results of Abel are reported in our Process Equipment Group segment for the relevant periods.

Based on the final purchase allocation, we recorded goodwill of $36 and acquired identifiable intangible assets of $58, which consisted of $5 of trade names not subject to amortization, $9 of developed technology, $3 of backlog, and $41 of customer relationships. In addition, we recorded $14 of net tangible assets, primarily working capital. Goodwill is deductible for tax purposes. Supplemental proforma information has not been provided as the acquisition did not have a material impact on consolidated results of operations.

Red Valve

On February 1, 2016, we completed the acquisition of Red Valve Company, Inc. (“Red Valve”) for $130.4 in cash, net of certain adjustments. We utilized borrowings under our Facility to fund this acquisition. Based in Carnegie, Pennsylvania, Red Valve is a global leader in highly-engineered valves designed to operate in the harshest municipal and industrial wastewater environments. Its products support mission critical applications in water/wastewater, power and mining, and other general industrial markets. The results of Red Valve are reported in our Process Equipment Group segment for the relevant periods.

Based on the final purchase allocation, we recorded goodwill of $59 and acquired identifiable intangible assets of $61, which consisted of $4 of trade names not subject to amortization, $8 of developed technology, $1 of backlog, and $48 of customer relationships. In addition, we recorded $10 of net tangible assets, primarily working capital. Goodwill is deductible for tax purposes. Supplemental proforma information has not been provided, as the acquisition did not have a material impact on consolidated results of operations.

Both of these acquisitions continue Hillenbrand’s strategy to transform into a world-class global diversified industrial company by increasing our ability to expand into new markets and geographies within the highly attractive flow control space. The fair value of these acquisitions did not ascribe a significant amount to tangible assets, as we often seek to acquire companies with a relatively low physical asset base in order to limit the need to invest significant additional cash post-acquisition.
Financing Agreements
Financing Agreements
Financing Agreements
 
 
September 30,
 
2017
 
2016
$700 revolving credit facility (excluding outstanding letters of credit)
$
68.0

 
$
198.5

$180 term loan
148.5

 
162.0

$150 senior unsecured notes, net of discount (1)
148.9

 
148.5

$100 Series A Notes (2)
99.7

 
99.6

Other
0.6

 
0.3

Total debt
465.7

 
608.9

Less: current portion
18.8

 
13.8

Total long-term debt
$
446.9

 
$
595.1

 
 
 
 
(1) Includes debt issuance costs of $0.6 and $0.8 at September 30, 2017 and September 30, 2016.
(2) Includes debt issuance costs of $0.3 and $0.4 at September 30, 2017 and September 30, 2016.

 
The following table summarizes the scheduled maturities of long-term debt for 2018 through 2022:
 
 
Amount
2018
$
18.0

2019
18.0

2020
330.5

2021
—

2022
—


 
On December 19, 2014, the Company entered into a Second Amendment (the “JPM Amendment”) to the Amended and Restated Credit Agreement, dated as of November 19, 2012, which governs our Facility, by and among the Company and certain of its affiliates, the lenders party thereto from time to time, and JPMorgan Chase Bank, N.A., as administrative agent. The JPM Amendment provides for revolving loans of up to $700.0 and a term loan in the amount of $180.0 and extends the maturity date of the Facility to December 19, 2019. The JPM Amendment also amends a financial covenant in the Facility to provide the Company and its subsidiaries greater flexibility to consummate acquisitions. The financial covenant amendment allows for an increase in the Company’s permitted maximum leverage ratio during the three quarters subsequent to an acquisition valued in excess of $75.0. We are allowed this increase up to two times during the term of the Facility (each, a “Leverage Holiday”). New deferred financing costs related to the JPM Amendment were $1.0, which along with existing costs of $2.0, are being amortized to interest expense over the term of the Facility.

Borrowings under the Facility bear interest at variable rates plus a margin amount based upon our leverage.  There is also a facility fee based upon our leverage.  All revolving amounts due under the Facility mature upon expiration.  By its terms, the term loan amortizes such that 38% of the principal will be repaid over approximately a five-year term, with the balance due at maturity.  The Company also has the ability, under certain circumstances and with the lenders’ approval, to increase the total borrowing capacity under the Facility by $300.0. These borrowings are classified as long-term, with the exception of the term loan, where payments due within the next 12 months are classified as current. The Facility is an unsubordinated obligation of Hillenbrand and ranks equally in right of payment with all our other existing and future unsubordinated obligations.
 
With respect to the Facility, as of September 30, 2017, we had $10.8 in outstanding letters of credit issued and $621.2 of maximum borrowing capacity. Of the maximum borrowing capacity, $554.4 is immediately available based on our leverage covenant at September 30, 2017, with additional amounts available in the event of a qualifying acquisition.  The weighted-average interest rates on borrowings under the Facility were 1.40% and 1.48% for 2017 and 2016.  The weighted average facility fee was 0.23% and 0.21% for 2017 and 2016. The weighted-average interest rate on the term loan was 2.27% and 1.76% for 2017 and 2016. We have interest rate swaps on $50.0 of outstanding borrowings under the Facility in order to manage exposure to our variable rate interest payments. We have cross currency swaps on $55.0 of outstanding borrowings under the revolving credit facility to manage currency and interest rate risk exposure on foreign currency denominated debt.  The cross currency swaps are not designated as hedging instruments for accounting purposes.

In July 2010, we issued $150 of senior unsecured notes (“Notes”) due July 2020.  The Notes bear interest at a fixed rate of 5.5% per year, payable semi-annually in arrears beginning January 2011.  The Notes were issued at a discount of $1.6, resulting in an initial carrying value of $148.4.  We are amortizing the discount to interest expense over the term of the Notes using the effective interest rate method, resulting in an annual interest rate of 5.65%.  Deferred financing costs associated with the Notes of $2.1 are being amortized to interest expense on a straight-line basis over the term of the Notes.  The Notes are unsubordinated obligations of Hillenbrand and rank equally in right of payment with all of our other existing and future unsubordinated obligations.
 
The indenture governing the Notes does not limit our ability to incur additional indebtedness.  It does, however, contain certain covenants that restrict our ability to incur secured debt and to engage in certain sale and leaseback transactions.  The indenture provides holders of debt securities with remedies if we fail to perform specific obligations.  In the event of a “Change of Control Triggering Event” (as defined in the indenture), each holder of the Notes has the right to require the Company to purchase all or a portion of its Notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest.  The Notes are redeemable with prior notice at a price equal to par plus accrued interest and a make-whole amount.

On December 15, 2014, we issued $100.0 in 4.60% Series A unsecured notes (“Series A Notes”) pursuant to the Private Shelf Agreement, dated as of December 6, 2012 (as amended, the “Shelf Agreement”), among the Company, Prudential Investment Management, Inc. (“Prudential”) and each Prudential Affiliate (as defined therein) that became a purchaser thereunder. The Series A Notes are unsecured, mature on December 15, 2024, and bear interest at 4.60% payable semi-annually in arrears. The Company may at any time upon providing notice, prepay all or part of the Series A Notes at 100% of the principal amount prepaid plus a Make-Whole Amount (as defined therein). Deferred financing costs of $0.4 related to the Series A Notes are being amortized to interest expense over the term of the Series A Notes.

On December 15, 2014, December 19, 2014, and March 24, 2016, the Company and certain of the Company’s domestic subsidiaries entered into amendments (collectively, the “Prudential Amendments”) to the Shelf Agreement. The Prudential Amendments, among other things, amend a financial covenant contained in the Shelf Agreement to provide for Leverage Holidays similar to those discussed above regarding the Facility, extend the maturity date of the Shelf Agreement to March 24, 2019, and increase the aggregate principal amount available under the private shelf facility from $150 to $200, of which $100.0 has been drawn. The Shelf Agreement is an uncommitted facility, and the issuance of notes under the Shelf Agreement is subject to successful placement by Prudential. If a Leverage Holiday is elected, in addition to the interest accruing on the Series A Notes, the Company must pay to each holder of a Series A Note a fee equivalent to 0.75% per annum during the Leverage Holiday period.

On February 18, 2015, we entered into an Amendment Agreement (the “Amendment Agreement”), amending and restating our €150.0 Syndicated Letter of Guarantee Facility (as amended, “LG Facility”), dated as of June 3, 2013, under which unsecured letters of credit, bank guarantees, or other surety bonds may be issued.  The Amendment Agreement extends the maturity date of the LG Facility until at least December 19, 2019, and, among other amendments, amends a financial covenant contained in the LG Facility to provide for Leverage Holidays similar to those discussed above regarding the Facility. The Company has the potential, under certain circumstances and with the lenders’ approval, to increase the total capacity under the LG facility by an additional €70.0.  Guarantees provided under the LG Facility are priced at tiered rates based upon our leverage, and charges for unused capacity are assessed at 35% of the applicable guarantee rate (0.90% at September 30, 2017).  Deferred financing costs of $1.3 are being amortized to interest expense over the term of the LG Facility.  There were no direct borrowings under the LG Facility.

In the normal course of business, the Process Equipment Group provides to certain customers bank guarantees and other credit arrangements in support of performance, warranty, advance payment, and other contractual obligations.  This form of trade finance is customary in the industry and, as a result, we are required to maintain adequate capacity to provide the guarantees.  As of September 30, 2017, we had credit arrangements totaling $227.9, under which $174.6 was utilized for this purpose.  These arrangements included the LG Facility and other ancillary credit facilities.
 
The availability of borrowings under the Facility, the Shelf Agreement, and the LG Facility is subject to our ability to meet certain conditions including compliance with covenants, absence of default, and continued accuracy of certain representations and warranties.  Financial covenants include a maximum ratio of Indebtedness to EBITDA (as defined in the agreements) of 3.5 to 1.0 and a minimum ratio of EBITDA (as defined in the agreements) to interest expense of 3.5 to 1.0.  As of September 30, 2017, we were in compliance with all covenants.

The Facility, Notes, Series A Notes, and LG Facility are fully and unconditionally guaranteed by certain of the Company’s domestic subsidiaries.

We had restricted cash of $0.8 included in other current assets in the Consolidated Balance Sheets at September 30, 2017 and 2016.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This standard became effective and was retrospectively adopted for our fiscal year beginning October 1, 2016. As of September 30, 2017 and 2016, there were $0.9 and $1.2 in debt issuance costs recorded as a reduction in the carrying value of the related debt liability under the senior unsecured notes and Series A Notes. The $0.9 in debt issuance costs as of September 30, 2017 will be amortized over the remaining terms of the senior unsecured Notes and Series A Notes.
Retirement Benefits
Retirement Benefits
Retirement Benefits
 
Defined Benefit Retirement Plans — Approximately 44% of our employees participate in one of four defined benefit retirement programs, including the master defined benefit retirement plan in the U.S., the defined benefit plans of our German and Swiss subsidiaries, and the supplemental executive defined benefit retirement plan.  We fund the pension trusts in compliance with ERISA or local funding requirements and as necessary to provide for current service and for any unfunded projected future benefit obligations over a reasonable period.  The benefits for these plans are based primarily on years of service and the employee’s level of compensation during specific periods of employment.  All pension plans have a September 30 measurement date.
 
Effect on Operations — The components of net pension costs under defined benefit retirement plans were:
 
 
U.S. Pension Benefits
Year Ended September 30,
 
Non-U.S. Pension Benefits
Year Ended September 30,
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Service cost
$
3.6

 
$
3.9

 
$
4.3

 
$
1.3

 
$
1.8

 
$
1.7

Interest cost
8.8

 
9.5

 
14.4

 
0.7

 
1.8

 
2.8

Expected return on plan assets
(13.7
)
 
(9.7
)
 
(14.3
)
 
(0.5
)
 
(1.0
)
 
(1.0
)
Amortization of unrecognized prior service cost, net
0.4

 
0.6

 
0.9

 
0.1

 
0.1

 
—

Amortization of actuarial loss
3.6

 
3.8

 
5.3

 
1.1

 
0.3

 
0.1

Settlement expense
0.1

 
—

 
17.7

 
0.6

 
0.5

 
—

Net pension costs
$
2.8

 
$
8.1

 
$
28.3

 
$
3.3

 
$
3.5

 
$
3.6



Prior to 2016, we estimated the service and interest cost components of our defined benefit retirement plans using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Beginning in fiscal 2016, we elected to use a full yield curve approach in the estimation of these components of benefit cost. Under this approach, we applied discounting using individual spot rates from a yield curve composed of the rates of return on several hundred high-quality, fixed income corporate bonds available at the measurement date. These spot rates align to each of the projected benefit obligations and service cost cash flows. The service cost component relates to the active participants in the plan, so the relevant cash flows on which to apply the yield curve are considerably longer in duration on average than the total projected benefit obligation cash flows, which also include benefit payments to retirees. Interest cost is computed by multiplying each spot rate by the corresponding discounted projected benefit obligation cash flows. The full yield curve approach reduces any actuarial gains and losses based upon interest rate expectations (e.g. built-in gains in interest cost in an upward sloping yield curve scenario), or gains and losses merely resulting from the timing and magnitude of cash outflows associated with our benefit obligations.
We elected the full yield curve approach to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of service and interest rate costs. This change did not affect the measurement of our total benefit obligations as the change in service cost and interest cost was completely offset in the actuarial (gain) loss reported. We accounted for this change as a change in estimate prospectively starting in fiscal 2016. The change drove a collective decrease in service cost and interest cost of approximately $3.1 in 2016.
On April 1, 2015, we announced an offer to provide former employees who are participants in the Company’s U.S. defined benefit pension plan (the “Plan”) the opportunity to elect a lump sum distribution of their earned Plan benefits. The Plan’s fiduciaries made lump sum payments to electing eligible participants in September 2015, funded by the existing assets in the Plan. As a result, the assets in the Plan decreased by benefits paid of $75.9, and the projected obligation of the plan decreased by $81.9, consisting of benefits paid of $75.9 and the gain due to settlement of $6.0, which was included in accumulated other comprehensive income. The Company also recorded a non-cash income statement settlement pre-tax charge of $17.7 in September 2015.

During 2017, we also began implementing a plan to transition our U.S. employees not covered by a collective bargaining agreement and our employees covered by collective bargaining agreements at two of our U.S. facilities from a defined benefit-based model to a defined contribution structure over a three-year sunset period. This change caused remeasurements for the U.S. defined benefit pension plan for the affected populations. The remeasurements did not cause a material change, as the assumptions did not materially differ from the assumptions at September 30, 2016.

Obligations and Funded Status — The change in benefit obligation and funded status of the Company’s defined benefit retirement plans were: 

 
U.S. Pension Benefits
September 30,
 
Non-U.S. Pension Benefits
September 30,
 
2017
 
2016
 
2017
 
2016
Change in benefit obligation:
 

 
 

 
 

 
 

Projected benefit obligation at beginning of year
$
294.2

 
$
272.2

 
$
140.9

 
$
134.2

Service cost
3.6

 
3.9

 
1.3

 
1.8

Interest cost
8.8

 
9.5

 
0.7

 
1.8

Actuarial (gain) loss
(6.9
)
 
19.7

 
(9.5
)
 
11.7

Benefits paid
(11.0
)
 
(11.1
)
 
(5.7
)
 
(8.8
)
Gain due to settlement
(6.9
)
 
—

 
(1.2
)
 
—

Employee contributions
—

 
—

 
0.8

 
0.7

Effect of exchange rates on projected benefit obligation
—

 
—

 
6.1

 
(0.5
)
Projected benefit obligation at end of year
281.8

 
294.2

 
133.4

 
140.9

 
 
 
 
 
 
 
 
Change in plan assets:
 

 
 

 
 

 
 

Fair value of plan assets at beginning of year
173.7

 
158.9

 
29.7

 
29.5

Actual return on plan assets
17.9

 
19.1

 
0.3

 
0.5

Employee and employer contributions
81.8

 
6.8

 
8.5

 
8.5

Benefits paid
(11.0
)
 
(11.1
)
 
(5.7
)
 
(8.8
)
Gain due to settlement
—

 
—

 
(1.6
)
 
—

Effect of exchange rates on plan assets
—

 
—

 
0.2

 
—

Fair value of plan assets at end of year
262.4

 
173.7

 
31.4

 
29.7

 
 
 
 
 
 
 
 
Funded status:
 

 
 

 
 

 
 

Plan assets less than benefit obligations
$
(19.4
)
 
$
(120.5
)
 
$
(102.0
)
 
$
(111.2
)
 
 
 
 
 
 
 
 
Amounts recorded in the consolidated balance sheets:
 

 
 

 
 

 
 

Prepaid pension costs, non-current
$
8.2

 
$
—

 
$
0.4

 
$
—

Accrued pension costs, current portion
(1.8
)
 
(1.8
)
 
(6.8
)
 
(6.6
)
Accrued pension costs, long-term portion
(25.8
)
 
(118.7
)
 
(95.6
)
 
(104.6
)
Plan assets greater (less) than benefit obligations
$
(19.4
)
 
$
(120.5
)
 
$
(102.0
)
 
$
(111.2
)

 
Net actuarial losses ($71.9) and prior service costs ($1.0), less an aggregate tax effect ($25.0), are included as components of accumulated other comprehensive loss at September 30, 2017.  Net actuarial losses ($103.4) and prior service costs ($1.6), less an aggregate tax effect ($35.2), are included as components of accumulated other comprehensive loss at September 30, 2016.  The amount that will be amortized from accumulated other comprehensive loss into net pension costs in 2018 is expected to be $4.1.
 
Accumulated Benefit Obligation — The accumulated benefit obligation for all defined benefit retirement plans was $407.7 and $414.7 at September 30, 2017 and 2016.  Selected information for plans with accumulated benefit obligations in excess of plan assets was:
 
 
U.S. Pension Benefits
September 30,
 
Non-U.S. Pension Benefits
September 30,
 
2017
 
2016
 
2017
 
2016
Projected benefit obligation
$
27.7

 
$
294.2

 
$
102.0

 
$
108.6

Accumulated benefit obligation
27.6

 
276.5

 
102.0

 
108.6

Fair value of plan assets
—

 
173.7

 
—

 
—



The weighted-average assumptions used in accounting for defined benefit retirement plans were:
 
 
U.S. Pension Benefits
Year Ended September 30,
 
Non-U.S. Pension Benefits
Year Ended September 30,
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Discount rate for obligation, end of year
3.7
%
 
3.6
%
 
4.4
%
 
1.1
%
 
1.0
%
 
2.1
%
Discount rate for expense, during the year
3.5
%
 
4.4
%
 
4.4
%
 
0.5
%
 
1.7
%
 
1.9
%
Expected rate of return on plan assets
5.6
%
 
5.5
%
 
6.3
%
 
2.0
%
 
2.0
%
 
3.5
%
Rate of compensation increase
3.0
%
 
3.0
%
 
3.0
%
 
2.0
%
 
2.0
%
 
0.2
%

 
The discount rates are evaluated annually based on current market conditions.  In setting these rates, we utilize long-term bond indices and yield curves as a preliminary indication of interest rate movements, then make adjustments to the indices to reflect differences in the terms of the bonds covered under the indices in comparison to the projected outflow of pension obligations. See prior comments on our change to a full yield curve approach in 2016.  The overall expected long-term rate of return is based on historical and expected future returns, which are inflation-adjusted and weighted for the expected return for each component of the investment portfolio.  The rate of assumed compensation increase is also based on our specific historical trends of past wage adjustments in recent years.
 
U.S. Pension Plan Assets — Long-term strategic investment objectives utilize a diversified mix of equity and fixed income securities to preserve the funded status of the trusts and balance risk and return.  The primary investment strategy is a dynamic target allocation method that periodically rebalances among various investment categories depending on the current funded position.  This program is designed to actively move from return-seeking investments (such as equities) toward liability-hedging investments (such as long-duration fixed income) as funding levels improve.  The target investment in return-seeking assets is not to exceed 60% of total domestic plan assets. Plan assets are invested by the plans’ fiduciaries, which direct investments according to specific policies.  Those policies subject investments to the following restrictions in our domestic plan: short-term securities must be rated A2/P2 or higher, liability-hedging fixed income securities must have an average quality credit rating of investment grade and investments in equities in any one company may not exceed 10% of the equity portfolio.

During the first quarter of 2017, we made an $80.0 contribution to our U.S. defined benefit pension plan using cash on hand and funds borrowed from our Facility. Although this action increased Plan assets and reduced 2017 pension expense, the majority of the pension expense savings in 2017 from this action was offset by the additional interest expense on the funds borrowed and certain tax effects from the transaction.
Non-U.S. Pension Plan Assets — Long-term strategic investment objectives utilize a diversified mix of suitable assets of appropriate liquidity to generate income and capital growth that, together with contributions from participants and Hillenbrand, we believe will meet the cost of the current and future benefits that the plan provides.  Long-term strategic investment objectives also seek to limit the risk of the assets failing to meet the liabilities over the long term.
 
None of Hillenbrand’s common stock was directly owned by the pension plan trusts at September 30, 2017.
 
The tables below provide the fair value of our pension plan assets by asset category at September 30, 2017 and 2016.  The accounting guidance on fair value measurements specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques (Level 1, 2, and 3).  See Note 13 for definitions.
 
Fair values are determined as follows:
 
•
Cash equivalents are stated at the carrying amount, which approximates fair value, or at the fund’s net asset value.
•
Equity securities are stated at the last reported sales price on the day of valuation.
•
Corporate bonds actively traded are stated at the closing price reported in the active markets in which the bonds are traded.
•
Government index funds are stated at the closing price reported in the active market in which the fund is traded.
•
Corporate bond funds and equity mutual funds are stated at the closing price in the active markets in which the underlying securities of the funds are traded.
•
Real estate is stated based on a discounted cash flow approach, which includes future rental receipts, expenses, and residual values as the highest and best use of the real estate from a market participant view as rental property.

U.S. Pension Plans

The plan assets of our U.S. pension plans consist of certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient. Accordingly, these assets are not required to be classified and reported under the fair value hierarchy. At September 30, 2017 and 2016, the fair values of these investments were $262.4 and $173.7.

Non-U.S. Pension Plans
 
Fair Value at September 30, 2017 Using Inputs Considered as:
 
Total
 
Level 1
 
Level 2
 
Level 3
Non-U.S. Pension Plans
 

 
 

 
 

 
 

Cash equivalents
$
5.2

 
$
5.2

 
$
—

 
$
—

Equity securities
6.8

 
6.8

 
—

 
—

Other types of investments:
 
 
 
 
 
 
 
Government index funds
5.7

 
5.7

 
—

 
—

Corporate bond funds
9.8

 
9.8

 
—

 
—

Real estate and real estate funds
2.0

 
—

 
—

 
2.0

Other
1.9

 
—

 
1.9

 
—

Total Non-U.S. pension plan assets
$
31.4

 
$
27.5

 
$
1.9

 
$
2.0

 
 
Fair Value at September 30, 2016 Using Inputs Considered as:
 
Total
 
Level 1
 
Level 2
 
Level 3
Non-U.S. Pension Plans
 

 
 

 
 

 
 

Cash equivalents
$
4.1

 
$
4.1

 
$
—

 
$
—

Equity securities
6.5

 
6.5

 
—

 
—

Other types of investments:
0

 
0

 
0

 
0

Government index funds
5.8

 
5.8

 
—

 
—

Corporate bond funds
9.7

 
9.7

 
—

 
—

Real estate and real estate funds
2.0

 
—

 
—

 
2.0

Other
1.6

 
—

 
1.6

 
—

Total Non-U.S. pension plan assets
$
29.7

 
$
26.1

 
$
1.6

 
$
2.0


 
Cash Flows — During 2017, 2016, and 2015 we contributed cash of $89.6, $14.6, and $14.9, to our defined benefit pension plans.  We expect to make estimated contributions of $9.9 in 2018 to our pension plans.  Due to the funded status of our U.S. defined benefit pension plan, we do not expect to make contributions to this plan in 2018. We will evaluate business conditions and capital and equity market volatility to determine whether we will make any additional discretionary contributions.

Estimated Future Benefit Payments — The following represents estimated future benefit payments, including expected future service, which are expected to be paid from plan assets or Company contributions as necessary:
 
 
U.S. Pension Plans
Projected Pension
Benefits Payout
 
Non-U.S. Pension Plans
Projected Pension
Benefits Payout
2018
$
12.9

 
$
8.0

2019
13.4

 
7.7

2020
14.1

 
7.9

2021
14.8

 
7.2

2022
15.4

 
7.3

2023 - 2027
82.4

 
34.4


 
Defined Contribution Plans — We sponsor a number of defined contribution plans.  Depending on the plan, we may make contributions up to 4% of an employee’s compensation and matching contributions up to 6% of compensation.  Company contributions generally vest over a period of zero to five years.  Expenses related to our defined contribution plans were $11.4, $9.9, and $9.1 for 2017, 2016, and 2015. See comments above regarding our retirement strategy change for certain U.S. employees in 2017.
 
Postretirement Healthcare Plan — The Company offers a domestic postretirement healthcare plan that provides healthcare benefits to eligible qualified retirees and their spouses.  The plan includes retiree cost-sharing provisions and generally extends retiree coverage for medical, prescription, and dental benefits beyond the COBRA continuation period to the date of Medicare eligibility.  We use a measurement date of September 30.  The net postretirement healthcare benefit cost for 2017, 2016, and 2015 was $0.3 for each year.
 
 
September 30,
 
2017
 
2016
Benefit obligation at beginning of year
$
10.3

 
$
10.3

Interest cost
0.2

 
0.3

Service cost
0.4

 
0.4

Actuarial (gain) loss
(0.9
)
 
0.2

Net benefits paid
(1.0
)
 
(0.9
)
Benefit obligation at end of year
$
9.0

 
$
10.3

 
 
 
 
Amounts recorded in the balance sheets:
 

 
 

Accrued postretirement benefits, current portion
$
0.8

 
$
0.9

Accrued postretirement benefits, long-term portion
8.2

 
9.4

Net amount recognized
$
9.0

 
$
10.3


 
The weighted-average assumptions used in revaluing our obligation under the postretirement healthcare plan were:
 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Discount rate for obligation
3.3
%
 
3.1
%
 
3.7
%
Healthcare cost rate assumed for next year
7.6
%
 
7.3
%
 
7.6
%
Ultimate trend rate
4.5
%
 
4.5
%
 
4.5
%

 
Net actuarial gains of $3.4 and $3.1 and prior service costs of $0.8 and $0.5, less tax of $1.6 and $1.3, were included as a component of accumulated other comprehensive loss at September 30, 2017 and 2016.  The estimated amount that will be amortized from accumulated other comprehensive loss as a reduction to postretirement healthcare costs in 2018 is $0.4.  A one percentage-point increase or decrease in the assumed healthcare cost trend rates as of September 30, 2017, would cause an increase or decrease in service and interest costs of $0.1, along with an increase or decrease in the benefit obligation of $0.6.
 
We fund the postretirement healthcare plan as benefits are paid.  Current plan benefits are expected to require net Company contributions for retirees of $0.8 per year for the foreseeable future.
Other Long-Term Liabilities
Other Long-Term Liabilities
Other Long-Term Liabilities
 
 
September 30,
 
2017
 
2016
Casket pricing obligation
$
3.1

 
$
3.9

Rabbi trust liability
4.3

 
4.0

Self-insurance loss reserves
14.3

 
13.3

Other
11.8

 
13.7

 
33.5

 
34.9

Less current portion
(6.8
)
 
(5.5
)
Total long-term portion
$
26.7

 
$
29.4


 
The casket pricing obligation is associated with a program for the future sale of caskets made in connection with prearranged funerals and was discontinued for arrangements made after December 31, 2004.  The remaining liability under the program is being recognized as a component of revenue as casket sales subject to the program are delivered and the obligation is satisfied.
Income Taxes
Income Taxes
Income Taxes
 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Domestic
$
108.2

 
$
99.3

 
$
110.0

Foreign
80.1

 
64.8

 
52.3

Total earnings before income taxes
$
188.3

 
$
164.1

 
$
162.3

 
 
 
 
 
 
Income tax expense:
 

 
 

 
 

Current provision:
 

 
 

 
 

Federal
$
0.5

 
$
28.9

 
$
35.0

State
(0.4
)
 
5.1

 
4.4

Foreign
22.7

 
18.0

 
10.2

Total current provision
22.8

 
52.0

 
49.6

 
 
 
 
 
 
Deferred provision (benefit):
 

 
 

 
 

Federal
32.0

 
3.2

 
(0.5
)
State
5.0

 
(0.7
)
 
1.6

Foreign
0.1

 
(7.2
)
 
(1.6
)
Total deferred provision (benefit)
37.1

 
(4.7
)
 
(0.5
)
Income tax expense
$
59.9

 
$
47.3

 
$
49.1


 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Federal statutory rates
35.0
 %
 
35.0
 %
 
35.0
 %
Adjustments resulting from the tax effect of:
 

 
 

 
 

State income taxes, net of federal benefit
1.6

 
2.0

 
2.3

Foreign income tax rate differential
(5.8
)
 
(6.7
)
 
(6.2
)
Domestic manufacturer’s deduction
(0.3
)
 
(1.9
)
 
(2.2
)
Share-based compensation
(1.1
)
 
(1.5
)
 
—

Unremitted Earnings
2.7

 
—

 
—

Valuation allowance
(1.3
)
 
1.7

 
0.3

Other, net
1.0

 
0.2

 
1.0

Effective income tax rate
31.8
 %
 
28.8
 %
 
30.2
 %

 
September 30,
 
2017
 
2016
Deferred tax assets:
 

 
 

Employee benefit accruals
$
46.0

 
$
90.1

Loss and tax credit carryforwards
43.7

 
40.6

Rebates and other discounts
5.8

 
5.7

Self-insurance reserves
4.6

 
4.6

Casket pricing obligation
1.3

 
1.6

Allowance for doubtful accounts
1.0

 
1.1

Inventory, net
3.1

 
3.2

Other, net
10.3

 
11.9

Total deferred tax assets before valuation allowance
115.8

 
158.8

Less valuation allowance
(3.1
)
 
(5.5
)
Total deferred tax assets, net
112.7

 
153.3

Deferred tax liabilities:
 

 
 

Depreciation
(11.6
)
 
(9.7
)
Amortization
(134.9
)
 
(134.9
)
Long-term contracts and customer prepayments
(28.9
)
 
(21.2
)
Unremitted earnings of foreign operations
(4.2
)
 
(0.2
)
Other, net
(5.1
)
 
(8.8
)
Total deferred tax liabilities
(184.7
)
 
(174.8
)
Deferred tax liabilities, net
$
(72.0
)
 
$
(21.5
)
 
 
 
 
Amounts recorded in the balance sheets:
 

 
 

Deferred tax assets, current
$
—

 
$
23.9

Deferred tax assets, non-current
3.7

 
—

Deferred tax liabilities, current
—

 
(22.8
)
Deferred tax liabilities, non-current
(75.7
)
 
(22.6
)
Total
$
(72.0
)
 
$
(21.5
)

 
At September 30, 2017, we had $4.7 of deferred tax assets related to U.S. federal and state net operating losses and tax credit carryforwards, which will begin to expire in 2018, and $39.0 of deferred tax assets related to foreign net operating loss carryforwards, which will begin to expire in 2018. Deferred tax assets as of September 30, 2017, were reduced by a valuation allowance of $3.1 relating to foreign net operating loss carryforwards and foreign tax credit carryforwards.  At September 30, 2017 and 2016, we had $18.3 and $16.6 of current income tax payable classified as other current liabilities on our balance sheets.
 
