Edgar Filing: EDGEWELL PERSONAL CARE Co

EPC 10Q 6.30.15

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

_______________________________



(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 001-15401

____________________________________________________________________________________________________________

EDGEWELL PERSONAL CARE COMPANY

(Exact name of registrant as specified in its charter)



Missouri	43-1863181
(State or other jurisdiction of	(I. R. S. Employer
incorporation or organization)	Identification No.)

1350 Timberlake Manor Parkway
Chesterfield, Missouri	63017
(Address of principal executive offices)	(Zip Code)

(314) 594-1900
(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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x 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 the definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x		Accelerated filer	o

Non-accelerated filer	o	(Do not check if smaller reporting company)	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 x

Indicate the number of shares of Edgewell Personal Care Company common stock, $.01 par value, outstanding as of the close of business on July 31, 2015: 62,193,281.



INDEX
	Page
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Unaudited Consolidated Statements of Earnings and Comprehensive (Loss) Income (Condensed) for the Quarter and Nine Months Ended June 30, 2015 and 2014	3

Unaudited Consolidated Balance Sheets (Condensed) as of June 30, 2015 and September 30, 2014	4

Unaudited Consolidated Statements of Cash Flows (Condensed) for the Nine Months Ended June 30, 2015 and 2014	5

Notes to Unaudited Condensed Financial Statements	6

Items 2 and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Quantitative and Qualitative Disclosures About Market Risk	39

Item 4. Controls and Procedures	57

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	57

Item 1A. Risk Factors	57

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	58

Item 6. Exhibits	58

SIGNATURES	59

EXHIBIT INDEX	60

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

EDGEWELL PERSONAL CARE COMPANY

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE (LOSS) INCOME

(Condensed)

(In millions, except per share data - Unaudited)



	Quarter Ended June 30,						Nine Months Ended June 30,
	2015			2014			2015			2014
Net sales	$	1,047.1		$	1,130.0		$	3,093.5		$	3,306.3
Cost of products sold	553.0			591.0			1,608.7			1,747.2
Gross profit	494.1			539.0			1,484.8			1,559.1

Selling, general and administrative expense	258.5			207.1			700.8			610.8
Advertising and sales promotion expense	177.3			161.4			370.3			339.5
Research and development expense	23.3			23.2			67.6			67.8
Venezuela deconsolidation charge	—			—			144.5			—
Spin restructuring charges	18.6			—			66.9			—
2013 restructuring charges	22.3			28.0			28.7			75.1
Industrial exit charges	21.9			—			21.9			—
Interest expense	31.1			31.1			88.7			93.6
Cost of early debt retirements	61.4			—			61.4			—
Other financing items, net	(10.3		)	0.1			(19.0		)	(3.4		)
(Loss) earnings before income taxes	(110.0		)	88.1			(47.0		)	375.7
Income tax (benefit) provision	(37.5		)	23.6			8.9			104.8
Net (loss) earnings	$	(72.5	)	$	64.5		$	(55.9	)	$	270.9

Basic (loss) earnings per share	$	(1.17	)	$	1.05		$	(0.90	)	$	4.36
Diluted (loss) earnings per share	$	(1.17	)	$	1.03		$	(0.90	)	$	4.33

Statement of Comprehensive (Loss) Income:
Net (loss) earnings	$	(72.5	)	$	64.5		$	(55.9	)	$	270.9
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments	33.0			3.4			(106.4		)	4.7
Pension and postretirement activity, net of tax of ($0.3) and $4.7 for the quarter and nine months ended June 30, 2015, respectively, and $1.3 and $4.7 for the quarter and nine months ended June 30, 2014, respectively	(1.4		)	2.3			9.0			8.4
Deferred loss on hedging activity, net of tax of ($3.9) and ($0.7) for the quarter and nine months ended June 30, 2015, respectively, and ($1.6) and ($2.2) for the quarter and nine months ended June 30, 2014, respectively	(10.2		)	(3.1		)	(1.0		)	(4.0		)
Total comprehensive (loss) income	$	(51.1	)	$	67.1		$	(154.3	)	$	280.0

See accompanying Notes to (Unaudited) Condensed Financial Statements

EDGEWELL PERSONAL CARE COMPANY

CONSOLIDATED BALANCE SHEETS

(Condensed)

(In millions - Unaudited)



