Indiana
|
35-1160484
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Two Prudential Plaza, Suite 4100
Chicago, IL
|
60601
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Common Stock, without par value
|
New York Stock Exchange
|
PART II
|
||
4
|
||
PART IV
|
||
43
|
Page
|
|
Financial Statements:
|
|
5
|
|
6
|
|
7
|
|
8 | |
9 | |
10 | |
11 | |
12
|
|
12
|
|
20
|
|
22
|
|
23
|
|
26
|
|
26
|
|
32
|
|
34
|
|
36
|
|
38
|
|
39
|
|
41
|
|
41
|
|
Financial Statement Schedule for the fiscal years ended September 30, 2016, 2015 and 2014:
|
|
44
|
|
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto.
|
1) | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
2) | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and |
3) | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our Consolidated Financial Statements. |
Years Ended September 30
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Net Revenue
|
||||||||||||
Product sales and service
|
$
|
2,263.4
|
$
|
1,604.5
|
$
|
1,301.4
|
||||||
Rental revenue
|
391.8
|
383.7
|
384.7
|
|||||||||
Total revenue
|
2,655.2
|
1,988.2
|
1,686.1
|
|||||||||
Cost of Revenue
|
||||||||||||
Cost of goods sold
|
1,209.4
|
921.2
|
730.2
|
|||||||||
Rental expenses
|
188.8
|
186.7
|
176.0
|
|||||||||
Total cost of revenue
|
1,398.2
|
1,107.9
|
906.2
|
|||||||||
Gross Profit
|
1,257.0
|
880.3
|
779.9
|
|||||||||
Research and development expenses
|
133.5
|
91.8
|
71.9
|
|||||||||
Selling and administrative expenses
|
853.3
|
664.2
|
548.3
|
|||||||||
Special charges (Note 8)
|
39.9
|
41.2
|
37.1
|
|||||||||
Operating Profit
|
230.3
|
83.1
|
122.6
|
|||||||||
Interest expense
|
(90.4
|
)
|
(18.4
|
)
|
(9.8
|
)
|
||||||
Loss on extinguishment of debt
|
(10.8
|
)
|
-
|
-
|
||||||||
Investment income and other, net
|
9.2
|
0.4
|
2.4
|
|||||||||
Income Before Income Taxes
|
138.3
|
65.1
|
115.2
|
|||||||||
Income tax expense (Note 9)
|
15.5
|
18.3
|
54.6
|
|||||||||
Net Income
|
122.8
|
46.8
|
60.6
|
|||||||||
Less: Net loss attributable to noncontrolling interests
|
(1.3
|
)
|
(0.9
|
)
|
-
|
|||||||
Net Income Attributable to Common Shareholders
|
$
|
124.1
|
$
|
47.7
|
$
|
60.6
|
||||||
Net Income Attributable to Common Shareholders
|
||||||||||||
per Common Share - Basic
|
$
|
1.90
|
$
|
0.83
|
$
|
1.05
|
||||||
Net Income Attributable to Common Shareholders
|
||||||||||||
per Common Share - Diluted
|
$
|
1.86
|
$
|
0.82
|
$
|
1.04
|
||||||
Dividends per Common Share
|
$
|
0.6700
|
$
|
0.6325
|
$
|
0.5950
|
||||||
Average Common Shares Outstanding - Basic (thousands) (Note 10)
|
65,333
|
57,249
|
57,555
|
|||||||||
Average Common Shares Outstanding - Diluted (thousands) (Note 10)
|
66,596
|
58,536
|
58,523
|
Years Ended September 30
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Net Income
|
$
|
122.8
|
$
|
46.8
|
$
|
60.6
|
||||||
Other Comprehensive Loss, Net of Tax:
|
||||||||||||
Available-for-sale securities and hedges
|
(3.1
|
)
|
-
|
0.3
|
||||||||
Foreign currency translation adjustment
|
(22.4
|
)
|
(58.6
|
)
|
(29.6
|
)
|
||||||
Change in pension and postretirement defined benefit plans
|
(2.8
|
)
|
(8.1
|
)
|
(9.1
|
)
|
||||||
Total Other Comprehensive Loss, Net of Tax
|
(28.3
|
)
|
(66.7
|
)
|
(38.4
|
)
|
||||||
Total Comprehensive Income (Loss)
|
94.5
|
(19.9
|
)
|
22.2
|
||||||||
Less: Comprehensive loss attributable to noncontrolling interests
|
(1.3
|
)
|
(0.9
|
)
|
-
|
|||||||
Total Comprehensive Income (Loss) Attributable to Common Shareholders
|
$
|
95.8
|
$
|
(19.0
|
)
|
$
|
22.2
|
September 30
|
||||||||
2016
|
2015
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
232.2
|
$
|
192.8
|
||||
Trade accounts receivable, less allowances of $26.8 in 2016 and $26.0 in 2015 (Note 1)
|
515.1
|
494.7
|
||||||
Inventories (Note 1)
|
252.0
|
267.4
|
||||||
Deferred income taxes (Notes 1 and 9)
|
-
|
77.0
|
||||||
Other current assets
|
82.8
|
109.1
|
||||||
Total current assets
|
1,082.1
|
1,141.0
|
||||||
Property, plant, and equipment (Note 1)
|
961.8
|
976.4
|
||||||
Less accumulated depreciation
|
(611.8
|
)
|
(598.0
|
)
|
||||
Property, plant, and equipment, net
|
350.0
|
378.4
|
||||||
Intangible assets:
|
||||||||
Goodwill (Notes 1, 2 and 3)
|
1,584.4
|
1,610.5
|
||||||
Other intangible assets and software, net (Notes 1, 2 and 3)
|
1,143.3
|
1,247.7
|
||||||
Deferred income taxes (Notes 1 and 9)
|
43.1
|
21.6
|
||||||
Other assets
|
59.5
|
58.4
|
||||||
Total Assets
|
$
|
4,262.4
|
$
|
4,457.6
|
||||
LIABILITIES
|
||||||||
Current Liabilities
|
||||||||
Trade accounts payable
|
$
|
136.0
|
$
|
136.3
|
||||
Short-term borrowings (Note 4)
|
210.1
|
58.0
|
||||||
Accrued compensation
|
127.0
|
171.8
|
||||||
Accrued product warranties (Note 1)
|
27.5
|
32.1
|
||||||
Accrued rebates
|
40.8
|
33.7
|
||||||
Other current liabilities
|
120.9
|
146.9
|
||||||
Total current liabilities
|
662.3
|
578.8
|
||||||
Long-term debt (Note 4)
|
1,938.4
|
2,175.2
|
||||||
Accrued pension and postretirement benefits (Note 6)
|
99.0
|
118.8
|
||||||
Deferred income taxes (Notes 1 and 9)
|
287.8
|
380.6
|
||||||
Other long-term liabilities
|
39.0
|
47.3
|
||||||
Total Liabilities
|
3,026.5
|
3,300.7
|
||||||
Commitments and Contingencies (Note 13)
|
||||||||
SHAREHOLDERS' EQUITY (Note 7)
|
||||||||
Capital Stock:
|
||||||||
Preferred stock - without par value:
|
||||||||
Authorized - 1,000,000 shares; none issued or outstanding
|
-
|
-
|
||||||
Common stock - without par value:
|
||||||||
Authorized - 199,000,000
|
||||||||
Issued - 88,457,634 shares in 2016 and 2015
|
4.4
|
4.4
|
||||||
Additional paid-in-capital
|
575.9
|
562.0
|
||||||
Retained earnings
|
1,589.7
|
1,509.9
|
||||||
Accumulated other comprehensive loss (Note 1)
|
(169.1
|
)
|
(140.8
|
)
|
||||
Treasury stock, common shares at cost: 2016 - 22,752,381 and 2015 - 23,291,738
