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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
For the quarterly period ended December 31, 2015
 
Commission File No. 001-33794
 
HILLENBRAND, INC.
(Exact name of registrant as specified in its charter)
 
Indiana
(State of incorporation)
 
26-1342272
(I.R.S. Employer Identification No.)
 
 
 
One Batesville Boulevard
 
 
Batesville, IN
 
47006
(Address of principal executive offices)
 
(Zip Code)
 
(812) 934-7500
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý  No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ý  No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ý
 
Accelerated filer o
 
Non-accelerated filer o
 
Smaller reporting company o
 
Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No ý
 
The registrant had 63,002,447 shares of common stock, no par value per share, outstanding as of January 27, 2016.

 


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HILLENBRAND, INC.
INDEX TO FORM 10-Q
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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PART I — FINANCIAL INFORMATION

Item 1.                FINANCIAL STATEMENTS
 
Hillenbrand, Inc.
Consolidated Statements of Income (Unaudited)
(in millions, except per share data)
 
 
Three Months Ended
December 31,
 
2015
 
2014
Net revenue
$
351.7

 
$
401.5

Cost of goods sold
223.5

 
263.1

Gross profit
128.2

 
138.4

Operating expenses
82.1

 
83.6

Amortization expense
9.8

 
7.6

Interest expense
5.9

 
5.7

Other income (expense), net
(0.7
)
 
—

Income before income taxes
29.7

 
41.5

Income tax expense
8.7

 
11.8

Consolidated net income
21.0

 
29.7

Less: Net income attributable to noncontrolling interests
1.0

 
0.2

Net income(1)
$
20.0

 
$
29.5

 
 
 
 
Net income(1)  — per share of common stock:
 
 
 
Basic earnings per share
$
0.32

 
$
0.47

Diluted earnings per share
$
0.31

 
$
0.46

Weighted average shares outstanding (basic)
63.2

 
63.1

Weighted average shares outstanding (diluted)
63.8

 
63.9

 
 
 
 
Cash dividends declared per share
$
0.2025

 
$
0.2000



(1) Net income attributable to Hillenbrand
 
See Condensed Notes to Consolidated Financial Statements


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Hillenbrand, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
(in millions)
 
 
Three Months Ended
December 31,
 
2015
 
2014
Consolidated net income
$
21.0

 
$
29.7

Changes in other comprehensive income (loss), net of tax
 
 
 
Currency translation adjustment
(15.2
)
 
(20.1
)
Pension and postretirement (net of tax of $0.4 and $0.5)
0.7

 
0.8

Change in net unrealized gain (loss) on derivative instruments
(net of tax of $— and ($0.2))
0.6

 
(0.5
)
Total changes in other comprehensive income (loss), net of tax
(13.9
)
 
(19.8
)
Consolidated comprehensive income
7.1

 
9.9

Less: Comprehensive income attributable to noncontrolling interests
0.9

 
0.1

Comprehensive income (2)
$
6.2

 
$
9.8

 

(2) Comprehensive income attributable to Hillenbrand
 
See Condensed Notes to Consolidated Financial Statements


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Hillenbrand, Inc.
Consolidated Balance Sheets (Unaudited)
(in millions) 
 
December 31,
2015
 
September 30,
2015
ASSETS
 

 
 

Current Assets
 

 
 

Cash and cash equivalents
$
55.1

 
$
48.3

Trade receivables, net
173.4

 
187.9

Unbilled receivables from long-term manufacturing contracts
120.3

 
144.9

Inventories
166.1

 
153.6

Deferred income taxes
19.3

 
21.9

Prepaid expenses
21.2

 
23.8

Other current assets
20.3

 
23.7

Total current assets
575.7

 
604.1

Property, plant, and equipment, net
158.0

 
158.3

Intangible assets, net
499.8

 
459.6

Goodwill
569.2

 
544.0

Other assets
40.1

 
42.1

Total Assets
$
1,842.8

 
$
1,808.1

 
 
 
 
LIABILITIES
 

 
 

Current Liabilities
 

 
 

Trade accounts payable
$
101.7

 
$
104.3

Liabilities from long-term manufacturing contracts and advances
70.2

 
79.7

Current portion of long-term debt
10.1

 
9.4

Accrued compensation
40.7

 
62.3

Deferred income taxes
19.7

 
25.4

Other current liabilities
112.6

 
123.1

Total current liabilities
355.0

 
404.2

Long-term debt
612.9

 
518.7

Accrued pension and postretirement healthcare
215.1

 
218.7

Deferred income taxes
31.6

 
29.4

Other long-term liabilities
30.6

 
31.3

Total Liabilities
1,245.2

 
1,202.3

 
 
 
 
Commitments and contingencies


 


 
 
 
 
SHAREHOLDERS’ EQUITY
 

 
 

Common stock, no par value (63.7 and 63.6 shares issued, 63.0 and 62.9 shares outstanding)
—

 
—

Additional paid-in capital
348.4

 
350.9

Retained earnings
379.0

 
372.1

Treasury stock (0.7 and 0.7 shares)
(20.7
)
 