Assets	June 30, 2015			September 30, 2014
Current assets
Cash and cash equivalents	$	1,090.1		$	1,129.0
Trade receivables, less allowance for doubtful accounts of $13.2 and $13.4, respectively	507.1			495.0
Inventories	626.2			616.9
Other current assets	548.0			488.7
Total current assets	2,771.4			2,729.6
Property, plant and equipment, net	701.0			751.7
Goodwill	1,465.3			1,487.4
Other intangible assets, net	1,809.0			1,847.3
Other assets	122.5			112.7
Total assets	$	6,869.2		$	6,928.7

Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt	$	4.0		$	230.0
Notes payable	23.0			289.5
Accounts payable	358.1			397.1
Other current liabilities	654.1			657.1
Total current liabilities	1,039.2			1,573.7
Long-term debt	2,508.0			1,768.9
Deferred income tax liabilities	484.9			471.1
Other liabilities	550.8			592.7
Total liabilities	4,582.9			4,406.4
Shareholders' equity
Common shares	0.7			0.7
Additional paid-in capital	1,639.2			1,641.3
Retained earnings	1,222.8			1,373.0
Treasury shares	(206.9		)	(221.6		)
Accumulated other comprehensive loss	(369.5		)	(271.1		)
Total shareholders' equity	2,286.3			2,522.3
Total liabilities and shareholders' equity	$	6,869.2		$	6,928.7

See accompanying Notes to (Unaudited) Condensed Financial Statements

EDGEWELL PERSONAL CARE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Condensed)

(In millions - Unaudited)



	Nine Months Ended June 30,
	2015			2014
Cash Flow from Operating Activities
Net (loss) earnings	$	(55.9	)	$	270.9
Non-cash restructuring costs	40.9			8.3
Depreciation and amortization	93.5			97.8
Venezuela deconsolidation charge	144.5			—
Non-cash items included in income, net	19.3			71.6
Other, net	(28.7		)	(19.3		)
Changes in current assets and liabilities used in operations	(189.9		)	(50.6		)
Net cash from operating activities	23.7			378.7

Cash Flow from Investing Activities
Capital expenditures	(72.4		)	(55.0		)
Change related to Venezuelan operations	(93.8		)	—
Acquisitions, net of cash acquired	(12.1		)	(187.1		)
Proceeds from sale of assets	14.3			8.6
Change in restricted cash	13.9			—
Net cash used by investing activities	(150.1		)	(233.5		)

Cash Flow from Financing Activities
Cash proceeds from issuance of debt with original maturities greater than 90 days	2,414.0			—
Cash payments on debt with original maturities greater than 90 days	(1,900.0		)	(140.0		)
Net (decrease) increase in debt with original maturities of 90 days or less	(270.5		)	253.5
Deferred finance expense	(15.1		)	(0.1		)
Common shares purchased	—			(94.4		)
Cash dividends paid	(93.2		)	(93.0		)
Proceeds from issuance of common shares, net	4.4			6.7
Excess tax benefits from share-based payments	9.3			6.1
Net cash from (used by) financing activities	148.9			(61.2		)

Effect of exchange rate changes on cash	(61.4		)	6.4

Net (decrease) increase in cash and cash equivalents	(38.9		)	90.4
Cash and cash equivalents, beginning of period	1,129.0			998.3
Cash and cash equivalents, end of period	$	1,090.1		$	1,088.7

See accompanying Notes to (Unaudited) Condensed Financial Statements

EDGEWELL PERSONAL CARE COMPANY

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2015

(In millions, except per share data – Unaudited)

Note 1 - Background and Basis of Presentation

Background

Edgewell Personal Care Company, formerly known as Energizer Holdings, Inc., and its subsidiaries (collectively, "Edgewell" or the "Company"), is one of the world's largest manufacturers and marketers of personal care products in the wet shave, skin care, feminine care and infant care categories. Prior to the separation of its Household Products business on July 1, 2015, the Company was also one of the world's largest manufacturers and marketers of primary batteries and portable lighting.

