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Other Required Disclosures | 6 Months Ended
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Mar. 31, 2013
Other Required Disclosures [Abstract] |
Other Required Disclosures | Other Required Disclosures Securitizations and Variable Interest Entities Collateralized Loan Obligations (CLOs) In February 2013, Salus completed a CLO securitization with a notional aggregate principal amount of $175.5 of the asset-backed loans that it had originated through that date. Salus' continuing involvement with the trust created as part of the securitization include servicing the receivables; retaining an undivided interest (seller's interest) in the receivables; and holding certain retained interests in subordinate securities, subordinate interests in accrued interest and fees on the securitized receivables, and cash reserve accounts. Salus continues to consolidate the loans transferred into the trust as it has determined that it is the primary beneficiary of the variable-interest entity represented by the trust, as result of it holding subordinate interest and servicing the receivables. Neither the Company nor Salus provided guarantees or recourse to the securitization trust other than standard representations and warranties. Included within "Asset-backed loans" under Investments in the Condensed Consolidated Balance Sheet as of March 31, 2013 where asset-based loans of $201.3 that serve as collateral to the obligations of the CLO of $225.0, of which $63.5 are to unaffiliated entities. The unaffiliated obligations of the CLO are included within "Debt" in the Condensed Consolidated Balance Sheet as of March 31, 2013. At March 31, 2013, the asset-backed loans receivable included $62.5 of seller's interest. The table below summarizes select information related to the CLO vehicle in which Salus held a variable interest at March 31, 2013.
|  | March 31, 2013
Maximum loss exposure |  | $ | 201.3 |
Asset-backed loans receivable |  | $ | 201.3 |
Cash and other assets |  | 28.4 |
Total assets of consolidated VIE |  | 229.7 |
Long-term debt |  | 225.0 |
Other liabilities |  | 3.2 |
Total liabilities of consolidated VIE |  | $ | 228.2 |
Proportionately consolidated equity-method investments The following tables present summarized consolidated financial information of HGI's proportionately consolidated equity investment in the EXCO/HGI Partnership, for the period subsequent to HGI's acquisition of the equity interest on February 14, 2013.
|  | March 31, 2013
Assets |  |
Total current assets |  | $ | 46.6 |
Oil and natural gas properties, net |  | 831.8 |
Other assets |  | 34.6 |
Total assets |  | $ | 913.0 |
Liabilities and members' equity |  |
Total current liabilities |  | $ | 51.7 |
Total long-term liabilities |  | 406.0 |
Total members' equity |  | 455.3 |
Total liabilities and members' equity |  | $ | 913.0 |
|  | Three and six months ended
|  | March 31, 2013
Revenues |  | $ | 22.4 |
Costs and Expenses |  |
Oil and natural gas direct operating costs |  | 11.8 |
Selling, acquisition, operating and general expenses |  | 9.6 |
Total costs and expenses |  | 21.4 |
Operating income |  | 1.0 |
Other expense |  | (13.1 | )
Net loss |  | $ | (12.1 | )
Receivables and concentrations of credit risk "Receivables, net" in the accompanying Condensed Consolidated Balance Sheets consist of the following:
| March 31, 2013 |  | September 30, 2012
Trade accounts receivable |  |  |
Consumer products | $ | 508.5 |  |  | $ | 357.2 |
Oil and natural gas | 21.9 |  |  | — |
Total trade accounts receivable | 530.4 |  |  | 357.2 |
Contingent purchase price reduction receivable (Note 3) | 41.0 |  |  | 41.0 |
Other receivables | 50.5 |  |  | 38.1 |
Total receivables | 621.9 |  |  | 436.3 |
Less: Allowance for doubtful trade accounts receivable | 28.5 |  |  | 21.9 |
Total receivables, net | $ | 593.4 |  |  | $ | 414.4 |
Trade receivables held by Spectrum Brands and the EXCO/HGI Partnership subject the Company to credit risk and are carried at net realizable value. Spectrum Brands extends credit to its customers based upon an evaluation of the customer’s financial condition and credit history, and generally does not require collateral. Spectrum Brands monitors its customers’ credit and financial condition based on changing economic conditions and makes adjustments to credit policies as required. Provisions for losses on uncollectible consumer products trade receivables are determined based on ongoing evaluations of Spectrum Brands’ receivables, principally on the basis of historical collection experience and evaluations of the risks of nonpayment for a given customer. The EXCO/HGI Partnership sells oil and natural gas to various customers and participates with other parties in the drilling, completion and operation of oil and natural gas wells. The EXCO/HGI Partnership's trade accounts