We establish a valuation allowance for deferred tax assets when it is determined that the amount of expected future taxable income is not likely to support the use of the deduction or credit.
 
As of September 30, 2017 and 2016, U.S. federal and state income taxes have not been provided on accumulated undistributed earnings of substantially all our foreign subsidiaries, as these earnings were considered permanently reinvested.  However, as of September 30, 2017, $4.0 of deferred tax liability on unremitted earnings of foreign subsidiaries was recognized, representing the assumed tax on the distribution of such earnings among certain of our foreign subsidiaries. The total permanently reinvested earnings were $241.2 and $172.7 for 2017 and 2016.  These amounts represent book earnings translated at historical rates. It is not practicable to estimate the tax liabilities that would be incurred upon full repatriation of undistributed earnings due to foreign tax credit limitation uncertainty and uncertainty on applicable withholding tax rate on certain foreign to foreign distributions.
  
A reconciliation of the unrecognized tax benefits is as follows:
 
September 30,
 
2017
 
2016
 
2015
Balance at September 30
$
7.7

 
$
7.8

 
$
8.4

Additions for tax positions related to the current year
0.7

 
0.2

 
0.6

Additions for tax positions of prior years
3.4

 
1.7

 
0.8

Reductions for tax positions of prior years
(1.5
)
 
(2.0
)
 
(2.0
)
Settlements
(0.4
)
 
—

 
—

Balance at September 30
$
9.9

 
$
7.7

 
$
7.8



The gross unrecognized tax benefit included $9.9 and $7.7 at September 30, 2017 and 2016, which, if recognized, would impact the effective tax rate in future periods.
 
We recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense.  During 2017 and 2016, we recognized $0.7 in additional interest and penalties.  Excluded from the reconciliation were $1.3 and $1.3 of accrued interest and penalties at September 30, 2017 and 2016.
 
We operate in multiple income tax jurisdictions both inside and outside the U.S. and are currently under examination in various federal, state, and foreign jurisdictions. Specifically, we are currently under examination in the U.S. for 2016 and under examination in Germany for 2009 through 2013. In addition, there are other ongoing audits in various stages of completion in several state and foreign jurisdictions.
 
It is possible that the liability associated with the unrecognized tax benefits will increase or decrease within the next 12 months.  These changes may be the result of ongoing audits or the expiration of statutes of limitations and could range up to $1.0 based on current estimates.  Audit outcomes and the timing of audit settlements are subject to significant uncertainty.  Although we believe that adequate provision has been made for such issues, it is possible that their ultimate resolution could affect our earnings.  Conversely, if these issues are resolved favorably in the future, the related provision would be reduced and yield a positive impact on earnings.  We do not expect that the outcome of these audits will significantly impact the financial statements.
Earnings Per Share
Earnings Per Share
Earnings per Share
 
The dilutive effects of performance-based stock awards described in Note 9 are included in the computation of diluted earnings per share at the level the related performance criteria are met through the respective balance sheet date.  At September 30, 2017, 2016, and 2015, potential dilutive effects, representing 600,000, 800,000, and 1,600,000 shares were excluded from the computation of diluted earnings per share as the related performance criteria were not yet met, although we expect to meet various levels of criteria in the future.

 
Year Ended September 30,
 
2017
 
2016
 
2015
Net income(1)
$
126.2

 
$
112.8

 
$
111.4

Weighted average shares outstanding — basic (in millions)
63.6

 
63.3

 
63.2

Effect of dilutive stock options and unvested time-based
restricted stock (in millions)
0.4

 
0.5

 
0.7

Weighted average shares outstanding — diluted (in millions)
64.0

 
63.8

 
63.9

 


 


 


Earnings per share — basic
$
1.99

 
$
1.78

 
$
1.76

Earnings per share — diluted
$
1.97

 
$
1.77

 
$
1.74

 
 
 
 
 
 
Shares with anti-dilutive effect excluded from the computation
of diluted earnings per share (millions)
0.4

 
0.8

 
0.7

 
 
(1) Net income attributable to Hillenbrand
 
Share-Based Compensation
Share-Based Compensation
Share-Based Compensation
 
We have share-based compensation plans under which 12,685,436 shares are registered.  As of September 30, 2017, 2,908,018 shares were outstanding under these plans and 5,672,778 shares had been issued, leaving 4,104,640 shares available for future issuance.  Our primary plan, the Hillenbrand, Inc. Stock Incentive Plan, provides for long-term performance compensation for management and members of the Board of Directors.  Under the Stock Incentive Plan, a variety of discretionary awards for employees and non-employee directors are authorized, including incentive or non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, and bonus stock.  In addition, our Executive Deferred Compensation Program and our Board of Directors’ Deferred Compensation Plan allow for voluntary deferrals of compensation and directors’ fees into restricted stock units. These programs are administered by the Board of Directors and its Compensation and Management Development Committee.
 
Year Ended September 30,
 
2017
 
2016
 
2015
Stock-based compensation cost
$
10.5

 
$
8.5


$
12.0

Less impact of income tax
3.8

 
3.1


4.4

Stock-based compensation cost, net of tax
$
6.7

 
$
5.4


$
7.6


 
The Company realized current tax benefits of $6.0 from the exercise of stock options and the payment of stock awards during 2017.
 
Stock Options — The fair values of option grants are estimated on the date of grant using the Black-Scholes option-pricing model. For grants issued prior to 2017, fair values were estimated using the binomial option-pricing model. The grants are contingent upon continued employment and generally vest over a three-year period.  Expense is recognized on a straight-line basis over the applicable vesting periods. Option terms generally do not exceed 10 years.  The weighted-average fair value of options granted was $8.37, $7.80, and $8.38 per share for 2017, 2016, and 2015.  The following assumptions were used in the determination of fair value:
 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Risk-free interest rate
1.9
%
 
0.5 - 2.2%

 
0.1 - 2.2%

Weighted-average dividend yield
2.2
%
 
2.6
%
 
2.5
%
Weighted-average volatility factor
28.8
%
 
31.0
%
 
31.8
%
Exercise factor(1)
n/a

 
33.6
%
 
33.1
%
Post-vesting termination rate(1)
n/a

 
5.0
%
 
5.0
%
Expected life (years)
5.8

 
4.5

 
4.6


(1) Assumption only applicable to the binomial option-pricing model used in 2016 and 2015

The risk-free interest rate is based upon observed interest rates appropriate for the term of the employee stock options.  The remaining assumptions require significant judgment utilizing historical information, peer data, and future expectations.  The dividend yield is based on the history of dividend payouts and the computation of expected volatility is based on historical stock volatility.  The expected life of employee stock options represents the weighted-average period the stock options are expected to remain outstanding. In 2017, the expected life was based on historical exercise activity. Prior to 2017, the expected life was a derived output of the binomial model.  The post-vesting termination rate and the exercise factor are based on the history of exercises and forfeitures for previous stock options.
 
A summary of outstanding stock option awards as of September 30, 2017 and changes during the year is presented below:
 
 
Number
of Shares
 
Weighted-Average
Exercise Price
Outstanding at September 30, 2016
2,274,596

 
$
25.41

Granted
477,594

 
35.90

Exercised
(800,248
)
 
22.37

Forfeited
(109,606
)
 
34.06

Expired/cancelled
(8,405
)
 
30.44

Outstanding at September 30, 2017
1,833,931

 
$
28.93

 
 
 
 
Exercisable at September 30, 2017
1,103,512

 
$
25.58


 
As of September 30, 2017, there was $2.9 of unrecognized stock-based compensation associated with unvested stock options expected to be recognized over a weighted-average period of 1.8 years.  This unrecognized compensation expense included a reduction for our estimate of potential forfeitures. As of September 30, 2017, the average remaining life of the outstanding stock options was 6.5 years with an aggregate intrinsic value of $18.2.  As of September 30, 2017, the average remaining life of the exercisable stock options was 5.1 years with an aggregate intrinsic value of $14.6.  The total intrinsic value of options exercised by employees and directors during 2017, 2016, and 2015 was $11.2, $7.5, and $2.8.
 
Time-Based Stock Awards and Performance-Based Stock Awards — These awards are consistent with our compensation program’s guiding principles and are designed to (i) align management’s interests with those of shareholders, (ii) motivate and provide incentive to achieve superior results, (iii) maintain a significant portion of at-risk incentive compensation, (iv) delineate clear accountabilities, and (v) ensure competitive compensation.  We believe that our blend of compensation components provides the Company’s management with the appropriate incentives to create long-term value for shareholders while taking thoughtful and prudent risks to grow the value of the Company.  Our stock plan enables us to grant several types of restricted stock unit awards including time-based, performance-based contingent on the creation of shareholder value (“SV”), and performance-based based on a relative total shareholder return formula (“TSR”).

Our time-based stock awards provide an unconditional delivery of shares after a specified period of service. We record expense associated with time-based awards on a straight-line basis over the vesting period, net of estimated forfeitures.

The vesting of the SV awards is contingent upon the creation of shareholder value as measured by the cumulative cash returns and final period net operating profit after tax compared to the established hurdle rate over a three-year period and a corresponding service requirement.  The hurdle rate is a reflection of the weighted-average cost of capital and targeted capital structure.  The number of shares awarded is based upon the fair value of our stock at the date of grant adjusted for the attainment level at the end of the period.  Based on the extent to which the performance criteria are achieved, it is possible for none of the awards to vest or for a range up to the maximum to vest.  We record expense associated with the awards on a straight-line basis over the vesting period based upon an estimate of projected performance.  The actual performance of the Company is evaluated quarterly, and the expense is adjusted according to the new projections.  As a result, depending on the degree to which performance criteria are achieved or projections change, expenses related to the SV awards may become more volatile as we approach the final performance measurement date at the end of the three-year period.
 
The vesting of TSR awards is determined by comparing our total shareholder return during a three-year period to the respective total shareholder returns of companies in a designated performance peer group of 15 companies. Based on the Company’s relative ranking within the performance peer group, it is possible for none of the awards to vest or for a range up to the maximum to vest. The Monte-Carlo simulation method is used to determine fair value of TSR awards at the grant date.  The Monte-Carlo simulation model estimates the fair value of this market-based award based upon the expected term, risk-free interest rate, expected dividend yield, and expected volatility measure for the Company and its peer group. Compensation expense for the TSR awards is recognized over the vesting period regardless of whether the market conditions are expected to be achieved.
 
A summary of the non-vested stock awards as of September 30, 2017 (representing the maximum number of shares that could be vested) and changes during the year is presented below:
 
 
 
Number of Shares
 
Weighted-Average
Grant Date Fair Value
Time-Based Stock Awards 
 
 
Non-vested time-based stock awards at September 30, 2016
 
82,615

 
$
30.80

Granted
 
47,024

 
35.41

Vested
 
(33,388
)
 
31.28

Forfeited
 
(5,977
)
 
32.50

Non-vested time-based stock awards at September 30, 2017
 
90,274

 
$
33.04


 
 
 
Number of Shares
 
Weighted-Average
Grant Date Fair Value
Performance-Based Stock Awards 
 
 
Non-vested performance-based stock awards at September 30, 2016
 
783,436

 
$
33.33

Granted
 
302,407

 
39.72

Vested
 
(203,981
)
 
33.42

Forfeited
 
(284,408
)
 
34.16

Non-vested performance-based stock awards at September 30, 2017
 
597,454

 
$
36.14


 
The total vest date fair value of shares held by Hillenbrand employees and directors which vested during 2017, 2016, and 2015 was $10.9, $7.4, and $7.1 (including dividends).

As of September 30, 2017, $1.2 and $5.4 of unrecognized stock-based compensation was associated with our unvested time-based and performance-based (including SV and TSR) stock awards.  The unrecognized amount of compensation related to the SV awards is based upon projected performance to date. The unrecognized compensation cost of the time-based and performance based awards is expected to be recognized over a weighted-average period of 1.9 and 1.7 years and includes a reduction for an estimate of potential forfeitures.  As of September 30, 2017, the outstanding time-based stock awards and performance-based stock awards had an aggregate fair value of $3.6 and $23.0.  The weighted-average grant date fair value of time-based stock awards was $30.59 and $30.99 per share for 2016 and 2015.  The weighted-average grant date fair value of performance-based stock awards was $33.14 and $33.44 per share for 2016 and 2015.
 
Dividends payable in stock accrue on both time-based and SV awards during the performance period and are subject to the same terms as the original grants.  Dividends do not accrue on TSR awards during the performance period. As of September 30, 2017, a total of 14,138 shares had accumulated on unvested stock awards due to dividend reinvestments and were excluded from the tables above.  The aggregate fair value of these shares at September 30, 2017 was $0.5.
 
Vested Deferred Stock — Certain stock-based compensation programs allow or require deferred delivery of shares after vesting.  As of September 30, 2017, there were 372,221 fully vested deferred shares, which were excluded from the tables above.  The aggregate fair value of these shares at September 30, 2017 was $14.5.
Other Comprehensive Income (Loss)
Other Comprehensive Income (Loss)
Other Comprehensive Income (Loss)
 
Pension and
Postretirement
 
Currency
Translation
 
Net
Unrealized
Gain (Loss) on
Derivative
Instruments
 
Total
Attributable
to
Hillenbrand,
Inc.
 
Noncontrolling
Interests
 
Total
Balance at September 30, 2016
$
(67.5
)
 
$
(61.6
)
 
$
(0.7
)
 
$
(129.8
)
 
 

 
 

Other comprehensive income before reclassifications
 

 
 

 
 

 
 
 
 

 
 

Before tax amount
28.1

 
24.7

 
3.2

 
56.0

 
$
0.2

 
$
56.2

Tax expense
(9.3
)
 
—

 
(1.2
)
 
(10.5
)
 
—

 
(10.5
)
After tax amount
18.8

 
24.7

 
2.0

 
45.5

 
0.2

 
45.7

Amounts reclassified from accumulated other comprehensive income(1)
3.4

 
—

 
(0.3
)
 
3.1

 
—

 
3.1

Net current period other comprehensive income
22.2

 
24.7

 
1.7

 
48.6

 
$
0.2

 
$
48.8

Balance at September 30, 2017
$
(45.3
)
 
$
(36.9
)
 
$
1.0

 
$
(81.2
)
 
 

 
 

 
 
(1)  Amounts are net of tax.
 
Reclassifications out of Accumulated Other Comprehensive Income include:
 
 
Year Ended September 30, 2017
 
Amortization of Pension and 
Postretirement (1)
 
(Gain)/Loss on Derivative
Instruments
 
 
 
Net Loss
Recognized
 
Prior Service Costs
Recognized
 
 
Total
Affected Line in the Consolidated Statement of Operations:
 

 
 

 
 

 
 

Net revenue
$
—

 
$
—

 
$
(0.1
)
 
$
(0.1
)
Cost of goods sold
3.2

 
0.3

 
(0.5
)
 
3.0

Operating expenses
1.4

 
0.1

 
—

 
1.5

Other (expense) income, net
—

 
—

 
0.1

 
0.1

Total before tax
$
4.6

 
$
0.4

 
$
(0.5
)
 
4.5

Tax expense
 

 
 

 
 

 
(1.4
)
Total reclassifications for the period, net of tax
 

 
 

 
 

 
$
3.1

 
 
(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 5).


 
Pension and
Postretirement
 
Currency
Translation
 
Net
Unrealized
Gain (Loss) on
Derivative
Instruments
 
Total
Attributable
to
Hillenbrand,
Inc.
 
Noncontrolling
Interests
 
Total
Balance at September 30, 2015
$
(54.4
)
 
$
(52.1
)
 
$
(1.4
)
 
$
(107.9
)
 
 

 
 
Other comprehensive income before reclassifications
 
 
 
 
 
 
 

 
 

 
 
Before tax amount
(22.7
)
 
(9.5
)
 
0.2

 
(32.0
)
 
$
(0.3
)
 
$
(32.3
)
Tax benefit (expense)
6.5

 
—

 
0.1

 
6.6

 
—

 
6.6

After tax amount
(16.2
)
 
(9.5
)
 
0.3

 
(25.4
)
 
(0.3
)
 
(25.7
)
Amounts reclassified from accumulated other comprehensive income(1)
3.1

 
—

 
0.4

 
3.5

 
—

 
3.5

Net current period other comprehensive income (loss)
(13.1
)
 
(9.5
)
 
0.7

 
(21.9
)
 
$
(0.3
)
 
$
(22.2
)
Balance at September 30, 2016
$
(67.5
)
 
$
(61.6
)
 
$
(0.7
)
 
$
(129.8
)
 
 

 
 
 
 
(1)  Amounts are net of tax.
 
Reclassifications out of Accumulated Other Comprehensive Income include:
 
 
Year Ended September 30, 2016
 
Amortization of Pension and
Postretirement (1)
 
(Gain)/Loss on Derivative
Instruments
 
 
 
Net Loss
Recognized
 
Prior Service Costs
Recognized
 
 
Total
Affected Line in the Consolidated Statement of Operations:
 

 
 

 
 

 
 

Net revenue
$
—

 
$
—

 
$
0.3

 
$
0.3

Cost of goods sold
3.0

 
0.3

 
—

 
3.3

Operating expenses
1.3

 
0.2

 
—

 
1.5

Other (expense) income, net
—

 
—

 
0.4

 
0.4

Total before tax
$
4.3

 
$
0.5

 
$
0.7

 
5.5

Tax expense
 

 
 

 
 

 
(2.0
)
Total reclassifications for the period, net of tax
 

 
 

 
 

 
$
3.5

 
 
(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 5).



 
Pension and
Postretirement
 
Currency
Translation
 
Net
Unrealized
Gain (Loss) on
Derivative
Instruments
 
Total
Attributable
to
Hillenbrand,
Inc.
 
Noncontrolling
Interests
 
Total
Balance at September 30, 2014
$
(46.0
)
 
$
(4.9
)
 
$
(1.3
)
 
$
(52.2
)
 
 

 
 

Other comprehensive income before reclassifications
 

 
 

 
 

 
 

 
 

 
 

Before tax amount
(18.0
)
 
(47.2
)
 
(6.6
)
 
(71.8
)
 
$
(0.4
)
 
$
(72.2
)
Tax benefit
6.1

 
—

 
3.1

 
9.2

 
—

 
9.2

After tax amount
(11.9
)
 
(47.2
)
 
(3.5
)
 
(62.6
)
 
(0.4
)
 
(63.0
)
Amounts reclassified from accumulated other comprehensive income(1)
3.5

 
—

 
3.4

 
6.9

 
—

 
6.9

Net current period other comprehensive loss
(8.4
)
 
(47.2
)
 
(0.1
)
 
(55.7
)
 
$
(0.4
)
 
$
(56.1
)
Balance at September 30, 2015
$
(54.4
)
 
$
(52.1
)
 
$
(1.4
)
 
$
(107.9
)
 
 

 
 

 
 
(1)  Amounts are net of tax.
 
Reclassifications out of Accumulated Other Comprehensive Income include:
 
 
Year Ended September 30, 2015
 
Amortization of Pension and
Postretirement (1)
 
(Gain)/Loss on Derivative
Instruments
 
 
 
Net Loss
Recognized
 
Prior Service Costs
Recognized
 
 
Total
Affected Line in the Consolidated Statement of Operations:
 

 
 

 
 

 
 

Net revenue
$
—

 
$
—

 
$
2.5

 
$
2.5

Cost of goods sold
3.5

 
0.5

 
0.1

 
4.1

Operating expenses
1.3

 
0.3

 
—

 
1.6

Other (expense) income, net
—

 
—

 
1.9

 
1.9

Total before tax
$
4.8

 
$
0.8

 
$
4.5

 
10.1

Tax expense
 

 
 

 
 

 
(3.2
)
Total reclassifications for the period, net of tax
 

 
 

 
 

 
$
6.9

 
 
(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 5).
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
 
Lease Commitments — We lease certain manufacturing facilities, warehouse distribution centers, service centers, and sales offices under operating leases.  Rental expense for 2017, 2016, and 2015 was $23.6, $27.8 and $30.0.  The aggregate future minimum lease payments for operating leases, excluding renewable periods, as of September 30, 2017, were as follows:
 
 
Amount
2018
$
18.5

2019
15.8

2020
12.1

2021
10.4

2022
8.3

Thereafter
35.3

 
$
100.4


 
Litigation
 
General — Like most companies, we are involved from time to time in claims, lawsuits, and government proceedings relating to our operations, including environmental, patent infringement, business practices, commercial transactions, product and general liability, workers’ compensation, auto liability, employment, and other matters.  The ultimate outcome of these matters cannot be predicted with certainty.  An estimated loss from these contingencies is recognized when we believe it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated; however, it is difficult to measure the actual loss that might be incurred related to litigation.  If a loss is not considered probable and/or cannot be reasonably estimated, we are required to make a disclosure if there is at least a reasonable possibility that a significant loss may have been incurred.  Legal fees associated with claims and lawsuits are generally expensed as incurred.
 
Claims other than employment and employment-related matters have deductibles and self-funded retentions up to $0.5 per occurrence or per claim, depending upon the type of coverage and policy period.  Outside insurance companies and third-party claims administrators assist in establishing individual claim reserves, and an independent outside actuary provides estimates of ultimate projected losses, including incurred but not reported claims, which are used to establish reserves for losses.  Claim reserves for employment-related matters are established based upon advice from internal and external counsel and historical settlement information for claims and related fees when such amounts are considered probable of payment.
 
The recorded amounts represent our best estimate of the costs we will incur in relation to such exposures, but it is possible that actual costs will differ from those estimates.
 
Other (Expense) Income, Net
Other (Expense) Income, Net
Other (Expense) Income, Net
 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Equity in net income (loss) of affiliates
$
(0.4
)
 
$
0.3

 
$
(2.1
)
Foreign currency exchange gain (loss), net
(1.4
)
 
0.3

 
(4.4
)
Other, net
(2.4
)
 
(2.3
)
 
(1.4
)
Other (expense) income, net
$
(4.2
)
 
$
(1.7
)
 
$
(7.9
)

  
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
 
Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date.  The authoritative guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.  Observable inputs are from sources independent of the Company.  Unobservable inputs reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances.  The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  The hierarchy is broken down into three levels:
 
Level 1:
Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2:
Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.
Level 3:
Inputs are unobservable for the asset or liability.
 
See the section below titled “Valuation Techniques” for further discussion of how Hillenbrand determines fair value for investments.
 
Carrying
Value at
9/30/2017
 
Fair Value at September 30, 2017
 
 
Using Inputs Considered as:
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 

 
 

 
 

 
 

Cash and cash equivalents
$
66.0

 
$
66.0

 
$
—

 
$
—

Investments in rabbi trust
4.3

 
4.3

 
—

 
—

Derivative instruments
3.8

 
—

 
3.8

 
—

 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

$150 senior unsecured notes
149.5

 
161.2

 
—

 
—

Revolving credit facility
68.0

 
—

 
68.0

 
—

Term loan
148.5

 
—

 
148.5

 
—

$100 Series A Notes
100.0

 
—

 
106.7

 
—

Derivative instruments
2.3

 
—

 
2.3

 
—

 
 
Carrying
Value at
9/30/2016
 
Fair Value at September 30, 2016
 
 
Using Inputs Considered as:
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 

 
 

 
 

 
 

Cash and cash equivalents
$
52.0

 
$
52.0

 
$
—

 
$
—

Investments in rabbi trust
4.0

 
4.0

 
—

 
—

Derivative instruments
1.4

 
—

 
1.4

 
—

 


 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

$150 senior unsecured notes
149.3

 
163.5

 
—

 
—

Revolving credit facility
198.5

 
—

 
198.5

 
—

Term loan
162.0

 
—

 
162.0

 
—

$100 Series A Notes
100.0

 
—

 
110.8

 
—

Derivative instruments
3.3

 
—

 
3.3

 
—


 
Valuation Techniques
 
•
The fair value of the investments in the rabbi trust were based on quoted prices in active markets.  The trust assets consist of participant-directed investments in publicly traded mutual funds.
•
We estimate the fair value of our foreign currency derivatives using industry accepted models.  The significant Level 2 inputs used in the valuation of our derivatives include spot rates, forward rates, and volatility.  These inputs were obtained from pricing services, broker quotes, and other sources.
•
The fair value of the 10-year, 5.5% fixed-rate senior unsecured notes was based on quoted prices in an active market.
•
The fair values of the revolving credit facility, term loan, and Series A Notes were estimated based on internally-developed models, using current market interest rate data for similar issues, as there is no active market for our revolving credit facility, term loan or Series A Notes.
Segment and Geographical Information
Segment and Geographical Information
Segment and Geographical Information
 
We conduct our operations through two reportable business segments: the Process Equipment Group and Batesville.  These reporting segments are determined on the basis of our management structure, and how we internally report financial information used to make operating decisions and evaluate results.
 
We record the direct costs of business operations to the reporting segments, including stock-based compensation, asset impairments, restructuring activities, and business acquisition costs.  Corporate provides management and administrative services to each reporting segment.  These services include treasury management, human resources, legal, business development, and other public company support functions such as internal audit, investor relations, financial reporting, and tax compliance.  With limited exception for certain professional services and back-office and technology costs, we do not allocate these types of corporate expenses to the reporting segments.
 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Net revenue
 

 
 

 
 

Process Equipment Group
$
1,028.2

 
$
964.7

 
$
992.8

Batesville
562.0

 
573.7

 
604.0

Total net revenue
$
1,590.2

 
$
1,538.4

 
$
1,596.8

 
 
 
 
 
 
Adjusted EBITDA
 
 
 

 
 

Process Equipment Group
$
177.7

 
$
160.9

 
$
160.5

Batesville
141.9

 
143.5

 
145.5

Corporate
(38.6
)
 
(37.3
)
 
(37.3
)
 
 
 
 
 
 
Net revenue(1) (2)
 
 
 

 
 

United States
$
896.1

 
$
857.0

 
$
915.0

Germany
425.6

 
403.0

 
420.7

All other foreign business units
268.5

 
278.4

 
261.1

Total revenue
$
1,590.2

 
$
1,538.4

 
$
1,596.8

 
 
 
 
 
 
Depreciation and amortization
 

 
 

 
 

Process Equipment Group
$
41.3

 
$
45.2

 
$
37.2

Batesville
13.8

 
14.1

 
15.8

Corporate
1.5

 
1.1

 
1.3

Total depreciation and amortization
$
56.6

 
$
60.4

 
$
54.3

 
 
(1) We attribute revenue to a geography based upon the location of the business unit that consummates the external sale.
(2) In 2017, the Company corrected its disclosure of net revenue by geography. The effect of this adjustment for the year ended September 30, 2016 was to decrease Germany net revenue by $79.7, from $482.7 as previously disclosed to $403.0 and to increase the All other foreign business units net revenue by $79.7, from $198.7 as previously disclosed to $278.4. The effect for the year ended September 30, 2015 was to decrease Germany net revenue by $56.6, from $477.3 as previously disclosed to $420.7 and to increase the All other foreign business units net revenue by $56.6, from $204.5 as previously disclosed to $261.1. Management performed an assessment of the materiality of this correction and concluded that the net revenue by geography as originally disclosed was not material to previously issued financial statements.
 