On July 1, 2015, the Company completed the previously announced separation of its Household Products business into a separate publicly-traded company (the "Spin" or the "Separation"). The Company completed the tax-free Separation by distributing 100% of the outstanding shares of common stock of Energizer SpinCo, Inc. to the Company's shareholders. The newly formed company assumed the name Energizer Holdings, Inc. ("New Energizer") and began trading under the symbol "ENR" on the New York Stock Exchange ("NYSE"). Shareholders of record received one share of New Energizer for each share held of the historical combined company as of the close of business on June 16, 2015, the record date of the distribution. The Company distributed a total of 62.2 shares of New Energizer common stock. Edgewell retained the Personal Care business of the historical combined company and now trades on the NYSE under the symbol "EPC". Following the Separation, the Company does not beneficially own any shares of New Energizer.

In connection with the Spin, at the end of June 2015, the Company entered into certain agreements with New Energizer to implement the legal and structural separation from New Energizer, govern the relationship between the Company and New Energizer up to and after the completion of the Spin, and allocate between the Company and New Energizer various assets, liabilities and obligations, including, among other things, employee benefits, intellectual property and tax-related assets and liabilities. These agreements included a Contribution Agreement, Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, Transition Services Agreement and certain Trademark License Agreements.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The year-end condensed balance sheet data was derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Certain reclassifications have been made to the prior year financial statements to conform to the current presentation. The Company has evaluated subsequent events and has determined no disclosure is necessary beyond those events disclosed herein, including the information regarding the Separation. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for the full year. These statements should be read in conjunction with the financial statements and notes thereto for the year ended September 30, 2014 included in the Company's Annual Report on Form 10-K dated November 18, 2014.

The accompanying unaudited financial statements include the historical results of New Energizer, as the Separation did not take place until July 1, 2015, after the date of this Quarterly Report on Form 10-Q. In future filings, the historical results of the Household Products business of the Company will be presented as discontinued operations. As a result of the Separation, the accompanying unaudited financial statements are not indicative of the Company's future financial position, results of operations or cash flows.

Additionally, the accompanying unaudited financial statements include incremental costs incurred to evaluate, plan and execute the Separation. The Company also initiated certain restructuring activities in order to prepare both businesses to operate as stand-alone entities, some of which will continue in future periods. The restructuring activities include efforts to:


•	Adapt the global go-to-market footprint to adjust to the future strategies and scale of each stand-alone business;


•	Centralize certain back-office functions to increase efficiencies;


•	Outsource certain non-core transactional activities; and


•	Reduce headcount to optimize the cost structures of each stand-alone business.

The Company incurred the following pre-tax charges related to the Spin and Spin restructuring initiatives:


•	$114.5 for the third fiscal quarter ($92.5 included in Selling, general and administrative expense ("SG&A"), $3.4 included in Cost of products sold and $18.6 included in Spin restructuring charges);


•	$251.9 for the nine months ended June 30, 2015 ($180.9 included in SG&A, $4.1 included in Cost of products sold and $66.9 included in Spin restructuring charges); and


•	$296.6 for the project-to-date ($225.6 included in SG&A, $4.1 included in Cost of products sold and $66.9 included in Spin restructuring charges).

The Company expects to incur approximately $30.0 to $35.0 additional Spin and Spin restructuring related costs, all of which are expected to be incurred by the end of fiscal 2016, with the majority of the remaining costs incurred in the fourth quarter of fiscal 2015. This estimate excludes any Spin or Spin restructuring costs that will be recorded by New Energizer post-Spin.

For further information on the Company's Spin restructuring activities, see Note 4 to the Condensed Financial Statements.

Note 2 - Segments

Prior to the July 1, 2015 Separation, operations for the Company were managed via two segments - Personal Care (Wet Shave, Skin Care, Feminine Care and Infant Care products) and Household Products (Battery and Portable Lighting products). Segment performance was evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation costs, costs associated with restructuring initiatives (including Spin restructuring, the 2013 Restructuring and the industrial blade product line exit), the Venezuela deconsolidation charge, acquisition or integration activities, amortization of intangible assets and cost of early debt retirements. Financial items, such as interest income and expense, were managed on a global basis at the corporate level. The exclusion of charges such as other acquisition transaction and integration costs, and substantially all restructuring and realignment costs, from segment results reflected management's view on how it evaluated segment performance.

The Company's operating model included a combination of stand-alone and combined business functions between the Personal Care and Household Products businesses, varying by country and region of the world. Shared functions included product warehousing and distribution, various transaction processing functions, and in some countries, a combined sales force and management. The Company applied a fully allocated cost basis, in which shared business functions were allocated between the segments. Such allocations were estimates, and do not represent the costs of such services if performed on a stand-alone basis.