(21.0
)
Accumulated other comprehensive loss
(121.7
)
 
(107.9
)
Hillenbrand Shareholders’ Equity
585.0

 
594.1

Noncontrolling interests
12.6

 
11.7

Total Shareholders’ Equity
597.6

 
605.8

 
 
 
 
Total Liabilities and Equity
$
1,842.8

 
$
1,808.1


 See Condensed Notes to Consolidated Financial Statements

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Hillenbrand, Inc.
Consolidated Statements of Cash Flow (Unaudited)
(in millions)
 
 
Three Months Ended
December 31,
 
2015
 
2014
Operating Activities
 

 
 

Consolidated net income
$
21.0

 
$
29.7

Adjustments to reconcile net income to cash provided by operating activities:
 

 
 

Depreciation and amortization
16.0

 
15.0

Deferred income taxes
0.5

 
0.5

Share-based compensation
0.6

 
2.2

Trade accounts receivable and receivables on long-term manufacturing contracts
34.6

 
5.5

Inventories
(7.6
)
 
(11.7
)
Prepaid expenses and other current assets
4.4

 
0.3

Trade accounts payable
(1.6
)
 
(48.7
)
Accrued expenses and other current liabilities
(33.5
)
 
(37.9
)
Income taxes payable
(5.0
)
 
8.4

Defined benefit plan and postretirement funding
(3.1
)
 
(2.7
)
Defined benefit plan and postretirement expense
3.1

 
3.6

Other, net
6.3

 
(6.1
)
Net cash provided by (used in) operating activities
35.7

 
(41.9
)
 
 
 
 
Investing Activities
 

 
 

Capital expenditures
(6.5
)
 
(5.7
)
Proceeds from sales of property, plant, and equipment
0.1

 
0.5

Acquisition of business, net of cash acquired
(105.7
)
 
—

Other, net
—

 
(2.6
)
Net cash used in investing activities
(112.1
)
 
(7.8
)
 
 
 
 
Financing Activities
 

 
 

Repayments on term loan
(3.4
)
 
(2.3
)
Proceeds from revolving credit facilities
182.3

 
149.3

Repayments on revolving credit facilities
(81.5
)
 
(187.2
)
Proceeds from unsecured Series A Notes, net of financing costs
—

 
99.7

Payments of dividends on common stock
(12.7
)
 
(12.6
)
Repurchases of common stock
(3.0
)
 
(6.8
)
Net proceeds (payments) on stock plans
(0.8
)
 
1.2

Other, net
0.8

 
1.0

Net cash provided by financing activities
81.7

 
42.3

 
 
 
 
Effect of exchange rates on cash and cash equivalents
1.5

 
1.4

 
 
 
 
Net cash flows
6.8

 
(6.0
)
 
 
 
 
Cash and cash equivalents:
 

 
 

At beginning of period
48.3

 
58.0

At end of period
$
55.1

 
$
52.0

 
See Condensed Notes to Consolidated Financial Statements

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Hillenbrand, Inc.
Condensed Notes to Consolidated Financial Statements (Unaudited)
(in millions, except share and per share data)
 
1.
Background and Basis of Presentation
 
Hillenbrand, Inc. (“Hillenbrand”) is a global diversified industrial company that makes and sells premium business-to-business products and services for a wide variety of industries.  We strive to provide superior return for our shareholders, exceptional value for our customers, and great professional opportunities for our people through deployment of the Hillenbrand Operating Model (the “HOM”). The HOM is a consistent and repeatable framework designed to produce sustainable and predictable results.  The HOM describes our mission, vision, values, and leader’s mindset; uses our management practices in Strategy Management, Segmentation, Lean, Talent Development, and Acquisitions; and prescribes three steps (Understand, Focus and Grow) to make our businesses both bigger and better.  Our goal is to continue developing Hillenbrand as a world-class global diversified industrial company. Hillenbrand is composed of two 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,” “the Company,” “we,” “us,” “our,” and similar words refer to Hillenbrand and its subsidiaries.
 
The accompanying unaudited consolidated financial statements include the accounts of Hillenbrand and its subsidiaries.  They also include two minor subsidiaries where the Company’s ownership percentage is less than 100%.  The Company’s fiscal year ends on September 30.  Unless otherwise stated, references to years relate to fiscal years. Certain prior period amounts have been reclassified to conform to the fiscal 2016 presentation.
 
These unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements and therefore do not include all information required in accordance with accounting principles generally accepted in the United States (“GAAP”).  The unaudited consolidated financial statements have been prepared on the same basis as, and should be read in conjunction with, the audited consolidated financial statements and notes thereto included in our latest Annual Report on Form 10-K for the year ended September 30, 2015, as filed with the SEC.  The September 30, 2015 Consolidated Balance Sheet included in this Form 10-Q was derived from audited consolidated financial statements, but does not include all disclosures required by GAAP for a year-end balance sheet included in Form 10-K.  In the opinion of management, these financial statements reflect all adjustments necessary to present a fair statement of the Company’s consolidated financial position and the consolidated results of operations and cash flow as of the dates and for the periods presented.
 