|
(773.7
|
)
|
(788.6
|
)
|
||||
Total Shareholders' Equity Attributable to Common Shareholders
|
1,227.2
|
1,146.9
|
||||||
Noncontrolling interests
|
8.7
|
10.0
|
||||||
Total Shareholders' Equity
|
1,235.9
|
1,156.9
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
4,262.4
|
$
|
4,457.6
|
Years Ended September 30
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Operating Activities
|
||||||||||||
Net income
|
$
|
122.8
|
$
|
46.8
|
$
|
60.6
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation
|
86.2
|
73.6
|
65.4
|
|||||||||
Amortization
|
26.9
|
10.5
|
12.2
|
|||||||||
Acquisition-related intangible asset amortization
|
95.9
|
34.1
|
28.8
|
|||||||||
Loss on extinguishment of debt
|
10.8
|
-
|
-
|
|||||||||
Provision for deferred income taxes
|
(0.5
|
)
|
(22.3
|
)
|
3.9
|
|||||||
Loss on disposal of property, equipment leased to others,
|
||||||||||||
intangible assets and impairments
|
1.9
|
0.5
|
7.2
|
|||||||||
Pension settlement charge
|
-
|
9.6
|
-
|
|||||||||
Pension contribution to master pension plan
|
(30.0
|
)
|
-
|
-
|
||||||||
Gain on sale of non-core products
|
(10.1
|
)
|
-
|
-
|
||||||||
Stock compensation
|
23.1
|
25.0
|
18.0
|
|||||||||
Excess tax benefits from employee stock plans
|
(3.6
|
)
|
(3.6
|
)
|
0.3
|
|||||||
Change in working capital excluding cash, current debt,
|
||||||||||||
acquisitions and dispositions:
|
||||||||||||
Trade accounts receivable
|
(15.8
|
)
|
(39.7
|
)
|
17.1
|
|||||||
Inventories
|
21.3
|
11.0
|
9.1
|
|||||||||
Other current assets
|
27.7
|
(7.7
|
)
|
(2.6
|
)
|
|||||||
Trade accounts payable
|
(0.5
|
)
|
0.7
|
7.0
|
||||||||
Accrued expenses and other liabilities
|
(73.0
|
)
|
53.8
|
(12.5
|
)
|
|||||||
Other, net
|
(1.9
|
)
|
21.5
|
(4.2
|
)
|
|||||||
Net cash provided by operating activities
|
281.2
|
213.8
|
210.3
|
|||||||||
Investing Activities
|
||||||||||||
Capital expenditures and purchases of intangible assets
|
(83.3
|
)
|
(121.3
|
)
|
(62.7
|
)
|
||||||
Proceeds on sale of property and equipment leased to others
|
2.2
|
1.5
|
2.4
|
|||||||||
Payment for acquisition of businesses, net of cash acquired
|
(25.3
|
)
|
(1,638.7
|
)
|
(239.5
|
)
|
||||||
Proceeds on sale of non-core products
|
10.3
|
-
|
-
|
|||||||||
Refund on acquisition of businesses
|
-
|
-
|
4.6
|
|||||||||
Other
|
(1.6
|
)
|
2.1
|
0.7
|
||||||||
Net cash used in investing activities
|
(97.7
|
)
|
(1,756.4
|
)
|
(294.5
|
)
|
||||||
Financing Activities
|
||||||||||||
Net change in short-term debt
|
-
|
(0.7
|
)
|
(0.2
|
)
|
|||||||
Borrowings on revolving credit facility
|
156.9
|
95.0
|
252.0
|
|||||||||
Payments on revolving credit facility
|
(20.0
|
)
|
(135.0
|
)
|
(57.0
|
)
|
||||||
Proceeds from long-term debt
|
530.4
|
2,225.0
|
0.8
|
|||||||||
Payment of long-term debt
|
(767.9
|
)
|
(401.6
|
)
|
(11.4
|
)
|
||||||
Payment of acquired debt
|
-
|
-
|
(26.8
|
)
|
||||||||
Repurchase of registered debentures
|
-
|
(5.9
|
)
|
-
|
||||||||
Debt issuance costs
|
(2.3
|
)
|
(50.3
|
)
|
-
|
|||||||
Purchase of noncontrolling interest of former joint venture
|
(0.4
|
)
|
(1.9
|
)
|
(1.3
|
)
|
||||||
Payment of cash dividends
|
(43.8
|
)
|
(37.1
|
)
|
(34.2
|
)
|
||||||
Proceeds from exercise of stock options
|
6.2
|
12.1
|
11.5
|
|||||||||
Proceeds from stock issuance
|
3.8
|
2.8
|
2.5
|
|||||||||
Excess tax benefits from employee stock plans
|
3.6
|
3.6
|
(0.3
|
)
|
||||||||
Treasury stock acquired
|
(8.4
|
)
|
(63.3
|
)
|
(71.8
|
)
|
||||||
Net cash provided by (used in) financing activities
|
(141.9
|
)
|
1,642.7
|
63.8
|
||||||||
Effect of exchange rate changes on cash
|
(2.2
|
)
|
(6.6
|
)
|
(7.7
|
)
|
||||||
Net Cash Flows
|
39.4
|
93.5
|
(28.1
|
)
|
||||||||
Cash and Cash Equivalents
|
||||||||||||
At beginning of period
|
192.8
|
99.3
|
127.4
|
|||||||||
At end of period
|
$
|
232.2
|
$
|
192.8
|
$
|
99.3
|
||||||
Supplemental cash flow information:
|
||||||||||||
Cash paid for income taxes
|
$
|
10.9
|
$
|
49.1
|
$
|
44.4
|
||||||
Cash paid for interest
|
$
|
80.9
|
$
|
6.3
|
$
|
7.8
|
||||||
Non-cash investing and financing activities:
|
||||||||||||
Treasury stock issued under stock compensation plans
|
$
|
23.3
|
$
|
32.4
|
$
|
20.6
|
||||||
Common stock issued for acquisition of businesses
|
$
|
-
|
$
|
416.3
|
$
|
-
|
Accumulated
|
Total Equity
|
|||||||||||||||||||||||||||||||||||||||
Common Stock
|
Other
|
Common Stock
|
Attributable to
|
|||||||||||||||||||||||||||||||||||||
Shares
|
Additional
|
Retained
|
Comprehensive
|
in Treasury
|
Common
|
Noncontrolling
|
||||||||||||||||||||||||||||||||||
Outstanding
|
Amount
|
Paid-in-Capital
|
Earnings
|
Income (Loss)
|
Shares
|
Amount
|
Shareholders
|
Interests
|
Total
|
|||||||||||||||||||||||||||||||
Balance at September 30, 2013
|
58,523,392
|
$
|
4.4
|
$
|
122.7
|
$
|
1,473.8
|
$
|
(35.7
|
)
|
21,800,520
|
$
|
(706.5
|
)
|
$
|
858.7
|
$
|
858.7
|
||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
60.6
|
-
|
-
|
-
|
60.6
|
-
|
60.6
|
||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax of $4.9
|
-
|
-
|
-
|
-
|
(38.4
|
)
|
-
|
-
|
(38.4
|
)
|
-
|
(38.4
|
)
|
|||||||||||||||||||||||||||
Dividends
|
-
|
-
|
0.4
|
(34.6
|
)
|
-
|
-
|
-
|
(34.2
|
)
|
-
|
(34.2
|
)
|
|||||||||||||||||||||||||||
Treasury shares acquired
|
(1,709,523
|
)
|
-
|
-
|
-
|
-
|
1,709,523
|
(71.8
|
)
|
(71.8
|
)
|
-
|
(71.8
|
)
|
||||||||||||||||||||||||||
Stock awards and option exercises
|
626,042
|
-
|
11.0
|
-
|
-
|
(626,042
|
)
|
20.6
|
31.6
|
-
|
31.6
|
|||||||||||||||||||||||||||||
Balance at September 30, 2014
|
57,439,911
|
4.4
|
134.1
|
1,499.8
|
(74.1
|
)
|
22,884,001
|
(757.7
|
)
|
806.5
|
806.5
|
|||||||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
47.7
|
-
|
-
|
-
|
47.7
|
(0.9
|
)
|
46.8
|
|||||||||||||||||||||||||||||