For the nine months ended June 30, 2015, the Company recorded a charge of $144.5 as a result of deconsolidating its Venezuelan subsidiaries, which had no accompanying tax benefit. The Venezuela deconsolidation charge was reported as a separate line item. See Note 5 to the Condensed Financial Statements.

On July 1, 2015, the Company separated the Household Products and Personal Care divisions to form two independent, publicly traded companies. As a result, the Company incurred incremental costs to evaluate, plan and execute the transaction. Separation related costs were recorded as follows:


•	For the quarter and nine months ended June 30, 2015, $92.5 and $180.9, respectively, of pre-tax charges were recorded in SG&A;


•	For the quarter and nine months ended June 30, 2015, $3.4 and $4.1 of pre-tax charges were recorded in Cost of products sold.

Additionally, the Company recorded $18.6 and $66.9, respectively, in pre-tax Spin restructuring charges related to the Separation for the quarter and nine months ended June 30, 2015. The Spin restructuring charges were reported as a separate line item. See Note 1 and Note 4 to the Condensed Financial Statements.

For the quarter and nine months ended June 30, 2015, the Company recorded pre-tax expense of $22.3 and $28.7, respectively, related to its 2013 restructuring charges, as compared to pre-tax expense of $28.0 and $75.1, respectively, in the prior year quarter and nine months ended June 30, 2014. The 2013 restructuring charges were reported as a separate line item. In addition, pre-tax costs of $0.2 and $0.5, respectively, for the quarter and nine months ended June 30, 2015 and $2.6 and $8.1, respectively, for the quarter and nine months ended June 30, 2014, associated with certain information technology enablement activities related to the Company's restructuring initiatives were included in SG&A. Additionally, pre-tax costs of $1.1 for the quarter and nine months ended June 30, 2015 and $0.4 for the nine months ended June 30, 2014, associated with obsolescence charges related to the Company's restructuring, were included in Cost of products sold. These information technology and inventory obsolescence costs are considered part of the total project costs incurred for the restructuring initiative. See Note 4 to the Condensed Financial Statements.

For the quarter and nine months ended June 30, 2015, the Company recorded pre-tax expense of $21.9 related to its decision to exit the industrial blade product line (included in Industrial exit charges). See Note 4 to the Condensed Financial Statements.

In connection with the Company's October 2013 acquisition of certain feminine care brands from Johnson & Johnson (the "feminine care acquisition"), the Company recorded pre-tax acquisition and integration costs of $1.5 and $7.4, respectively, for the quarter and nine months ended June 30, 2014. These amounts were not reflected in the Personal Care segment, but rather were presented as a separate line item below segment profit. Such presentation reflects management's view on how segment results are evaluated.

For the nine months ended June 30, 2014, the Company recorded a pre-tax inventory valuation adjustment of $8.0 related to the feminine care acquisition, representing the increased fair value of the inventory based on the estimated selling price of the finished goods acquired on the closing date less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity. For the nine months ended June 30, 2014, the Company recorded $8.0 within Cost of products sold based upon the write-up and subsequent sale of inventory acquired in the feminine care acquisition. These amounts were not reflected in the Personal Care segment, but rather presented as a separate line item below segment profit. Such presentation reflects management's view on how segment results are evaluated.

For the quarter and nine months ended June 30, 2015, the Company recorded early debt retirement costs of $61.4 associated with the prepayment of its Private Placement Notes on May 29, 2015. See Note 11 to the Condensed Financial Statements.

Segment sales and profitability for the quarter and nine months ended June 30, 2015 and 2014, respectively, are presented below.