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the period.  Actual results could differ from those estimates.  Examples of such estimates include, but are not limited to, revenue recognition under the percentage-of-completion method and the establishment of reserves related to customer rebates, doubtful accounts, warranties, early-pay discounts, inventories, income taxes, litigation, self-insurance, and progress toward achievement of performance criteria under the incentive compensation programs.

2.
Summary of Significant Accounting Policies
 
The significant accounting policies used in preparing these consolidated financial statements are consistent with the accounting policies described in our Annual Report on Form 10-K for 2015.

Recently Adopted Accounting Standards

In April 2014, the FASB issued ASU 2014-8, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which includes amendments that change the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations.  Under ASU 2014-8, only disposals representing a strategic shift in operations should be presented as discontinued operations.  ASU 2014-8 became effective and was adopted for our fiscal year beginning October 1, 2015.  The adoption of this standard did not have a significant impact on our consolidated financial statements.





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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. 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 are currently evaluating the impact that ASU 2014-09 will have on our consolidated financial statements.
 
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 will be effective for our fiscal year beginning October 1, 2016, with early adoption permitted.  We are currently evaluating the impact that ASU 2014-12 will have 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 will be effective for our fiscal year beginning October 1, 2016, with early adoption permitted. We do not expect the adoption of ASU 2014-15 to have a material 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 will be effective for our fiscal year beginning October 1, 2016, with early adoption permitted. We do not expect the adoption of ASU 2015-01 to have a material 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 will be effective for our fiscal year beginning October 1, 2016, with early adoption permitted. We are currently evaluating the impact that ASU 2015-02 will have 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 will be effective for our fiscal year beginning October 1, 2016, with early adoption permitted. We do not expect the adoption of ASU 2015-03 and ASU 2015-15 to have a material impact on our consolidated financial statements.

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 will be effective for our fiscal year beginning October 1, 2016, with early adoption permitted. We are currently evaluating the impact that ASU 2015-05 will have on our consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330). Under current FASB standards, an entity is required to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. ASU 2015-11 requires an entity to measure inventory within the scope of this update at the lower of cost and net realizable value. Subsequent measurement is unchanged for inventory measured using last-in, first-out (LIFO) or the retail inventory method. ASU 2015-11 will be effective for our fiscal year beginning October 1, 2017, with early adoption permitted. We are currently evaluating the impact that ASU 2015-11 will have on our consolidated financial statements.


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In July 2015, the FASB issued ASU 2015-12, Plan accounting: defined benefit pension plans (Topic 960), defined contribution pension plans (Topic 962), health and welfare benefit plans (Topic 965): (Part I) fully benefit-responsive investment contracts, (Part II) plan investment disclosures, (Part III) measurement date practical expedient. This update reduces complexity in employee benefit plan accounting, which is consistent with the FASB’s Simplification initiative.

Part I: Fully Benefit-Responsive Investment Contracts, designate contract value as the only required measure for fully benefit-responsive investment contracts, which maintains the relevant information while reducing the cost and complexity of reporting for fully benefit-responsive investment contracts. It removes the requirement that fully benefit-responsive investment contracts be measured at contract value and require an adjustment to reconcile contract value to fair value, when these measures differ, on the face of the plan financial statements.

Part II: Plan Investment Disclosures, simplifies and makes more effective the investment disclosure requirements under Topic 820 and under Topics 960, 962, and 965 for employee benefit plans.

Part III: Measurement Date Practical Expedient, reduces complexity in employee benefit plan accounting by providing a practical expedient that permits plans to measure investments and investment-related accounts as of a month-end date that is closest to the plan’s fiscal year-end, when the fiscal period does not coincide with month-end.

ASU 2015-12 will be effective for our fiscal year beginning October 1, 2016, with early adoption permitted. We are currently evaluating the impact that ASU 2015-12 will have 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 will be effective for our fiscal year beginning on October 1, 2016, with early adoption permitted. We are currently evaluating the impact that ASU 2015-16 will have 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 will be effective for our fiscal year beginning on October 1, 2017, with early adoption permitted. We are currently evaluating the impact that ASU 2015-17 will have on our consolidated financial statements.

3.
Business Acquisitions

We incurred $1.7 of business acquisition and integration costs during the three months ended December 31, 2015 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 ($105.7) in cash.  We utilized borrowings under our revolving credit facility and term loan (the “Facility”), which provides for revolving loans of up to $700.0 and a term loan in the amount of $180.0, 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 into the power generation, wastewater treatment, mining, general industry, and marine markets. The results of Abel are reported in our Process Equipment Group segment.

Based on the preliminary purchase allocation, we recorded goodwill of $35, and $58 of acquired identifiable intangible assets which consisted of $5 of trade names not subject to amortization, $9 of developed technology, $3 of backlog, and $41 of customer relationships. Goodwill is expected to be deductible for tax purposes in Germany. Supplemental proforma information has not been provided as the acquisition did not have a material impact on consolidated results of operations.