 
September 30,
 
2017
 
2016
Total assets assigned
 

 
 

Process Equipment Group
$
1,722.2

 
$
1,694.6

Batesville
203.4

 
211.8

Corporate
30.9

 
53.3

Total assets
$
1,956.5

 
$
1,959.7

 
 
 
 
Tangible long-lived assets, net
 
 
 

United States
$
84.4

 
$
89.5

Germany
39.0

 
35.8

All other foreign business units
27.0

 
27.2

Tangible long-lived assets, net
$
150.4

 
$
152.5



The following schedule reconciles segment adjusted EBITDA to consolidated net income.
 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Adjusted EBITDA:
 

 
 

 
 

Process Equipment Group
$
177.7

 
$
160.9

 
$
160.5

Batesville
141.9

 
143.5

 
145.5

Corporate
(38.6
)
 
(37.3
)
 
(37.3
)
Less:
 

 
 

 
 

Interest income
(0.9
)
 
(1.2
)
 
(1.0
)
Interest expense
25.2

 
25.3

 
23.8

Income tax expense
59.9

 
47.3

 
49.1

Depreciation and amortization
56.6

 
60.4

 
54.3

Business acquisition costs
1.1

 
3.7

 
3.6

Inventory step-up
—

 
2.4

 
—

Restructuring and restructuring related
10.7

 
10.2

 
7.5

Litigation
—

 
—

 
0.5

Pension settlement charge
—

 
—

 
17.7

Trade name impairment
—

 
2.2

 
—

Consolidated net income
$
128.4

 
$
116.8

 
$
113.2

Unaudited Quarterly Financial Information
Unaudited Quarterly Financial Information
Unaudited Quarterly Financial Information
 
 
First
 Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
2017
 

 
 

 
 

 
 

Net revenue
$
356.1

 
$
395.3

 
$
395.9

 
$
442.9

Gross profit
126.0

 
148.6

 
152.4

 
164.3

Net income(1)
21.7

 
33.4

 
32.9

 
38.2

Earnings per share — basic
0.34

 
0.52

 
0.52

 
0.60

Earnings per share —diluted
0.34

 
0.52

 
0.52

 
0.60

 
 
 
 
 
 
 
 
2016
 

 
 

 
 

 
 

Net revenue
$
351.7

 
$
387.0

 
$
371.0

 
$
428.7

Gross profit
128.2

 
142.7

 
143.5

 
156.2

Net income(1)
20.0

 
26.1

 
30.7

 
36.0

Earnings per share — basic
0.32

 
0.41

 
0.49

 
0.57

Earnings per share —diluted
0.31

 
0.41

 
0.48

 
0.56


 
 
(1) Net income attributable to Hillenbrand
Condensed Consolidating Information
Condensed Consolidating Information
Condensed Consolidating Information
 
Certain 100% owned domestic subsidiaries of Hillenbrand fully and unconditionally, jointly and severally, agreed to guarantee all of the indebtedness and guarantee obligations relating to our obligations under our senior unsecured notes.  The following are the condensed consolidating financial statements, including the guarantors, which present the statements of income, balance sheets, and cash flows of (i) the parent holding company, (ii) the guarantor subsidiaries, (iii) the non-guarantor subsidiaries, and (iv) eliminations necessary to present the information for Hillenbrand on a consolidated basis.


Condensed Consolidating Statements of Income

 
Year Ended September 30, 2017
 
Year Ended September 30, 2016
 
Year Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Net revenue
$
—

 
$
901.4

 
$
904.7

 
$
(215.9
)
 
$
1,590.2

 
$
—

 
$
846.8


$
892.8


$
(201.2
)

$
1,538.4


$
—


$
912.0


$
889.0


$
(204.2
)

$
1,596.8

Cost of goods sold
—

 
467.3

 
647.4

 
(115.8
)
 
998.9

 
—

 
428.7


638.4


(99.3
)

967.8


—


475.6


654.5


(103.7
)

1,026.4

Gross profit
—

 
434.1

 
257.3

 
(100.1
)
 
591.3

 
—

 
418.1

 
254.4

 
(101.9
)
 
570.6


—


436.4


234.5


(100.5
)

570.4

Operating expenses
42.4

 
237.8

 
164.3

 
(100.1
)
 
344.4

 
41.8

 
242.0


164.6


(101.9
)

346.5


33.1


244.1


153.9


(100.5
)

330.6

Amortization expense
—

 
13.5

 
15.7

 
—

 
29.2

 
—

 
13.0

 
20.0

 
—

 
33.0

 
0.4

 
11.4

 
16.3

 
—

 
28.1

Pension settlement charge
—

 
—

 
—

 
—

 
—

 
—

 
—


—


—


—


3.3


14.4


—


—


17.7

Interest expense
21.8

 
—

 
3.4

 
—

 
25.2

 
22.7

 
0.2


2.4


—


25.3


20.5


0.8


2.5


—


23.8

Other income (expense), net
(0.6
)
 
(3.4
)
 
(0.2
)
 
—

 
(4.2
)
 
(0.3
)
 
(2.2
)

0.8


—


(1.7
)

(0.2
)

(4.0
)

(3.7
)

—


(7.9
)
Equity in net income (loss) of subsidiaries
164.4

 
8.2

 
—

 
(172.6
)
 
—

 
144.4

 
10.2


—


(154.6
)

—


141.1


12.5


—


(153.6
)

—

Income (loss) before income taxes
99.6

 
187.6

 
73.7

 
(172.6
)
 
188.3

 
79.6

 
170.9


68.2


(154.6
)

164.1


83.6


174.2


58.1


(153.6
)

162.3

Income tax expense (benefit)
(26.6
)
 
65.9

 
20.6

 
—

 
59.9

 
(33.2
)
 
62.4


18.1


—


47.3


(27.8
)

60.5


16.4


—


49.1

Consolidated net income
126.2

 
121.7

 
53.1

 
(172.6
)
 
128.4

 
112.8

 
108.5


50.1


(154.6
)

116.8


111.4


113.7


41.7


(153.6
)

113.2

Less: Net income attributable to noncontrolling interests
—

 
—

 
2.2

 
—

 
2.2

 
—

 
—


4.0


—


4.0


—


—


1.8


—


1.8

Net income (loss)(1)
$
126.2

 
$
121.7

 
$
50.9

 
$
(172.6
)
 
$
126.2

 
$
112.8

 
$
108.5


$
46.1


$
(154.6
)

$
112.8


$
111.4


$
113.7


$
39.9


$
(153.6
)

$
111.4

Consolidated comprehensive income (loss)
$
174.8

 
$
131.8

 
$
86.4

 
$
(215.8
)
 
$
177.2

 
$
90.9

 
$
116.4


$
33.1


$
(145.8
)

$
94.6


$
55.7


$
103.5


$
0.8


$
(102.9
)

$
57.1

Less: Comprehensive income attributable to noncontrolling interests
—

 
—

 
2.4

 
—

 
2.4

 
—

 
—

 
3.7

 
—

 
3.7


—


—


1.4


—

 
1.4

Comprehensive income (loss)(2)
$
174.8

 
$
131.8

 
$
84.0

 
$
(215.8
)
 
$
174.8

 
$
90.9

 
$
116.4


$
29.4


$
(145.8
)

$
90.9


$
55.7


$
103.5


$
(0.6
)

$
(102.9
)

$
55.7

 
(1) Net income attributable to Hillenbrand
(2) Comprehensive income attributable to Hillenbrand
Condensed Consolidating Balance Sheets
 
 
September 30, 2017
 
September 30, 2016
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Cash and cash equivalents
$
0.1


$
4.9


$
61.0


$
—


$
66.0


$
4.4


$
5.6


$
42.0


$
—


$
52.0

Trade receivables, net
—


114.5


91.6


—


206.1


—


120.6


84.4


—


205.0

Receivables from long-term manufacturing contracts
—


8.5


116.7


—


125.2


—


10.6


115.2


—


125.8

Inventories
—


68.2


85.9


(2.5
)

151.6


—


69.8


86.1


(2.8
)

153.1

Deferred income taxes
—


—


—


—


—


1.6


17.4


—


4.9


23.9

Prepaid expense
2.1


7.6


18.5


—


28.2


2.2


6.5


9.5


—


18.2

Intercompany receivables
—


1,050.4


93.9


(1,144.3
)

—


—


1,003.1


97.4


(1,100.5
)

—

Other current assets
0.2


1.6


14.4


0.3


16.5


4.6


1.5


15.9


0.3


22.3

Total current assets
2.4


1,255.7


482.0


(1,146.5
)

593.6


12.8


1,235.1


450.5


(1,098.1
)

600.3

Property, plant and equipment, net
4.7


64.5


81.2


—


150.4


4.9


65.7


81.9


—


152.5

Intangible assets, net
3.6


211.3


309.0


—


523.9


4.1


220.4


317.0


—


541.5

Goodwill
—


283.9


363.6


—


647.5


—


271.8


362.5


—


634.3

Investment in consolidated subsidiaries
2,298.0


664.1


—


(2,962.1
)

—


2,143.4


820.2


—


(2,963.6
)

—

Other assets
20.2


29.0


4.4


(12.5
)

41.1


18.9


22.7


0.8


(11.3
)

31.1

Total Assets
$
2,328.9


$
2,508.5


$
1,240.2


$
(4,121.1
)

$
1,956.5


$
2,184.1


$
2,635.9


$
1,212.7


$
(4,073.0
)

$
1,959.7

 





























Trade accounts payable
$
1.0


$
36.7


$
120.0


$
0.3


$
158.0


$
0.4


$
28.4


$
106.9


$
—


$
135.7

Liabilities from long-term manufacturing contracts and advances
—


26.2


106.1


—


132.3


—


14.0


64.6


—


78.6

Current portion of long-term debt
18.0


—


0.8


—


18.8


13.5


—


0.3


—


13.8

Accrued compensation
7.6


17.9


41.4


—


66.9


4.7


17.3


35.3


—


57.3

Deferred income taxes
—


—


—


—


—


—


—


18.1


4.7


22.8

Intercompany payables
1,142.8


4.0


—


(1,146.8
)

—


1,098.8


4.5


—


(1,103.3
)

—

Other current liabilities
14.0


42.2


79.3


0.2


135.7


13.9


39.8


71.6


0.2


125.5

Total current liabilities
1,183.4


127.0


347.6


(1,146.3
)

511.7


1,131.3


104.0


296.8


(1,098.4
)

433.7

Long-term debt
392.0


—


54.9


—


446.9


416.6


—


178.5


—


595.1

Accrued pension and postretirement healthcare
0.8


33.3


95.5


—


129.6


1.1


127.0


104.6


—


232.7

Deferred income taxes
—


27.5


60.9


(12.7
)

75.7


—


5.8


27.8


(11.0
)

22.6

Other long-term liabilities
1.3


15.3


10.1


—


26.7


2.8


16.3


10.3


—


29.4

Total Liabilities
1,577.5


203.1


569.0


(1,159.0
)

1,190.6


1,551.8


253.1


618.0


(1,109.4
)

1,313.5

Total Hillenbrand Shareholders’ Equity
751.4


2,305.4


656.7


(2,962.1
)

751.4


632.3


2,382.8


580.8


(2,963.6
)

632.3

Noncontrolling interests
—


—


14.5


—


14.5


—


—


13.9


—


13.9

Total Equity
751.4


2,305.4


671.2


(2,962.1
)

765.9


632.3


2,382.8


594.7


(2,963.6
)

646.2

Total Liabilities and Equity
$
2,328.9


$
2,508.5


$
1,240.2


$
(4,121.1
)

$
1,956.5


$
2,184.1


$
2,635.9


$
1,212.7


$
(4,073.0
)

$
1,959.7

Condensed Consolidating Statements of Cash Flows
 
 
Year Ended September 30, 2017
 
Year Ended September 30, 2016
 
Year Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Net cash provided by (used in) operating activities
$
79.9


$
126.7


$
168.3


$
(128.7
)

$
246.2


$
157.8


$
239.9


$
(49.5
)

$
(110.0
)

$
238.2


$
76.0


$
91.0


$
23.6


$
(85.6
)

$
105.0

 












































Investing activities:












 














 


 


 


 


 


 

Capital expenditures
(0.7
)

(9.7
)

(11.6
)

—


(22.0
)

(2.6
)

(8.0
)

(10.6
)

—


(21.2
)

(1.1
)

(14.5
)

(15.4
)

—


(31.0
)
Proceeds from property, plant, and equipment
—


5.3


0.4


—


5.7


—


1.6


0.4


—


2.0


—


2.8


—


—


2.8

Acquisition of business, net of cash acquired
—


—


—


—


—


—


(130.4
)

(105.0
)

—


(235.4
)

—


—


—


—


—

Return of investment capital from affiliates
3.2

 
—

 
—

 
—

 
3.2

 
1.1

 
—

 
—

 
—

 
1.1

 
1.5

 
—

 
—

 
—

 
1.5

Other, net
—


(0.4
)

—


—


(0.4
)

—


—


—


—


—


—


(2.5
)

(0.3
)

—


(2.8
)
Net cash provided by (used in) investing activities
2.5


(4.8
)

(11.2
)

—


(13.5
)

(1.5
)

(136.8
)

(115.2
)

—


(253.5
)

0.4


(14.2
)

(15.7
)

—


(29.5
)
 












































Financing activities:












 














 


 


 


 


 


 

Repayments on term loan
(13.5
)

—


—


—


(13.5
)

(9.0
)

—


—


—


(9.0
)

(9.0
)

—


—


—


(9.0
)
Proceeds from revolving credit facility
289.5


—


529.8


—


819.3


375.5


—


344.3


—


719.8


331.7


—


98.5


—


430.2

Repayments on revolving credit facility
(296.5
)

—


(656.5
)

—


(953.0
)

(457.5
)

—


(169.7
)

—


(627.2
)

(441.8
)

—


(105.2
)

—


(547.0
)
Proceeds from Series A unsecured notes, net of financing costs
—


—


—


—


—


—


—


—


—


—


99.6


—


—


—


99.6

Payment of dividends - intercompany
—


(122.6
)

(6.1
)

128.7


—


—


(104.6
)

(5.4
)

110.0


—


—


(80.3
)

(5.3
)

85.6


—

Payment of dividends on common stock
(51.9
)

—


—


—


(51.9
)

(51.1
)

—


—


—


(51.1
)

(50.4
)

—


—


—


(50.4
)
Repurchases of common stock
(28.0
)

—


—


—


(28.0
)

(21.2
)

—


—


—


(21.2
)

(11.2
)

—


—


—


(11.2
)
Net proceeds (payments) on stock plans
13.7


—


—


—


13.7


11.1


—


—


—


11.1


3.4


—


—


—


3.4

Other, net
—


—


(1.7
)

—


(1.7
)

—


—


(0.8
)

—


(0.8
)

1.2


—


—


—


1.2

Net cash (used in) provided by financing activities
(86.7
)

(122.6
)

(134.5
)

128.7


(215.1
)

(152.2
)

(104.6
)

168.4


110.0


21.6


(76.5
)

(80.3
)

(12.0
)

85.6


(83.2
)
 












































Effect of exchange rates on cash and cash equivalents
—


—


(3.6
)

—


(3.6
)

—


—


(2.6
)

—


(2.6
)

—


—


(2.0
)

—


(2.0
)
 












































Net cash flow
(4.3
)

(0.7
)

19.0


—


14.0


4.1


(1.5
)

1.1


—


3.7


(0.1
)

(3.5
)

(6.1
)

—


(9.7
)
Cash and equivalents at beginning of period
4.4


5.6


42.0


—


52.0


0.3


7.1


40.9


—


48.3


0.4


10.6


47.0


—


58.0

Cash and equivalents at end of period
$
0.1


$
4.9


$
61.0


$
—


$
66.0


$
4.4


$
5.6


$
42.0


$
—


$
52.0


$
0.3


$
7.1


$
40.9


$
—


$
48.3

Restructuring
Restructuring
Restructuring
 
The following schedule details the restructuring charges by segment and the classification of those charges on the income statement.

 
Year Ended September 30,
 
2017
 
2016
 
Cost of goods sold
 
Operating expenses
 
Total
 
Cost of goods sold
 
Operating expenses
 
Total
Process Equipment Group
$
0.5

 
$
1.4

 
$
1.9

 
$
3.0

 
$
4.1

 
$
7.1

Batesville
5.5

 
—

 
5.5

 
0.2

 
1.1

 
1.3

Corporate
—

 
2.1

 
2.1

 
—

 
0.5

 
0.5

Total
$
6.0

 
$
3.5

 
$
9.5

 
$
3.2

 
$
5.7

 
$
8.9



The 2017 charges related primarily to the closure of a plant at Batesville and corporate functional restructuring. The 2016 charges primarily related to severance costs at the Process Equipment Group as we integrated and streamlined the business operations within the segment. At September 30, 2017, $2.7 of restructuring costs were accrued and are expected to be paid over the next twelve months.
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II
HILLENBRAND, INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED SEPTEMBER 30, 2017, 2016, AND 2015
 
 
 
 
 
Additions
 
 
 
 
(in millions)
 
Balance at
Beginning
of Period
 
Charged to Revenue,
Costs, and
Expense
 
Charged to
Other
Accounts
 
Deductions
Net of
Recoveries (a)
 
Balance
at End
of Period
Allowance for doubtful accounts, early pay discounts, and sales returns:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
Year ended September 30, 2017
 
$
21.0

 
$
2.5

 
$
0.1

 
$
(2.0
)
 
$
21.6

Year ended September 30, 2016
 
$
20.0

 
$
3.7

 
$
0.4

 
$
(3.1
)
 
$
21.0

Year ended September 30, 2015
 
$
19.2

 
$
2.4

 
$
(0.2
)
 
$
(1.4
)
 
$
20.0

 
 
 
 
 
 
 
 
 
 
 
Allowance for inventory valuation:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
Year ended September 30, 2017
 
$
18.0

 
$
2.4

 
$
0.8

 
$
(2.2
)
 
$
19.0

Year ended September 30, 2016
 
$
14.8

 
$
4.3

 
$
0.6

 
$
(1.7
)
 
$
18.0

Year ended September 30, 2015
 
$
14.6

 
$
3.4

 
$
(1.2
)
 
$
(2.0
)
 
$
14.8

 
(a)   Reflects the write-off of specific receivables against recorded reserves and other adjustments.
Summary of Significant Accounting Policies (Policies)
Basis of presentation 
Basis of presentation — The accompanying consolidated financial statements include the accounts of Hillenbrand and its subsidiaries.  They also include two subsidiaries where the Company’s ownership percentage is less than 100%.  The portion of the business that is not owned by the Company is presented as noncontrolling interests within equity in the balance sheets.  Income attributable to the noncontrolling interests is separately reported within the statements of income.  All significant intercompany accounts and transactions have been eliminated. 
Use of estimates 
Use of estimates — We prepared the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”).  GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
Foreign currency translation 
Foreign currency translation — The financial statements of our foreign subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for operating results.  Unrealized translation gains and losses are included in accumulated other comprehensive loss in shareholders’ equity.  When a transaction is denominated in a currency other than the subsidiary’s functional currency, we recognize a transaction gain or loss in “other (expense) income, net” when the transaction is settled.
Cash and cash equivalents 
Cash and cash equivalents include short-term investments with original maturities of three months or less.  The carrying amounts reported in the balance sheet for cash and cash equivalents are valued at cost, which approximates their fair value.
Trade receivables 
Trade receivables are recorded at the invoiced amount and generally do not bear interest, unless they become past due.  The allowance for doubtful accounts is a best estimate of the amount of probable credit losses and collection risk in the existing accounts receivable portfolio.  The allowance for cash discounts and sales returns reserve are based upon historical experience and trends.  Account balances are charged against the allowance when we believe it is probable the receivable will not be recovered. We generally hold trade accounts receivable until they are collected.  At September 30, 2017 and 2016, we had reserves against trade receivables of $21.6 and $21.0.
Inventories 
Inventories are valued at the lower of cost or market.  Inventory costs are determined by the last-in, first-out (“LIFO”) method for approximately 32% of inventories at September 30, 2017 and 2016.  Costs of remaining inventories have been determined principally by the first-in, first-out (“FIFO”) and average cost methods.  If the FIFO method of inventory accounting, which approximates current cost, had been used for inventory accounted for using the LIFO method, that inventory would have been approximately $15.0 and $15.2 higher than reported at September 30, 2017 and 2016.
Property, plant, and equipment 
Property, plant, and equipment are carried at cost less accumulated depreciation. Depreciation is computed using principally the straight-line method based on estimated useful lives of three to 50 years for buildings and improvements and three to 25 years for machinery and equipment. Maintenance and repairs are expensed as incurred. Upon disposal or retirement, the cost and accumulated depreciation of assets are eliminated. Any gain or loss is reflected in the Company’s income from operations. We review these assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows relating to the asset are less than its carrying amount. The impairment loss is measured as the amount by which the carrying amount of an asset exceeds its fair value. Total depreciation expense for 2017, 2016, and 2015 was $25.4, $25.6, and $26.2.
Intangible assets 
Intangible assets are stated at the lower of cost or fair value.  With the exception of certain trade names, intangible assets are amortized on a straight-line basis over periods ranging from three to 21 years, representing the period over which we expect to receive future economic benefits from these assets.  We assess the carrying value of trade names annually, or more often if events or changes in circumstances indicate there may be impairment. Estimated amortization expense related to intangible assets for the next five years is: $32.2 in 2018, $32.0 in 2019, $31.4 in 2020, $30.4 in 2021, and $29.3 in 2022.
 
 
September 30, 2017
 
September 30, 2016
 
Cost
 
Accumulated
Amortization
 
Cost
 
Accumulated
Amortization
Finite-lived assets:
 

 
 

 
 

 
 

Trade names
$
0.2

 
$
(0.1
)
 
$
0.2

 
$
(0.1
)
Customer relationships
468.7

 
(125.9
)
 
459.5

 
(100.7
)
Technology, including patents
80.7

 
(39.9
)
 
77.9

 
(33.3
)
Software
48.3

 
(41.5
)
 
47.4

 
(39.8
)
Other
0.2

 
(0.2
)
 
0.4

 
(0.3
)
 
598.1

 
(207.6
)
 
585.4

 
(174.2
)
Indefinite-lived assets:
 

 
 

 
 

 
 

Trade names
133.4

 
—

 
130.3

 
—

 
 
 
 
 
 
 
 
Total
$
731.5

 
$
(207.6
)
 
$
715.7

 
$
(174.2
)


In the third quarter of 2016, the Company recorded a trade name impairment charge of $2.2, included in operating expenses, on two trade names related to the Process Equipment Group segment. The decline in the estimated fair value of these trade names was largely driven by the decreased demand for equipment and parts used in coal mining and coal power. As of September 30, 2017, we had approximately $13 of trade name book value in the Process Equipment Group segment’s reporting units most significantly impacted by demand for coal mining and coal power.

As a result of the required annual impairment assessment performed in the third quarter of 2017, the fair value of trade names was determined to meet or exceed the carrying value for all trade names, resulting in no impairment to trade names.
Goodwill 
Goodwill is not amortized, but is subject to annual impairment tests.  Goodwill has been assigned to reporting units.  We assess the carrying value of goodwill annually, or more often if events or changes in circumstances indicate there may be impairment.  Impairment testing is performed at a reporting unit level.
 
Process
Equipment
Group
 
Batesville
 
Total
Balance September 30, 2015
$
535.7

 
$
8.3

 
$
544.0

Acquisitions
96.4

 
—

 
96.4

Adjustments
(0.3
)
 
—

 
(0.3
)
Foreign currency adjustments
(5.8
)
 
—

 
(5.8
)
Balance September 30, 2016
626.0

 
8.3

 
634.3

Acquisitions, including purchase price adjustments
(0.9
)
 
—

 
(0.9
)
Foreign currency adjustments
14.1

 
—

 
14.1

Balance September 30, 2017
$
639.2

 
$
8.3

 
$
647.5



As a result of the required annual impairment assessment performed in the third quarter of 2017, the Company tested the recoverability of its goodwill, and in all reporting units, the fair value of goodwill was determined to exceed the carrying value, resulting in no impairment of goodwill. Since the fair value of each reporting unit exceeded its carrying value, the second step of the goodwill impairment test was not necessary. The fair value of the reporting unit in the Process Equipment Group segment that is most directly impacted by demand in domestic coal mining and coal power exceeded its carrying value by less than 10%. The carrying value of goodwill at September 30, 2017 for this reporting unit was $71.3. In the event that the assumptions used (e.g., order backlog, revenue and profit growth rates, discount rate, industry valuation multiples) for this reporting unit are not consistent with actual performance in 2018, we may be required to perform an interim impairment analysis with respect to the carrying value of goodwill for this reporting unit prior to our annual test, and based on the outcome of that analysis, could be required to take a non-cash impairment charge as a result of any such test.
Investments 
Investments — Our investment portfolio consists of investments in private equity limited partnerships.  The carrying value of the portfolio was $1.4 and $7.6 at September 30, 2017 and 2016 and is included in other assets on the balance sheets.  The fair value of these investments is not readily available. We use the equity method of accounting for substantially all private equity limited partnerships, with earnings or losses reported in “other (expense) income, net” in the income statements. We regularly evaluate all investments for possible impairment.
Environmental liabilities 
Environmental liabilities — Expenditures that relate to an existing condition caused by past operations which do not contribute to current or future revenue generation are expensed.  A reserve is established when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.  These reserves are determined without consideration of possible loss recoveries.  Based on consultations with an environmental engineer, the range of liability is estimated based on current interpretations of environmental laws and regulations.  A determination is made of the specific measures that are believed to be required to remediate the site, the estimated total cost to carry out the remediation plan, and the periods in which we will make payments toward the remediation plan.  We do not make an estimate of inflation for environmental matters because the number of sites is small, the magnitude of costs to execute remediation plans is not significant, and the estimated time frames to remediate sites are not believed to be lengthy.
 
Specific costs included in environmental expense and reserves include site assessment, remediation plan development, clean-up costs, post-remediation expenditures, monitoring, fines, penalties, and legal fees.  The amount reserved represents the expected undiscounted future cash outflows associated with such plans and actions and is not significant to Hillenbrand.
Self-insurance 
Self-insurance — We are self-funded up to certain limits for product and general liability, workers compensation, and auto liability insurance programs, as well as certain employee health benefits including medical, drug, and dental.  These policies have deductibles and self-funded retentions up to $0.5 per occurrence, depending upon the type of coverage and policy period.  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.  The outside actuarial analysis is based on historical information along with certain assumptions about future events.  These reserves are classified as other current and other long-term liabilities within the balance sheets.
Treasury stock 
Treasury stock consists of our common shares that have been issued but subsequently reacquired.  We account for treasury stock purchases under the cost method.  When these shares are reissued, we use an average-cost method to determine cost.  Proceeds in excess of cost are credited to additional paid-in capital.
 
On July 24, 2008, our Board of Directors approved a stock repurchase program for the repurchase of up to $100.0 of our common stock. On February 23, 2017, our Board of Directors approved an increase of $100.0 to the existing stock repurchase program. The authorization brings the maximum cumulative repurchase authorization up to $200.0. The repurchase program has no expiration date, but may be terminated by the Board of Directors at any time. As of September 30, 2017, we had repurchased approximately 3,600,000 shares for approximately $99.4 in the aggregate. Such shares were classified as treasury stock. We repurchased approximately 778,000 shares of our common stock during 2017, at a total cost of approximately $28.0. In 2017 and 2016, approximately 700,000 shares and 800,000 shares were issued from treasury stock under our stock compensation programs.  At September 30, 2017, we had approximately $100.6 remaining for share repurchases under the existing Board authorization.
Preferred stock 
Preferred stock — The Company has authorized 1,000,000 shares of preferred stock (no par value), of which no shares were issued at September 30, 2017 and 2016.
Accumulated other comprehensive loss 
Accumulated other comprehensive loss included all changes in Hillenbrand shareholders’ equity during a period except those that resulted from investments by or distributions to our shareholders.
Revenue recognition 
Revenue recognition — Net revenue includes gross revenue less sales discounts, customer rebates, sales incentives, and product returns, all of which require us to make estimates for the portion of these allowances that have yet to be credited or paid to our customers.  We estimate these allowances based upon historical rates and projections of customer purchases toward contractual rebate thresholds.
 
A portion of Hillenbrand’s revenue is derived from long-term manufacturing contracts.  The majority of this revenue is recognized based on the percentage-of-completion method. Under this method, revenue is recognized based upon the costs incurred to date as compared to the total estimated project costs.  Approximately 25%, 24%, and 25% of Hillenbrand’s revenue was attributable to these long-term manufacturing contracts for 2017, 2016, and 2015.
 
Accounting for these contracts involves management judgment in estimating total contract revenue and cost.  Contract revenues are largely determined by negotiated contract prices and quantities, modified by our assumptions regarding contract options, change orders, and incentive and award provisions associated with technical performance clauses.  Contract costs are incurred over longer periods of time and, accordingly, the estimation of these costs requires management judgment.  Cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance trends, and other economic projections.  Significant factors that influence these estimates include inflationary trends, technical and schedule risk, internal and subcontractor performance trends, business volume assumptions, asset utilization, and anticipated labor agreements.  Revenue and cost estimates are regularly monitored and revised based on changes in circumstances.  Anticipated losses on long-term contracts are recognized immediately when such losses become evident.  We maintain financial controls over the customer qualification, contract pricing, and estimation processes to reduce the risk of contract losses.
 
Revenue for components, most replacement parts, and service is recognized when title and risk of loss passes to the customer.
Cost of goods sold 
Cost of goods sold consists primarily of purchased material costs, fixed manufacturing expense, variable direct labor, and overhead costs.  It also includes costs associated with the distribution and delivery of products.
Research and development costs 
Research and development costs are expensed as incurred as a component of operating expenses and were $11.9, $12.6, and $12.7 for 2017, 2016, and 2015.
Warranty costs 
Warranty costs — We provide for the estimated warranty cost of a product at the time revenue is recognized.  Warranty expense is accrued based upon historical information and may also include specific provisions for known conditions.  Warranty obligations are affected by actual product performance and by material usage and service costs incurred in making product corrections.  Our warranty provision takes into account the best estimate of amounts necessary to settle future and existing claims on products sold.  The Process Equipment Group generally offers a one to two-year warranty on a majority of its products.  It engages in extensive product quality programs and processes in an effort to minimize warranty obligations, including active monitoring and evaluation of the quality of component suppliers.  Warranty reserves were $15.8 and $16.6 for 2017 and 2016.  Warranty costs were $4.1, $4.3, and $4.0 for 2017, 2016, and 2015
Income taxes 
Income taxes — We establish deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.  Deferred tax assets and liabilities are determined based on the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.  The majority of the cash at our foreign subsidiaries represents earnings considered to be permanently reinvested for which deferred taxes have not been provided, as we do not intend, nor do we foresee a need, to repatriate these funds.
 