Consolidation of noncontrolling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
10.9
|
10.9
|
||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax of $5.1
|
-
|
-
|
-
|
-
|
(66.7
|
)
|
-
|
-
|
(66.7
|
)
|
-
|
(66.7
|
)
|
|||||||||||||||||||||||||||
Dividends
|
-
|
-
|
0.5
|
(37.6
|
)
|
-
|
-
|
-
|
(37.1
|
)
|
-
|
(37.1
|
)
|
|||||||||||||||||||||||||||
Issuance of common stock
|
8,133,722
|
-
|
416.3
|
-
|
-
|
-
|
-
|
416.3
|
-
|
416.3
|
||||||||||||||||||||||||||||||
Treasury shares acquired
|
(1,373,321
|
)
|
-
|
-
|
-
|
-
|
1,373,321
|
(63.3
|
)
|
(63.3
|
)
|
-
|
(63.3
|
)
|
||||||||||||||||||||||||||
Stock awards and option exercises
|
965,584
|
-
|
11.1
|
-
|
-
|
(965,584
|
)
|
32.4
|
43.5
|
-
|
43.5
|
|||||||||||||||||||||||||||||
Balance at September 30, 2015
|
65,165,896
|
4.4
|
562.0
|
1,509.9
|
(140.8
|
)
|
23,291,738
|
(788.6
|
)
|
1,146.9
|
10.0
|
1,156.9
|
||||||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
124.1
|
-
|
-
|
-
|
124.1
|
(1.3
|
)
|
122.8
|
|||||||||||||||||||||||||||||
Other comprehensive loss, net of tax of $1.3
|
-
|
-
|
-
|
-
|
(28.3
|
)
|
-
|
-
|
(28.3
|
)
|
-
|
(28.3
|
)
|
|||||||||||||||||||||||||||
Dividends
|
-
|
-
|
0.5
|
(44.3
|
)
|
-
|
-
|
-
|
(43.8
|
)
|
-
|
(43.8
|
)
|
|||||||||||||||||||||||||||
Treasury shares acquired
|
(148,203
|
)
|
-
|
-
|
-
|
-
|
148,203
|
(8.4
|
)
|
(8.4
|
)
|
-
|
(8.4
|
)
|
||||||||||||||||||||||||||
Stock awards and option exercises
|
687,560
|
-
|
13.4
|
-
|
-
|
(687,560
|
)
|
23.3
|
36.7
|
-
|
36.7
|
|||||||||||||||||||||||||||||
Balance at September 30, 2016
|
65,705,253
|
$
|
4.4
|
$
|
575.9
|
$
|
1,589.7
|
$
|
(169.1
|
)
|
22,752,381
|
$
|
(773.7
|
)
|
$
|
1,227.2
|
$
|
8.7
|
$
|
1,235.9
|
September 30
|
||||||||
2016
|
2015
|
|||||||
Finished products
|
$
|
124.2
|
$
|
133.2
|
||||
Work in process
|
35.7
|
46.1
|
||||||
Raw materials
|
92.1
|
88.1
|
||||||
Total
|
$
|
252.0
|
$
|
267.4
|
Useful Life
|
||
Land improvements
|
6 - 15 years
|
|
Buildings and building equipment
|
10 - 40 years
|
|
Machinery and equipment
|
3 - 10 years
|
|
Equipment leased to others
|
2 -10 years
|
September 30
|
||||||||||||||||
2016
|
2015
|
|||||||||||||||
Accumulated
|
Accumulated
|
|||||||||||||||
Cost
|
Depreciation
|
Cost
|
Depreciation
|
|||||||||||||
Land and land improvements
|
$
|
21.5
|
$
|
3.1
|
$
|
23.3
|
$
|
2.8
|
||||||||
Buildings and building equipment
|
186.9
|
91.9
|
196.2
|
90.3
|
||||||||||||
Machinery and equipment
|
380.6
|
239.2
|
369.5
|
226.5
|
||||||||||||
Equipment leased to others
|
372.8
|
277.6
|
387.4
|
278.4
|
||||||||||||
Total
|
$
|
961.8
|
$
|
611.8
|
$
|
976.4
|
$
|
598.0
|
September 30
|
||||||||||||||||
2016
|
2015
|
|||||||||||||||
Amortization
|
Amortization
|
|||||||||||||||
Cost
|
and Impairment
|
Cost
|
and Impairment
|
|||||||||||||
Goodwill
|
$
|
2,057.2
|
$
|
472.8
|
$
|
2,083.3
|
$
|
472.8
|
||||||||
Software
|
174.1
|
140.0
|
181.7
|
139.2
|
||||||||||||
Patents and Trademarks
|
497.1
|
19.2
|
497.6
|
16.9
|
||||||||||||
Other
|
870.4
|
239.1
|
872.8
|
148.3
|
||||||||||||
Total
|
$
|
3,598.8
|
$
|
871.1
|
$
|
3,635.4
|
$
|
777.2
|
Amount
|
||||
2017
|
$
|
112.7
|
||
2018
|
$
|
103.9
|
||
2019
|
$
|
91.1
|
||
2020
|
$
|
78.3
|
||
2021
|
$
|
70.2
|
||
2022 and beyond
|
$
|
220.2
|
· | Level 1: Financial instruments with unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities. |
· | Level 2: Financial instruments with observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
· | Level 3: Financial instruments with unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs reflect our own assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs shall be developed based on the best information available in the circumstances, which might include our own data. |
2016
|
2015
|
2014
|
||||||||||
Balance at October 1
|
$
|
32.1
|
$
|
28.4
|
$
|
38.1
|
||||||
Provision for warranties during the period
|
13.9
|
14.7
|
9.8
|
|||||||||
Warranty reserves acquired
|
2.6
|
7.1
|
3.0
|
|||||||||
Warranty claims incurred during the period
|
(21.1
|
)
|
(18.1
|
)
|
(22.5
|
)
|
||||||
Balance at September 30
|
$
|
27.5
|
$
|
32.1
|
$
|
28.4
|
• | Evidence of an arrangement: An agreement with the customer reflecting the terms and conditions to deliver products or services serves as evidence of an arrangement. |
• | Delivery: For products, delivery is generally considered to occur upon transfer of title and risk of loss per the respective sales terms. For rental services, delivery is considered to occur when the services are rendered. |
• | Fixed or determinable price: The sales price is considered fixed or determinable if it is not subject to refund or measurable adjustment. |
• | Collection is deemed probable: At or prior to the time of a transaction, credit reviews of each customer are performed to determine the creditworthiness of the customer. Collection is deemed probable if the customer is expected to be able to pay amounts under the arrangement as those amounts become due. If collection is not probable, revenue is recognized when collection becomes probable, generally upon cash collection. |
Amount
|
||||
Trade receivables
|
$
|
62.9
|
||
Inventory
|
110.5
|
|||
Other current assets
|
53.8
|
|||
Property, plant, and equipment
|
91.5
|
|||
Goodwill
|
1,179.8
|
|||
Trade name (indefinite life)
|
434.0
|
|||
Customer relationships (12-year useful life)
|
516.8
|
|||
Developed technology (7-year weighted average useful life)
|
54.0
|
|||
Other intangibles
|
19.5
|
|||
Other noncurrent assets
|
26.5
|
|||
Current liabilities
|
(166.1
|
)
|
||
Noncurrent deferred income taxes
|
(309.0
|
)
|
||
Other noncurrent liabilities
|
(24.8
|
)
|
||
Total purchase price, net of cash acquired
|
$
|
2,049.4
|
||
Fair value of common stock issued
|
$
|
416.3
|
||
Cash payment, net of cash acquired
|
1,633.1
|