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Red Valve

On February 1, 2016, we completed the acquisition of Red Valve Company, Inc. (“Red Valve”) for $131.9 in cash, including $3.3 for related real estate. 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, power and mining and other general industrial markets.


4.
Supplemental Balance Sheet Information
 
 
December 31,
2015
 
September 30,
2015
Trade accounts receivable reserves
$
20.8

 
$
20.0

 
 
 
 
Accumulated depreciation on property, plant, and equipment
$
305.3

 
$
295.2

 
 
 
 
Accumulated amortization on intangible assets
$
170.9

 
$
144.8

 
 
 
 
Inventories:
 

 
 

Raw materials and components
$
43.9

 
$
40.1

Work in process
68.2

 
63.9

Finished goods
54.0

 
49.6

Total inventories
$
166.1

 
$
153.6

 


5.
Financing Agreements
 
December 31,
2015
 
September 30, 2015
$700 revolving credit facility (excluding outstanding letters of credit)
$
205.1

 
$
107.6

$180 term loan
168.8

 
171.0

$150 senior unsecured notes, net of discount
149.1

 
149.1

$100 Series A Notes
100.0

 
100.0

Other
—

 
0.4

Total debt
623.0

 
528.1

Less: current portion
10.1

 
9.4

Total long-term debt
$
612.9

 
$
518.7

 
With respect to the Facility, as of December 31, 2015, we had $15.1 in outstanding letters of credit issued and $479.8 of maximum borrowing capacity. $343.7 of borrowing capacity is immediately available based on our leverage covenant at December 31, 2015, with additional amounts available in the event of a qualifying acquisition.  The weighted-average interest rates on borrowings under the Facility were 1.21% and 1.27% for the three months ended December 31, 2015 and 2014. The weighted average facility fee was 0.18% and 0.25% for the three months ended December 31, 2015 and 2014. The weighted average interest rate on the term loan was 1.46% and 1.54% for the three months ended December 31, 2015 and 2014.
 
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 December 31, 2015, we had credit arrangements totaling $213.3, under which $124.5 was utilized for this purpose. These arrangements included our €150.0 Syndicated Letter of Guarantee Facility (as amended, the “LG Facility”) and other ancillary credit facilities.

The availability of borrowings under the Facility, the LG Facility, and the Private Shelf Agreement, dated as of December 6, 2012 (the “Shelf Agreement”), among the Company, Prudential Investment Management and each Prudential Affiliate (as defined thereunder), governing the 4.60% Series A unsecured notes (the “Series A Notes”), is subject to our ability to meet certain conditions including compliance with covenants, absence of default, and continued accuracy of certain representations

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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 to interest expense of 3.5 to 1.0. As of December 31, 2015, we were in compliance with all covenants.

The Facility, senior unsecured 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 $0.7 and $0.8 at December 31, 2015 and September 30, 2015.

6.
Retirement Benefits
 
Defined Benefit Plans
 
 
U.S. Pension Benefits
 
Non-U.S. Pension Benefits
 
Three Months Ended December 31,
 
Three Months Ended December 31,
 
2015
 
2014
 
2015
 
2014
Service costs
$
1.0

 
$
1.1

 
$
0.6

 
$
0.4

Interest costs
2.4

 
3.6

 
0.6

 
0.8

Expected return on plan assets
(2.4
)
 
(3.5
)
 
(0.3
)
 
(0.3
)
Amortization of unrecognized prior service costs, net
0.1

 
0.2

 
—

 
—

Amortization of net loss
0.9

 
1.2

 
0.2

 
—

Net pension costs
$
2.0

 
$
2.6

 
$
1.1

 
$
0.9

 
Postretirement Healthcare Plans — Net postretirement healthcare costs were $0.1 and $0.1 for the three months ended December 31, 2015 and 2014.

Defined Contribution Plans — Expenses related to our defined contribution plans were $2.3 and $2.1 for the three months ended December 31, 2015 and 2014.
 
7.
Income Taxes
 
The effective tax rates for the three months ended December 31, 2015 and 2014 were 29.3% and 28.4%. The increase in the effective tax rate during the three months ended December 31, 2015 was primarily due to discrete tax benefits recognized in fiscal 2015 that did not repeat in fiscal 2016.

8.
Earnings Per Share
 
The dilutive effects of performance-based stock awards were included in the computation of diluted earnings per share at the level the related performance criteria were met through the respective balance sheet date.  At December 31, 2015 and 2014, potential dilutive effects, representing approximately 1,300,000 and 1,400,000 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.