We have a variety of deferred income tax assets in numerous tax jurisdictions.  The recoverability of these deferred income tax assets is assessed periodically and valuation allowances are recognized if it is determined that it is more likely than not that the benefits will not be realized.  When performing this assessment, we consider future taxable income, the reversal of existing temporary differences, and tax planning strategies.  We account for accrued interest and penalties related to unrecognized tax benefits in income tax expense.
Derivative financial instruments 
Derivative financial instruments — The Company has hedging programs in place to manage its currency exposures.  The objectives of our hedging programs are to mitigate exposures in gross margin and non-functional-currency-denominated assets and liabilities. Under these programs, we use derivative financial instruments to manage the economic impact of fluctuations in currency exchange rates.  These include foreign currency exchange forward contracts, which generally have terms up to 24 months.   

The Company has interest rate and cross currency swaps in place to manage or hedge the risks associated with our indebtedness and interest payments. Our objectives in using these swaps are to add stability to interest expense and to manage our exposure to interest rate movements.

We require that hedging derivative instruments be highly effective in reducing the risk exposure that they are designated to hedge. As a result, there was no significant ineffectiveness from any of our derivative activities during the period. We formally designate any instrument that meets these hedging criteria as a hedge.

The aggregate notional amount of all derivative instruments was $262.4 and $208.3 at September 30, 2017 and 2016.

We measure all derivative instruments at fair value and report them on our balance sheets as assets or liabilities.  Contracts designated as hedges for customer orders or intercompany purchases have an offsetting tax-adjusted amount in accumulated other comprehensive gain (loss).  Foreign exchange contracts designated to hedge foreign currency exposures within our balance sheet have an offsetting amount recorded in “Other (expense) income, net”. 

The carrying value of all of derivative instruments at fair value resulted in assets of $3.8 and $1.4 (included in other current assets and other assets) and liabilities of $2.3 and $3.3 (included in other current liabilities) at September 30, 2017 and 2016.  See Note 13 for additional information on the fair value of our derivative instruments.
 
Changes in the fair value of derivatives are accounted for depending on the intended use of the derivative, designation of the hedging relationship, and whether or not the criteria to apply hedge accounting has been satisfied.  Gains and losses on derivative instruments reported in accumulated other comprehensive gain (loss) are subsequently included in earnings in the periods in which earnings are affected by the hedged item.  The amounts recognized in accumulated other comprehensive income (loss) and subsequently through earnings were not significant from 2015 through 2017.  Net gains and losses on foreign exchange contracts offset foreign exchange effects on the hedged items.  The Company does not enter into derivative contracts for purposes of speculation.
Business acquisitions and related business acquisition and integration costs 
Business acquisitions and related business acquisition and integration costs — Assets and liabilities associated with business acquisitions are recorded at fair value, using the acquisition method of accounting.  We allocate the purchase price of acquisitions based upon the fair value of each component, which may be derived from observable or unobservable inputs and assumptions.  We may utilize third-party valuation specialists to assist us in this allocation.  Initial purchase price allocations are preliminary and subject to revision within the measurement period, generally not to exceed one year from the date of acquisition.
 
Business acquisition and integration costs are expensed as incurred and are reported as a component of cost of goods sold, operating expenses, interest expense, and “other (expense) income, net,” depending on the nature of the cost.  We define these costs to include finder’s fees, advisory, legal, accounting, valuation, and other professional or consulting fees, as well as travel associated with the evaluation and effort to acquire specific businesses.  Business acquisition and integration costs also include costs associated with acquisition tax planning, retention bonuses, and related integration costs.  These costs exclude the ongoing expenses of our business development department.
Restructuring costs 
Restructuring costs may occur when we take action to exit or significantly curtail a part of our operations or change the deployment of assets or personnel.  A restructuring charge can consist of an impairment or accelerated depreciation of effected assets, severance costs associated with reductions to the workforce, costs to terminate an operating lease or contract, and charges for legal obligations for which no future benefit will be derived.
Recently adopted accounting standards 
Recently adopted accounting standards — In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.  ASU 2014-12 states that a performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition.  ASU 2014-12 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern. ASU 2014-15 provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. ASU 2014-15 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have an impact on our consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01, Income Statement—Extraordinary and Unusual Items. ASU 2015-01 eliminates from GAAP the concept of extraordinary items. ASU 2015-01 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis. The new standard amends the consolidation guidance in ASC 810 and significantly changes the consolidation analysis required under current generally accepted accounting principles. ASU 2015-02 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest. ASU 2015-03 simplifies the presentation of debt issuance costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. This standard permits an entity to defer and present debt issuance costs related to line-of-credit arrangements as an asset and to subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. These new standards do not affect the recognition and measurement of debt issuance costs. ASU 2015-03 and ASU 2015-15 became effective and were retrospectively adopted for our fiscal year beginning October 1, 2016. The retrospective adoption resulted in $1.2 of debt issuance costs being reclassified from other assets to a reduction of the carrying value of long-term debt as of September 30, 2016. Debt issuance costs related to line-of-credit arrangements were not reclassified.

In April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software. ASU 2015-05 helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance as to whether an arrangement includes the sale or license of software. ASU 2015-05 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, Business Combinations. ASU 2015-16 simplifies the accounting for adjustments made to provisional amounts. The amendments in ASU 2015-16 require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is also required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition, an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 became effective and was adopted for our fiscal year beginning October 1, 2016. The adoption of this standard did not have a significant impact on our consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes. ASU 2015-17 requires that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position in order to simplify the presentation of deferred income taxes. ASU 2015-17 was early adopted for our fiscal year beginning October 1, 2016.  The adoption of this standard resulted in a reclassification of $7.4 from current deferred income taxes to non-current deferred income taxes on the Consolidated Balance Sheets as of September 30, 2017. No periods prior to adoption were retrospectively adjusted.
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] 
Recently issued accounting standards — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires entities to recognize revenue in a way that depicts 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 FASB has also issued several updates to ASU 2014-09. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires significant disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. ASU 2014-09 will be effective for our fiscal year beginning October 1, 2018, including interim periods within that reporting period, and allows for either full retrospective adoption or modified retrospective adoption, with early adoption permitted on October 1, 2017.

We have begun the assessment process and continue to evaluate the impact that ASU 2014-09 will have on our consolidated financial statements and financial reporting processes, including evaluating new disclosure requirements. Based on our initial assessment, which included a comparison of our existing accounting policies and practices against the new standard and a review of contracts active during and through the end of 2016, we believe the key areas of consideration for our financial statements include percentage-of-completion accounting, separate performance obligations, and related revenue recognized over time. Based on our initial assessment, we also expect to adopt this new standard using the modified retrospective method, which will result in a cumulative effect adjustment as of the date of adoption, and we currently do not expect the adoption of ASU 2014-09 to have a material impact on our results of operations, financial condition, or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires lessees to recognize a right of use asset and related lease liability for leases that have terms of more than twelve months. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance, with the classifications based on criteria that are similar to those applied under the current lease guidance, without the explicit bright lines. ASU 2016-02 will be effective for our fiscal year beginning on October 1, 2019, with early adoption permitted. We are currently evaluating the impact that ASU 2016-02 will have on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Statements." ASU 2016-13 replaces the current incurred loss impairment model with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. ASU 2016-13 will be effective for our fiscal year beginning on October 1, 2020, with early adoption permitted for our fiscal year beginning October 1, 2019. We are currently evaluating the impact that ASU 2016-13 will have on our consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-17 will be effective for our fiscal year beginning on October 1, 2018, with early adoption permitted. We expect the adoption of ASU 2016-18 to have a financial statement presentation and disclosure impact only.

In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business. ASU 2017-01 assists entities in determining whether a transaction involves an asset or a business. Specifically, it states that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. If this initial test is not met, a set cannot be considered a business unless it includes an input and a substantive process that together significantly contribute to the ability to create output.  ASU 2017-01 will be effective for our fiscal year beginning on October 1, 2018, with early adoption permitted. We are currently evaluating ASU 2017-01, but do not expect a significant impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 from the goodwill impairment test and modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value.  ASU 2017-04 will be effective for our fiscal year beginning on October 1, 2020, with early adoption permitted. We are currently evaluating the impact that ASU 2017-04 will have on our consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 states that an employer must report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period and present the other components of net benefit cost (as defined in paragraphs 715-30-35-4 and 715-60-35-9) in the income statement separately from the service cost component and outside a subtotal of income from operations (if one is presented). In addition, ASU 2017-07 limits the capitalization of compensation costs to the service cost component only (if capitalization is appropriate). ASU 2017-07 will be effective for our fiscal year beginning on October 1, 2018, with early adoption permitted. We are currently evaluating the impact that ASU 2017-07 will have on our consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications (in accordance with Topic 718). The new guidance will provide relief to entities that make non-substantive changes to share-based payment awards. ASU 2017-09 will be effective for our fiscal year beginning on October 1, 2018, with early adoption permitted. The amendment would be applied prospectively to an award modified on or after the adoption date. We do not expect ASU 2017-09 to have a significant impact on our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both nonfinancial and financial risk components, and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. In addition, this ASU makes certain targeted improvements to simplify the application of hedge accounting guidance.  ASU 2017-12 will be effective for our fiscal year beginning on October 1, 2019, with early adoption permitted. The amendment would be applied to hedging relationships existing on the date of adoption and the effect of adoption would be reflected as of the beginning of the fiscal year of adoption (that is, the initial application date). We are currently evaluating the impact that ASU 2017-12 will have on our consolidated financial statements.

Summary of Significant Accounting Policies (Tables)
Schedule of inventories 
 
September 30,
 
2017
 
2016
Raw materials and components
$
52.6

 
$
51.4

Work in process
55.4

 
54.0

Finished goods
43.6

 
47.7

Total inventories
$
151.6

 
$
153.1

Schedule of carrying value of property, plant and equipment 
 
September 30, 2017
 
September 30, 2016
 
Cost
 
Accumulated
Depreciation
 
Cost
 
Accumulated
Depreciation
Land and land improvements
$
15.9

 
$
(3.5
)
 
$
17.3

 
$
(3.6
)
Buildings and building equipment
110.5

 
(68.0
)
 
105.6

 
(64.3
)
Machinery and equipment
335.8

 
(240.3
)
 
329.0

 
(231.5
)
Total
$
462.2

 
$
(311.8
)
 
$
451.9

 
$
(299.4
)
Schedule of intangible assets and related amortization 
 
September 30, 2017
 
September 30, 2016
 
Cost
 
Accumulated
Amortization
 
Cost
 
Accumulated
Amortization
Finite-lived assets:
 

 
 

 
 

 
 

Trade names
$
0.2

 
$
(0.1
)
 
$
0.2

 
$
(0.1
)
Customer relationships
468.7

 
(125.9
)
 
459.5

 
(100.7
)
Technology, including patents
80.7

 
(39.9
)
 
77.9

 
(33.3
)
Software
48.3

 
(41.5
)
 
47.4

 
(39.8
)
Other
0.2

 
(0.2
)
 
0.4

 
(0.3
)
 
598.1

 
(207.6
)
 
585.4

 
(174.2
)
Indefinite-lived assets:
 

 
 

 
 

 
 

Trade names
133.4

 
—

 
130.3

 
—

 
 
 
 
 
 
 
 
Total
$
731.5

 
$
(207.6
)
 
$
715.7

 
$
(174.2
)
Changes in the carrying amount of goodwill 
 
Process
Equipment
Group
 
Batesville
 
Total
Balance September 30, 2015
$
535.7

 
$
8.3

 
$
544.0

Acquisitions
96.4

 
—

 
96.4

Adjustments
(0.3
)
 
—

 
(0.3
)
Foreign currency adjustments
(5.8
)
 
—

 
(5.8
)
Balance September 30, 2016
626.0

 
8.3

 
634.3

Acquisitions, including purchase price adjustments
(0.9
)
 
—

 
(0.9
)
Foreign currency adjustments
14.1

 
—

 
14.1

Balance September 30, 2017
$
639.2

 
$
8.3

 
$
647.5

Schedule of changes in accumulated other comprehensive income (loss) by component 
 
September 30,
 
2017
 
2016
Currency translation
$
(36.9
)
 
$
(61.6
)
Pension and postretirement (net of taxes of $23.4 and $34.1)
(45.3
)
 
(67.5
)
Unrealized gain (loss) on derivative instruments (net of taxes of $0.8 and $0.5)
1.0

 
(0.7
)
Accumulated other comprehensive loss
$
(81.2
)
 
$
(129.8
)
Financing Agreements (Tables)
Schedule of borrowings under financing agreements 
 
September 30,
 
2017
 
2016
$700 revolving credit facility (excluding outstanding letters of credit)
$
68.0

 
$
198.5

$180 term loan
148.5

 
162.0

$150 senior unsecured notes, net of discount (1)
148.9

 
148.5

$100 Series A Notes (2)
99.7

 
99.6

Other
0.6

 
0.3

Total debt
465.7

 
608.9

Less: current portion
18.8

 
13.8

Total long-term debt
$
446.9

 
$
595.1

 
 
 
 
(1) Includes debt issuance costs of $0.6 and $0.8 at September 30, 2017 and September 30, 2016.
(2) Includes debt issuance costs of $0.3 and $0.4 at September 30, 2017 and September 30, 2016.
Summary of scheduled maturities of long-term debt 
The following table summarizes the scheduled maturities of long-term debt for 2018 through 2022:
 
 
Amount
2018
$
18.0

2019
18.0

2020
330.5

2021
—

2022
—

Retirement Benefits (Tables)
Components of net pension costs 
The components of net pension costs under defined benefit retirement plans were:
 
 
U.S. Pension Benefits
Year Ended September 30,
 
Non-U.S. Pension Benefits
Year Ended September 30,
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Service cost
$
3.6

 
$
3.9

 
$
4.3

 
$
1.3

 
$
1.8

 
$
1.7

Interest cost
8.8

 
9.5

 
14.4

 
0.7

 
1.8

 
2.8

Expected return on plan assets
(13.7
)
 
(9.7
)
 
(14.3
)
 
(0.5
)
 
(1.0
)
 
(1.0
)
Amortization of unrecognized prior service cost, net
0.4

 
0.6

 
0.9

 
0.1

 
0.1

 
—

Amortization of actuarial loss
3.6

 
3.8

 
5.3

 
1.1

 
0.3

 
0.1

Settlement expense
0.1

 
—

 
17.7

 
0.6

 
0.5

 
—

Net pension costs
$
2.8

 
$
8.1

 
$
28.3

 
$
3.3

 
$
3.5

 
$
3.6

Schedule of changes in projected benefit obligations, plan assets, and funded status, along with amounts recognized in the consolidated balance sheets for defined benefit retirement plans 
The change in benefit obligation and funded status of the Company’s defined benefit retirement plans were: 

 
U.S. Pension Benefits
September 30,
 
Non-U.S. Pension Benefits
September 30,
 
2017
 
2016
 
2017
 
2016
Change in benefit obligation:
 

 
 

 
 

 
 

Projected benefit obligation at beginning of year
$
294.2

 
$
272.2

 
$
140.9

 
$
134.2

Service cost
3.6

 
3.9

 
1.3

 
1.8

Interest cost
8.8

 
9.5

 
0.7

 
1.8

Actuarial (gain) loss
(6.9
)
 
19.7

 
(9.5
)
 
11.7

Benefits paid
(11.0
)
 
(11.1
)
 
(5.7
)
 
(8.8
)
Gain due to settlement
(6.9
)
 
—

 
(1.2
)
 
—

Employee contributions
—

 
—

 
0.8

 
0.7

Effect of exchange rates on projected benefit obligation
—

 
—

 
6.1

 
(0.5
)
Projected benefit obligation at end of year
281.8

 
294.2

 
133.4

 
140.9

 
 
 
 
 
 
 
 
Change in plan assets:
 

 
 

 
 

 
 

Fair value of plan assets at beginning of year
173.7

 
158.9

 
29.7

 
29.5

Actual return on plan assets
17.9

 
19.1

 
0.3

 
0.5

Employee and employer contributions
81.8

 
6.8

 
8.5

 
8.5

Benefits paid
(11.0
)
 
(11.1
)
 
(5.7
)
 
(8.8
)
Gain due to settlement
—

 
—

 
(1.6
)
 
—

Effect of exchange rates on plan assets
—

 
—

 
0.2

 
—

Fair value of plan assets at end of year
262.4

 
173.7

 
31.4

 
29.7

 
 
 
 
 
 
 
 
Funded status:
 

 
 

 
 

 
 

Plan assets less than benefit obligations
$
(19.4
)
 
$
(120.5
)
 
$
(102.0
)
 
$
(111.2
)
 
 
 
 
 
 
 
 
Amounts recorded in the consolidated balance sheets:
 

 
 

 
 

 
 

Prepaid pension costs, non-current
$
8.2

 
$
—

 
$
0.4

 
$
—

Accrued pension costs, current portion
(1.8
)
 
(1.8
)
 
(6.8
)
 
(6.6
)
Accrued pension costs, long-term portion
(25.8
)
 
(118.7
)
 
(95.6
)
 
(104.6
)
Plan assets greater (less) than benefit obligations
$
(19.4
)
 
$
(120.5
)
 
$
(102.0
)
 
$
(111.2
)
Schedule of accumulated benefit obligation in excess of plan assets 
Selected information for plans with accumulated benefit obligations in excess of plan assets was:
 
 
U.S. Pension Benefits
September 30,
 
Non-U.S. Pension Benefits
September 30,
 
2017
 
2016
 
2017
 
2016
Projected benefit obligation
$
27.7

 
$
294.2

 
$
102.0

 
$
108.6

Accumulated benefit obligation
27.6

 
276.5

 
102.0

 
108.6

Fair value of plan assets
—

 
173.7

 
—

 
—

Summary of actuarial assumptions 
The weighted-average assumptions used in accounting for defined benefit retirement plans were:
 
 
U.S. Pension Benefits
Year Ended September 30,
 
Non-U.S. Pension Benefits
Year Ended September 30,
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Discount rate for obligation, end of year
3.7
%
 
3.6
%
 
4.4
%
 
1.1
%
 
1.0
%
 
2.1
%
Discount rate for expense, during the year
3.5
%
 
4.4
%
 
4.4
%
 
0.5
%
 
1.7
%
 
1.9
%
Expected rate of return on plan assets
5.6
%
 
5.5
%
 
6.3
%
 
2.0
%
 
2.0
%
 
3.5
%
Rate of compensation increase
3.0
%
 
3.0
%
 
3.0
%
 
2.0
%
 
2.0
%
 
0.2
%
Schedule of fair value of pension plan assets by asset category 
 
Fair Value at September 30, 2017 Using Inputs Considered as:
 
Total
 
Level 1
 
Level 2
 
Level 3
Non-U.S. Pension Plans
 

 
 

 
 

 
 

Cash equivalents
$
5.2

 
$
5.2

 
$
—

 
$
—

Equity securities
6.8

 
6.8

 
—

 
—

Other types of investments:
 
 
 
 
 
 
 
Government index funds
5.7

 
5.7

 
—

 
—

Corporate bond funds
9.8

 
9.8

 
—

 
—

Real estate and real estate funds
2.0

 
—

 
—

 
2.0

Other
1.9

 
—

 
1.9

 
—

Total Non-U.S. pension plan assets
$
31.4

 
$
27.5

 
$
1.9

 
$
2.0

 
 
Fair Value at September 30, 2016 Using Inputs Considered as:
 
Total
 
Level 1
 
Level 2
 
Level 3
Non-U.S. Pension Plans
 

 
 

 
 

 
 

Cash equivalents
$
4.1

 
$
4.1

 
$
—

 
$
—

Equity securities
6.5

 
6.5

 
—

 
—

Other types of investments:
0

 
0

 
0

 
0

Government index funds
5.8

 
5.8

 
—

 
—

Corporate bond funds
9.7

 
9.7

 
—

 
—

Real estate and real estate funds
2.0

 
—

 
—

 
2.0

Other
1.6

 
—

 
1.6

 
—

Total Non-U.S. pension plan assets
$
29.7

 
$
26.1

 
$
1.6

 
$
2.0

Schedule of estimated future benefit payments 
The following represents estimated future benefit payments, including expected future service, which are expected to be paid from plan assets or Company contributions as necessary:
 
 
U.S. Pension Plans
Projected Pension
Benefits Payout
 
Non-U.S. Pension Plans
Projected Pension
Benefits Payout
2018
$
12.9

 
$
8.0

2019
13.4

 
7.7

2020
14.1

 
7.9

2021
14.8

 
7.2

2022
15.4

 
7.3

2023 - 2027
82.4

 
34.4

Schedule of changes in projected benefit obligations, plan assets, and funded status, along with amounts recognized in the consolidated balance sheets for defined benefit retirement plans 
 
September 30,
 
2017
 
2016
Benefit obligation at beginning of year
$
10.3

 
$
10.3

Interest cost
0.2

 
0.3

Service cost
0.4

 
0.4

Actuarial (gain) loss
(0.9
)
 
0.2

Net benefits paid
(1.0
)
 
(0.9
)
Benefit obligation at end of year
$
9.0

 
$
10.3

 
 
 
 
Amounts recorded in the balance sheets:
 

 
 

Accrued postretirement benefits, current portion
$
0.8

 
$
0.9

Accrued postretirement benefits, long-term portion
8.2

 
9.4

Net amount recognized
$
9.0

 
$
10.3

Schedule of weighted average assumptions under the postretirement healthcare plan 
The weighted-average assumptions used in revaluing our obligation under the postretirement healthcare plan were:
 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Discount rate for obligation
3.3
%
 
3.1
%
 
3.7
%
Healthcare cost rate assumed for next year
7.6
%
 
7.3
%
 
7.6
%
Ultimate trend rate
4.5
%
 
4.5
%
 
4.5
%
Other Long-Term Liabilities (Tables)
Schedule of other long-term liabilities
 
September 30,
 
2017
 
2016
Casket pricing obligation
$
3.1

 
$
3.9

Rabbi trust liability
4.3

 
4.0

Self-insurance loss reserves
14.3

 
13.3

Other
11.8

 
13.7

 
33.5

 
34.9

Less current portion
(6.8
)
 
(5.5
)
Total long-term portion
$
26.7

 
$
29.4

Income Taxes (Tables)
Summary of components of earnings before income taxes and the consolidated income tax provision 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Domestic
$
108.2

 
$
99.3

 
$
110.0

Foreign
80.1

 
64.8

 
52.3

Total earnings before income taxes
$
188.3

 
$
164.1

 
$
162.3

 
 
 
 
 
 
Income tax expense:
 

 
 

 
 

Current provision:
 

 
 

 
 

Federal
$
0.5

 
$
28.9

 
$
35.0

State
(0.4
)
 
5.1

 
4.4

Foreign
22.7

 
18.0

 
10.2

Total current provision
22.8

 
52.0

 
49.6

 
 
 
 
 
 
Deferred provision (benefit):
 

 
 

 
 

Federal
32.0

 
3.2

 
(0.5
)
State
5.0

 
(0.7
)
 
1.6

Foreign
0.1

 
(7.2
)
 
(1.6
)
Total deferred provision (benefit)
37.1

 
(4.7
)
 
(0.5
)
Income tax expense
$
59.9

 
$
47.3

 
$
49.1

Schedule of reconciliation of the U.S. federal statutory income tax rate to the effective income tax rate 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Federal statutory rates
35.0
 %
 
35.0
 %
 
35.0
 %
Adjustments resulting from the tax effect of:
 

 
 

 
 

State income taxes, net of federal benefit
1.6

 
2.0

 
2.3

Foreign income tax rate differential
(5.8
)
 
(6.7
)
 
(6.2
)
Domestic manufacturer’s deduction
(0.3
)
 
(1.9
)
 
(2.2
)
Share-based compensation
(1.1
)
 
(1.5
)
 
—

Unremitted Earnings
2.7

 
—

 
—

Valuation allowance
(1.3
)
 
1.7

 
0.3

Other, net
1.0

 
0.2

 
1.0

Effective income tax rate
31.8
 %
 
28.8
 %
 
30.2
 %
Summary of deferred income tax balance sheet accounts 
 
September 30,
 
2017
 
2016
Deferred tax assets:
 

 
 

Employee benefit accruals
$
46.0

 
$
90.1

Loss and tax credit carryforwards
43.7

 
40.6

Rebates and other discounts
5.8

 
5.7

Self-insurance reserves
4.6

 
4.6

Casket pricing obligation
1.3

 
1.6

Allowance for doubtful accounts
1.0

 
1.1

Inventory, net
3.1

 
3.2

Other, net
10.3

 
11.9

Total deferred tax assets before valuation allowance
115.8

 
158.8

Less valuation allowance
(3.1
)
 
(5.5
)
Total deferred tax assets, net
112.7

 
153.3

Deferred tax liabilities:
 

 
 

Depreciation
(11.6
)
 
(9.7
)
Amortization
(134.9
)
 
(134.9
)
Long-term contracts and customer prepayments
(28.9
)
 
(21.2
)
Unremitted earnings of foreign operations
(4.2
)
 
(0.2
)
Other, net
(5.1
)
 
(8.8
)
Total deferred tax liabilities
(184.7
)
 
(174.8
)
Deferred tax liabilities, net
$
(72.0
)
 
$
(21.5
)
 
 
 
 
Amounts recorded in the balance sheets:
 

 
 

Deferred tax assets, current
$
—

 
$
23.9

Deferred tax assets, non-current
3.7

 
—

Deferred tax liabilities, current
—

 
(22.8
)
Deferred tax liabilities, non-current
(75.7
)
 
(22.6
)
Total
$
(72.0
)
 
$
(21.5
)
Activity within the reserve for unrecognized tax benefits 
A reconciliation of the unrecognized tax benefits is as follows:
 
September 30,
 
2017
 
2016
 
2015
Balance at September 30
$
7.7

 
$
7.8

 
$
8.4

Additions for tax positions related to the current year
0.7

 
0.2

 
0.6

Additions for tax positions of prior years
3.4

 
1.7

 
0.8

Reductions for tax positions of prior years
(1.5
)
 
(2.0
)
 
(2.0
)
Settlements
(0.4
)
 
—

 
—

Balance at September 30
$
9.9

 
$
7.7

 
$
7.8

Earnings Per Share (Tables)
Schedule of computation of basic and diluted earnings per share

 
Year Ended September 30,
 
2017
 
2016
 
2015
Net income(1)
$
126.2

 
$
112.8

 
$
111.4

Weighted average shares outstanding — basic (in millions)
63.6

 
63.3

 
63.2

Effect of dilutive stock options and unvested time-based
restricted stock (in millions)
0.4

 
0.5

 
0.7

Weighted average shares outstanding — diluted (in millions)
64.0

 
63.8

 
63.9

 


 


 


Earnings per share — basic
$
1.99

 
$
1.78

 
$
1.76

Earnings per share — diluted
$
1.97

 
$
1.77

 
$
1.74

 
 
 
 
 
 
Shares with anti-dilutive effect excluded from the computation
of diluted earnings per share (millions)
0.4

 
0.8

 
0.7

 
 
(1) Net income attributable to Hillenbrand
Share-Based Compensation (Tables)
Schedule of stock-based compensation costs 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Stock-based compensation cost
$
10.5

 
$
8.5


$
12.0

Less impact of income tax
3.8

 
3.1


4.4

Stock-based compensation cost, net of tax
$
6.7

 
$
5.4


$
7.6

Summary of assumptions used in determining fair value of options 
The following assumptions were used in the determination of fair value:
 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Risk-free interest rate
1.9
%
 
0.5 - 2.2%

 
0.1 - 2.2%

Weighted-average dividend yield
2.2
%
 
2.6
%
 
2.5
%
Weighted-average volatility factor
28.8
%
 
31.0
%
 
31.8
%
Exercise factor(1)
n/a

 
33.6
%
 
33.1
%
Post-vesting termination rate(1)
n/a

 
5.0
%
 
5.0
%
Expected life (years)
5.8

 
4.5

 
4.6


(1) Assumption only applicable to the binomial option-pricing model used in 2016 and 2015

Summary of outstanding stock options 
A summary of outstanding stock option awards as of September 30, 2017 and changes during the year is presented below:
 
 
Number
of Shares
 
Weighted-Average
Exercise Price
Outstanding at September 30, 2016
2,274,596

 
$
25.41

Granted
477,594

 
35.90

Exercised
(800,248
)
 
22.37

Forfeited
(109,606
)
 
34.06

Expired/cancelled
(8,405
)
 
30.44

Outstanding at September 30, 2017
1,833,931

 
$
28.93

 
 
 
 
Exercisable at September 30, 2017
1,103,512

 
$
25.58

Summary of outstanding restricted stock units 
A summary of the non-vested stock awards as of September 30, 2017 (representing the maximum number of shares that could be vested) and changes during the year is presented below:
 
 
 
Number of Shares
 
Weighted-Average
Grant Date Fair Value
Time-Based Stock Awards 
 
 
Non-vested time-based stock awards at September 30, 2016
 
82,615

 
$
30.80

Granted
 
47,024

 
35.41

Vested
 
(33,388
)
 
31.28

Forfeited
 
(5,977
)
 
32.50

Non-vested time-based stock awards at September 30, 2017
 
90,274

 
$
33.04

Summary of outstanding performance-based units 
 
 
Number of Shares
 
Weighted-Average
Grant Date Fair Value
Performance-Based Stock Awards 
 
 
Non-vested performance-based stock awards at September 30, 2016
 
783,436

 
$
33.33

Granted
 
302,407

 
39.72

Vested
 
(203,981
)
 
33.42

Forfeited
 
(284,408
)
 
34.16

Non-vested performance-based stock awards at September 30, 2017
 
597,454

 
$
36.14

Other Comprehensive Income (Loss) (Tables)
Schedule of changes in accumulated other comprehensive income (loss) by component 
 
Pension and
Postretirement
 
Currency
Translation
 
Net
Unrealized
Gain (Loss) on
Derivative
Instruments
 
Total
Attributable
to
Hillenbrand,
Inc.
 
