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Divestitures | 9 Months Ended
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Jun. 30, 2018
Divestitures [Abstract] |
Divestitures | NOTE 3 – DIVESTITURES ﻿ GBA ﻿ As previously discussed in Note 1 - Basis of Presentation and Nature of Operations, GBA was classified as held for sale in the accompanying Condensed Consolidated Balance Sheets and as discontinued operations in the accompanying Condensed Consolidated Statements of Income. The following table summarizes the assets and liabilities of GBA classified as held for sale as of June 30, 2018 and September 30, 2017.
﻿ |  |  |  |  |  |
﻿(in millions) |  | June 30, 2018 |  | September 30, 2017
﻿Assets |  |  |  |  |  |
﻿Trade receivables, net |  | $ | 193.5 |  | $ | 260.1
﻿Other receivables |  |  | 24.7 |  |  | 24.0
﻿Inventories |  |  | 319.9 |  |  | 279.2
﻿Prepaid expenses and other current assets |  |  | 39.6 |  |  | 39.7
﻿Property, plant and equipment, net |  |  | 193.7 |  |  | 196.8
﻿Deferred charges and other |  |  | 15.3 |  |  | 19.3
﻿Goodwill |  |  | 344.8 |  |  | 348.9
﻿Intangible assets, net |  |  | 781.6 |  |  | 811.9
﻿Total assets of business held for sale |  | $ | 1,913.1 |  | $ | 1,979.9
﻿Liabilities |  |  |  |  |  |
﻿Current portion of long-term debt |  |  | 18.6 |  |  | 17.3
﻿Accounts payable |  |  | 227.1 |  |  | 355.9
﻿Accrued wages and salaries |  |  | 34.2 |  |  | 37.6
﻿Other current liabilities |  |  | 94.7 |  |  | 89.8
﻿Long-term debt, net of current portion |  |  | 51.2 |  |  | 51.7
﻿Deferred income taxes |  |  | 37.3 |  |  | 38.2
﻿Other long-term liabilities |  |  | 62.2 |  |  | 66.2
﻿Total liabilities of business held for sale |  | $ | 525.3 |  | $ | 656.7
﻿ NOTE 3 – DIVESTITURES (continued) ﻿ The following table summarizes the components of Income From Discontinued Operations - GBA in the accompanying Condensed Consolidated Statements of Operations for the three and nine month periods ended June 30, 2018 and 2017.
﻿ |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | Three Month Periods Ended |  | Nine Month Periods Ended
﻿(in millions) |  | June 30, 2018 |  | June 30, 2017 |  | June 30, 2018 |  | June 30, 2017
﻿Net sales |  | $ | 442.0 |  | $ | 441.0 |  | $ | 1,473.2 |  | $ | 1,464.0
﻿Cost of goods sold |  |  | 298.1 |  |  | 287.8 |  |  | 982.4 |  |  | 951.5
﻿Gross profit |  |  | 143.9 |  |  | 153.2 |  |  | 490.8 |  |  | 512.5
﻿Operating expenses |  |  | 137.3 |  |  | 106.2 |  |  | 403.3 |  |  | 336.6
﻿Operating income |  |  | 6.6 |  |  | 47.0 |  |  | 87.5 |  |  | 175.9
﻿Interest expense |  |  | 14.1 |  |  | 12.7 |  |  | 40.3 |  |  | 37.2
﻿Other non-operating expense, net |  |  | 3.7 |  |  | 0.7 |  |  | 4.1 |  |  | 0.6
﻿(Loss) income from discontinued operations before income taxes |  |  | (11.2) |  |  | 33.6 |  |  | 43.1 |  |  | 138.1
﻿Income tax (benefit) expense |  |  | (1.7) |  |  | 5.3 |  |  | 11.1 |  |  | 38.3
﻿Net (loss) income from discontinued operations |  |  | (9.5) |  |  | 28.3 |  |  | 32.0 |  |  | 99.8
﻿Net income from discontinued operations attributable to non-controlling interest |  |  | 0.1 |  |  | 1.7 |  |  | 0.1 |  |  | 1.5
﻿Net (loss) income from discontinued operations attributable to controlling interest |  | $ | (9.6) |  | $ | 26.6 |  | $ | 31.9 |  | $ | 98.3
﻿ Interest expense consists of interest from debt directly held by subsidiaries of the business held for sale, including interest from capital leases, and interest on Term Loans required to be paid down using proceeds received on disposal on sale of a business within 365 days with the exception for funds used for capital expenditures and acquisitions. No impairment loss has been recognized as the fair value or expected proceeds from the disposal of the businesses are anticipated to be in excess of the asset carrying values. During the three and nine month periods ended June 30, 2018, the Company incurred transaction costs of $24.3 million and $49.4 million, respectively, associated with the divestiture and has been recognized as a component of Income From Discontinued Operations – GBA on the Condensed Consolidated Statements of Income. Transaction costs are expensed as incurred and include fees for investment banking services, legal, accounting, due diligence, tax, valuation and various other services necessary to complete the transactions. ﻿ Energizer Holdings, Inc. ﻿ On January 15, 2018 Spectrum entered into a definitive Acquisition Agreement (“Agreement”) with Energizer Holdings, Inc. (“Energizer”) where Energizer will acquire from Spectrum its Global Battery and Lighting (“GBL”) business for an aggregate purchase price of $2.0 billion in cash, subject to customary purchase price adjustments. ﻿ The Agreement provides that Energizer will purchase the equity of certain subsidiaries of Spectrum, and acquire certain assets and assume certain liabilities of other subsidiaries used or held for