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Table of Contents

 
Three Months Ended
December 31,
 
2015
 
2014
Net income(1)
$
20.0

 
$
29.5

Weighted average shares outstanding (basic - in millions)
63.2

 
63.1

Effect of dilutive stock options and other unvested equity awards (in millions)
0.6

 
0.8

Weighted average shares outstanding (diluted - in millions)
63.8

 
63.9

 
 
 
 
Basic earnings per share
$
0.32

 
$
0.47

Diluted earnings per share
$
0.31

 
$
0.46

 
 
 
 
Shares with anti-dilutive effect excluded from the computation of diluted earnings per share (in millions)
0.5

 
0.4

 
(1) Net income attributable to Hillenbrand
 
9.
Shareholders’ Equity
 
During the three months ended December 31, 2015, we paid approximately $12.7 of cash dividends.  We also repurchased approximately 106,000 shares of our common stock during the three months ended December 31, 2015, for a total cost of approximately $3.0. In connection with our share-based compensation plans discussed further in Note 11, we also issued approximately 217,000 shares of common stock, of which approximately 113,000 shares were treasury stock.

10.
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, 2014
$
(46.0
)
 
$
(4.9
)
 
$
(1.3
)
 
$
(52.2
)
 
 

 
 

Other comprehensive income before reclassifications
 

 
 

 
 

 
 

 
 

 
 

Before tax amount
—

 
(20.0
)
 
(1.5
)
 
(21.5
)
 
$
(0.1
)
 
$
(21.6
)
Tax expense
—

 
—

 
0.5

 
0.5

 
—

 
0.5

After tax amount
—

 
(20.0
)
 
(1.0
)
 
(21.0
)
 
(0.1
)
 
(21.1
)
Amounts reclassified from accumulated other comprehensive income(1)
0.8

 
—

 
0.5

 
1.3

 
—

 
1.3

Net current period other comprehensive income (loss)
0.8

 
(20.0
)
 
(0.5
)
 
(19.7
)
 
$
(0.1
)
 
$
(19.8
)
Balance at December 31, 2014
$
(45.2
)
 
$
(24.9
)
 
$
(1.8
)
 
$
(71.9
)
 
 

 
 

 (1)  Amounts are net of tax.

11
Table of Contents

 
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
—

 
(15.1
)
 
(0.2
)
 
(15.3
)
 
$
(0.1
)
 
$
(15.4
)
Tax expense
—

 
—

 
0.2

 
0.2

 
—

 
0.2

After tax amount
—

 
(15.1
)
 
—

 
(15.1
)
 
(0.1
)
 
(15.2
)
Amounts reclassified from accumulated other comprehensive income(1)
0.7

 
—

 
0.6

 
1.3

 
—

 
1.3

Net current period other comprehensive income (loss)
0.7

 
(15.1
)
 
0.6

 
(13.8
)
 
$
(0.1
)
 
$
(13.9
)
Balance at December 31, 2015
$
(53.7
)
 
$
(67.2
)
 
$
(0.8
)
 
$
(121.7
)
 
 

 
 

(1)  Amounts are net of tax.
 
Reclassifications out of Accumulated Other Comprehensive Income include: 
 
Three Months Ended December 31, 2014
 
Amortization of Pension and
Postretirement (1)
 
(Gain)/Loss on
 
 
 
Net Loss
Recognized
 
Prior Service Costs
Recognized
 
Derivative
Instruments
 
Total
Affected Line in the Consolidated Statement of Operations:
 

 
 

 
 

 
 

Net revenue
$
—

 
$
—

 
$
0.5

 
$
0.5

Cost of goods sold
0.9

 
0.1

 
(0.1
)
 
0.9

Operating expenses
0.3

 
0.1

 
—

 
0.4

Other income (expense), net
—

 
—

 
0.3

 
0.3

Total before tax
$
1.2

 
$
0.2

 
$
0.7

 
$
2.1

Tax expense
 

 
 

 
 

 
(0.8
)
Total reclassifications for the period, net of tax
 

 
 

 
 

 
$
1.3



 
Three Months Ended December 31, 2015
 
Amortization of Pension and
Postretirement (1)
 
(Gain)/Loss on
 
 
 
Net Loss
Recognized
 
Prior Service Costs
Recognized
 
Derivative
Instruments
 
Total
Affected Line in the Consolidated Statement of Operations:
 

 
 

 
 

 
 

Net revenue
$
—

 
$
—

 
$
0.5

 
$
0.5

Cost of goods sold
0.6

 
0.1

 
—

 
0.7

Operating expenses
0.2

 
—

 
—

 
0.2

Other income (expense), net
—

 
—

 
0.3

 
0.3

Total before tax
$
0.8

 
$
0.1

 
$
0.8

 
$
1.7

Tax expense
 
 
 
 
 
 
(0.4
)
Total reclassifications for the period, net of tax
 
 
 
 
 
 
$
1.3


(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 6).


12
Table of Contents

11.
Share-Based Compensation
 
 
Three Months Ended
December 31,
 
2015
 
2014
Share-based compensation costs
$
0.6

 
$
2.2

Less impact of income tax benefit
0.2

 
0.8

Share-based compensation costs, net of tax
$
0.4

 
$
1.4

 
We have share-based compensation with long-term performance-based metrics that are contingent upon our relative total shareholder return and the creation of shareholder value as measured by the cumulative cash returns and final period net operating profit after tax compared to the performance-based targets for each grant over a three-year period.  For the performance-based awards contingent upon the creation of shareholder value, compensation expense is adjusted each quarter based upon actual results to date and any changes to forecasted information on each of the separate grants. 
 