|||
Total consideration
|
$
|
2,049.4
|
Amount
|
||||
Trade receivables
|
$
|
67.6
|
||
Inventory
|
63.6
|
|||
Other current assets
|
23.4
|
|||
Property, plant, and equipment
|
42.1
|
|||
Goodwill
|
66.0
|
|||
Trade name (5-year useful life)
|
6.7
|
|||
Customer relationships (10-year weighted average useful life)
|
15.8
|
|||
Developed technology (8-year weighted average useful life)
|
17.8
|
|||
Other intangibles
|
4.8
|
|||
Other noncurrent assets
|
0.7
|
|||
Deferred tax asset
|
12.9
|
|||
Current liabilities
|
(74.4
|
)
|
||
Long term debt
|
(6.0
|
)
|
||
Noncurrent liabilities
|
(8.1
|
)
|
||
Total purchase price
|
$
|
232.9
|
North America
Patient Support Systems |
Front Line Care
|
Surgical
Solutions |
International
Patient Support Systems |
Total
|
||||||||||||||||
Balances at September 30, 2014:
|
||||||||||||||||||||
Goodwill
|
$
|
390.6
|
$
|
28.7
|
$
|
304.8
|
$
|
148.5
|
$
|
872.6
|
||||||||||
Accumulated impairment losses
|
(358.1
|
)
|
-
|
-
|
(114.7
|
)
|
(472.8
|
)
|
||||||||||||
Goodwill, net at September 30, 2014
|
32.5
|
28.7
|
304.8
|
33.8
|
399.8
|
|||||||||||||||
Changes in Goodwill during the period:
|
||||||||||||||||||||
Goodwill related to acquisitions
|
-
|
1,203.5
|
22.1
|
-
|
1,225.6
|
|||||||||||||||
Currency translation effect
|
-
|
-
|
(11.8
|
)
|
(3.1
|
)
|
(14.9
|
)
|
||||||||||||
Balances at September 30, 2015:
|
||||||||||||||||||||
Goodwill
|
390.6
|
1,232.2
|
315.1
|
145.4
|
2,083.3
|
|||||||||||||||
Accumulated impairment losses
|
(358.1
|
)
|
-
|
-
|
(114.7
|
)
|
(472.8
|
)
|
||||||||||||
Goodwill, net at September 30, 2015
|
32.5
|
1,232.2
|
315.1
|
30.7
|
1,610.5
|
|||||||||||||||
Changes in Goodwill during the period:
|
||||||||||||||||||||
Goodwill related to acquisitions
|
7.9
|
(23.7
|
)
|
1.1
|
-
|
(14.7
|
)
|
|||||||||||||
Currency translation effect
|
-
|
(3.0
|
)
|
(8.6
|
)
|
0.2
|
(11.4
|
)
|
||||||||||||
Balances at September 30, 2016:
|
||||||||||||||||||||
Goodwill
|
398.5
|
1,205.5
|
307.6
|
145.6
|
2,057.2
|
|||||||||||||||
Accumulated impairment losses
|
(358.1
|
)
|
-
|
-
|
(114.7
|
)
|
(472.8
|
)
|
||||||||||||
Goodwill, net at September 30, 2016
|
$
|
40.4
|
$
|
1,205.5
|
$
|
307.6
|
$
|
30.9
|
$
|
1,584.4
|
September 30
|
||||||||
2016
|
2015
|
|||||||
Revolving credit facilities
|
$
|
235.8
|
$
|
-
|
||||
Current portion of long-term debt
|
73.2
|
58.0
|
||||||
Senior secured Term Loan A, long-term portion
|
1,372.3
|
931.7
|
||||||
Senior secured Term Loan B, long-term portion
|
-
|
778.3
|
||||||
Senior unsecured 5.75% notes due on September 1, 2023
|
419.1
|
418.2
|
||||||
Unsecured 7.00% debentures due on February 15, 2024
|
13.7
|
13.8
|
||||||
Unsecured 6.75% debentures due on December 15, 2027
|
29.6
|
29.6
|
||||||
Other
|
4.8
|
3.6
|
||||||
Total debt
|
2,148.5
|
2,233.2
|
||||||
Less current portion of debt
|
210.1
|
58.0
|
||||||
Total long-term debt
|
$
|
1,938.4
|
$
|
2,175.2
|
· | $1.0 billion senior secured Term Loan A facility, maturing in September 2020 |
· | $800 million senior secured Term Loan B facility, maturing in September 2022 |
· | Senior secured Revolving Credit Facility, providing borrowing capacity of up to $500.0 million, maturing in September 2020 |
· | $425.0 million of senior unsecured notes (“Senior Notes”), maturing in September 2023 |
· | $1,462.5 million senior secured Term Loan A facility (“TLA Facility”), maturing in September 2021 |
· | Senior secured Revolving Credit Facility (“Revolving Credit Facility”), providing borrowing capacity of up to $700.0 million, maturing in September 2021 |
Amount
|
||||
2017
|
$
|
73.1
|
||
2018
|
$
|
109.7
|
||
2019
|
$
|
146.3
|
||
2020
|
$
|
146.3
|
||
2021
|
$
|
987.2
|
Fiscal Quarter Ended
|
Maximum
Secured Net Leverage Ratio |
Minimum
Interest Coverage Ratio |
December 31, 2016
|
4.50x
|
3.25x
|
December 31, 2017
|
4.00x
|
3.50x
|
December 31, 2018
|
3.50x
|
3.75x
|
December 31, 2019 and thereafter
|
3.00x
|
4.00x
|
September 30
|
||||||||
2016
|
2015
|
|||||||
Senior secured Term Loan A
|
$
|
1,441.0
|
$
|
990.7
|
||||
Senior secured Term Loan B
|
-
|
780.7
|
||||||
Senior unsecured 5.75% notes due on September 1, 2023
|
454.0
|
428.4
|
||||||
Unsecured debentures
|
45.8
|
43.4
|
||||||
Total debt
|
$
|
1,940.8
|
$
|
2,243.2
|
Year Ended September 30, 2016
|
||||||||||||||||||||||||||||||||
Other comprehensive income (loss)
|
Accumulated other comprehensive loss
|
|||||||||||||||||||||||||||||||
Prior to
reclassification |
Reclassification
from |
Pre-tax
|
Tax effect
|
Net of tax
|
Beginning
balance |
Net activity
|
Ending
balance |
|||||||||||||||||||||||||
Available-for-sale securities
and hedges |
$
|
(4.9
|
)
|
$
|
(0.1
|
)
|
$
|
(5.0
|
)
|
$
|
1.9
|
$
|
(3.1
|
)
|
$
|
-
|
$
|
(3.1
|
)
|
$
|
(3.1
|
)
|
||||||||||
Foreign currency translation
adjustment |
(22.4
|
)
|
-
|
(22.4
|
)
|
-
|
(22.4
|
)
|
(92.8
|
)
|
(22.4
|
)
|
(115.2
|
)
|
||||||||||||||||||
Change in pension and postretirement
defined benefit plans |
(8.5
|
)
|
4.4
|
(4.1
|
)
|
1.3
|
(2.8
|
)
|
(48.0
|
)
|
(2.8
|
)
|
(50.8
|
)
|
||||||||||||||||||
Total
|
$
|
(35.8
|
)
|
$
|
4.3
|
$
|
(31.5
|
)
|
$
|
3.2
|
$
|
(28.3
|
)
|
$
|
(140.8
|
)
|
$
|
(28.3
|
)
|
$
|
(169.1
|
)
|
||||||||||
Year Ended September 30, 2015
|
||||||||||||||||||||||||||||||||
Other comprehensive income (loss)
|
Accumulated other comprehensive loss
|
|||||||||||||||||||||||||||||||
Prior to
reclassification |
Reclassification
from |
Pre-tax
|
Tax effect
|
Net of tax
|
Beginning
balance |
Net activity
|
Ending
balance |
|||||||||||||||||||||||||
Available-for-sale securities
and hedges |
$
|
(0.6
|
)
|
$
|
0.6
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||
Foreign currency translation
adjustment |
(58.6
|
)
|
-
|
(58.6
|
)
|
-
|
(58.6
|
)
|
(34.2
|
)
|
(58.6
|
)
|
(92.8
|
)
|