	Quarter Ended June 30,						Nine Months Ended June 30,
	2015			2014			2015			2014
Net Sales
Personal Care	$	672.8		$	718.3		$	1,861.0		$	1,957.5
Household Products	374.3			411.7			1,232.5			1,348.8
Total net sales	$	1,047.1		$	1,130.0		$	3,093.5		$	3,306.3

	Quarter Ended June 30,						Nine Months Ended June 30,
	2015			2014			2015			2014
Segment Profit
Personal Care	$	95.3		$	112.2		$	376.6		$	413.2
Household Products	68.6			84.2			257.7			279.7
Total segment profit	163.9			196.4			634.3			692.9

General corporate and other expenses	(27.9		)	(33.3		)	(90.1		)	(107.0		)
Venezuela deconsolidation charge	—			—			(144.5		)	—
Spin costs ⁽¹⁾	(95.9		)	(7.0		)	(185.0		)	(7.0		)
Spin restructuring charges	(18.6		)	—			(66.9		)	—
2013 Restructuring and related costs ⁽²⁾	(23.6		)	(30.6		)	(30.3		)	(83.6		)
Industrial exit charges	(21.9		)	—			(21.9		)	—
Feminine care acquisition and integration costs	—			(1.5		)	—			(7.4		)
Acquisition inventory valuation	—			—			—			(8.0		)
Amortization of intangibles	(3.8		)	(4.7		)	(11.5		)	(14.0		)
Cost of early debt retirements	(61.4		)	—			(61.4		)	—
Interest and other financing items	(20.8		)	(31.2		)	(69.7		)	(90.2		)
Total (loss) earnings before income taxes	$	(110.0	)	$	88.1		$	(47.0	)	$	375.7


(1)	Includes pre-tax costs of $92.5 and $180.9, respectively, for the quarter and nine months ended June 30, 2015 and $7.0 for the quarter and nine months ended June 30, 2014 which are included in SG&A. Additionally, pre-tax costs of $3.4 and $4.1, respectively, for the quarter and nine months ended June 30, 2015 were included in Cost of products sold.

(2)

Includes pre-tax costs of $0.2 and $0.5, respectively, for the quarter and nine months ended June 30, 2015 and $2.6 and $8.1, respectively, for the quarter and nine months ended June 30, 2014, associated with certain information technology and related activities, which were included in SG&A. Additionally, pre-tax costs of $1.1 for the nine months ended June 30, 2015 and $0.4 for the nine months ended June 30, 2014, associated with obsolescence charges related to the restructuring, were included in Cost of products sold.

Supplemental product information is presented below for revenues from external customers:



	Quarter Ended June 30,				Nine Months Ended June 30,
Net Sales	2015		2014		2015		2014
Wet shave	$	370.3	$	403.9	$	1,086.1	$	1,170.5
Alkaline batteries	233.9		256.5		786.2		844.9
Other batteries and lighting products	140.4		155.2		446.3		503.9
Skin care	153.3		169.6		337.8		355.8
Feminine care	104.1		98.7		301.5		286.6
Infant care	29.6		31.5		92.6		103.7
Other personal care products	15.5		14.6		43.0		40.9
Total net sales	$	1,047.1	$	1,130.0	$	3,093.5	$	3,306.3

Total assets by segment are presented below:



	June 30, 2015		September 30, 2014
Personal Care	$	1,322.1	$	1,241.6
Household Products	801.1		882.1
Total segment assets	2,123.2		2,123.7
Corporate	1,471.7		1,470.3
Goodwill and other intangible assets, net	3,274.3		3,334.7
Total assets	$	6,869.2	$	6,928.7

Future Segments

Starting July 1, 2015, as a result of the Separation, operations for the Company will be reported via four segments - Wet Shave, Sun and Skin Care, Feminine Care and All Other. Segment performance will continue to be evaluated based on segment operating profit, exclusive of general corporate expenses, share-based compensation costs, costs associated with restructuring initiatives and other items that are not representative of management's view on how segment performance is evaluated. Financial items, such as interest income and expense, will continue to be managed on a global basis at the corporate level.

Note 3 - Acquisitions

Feminine Care Acquisition

In October 2013, the Company completed the acquisition of the Stayfree^® pad, Carefree^® liner and o.b.^® tampon feminine care brands in the U.S., Canada and the Caribbean from Johnson & Johnson for an aggregate cash purchase price of $187.1, inclusive of a $1.8 working capital adjustment, which was finalized and settled in April 2014. The Company financed the feminine care acquisition with approximately $135.0 of available foreign cash and $50.0 obtained from borrowings under the Company's bank facilities. Liabilities assumed as a result of the feminine care acquisition were limited primarily to certain employee benefit obligations. The Company combined these acquired brands within its existing feminine care business in the Personal Care segment. Combining these complementary businesses with its existing feminine care products provides the Company with brands in each of the key feminine hygiene categories. There were no contingent payments, options or commitments associated with the feminine care acquisition.