During the three months ended December 31, 2015, we made the following grants:
 
 
Number of
Units
Stock options
497,774

Time-based stock awards
42,262

Performance-based stock awards (maximum that can be earned)
368,221

 
Stock options granted during fiscal 2016 had a weighted-average exercise price of $31.11 and a weighted-average grant date fair value of $7.80.  Our time-based stock awards and performance-based stock awards granted during fiscal 2016 had weighted-average grant date fair values of $30.54 and $33.11.  Included in the performance-based stock awards granted during 2016 are 194,689 units whose payout level is based upon the Company’s total shareholder return as it relates to the performance of companies in its compensation peer group over a three-year measurement period.  These units will be expensed on a straight-line basis over the measurement period and are not subsequently adjusted after the grant date.
 
12.
Other Income (Expense), Net
 
Three Months Ended
December 31,
 
2015
 
2014
Equity in net income (loss) of affiliates
$
(0.4
)
 
$
0.3

Foreign currency exchange loss, net
(0.1
)
 
(0.8
)
Other, net
(0.2
)
 
0.5

Other income (expense), net
$
(0.7
)
 
$
—

  

13.
Commitments and Contingencies
 
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 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

13
Table of Contents

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.
 
14.
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.
 
 
Carrying
 
 
 
 
 
 
 
Value at
December 31,
 
Fair Value at December 31, 2015
Using Inputs Considered as:
 
2015
 
Level 1
 
Level 2
 
Level 3
Assets:
 

 
 

 
 

 
 

Cash and cash equivalents
$
55.1

 
$
55.1

 
$
—

 
$
—

Investments in rabbi trust
4.4

 
4.4

 
—

 
—

Derivative instruments
2.0

 
—

 
2.0

 
—

 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

$150 senior unsecured notes
149.1

 
162.3

 
—

 
—

Revolving credit facility
205.1

 
—

 
205.1

 
—

Term loan
168.8

 
—

 
168.8

 
—

  $100 Series A Notes
100.0

 
—

 
99.4

 
—

Derivative instruments
6.4

 
—

 
6.4

 
—

 
The fair values of the revolving credit facility and term loan approximated carrying value at December 31, 2015.  The fair values of the revolving credit facility, term loan, and Series A Notes are 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.

The fair values of the Company’s derivative instruments are based upon pricing models using inputs derived from third-party pricing services or observable market data such as currency spot and forward rates.  These values are periodically validated by comparing to third-party broker quotes.  The aggregate notional value of these foreign currency derivatives was $177.9 at December 31, 2015. The derivatives are included in other current assets and other current liabilities on the balance sheet.
 


14
Table of Contents

15.
Segment and Geographical Information
 
 
Three Months Ended December 31,
 
2015
 
2014
Net revenue
 

 
 

Process Equipment Group
$
214.0

 
$
256.4

Batesville
137.7

 
145.1

Total
$
351.7

 
$
401.5

 
 
 
 
Adjusted EBITDA
 

 
 

Process Equipment Group
$
33.0

 
$
38.1

Batesville
31.8

 
32.6

Corporate
(7.0
)
 
(7.3
)
 
 
 
 
Net revenue (1)
 

 
 

United States
$
198.9

 
$
216.6

International
152.8

 
184.9

Total
$
351.7

 
$
401.5

 
(1) We attribute revenue to a geography based upon the location of the business unit that consummates the external sale.
 
 
December 31,
2015
 
September 30, 2015
Total assets assigned
 

 
 

Process Equipment Group
$
1,578.8

 
$
1,537.3

Batesville
217.1

 
224.9

Corporate
46.9

 
45.9

Total
$
1,842.8

 
$
1,808.1

 
 
 
 
Tangible long-lived assets, net
 

 
 

United States
$
94.1

 
$
95.7

International
63.9

 
62.6

Total
$
158.0

 
$
158.3



15
Table of Contents

The following schedule reconciles segment adjusted EBITDA to consolidated net income.
 
 
Three Months Ended
December 31,
 
2015
 
2014
Adjusted EBITDA:
 

 
 

Process Equipment Group
$
33.0

 
$
38.1

Batesville
31.8

 
32.6

Corporate
(7.0
)
 
(7.3
)
Less:
 

 
 

Interest income
(0.3
)
 
(0.3
)
Interest expense
5.9

 
5.7

Income tax expense
8.7

 
11.8

Depreciation and amortization
16.0

 
15.0

Business acquisition and integration
1.7

 
0.3

Inventory step-up
1.4

 
—

Restructuring
3.4

 
0.7

Litigation
—

 
0.5

Consolidated net income
$
21.0

 
$
29.7

 

16
Table of Contents

16.
Condensed Consolidating Information
 
Certain 100% owned subsidiaries of Hillenbrand fully and unconditionally, jointly and severally, agreed to guarantee all of the indebtedness relating to our obligations under our revolving credit facility, term loan, senior unsecured notes, Series A Notes, and LG Facility.  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
 