Noncontrolling
Interests
 
Total
Balance at September 30, 2015
$
(54.4
)
 
$
(52.1
)
 
$
(1.4
)
 
$
(107.9
)
 
 

 
 
Other comprehensive income before reclassifications
 
 
 
 
 
 
 

 
 

 
 
Before tax amount
(22.7
)
 
(9.5
)
 
0.2

 
(32.0
)
 
$
(0.3
)
 
$
(32.3
)
Tax benefit (expense)
6.5

 
—

 
0.1

 
6.6

 
—

 
6.6

After tax amount
(16.2
)
 
(9.5
)
 
0.3

 
(25.4
)
 
(0.3
)
 
(25.7
)
Amounts reclassified from accumulated other comprehensive income(1)
3.1

 
—

 
0.4

 
3.5

 
—

 
3.5

Net current period other comprehensive income (loss)
(13.1
)
 
(9.5
)
 
0.7

 
(21.9
)
 
$
(0.3
)
 
$
(22.2
)
Balance at September 30, 2016
$
(67.5
)
 
$
(61.6
)
 
$
(0.7
)
 
$
(129.8
)
 
 

 
 
 
 
(1)  Amounts are net of tax.
 
Pension and
Postretirement
 
Currency
Translation
 
Net
Unrealized
Gain (Loss) on
Derivative
Instruments
 
Total
Attributable
to
Hillenbrand,
Inc.
 
Noncontrolling
Interests
 
Total
Balance at September 30, 2016
$
(67.5
)
 
$
(61.6
)
 
$
(0.7
)
 
$
(129.8
)
 
 

 
 

Other comprehensive income before reclassifications
 

 
 

 
 

 
 
 
 

 
 

Before tax amount
28.1

 
24.7

 
3.2

 
56.0

 
$
0.2

 
$
56.2

Tax expense
(9.3
)
 
—

 
(1.2
)
 
(10.5
)
 
—

 
(10.5
)
After tax amount
18.8

 
24.7

 
2.0

 
45.5

 
0.2

 
45.7

Amounts reclassified from accumulated other comprehensive income(1)
3.4

 
—

 
(0.3
)
 
3.1

 
—

 
3.1

Net current period other comprehensive income
22.2

 
24.7

 
1.7

 
48.6

 
$
0.2

 
$
48.8

Balance at September 30, 2017
$
(45.3
)
 
$
(36.9
)
 
$
1.0

 
$
(81.2
)
 
 

 
 

 
 
(1)  Amounts are net of tax.
 
Pension and
Postretirement
 
Currency
Translation
 
Net
Unrealized
Gain (Loss) on
Derivative
Instruments
 
Total
Attributable
to
Hillenbrand,
Inc.
 
Noncontrolling
Interests
 
Total
Balance at September 30, 2014
$
(46.0
)
 
$
(4.9
)
 
$
(1.3
)
 
$
(52.2
)
 
 

 
 

Other comprehensive income before reclassifications
 

 
 

 
 

 
 

 
 

 
 

Before tax amount
(18.0
)
 
(47.2
)
 
(6.6
)
 
(71.8
)
 
$
(0.4
)
 
$
(72.2
)
Tax benefit
6.1

 
—

 
3.1

 
9.2

 
—

 
9.2

After tax amount
(11.9
)
 
(47.2
)
 
(3.5
)
 
(62.6
)
 
(0.4
)
 
(63.0
)
Amounts reclassified from accumulated other comprehensive income(1)
3.5

 
—

 
3.4

 
6.9

 
—

 
6.9

Net current period other comprehensive loss
(8.4
)
 
(47.2
)
 
(0.1
)
 
(55.7
)
 
$
(0.4
)
 
$
(56.1
)
Balance at September 30, 2015
$
(54.4
)
 
$
(52.1
)
 
$
(1.4
)
 
$
(107.9
)
 
 

 
 

 
 
(1)  Amounts are net of tax.
Schedule of reclassifications out of accumulated other comprehensive income 
Reclassifications out of Accumulated Other Comprehensive Income include:
 
 
Year Ended September 30, 2015
 
Amortization of Pension and
Postretirement (1)
 
(Gain)/Loss on Derivative
Instruments
 
 
 
Net Loss
Recognized
 
Prior Service Costs
Recognized
 
 
Total
Affected Line in the Consolidated Statement of Operations:
 

 
 

 
 

 
 

Net revenue
$
—

 
$
—

 
$
2.5

 
$
2.5

Cost of goods sold
3.5

 
0.5

 
0.1

 
4.1

Operating expenses
1.3

 
0.3

 
—

 
1.6

Other (expense) income, net
—

 
—

 
1.9

 
1.9

Total before tax
$
4.8

 
$
0.8

 
$
4.5

 
10.1

Tax expense
 

 
 

 
 

 
(3.2
)
Total reclassifications for the period, net of tax
 

 
 

 
 

 
$
6.9

 
 
(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 5).
Reclassifications out of Accumulated Other Comprehensive Income include:
 
 
Year Ended September 30, 2017
 
Amortization of Pension and 
Postretirement (1)
 
(Gain)/Loss on Derivative
Instruments
 
 
 
Net Loss
Recognized
 
Prior Service Costs
Recognized
 
 
Total
Affected Line in the Consolidated Statement of Operations:
 

 
 

 
 

 
 

Net revenue
$
—

 
$
—

 
$
(0.1
)
 
$
(0.1
)
Cost of goods sold
3.2

 
0.3

 
(0.5
)
 
3.0

Operating expenses
1.4

 
0.1

 
—

 
1.5

Other (expense) income, net
—

 
—

 
0.1

 
0.1

Total before tax
$
4.6

 
$
0.4

 
$
(0.5
)
 
4.5

Tax expense
 

 
 

 
 

 
(1.4
)
Total reclassifications for the period, net of tax
 

 
 

 
 

 
$
3.1

 
 
(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 5).
Reclassifications out of Accumulated Other Comprehensive Income include:
 
 
Year Ended September 30, 2016
 
Amortization of Pension and
Postretirement (1)
 
(Gain)/Loss on Derivative
Instruments
 
 
 
Net Loss
Recognized
 
Prior Service Costs
Recognized
 
 
Total
Affected Line in the Consolidated Statement of Operations:
 

 
 

 
 

 
 

Net revenue
$
—

 
$
—

 
$
0.3

 
$
0.3

Cost of goods sold
3.0

 
0.3

 
—

 
3.3

Operating expenses
1.3

 
0.2

 
—

 
1.5

Other (expense) income, net
—

 
—

 
0.4

 
0.4

Total before tax
$
4.3

 
$
0.5

 
$
0.7

 
5.5

Tax expense
 

 
 

 
 

 
(2.0
)
Total reclassifications for the period, net of tax
 

 
 

 
 

 
$
3.5

 
 
(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 5).
Commitments and Contingencies (Tables)
Schedule of aggregate future minimum lease payments for operating leases, excluding renewable periods
The aggregate future minimum lease payments for operating leases, excluding renewable periods, as of September 30, 2017, were as follows:
 
 
Amount
2018
$
18.5

2019
15.8

2020
12.1

2021
10.4

2022
8.3

Thereafter
35.3

 
$
100.4

Other (Expense) Income, Net (Tables)
Other Income (Expense), Net
 
Year Ended September 30,
 
2017
 
2016
 
2015
Equity in net income (loss) of affiliates
$
(0.4
)
 
$
0.3

 
$
(2.1
)
Foreign currency exchange gain (loss), net
(1.4
)
 
0.3

 
(4.4
)
Other, net
(2.4
)
 
(2.3
)
 
(1.4
)
Other (expense) income, net
$
(4.2
)
 
$
(1.7
)
 
$
(7.9
)
Fair Value Measurements (Tables)
Schedule of financial assets and liabilities at carrying value and fair value and the level within the fair value hierarchy
 
Carrying
Value at
9/30/2017
 
Fair Value at September 30, 2017
 
 
Using Inputs Considered as:
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 

 
 

 
 

 
 

Cash and cash equivalents
$
66.0

 
$
66.0

 
$
—

 
$
—

Investments in rabbi trust
4.3

 
4.3

 
—

 
—

Derivative instruments
3.8

 
—

 
3.8

 
—

 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

$150 senior unsecured notes
149.5

 
161.2

 
—

 
—

Revolving credit facility
68.0

 
—

 
68.0

 
—

Term loan
148.5

 
—

 
148.5

 
—

$100 Series A Notes
100.0

 
—

 
106.7

 
—

Derivative instruments
2.3

 
—

 
2.3

 
—

 
 
Carrying
Value at
9/30/2016
 
Fair Value at September 30, 2016
 
 
Using Inputs Considered as:
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 

 
 

 
 

 
 

Cash and cash equivalents
$
52.0

 
$
52.0

 
$
—

 
$
—

Investments in rabbi trust
4.0

 
4.0

 
—

 
—

Derivative instruments
1.4

 
—

 
1.4

 
—

 


 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

$150 senior unsecured notes
149.3

 
163.5

 
—

 
—

Revolving credit facility
198.5

 
—

 
198.5

 
—

Term loan
162.0

 
—

 
162.0

 
—

$100 Series A Notes
100.0

 
—

 
110.8

 
—

Derivative instruments
3.3

 
—

 
3.3

 
—

Segment and Geographical Information (Tables)
Schedule of Segment Reporting Information, by Segment 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Net revenue
 

 
 

 
 

Process Equipment Group
$
1,028.2

 
$
964.7

 
$
992.8

Batesville
562.0

 
573.7

 
604.0

Total net revenue
$
1,590.2

 
$
1,538.4

 
$
1,596.8

 
 
 
 
 
 
Adjusted EBITDA
 
 
 

 
 

Process Equipment Group
$
177.7

 
$
160.9

 
$
160.5

Batesville
141.9

 
143.5

 
145.5

Corporate
(38.6
)
 
(37.3
)
 
(37.3
)
 
 
 
 
 
 
Net revenue(1) (2)
 
 
 

 
 

United States
$
896.1

 
$
857.0

 
$
915.0

Germany
425.6

 
403.0

 
420.7

All other foreign business units
268.5

 
278.4

 
261.1

Total revenue
$
1,590.2

 
$
1,538.4

 
$
1,596.8

 
 
 
 
 
 
Depreciation and amortization
 

 
 

 
 

Process Equipment Group
$
41.3

 
$
45.2

 
$
37.2

Batesville
13.8

 
14.1

 
15.8

Corporate
1.5

 
1.1

 
1.3

Total depreciation and amortization
$
56.6

 
$
60.4

 
$
54.3

 
 
(1) We attribute revenue to a geography based upon the location of the business unit that consummates the external sale.
(2) In 2017, the Company corrected its disclosure of net revenue by geography. The effect of this adjustment for the year ended September 30, 2016 was to decrease Germany net revenue by $79.7, from $482.7 as previously disclosed to $403.0 and to increase the All other foreign business units net revenue by $79.7, from $198.7 as previously disclosed to $278.4. The effect for the year ended September 30, 2015 was to decrease Germany net revenue by $56.6, from $477.3 as previously disclosed to $420.7 and to increase the All other foreign business units net revenue by $56.6, from $204.5 as previously disclosed to $261.1. Management performed an assessment of the materiality of this correction and concluded that the net revenue by geography as originally disclosed was not material to previously issued financial statements.
Schedule of Assets from Segment and Long Lived Assets by Geographical Area 
 
September 30,
 
2017
 
2016
Total assets assigned
 

 
 

Process Equipment Group
$
1,722.2

 
$
1,694.6

Batesville
203.4

 
211.8

Corporate
30.9

 
53.3

Total assets
$
1,956.5

 
$
1,959.7

 
 
 
 
Tangible long-lived assets, net
 
 
 

United States
$
84.4

 
$
89.5

Germany
39.0

 
35.8

All other foreign business units
27.0

 
27.2

Tangible long-lived assets, net
$
150.4

 
$
152.5

Reconciliation of Adjusted Earnings before Interest, Tax, Depreciation and Amortization from Segments to Consolidated 
The following schedule reconciles segment adjusted EBITDA to consolidated net income.
 
 
Year Ended September 30,
 
2017
 
2016
 
2015
Adjusted EBITDA:
 

 
 

 
 

Process Equipment Group
$
177.7

 
$
160.9

 
$
160.5

Batesville
141.9

 
143.5

 
145.5

Corporate
(38.6
)
 
(37.3
)
 
(37.3
)
Less:
 

 
 

 
 

Interest income
(0.9
)
 
(1.2
)
 
(1.0
)
Interest expense
25.2

 
25.3

 
23.8

Income tax expense
59.9

 
47.3

 
49.1

Depreciation and amortization
56.6

 
60.4

 
54.3

Business acquisition costs
1.1

 
3.7

 
3.6

Inventory step-up
—

 
2.4

 
—

Restructuring and restructuring related
10.7

 
10.2

 
7.5

Litigation
—

 
—

 
0.5

Pension settlement charge
—

 
—

 
17.7

Trade name impairment
—

 
2.2

 
—

Consolidated net income
$
128.4

 
$
116.8

 
$
113.2

Unaudited Quarterly Financial Information (Tables)
Schedule of unaudited quarterly financial information
 
First
 Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
2017
 

 
 

 
 

 
 

Net revenue
$
356.1

 
$
395.3

 
$
395.9

 
$
442.9

Gross profit
126.0

 
148.6

 
152.4

 
164.3

Net income(1)
21.7

 
33.4

 
32.9

 
38.2

Earnings per share — basic
0.34

 
0.52

 
0.52

 
0.60

Earnings per share —diluted
0.34

 
0.52

 
0.52

 
0.60

 
 
 
 
 
 
 
 
2016
 

 
 

 
 

 
 

Net revenue
$
351.7

 
$
387.0

 
$
371.0

 
$
428.7

Gross profit
128.2

 
142.7

 
143.5

 
156.2

Net income(1)
20.0

 
26.1

 
30.7

 
36.0

Earnings per share — basic
0.32

 
0.41

 
0.49

 
0.57

Earnings per share —diluted
0.31

 
0.41

 
0.48

 
0.56


 
 
(1) Net income attributable to Hillenbrand
Condensed Consolidating Information (Tables)
Schedule of condensed consolidating statements of income 
Condensed Consolidating Statements of Income

 
Year Ended September 30, 2017
 
Year Ended September 30, 2016
 
Year Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Net revenue
$
—

 
$
901.4

 
$
904.7

 
$
(215.9
)
 
$
1,590.2

 
$
—

 
$
846.8


$
892.8


$
(201.2
)

$
1,538.4


$
—


$
912.0


$
889.0


$
(204.2
)

$
1,596.8

Cost of goods sold
—

 
467.3

 
647.4

 
(115.8
)
 
998.9

 
—

 
428.7


638.4


(99.3
)

967.8


—


475.6


654.5


(103.7
)

1,026.4

Gross profit
—

 
434.1

 
257.3

 
(100.1
)
 
591.3

 
—

 
418.1

 
254.4

 
(101.9
)
 
570.6


—


436.4


234.5


(100.5
)

570.4

Operating expenses
42.4

 
237.8

 
164.3

 
(100.1
)
 
344.4

 
41.8

 
242.0


164.6


(101.9
)

346.5


33.1


244.1


153.9


(100.5
)

330.6

Amortization expense
—

 
13.5

 
15.7

 
—

 
29.2

 
—

 
13.0

 
20.0

 
—

 
33.0

 
0.4

 
11.4

 
16.3

 
—

 
28.1

Pension settlement charge
—

 
—

 
—

 
—

 
—

 
—

 
—


—


—


—


3.3


14.4


—


—


17.7

Interest expense
21.8

 
—

 
3.4

 
—

 
25.2

 
22.7

 
0.2


2.4


—


25.3


20.5


0.8


2.5


—


23.8

Other income (expense), net
(0.6
)
 
(3.4
)
 
(0.2
)
 
—

 
(4.2
)
 
(0.3
)
 
(2.2
)

0.8


—


(1.7
)

(0.2
)

(4.0
)

(3.7
)

—


(7.9
)
Equity in net income (loss) of subsidiaries
164.4

 
8.2

 
—

 
(172.6
)
 
—

 
144.4

 
10.2


—


(154.6
)

—


141.1


12.5


—


(153.6
)

—

Income (loss) before income taxes
99.6

 
187.6

 
73.7

 
(172.6
)
 
188.3

 
79.6

 
170.9


68.2


(154.6
)

164.1


83.6


174.2


58.1


(153.6
)

162.3

Income tax expense (benefit)
(26.6
)
 
65.9

 
20.6

 
—

 
59.9

 
(33.2
)
 
62.4


18.1


—


47.3


(27.8
)

60.5


16.4


—


49.1

Consolidated net income
126.2

 
121.7

 
53.1

 
(172.6
)
 
128.4

 
112.8

 
108.5


50.1


(154.6
)

116.8


111.4


113.7


41.7


(153.6
)

113.2

Less: Net income attributable to noncontrolling interests
—

 
—

 
2.2

 
—

 
2.2

 
—

 
—


4.0


—


4.0


—


—


1.8


—


1.8

Net income (loss)(1)
$
126.2

 
$
121.7

 
$
50.9

 
$
(172.6
)
 
$
126.2

 
$
112.8

 
$
108.5


$
46.1


$
(154.6
)

$
112.8


$
111.4


$
113.7


$
39.9


$
(153.6
)

$
111.4

Consolidated comprehensive income (loss)
$
174.8

 
$
131.8

 
$
86.4

 
$
(215.8
)
 
$
177.2

 
$
90.9

 
$
116.4


$
33.1


$
(145.8
)

$
94.6


$
55.7


$
103.5


$
0.8


$
(102.9
)

$
57.1

Less: Comprehensive income attributable to noncontrolling interests
—

 
—

 
2.4

 
—

 
2.4

 
—

 
—

 
3.7

 
—

 
3.7


—


—


1.4


—

 
1.4

Comprehensive income (loss)(2)
$
174.8

 
$
131.8

 
$
84.0

 
$
(215.8
)
 
$
174.8

 
$
90.9

 
$
116.4


$
29.4


$
(145.8
)

$
90.9


$
55.7


$
103.5


$
(0.6
)

$
(102.9
)

$
55.7

 
(1) Net income attributable to Hillenbrand
(2) Comprehensive income attributable to Hillenbrand
Schedule of condensed consolidating balance sheets 
Condensed Consolidating Balance Sheets
 
 
September 30, 2017
 
September 30, 2016
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Cash and cash equivalents
$
0.1


$
4.9


$
61.0


$
—


$
66.0


$
4.4


$
5.6


$
42.0


$
—


$
52.0

Trade receivables, net
—


114.5


91.6


—


206.1


—


120.6


84.4


—


205.0

Receivables from long-term manufacturing contracts
—


8.5


116.7


—


125.2


—


10.6


115.2


—


125.8

Inventories
—


68.2


85.9


(2.5
)

151.6


—


69.8


86.1


(2.8
)

153.1

Deferred income taxes
—


—


—


—


—


1.6


17.4


—


4.9


23.9

Prepaid expense
2.1


7.6


18.5


—


28.2


2.2


6.5


9.5


—


18.2

Intercompany receivables
—


1,050.4


93.9


(1,144.3
)

—


—


1,003.1


97.4


(1,100.5
)

—

Other current assets
0.2


1.6


14.4


0.3


16.5


4.6


1.5


15.9


0.3


22.3

Total current assets
2.4


1,255.7


482.0


(1,146.5
)

593.6


12.8


1,235.1


450.5


(1,098.1
)

600.3

Property, plant and equipment, net
4.7


64.5


81.2


—


150.4


4.9


65.7


81.9


—


152.5

Intangible assets, net
3.6


211.3


309.0


—


523.9


4.1


220.4


317.0


—


541.5

Goodwill
—


283.9


363.6


—


647.5


—


271.8


362.5


—


634.3

Investment in consolidated subsidiaries
2,298.0


664.1


—


(2,962.1
)

—


2,143.4


820.2


—


(2,963.6
)

—

Other assets
20.2


29.0


4.4


(12.5
)

41.1


18.9


22.7


0.8


(11.3
)

31.1

Total Assets
$
2,328.9


$
2,508.5


$
1,240.2


$
(4,121.1
)

$
1,956.5


$
2,184.1


$
2,635.9


$
1,212.7


$
(4,073.0
)

$
1,959.7

 





























Trade accounts payable
$
1.0


$
36.7


$
120.0


$
0.3


$
158.0


$
0.4


$
28.4


$
106.9


$
—


$
135.7

Liabilities from long-term manufacturing contracts and advances
—


26.2


106.1


—


132.3


—


14.0


64.6


—


78.6

Current portion of long-term debt
18.0


—


0.8


—


18.8


13.5


—


0.3


—


13.8

Accrued compensation
7.6


17.9


41.4


—


66.9


4.7


17.3


35.3


—


57.3

Deferred income taxes
—


—


—


—


—


—


—


18.1


4.7


22.8

Intercompany payables
1,142.8


4.0


—


(1,146.8
)

—


1,098.8


4.5


—


(1,103.3
)

—

Other current liabilities
14.0


42.2


79.3


0.2


135.7


13.9


39.8


71.6


0.2


125.5

Total current liabilities
1,183.4


127.0


347.6


(1,146.3
)

511.7


1,131.3


104.0


296.8


(1,098.4
)

433.7

Long-term debt
392.0


—


54.9


—


446.9


416.6


—


178.5


—


595.1

Accrued pension and postretirement healthcare
0.8


33.3


95.5


—


129.6


1.1


127.0


104.6


—


232.7

Deferred income taxes
—


27.5


60.9


(12.7
)

75.7


—


5.8


27.8


(11.0
)

22.6

Other long-term liabilities
1.3


15.3


10.1


—


26.7


2.8


16.3


10.3


—


29.4

Total Liabilities
1,577.5


203.1


569.0


(1,159.0
)

1,190.6


1,551.8


253.1


618.0


(1,109.4
)

1,313.5

Total Hillenbrand Shareholders’ Equity
751.4


2,305.4


656.7


(2,962.1
)

751.4


632.3


2,382.8


580.8


(2,963.6
)

632.3

Noncontrolling interests
—


—


14.5


—


14.5


—


—


13.9


—


13.9

Total Equity
751.4


2,305.4


671.2


(2,962.1
)

765.9


632.3


2,382.8


594.7


(2,963.6
)

646.2

Total Liabilities and Equity
$
2,328.9


$
2,508.5


$
1,240.2


$
(4,121.1
)

$
1,956.5


$
2,184.1


$
2,635.9


$
1,212.7


$
(4,073.0
)

$
1,959.7

Schedule of condensed consolidating statements of cash flows 
Condensed Consolidating Statements of Cash Flows
 
 
Year Ended September 30, 2017
 
Year Ended September 30, 2016
 
Year Ended September 30, 2015
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Net cash provided by (used in) operating activities
$
79.9


$
126.7


$
168.3


$
(128.7
)

$
246.2


$
157.8


$
239.9


$
(49.5
)

$
(110.0
)

$
238.2


$
76.0


$
91.0


$
23.6


$
(85.6
)

$
105.0

 












































Investing activities:












 














 


 


 


 


 


 

Capital expenditures
(0.7
)

(9.7
)

(11.6
)

—


(22.0
)

(2.6
)

(8.0
)

(10.6
)

—


(21.2
)

(1.1
)

(14.5
)

(15.4
)

—


(31.0
)
Proceeds from property, plant, and equipment
—


5.3


0.4


—


5.7


—


1.6


0.4


—


2.0


—


2.8


—


—


2.8

Acquisition of business, net of cash acquired
—


—


—


—


—


—


(130.4
)

(105.0
)

—


(235.4
)

—


—


—


—


—

Return of investment capital from affiliates
3.2

 
—

 
—

 
—

 
3.2

 
1.1

 
—

 
—

 
—

 
1.1

 
1.5

 
—

 
—

 
—

 
1.5

Other, net
—


(0.4
)

—


—


(0.4
)

—


—


—


—


—


—


(2.5
)

(0.3
)

—


(2.8
)
Net cash provided by (used in) investing activities
2.5


(4.8
)

(11.2
)

—


(13.5
)

(1.5
)

(136.8
)

(115.2
)

—


(253.5
)

0.4


(14.2
)

(15.7
)

—


(29.5
)
 












































Financing activities:












 














 


 


 


 


 


 

Repayments on term loan
(13.5
)

—


—


—


(13.5
)

(9.0
)

—


—


—


(9.0
)

(9.0
)

—


—


—


(9.0
)
Proceeds from revolving credit facility
289.5


—


529.8


—


819.3


375.5


—


344.3


—


719.8


331.7


—


98.5


—


430.2

Repayments on revolving credit facility
(296.5
)

—


(656.5
)

—


(953.0
)

(457.5
)

—


(169.7
)

—


(627.2
)

(441.8
)

—


(105.2
)

—


(547.0
)
Proceeds from Series A unsecured notes, net of financing costs
—


—


—


—


—


—


—


—


—


—


99.6


—


—


—


99.6

Payment of dividends - intercompany
—


(122.6
)

(6.1
)

128.7


—


—


(104.6
)

(5.4
)

110.0


—


—


(80.3
)

(5.3
)

85.6


—

Payment of dividends on common stock
(51.9
)

—


—


—


(51.9
)

(51.1
)

—


—


—


(51.1
)

(50.4
)

—


—


—


(50.4
)
Repurchases of common stock
(28.0
)

—


—


—


(28.0
)

(21.2
)

—


—


—


(21.2
)

(11.2
)

—


—


—


(11.2
)
Net proceeds (payments) on stock plans
13.7


—


—


—


13.7


11.1


—


—


—


11.1


3.4


—


—


—


3.4

Other, net
—


—


(1.7
)

—


(1.7
)

—


—


(0.8
)

—


(0.8
)

1.2


—


—


—


1.2

Net cash (used in) provided by financing activities
(86.7
)

(122.6
)

(134.5
)

128.7


(215.1
)

(152.2
)

(104.6
)

168.4


110.0


21.6


(76.5
)

(80.3
)

(12.0
)

85.6


(83.2
)
 












































Effect of exchange rates on cash and cash equivalents
—


—


(3.6
)

—


(3.6
)

—


—


(2.6
)

—


(2.6
)

—


—


(2.0
)

—


(2.0
)
 












































Net cash flow
(4.3
)

(0.7
)

19.0


—


14.0


4.1


(1.5
)

1.1


—


3.7


(0.1
)

(3.5
)

(6.1
)

—


(9.7
)
Cash and equivalents at beginning of period
4.4


5.6


42.0


—


52.0


0.3


7.1


40.9


—


48.3


0.4


10.6


47.0


—


58.0

Cash and equivalents at end of period
$
0.1


$
4.9


$
61.0


$
—


$
66.0


$
4.4


$
5.6


$
42.0


$
—


$
52.0


$
0.3


$
7.1


$
40.9


$
—


$
48.3

Restructuring Restructuring (Tables)
Restructuring charges by segment
The following schedule details the restructuring charges by segment and the classification of those charges on the income statement.