As of March 31, 2014, the purchase price allocation for the feminine care acquisition was complete. The Company determined the fair values of assets acquired and liabilities assumed for purposes of allocating the purchase price. The Company estimated a fair value adjustment for inventory based on the estimated selling price of the finished goods acquired at the closing date less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity. The fair value adjustment for the acquired equipment was established using both a cost and market approach. The fair values of the identifiable intangible assets were estimated using various valuation methods including discounted cash flows using both an income and cost approach.

The allocation of the purchase price was as follows:



Inventories	$	44.4
Goodwill	28.0
Intangible assets	39.3
Other assets	5.1
Property, plant and equipment,net	95.1
Other liabilities	(4.5		)
Pension and other post-retirement benefits	(20.3		)
Net assets acquired	$	187.1

The purchased amortizable identifiable intangible assets were as follows:



	Total		Estimated Life
Customer relationships	$	6.1	20 years
Technology and patents	3.0		7 years
Total	$	9.1

Remaining intangible assets acquired are indefinite-lived intangible assets related to the acquired tradenames and were fully allocated to the Personal Care segment.

Goodwill was deductible for tax purposes and amortized over 14 to 15 years, depending on the statutory jurisdiction.

Pro forma revenue and operating results for the feminine care acquisition are not included as they are not considered material to the Consolidated Financial Statements.

Household Products Acquisition

On December 12, 2014, the Company completed an acquisition related to the Household Products business for approximately $12.1, primarily related to the purchase of fixed assets. As of June 30, 2015, the purchase price allocation for the acquisition was complete. The Company developed an estimate of the fair values for purposes of allocating the purchase price, which resulted in $2.3 of goodwill.

Note 4 - Restructuring Charges

Spin Restructuring

As mentioned in Note 1 to the Condensed Financial Statements, the Company is incurring charges related to Spin restructuring activities, which are recorded as a separate line item. The Company does not include restructuring costs in the results of its reportable segments. The estimated impact of allocating such charges to segment results for the quarter and nine months ended June 30, 2015 would have been as follows:



	Quarter Ended June 30, 2015
	Personal Care			Household Products		Corporate		Total
Spin Restructuring
Severance and related benefit costs	$	7.3		$	8.2	$	—	$	15.5
Non-cash asset write-down	(1.8		)	1.1		—		(0.7		)
Other exit costs	1.9			1.9		—		3.8
Total Spin restructuring charges	$	7.4		$	11.2	$	—	$	18.6



	Nine Months Ended June 30, 2015
	Personal Care		Household Products		Corporate		Total
Spin Restructuring
Severance and related benefit costs	$	24.1	$	29.5	$	1.3	$	54.9
Non-cash asset write-down	3.7		3.7		—		7.4
Other exit costs	2.3		2.3		—		4.6
Total Spin restructuring charges	$	30.1	$	35.5	$	1.3	$	66.9

The Company expects to incur additional Spin restructuring costs of approximately $1.0 to $2.0 in the fourth quarter of fiscal 2015.

The following table summarizes the Spin restructuring activities and the related accrual which is included in Other current liabilities:



								Utilized
	October 1, 2014		Charge to Income		Other ⁽¹⁾			Cash			Non-Cash			June 30, 2015
Spin Restructuring
Severance and related benefit costs	$	—	$	54.9	$	0.5		$	(24.6	)	$	—		$	30.8
Non-cash asset write-down	—		7.4		(0.1		)	—			(7.3		)	—
Other exit costs	—		4.6		0.5			(4.6		)	—			0.5
Total Spin restructuring	$	—	$	66.9	$	0.9		$	(29.2	)	$	(7.3	)	$	31.3


(1)	Includes the impact of currency translation.

2013 Restructuring

In November 2012, the Company's Board of Directors (the "Board") authorized an enterprise-wide restructuring plan ("2013 Restructuring"). The primary objectives of the 2013 Restructuring included reduction in workforce, consolidation of general and administrative functional support across the organization, reduced overhead spending, creation of a center-led purchasing function and rationalization and streamlining of the Household Products operating facilities, product portfolio and marketing organization.

In January 2014, the Board authorized an expansion of scope of the previously announced 2013 Restructuring. As a result of the expanded scope of the Company's restructuring efforts, incremental costs will be incurred to successfully execute the program. Total project restructuring costs were estimated to increase from the original outlook of $250.0 to approximately $350.0.