Three Months Ended December 31, 2015
 
Three Months Ended December 31, 2014
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Net revenue
$
—

 
$
197.3

 
$
205.2

 
$
(50.8
)
 
$
351.7

 
$
—

 
$
216.7

 
$
233.5

 
$
(48.7
)
 
$
401.5

Cost of goods sold
—

 
102.2

 
146.7

 
(25.4
)
 
223.5

 
—

 
114.3

 
172.8

 
(24.0
)
 
263.1

Gross profit
—

 
95.1

 
58.5

 
(25.4
)
 
128.2

 
—

 
102.4

 
60.7

 
(24.7
)
 
138.4

Operating expenses
7.2

 
60.1

 
40.2

 
(25.4
)
 
82.1

 
8.0

 
60.3

 
40.0

 
(24.7
)
 
83.6

Amortization expense
—

 
2.3

 
7.5

 
—

 
9.8

 
0.1

 
2.6

 
4.9

 
—

 
7.6

Interest expense
5.2

 
—

 
0.7

 
—

 
5.9

 
4.9

 
—

 
0.8

 
—

 
5.7

Other income (expense), net
0.1

 
(1.0
)
 
0.2

 
—

 
(0.7
)
 
—

 
—

 
—

 
—

 
—

Equity in net income (loss) of subsidiaries
26.4

 
2.2

 
—

 
(28.6
)
 
—

 
34.1

 
2.2

 
—

 
(36.3
)
 
—

Income (loss) before income taxes
14.1

 
33.9

 
10.3

 
(28.6
)
 
29.7

 
21.1

 
41.7

 
15.0

 
(36.3
)
 
41.5

Income tax expense (benefit)
(5.9
)
 
12.0

 
2.6

 
—

 
8.7

 
(8.4
)
 
14.9

 
5.3

 
—

 
11.8

Consolidated net income
20.0

 
21.9

 
7.7

 
(28.6
)
 
21.0

 
29.5

 
26.8

 
9.7

 
(36.3
)
 
29.7

Less: Net income attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noncontrolling interests
—

 
—

 
1.0

 
—

 
1.0

 
—

 
—

 
0.2

 
—

 
0.2

Net income (loss) (1)
$
20.0

 
$
21.9

 
$
6.7

 
$
(28.6
)
 
$
20.0

 
$
29.5

 
$
26.8

 
$
9.5

 
$
(36.3
)
 
$
29.5

Consolidated comprehensive income (loss)
$
6.2

 
$
30.8

 
$
(6.8
)
 
$
(23.1
)
 
$
7.1

 
$
9.8

 
$
27.6

 
$
2.3

 
$
(29.8
)
 
$
9.9

Less: Comprehensive income attributable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     to noncontrolling interests
—

 
—

 
0.9

 
—

 
0.9

 
—

 
—

 
0.1

 
—

 
0.1

Comprehensive income (loss) (2)
$
6.2

 
$
30.8

 
$
(7.7
)
 
$
(23.1
)
 
$
6.2

 
$
9.8

 
$
27.6

 
$
2.2

 
$
(29.8
)
 
$
9.8



(1) Net income attributable to Hillenbrand
(2) Comprehensive income attributable to Hillenbrand











17
Table of Contents

Condensed Consolidating Balance Sheets
 
December 31, 2015
 
September 30, 2015
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Cash and cash equivalents
$
0.7

 
$
6.5

 
$
47.9

 
$
—

 
$
55.1

 
$
0.3

 
$
7.1

 
$
40.9

 
$
—

 
$
48.3

Trade receivables, net
—

 
98.3

 
75.1

 
—

 
173.4

 
—

 
113.4

 
74.5

 
—

 
187.9

Unbilled receivables from long-term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
manufacturing contracts
—

 
8.4

 
111.9

 
—

 
120.3

 
—

 
13.5

 
131.4

 
—

 
144.9

Inventories
—

 
75.0

 
93.9

 
(2.8
)
 
166.1

 
—

 
69.0

 
87.1

 
(2.5
)
 
153.6

Deferred income taxes
0.2

 
15.8

 
3.3

 
—

 
19.3

 
1.8

 
15.7

 
4.4

 
—

 
21.9

Prepaid expense
2.9

 
6.3

 
12.0

 
—

 
21.2

 
2.8

 
6.5

 
14.5

 
—

 
23.8

Intercompany receivables
—

 
973.1

 
54.2

 
(1,027.3
)
 
—

 
—

 
921.8

 
60.2

 
(982.0
)
 
—

Other current assets
0.3

 
1.6

 
17.7

 
0.7

 
20.3

 
0.6

 
1.9

 
20.8

 
0.4

 
23.7

Total current assets
4.1

 
1,185.0

 
416.0

 
(1,029.4
)
 
575.7

 
5.5

 
1,148.9

 
433.8

 
(984.1
)
 