the purpose of the GBL business. ﻿ In the Agreement, Spectrum and Energizer have made customary representations and warranties and have agreed to customary covenants relating to the acquisition. Among other things, prior to the consummation of the acquisition, Spectrum will be subject to certain business conduct restrictions with respect to its operation of the GBL business. ﻿ Spectrum and Energizer have agreed to indemnify each other for losses arising from certain breaches of the Agreement and for certain other matters. In particular, the Spectrum has agreed to indemnify Energizer for certain liabilities relating to the assets retained by Spectrum, and Energizer has agreed to indemnify Spectrum for certain liabilities assumed by Energizer, in each case as described in the Agreement. ﻿ Spectrum and Energizer have agreed to enter into related agreements ancillary to the acquisition that will become effective upon the consummation of the acquisition, including a customary transition services agreement and reverse transition services agreement. ﻿ The consummation of the acquisition is subject to certain customary conditions, including, among other things, (i) the absence of a material adverse effect on GBL, (ii) the expiration or termination of required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the receipt of certain other antitrust approvals in certain specified foreign jurisdictions (the conditions contained in (ii) and (iii) together, the “Antitrust Conditions”), (iv) the accuracy of the representations and warranties of the parties generally subject to a customary material adverse effect standard (as described in the Agreement) or other customary materiality qualifications), (v) the absence of governmental restrictions on the consummation of the acquisition in certain jurisdictions, and (vi) material compliance by the parties with their respective covenants and agreements under the Agreement. The consummation of the transaction is not subject to any financing condition. On March 29, 2018, the Federal Trade Commission allowed the expiration of the 30-day Hart-Scott-Rodino waiting period, which in effect provides US regulatory approval of the sale. We are proceeding with other required international regulatory approvals and continue to expect the transaction to be consummated prior to December 31, 2018. ﻿ The Agreement also contains certain termination rights, including the right of either party to terminate the Agreement if the consummation of the acquisition has not occurred on or before July 15, 2019 (the “Termination Date”). Further, if the acquisition has not been consummated by the Termination Date and all conditions precedent to Energizer’s obligation to consummate the acquisition have otherwise been satisfied except for one or more of the Antitrust Conditions, then Energizer would be required to pay Spectrum a termination fee of $100 million. ﻿ The GBL business is a component of GBA, which also includes shared operations and assets of the remaining components of the segment consisting of the Home and Personal Care (“HPC”) business. Spectrum is actively marketing the HPC business with interested parties for a separate transaction(s) expected to be entered into and consummated prior to December 31, 2018. ﻿ NOTE 3 – DIVESTITURES (continued) ﻿ HRG - Insurance Operations ﻿ On November 30, 2017, Fidelity and Guaranty Life (“FGL”) completed the FGL Merger pursuant to which, except for certain shares specified in the FGL Merger Agreement, each issued and outstanding share of common stock of FGL was automatically canceled and converted into the right to receive $31.10 in cash, without interest. The total consideration received by HRG Group Inc. as a result of the completion of the FGL Merger was $1,518.3 million. ﻿ Also on November 30, 2017, Front Street Re (Delaware) Ltd. Sold to the CF Entities all of the issued and outstanding shares of Front Street for $65 million, which is subject to reduction for customary transaction expenses. In addition, $6.5 million of the purchase price was deposited in escrow for a period of 15 months to support any indemnification claims that might be made (if any) by the CF entities. ﻿ The operations of FGL were classified as held for sale in the accompanying Condensed Consolidated Statement of Financial Position at September 30, 2017 and as discontinued operations through November 30, 2017 in the accompanying Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows. ﻿ Additionally, HRG, FS Holdco II Ltd. (“FS Holdco”) and the CF Entities entered into an agreement (the “338 Agreement”) on May 24, 2017 pursuant to which the CF Entities agreed that FS Holdco may, at its option, cause the relevant CF Entity and FS Holdco to make a joint election under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended, with respect to the FGL Merger and the deemed share purchases of FGL’s subsidiaries (the “338 Tax Election”). Pursuant to the 338 Agreement, if FS Holdco elects to make the 338 Tax Election, FS Holdco and/or CF Corporation will be required to make a payment for the election to the other. On March 8, 2018, FS Holdco exercised the 338 Tax Election and the CF Entities were required to pay FS Holdco $26.6 million during the three month period ended June 30, 2018. ﻿ The following table summarizes the major categories of assets and liabilities of FGL classified as held for sale in the accompanying Condensed Consolidated Statement of Financial Position as of September 30, 2017. ﻿ ﻿