||||||||||||||||||
Change in pension and postretirement
defined benefit plans |
(28.7
|
)
|
15.5
|
(13.2
|
)
|
5.1
|
(8.1
|
)
|
(39.9
|
)
|
(8.1
|
)
|
(48.0
|
)
|
||||||||||||||||||
Total
|
$
|
(87.9
|
)
|
$
|
16.1
|
$
|
(71.8
|
)
|
$
|
5.1
|
$
|
(66.7
|
)
|
$
|
(74.1
|
)
|
$
|
(66.7
|
)
|
$
|
(140.8
|
)
|
Years Ended September 30
|
||||||||||||||||||||||||
2016
|
2015
|
|||||||||||||||||||||||
Amount
reclassified |
Tax effect
|
Net of tax
|
Amount
reclassified |
Tax effect
|
Net of tax
|
|||||||||||||||||||
Available-for-sale securities
and hedges (1) |
$
|
(0.1
|
)
|
$
|
-
|
$
|
(0.1
|
)
|
$
|
0.6
|
$
|
(0.2
|
)
|
$
|
0.4
|
|||||||||
Change in pension and postretirement
defined benefit plans (2) |
$
|
4.4
|
$
|
(1.3
|
)
|
$
|
3.1
|
$
|
15.5
|
$
|
(5.6
|
)
|
$
|
9.9
|
(1) | Reclassified from accumulated other comprehensive loss into other income (expense), net. |
(2) | Reclassified from accumulated other comprehensive loss into cost of goods sold and selling and administrative expenses. These components are included in the computation of net periodic pension and postretirement benefit expense. |
Years Ended September 30
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Service cost
|
$
|
5.0
|
$
|
5.4
|
$
|
5.0
|
||||||
Interest cost
|
10.9
|
14.6
|
14.4
|
|||||||||
Expected return on plan assets
|
(13.0
|
)
|
(16.7
|
)
|
(16.7
|
)
|
||||||
Amortization of unrecognized prior service cost, net
|
0.3
|
0.6
|
0.6
|
|||||||||
Amortization of net loss
|
4.5
|
5.2
|
3.2
|
|||||||||
Net periodic benefit cost
|
7.7
|
9.1
|
6.5
|
|||||||||
Settlement charge
|
-
|
9.6
|
-
|
|||||||||
Special termination benefits
|
-
|
-
|
2.4
|
|||||||||
Net pension expense
|
$
|
7.7
|
$
|
18.7
|
$
|
8.9
|
Years Ended September 30
|
||||||||
2016
|
2015
|
|||||||
Change in benefit obligation:
|
||||||||
Benefit obligation at beginning of year
|
$
|
315.5
|
$
|
343.8
|
||||
Service cost
|
5.0
|
5.4
|
||||||
Interest cost
|
10.9
|
14.6
|
||||||
Actuarial loss
|
27.4
|
12.5
|
||||||
Benefits paid
|
(11.9
|
)
|
(54.0
|
)
|
||||
Plan settlement
|
-
|
(4.4
|
)
|
|||||
Exchange rate loss (gain)
|
0.2
|
(2.4
|
)
|
|||||
Benefit obligation at end of year
|
347.1
|
315.5
|
||||||
Change in plan assets:
|
||||||||
Fair value of plan assets at beginning of year
|
219.1
|
276.1
|
||||||
Actual return on plan assets
|
28.8
|
(3.9
|
)
|
|||||
Employer contributions
|
31.0
|
0.9
|
||||||
Benefits paid
|
(11.9
|
)
|
(54.0
|
)
|
||||
Fair value of plan assets at end of year
|
267.0
|
219.1
|
||||||
Funded status and net amounts recognized
|
$
|
(80.1
|
)
|
$
|
(96.4
|
)
|
||
Amounts recorded in the Consolidated Balance Sheets:
|
||||||||
Accrued pension benefits, current portion
|
$
|
(1.1
|
)
|
$
|
(1.0
|
)
|
||
Accrued pension benefits, long-term
|
(79.0
|
)
|
(95.4
|
)
|
||||
Net amount recognized
|
$
|
(80.1
|
)
|
$
|
(96.4
|
)
|
September 30
|
||||||||||||||||||||||||
2016
|
2015
|
|||||||||||||||||||||||
PBO
|
ABO
|
Plan Assets
|
PBO
|
ABO
|
Plan Assets
|
|||||||||||||||||||
Master plan
|
$
|
319.6
|
$
|
300.7
|
$
|
266.8
|
$
|
292.5
|
$
|
275.3
|
$
|
218.9
|
||||||||||||
International plans
|
22.2
|
20.3
|
0.2
|
17.9
|
16.3
|
0.2
|
||||||||||||||||||
Supplemental executive plan
|
5.3
|
5.3
|
-
|
5.1
|
5.1
|
-
|
||||||||||||||||||
$
|
347.1
|
$
|
326.3
|
$
|
267.0
|
$
|
315.5
|
$
|
296.7
|
$
|
219.1
|
2016
|
2015
|
2014
|
||||
Weighted average assumptions to determine benefit
|
||||||
obligations at the measurement date:
|
||||||
Discount rate for obligation
|
3.7%
|
4.4%
|
4.5%
|
|||
Rate of compensation increase
|
3.0%
|
3.0%
|
3.0%
|
|||
Weighted average assumptions to determine benefit
|
||||||
cost for the year:
|
||||||
Discount rate for expense
|
4.4%
|
4.5%
|
5.0%
|
|||
Expected rate of return on plan assets
|
5.8%
|
6.8%
|
7.0%
|
|||
Rate of compensation increase
|
3.0%
|
3.0%
|
3.3%
|
2016
|
2015
|
2016
|
2015
|
||||||
Target
|
Target
|
Actual
|
Actual
|
||||||
Allocation
|
Allocation
|
Allocation
|
Allocation
|
||||||
Equity securities
|
39 - 49%
|
39 - 49%
|
43%
|
42%
|
|||||
Fixed income securities
|
51 - 61%
|
51 - 61%
|
57%
|
58%
|
|||||
Total
|
100%
|
100%
|
Quoted Prices in
|
Significant
|
|||||||||||||||
Active Markets
|
Other
|
Significant
|
||||||||||||||
for Identical
|
Observable
|
Unobservable
|
||||||||||||||
Balance at
|
Assets
|
Inputs
|
Inputs
|
|||||||||||||
September 30, 2016
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Cash
|
$
|
3.7
|
$
|
3.7
|
$
|
-
|
$
|
-
|
||||||||
Equities
|
||||||||||||||||
U.S. companies
|
59.3
|
-
|
59.3
|
-
|
||||||||||||
International companies
|
56.4
|
-
|
56.4
|
-
|
||||||||||||
Fixed income securities
|
147.6
|
-
|
147.6
|
-
|
||||||||||||
Total plan assets at fair value
|
$
|
267.0
|
$
|
3.7
|
$
|
263.3
|
$
|
-
|
Quoted Prices in
|
Significant
|
|||||||||||||||
Active Markets
|
Other
|
Significant
|
||||||||||||||
for Identical
|
Observable
|
Unobservable
|
||||||||||||||
Balance at
|
Assets
|
Inputs
|
Inputs
|
|||||||||||||
September 30, 2015
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Cash
|
$
|
3.5
|
$
|
3.5
|
$
|
-
|
$
|
-
|
||||||||
Equities
|
||||||||||||||||
U.S. companies
|
47.1
|
-
|
47.1
|
-
|
||||||||||||
International companies
|
44.8
|
-
|
44.8
|
-
|
||||||||||||
Fixed income securities
|
123.7
|
-
|
123.7
|
-
|
||||||||||||
Total plan assets at fair value
|
$
|
219.1
|
$
|
3.5
|
$
|
215.6
|
$
|
-
|
Pension Benefits
|
||||
2017
|
$
|
13.3
|
||
2018
|
$
|
13.4
|
||
2019
|
$
|
14.0
|
||
2020
|
$
|
14.6
|
||
2021
|
$
|
15.4
|
||
2022-2026
|
$
|
88.6
|
Years Ended September 30
|
||||||||
2016
|
2015
|
|||||||
Change in benefit obligation:
|
||||||||
Benefit obligation at beginning of year
|
$
|
25.1
|
$
|
11.2
|
||||
Service cost
|
0.3
|
0.4
|
||||||
Interest cost
|
0.8
|
0.4
|
||||||
Acquired obligation
|
-
|
14.1
|
||||||