 
Year Ended September 30,
 
2017
 
2016
 
Cost of goods sold
 
Operating expenses
 
Total
 
Cost of goods sold
 
Operating expenses
 
Total
Process Equipment Group
$
0.5

 
$
1.4

 
$
1.9

 
$
3.0

 
$
4.1

 
$
7.1

Batesville
5.5

 
—

 
5.5

 
0.2

 
1.1

 
1.3

Corporate
—

 
2.1

 
2.1

 
—

 
0.5

 
0.5

Total
$
6.0

 
$
3.5

 
$
9.5

 
$
3.2

 
$
5.7

 
$
8.9

Description of the Business (Details)
12 Months Ended
Sep. 30, 2017
segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
Number of reportable segments
2 
Summary of Significant Accounting Policies - Basis of presentation (Details) (Coperion Capital Gmb H, Maximum)
Sep. 30, 2017
Coperion Capital Gmb H |
Maximum
 
Business acquisitions
 
Percentage ownership in affiliates acquired through acquisition of the affiliate's parent company
100.00% 
Summary of Significant Accounting Policies - Trade receivables, Inventories and Property, plant, and equipment (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Trade Receivables
 
 
 
Reserve for trade receivables
$ (21.6)
$ (21.0)
 
Inventories
 
 
 
Percentage of inventories determined by LIFO method
32.00% 
32.00% 
 
Difference in valuation if the FIFO method of inventory accounting had been used for all inventories
15.0 
15.2 
 
Raw materials and components
52.6 
51.4 
 
Work in process
55.4 
54.0 
 
Finished goods
43.6 
47.7 
 
Total inventories
151.6 
153.1 
 
Properties
 
 
 
Depreciation expense
25.4 
25.6 
26.2 
Cost
462.2 
451.9 
 
Accumulated Depreciation
(311.8)
(299.4)
 
Land and land improvements
 
 
 
Properties
 
 
 
Cost
15.9 
17.3 
 
Accumulated Depreciation
(3.5)
(3.6)
 
Buildings and building equipment
 
 
 
Properties
 
 
 
Cost
110.5 
105.6 
 
Accumulated Depreciation
(68.0)
(64.3)
 
Buildings and building equipment |
Minimum
 
 
 
Properties
 
 
 
Estimated useful lives
3 years 
 
 
Buildings and building equipment |
Maximum
 
 
 
Properties
 
 
 
Estimated useful lives
50 years 
 
 
Machinery and equipment
 
 
 
Properties
 
 
 
Cost
335.8 
329.0 
 
Accumulated Depreciation
$ (240.3)
$ (231.5)
 
Machinery and equipment |
Minimum
 
 
 
Properties
 
 
 
Estimated useful lives
3 years 
 
 
Machinery and equipment |
Maximum
 
 
 
Properties
 
 
 
Estimated useful lives
25 years 
 
 
Summary of Significant Accounting Policies - Intangible assets (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Future amortization expense
 
 
 
2017
$ 32.2 
 
 
2018
32.0 
 
 
2019
31.4 
 
 
2020
30.4 
 
 
2021
29.3 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)
0 
2.2 
0 
Cost
598.1 
585.4 
 
Accumulated amortization
(207.6)
(174.2)
 
Other Finite-Lived Intangible Assets, Gross
731.5 
715.7 
 
Minimum
 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Intangible assets amortization period
3 years 
 
 
Maximum
 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Intangible assets amortization period
21 years 
 
 
Trade names
 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Trade names, indefinite lives
133.4 
130.3 
 
Trade names
 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Cost
0.2 
0.2 
 
Accumulated amortization
(0.1)
(0.1)
 
Customer relationships
 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Cost
468.7 
459.5 
 
Accumulated amortization
(125.9)
(100.7)
 
Technology, including patents
 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Cost
80.7 
77.9 
 
Accumulated amortization
(39.9)
(33.3)
 
Software
 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Cost
48.3 
47.4 
 
Accumulated amortization
(41.5)
(39.8)
 
Other
 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Cost
0.2 
0.4 
 
Accumulated amortization
(0.2)
(0.3)
 
Customer Concentration Risk [Member] |
Trade names
 
 
 
Components of intangible assets and the related accumulated amortization
 
 
 
Trade names, indefinite lives
$ 13.0 
 
 
Summary of Significant Accounting Policies - Goodwill (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Changes in the carrying amount of goodwill
 
 
Goodwill, Beginning Balance
$ 634.3 
$ 544.0 
Acquisitions
 
96.4 
Adjustments
(0.9)
(0.3)
Foreign currency adjustments
14.1 
(5.8)
Goodwill, Ending Balance
647.5 
634.3 
Process Equipment Group
 
 
Changes in the carrying amount of goodwill
 
 
Goodwill, Beginning Balance
626.0 
535.7 
Acquisitions
 
96.4 
Adjustments
(0.9)
(0.3)
Foreign currency adjustments
14.1 
(5.8)
Goodwill, Ending Balance
639.2 
626.0 
Batesville
 
 
Changes in the carrying amount of goodwill
 
 
Goodwill, Beginning Balance
8.3 
8.3 
Adjustments
0 
0 
Foreign currency adjustments
0 
0 
Goodwill, Ending Balance
8.3 
8.3 
Customer Concentration Risk [Member]
 
 
Goodwill
 
 
Reporting Unit, Approximate Percentage of Fair Value in Excess of Carrying Amount
10.00% 
 
Changes in the carrying amount of goodwill
 
 
Goodwill, Ending Balance
$ 71.3 
 
Summary of Significant Accounting Policies - Other (Details) (USD $)
3 Months Ended 12 Months Ended
Sep. 30, 2017
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Feb. 23, 2017
Jul. 24, 2008
Increase (Decrease) in Deferred Income Taxes
$ 7,400,000 
 
 
 
 
 
Treasury Stock
 
 
 
 
 
 
Maximum amount of common stock repurchases
200,000,000 
200,000,000 
 
 
100,000,000 
100,000,000 
Treasury Stock, Shares, Acquired
 
3,600,000 
 
 
 
 
Shares Repurchased And Classified As Treasury Stock Value
 
99,400,000 
 
 
 
 
Shares Repurchased
 
778,000 
 
 
 
 
Shares repurchased (in dollars)
 
28,000,000 
21,200,000 
11,200,000 
 
 
Shares issued from treasury stock under various stock compensation programs (in shares)
 
700,000 
800,000 
 
 
 
Remaining amount of share repurchases
100,600,000 
100,600,000 
 
 
 
 
Preferred stock
 
 
 
 
 
 
Authorized shares of preferred stock (in shares)
1,000,000 
1,000,000 
 
 
 
 
Preferred stock par value (in dollars per share)
$ 0 
$ 0 
$ 0 
 
 
 
Shares issued
0 
0 
0 
 
 
 
Accumulated other comprehensive loss
 
 
 
 
 
 
Currency translation
(36,900,000)
(36,900,000)
(61,600,000)
 
 
 
Pension and postretirement (net of taxes of $23.4 and $34.1)
(45,300,000)
(45,300,000)
(67,500,000)
 
 
 
Unrealized gain (loss) on derivative instruments (net of taxes of $0.8 and $0.5)
1,000,000 
1,000,000 
(700,000)
 
 
 
Accumulated other comprehensive loss
(81,200,000)
(81,200,000)
(129,800,000)
 
 
 
Pension and postretirement, taxes
23,400,000 
23,400,000 
34,100,000 
 
 
 
Unrealized gain (loss) on derivative instruments, taxes
800,000 
800,000 
500,000 
 
 
 
Revenue recognition
 
 
 
 
 
 
Revenue from long-term manufacturing contracts as a percentage of total revenue
 
25.00% 
24.00% 
25.00% 
 
 
Research and Development Costs
 
 
 
 
 
 
Research and development costs
 
11,900,000 
12,600,000 
12,700,000 
 
 
Warranty costs
 
 
 
 
 
 
Warranty reserves
15,800,000 
15,800,000 
16,600,000 
 
 
 
Warranty costs
 
4,100,000 
4,300,000 
4,000,000 
 
 
Recently Adopted Accounting Standards
 
 
 
 
 
 
Income tax expense
 
59,900,000 
47,300,000 
49,100,000 
 
 
Cash Flow Hedging |
Foreign Exchange Forward
 
 
 
 
 
 
Derivative instruments and hedging activity
 
 
 
 
 
 
Aggregate notional value of derivatives
262,400,000 
262,400,000 
208,300,000 
 
 
 
Minimum
 
 
 
 
 
 
Standard Product Warranty Period
 
1 year 
 
 
 
 
Maximum
 
 
 
 
 
 
Standard Product Warranty Period
 
2 years 
 
 
 
 
Self-Insurance
 
 
 
 
 
 
Deductibles and self-insured retentions per occurrence
 
500,000 
 
 
 
 
Derivative instruments and hedging activity
 
 
 
 
 
 
Term of foreign currency exchange forward contracts
 
24 months 
 
 
 
 
Business acquisitions and related business acquisition and transition costs
 
 
 
 
 
 
Measurement period over which initial purchase price allocations are subject to revision
 
1 year 
 
 
 
 
Carrying Value
 
 
 
 
 
 
Investments
 
 
 
 
 
 
Carrying amount of private equity limited partnerships for which fair value is not readily available
1,400,000 
1,400,000 
7,600,000 
 
 
 
Derivative instruments and hedging activity
 
 
 
 
 
 
Derivative Asset
3,800,000 
3,800,000 
1,400,000 
 
 
 
Derivative Liability
2,300,000 
2,300,000 
3,300,000 
 
 
 
Adjustments for New Accounting Pronouncement
 
 
 
 
 
 
Debt Issuance Costs, Net
$ 900,000 
$ 900,000 
$ 1,200,000 
 
 
 
Business Acquisitions - Identifiable finite-lived intangible assets (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 0 Months Ended 0 Months Ended
Sep. 30, 2016
Oct. 2, 2015
ABEL Pumps LP and Abel GmbH & Co. KG
Oct. 2, 2015
ABEL Pumps LP and Abel GmbH & Co. KG
Oct. 2, 2015
ABEL Pumps LP and Abel GmbH & Co. KG
Customer relationships
Oct. 2, 2015
ABEL Pumps LP and Abel GmbH & Co. KG
Technology, including patents
Oct. 2, 2015
ABEL Pumps LP and Abel GmbH & Co. KG
Backlog
Feb. 1, 2016
Red Valve Company, Inc. [Member] [Domain]
Feb. 1, 2016
Red Valve Company, Inc. [Member] [Domain]
Feb. 1, 2016
Red Valve Company, Inc. [Member] [Domain]
Customer relationships
Feb. 1, 2016
Red Valve Company, Inc. [Member] [Domain]
Technology, including patents
Feb. 1, 2016
Red Valve Company, Inc. [Member] [Domain]
Backlog
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Goodwill, Acquired During Period
$ 96.4 
$ 36.0 
 
 
 
 
$ 59.0 
 
 
 
 
Fair Values
 
 
$ 58 
$ 41 
$ 9 
$ 3 
 
$ 61 
$ 48 
$ 8 
$ 1 
Business Acquisitions - Other (Details)
12 Months Ended 0 Months Ended 0 Months Ended
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Sep. 30, 2015
USD ($)
Oct. 2, 2015
ABEL Pumps LP and Abel GmbH & Co. KG
EUR (€)
Oct. 2, 2015
ABEL Pumps LP and Abel GmbH & Co. KG
USD ($)
Feb. 1, 2016
Red Valve Company, Inc. [Member] [Domain]
USD ($)
Feb. 1, 2016
Red Valve Company, Inc. [Member] [Domain]
USD ($)
Dec. 19, 2014
Line of Credit [Member]
USD ($)
Dec. 19, 2014
$180 term loan
USD ($)
Oct. 2, 2015
Trade Names [Member]
ABEL Pumps LP and Abel GmbH & Co. KG
USD ($)
Feb. 1, 2016
Trade Names [Member]
Red Valve Company, Inc. [Member] [Domain]
USD ($)
Acquisitions
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles
 
 
 
 
$ 58,000,000 
 
$ 61,000,000 
 
 
$ 5,000,000 
$ 4,000,000 
Business acquisition costs
1,100,000 
3,700,000 
3,600,000 
 
 
 
 
 
 
 
 
Payment to acquire business
 
 
 
95,000,000 
 
130,400,000 
 
 
 
 
 
Maximum borrowing capacity available under the facility
 
 
 
 
 
 
 
700,000,000.0 
 
 
 
Debt issued
 
 
 
 
 
 
 
 
180,000,000 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Equipment
 
 
 
 
$ 14,000,000 
 
$ 10,000,000 
 
 
 
 
Financing Agreements (Details)
12 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Sep. 30, 2017
$700 revolving credit facility
USD ($)
Sep. 30, 2016
$700 revolving credit facility
USD ($)
Dec. 19, 2014
$700 revolving credit facility
USD ($)
Nov. 19, 2012
$700 revolving credit facility
USD ($)
Sep. 30, 2017
$700 revolving credit facility
Maximum
Sep. 30, 2017
$700 revolving credit facility
Minimum
Dec. 19, 2014
$180 term loan
Sep. 30, 2017
$180 term loan
USD ($)
Sep. 30, 2016
$180 term loan
USD ($)
Dec. 19, 2014
$180 term loan
USD ($)
Jul. 9, 2010
$150 senior unsecured notes
Sep. 30, 2017
$150 senior unsecured notes
USD ($)
Sep. 30, 2016
$150 senior unsecured notes
USD ($)
Jul. 9, 2010
$150 senior unsecured notes
USD ($)
Dec. 15, 2014
$100 Series A Notes (2)
Sep. 30, 2017
$100 Series A Notes (2)
USD ($)
Sep. 30, 2016
$100 Series A Notes (2)
USD ($)
Mar. 24, 2016
$100 Series A Notes (2)
USD ($)
Dec. 15, 2014
$100 Series A Notes (2)
USD ($)
Sep. 30, 2017
Other
USD ($)
Sep. 30, 2016
Other
USD ($)
Sep. 30, 2017
Syndicated Credit Facility
USD ($)
Sep. 30, 2017
Syndicated Credit Facility
EUR (€)
Jun. 3, 2013
Syndicated Credit Facility
EUR (€)
Sep. 30, 2017
Other Financing Agreements
USD ($)
Sep. 30, 2016
Other Financing Agreements
USD ($)
Sep. 30, 2017
Interest Rate Swap [Member]
Cash Flow Hedging
USD ($)
Sep. 30, 2017
Cross Currency Interest Rate Contract [Member]
Cash Flow Hedging
USD ($)
Sep. 30, 2017
Adjustments for New Accounting Pronouncement
USD ($)
Sep. 30, 2016
Adjustments for New Accounting Pronouncement
USD ($)
Financing Agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Gross
 
 
$ 68,000,000 
$ 198,500,000 
 
 
 
 
 
$ 148,500,000 
$ 162,000,000 
 
 
$ 149,500,000 
$ 149,300,000 
 
 
$ 100,000,000 
$ 100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total debt
465,700,000 
608,900,000 
 
 
 
 
 
 
 
 
 
 
 
148,900,000 
148,500,000 
 
 
99,700,000 
99,600,000 
 
 
600,000 
300,000 
 
 
 
 
 
 
 
 
 
Less: current portion
18,800,000 
13,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total long-term debt
446,900,000 
595,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
148,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
18,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
18,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
330,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2020
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity available under the facility
 
 
 
 
700,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
150,000,000 
227,900,000 
 
 
 
 
 
Debt issued
 
 
 
 
 
 
 
 
 
 
 
180,000,000 
 
 
 
150,000,000 
 
 
 
 
100,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
Debt covenant, business acquisition value threshold
 
 
 
 
75,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred financing costs
 
 
 
 
1,000,000 
2,000,000 
 
 
 
 
 
 
 
 
 
2,100,000 
 
 
 
 
400,000 
 
 
1,300,000 
 
 
 
 
 
 
 
 
Private Shelf Facility, Accordion Feature, Maximum
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
200 
150 
 
 
 
 
 
 
 
 
 
 
 
Percentage of principal which will be repaid over the term of debt
 
 
 
 
 
 
 
 
38.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of debt instrument
 
 
 
 
 
 
 
 
5 years 
 
 
 
 
10 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accordion option to increase commitments under the unsecured revolving credit facility
 
 
 
 
300,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Letters of credit outstanding
 
 
10,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining borrowing capacity available under the credit facility
 
 
621,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current borrowing capacity available under the facility
 
 
554,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average interest rates (as a percent)
 
 
1.40% 
1.48% 
 
 
 
 
 
2.27% 
1.76% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Notional Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50,000,000 
55,000,000 
 
 
Weighted average facility fee (as a percent)
 
 
0.23% 
0.21% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stated interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
5.50% 
 
5.50% 
 
 
 
 
4.60% 
 
 
 
 
 
 
 
 
 
 
 
Notes issued at a discount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective annual interest rate (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.65% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of the principal amount at which the notes are redeemable due to a change of control
 
 
 
 
 
 
 
 
 
 
 
 
101.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemption price, percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leverage holiday fee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.75% 
 
 
 
 
 
 
 
 
 
 
 
Amount of credit facility utilized for providing bank guarantees
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
174,600,000 
 
 
 
 
 
Increase in financing capacity, exercise of accordion feature
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
70,000,000 
 
 
 
 
 
 
 
Charges for unused capacity (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35.00% 
35.00% 
 
 
 
 
 
 
 
Applicable guarantee rate (as a percent)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.90% 
0.90% 
 
 
 
 
 
 
 
Borrowings under facilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
 
 
Ratio of indebtedness to EBITDA
 
 
 
 
 
 
3.5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of Debt to interest expense
 
 
 
 
 
 
 
3.5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted cash
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
800,000 
800,000 
 
 
 
 
Debt Issuance Costs, Net
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 600,000 
$ 800,000 
 
 
$ 300,000 
$ 400,000 
 
 
 
 
 
 
 
 
 
 
 
$ 900,000 
$ 1,200,000 
Retirement Benefits (Details) (USD $)
In Millions, except Share data, unless otherwise specified
1 Months Ended 12 Months Ended
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Retirement and Postemployment Benefits
 
 
 
 
Percentage of employee participation in the defined benefit retirement programs
 
44.00% 
 
 
Number of defined benefit retirement programs in which a specified percentage of employees participate
 
1 
 
 
Number of defined benefit retirement programs
 
4 
 
 
Pension Expense
 
$ 0 
$ 0 
$ 17.7 
Amounts recorded in the consolidated balance sheets:
 
 
 
 
Accrued pension costs, long-term portion
232.7 
129.6 
232.7 
 
Plan Assets
 
 
 
 
Reporting entity's common stock owned by trust (in shares)
 
0 
 
 
Pension Plans Defined Benefit
 
 
 
 
Accumulated other comprehensive loss
 
 
 
 
Net actuarial gains (losses)
103.4 
(71.9)
103.4 
 
Prior service cost
(1.6)
1.0 
(1.6)
 
Aggregate tax effect
(35.2)
(25.0)
(35.2)
 
Amount that will be amortized from accumulated other comprehensive loss into net benefit costs
 
4.1 
 
 
Accumulated Benefit Obligation
 
 
 
 
Accumulated benefit obligation
414.7 
407.7 
414.7 
 
U.S. Pension Benefits
 
 
 
 
Retirement and Postemployment Benefits
 
 
 
 
Decrease in projected obligation
81.9 
 
 
 
Defined benefit plans
 
 
 
 
Service cost
 
3.6 
3.9 
4.3 
Interest cost
 
8.8 
9.5 
14.4 
Expected return on plan assets
 
(13.7)
(9.7)
(14.3)
Amortization of unrecognized prior service cost, net
 
0.4 
0.6 
0.9 
Amortization of actuarial loss
 
3.6 
3.8 
5.3 
Settlement expense
17.7 
0.1 
0 
17.7 
Net pension costs
 
2.8 
8.1 
28.3 
Change in benefit obligation:
 
 
 
 
Projected benefit obligation at beginning of year
 
294.2 
272.2 
 
Service cost
 
3.6 
3.9 
4.3 
Interest cost
 
8.8 
9.5 
14.4 
Actuarial loss (gain)
 
(6.9)
19.7 
 
Benefits paid
(75.9)
(11.0)
(11.1)
 
Gain due to settlement
 
(6.9)
0 
 
Employee contributions
 
0 
0 
 
Effect of exchange rates on projected benefit obligation
 
0 
0 
 
Projected benefit obligation at end of year
294.2 
281.8 
294.2 
272.2 
Change in plan assets:
 
 
 
 
Fair value of plan assets at beginning of year
 
173.7 
158.9 
 
Actual return on plan assets
 
17.9 
19.1 
 
Employee and employer contributions
 
81.8 
6.8 
 
Benefits paid
(75.9)
(11.0)
(11.1)
 
Effect of exchange rates on plan assets
 
0 
0 
 
Fair value of plan assets at end of year
173.7 
262.4 
173.7 
158.9 
Funded status:
 
 
 
 
Plan assets less than benefit obligations
(120.5)
(19.4)
(120.5)
 
Amounts recorded in the consolidated balance sheets:
 
 
 
 
Defined Benefit Plan, Assets for Plan Benefits, Noncurrent
 
8.2 
 
 
Accrued pension costs, current portion
(1.8)
(1.8)
(1.8)
 
Accrued pension costs, long-term portion
118.7 
25.8 
118.7 
 
Plan assets less than benefit obligations
(120.5)
(19.4)
(120.5)
 
Accumulated Benefit Obligation
 
 
 
 
Projected benefit obligation
294.2 
27.7 
294.2 
 
Accumulated benefit obligation
276.5 
27.6 
276.5 
 
Fair value of plan assets
173.7 
0 
173.7 
 
Actuarial Assumptions
 
 
 
 
Discount rate for obligation, end of year (as a percent)
3.60% 
3.70% 
3.60% 
4.40% 
Discount rate for expense, during the year (as a percent)
 
3.50% 
4.40% 
4.40% 
Expected rate of return on plan assets (as a percent)
 
5.60% 
5.50% 
6.30% 
Rate of compensation increase (as a percent)
 
3.00% 
3.00% 
3.00% 
Plan Assets
 
 
 
 
Maximum target investment in return seeking investments as a percentage of total domestic plan assets
 
60.00% 
 
 
Maximum equity investment in one entity as a percent of total equity portfolio
 
10.00% 
 
 
U.S. Pension Benefits |
Accumulated Other Comprehensive Income
 
 
 
 
Defined benefit plans
 
 
 
 
Settlement expense
(6.0)
 
 
 
Non-U.S. Pension Plans
 
 
 
 
Defined benefit plans
 
 
 
 
Service cost
 
1.3 
1.8 
1.7 
Interest cost
 
0.7 
1.8 
2.8 
Expected return on plan assets
 
(0.5)
(1.0)
(1.0)
Amortization of unrecognized prior service cost, net
 
0.1 
0.1 
0 
Amortization of actuarial loss
 
1.1 
0.3 
0.1 
Settlement expense
 
0.6 
0.5 
0 
Net pension costs
 
3.3 
3.5 
3.6 
Change in benefit obligation:
 
 
 
 
Projected benefit obligation at beginning of year
 
140.9 
134.2 
 
Service cost
 
1.3 
1.8 
1.7 
Interest cost
 
0.7 
1.8 
2.8 
Actuarial loss (gain)
 
(9.5)
11.7 
 
Benefits paid
 
(5.7)
(8.8)
 
Gain due to settlement
 
(1.2)
0 
 
Employee contributions
 
0.8 
0.7 
 
Effect of exchange rates on projected benefit obligation
 
6.1 
(0.5)
 
Projected benefit obligation at end of year
140.9 
133.4 
140.9 
134.2 
Change in plan assets:
 
 
 
 
Fair value of plan assets at beginning of year
 
29.7 
29.5 
 
Actual return on plan assets
 
0.3 
0.5 
 
Employee and employer contributions
 
8.5 
8.5 
 
Benefits paid
 
(5.7)
(8.8)
 
Effect of exchange rates on plan assets
 
0.2 
0 
 
Fair value of plan assets at end of year
29.7 
31.4 
29.7 
29.5 
Funded status:
 
 
 
 
Plan assets less than benefit obligations
(111.2)
(102.0)
(111.2)
 
Amounts recorded in the consolidated balance sheets:
 
 
 
 
Defined Benefit Plan, Assets for Plan Benefits, Noncurrent
 
0.4 
 
 
Accrued pension costs, current portion
(6.6)
(6.8)
(6.6)
 
Accrued pension costs, long-term portion
104.6 
95.6 
104.6 
 
Plan assets less than benefit obligations
(111.2)
(102.0)
(111.2)
 
Accumulated Benefit Obligation
 
 
 
 
Projected benefit obligation
108.6 
102.0 
108.6 
 
Accumulated benefit obligation
108.6 
102.0 
108.6 
 
Fair value of plan assets
0 
0 
0 
 
Actuarial Assumptions
 
 
 
 
Discount rate for obligation, end of year (as a percent)
1.00% 
1.10% 
1.00% 
2.10% 
Discount rate for expense, during the year (as a percent)
 
0.50% 
1.70% 
1.90% 
Expected rate of return on plan assets (as a percent)
 
2.00% 
2.00% 
3.50% 
Rate of compensation increase (as a percent)
 
2.00% 
2.00% 
0.20% 
Other Postretirement Benefit Plan [Member]
 
 
 
 
Defined benefit plans
 
 
 
 
Service cost
 
0.4 
0.4 
 
Interest cost
 
0.2 
0.3 
 
Change in benefit obligation:
 
 
 
 
Projected benefit obligation at beginning of year
 
10.3 
10.3 
 
Service cost
 
0.4 
0.4 
 
Interest cost
 
0.2 
0.3 
 
Actuarial loss (gain)
 
0.9 
(0.2)
 
Benefits paid
 
(1.0)
(0.9)
 
Projected benefit obligation at end of year
10.3 
9.0 
10.3 
 
Change in plan assets:
 
 
 
 
Benefits paid
 
(1.0)
(0.9)
 
Amounts recorded in the consolidated balance sheets:
 
 
 
 
Accrued pension costs, current portion
(0.9)
(0.8)
(0.9)
 
Accrued pension costs, long-term portion
9.4 
8.2 
9.4 
 
Accumulated other comprehensive loss
 
 
 
 
Net actuarial gains (losses)
3.1 
3.4 
3.1 
 
Prior service cost
0.5 
0.8 
0.5 
 
Aggregate tax effect
1.3 
1.6 
1.3 
 
Amount that will be amortized from accumulated other comprehensive loss into net benefit costs
 
0.4 
 
 
Actuarial Assumptions
 
 
 
 
Discount rate for obligation, end of year (as a percent)
3.10% 
3.30% 
3.10% 
3.70% 
Change in Accounting Method Accounted for as Change in Estimate [Member]
 
 
 
 
Retirement and Postemployment Benefits
 
 
 
 
Pension Expense
 
$ 3.1 
 
 
Retirement Benefits - Pension Plans and Defined Contribution Plans (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 12 Months Ended
Oct. 3, 2016
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Cash Flows
 
 
 
 
Cash contribution to defined benefit retirement plans
$ 80.0 
$ 90.6 
$ 15.5 
$ 15.4 
Defined Contribution Plans
 
 
 
 
Employer's contribution to defined contribution plans (as a percent)
 
4.00% 
 
 
Expenses related to defined contribution plans
 
11.4 
9.9 
9.1 
Minimum
 
 
 
 
Defined Contribution Plans
 
 
 
 
Contribution vesting period
 
0 years 
 
 
Maximum
 
 
 
 
Defined Contribution Plans
 
 
 
 
Employer's matching contribution to defined contribution plans (as a percent)
 
6.00% 
 
 
Contribution vesting period
 
5 years 
 
 
Other Postretirement Benefit Plan [Member]
 
 
 
 
Fair Value Measurements
 
 
 
 
Other Postretirement Benefit Expense
 
0.3 
0.3 
0.3 
Cash Flows
 
 
 
 
Estimated cash contribution to defined benefit retirement plans
 
0.8 
 
 
Pension Plans Defined Benefit
 
 
 
 
Cash Flows
 
 
 
 
Cash contribution to defined benefit retirement plans
 
89.6 
14.6 
14.9 
Pension Plans Defined Benefit |
Minimum
 
 
 
 
Cash Flows
 
 
 
 
Estimated cash contribution to defined benefit retirement plans
 
9.9 
 
 
U.S. Pension Benefits
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
262.4 
173.7 
158.9 
Estimated Future Benefit Payments
 
 
 
 
2017
 
12.9 
 
 
2018
 
13.4 
 
 
2019
 
14.1 
 
 
2020
 
14.8 
 
 
2021
 
15.4 
 
 
2023 - 2027
 
82.4 
 
 
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
31.4 
29.7 
29.5 
Estimated Future Benefit Payments
 
 
 
 
2017
 
8.0 
 
 
2018
 
7.7 
 
 
2019
 
7.9 
 
 
2020
 
7.2 
 
 
2021
 
7.3 
 
 
2023 - 2027
 
34.4 
 
 
Level 1 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
27.5 
26.1 
 
Level 2 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
1.9 
1.6 
 
Level 3 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
2.0 
2.0 
 
Cash equivalents |
Level 1 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
5.2 
4.1 
 
Cash equivalents |
Level 2 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Cash equivalents |
Level 3 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Equity securities |
Level 1 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
6.8 
6.5 
 
Equity securities |
Level 2 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Equity securities |
Level 3 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Government index funds |
Level 1 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
5.7 
5.8 
 
Government index funds |
Level 2 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Government index funds |
Level 3 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Corporate bond funds |
Level 1 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
9.8 
9.7 
 
Corporate bond funds |
Level 2 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Corporate bond funds |
Level 3 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Real estate and real estate funds |
Level 1 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Real estate and real estate funds |
Level 2 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Real estate and real estate funds |
Level 3 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
2.0 
2.0 
 
Other |
Level 1 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Other |
Level 2 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
1.9 
1.6 
 
Other |
Level 3 |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
0 
0 
 
Estimate of Fair Value Measurement [Member] |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
31.4 
29.7 
 
Estimate of Fair Value Measurement [Member] |
Cash equivalents |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
5.2 
4.1 
 
Estimate of Fair Value Measurement [Member] |
Equity securities |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
6.8 
6.5 
 
Estimate of Fair Value Measurement [Member] |
Government index funds |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
5.7 
5.8 
 
Estimate of Fair Value Measurement [Member] |
Corporate bond funds |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
9.8 
9.7 
 
Estimate of Fair Value Measurement [Member] |
Real estate and real estate funds |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
2.0 
2.0 
 
Estimate of Fair Value Measurement [Member] |
Other |
Non-U.S. Pension Plans
 
 
 
 
Fair Value Measurements
 
 
 
 
Fair value of plan assets
 
$ 1.9 
$ 1.6 
 
Retirement Benefits - Postretirement Healthcare Plan (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
One-percentage-point increase/decrease in the assumed healthcare cost trend rates
 
 
 
Accrued pension costs, long-term portion
$ 129.6 
$ 232.7 
 
Other Postretirement Benefit Plan [Member]
 
 
 
Retirement and Postemployment Benefits
 
 
 
Other Postretirement Benefit Expense
0.3 
0.3 
0.3 
Weighted average assumptions used in revaluing obligation under the postretirement healthcare plan
 
 
 
Discount rate for obligation (as a percent)
3.30% 
3.10% 
3.70% 
Healthcare cost rate assumed for next year (as a percent)
7.60% 
7.30% 
7.60% 
Ultimate trend rate (as a percent)
4.50% 
4.50% 
4.50% 
One-percentage-point increase/decrease in the assumed healthcare cost trend rates
 
 
 
Impact of a one percentage point increase in healthcare cost trends on service and interest costs
0.1 
 
 
Impact of a one percentage point decrease in healthcare cost trends on service and interest costs
0.1 
 
 
Impact of a one percentage point increase in healthcare cost trends on the benefit obligation
0.6 
 
 
Impact of a one percentage point decrease in healthcare cost trends on the benefit obligation
0.6 
 
 
Employer's expected annual future contribution to the postretirement healthcare plan
0.8 
 