604.1

Property, plant and equipment, net
6.3

 
65.3

 
86.4

 
—

 
158.0

 
6.3

 
66.2

 
85.8

 
—

 
158.3

Intangible assets, net
2.1

 
173.0

 
324.7

 
—

 
499.8

 
2.2

 
175.6

 
281.8

 
—

 
459.6

Goodwill
—

 
211.7

 
357.5

 
—

 
569.2

 
—

 
211.7

 
332.3

 
—

 
544.0

Investment in consolidated subsidiaries
2,130.9

 
842.6

 
—

 
(2,973.5
)
 
—

 
2,082.7

 
836.1

 
—

 
(2,918.8
)
 
—

Other assets
22.9

 
28.7

 
0.4

 
(11.9
)
 
40.1

 
24.5

 
31.0

 
0.9

 
(14.3
)
 
42.1

Total Assets
$
2,166.3

 
$
2,506.3

 
$
1,185.0

 
$
(4,014.8
)
 
$
1,842.8

 
$
2,121.2

 
$
2,469.5

 
$
1,134.6

 
$
(3,917.2
)
 
$
1,808.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade accounts payable
$
1.1

 
$
19.4

 
$
81.2

 
$
—

 
$
101.7

 
$
0.5

 
$
22.7

 
$
81.3

 
$
(0.2
)
 
$
104.3

Liabilities from long-term manufacturing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
contracts and advances
—

 
12.3

 
57.9

 
—

 
70.2

 
—

 
13.5

 
66.2

 
—

 
79.7

Current portion of long-term debt
10.1

 
—

 
—

 
—

 
10.1

 
9.0

 
—

 
0.4

 
—

 
9.4

Accrued compensation
1.5

 
12.4

 
26.8

 
—

 
40.7

 
3.9

 
23.0

 
35.4

 
—

 
62.3

Deferred income taxes
—

 
—

 
19.7

 
—

 
19.7

 
—

 
—

 
25.4

 
—

 
25.4

Intercompany payables
1,024.8

 
5.3

 
—

 
(1,030.1
)
 
—

 
979.7

 
4.8

 
—

 
(984.5
)
 
—

Other current liabilities
9.5

 
44.7

 
56.9

 
1.5

 
112.6

 
18.1

 
46.0

 
58.6

 
0.4

 
123.1

Total current liabilities
1,047.0

 
94.1

 
242.5

 
(1,028.6
)
 
355.0

 
1,011.2

 
110.0

 
267.3

 
(984.3
)
 
404.2

Long-term debt
531.3

 
—

 
81.6

 
—

 
612.9

 
513.1

 
—

 
5.6

 
—

 
518.7

Accrued pension and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
postretirement healthcare
1.1

 
119.9

 
94.1

 
—

 
215.1

 
1.1

 
119.8

 
97.8

 
—

 
218.7

Deferred income taxes
—

 
17.4

 
26.9

 
(12.7
)
 
31.6

 
—

 
17.0

 
26.5

 
(14.1
)
 
29.4

Other long-term liabilities
1.9

 
20.6

 
8.1

 
—

 
30.6

 
1.7

 
20.4

 
9.2

 
—

 
31.3

Total Liabilities
1,581.3

 
252.0

 
453.2

 
(1,041.3
)
 
1,245.2

 
1,527.1

 
267.2

 
406.4

 
(998.4
)
 
1,202.3

Total Hillenbrand Shareholders’ Equity
585.0

 
2,254.3

 
719.2

 
(2,973.5
)
 
585.0

 
594.1

 
2,202.3

 
716.5

 
(2,918.8
)
 
594.1

Noncontrolling interests
—

 
—

 
12.6

 
—

 
12.6

 
—

 
—

 
11.7

 
—

 
11.7

Total Equity
585.0

 
2,254.3

 
731.8

 
(2,973.5
)
 
597.6

 
594.1

 
2,202.3

 
728.2

 
(2,918.8
)
 
605.8

Total Liabilities and Equity
$
2,166.3

 
$
2,506.3

 
$
1,185.0

 
$
(4,014.8
)
 
$
1,842.8

 
$
2,121.2

 
$
2,469.5

 
$
1,134.6

 
$
(3,917.2
)
 
$
1,808.1



18
Table of Contents


Condensed Consolidating Statements of Cash Flow
 
 
Three Months Ended December 31, 2015
 
Three Months Ended December 31, 2014
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
Parent
 
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
Net cash provided by (used in)
     operating activities
$
(1.7
)
 
$
3.2

 
$
34.2

 
$
—

 
$
35.7

 
$
(33.3
)
 
$
3.6

 
$
(12.2
)
 
$
—

 
$
(41.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investing activities:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Capital expenditures
(0.3
)
 
(3.8
)
 
(2.4
)
 
—

 
(6.5
)
 
(0.3
)
 
(3.3
)
 
(2.1
)
 
—

 
(5.7
)
Proceeds from sales of property, plant, and
     equipment
—

 
—

 
0.1

 
—

 
0.1

 
—

 
0.5

 
—

 
—

 
0.5

Acquisition of business, net of cash
     acquired
—

 
—

 
(105.7
)
 
—

 
(105.7
)
 
—

 
—