Actuarial gain
|
(3.7
|
)
|
(0.9
|
)
|
||||
Benefits paid
|
(1.5
|
)
|
(0.2
|
)
|
||||
Retiree contributions
|
0.6
|
0.1
|
||||||
Benefit obligation at end of year
|
$
|
21.6
|
$
|
25.1
|
||||
Amounts recorded in the Consolidated Balance Sheets:
|
||||||||
Accrued benefits obligation, current portion
|
$
|
1.6
|
$
|
1.8
|
||||
Accrued benefits obligation, long-term
|
20.0
|
23.3
|
||||||
Net amount recognized
|
$
|
21.6
|
$
|
25.1
|
Years Ended September 30
|
||||||||||||
|
2016
|
2015
|
2014
|
|||||||||
|
||||||||||||
Total stock-based compensation cost (pre-tax)
|
$
|
23.1
|
$
|
25.0
|
$
|
18.0
|
||||||
Total income tax benefit
|
(7.9
|
)
|
(7.5
|
)
|
(6.5
|
)
|
||||||
Total stock-based compensation cost, net of tax
|
$
|
15.2
|
$
|
17.5
|
$
|
11.5
|
|
|
Years Ended September 30
|
||||
|
|
2016
|
|
2015
|
|
2014
|
Weighted average fair value per share
|
|
$14.07
|
|
$12.83
|
|
$11.91
|
|
|
|
|
|
|
|
Valuation assumptions:
|
|
|
|
|
|
|
Risk-free interest rate
|
|
1.6%
|
|
1.6%
|
|
1.3%
|
Expected dividend yield
|
|
1.2%
|
|
1.4%
|
|
1.4%
|
Expected volatility
|
|
33.1%
|
|
35.0%
|
|
36.1%
|
Weighted average expected life
|
|
4.9 years
|
|
4.9 years
|
|
4.9 years
|
|
Weighted
|
Weighted
|
|||||||||||
|
Average
|
Weighted
|
Average
|
Aggregate
|
|||||||||
|
Number of
|
Average
|
Remaining
|
Intrinsic
|
|||||||||
|
Shares
|
Exercise
|
Contractual
|
Value (1)
|
|||||||||
|
(in thousands)
|
Price
|
Term
|
(in millions)
|
|||||||||
|
|
||||||||||||
Balance Outstanding at October 1, 2015
|
1,901
|
$
|
34.38
|
|
|||||||||
Granted
|
361
|
50.98
|
|
||||||||||
Exercised
|
(191
|
)
|
32.22
|
|
|||||||||
Cancelled/Forfeited
|
(65
|
)
|
42.49
|
|
|||||||||
Balance Outstanding at September 30, 2016
|
2,006
|
$
|
37.31
|
5.9 years
|
$
|
49.5
|
|||||||
Exercisable at September 30, 2016
|
1,258
|
$
|
32.30
|
4.5 years
|
$
|
37.4
|
|||||||
Options Expected to Vest
|
673
|
$
|
45.43
|
8.2 years
|
$
|
11.1
|
(1) | The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $61.98, as reported by the New York Stock Exchange on September 30, 2016. This amount, which changes continuously based on the fair value of our common stock, would have been received by the option holders had all option holders exercised their options as of the balance sheet date. |
|
Weighted
|
|||||||
|
Number of
|
Average
|
||||||
|
Share Units
|
Grant Date
|
||||||
|
(in thousands)
|
Fair Value
|
||||||
|
||||||||
Nonvested RSUs at October 1, 2015
|
634
|
$
|
41.35
|
|||||
Granted
|
256
|
50.41
|
||||||
Vested
|
(277
|
)
|
38.62
|
|||||
Forfeited
|
(57
|
)
|
46.30
|
|||||
Nonvested RSUs at September 30, 2016
|
556
|
$
|
46.32
|
|
|
Years Ended September 30
|
||||
|
|
2016
|
|
2015
|
|
2014
|
Weighted average fair value per share
|
|
$50.51
|
|
$47.82
|
|
$47.91
|
|
|
|
|
|
|
|
Valuation assumptions:
|
|
|
|
|
|
|
Risk-free interest rate
|
|
1.1%
|
|
0.9%
|
|
0.5%
|
Expected dividend yield
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
Expected volatility
|
|
22.3%
|
|
23.5%
|
|
30.1%
|
|
Weighted
|
|||||||
|
Number of
|
Average
|
||||||
|
Share Units
|
Grant Date
|
||||||
|
(in thousands)
|
Fair Value
|
||||||
|
||||||||
Nonvested PSUs as of October 1, 2015
|
354
|
$
|
47.86
|
|||||
Granted
|
314
|
51.43
|
||||||
Vested
|
(166
|
)
|
50.05
|
|||||
Forfeited
|
(47
|
)
|
47.51
|
|||||
Nonvested PSUs at September 30, 2016
|
455
|
$
|
49.50
|
Balance at September 30, 2015
|
$
|
24.3
|
||
Expenses
|
23.3
|
|||
Cash Payments
|
(32.6
|
)
|
||
Reversals
|
(0.3
|
)
|
||
Balance at September 30, 2016
|
$
|
14.7
|
Years Ended September 30
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Income before income taxes:
|
||||||||||||
Domestic
|
$
|
92.2
|
$
|
49.2
|
$
|
87.0
|
||||||
Foreign
|
46.1
|
15.9
|
28.2
|
|||||||||
Total
|
$
|
138.3
|
$
|
65.1
|
$
|
115.2
|
||||||
Income tax expense:
|
||||||||||||
Current provision
|
||||||||||||
Federal
|
$
|
4.7
|
$
|
35.3
|
$
|
40.2
|
||||||
State
|
2.2
|
3.6
|
3.1
|
|||||||||
Foreign
|
9.1
|
1.7
|
7.4
|
|||||||||
Total current provision
|
16.0
|
40.6
|
50.7
|
|||||||||
Deferred provision:
|
||||||||||||
Federal
|
21.8
|
(18.1
|
)
|
(12.2
|
)
|
|||||||
State
|
1.2
|
(1.3
|
)
|
(1.0
|
)
|
|||||||
Foreign
|
(23.5
|
)
|
(2.9
|
)
|
17.1
|
|||||||
Total deferred provision
|
(0.5
|
)
|
(22.3
|
)
|
3.9
|
|||||||
Income tax expense
|
$
|
15.5
|
$
|
18.3
|
$
|
54.6
|
Years Ended September 30
|
||||||||||||||||||||||||
2016
|
2015
|
2014
|
||||||||||||||||||||||
% of
|
% of
|
% of
|
||||||||||||||||||||||
Pretax
|
Pretax
|
Pretax
|
||||||||||||||||||||||
Amount
|
Income
|
Amount
|
Income
|
Amount
|
Income
|
|||||||||||||||||||
Federal income tax (a)
|
$
|
48.4
|
35.0
|
$
|
22.8
|
35.0
|
$
|
40.3
|
35.0
|
|||||||||||||||
State income tax (b)
|
2.9
|
2.1
|
1.6
|
2.4
|
2.0
|
1.7
|
||||||||||||||||||
Foreign income tax (c)
|
(14.0
|
)
|
(10.1
|
)
|
(10.2
|
)
|
(15.7
|
)
|
(7.7
|
)
|
(6.7
|
)
|
||||||||||||
Application of federal tax credits
|
(6.1
|
)
|
(4.4
|
)
|
(2.2
|
)
|
(3.4
|
)
|
(0.6
|
)
|
(0.5
|
)
|
||||||||||||
Adjustment of estimated income tax accruals
|
0.3
|
0.2
|
(1.6
|
)
|
(2.4
|
)
|
(0.6
|
)
|
(0.5
|
)
|
||||||||||||||
Valuation of tax attributes
|
(14.4
|
)
|
(10.4
|
)
|
4.0
|
6.2
|
21.3
|
18.5
|
||||||||||||||||
Domestic manufacturer's deduction
|
(1.8
|
)
|
(1.3
|
)
|
(1.5
|
)
|
(2.3
|
)
|
(1.8
|
)
|
(1.5
|
)
|
||||||||||||
Capitalized transaction costs
|
-
|
-
|
2.5
|
3.8
|
0.3
|
0.2
|
||||||||||||||||||
Other, net
|
0.2
|
0.1
|
2.9
|
4.5
|
1.4
|
1.2
|
||||||||||||||||||
Income tax expense
|
$
|
15.5
|
11.2
|
$
|
18.3
|
28.1
|
$
|
54.6
|
47.4
|
(a) | At statutory rate. |
(b) | Net of Federal benefit. |
(c) | Federal tax rate differential. |
Years Ended September 30
|
||||||||
2016
|
2015
|
|||||||
Deferred tax assets:
|
||||||||
Employee benefit accruals
|
$
|
76.5
|
$
|
106.4