 
Defined Benefit Plan, Benefit Obligation
9.0 
10.3 
10.3 
Interest cost
0.2 
0.3 
 
Service cost
0.4 
0.4 
 
Defined Benefit Plan, Actuarial Gain (Loss)
(0.9)
0.2 
 
Defined Benefit Plan, Benefits Paid
1.0 
0.9 
 
Accrued pension costs, current portion
0.8 
0.9 
 
Accrued pension costs, long-term portion
8.2 
9.4 
 
Net amount recognized
$ 9.0 
$ 10.3 
 
Other Long-Term Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Sep. 30, 2016
Other Liabilities Disclosure [Abstract]
 
 
Casket pricing obligation
$ 3.1 
$ 3.9 
Deferred Compensation Liability, Classified, Noncurrent
4.3 
4.0 
Self-insurance loss reserves
14.3 
13.3 
Other
11.8 
13.7 
Other long-term liabilities including current and long-term portion
33.5 
34.9 
Less current portion
(6.8)
(5.5)
Total long-term portion
$ 26.7 
$ 29.4 
Income Taxes (Details) (USD $)
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Components of earnings before income taxes and the consolidated income tax provision:
 
 
 
Domestic
$ 108,200,000 
$ 99,300,000 
$ 110,000,000 
Foreign
80,100,000 
64,800,000 
52,300,000 
Income (Loss) from Subsidiaries, before Tax
188,300,000 
164,100,000 
162,300,000 
Current provision:
 
 
 
Federal
500,000 
28,900,000 
35,000,000 
State
(400,000)
5,100,000 
4,400,000 
Foreign
22,700,000 
18,000,000 
10,200,000 
Total current provision
22,800,000 
52,000,000 
49,600,000 
Deferred provision (benefit):
 
 
 
Federal
32,000,000 
3,200,000 
(500,000)
State
5,000,000 
(700,000)
1,600,000 
Foreign
100,000 
(7,200,000)
(1,600,000)
Total deferred provision (benefit)
37,100,000 
(4,700,000)
(500,000)
Income tax expense
59,900,000 
47,300,000 
49,100,000 
Reconciliation of the effective income tax rate with the U.S. federal statutory income tax rate
 
 
 
Federal statutory rates (as a percent)
35.00% 
35.00% 
35.00% 
Adjustments resulting from the tax effect of:
 
 
 
State income taxes, net of federal benefit
1.60% 
2.00% 
2.30% 
Foreign income tax rate differential (as a percent)
(5.80%)
(6.70%)
(6.20%)
Domestic manufacturer's deduction (as a percent)
(0.30%)
(1.90%)
(2.20%)
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Percent
(1.10%)
(1.50%)
0.00% 
Effective Income Tax Rate Reconciliation, Deduction, Percent
2.70% 
 
 
Valuation allowance (as a percent)
(1.30%)
1.70% 
0.30% 
Other, net (as a percent)
1.00% 
0.20% 
1.00% 
Effective income tax rate (as a percent)
31.80% 
28.80% 
30.20% 
Deferred tax assets:
 
 
 
Employee benefit accruals
46,000,000 
90,100,000 
 
Loss and tax credit carryforwards
43,700,000 
40,600,000 
 
Rebates and other discounts
5,800,000 
5,700,000 
 
Self-insurance reserves
4,600,000 
4,600,000 
 
Casket pricing obligation
1,300,000 
1,600,000 
 
Allowance for doubtful accounts
1,000,000 
1,100,000 
 
Inventory, net
3,100,000 
3,200,000 
 
Other, net
10,300,000 
11,900,000 
 
Total deferred tax assets before valuation allowance
115,800,000 
158,800,000 
 
Less valuation allowance
(3,100,000)
(5,500,000)
 
Total deferred tax assets, net
112,700,000 
153,300,000 
 
Deferred tax liabilities:
 
 
 
Depreciation
(11,600,000)
(9,700,000)
 
Amortization
134,900,000 
134,900,000 
 
Long-term contracts and customer prepayments
(28,900,000)
(21,200,000)
 
Deferred Tax Liabilities, Undistributed Foreign Earnings
4,200,000 
200,000 
 
Other, net
(5,100,000)
(8,800,000)
 
Total deferred tax liabilities
(184,700,000)
(174,800,000)
 
Deferred tax liabilities, net
(72,000,000)
(21,500,000)
 
Amounts recorded in the balance sheets:
 
 
 
Deferred tax assets, current
 
23,900,000 
 
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent
3,700,000 
 
 
Deferred Tax Liabilities, Net, Current
0 
(22,800,000)
 
Deferred tax liabilities, non-current
(75,700,000)
(22,600,000)
 
Deferred tax liabilities, net
(72,000,000)
(21,500,000)
 
Deferred income tax assets related to U.S. federal and state tax credit carryforwards
4,700,000 
 
 
Deferred income tax assets related to foreign net operating loss carryforwards
39,000,000 
 
 
Current income tax payable
18,300,000 
16,600,000 
 
Deferred Tax Liability, Unremitted Earnings of Foreign Subsidiaries
4,000,000.0 
 
 
Total permanently reinvested earnings
$ 241,200,000 
$ 172,700,000 
 
Income Taxes - Unrecognized tax benefits (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Activity within the reserve for unrecognized tax benefits
 
 
 
Balance at the beginning of the period
$ 7.7 
$ 7.8 
$ 8.4 
Additions for tax positions related to the current year
0.7 
0.2 
0.6 
Additions for tax positions of prior years
3.4 
1.7 
0.8 
Reductions for tax positions of prior years
(1.5)
(2.0)
(2.0)
Settlements
(0.4)
0 
0 
Balance at the end of the period
9.9 
7.7 
7.8 
Gross unrecognized tax benefits, if recognized would impact the effective tax rate
9.9 
7.7 
 
Additional amounts recognized (released) for interest and penalties
0.7 
 
 
Other amounts accrued for interest and penalties
1.3 
1.3 
 
Amount by which the unrecognized tax benefits could increase or decrease over the next 12 months
$ 1.0 
 
 
Earnings Per Share (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Income per common share
 
 
 
 
 
 
 
 
 
 
 
Net income
$ 38.2 
$ 32.9 
$ 33.4 
$ 21.7 
$ 36.0 
$ 30.7 
$ 26.1 
$ 20.0 
$ 126.2 1
$ 112.8 1
$ 111.4 1
Weighted-average shares outstanding-basic (in shares)
 
 
 
 
 
 
 
 
63,600,000 
63,300,000 
63,200,000 
Effect of dilutive stock options and unvested time-based restricted stock (in shares)
 
 
 
 
 
 
 
 
400,000 
500,000 
700,000 
Weighted average shares outstanding-diluted (in shares)
 
 
 
 
 
 
 
 
64,000,000 
63,800,000 
63,900,000 
Earnings per share-basic (in dollars per share)
$ 0.60 
$ 0.52 
$ 0.52 
$ 0.34 
$ 0.57 
$ 0.49 
$ 0.41 
$ 0.32 
$ 1.99 1
$ 1.78 1
$ 1.76 1
Earnings per share-diluted (in dollars per share)
$ 0.60 
$ 0.52 
$ 0.52 
$ 0.34 
$ 0.56 
$ 0.48 
$ 0.41 
$ 0.31 
$ 1.97 1
$ 1.77 1
$ 1.74 1
Performance Shares
 
 
 
 
 
 
 
 
 
 
 
Income per common share
 
 
 
 
 
 
 
 
 
 
 
Shares with anti-dilutive effect excluded from the computation of diluted earnings per share
 
 
 
 
 
 
 
 
600,000 
800,000 
1,600,000 
Stock Option Awards and Time Based Stock Awards
 
 
 
 
 
 
 
 
 
 
 
Income per common share
 
 
 
 
 
 
 
 
 
 
 
Shares with anti-dilutive effect excluded from the computation of diluted earnings per share
 
 
 
 
 
 
 
 
400,000 
800,000 
700,000 
Share-Based Compensation (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Compensation Related Costs [Abstract]
 
 
 
Number of shares initially registered and authorized for issuance
12,685,436 
 
 
Total number of shares outstanding (in shares)
2,908,018 
 
 
Number of shares issued (in shares)
5,672,778 
 
 
Number of shares available for future issuance (in shares)
4,104,640 
 
 
Stock-based compensation cost
$ 10.5 
$ 8.5 
$ 12.0 
Less impact of income tax
3.8 
3.1 
4.4 
Stock-based compensation cost, net of tax
6.7 
5.4 
7.6 
Current tax benefit realized from the exercise of stock options and payment of restricted stock units
6.0 
 
 
Time Based Stock Awards
 
 
 
Weighted average exercise price
 
 
 
Unrecognized stock-based compensation
1.2 
 
 
Period for recognition of unrecognized stock-based compensation
1 year 10 months 25 days 
 
 
Number of shares
 
 
 
Number of shares outstanding under time-based stock awards and performance-based stock awards at the beginning of the period (in shares)
82,615 
 
 
Granted (in shares)
47,024 
 
 
Vested (in shares)
(33,388)
 
 
Forfeited (in shares)
(5,977)
 
 
Number of shares outstanding under time-based stock awards and performance-based stock awards at the end of the period (in shares)
90,274 
82,615 
 
Weighted-Average Grant Date Fair Value
 
 
 
Non-vested time-based stock awards at the beginning of the period (in dollars per share)
$ 30.80 
 
 
Granted (in dollars per share)
$ 35.41 
$ 30.59 
$ 30.99 
Vested (in dollars per share)
$ 31.28 
 
 
Forfeited (in dollars per share)
$ 32.50 
 
 
Non-vested time-based stock awards at the end of the period (in dollars per share)
$ 33.04 
$ 30.80 
 
Aggregate fair value
3.6 
 
 
Time Based Stock Awards and Performance Based Stock Awards
 
 
 
Time-based stock awards and performance-based stock awards
 
 
 
Total vest date fair value of vested time-based stock awards and performance-based stock awards shares held by employees and directors
10.9 
7.4 
7.1 
Weighted-Average Grant Date Fair Value
 
 
 
Number of shares under the time-based and performance-based stock awards due to dividend reinvestment (in shares)
14,138 
 
 
Aggregate fair value of shares under the time-based and performance-based stock awards plans due to dividend reinvestment
0.5 
 
 
Vested Deferred Stock
 
 
 
Vested deferred stock (in shares)
372,221 
 
 
Aggregate fair value of vested deferred stock
14.5 
 
 
Employee Stock Option
 
 
 
Share-based compensation
 
 
 
Vesting period
3 years 
 
 
Weighted average fair value of options granted (in dollars per share)
$ 8.37 
$ 7.80 
$ 8.38 
Assumptions used in the determination of fair value of options
 
 
 
Risk-free interest rate (as a percent)
1.90% 
 
 
Weighted-average dividend yield (as a percent)
2.20% 
2.60% 
2.50% 
Weighted-average volatility factor (as a percent)
28.80% 
31.00% 
31.80% 
Exercise factor (as a percent)
n/a 
0.336 
0.331 
Post-vesting termination rate (as a percent)
 
5.00% 
5.00% 
Expected life
5 years 9 months 5 days 
4 years 6 months 1 day 
4 years 7 months 6 days 
Number of shares
 
 
 
Outstanding at the beginning of the period (in shares)
2,274,596 
 
 
Granted (in shares)
477,594 
 
 
Exercised (in shares)
(800,248)
 
 
Forfeited (in shares)
(109,606)
 
 
Expired (in shares)
(8,405)
 
 
Outstanding at the end of the period (in shares)
1,833,931 
2,274,596 
 
Exercisable at the end of the period (in shares)
1,103,512 
 
 
Weighted average exercise price
 
 
 
Outstanding at the beginning of the period (in dollars per share)
$ 25.41 
 
 
Granted (in dollars per share)
$ 35.90 
 
 
Exercised (in dollars per share)
$ 22.37 
 
 
Forfeited (in dollars per share)
$ 34.06 
 
 
Expired (in dollars per share)
$ 30.44 
 
 
Outstanding at the end of the period (in dollars per share)
$ 28.93 
$ 25.41 
 
Exercisable at the end of the period (in dollars per share)
$ 25.58 
 
 
Unrecognized stock-based compensation
2.9 
 
 
Period for recognition of unrecognized stock-based compensation
1 year 9 months 13 days 
 
 
Average remaining life of outstanding stock options
6 years 6 months 
 
 
Aggregate intrinsic value of outstanding options
18.2 
 
 
Average remaining life of the exercisable options
5 years 1 month 1 day 
 
 
Aggregate intrinsic value of exercisable options
14.6 
 
 
Total intrinsic value of options exercised
11.2 
7.5 
2.8 
Employee Stock Option |
Minimum
 
 
 
Assumptions used in the determination of fair value of options
 
 
 
Risk-free interest rate (as a percent)
 
0.50% 
0.10% 
Employee Stock Option |
Maximum
 
 
 
Share-based compensation
 
 
 
Award expiration term
10 years 
 
 
Assumptions used in the determination of fair value of options
 
 
 
Risk-free interest rate (as a percent)
 
2.20% 
2.20% 
Performance Shares
 
 
 
Weighted average exercise price
 
 
 
Unrecognized stock-based compensation
5.4 
 
 
Period for recognition of unrecognized stock-based compensation
1 year 8 months 9 days 
 
 
Time-based stock awards and performance-based stock awards
 
 
 
Performance measurement period used to determined shares granted included in performance-based stock awards
3 years 
 
 
Number of shares
 
 
 
Number of shares outstanding under time-based stock awards and performance-based stock awards at the beginning of the period (in shares)
783,436 
 
 
Granted (in shares)
302,407 
 
 
Vested (in shares)
(203,981)
 
 
Forfeited (in shares)
(284,408)
 
 
Number of shares outstanding under time-based stock awards and performance-based stock awards at the end of the period (in shares)
597,454 
783,436 
 
Weighted-Average Grant Date Fair Value
 
 
 
Non-vested time-based stock awards at the beginning of the period (in dollars per share)
$ 33.33 
 
 
Granted (in dollars per share)
$ 39.72 
$ 33.14 
$ 33.44 
Vested (in dollars per share)
$ 33.42 
 
 
Forfeited (in dollars per share)
$ 34.16 
 
 
Non-vested time-based stock awards at the end of the period (in dollars per share)
$ 36.14 
$ 33.33 
 
Aggregate fair value
$ 23.0 
 
 
Other Comprehensive Income (Loss) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Changes in accumulated other comprehensive income (loss) by component
 
 
 
Balance at the beginning of the period
$ (129.8)
 
 
Other comprehensive income before reclassifications
 
 
 
Before tax amount
56.2 
(32.3)
(72.2)
Tax benefit (expense)
(10.5)
6.6 
9.2 
After tax amount
45.7 
(25.7)
(63.0)
Amounts reclassified from accumulated other comprehensive income
3.1 
3.5 
6.9 
Total other comprehensive income (loss), net of tax
48.8 
(22.2)
(56.1)
Balance at the end of the period
(81.2)
(129.8)
 
Total Attributable to Hillenbrand, Inc.
 
 
 
Changes in accumulated other comprehensive income (loss) by component
 
 
 
Balance at the beginning of the period
(129.8)
(107.9)
(52.2)
Other comprehensive income before reclassifications
 
 
 
Before tax amount
56.0 
(32.0)
(71.8)
Tax benefit (expense)
(10.5)
6.6 
9.2 
After tax amount
45.5 
(25.4)
(62.6)
Amounts reclassified from accumulated other comprehensive income
3.1 
3.5 
6.9 
Total other comprehensive income (loss), net of tax
48.6 
(21.9)
(55.7)
Balance at the end of the period
(81.2)
(129.8)
(107.9)
Pension and Postretirement
 
 
 
Changes in accumulated other comprehensive income (loss) by component
 
 
 
Balance at the beginning of the period
(67.5)
(54.4)
(46.0)
Other comprehensive income before reclassifications
 
 
 
Before tax amount
28.1 
(22.7)
(18.0)
Tax benefit (expense)
(9.3)
6.5 
6.1 
After tax amount
18.8 
(16.2)
(11.9)
Amounts reclassified from accumulated other comprehensive income
3.4 
3.1 
3.5 
Total other comprehensive income (loss), net of tax
22.2 
(13.1)
(8.4)
Balance at the end of the period
(45.3)
(67.5)
(54.4)
Currency Translation
 
 
 
Changes in accumulated other comprehensive income (loss) by component
 
 
 
Balance at the beginning of the period
(61.6)
(52.1)
(4.9)
Other comprehensive income before reclassifications
 
 
 
Before tax amount
24.7 
(9.5)
(47.2)
Tax benefit (expense)
0 
0 
0 
After tax amount
24.7 
(9.5)
(47.2)
Amounts reclassified from accumulated other comprehensive income
0 
0 
0 
Total other comprehensive income (loss), net of tax
24.7 
(9.5)
(47.2)
Balance at the end of the period
(36.9)
(61.6)
(52.1)
Net Unrealized Gain (Loss) on Derivative Instruments
 
 
 
Changes in accumulated other comprehensive income (loss) by component
 
 
 
Balance at the beginning of the period
(0.7)
(1.4)
(1.3)
Other comprehensive income before reclassifications
 
 
 
Before tax amount
3.2 
0.2 
(6.6)
Tax benefit (expense)
(1.2)
0.1 
3.1 
After tax amount
2.0 
0.3 
(3.5)
Amounts reclassified from accumulated other comprehensive income
(0.3)
0.4 
3.4 
Total other comprehensive income (loss), net of tax
1.7 
0.7 
(0.1)
Balance at the end of the period
1.0 
(0.7)
(1.4)
Noncontrolling Interests
 
 
 
Other comprehensive income before reclassifications
 
 
 
Before tax amount
0.2 
(0.3)
(0.4)
Tax benefit (expense)
0 
0 
0 
After tax amount
0.2 
(0.3)
(0.4)
Amounts reclassified from accumulated other comprehensive income
0 
0 
0 
Total other comprehensive income (loss), net of tax
$ 0.2 
$ (0.3)
$ (0.4)
Other Comprehensive Income (Loss) - Reclassifications out of Accumulated Other Comprehensive Income (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Affected Line in the Consolidated Statement of Operations:
 
 
 
 
 
 
 
 
 
 
 
Net revenue
$ 442.9 
$ 395.9 
$ 395.3 
$ 356.1 
$ 428.7 
$ 371.0 
$ 387.0 
$ 351.7 
$ 1,590.2 
$ 1,538.4 
$ 1,596.8 
Cost of goods sold
 
 
 
 
 
 
 
 
(998.9)
(967.8)
(1,026.4)
Operating expenses
 
 
 
 
 
 
 
 
(344.4)
(346.5)
(330.6)
Other (expense) income, net
 
 
 
 
 
 
 
 
(4.2)
(1.7)
(7.9)
Tax expense
 
 
 
 
 
 
 
 
(59.9)
(47.3)
(49.1)
Total reclassifications for the period, net of tax
 
 
 
 
 
 
 
 
3.1 
3.5 
6.9 
Pension and Postretirement
 
 
 
 
 
 
 
 
 
 
 
Affected Line in the Consolidated Statement of Operations:
 
 
 
 
 
 
 
 
 
 
 
Total reclassifications for the period, net of tax
 
 
 
 
 
 
 
 
3.4 
3.1 
3.5 
Net Unrealized Gain (Loss) on Derivative Instruments
 
 
 
 
 
 
 
 
 
 
 
Affected Line in the Consolidated Statement of Operations:
 
 
 
 
 
 
 
 
 
 
 
Total reclassifications for the period, net of tax
 
 
 
 
 
 
 
 
(0.3)
0.4 
3.4 
Reclassification out of Accumulated Other Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
Affected Line in the Consolidated Statement of Operations:
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
(0.1)
0.3 
2.5 
Cost of goods sold
 
 
 
 
 
 
 
 
3.0 
3.3 
4.1 
Operating expenses
 
 
 
 
 
 
 
 
1.5 
1.5 
1.6 
Other (expense) income, net
 
 
 
 
 
 
 
 
0.1 
0.4 
1.9 
Income before income taxes
 
 
 
 
 
 
 
 
4.5 
5.5 
10.1 
Tax expense
 
 
 
 
 
 
 
 
(1.4)
(2.0)
(3.2)
Total reclassifications for the period, net of tax
 
 
 
 
 
 
 
 
3.1 
3.5 
6.9 
Reclassification out of Accumulated Other Comprehensive Income |
Net Loss Recognized
 
 
 
 
 
 
 
 
 
 
 
Affected Line in the Consolidated Statement of Operations:
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Cost of goods sold
 
 
 
 
 
 
 
 
3.2 
3.0 
3.5 
Operating expenses
 
 
 
 
 
 
 
 
1.4 
1.3 
1.3 
Other (expense) income, net
 
 
 
 
 
 
 
 
0 
0 
0 
Income before income taxes
 
 
 
 
 
 
 
 
4.6 
4.3 
4.8 
Reclassification out of Accumulated Other Comprehensive Income |
Prior Service Costs Recognized
 
 
 
 
 
 
 
 
 
 
 
Affected Line in the Consolidated Statement of Operations:
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Cost of goods sold
 
 
 
 
 
 
 
 
0.3 
0.3 
0.5 
Operating expenses
 
 
 
 
 
 
 
 
0.1 
0.2 
0.3 
Other (expense) income, net
 
 
 
 
 
 
 
 
0 
0 
0 
Income before income taxes
 
 
 
 
 
 
 
 
0.4 
0.5 
0.8 
Reclassification out of Accumulated Other Comprehensive Income |
Net Unrealized Gain (Loss) on Derivative Instruments
 
 
 
 
 
 
 
 
 
 
 
Affected Line in the Consolidated Statement of Operations:
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
(0.1)
0.3 
2.5 
Cost of goods sold
 
 
 
 
 
 
 
 
(0.5)
0 
0.1 
Operating expenses
 
 
 
 
 
 
 
 
0 
0 
0 
Other (expense) income, net
 
 
 
 
 
 
 
 
0.1 
0.4 
1.9 
Income before income taxes
 
 
 
 
 
 
 
 
$ (0.5)
$ 0.7 
$ 4.5 
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Rental expense charged to income
$ 23.6 
$ 27.8 
$ 30.0 
Aggregate future minimum lease payments for operating leases, excluding renewable periods
 
 
 
2017
18.5 
 
 
2018
15.8 
 
 
2019
12.1 
 
 
2020
10.4 
 
 
2021
8.3 
 
 
Thereafter
35.3 
 
 
Future minimum operating lease payments, excluding renewable periods
100.4 
 
 
General Claims and Lawsuit |
Maximum
 
 
 
Commitments and Contingencies
 
 
 
Deductibles and self-insured retentions per occurrence or per claim
$ 0.5 
 
 
Other (Expense) Income, Net (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Other Nonoperating Income (Expense) [Abstract]
 
 
 
Income (Loss) from Equity Method Investments, Net of Dividends or Distributions
$ (0.4)
$ 0.3 
$ (2.1)
Foreign currency exchange gain (loss), net
(1.4)
0.3 
(4.4)
Other, net
(2.4)
(2.3)
(1.4)
Other (expense) income, net
$ (4.2)
$ (1.7)
$ (7.9)
Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 0 Months Ended
Sep. 30, 2017
$150 senior unsecured notes
Sep. 30, 2016
$150 senior unsecured notes
Jul. 9, 2010
$150 senior unsecured notes
Sep. 30, 2017
Line of Credit [Member]
Sep. 30, 2016
Line of Credit [Member]
Dec. 19, 2014
$180 term loan
Sep. 30, 2017
$180 term loan
Sep. 30, 2016
$180 term loan
Sep. 30, 2017
$100 Series A Notes
Sep. 30, 2016
$100 Series A Notes
Dec. 15, 2014
$100 Series A Notes
Sep. 30, 2017
Level 1
Sep. 30, 2016
Level 1
Sep. 30, 2017
Level 1
$150 senior unsecured notes
Sep. 30, 2016
Level 1
$150 senior unsecured notes
Sep. 30, 2017
Level 1
Line of Credit [Member]
Sep. 30, 2016
Level 1
Line of Credit [Member]
Sep. 30, 2017
Level 1
$180 term loan
Sep. 30, 2016
Level 1
$180 term loan
Sep. 30, 2017
Level 1
$100 Series A Notes
Sep. 30, 2016
Level 1
$100 Series A Notes
Sep. 30, 2017
Level 2
Sep. 30, 2016
Level 2
Sep. 30, 2017
Level 2
$150 senior unsecured notes
Sep. 30, 2016
Level 2
$150 senior unsecured notes
Sep. 30, 2017
Level 2
Line of Credit [Member]
Sep. 30, 2016
Level 2
Line of Credit [Member]
Sep. 30, 2017
Level 2
$180 term loan
Sep. 30, 2016
Level 2
$180 term loan
Sep. 30, 2017
Level 2
$100 Series A Notes
Sep. 30, 2016
Level 2
$100 Series A Notes
Sep. 30, 2017
Level 3
Sep. 30, 2016
Level 3
Sep. 30, 2017
Level 3
$150 senior unsecured notes
Sep. 30, 2016
Level 3
$150 senior unsecured notes
Sep. 30, 2017
Level 3
Line of Credit [Member]
Sep. 30, 2016
Level 3
Line of Credit [Member]
Sep. 30, 2017
Level 3
$180 term loan
Sep. 30, 2016
Level 3
$180 term loan
Sep. 30, 2017
Level 3
$100 Series A Notes
Sep. 30, 2016
Level 3
$100 Series A Notes
Sep. 30, 2017
Carrying Value
Sep. 30, 2016
Carrying Value
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
 
 
 
 
 
 
$ 66.0 
$ 52.0 
 
 
 
 
 
 
 
 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
$ 66.0 
$ 52.0 
Investments in rabbi trust
 
 
 
 
 
 
 
 
 
 
 
4.3 
4.0 
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
 
4.3 
4.0 
Derivative instruments
 
 
 
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
 
3.8 
1.4 
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
 
3.8 
1.4 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Gross
149.5 
149.3 
 
68.0 
198.5 
 
148.5 
162.0 
100.0 
100.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Fair Value Disclosure
 
 
 
 
 
 
 
 
 
 
 
 
 
161.2 
163.5 
0 
0 
0 
0 
0 
0 
 
 
0 
0 
68.0 
198.5 
148.5 
162.0 
106.7 
110.8 
 
 
0 
0 
0 
0 
0 
0 
0 
0 
 
 
Derivative instruments
 
 
 
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
 
2.3 
3.3 
 
 
 
 
 
 
 
 
0 
0 
 
 
 
 
 
 
 
 
2.3 
3.3 
Additional disclosures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of debt issued
10 years 
 
 
 
 
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stated interest rate
5.50% 
 
5.50% 
 
 
 
 
 
 
 
4.60% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying amount of private equity limited partnerships for which fair value is not readily available
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1.4 
$ 7.6 
Segment and Geographical Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2017
segment
Sep. 30, 2016
Sep. 30, 2015
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Number of reportable segments
 
 
 
 
 
 
 
 
2 
 
 
Net revenue
$ 442.9 
$ 395.9 
$ 395.3 
$ 356.1 
$ 428.7 
$ 371.0 
$ 387.0 
$ 351.7 
$ 1,590.2 
$ 1,538.4 
$ 1,596.8 
Assets
1,956.5 
 
 
 
1,959.7 
 
 
 
1,956.5 
1,959.7 
 
Property, plant, and equipment, net
150.4 
 
 
 
152.5 
 
 
 
150.4 
152.5 
 
Depreciation and amortization
 
 
 
 
 
 
 
 
56.6 
60.4 
54.3 
UNITED STATES
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
896.1 
857.0 
915.0 
Property, plant, and equipment, net
84.4 
 
 
 
89.5 
 
 
 
84.4 
89.5 
 
All other international
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
268.5 
278.4 
261.1 
Property, plant, and equipment, net
27.0 
 
 
 
27.2 
 
 
 
27.0 
27.2 
 
GERMANY
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
425.6 
403.0 
420.7 
Property, plant, and equipment, net
39.0 
 
 
 
35.8 
 
 
 
39.0 
35.8 
 
Corporate
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Assets
30.9 
 
 
 
53.3 
 
 
 
30.9 
53.3 
 
Depreciation and amortization
 
 
 
 
 
 
 
 
1.5 
1.1 
1.3 
All other international
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Immaterial net revenue error correction
 
 
 
 
 
 
 
 
 
79.7 
56.6 
GERMANY
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Immaterial net revenue error correction
 
 
 
 
 
 
 
 
 
79.7 
56.6 
Process Equipment Group Segment
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
1,028.2 
964.7 
992.8 
Process Equipment Group Segment |
Operating Segments
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Assets
1,722.2 
 
 
 
1,694.6 
 
 
 
1,722.2 
1,694.6 
 
Depreciation and amortization
 
 
 
 
 
 
 
 
41.3 
45.2 
37.2 
Batesville Segment
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
562.0 
573.7 
604.0 
Batesville Segment |
Operating Segments
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Assets
203.4 
 
 
 
211.8 
 
 
 
203.4 
211.8 
 
Depreciation and amortization
 
 
 
 
 
 
 
 
13.8 
14.1 
15.8 
Scenario, Previously Reported [Member] |
All other international
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
 
198.7 
204.5 
Scenario, Previously Reported [Member] |
GERMANY
 
 
 
 
 
 
 
 
 
 
 
Segment and Geographical Information
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
 
$ 482.7 
$ 477.3 
Segment and Geographical Information - Segment adjusted EBITDA to consolidated net income (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Segment and Geographical Information
 
 
 