﻿ |  |  |
﻿(in millions) |  | September 30, 2017
﻿Assets |  |  |
﻿Investments, including loans and receivables from affiliates |  | $ | 23,211.1
﻿Funds withheld receivables |  |  | 742.7
﻿Cash and cash equivalents |  |  | 914.5
﻿Accrued investment income |  |  | 231.3
﻿Reinsurance recoverable |  |  | 2,358.8
﻿Deferred acquisition costs and value of business acquired, net |  |  | 1,163.6
﻿Other assets |  |  | 125.4
﻿Write-down of assets of businesses held for sale to fair value less cost to sell |  |  | (421.2)
﻿Total assets of business held for sale |  | $ | 28,326.2
﻿Liabilities |  |  |
﻿Insurance reserves |  |  | 24,989.6
﻿Debt |  |  | 405.0
﻿Accounts payable and other current liabililtes |  |  | 56.2
﻿Deferred tax liabilities |  |  | 68.0
﻿Other long-term liabilities |  |  | 831.9
﻿Total liabilities of business held for sale |  | $ | 26,350.7
﻿ The following table summarizes the components of Income from Discontinued Operations – HRG Insurance Operations, in the accompanying Condensed Consolidated Statements of Income for the two month period ended November 30, 2017 and the three and nine month periods ended June 30, 2017. ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | Two Months ended |  | Three months ended |  | Nine months ended
﻿(in millions) |  | November 30, 2017 |  | June 30, 2017 |  | June 30, 2017
﻿Revenues: |  |  |  |  |  |  |  |  |
﻿Insurance premiums |  | $ | 6.8 |  | $ | 12.7 |  | $ | 27.0
﻿Net investment income |  |  | 181.9 |  |  | 269.4 |  |  | 778.6
﻿Net investment gains |  |  | 154.8 |  |  | 102.8 |  |  | 237.5
﻿Other |  |  | 35.1 |  |  | 44.0 |  |  | 127.6
﻿Total revenues |  |  | 378.6 |  |  | 428.9 |  |  | 1,170.7
﻿Operating costs and expenses: |  |  |  |  |  |  |  |  |
﻿Benefits and other changes in policy reserves |  |  | 241.3 |  |  | 266.0 |  |  | 575.4
﻿Selling, acquisition, operating and general expenses |  |  | 52.8 |  |  | 42.7 |  |  | 109.1
﻿Amortization of intangibles |  |  | 35.8 |  |  | 53.5 |  |  | 210.0
﻿Total operating costs and expenses |  |  | 329.9 |  |  | 362.2 |  |  | 894.5
﻿Operating income |  |  | 48.7 |  |  | 66.7 |  |  | 276.2
﻿Interest expense and other |  |  | 4.0 |  |  | 6.1 |  |  | 18.2
﻿(Write-down) write-up of assets of business held for sale to fair value less cost to sell |  |  | (14.2) |  |  | (36.1) |  |  | 35.6
﻿Reclassification of accumulated other comprehensive income |  |  | 445.9 |  |  | — |  |  | —
﻿Income from discontinued operations before income taxes |  |  | 476.4 |  |  | 24.5 |  |  | 293.6
﻿Income tax expense |  |  | 16.5 |  |  | 16.8 |  |  | 98.2
﻿Net income from discontinued operations |  |  | 459.9 |  |  | 7.7 |  |  | 195.4
﻿Net income from discontinued operations attributable to non-controlling interest |  |  | 5.4 |  |  | 4.1 |  |  | 31.6
﻿Net income from discontinued operations attributable to controlling interest |  | $ | 454.5 |  | $ | 3.6 |  | $ | 163.8
﻿ ﻿ ﻿ NOTE 3 – DIVESTITURES (continued) ﻿ Property, Plant, and Equipment and long-lived assets classified as held for sale are measured at the lower of their carrying value or fair value less cost to sell. As of September 30, 2017, the carrying value of HRG’s interest in FGL and Front Street exceeded their respective estimated fair value less cost to sell by $402.2 million and $19.0 million, respectively. The higher carrying value of FGL was primarily due to the increase in unrealized gains, net of offsets in FGL’s investment portfolio, with the effects of the unrealized gains, net of offsets, being recorded in accumulated other comprehensive income. Upon the completion of the FGL Merger, HRG deconsolidated its ownership interest in FGL, which resulted in the reclassification of $445.9 million of accumulated other comprehensive income attributable from FGL to income from discontinued operations during the nine months ended June 30, 2018. Additionally, subsequent to the close of the FGL Merger, the Company recognized a $5.9 million tax benefit allocated to HRG insurance operations discontinued operations during the three month period ended June 30, 2018, associated with the reversal of valuation allowance realized with the completion of the Spectrum Merger.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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