receivable are due from purchasers of oil or natural gas. The EXCO/HGI Partnership has the right to offset future revenues against unpaid charges related to wells which it operates. Oil and natural gas trade receivables are generally uncollateralized. The allowance for doubtful oil and natural gas accounts receivable was immaterial as of March 31, 2013. In addition, the EXCO/HGI Partnership has other receivables due from participants in oil and natural gas wells for which it serves as the operator. Spectrum Brands has a broad range of customers including many large retail outlet chains, one of which accounts for a significant percentage of its sales volume. This customer represented approximately 16% and 21% of Spectrum Brands’ net sales during the three months ended March 31, 2013 and April 1, 2012, respectively, and approximately 19% and 23% of Spectrum Brands’ net sales during the six months ended March 31, 2013 and April 1, 2012, respectively. This customer also represented approximately 9% and 13% of Spectrum Brands’ trade accounts receivable, net at March 31, 2013 and September 30, 2012, respectively. Approximately 37% and 42% of Spectrum Brands’ net sales during the three months ended March 31, 2013 and April 1, 2012, respectively, and 44% and 46% of Spectrum Brands' net sales during the six months ended March 31, 2013 and April 1, 2012, respectively, occurred outside the United States. These sales and related receivables are subject to varying degrees of credit, currency, political and economic risk. Spectrum Brands monitors these risks and makes appropriate provisions for collectibility based on an assessment of the risks present. Inventories Inventories of Spectrum Brands which are stated at the lower of cost or market, consist of the following:
| March 31, 2013 |  | September 30, 2012
Raw materials | $ | 112.1 |  |  | $ | 58.5 |
Work-in-process | 51.6 |  |  | 23.4 |
Finished goods | 541.7 |  |  | 370.7 |
Total inventories | $ | 705.4 |  |  | $ | 452.6 |
Properties, including oil and natural gas properties, net Properties, including oil and natural gas properties, net, consist of the following:
| March 31, 2013 |  | September 30, 2012
Oil and natural gas properties (full accounting method) |  |  |
Unproved oil and natural gas properties and development costs not being amortized | $ | 52.9 |  |  | $ | — |
Proved developed and undeveloped oil and natural gas properties | 572.5 |  |  | — |
Less: Accumulated depletion | 5.7 |  |  | — |
Total oil and natural gas properties, net | 619.7 |  |  | — |
Other properties |  |  |
Land, buildings and improvements | 121.2 |  |  | 93.6 |
Gas gathering assets | 21.5 |  |  | — |
Machinery, equipment and other | 413.9 |  |  | 325.7 |
Construction in progress | 34.0 |  |  | 18.4 |
Total other properties, at cost | 590.6 |  |  | 437.7 |
Less: Accumulated depreciation | 244.7 |  |  | 216.1 |
Total other properties, net | 345.9 |  |  | 221.6 |
Total properties, including oil and natural gas properties, net | $ | 965.6 |  |  | $ | 221.6 |
Shipping and handling costs Spectrum Brands incurred shipping and handling costs of $66.0 and $116.0 for the three and six months ended March 31, 2013, respectively, and $49.3 and $99.6 for the three and six months ended April 1, 2012, respectively. These costs are included in "Selling, acquisition, operating and general expenses" expenses in the accompanying Condensed Consolidated Statements of Operations. Shipping and handling costs include costs incurred with third-party carriers to transport products to customers as well as salaries and overhead costs related to activities to prepare Spectrum Brands’ products for shipment from its distribution facilities. Other assets "Other assets" in the accompanying Condensed Consolidated Balance Sheets consist of the following:
| March 31, 2013 |  | September 30, 2012
Prepaid expenses and other current assets | $ | 168.5 |  |  | $ | 53.1 |
Debt issuance costs | 94.2 |  |  | 50.9 |
Deferred charges and other assets | 112.0 |  |  | 68.6 |
Total other assets | $ | 374.7 |  |  | $ | 172.6 |
Accounts payable and other current liabilities "Accounts payable and other current liabilities" in the accompanying Condensed Consolidated Balance Sheets consist of the following:
| March 31, 2013 |  | September 30, 2012
Accounts payable | $ | 401.7 |  |  | $ | 325.9 |
Wages and benefits | 86.3 |  |  | 110.9 |
Income taxes payable | 31.4 |  |  | 96.6 |
Accrued interest | 76.8 |  |  | 50.4 |
Accrued expenses | 22.7 |  |  | 25.1 |
Oil and natural gas revenues and royalties payable | 19.1 |  |  | — |
Accrued dividends on Preferred Stock | 8.4 |  |  | 8.3 |
Restructuring and related charges | 7.7 |  |  | 6.6 |
Other | 141.4 |  |  | 130.4 |
Total accounts payable and other current liabilities | $ | 795.5 |  |  | $ | 754.2 |
Other liabilities "Other liabilities" in the accompanying Condensed Consolidated Balance Sheets consist of the following:
| March 31, 2013 |  | September 30, 2012
Amounts payable for investment purchases | $ | 95.7 |  |  | $ | 206.7 |
Retained asset account | 208.2 |  |  | 203.7 |
Amounts payable to reinsurers | 30.1 |  |  | 32.0 |
Remittances and items not allocated | 36.4 |  |  | 29.5 |
Oil and natural gas asset-retirement obligations | 24.3 |  |  | — |
Other | 94.2 |  |  | 128.7 |
Total other liabilities | $ | 488.9 |  |  | $ | 600.6 |
Asset retirement obligations The following is a reconciliation of the EXCO/HGI Partnership's asset retirement obligations for the period from inception to March 31, 2013:
|  | March 31, 2013
Asset retirement obligations at inception |  | $ | 18.5 |
Activity during the period: |  |
Adjustment to liability due to acquisitions |  | 5.5 |
Accretion of discount |  | 0.3 |
Asset retirement obligations at end of period |  | 24.3 |
Less: Current portion |  | 1.2 |
Long-term portion |  | $ | 23.1 |
Restructuring and related charges The Company reports restructuring and related charges associated with manufacturing and related initiatives of Spectrum Brands in "Consumer products cost of goods sold." Restructuring and related charges reflected in "Consumer products cost of goods sold" include, but are not limited to, termination, compensation and related costs associated with manufacturing employees, asset impairments relating to manufacturing initiatives, and other costs directly related to the restructuring or integration initiatives implemented. The Company reports restructuring and related charges relating to administrative functions of Spectrum Brands in "Selling, acquisition, operating and general expenses," such as initiatives impacting sales, marketing, distribution, or other non-manufacturing functions. Restructuring and related charges reflected in "Selling, acquisition, operating and general expenses" include, but are not limited to, termination and related costs, any asset impairments relating to the functional areas described above, and other costs directly related to the initiatives. In 2009, Spectrum Brands implemented a series of initiatives to reduce operating costs and to evaluate opportunities to improve its capital structure (the "Global Cost Reduction Initiatives"). The following table summarizes restructuring and related charges incurred by the Global Cost Reduction Initiatives, as well as other initiatives which were not significant, for the three months ended March 31, 2013 and April 1, 2012 and where those charges are classified in the accompanying Condensed Consolidated Statements of Operations:
|  | Three months ended |  | Six months ended |  |  |  |  |  |  |  |
|  | March 31, 2013 |  | April 1, 2012 |  | March 31, 2013 |  | April 1, 2012 |  | Charges Since Inception |  | Expected Future Charges |  | Total Projected Costs |  | Expected Completion Date
Initiatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Cost Reduction |  | $ | 5.2 |  |  | $ | 4.2 |  |  | $ | 11.7 |  |  | $ | 11.3 |  |  | $ | 94.7 |  |  | $ | 6.2 |  |  | $ | 100.9 |  |  | January 31, 2015
Other |  | 2.7 |  |  | 0.1 |  |  | 2.8 |  |  | 0.7 |  |  |  |  |  |  |  |  |
|  | $ | 7.9 |  |  | $ | 4.3 |  |  | $ | 14.5 |  |  | $ | 12.0 |  |  |  |  |  |  |  |  |
Classification: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer products cost of goods sold |  | $ | 2.6 |  |  | $ | 1.7 |  |  | $ | 3.7 |  |  | $ | 6.3 |  |  |  |  |  |  |  |  |
Selling, acquisition, operating and general expenses |  | 5.3 |  |  | 2.6 |  |  | 10.8 |  |  | 5.7 |  |  |  |  |  |  |  |  |
|  | $ | 7.9 |  |  | $ | 4.3 |  |  | $ | 14.5 |  |  | $ | 12.0 |  |  |  |  |  |  |  |  |
Included in "Other initiatives" in the table above, Spectrum Brands also recorded $2.7 of restructuring and related charges during the three and six months ended March 31, 2013, related to initiatives implemented by the HHI Business prior to the acquisition by Spectrum Brands in December 2012. The following table summarizes the remaining accrual balance associated with the initiatives and the activity during the six months ended March 31, 2013:
| Accrual Balance at September 30, 2012 |  | Provisions |  | Cash Expenditures |  | Accrual Balance at March 31, 2013 |  | Expensed as Incurred (a)
Global Cost Reduction Initiatives: |  |  |  |  |  |  |  |  |
Termination benefits | $ | 3.3 |  |  | $ | 4.5 |  |  | $ | (2.7 | ) |  | $ | 5.1 |  |  | $ | 0.7 |
Other costs | 1.1 |  |  | 0.3 |  |  | (0.6 | ) |  | 0.8 |  |  | 6.2 |
| 4.4 |  |  | 4.8 |  |  | (3.3 | ) |  | 5.9 |  |  | 6.9 |
Other initiatives | 2.2 |  |  | — |  |  | (0.4 | ) |  | 1.8 |  |  | 0.2 |
| $ | 6.6 |  |  | $ | 4.8 |  |  | $ | (3.7 | ) |  | $ | 7.7 |  |  | $ | 7.1 |
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(a) | Consists of amounts not impacting the accrual for restructuring and related charges.

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