Interest income
$ 0.9 
$ 1.2 
$ 1.0 
Interest expense
25.2 
25.3 
23.8 
Income tax expense
59.9 
47.3 
49.1 
Depreciation and amortization
56.6 
60.4 
54.3 
Business acquisition costs
1.1 
3.7 
3.6 
Inventory step-up
0 
2.4 
0 
Restructuring and restructuring related
10.7 
10.2 
7.5 
Litigation
0 
0 
0.5 
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)
0 
2.2 
0 
Consolidated net income
128.4 
116.8 
113.2 
Corporate
 
 
 
Segment and Geographical Information
 
 
 
Adjusted EBITDA
(38.6)
(37.3)
(37.3)
Depreciation and amortization
1.5 
1.1 
1.3 
Process Equipment Group Segment |
Operating Segments
 
 
 
Segment and Geographical Information
 
 
 
Adjusted EBITDA
177.7 
160.9 
160.5 
Depreciation and amortization
41.3 
45.2 
37.2 
Batesville Segment |
Operating Segments
 
 
 
Segment and Geographical Information
 
 
 
Adjusted EBITDA
141.9 
143.5 
145.5 
Depreciation and amortization
$ 13.8 
$ 14.1 
$ 15.8 
Unaudited Quarterly Financial Information (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net revenue
$ 442.9 
$ 395.9 
$ 395.3 
$ 356.1 
$ 428.7 
$ 371.0 
$ 387.0 
$ 351.7 
$ 1,590.2 
$ 1,538.4 
$ 1,596.8 
Gross profit
164.3 
152.4 
148.6 
126.0 
156.2 
143.5 
142.7 
128.2 
591.3 
570.6 
570.4 
Net income
$ 38.2 
$ 32.9 
$ 33.4 
$ 21.7 
$ 36.0 
$ 30.7 
$ 26.1 
$ 20.0 
$ 126.2 1
$ 112.8 1
$ 111.4 1
Earnings per share-basic (in dollars per share)
$ 0.60 
$ 0.52 
$ 0.52 
$ 0.34 
$ 0.57 
$ 0.49 
$ 0.41 
$ 0.32 
$ 1.99 1
$ 1.78 1
$ 1.76 1
Earnings per share-diluted (in dollars per share)
$ 0.60 
$ 0.52 
$ 0.52 
$ 0.34 
$ 0.56 
$ 0.48 
$ 0.41 
$ 0.31 
$ 1.97 1
$ 1.77 1
$ 1.74 1
Condensed Consolidating Information - Condensed Consolidating Statements of Income (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Condensed Consolidating Statements of Income
 
 
 
 
 
 
 
 
 
 
 
Net revenue
$ 442.9 
$ 395.9 
$ 395.3 
$ 356.1 
$ 428.7 
$ 371.0 
$ 387.0 
$ 351.7 
$ 1,590.2 
$ 1,538.4 
$ 1,596.8 
Cost of goods sold
 
 
 
 
 
 
 
 
998.9 
967.8 
1,026.4 
Gross profit
164.3 
152.4 
148.6 
126.0 
156.2 
143.5 
142.7 
128.2 
591.3 
570.6 
570.4 
Operating expenses
 
 
 
 
 
 
 
 
344.4 
346.5 
330.6 
Amortization expense
 
 
 
 
 
 
 
 
29.2 
33.0 
28.1 
Pension settlement charge
 
 
 
 
 
 
 
 
0 
0 
17.7 
Interest expense
 
 
 
 
 
 
 
 
25.2 
25.3 
23.8 
Other Nonoperating Income (Expense)
 
 
 
 
 
 
 
 
(4.2)
(1.7)
(7.9)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest
 
 
 
 
 
 
 
 
188.3 
164.1 
162.3 
Income Tax Expense (Benefit)
 
 
 
 
 
 
 
 
59.9 
47.3 
49.1 
Consolidated net income
 
 
 
 
 
 
 
 
128.4 
116.8 
113.2 
Less: Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
2.2 
4.0 
1.8 
Net Income (Loss) Available to Common Stockholders, Basic
38.2 
32.9 
33.4 
21.7 
36.0 
30.7 
26.1 
20.0 
126.2 1
112.8 1
111.4 1
Consolidated comprehensive income (loss)
 
 
 
 
 
 
 
 
177.2 
94.6 
57.1 
Less: Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
2.4 
3.7 
1.4 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
174.8 2
90.9 2
55.7 2
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
48.8 
(22.2)
(56.1)
Reportable Legal Entities
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statements of Income
 
 
 
 
 
 
 
 
 
 
 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
 
90.9 
(102.9)
Reportable Legal Entities |
Parent
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statements of Income
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
42.4 
41.8 
33.1 
Amortization expense
 
 
 
 
 
 
 
 
0 
0 
0.4 
Pension settlement charge
 
 
 
 
 
 
 
 
0 
0 
3.3 
Interest expense
 
 
 
 
 
 
 
 
21.8 
22.7 
20.5 
Other Nonoperating Income (Expense)
 
 
 
 
 
 
 
 
(0.6)
(0.3)
(0.2)
Income (Loss) from Subsidiaries, Net of Tax
 
 
 
 
 
 
 
 
164.4 
144.4 
141.1 
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest
 
 
 
 
 
 
 
 
99.6 
79.6 
83.6 
Income Tax Expense (Benefit)
 
 
 
 
 
 
 
 
(26.6)
(33.2)
(27.8)
Consolidated net income
 
 
 
 
 
 
 
 
126.2 
112.8 
111.4 
Net Income (Loss) Available to Common Stockholders, Basic
 
 
 
 
 
 
 
 
126.2 
112.8 
111.4 
Consolidated comprehensive income (loss)
 
 
 
 
 
 
 
 
174.8 
90.9 
55.7 
Less: Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
0 
0 
0 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
174.8 
 
55.7 
Reportable Legal Entities |
Guarantors
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statements of Income
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
901.4 
846.8 
912.0 
Cost of goods sold
 
 
 
 
 
 
 
 
467.3 
428.7 
475.6 
Gross profit
 
 
 
 
 
 
 
 
434.1 
418.1 
436.4 
Operating expenses
 
 
 
 
 
 
 
 
237.8 
242.0 
244.1 
Amortization expense
 
 
 
 
 
 
 
 
13.5 
13.0 
11.4 
Pension settlement charge
 
 
 
 
 
 
 
 
0 
0 
14.4 
Interest expense
 
 
 
 
 
 
 
 
0 
0.2 
0.8 
Other Nonoperating Income (Expense)
 
 
 
 
 
 
 
 
(3.4)
(2.2)
(4.0)
Income (Loss) from Subsidiaries, Net of Tax
 
 
 
 
 
 
 
 
8.2 
10.2 
12.5 
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest
 
 
 
 
 
 
 
 
187.6 
170.9 
174.2 
Income Tax Expense (Benefit)
 
 
 
 
 
 
 
 
65.9 
62.4 
60.5 
Consolidated net income
 
 
 
 
 
 
 
 
121.7 
108.5 
113.7 
Net Income (Loss) Available to Common Stockholders, Basic
 
 
 
 
 
 
 
 
121.7 
108.5 
113.7 
Consolidated comprehensive income (loss)
 
 
 
 
 
 
 
 
131.8 
116.4 
103.5 
Less: Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
0 
0 
0 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
131.8 
116.4 
103.5 
Reportable Legal Entities |
Non-Guarantors
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statements of Income
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
904.7 
892.8 
889.0 
Cost of goods sold
 
 
 
 
 
 
 
 
647.4 
638.4 
654.5 
Gross profit
 
 
 
 
 
 
 
 
257.3 
254.4 
234.5 
Operating expenses
 
 
 
 
 
 
 
 
164.3 
164.6 
153.9 
Amortization expense
 
 
 
 
 
 
 
 
15.7 
20.0 
16.3 
Pension settlement charge
 
 
 
 
 
 
 
 
0 
0 
0 
Interest expense
 
 
 
 
 
 
 
 
3.4 
2.4 
2.5 
Other Nonoperating Income (Expense)
 
 
 
 
 
 
 
 
(0.2)
0.8 
(3.7)
Income (Loss) from Subsidiaries, Net of Tax
 
 
 
 
 
 
 
 
0 
 
 
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest
 
 
 
 
 
 
 
 
73.7 
68.2 
58.1 
Income Tax Expense (Benefit)
 
 
 
 
 
 
 
 
20.6 
18.1 
16.4 
Consolidated net income
 
 
 
 
 
 
 
 
53.1 
50.1 
41.7 
Less: Net income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
2.2 
4.0 
1.8 
Net Income (Loss) Available to Common Stockholders, Basic
 
 
 
 
 
 
 
 
50.9 
46.1 
39.9 
Consolidated comprehensive income (loss)
 
 
 
 
 
 
 
 
86.4 
33.1 
0.8 
Less: Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
2.4 
3.7 
1.4 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
84.0 
29.4 
(0.6)
Eliminations
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Statements of Income
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
 
 
 
 
 
 
 
(215.9)
(201.2)
(204.2)
Cost of goods sold
 
 
 
 
 
 
 
 
(115.8)
(99.3)
(103.7)
Gross profit
 
 
 
 
 
 
 
 
(100.1)
(101.9)
(100.5)
Operating expenses
 
 
 
 
 
 
 
 
(100.1)
(101.9)
(100.5)
Other Nonoperating Income (Expense)
 
 
 
 
 
 
 
 
0 
0 
0 
Income (Loss) from Subsidiaries, Net of Tax
 
 
 
 
 
 
 
 
(172.6)
(154.6)
(153.6)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest
 
 
 
 
 
 
 
 
(172.6)
(154.6)
(153.6)
Consolidated net income
 
 
 
 
 
 
 
 
(172.6)
(154.6)
(153.6)
Net Income (Loss) Available to Common Stockholders, Basic
 
 
 
 
 
 
 
 
(172.6)
(154.6)
(153.6)
Consolidated comprehensive income (loss)
 
 
 
 
 
 
 
 
(215.8)
(145.8)
(102.9)
Less: Comprehensive income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
0 
0 
0 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
 
 
 
 
 
 
 
 
$ (215.8)
$ (145.8)
 
Condensed Consolidating Information - Condensed Consolidating Balance Sheets (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2014
Condensed Consolidating Balance Sheets
 
 
 
 
Cash and cash equivalents
$ 66.0 
$ 52.0 
$ 48.3 
$ 58.0 
Trade receivables, net
206.1 
205.0 
 
 
Receivables from long-term manufacturing contracts
125.2 
125.8 
 
 
Inventories
151.6 
153.1 
 
 
Deferred income taxes
0 
23.9 
 
 
Prepaid expense
28.2 
18.2 
 
 
Intercompany receivables
0 
0 
 
 
Other current assets
16.5 
22.3 
 
 
Total current assets
593.6 
600.3 
 
 
Property, plant, and equipment, net
150.4 
152.5 
 
 
Intangible assets, net
523.9 
541.5 
 
 
Goodwill
647.5 
634.3 
544.0 
 
Investment in consolidated subsidiaries
0 
0 
 
 
Other assets
41.1 
31.1 
 
 
Total Assets
1,956.5 
1,959.7 
 
 
Trade accounts payable
158.0 
135.7 
 
 
Liabilities from long-term manufacturing contracts and advances
132.3 
78.6 
 
 
Current portion of long-term debt
18.8 
13.8 
 
 
Accrued compensation
66.9 
57.3 
 
 
Deferred income taxes
0 
22.8 
 
 
Intercompany payables
0 
0 
 
 
Other current liabilities
135.7 
125.5 
 
 
Total current liabilities
511.7 
433.7 
 
 
Long-term debt
446.9 
595.1 
 
 
Accrued pension and postretirement healthcare
129.6 
232.7 
 
 
Deferred income taxes
75.7 
22.6 
 
 
Other long-term liabilities
26.7 
29.4 
 
 
Total Liabilities
1,190.6 
1,313.5 
 
 
Total Hillenbrand Shareholders’ Equity
751.4 
632.3 
 
 
Noncontrolling interests
14.5 
13.9 
 
 
Total Shareholders’ Equity
765.9 
646.2 
605.8 
593.8 
Total Liabilities and Equity
1,956.5 
1,959.7 
 
 
Reportable Legal Entities |
Parent
 
 
 
 
Condensed Consolidating Balance Sheets
 
 
 
 
Cash and cash equivalents
0.1 
4.4 
0.3 
0.4 
Trade receivables, net
0 
0 
 
 
Receivables from long-term manufacturing contracts
0 
0 
 
 
Inventories
0 
0 
 
 
Deferred income taxes
0 
1.6 
 
 
Prepaid expense
2.1 
2.2 
 
 
Intercompany receivables
0 
0 
 
 
Other current assets
0.2 
4.6 
 
 
Total current assets
2.4 
12.8 
 
 
Property, plant, and equipment, net
4.7 
4.9 
 
 
Intangible assets, net
3.6 
4.1 
 
 
Goodwill
0 
0 
 
 
Investment in consolidated subsidiaries
2,298.0 
2,143.4 
 
 
Other assets
20.2 
18.9 
 
 
Total Assets
2,328.9 
2,184.1 
 
 
Trade accounts payable
1.0 
0.4 
 
 
Liabilities from long-term manufacturing contracts and advances
0 
0 
 
 
Current portion of long-term debt
18.0 
13.5 
 
 
Accrued compensation
7.6 
4.7 
 
 
Deferred income taxes
0 
0 
 
 
Intercompany payables
1,142.8 
1,098.8 
 
 
Other current liabilities
14.0 
13.9 
 
 
Total current liabilities
1,183.4 
1,131.3 
 
 
Long-term debt
392.0 
416.6 
 
 
Accrued pension and postretirement healthcare
0.8 
1.1 
 
 
Deferred income taxes
0 
0 
 
 
Other long-term liabilities
1.3 
2.8 
 
 
Total Liabilities
1,577.5 
1,551.8 
 
 
Total Hillenbrand Shareholders’ Equity
751.4 
632.3 
 
 
Noncontrolling interests
0 
0 
 
 
Total Shareholders’ Equity
751.4 
632.3 
 
 
Total Liabilities and Equity
2,328.9 
2,184.1 
 
 
Reportable Legal Entities |
Guarantors
 
 
 
 
Condensed Consolidating Balance Sheets
 
 
 
 
Cash and cash equivalents
4.9 
5.6 
7.1 
10.6 
Trade receivables, net
114.5 
120.6 
 
 
Receivables from long-term manufacturing contracts
8.5 
10.6 
 
 
Inventories
68.2 
69.8 
 
 
Deferred income taxes
0 
17.4 
 
 
Prepaid expense
7.6 
6.5 
 
 
Intercompany receivables
1,050.4 
1,003.1 
 
 
Other current assets
1.6 
1.5 
 
 
Total current assets
1,255.7 
1,235.1 
 
 
Property, plant, and equipment, net
64.5 
65.7 
 
 
Intangible assets, net
211.3 
220.4 
 
 
Goodwill
283.9 
271.8 
 
 
Investment in consolidated subsidiaries
664.1 
820.2 
 
 
Other assets
29.0 
22.7 
 
 
Total Assets
2,508.5 
2,635.9 
 
 
Trade accounts payable
36.7 
28.4 
 
 
Liabilities from long-term manufacturing contracts and advances
26.2 
14.0 
 
 
Current portion of long-term debt
0 
0 
 
 
Accrued compensation
17.9 
17.3 
 
 
Deferred income taxes
0 
0 
 
 
Intercompany payables
4.0 
4.5 
 
 
Other current liabilities
42.2 
39.8 
 
 
Total current liabilities
127.0 
104.0 
 
 
Long-term debt
0 
0 
 
 
Accrued pension and postretirement healthcare
33.3 
127.0 
 
 
Deferred income taxes
27.5 
5.8 
 
 
Other long-term liabilities
15.3 
16.3 
 
 
Total Liabilities
203.1 
253.1 
 
 
Total Hillenbrand Shareholders’ Equity
2,305.4 
2,382.8 
 
 
Noncontrolling interests
0 
0 
 
 
Total Shareholders’ Equity
2,305.4 
2,382.8 
 
 
Total Liabilities and Equity
2,508.5 
2,635.9 
 
 
Reportable Legal Entities |
Non-Guarantors
 
 
 
 
Condensed Consolidating Balance Sheets
 
 
 
 
Cash and cash equivalents
61.0 
42.0 
40.9 
47.0 
Trade receivables, net
91.6 
84.4 
 
 
Receivables from long-term manufacturing contracts
116.7 
115.2 
 
 
Inventories
85.9 
86.1 
 
 
Deferred income taxes
0 
0 
 
 
Prepaid expense
18.5 
9.5 
 
 
Intercompany receivables
93.9 
97.4 
 
 
Other current assets
14.4 
15.9 
 
 
Total current assets
482.0 
450.5 
 
 
Property, plant, and equipment, net
81.2 
81.9 
 
 
Intangible assets, net
309.0 
317.0 
 
 
Goodwill
363.6 
362.5 
 
 
Investment in consolidated subsidiaries
0 
0 
 
 
Other assets
4.4 
0.8 
 
 
Total Assets
1,240.2 
1,212.7 
 
 
Trade accounts payable
120.0 
106.9 
 
 
Liabilities from long-term manufacturing contracts and advances
106.1 
64.6 
 
 
Current portion of long-term debt
0.8 
0.3 
 
 
Accrued compensation
41.4 
35.3 
 
 
Deferred income taxes
0 
18.1 
 
 
Intercompany payables
0 
0 
 
 
Other current liabilities
79.3 
71.6 
 
 
Total current liabilities
347.6 
296.8 
 
 
Long-term debt
54.9 
178.5 
 
 
Accrued pension and postretirement healthcare
95.5 
104.6 
 
 
Deferred income taxes
60.9 
27.8 
 
 
Other long-term liabilities
10.1 
10.3 
 
 
Total Liabilities
569.0 
618.0 
 
 
Total Hillenbrand Shareholders’ Equity
656.7 
580.8 
 
 
Noncontrolling interests
14.5 
13.9 
 
 
Total Shareholders’ Equity
671.2 
594.7 
 
 
Total Liabilities and Equity
1,240.2 
1,212.7 
 
 
Eliminations
 
 
 
 
Condensed Consolidating Balance Sheets
 
 
 
 
Cash and cash equivalents
0 
0 
0 
0 
Trade receivables, net
0 
0 
 
 
Receivables from long-term manufacturing contracts
0 
0 
 
 
Inventories
(2.5)
(2.8)
 
 
Deferred income taxes
0 
4.9 
 
 
Prepaid expense
0 
0 
 
 
Intercompany receivables
(1,144.3)
(1,100.5)
 
 
Other current assets
0.3 
0.3 
 
 
Total current assets
(1,146.5)
(1,098.1)
 
 
Property, plant, and equipment, net
0 
0 
 
 
Intangible assets, net
0 
0 
 
 
Goodwill
0 
0 
 
 
Investment in consolidated subsidiaries
(2,962.1)
(2,963.6)
 
 
Other assets
(12.5)
(11.3)
 
 
Total Assets
(4,121.1)
(4,073.0)
 
 
Trade accounts payable
0.3 
0 
 
 
Liabilities from long-term manufacturing contracts and advances
0 
0 
 
 
Current portion of long-term debt
0 
0 
 
 
Accrued compensation
0 
0 
 
 
Deferred income taxes
0 
4.7 
 
 
Intercompany payables
(1,146.8)
(1,103.3)
 
 
Other current liabilities
0.2 
0.2 
 
 
Total current liabilities
(1,146.3)
(1,098.4)
 
 
Long-term debt
0 
0 
 
 
Accrued pension and postretirement healthcare
0 
0 
 
 
Deferred income taxes
(12.7)
(11.0)
 
 
Other long-term liabilities
0 
0 
 
 
Total Liabilities
(1,159.0)
(1,109.4)
 
 
Total Hillenbrand Shareholders’ Equity
(2,962.1)
(2,963.6)
 
 
Noncontrolling interests
0 
0 
 
 
Total Shareholders’ Equity
(2,962.1)
(2,963.6)
 
 
Total Liabilities and Equity
$ (4,121.1)
$ (4,073.0)
 
 
Condensed Consolidating Information - Condensed Consolidating Statements of Cash Flows (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Condensed Consolidating Statements of Cash Flows
 
 
 
Net cash provided by (used in) operating activities
$ 246.2 
$ 238.2 
$ 105.0 
Investing activities:
 
 
 
Capital expenditures
(22.0)
(21.2)
(31.0)
Proceeds from sales of property, plant, and equipment
5.7 
2.0 
2.8 
Acquisitions of businesses, net of cash acquired
0 
(235.4)
0 
Return of investment capital from affiliates
3.2 
1.1 
1.5 
Other, net
(0.4)
0 
(2.8)
Net cash used in investing activities
(13.5)
(253.5)
(29.5)
Financing activities:
 
 
 
Repayments on term loan
(13.5)
(9.0)
(9.0)
Proceeds from revolving credit facility
819.3 
719.8 
430.2 
Repayments on revolving credit facility
(953.0)
(627.2)
(547.0)
Proceeds from Series A unsecured notes, net of financing costs
0 
0 
99.6 
Payment of dividends - intercompany
0 
0 
0 
Payment of dividends on common stock
(51.9)
(51.1)
(50.4)
Repurchases of common stock
(28.0)
(21.2)
(11.2)
Net proceeds on stock plans
13.7 
11.1 
3.4 
Other, net
(1.7)
(0.8)
1.2 
Net cash provided by (used in) financing activities
(215.1)
21.6 
(83.2)
Effect of exchange rate changes on cash and cash equivalents
(3.6)
(2.6)
(2.0)
Net cash flows
14.0 
3.7 
(9.7)
At beginning of period
52.0 
48.3 
58.0 
At end of period
66.0 
52.0 
48.3 
Reportable Legal Entities |
Parent
 
 
 
Condensed Consolidating Statements of Cash Flows
 
 
 
Net cash provided by (used in) operating activities
79.9 
157.8 
76.0 
Investing activities:
 
 
 
Capital expenditures
(0.7)
(2.6)
(1.1)
Proceeds from sales of property, plant, and equipment
0 
0 
0 
Acquisitions of businesses, net of cash acquired
0 
0 
0 
Return of investment capital from affiliates
3.2 
1.1 
1.5 
Other, net
0 
0 
0 
Net cash used in investing activities
2.5 
(1.5)
0.4 
Financing activities:
 
 
 
Repayments on term loan
(13.5)
(9.0)
(9.0)
Proceeds from revolving credit facility
289.5 
375.5 
331.7 
Repayments on revolving credit facility
(296.5)
(457.5)
(441.8)
Proceeds from Series A unsecured notes, net of financing costs
0 
0 
99.6 
Payment of dividends - intercompany
0 
0 
0 
Payment of dividends on common stock
(51.9)
(51.1)
(50.4)
Repurchases of common stock
(28.0)
(21.2)
(11.2)
Net proceeds on stock plans
13.7 
11.1 
3.4 
Other, net
0 
0 
1.2 
Net cash provided by (used in) financing activities
(86.7)
(152.2)
(76.5)
Effect of exchange rate changes on cash and cash equivalents
0 
0 
0 
Net cash flows
(4.3)
4.1 
(0.1)
At beginning of period
4.4 
0.3 
0.4 
At end of period
0.1 
4.4 
0.3 
Reportable Legal Entities |
Guarantors
 
 
 
Condensed Consolidating Statements of Cash Flows
 
 
 
Net cash provided by (used in) operating activities
126.7 
239.9 
91.0 
Investing activities:
 
 
 
Capital expenditures
(9.7)
(8.0)
(14.5)
Proceeds from sales of property, plant, and equipment
5.3 
1.6 
2.8 
Acquisitions of businesses, net of cash acquired
0 
(130.4)
0 
Return of investment capital from affiliates
0 
0 
0 
Other, net
(0.4)
0 
(2.5)
Net cash used in investing activities
(4.8)
(136.8)
(14.2)
Financing activities:
 
 
 
Repayments on term loan
0 
0 
0 
Proceeds from revolving credit facility
0 
0 
0 
Repayments on revolving credit facility
0 
0 
0 
Proceeds from Series A unsecured notes, net of financing costs
0 
0 
0 
Payment of dividends - intercompany
(122.6)
(104.6)
(80.3)
Payment of dividends on common stock
0 
0 
0 
Repurchases of common stock
0 
0 
0 
Net proceeds on stock plans
0 
0 
0 
Other, net
0 
0 
0 
Net cash provided by (used in) financing activities
(122.6)
(104.6)
(80.3)
Effect of exchange rate changes on cash and cash equivalents
0 
0 
0 
Net cash flows
(0.7)
(1.5)
(3.5)
At beginning of period
5.6 
7.1 
10.6 
At end of period
4.9 
5.6 
7.1 
Reportable Legal Entities |
Non-Guarantors
 
 
 
Condensed Consolidating Statements of Cash Flows
 
 
 
Net cash provided by (used in) operating activities
168.3 
(49.5)
23.6 
Investing activities:
 
 
 
Capital expenditures
(11.6)
(10.6)
(15.4)
Proceeds from sales of property, plant, and equipment
0.4 
0.4 
0 
Acquisitions of businesses, net of cash acquired
0 
(105.0)
0 
Return of investment capital from affiliates
0 
0 
0 
Other, net
0 
0 
(0.3)
Net cash used in investing activities
(11.2)
(115.2)
(15.7)
Financing activities:
 
 
 
Repayments on term loan
0 
0 
0 
Proceeds from revolving credit facility
529.8 
344.3 
98.5 
Repayments on revolving credit facility
(656.5)
(169.7)
(105.2)
Proceeds from Series A unsecured notes, net of financing costs
0 
0 
0 
Payment of dividends - intercompany
(6.1)
(5.4)
(5.3)
Payment of dividends on common stock
0 
0 
0 
Repurchases of common stock
0 
0 
0 
Net proceeds on stock plans
0 
0 
0 
Other, net
(1.7)
(0.8)
0 
Net cash provided by (used in) financing activities
(134.5)
168.4 
(12.0)
Effect of exchange rate changes on cash and cash equivalents
(3.6)
(2.6)
(2.0)
Net cash flows
19.0 
1.1 
(6.1)
At beginning of period
42.0 
40.9 
47.0 
At end of period
61.0 
42.0 
40.9 
Eliminations
 
 
 
Condensed Consolidating Statements of Cash Flows
 
 
 
Net cash provided by (used in) operating activities
(128.7)
(110.0)
(85.6)
Investing activities:
 
 
 
Capital expenditures
0 
0 
0 
Proceeds from sales of property, plant, and equipment
0 
0 
0 
Acquisitions of businesses, net of cash acquired
0 
0 
0 
Return of investment capital from affiliates
0 
0 
0 
Other, net
0 
0 
0 
Net cash used in investing activities
0 
0 
0 
Financing activities:
 
 
 
Repayments on term loan
0 
0 
0 
Proceeds from revolving credit facility
0 
0 
0 
Repayments on revolving credit facility
0 
0 
0 
Proceeds from Series A unsecured notes, net of financing costs
0 
0 
0 
Payment of dividends - intercompany
128.7 
110.0 
85.6 
Payment of dividends on common stock
0 
0 
0 
Repurchases of common stock
0 
0 
0 
Net proceeds on stock plans
0 
0 
0 
Other, net
0 
0 
0 
Net cash provided by (used in) financing activities
128.7 
110.0 
85.6 
Effect of exchange rate changes on cash and cash equivalents
0 
0 
0 
Net cash flows
0 
0 
0 
At beginning of period
0 
0 
0 
At end of period
$ 0 
$ 0 
$ 0 
Restructuring (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Restructuring and Related Cost
 
 
Restructuring charges
$ 9.5 
$ 8.9 
Restructuring costs accrued
2.7 
 
Corporate
 
 
Restructuring and Related Cost
 
 
Restructuring charges
2.1 
0.5 
Process Equipment Group
 
 
Restructuring and Related Cost
 
 
Restructuring charges
1.9 
7.1 
Batesville
 
 
Restructuring and Related Cost
 
 
Restructuring charges
5.5 
1.3 
Cost of goods sold
 
 
Restructuring and Related Cost
 
 
Restructuring charges
6.0 
3.2 
Cost of goods sold |
Corporate
 
 
Restructuring and Related Cost
 
 
Restructuring charges
0 
0 
Cost of goods sold |
Process Equipment Group
 
 
Restructuring and Related Cost
 
 
Restructuring charges
0.5 
3.0 
Cost of goods sold |
Batesville
 
 
Restructuring and Related Cost
 
 
Restructuring charges
5.5 
0.2 
Operating expenses
 
 
Restructuring and Related Cost
 
 
Restructuring charges
3.5 
5.7 
Operating expenses |
Corporate
 
 
Restructuring and Related Cost
 
 
Restructuring charges
2.1 
0.5 
Operating expenses |
Process Equipment Group
 
 
Restructuring and Related Cost
 
 
Restructuring charges
1.4 
4.1 
Operating expenses |
Batesville
 
 
Restructuring and Related Cost
 
 
Restructuring charges
$ 0 
$ 1.1 
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2015
Allowance for doubtful accounts, early pay discounts, and sales returns
 
 
 
Valuation and qualifying accounts activity
 
 
 
Balance at Beginning of Period
$ 21.0 
$ 20.0 
$ 19.2 
Charged to Revenue, Costs, and Expense
2.5 
3.7 
2.4 
Charged to Other Accounts
0.1 
0.4 
(0.2)
Deductions Net of Recoveries
(2.0)
(3.1)
(1.4)
Balance at End of Period
21.6 
21.0 
20.0 
Allowance for inventory valuation
 
 
 
Valuation and qualifying accounts activity
 
 
 
Balance at Beginning of Period
18.0 
14.8 
14.6 
Charged to Revenue, Costs, and Expense
2.4 
4.3 
3.4 
Charged to Other Accounts
0.8 
0.6 
(1.2)
Deductions Net of Recoveries
(2.2)
(1.7)
(2.0)
Balance at End of Period
$ 19.0 
$ 18.0 
$ 14.8