|
||||
Inventory
|
13.9
|
6.2
|
||||||
Net operating loss carryforwards
|
47.1
|
45.8
|
||||||
Tax credit carryforwards
|
14.2
|
11.7
|
||||||
Other, net
|
46.4
|
48.0
|
||||||
198.1
|
218.1
|
|||||||
Less: Valuation allowance
|
(26.9
|
)
|
(40.7
|
)
|
||||
Total deferred tax assets
|
171.2
|
177.4
|
||||||
Deferred tax liabilities:
|
||||||||
Depreciation
|
(41.6
|
)
|
(35.3
|
)
|
||||
Amortization
|
(371.2
|
)
|
(409.1
|
)
|
||||
Other, net
|
(3.1
|
)
|
(16.4
|
)
|
||||
Total deferred tax liabilities
|
(415.9
|
)
|
(460.8
|
)
|
||||
Deferred tax asset (liability) - net
|
$
|
(244.7
|
)
|
$
|
(283.4
|
)
|
Years Ended September 30
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Balance at October 1
|
$
|
5.8
|
$
|
4.1
|
$
|
4.6
|
||||||
Increases in tax position of prior years
|
0.8
|
0.4
|
2.1
|
|||||||||
Decreases in tax position of prior years
|
(0.1
|
)
|
(1.3
|
)
|
(0.9
|
)
|
||||||
Settlements with taxing authorities
|
(0.3
|
)
|
(1.2
|
)
|
(0.1
|
)
|
||||||
Lapse of applicable statute of limitations
|
(0.5
|
)
|
(1.3
|
)
|
(1.5
|
)
|
||||||
Increase in positions due to acquisitions
|
(0.6
|
)
|
5.5
|
-
|
||||||||
Foreign currency adjustments
|
-
|
(0.4
|
)
|
(0.1
|
)
|
|||||||
Total change
|
(0.7
|
)
|
1.7
|
(0.5
|
)
|
|||||||
Balance at September 30
|
$
|
5.1
|
$
|
5.8
|
$
|
4.1
|
Years Ended September 30
|
||||||||||||
|
2016
|
2015
|
2014
|
|||||||||
|
||||||||||||
Net income attributable to common shareholders
|
$
|
124.1
|
$
|
47.7
|
$
|
60.6
|
||||||
|
||||||||||||
Average shares outstanding - Basic (thousands)
|
65,333
|
57,249
|
57,555
|
|||||||||
Add potential effect of exercise of stock options
|
||||||||||||
and other unvested equity awards (thousands)
|
1,263
|
1,287
|
968
|
|||||||||
Average shares outstanding - Diluted (thousands)
|
66,596
|
58,536
|
58,523
|
|||||||||
|
||||||||||||
Net income attributable to common shareholders per common share - Basic
|
$
|
1.90
|
$
|
0.83
|
$
|
1.05
|
||||||
Net income attributable to common shareholders per common share - Diluted
|
$
|
1.86
|
$
|
0.82
|
$
|
1.04
|
· | North America Patient Support Systems – sells and rents our specialty frames and surfaces and mobility solutions, as well as our clinical workflow solutions, in the U.S. and Canada. |
· | International Patient Support Systems– sells and rents similar products as our North America Patient Support Systems segment in regions outside of the U.S. and Canada. |
· | Front Line Care – globally sells and rents respiratory care products, and sells medical diagnostic equipment and a diversified portfolio of devices that assess, diagnose, treat, and manage a wide variety of illnesses and diseases. |
· | Surgical Solutions – sells our surgical products globally. |
|
Years Ended September 30
|
|||||||||||
|
2016
|
2015
|
2014
|
|||||||||
Revenue:
|
||||||||||||
North America Patient Support Systems
|
$
|
1,076.9
|
$
|
1,002.0
|
$
|
888.9
|
||||||
International Patient Support Systems
|
360.3
|
424.6
|
490.1
|
|||||||||
Front Line Care
|
809.7
|
139.0
|
86.1
|
|||||||||
Surgical Solutions
|
408.3
|
422.6
|
221.0
|
|||||||||
Total revenue
|
$
|
2,655.2
|
$
|
1,988.2
|
$
|
1,686.1
|
||||||
|
||||||||||||
Divisional income (loss):
|
||||||||||||
North America Patient Support Systems
|
$
|
266.4
|
$
|
204.1
|
$
|
165.0
|
||||||
International Patient Support Systems
|
(13.8
|
)
|
9.2
|
21.3
|
||||||||
Front Line Care
|
202.1
|
41.5
|
28.8
|
|||||||||
Surgical Solutions
|
46.2
|
56.0
|
43.5
|
|||||||||
|
||||||||||||
Other:
|
||||||||||||
Non-allocated operating costs, administrative costs, and other
|
230.7
|
186.5
|
98.9
|
|||||||||
Special charges
|
39.9
|
41.2
|
37.1
|
|||||||||
Operating profit
|
230.3
|
83.1
|
122.6
|
|||||||||
|
||||||||||||
Interest expense
|
(90.4
|
)
|
(18.4
|
)
|
(9.8
|
)
|
||||||
Loss on extinguishment of debt
|
(10.8
|
)
|
-
|
-
|
||||||||
Investment income and other, net
|
9.2
|
0.4
|
2.4
|
|||||||||
Income before income taxes
|
$
|
138.3
|
$
|
65.1
|
$
|
115.2
|
|
Years Ended September 30
|
|||||||||||
|
2016
|
2015
|
2014
|
|||||||||
Net revenue to unaffiliated customers: (a)
|
||||||||||||
United States
|
$
|
1,829.4
|
$
|
1,273.0
|
$
|
1,070.8
|
||||||
Foreign
|
825.8
|
715.2
|
615.3
|
|||||||||
Total revenue
|
$
|
2,655.2
|
$
|
1,988.2
|
$
|
1,686.1
|
||||||
Long-lived assets: (b)
|
||||||||||||
United States
|
$
|
234.2
|
$
|
263.9
|
$
|
151.7
|
||||||
Foreign
|
115.8
|
114.5
|
109.8
|
|||||||||
Total long-lived assets
|
$
|
350.0
|
$
|
378.4
|
$
|
261.5
|
(a) | Net revenue is attributed to geographic areas based on the location of the customer. |
(b) | Includes property and equipment leased to others. |
2016 Quarter Ended
|
December 31,
2015 |
March 31,
2016 |
June 30,
2016 |
September 30,
2016 |
||||||||||||
Net revenue
|
$
|
661.2
|
$
|
632.6
|
$
|
655.4
|
$
|
706.0
|
||||||||
Gross profit
|
$
|
290.7
|
$
|
304.2
|
$
|
315.4
|
$
|
346.7
|
||||||||
Net income attributable to common shareholders
|
$
|
4.8
|
$
|
22.3
|
$
|
45.3
|
$
|
51.7
|
||||||||
Basic net income attributable to common
shareholders per common share |
$
|
0.07
|
$
|
0.34
|
$
|
0.69
|
$
|
0.79
|
||||||||
Diluted net income attributable to common
shareholders per common share |
$
|
0.07
|
$
|
0.33
|
$
|
0.68
|
$
|
0.77
|
||||||||
2015 Quarter Ended
|
December 31,
2014 |
March 31,
2015 |
June 30,
2015 |
September 30,
2015 |
||||||||||||
Net revenue
|
$
|
465.0
|
$
|
474.8
|
$
|
474.5
|
$
|
573.9
|
||||||||
Gross profit
|
$
|
199.9
|
$
|
214.2
|
$
|
209.5
|
$
|
256.7
|
||||||||
Net income (loss) attributable to common shareholders
|
$
|
12.1
|
$
|
26.1
|
$
|
19.1
|
$
|
(9.6
|
)
|
|||||||
Basic net income (loss) attributable to common
shareholders per common share |
$
|
0.21
|
$
|
0.46
|
$
|
0.34
|
$
|
(0.16
|
)
|
|||||||
Diluted net income (loss) attributable to common
shareholders per common share |
$
|
0.21
|
$
|
0.45
|
$
|
0.33
|
$
|
(0.16
|
)
|
Amount
|
||||
2017
|
$
|
29.0
|
||
2018
|
$
|
21.2
|
||
2019
|
$
|
13.5
|
||
2020
|
$
|
7.1
|
||
2021
|
$
|
5.1
|
||
2022 and beyond
|
$
|
4.8
|
(a) | The following documents have been filed as a part of this Form 10-K/A or, where noted, incorporated by reference: |
(1) | Financial Statements |
(2) | Financial Statement Schedules |
(3) | Exhibits (See changes to Exhibit Index below): |
· | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; |
· | may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
· | may apply standards of materiality in a way that is different from what may be viewed as material to certain investors; and |
· | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
ADDITIONS
|
||||||||||||||||||||
BALANCE AT
|
CHARGED TO
|
CHARGED TO
|
DEDUCTIONS
|
BALANCE
|
||||||||||||||||
BEGINNING
|
COSTS AND
|
OTHER
|
NET OF
|
AT END
|
||||||||||||||||
DESCRIPTION
|
OF PERIOD
|
EXPENSES
|
ACCOUNTS
|
RECOVERIES
|
OF PERIOD
|
|||||||||||||||
Reserves deducted from assets to which they apply:
|
||||||||||||||||||||
Allowance for possible losses and sales returns -
|
||||||||||||||||||||
accounts receivable:
|
||||||||||||||||||||
Period Ended:
|
||||||||||||||||||||
September 30, 2016
|
$
|
26.0
|
$
|
2.1
|
$
|
2.2
|
(a)
|
$
|
(3.5
|
) (b)
|
$
|
26.8
|
||||||||
September 30, 2015
|
$
|
31.4
|
$
|
1.8
|
$
|
0.1
|
(a)
|
$
|
(7.3
|
) (b)
|
$
|
26.0
|
||||||||
September 30, 2014
|
$
|
30.1
|
$
|
1.5
|
$
|
8.6
|
(a)
|
$
|
(8.8
|
) (b)
|
$
|
31.4
|
||||||||
Allowance for inventory valuation:
|
||||||||||||||||||||
Period Ended:
|
||||||||||||||||||||
September 30, 2016
|
$
|
45.5
|
$
|
5.8
|
$
|
-
|
(c)
|
$
|
(6.1
|
) (d)
|
$
|
45.2
|
||||||||
September 30, 2015
|
$
|
42.9
|
$
|
0.9
|
$
|
5.7
|
(c)
|
$
|
(4.0
|
) (d)
|
$
|
45.5
|
||||||||
September 30, 2014
|
$
|
22.0
|
$
|
4.0
|
$
|
19.8
|
(c)
|
$
|
(2.9
|
) (d)
|
$
|
42.9
|
||||||||
Valuation allowance against deferred tax assets:
|
||||||||||||||||||||
Period Ended:
|
||||||||||||||||||||
September 30, 2016
|
$
|
40.7
|
$
|
(14.9
|
)
|
$
|
-
|
(c)
|
$
|
1.1
|
(e)
|
$
|
26.9
|
|||||||
September 30, 2015
|
$
|
28.3
|
$
|
4.0
|
$
|
11.1
|
(c)
|
$
|
(2.7
|
) (e)
|
$
|
40.7
|
||||||||
September 30, 2014
|
$
|
8.9
|
$
|
21.3
|
$
|
-
|
$
|
(1.9
|
) (e)
|
$
|
28.3
|
(a) | Reduction of gross revenue for uncollectible health care rental reimbursements, cash discounts and other adjustments in determining net revenue. Also includes the effect of acquired businesses, if any. |
(b) | Generally reflects the write-off of specific receivables against recorded reserves. |
(c) | Generally reflects the effect of acquired businesses, if any. |
(d) | Generally reflects the write-off of specific inventory against recorded reserves. |
(e) | Primarily reflects write-offs of deferred tax assets against the valuation allowance and other movement of the valuation allowance offset by an opposing change in deferred tax assets. |
23
|
Consent of Independent Registered Public Accounting Firm
|
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
*101.INS
|
XBRL Instance Document
|
*101.SCH
|
XBRL Taxonomy Extension Schema Document
|
*101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
*101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*101.LAB
|
XBRL Extension Labels Linkbase Document
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
There were no changes to these exhibits from Form 10-K filed on November 17, 2016 which are incorporated herein by reference.
|
/s/ PricewaterhouseCoopers LLP
|
|
1. | I have reviewed this Annual Report on Form 10-K/A of Hill-Rom Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | I have reviewed this Annual Report on Form 10-K/A of Hill-Rom Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Hill-Rom Holdings, Inc.
180 North Stetson Avenue
Suite 4100
Chicago, IL 60601
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1.
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You disclose at the top of page 25 that adjusted net income attributable to common shareholders increased $70.4 million in 2016. In future filings when you present a non-GAAP measure, please include all of the disclosures required by Item 10(e) of Regulation S-K.
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2.
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We note that you present Schedule II on page 85. Please amend to include an audit report that covers the information in that schedule. Refer to Item 5-04(c) of Regulation S-X and AS 17.
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3.
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We note from your discussion of adjusted measures that you do not include adjusted items in forward looking measures because some of these items can be highly variable and cannot be reasonably predicted and, as such, prospective quantification of such items is not feasible and a reconciliation of non-GAAP earnings per share guidance to GAAP earnings per share is not provided. Please revise your discussion in future releases to specifically identify the information that is unavailable and its probable significance. We refer you to the updated Non-GAAP Compliance and Disclosure Interpretations issued on May 17, 2016. Please review this guidance, including Question 102.10, when preparing your next earnings release.
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Respectfully submitted,
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/s/ Steven J. Strobel
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Steven J. Strobel
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Senior Vice President and Chief Financial Officer
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