Expense (Income) incurred under the 2013 Restructuring plan are reflected below, including the estimated impact of allocating such charges to segment results. The Company does not include restructuring costs in the results of its reportable segments.



	Quarter Ended June 30, 2015
	Personal Care		Household Products		Corporate		Total
2013 Restructuring
Severance and related benefit costs	$	0.4	$	6.7	$	—	$	7.1
Accelerated depreciation	0.9		9.2		—		10.1
Consulting, program management and other exit costs	3.0		1.9		0.2		5.1
Total 2013 restructuring	$	4.3	$	17.8	$	0.2	$	22.3



	Nine Months Ended June 30, 2015
	Personal Care		Household Products			Corporate		Total
2013 Restructuring
Severance and related benefit costs	$	4.6	$	6.8		$	—	$	11.4
Accelerated depreciation	4.3		9.2			—		13.5
Consulting, program management and other exit costs	10.4		3.4			1.0		14.8
Net gain on asset sales	—		(11.0		)	—		(11.0		)
Total 2013 restructuring	$	19.3	$	8.4		$	1.0	$	28.7



	Quarter Ended June 30, 2014
	Personal Care		Household Products			Corporate		Total
2013 Restructuring
Severance and related benefit costs	$	9.7	$	2.0		$	0.1	$	11.8
Accelerated depreciation	—		1.1			—		1.1
Consulting, program management and other exit costs	9.5		6.6			0.3		16.4
Net gain on asset sale	—		(1.3		)	—		(1.3		)
Total 2013 restructuring	$	19.2	$	8.4		$	0.4	$	28.0



	Nine Months Ended June 30, 2014
	Personal Care		Household Products			Corporate		Total
2013 Restructuring
Severance and related benefit costs	$	12.0	$	10.0		$	0.7	$	22.7
Accelerated depreciation	—		8.3			—		8.3
Consulting, program management and other exit costs	23.9		20.9			0.6		45.4
Net (gain) loss on asset sale	—		(1.3		)	—		(1.3		)
Total 2013 restructuring	$	35.9	$	37.9		$	1.3	$	75.1

In addition, pre-tax costs of $0.2 and $0.5, respectively, for the quarter and nine months ended June 30, 2015 and $2.6 and $8.1, respectively, for the quarter and nine months ended June 30, 2014, associated with certain information technology enablement activities related to the Company's 2013 Restructuring initiatives were included in SG&A. Additionally, pre-tax costs of $1.1 for the quarter and nine months ended June 30, 2015 and $0.4 for the nine months ended June 30, 2014, associated with obsolescence charges related to the Company's 2013 Restructuring, were included in Cost of products sold. These information technology costs and non-core inventory obsolescence charges are considered part of the total project costs incurred for the 2013 Restructuring initiative.

Total project-to-date costs associated with the 2013 Restructuring are approximately $293.5, of which approximately $61.1 relates to non-cash asset impairment and accelerated depreciation charges, approximately $93.2 relates to severance and related benefit costs, and approximately $122.1 relates to consulting, program management and other exit costs. Consulting, program management and other exit costs are inclusive of approximately $17.5 in certain information technology enablement costs (included in SG&A) and approximately $8.2 in obsolescence charges (included in Cost of products sold), both of which were considered part of the overall restructuring project. These costs were partially offset by project to date net gains of approximately $8.6, primarily relating to the gain on sale of the Asia battery packaging facility (recorded in the first fiscal quarter of 2015) and offset by losses on other asset disposals in the prior year.

Post-Spin, the Company expects to incur additional 2013 Restructuring charges of approximately $8.0 to $10.0 within the fourth quarter of fiscal 2015. Spending for the remainder of the project, which is now expected to continue through fiscal 2017, is expected to be approximately $40.0 to $50.0. A summary of total remaining estimated costs is as follows:


•	$15.0 - $20.0 related to plant closure and accelerated depreciation charges;


•	$3.0 - $5.0 related to severance and related benefit costs; and


•	$22.0 - $25.0 related to other restructuring related costs.

The following table summarizes the 2013 restructuring activities and related accrual (excluding certain information technology enablement and obsolescence charges related to the 2013 Restructuring) for the first nine months of fiscal 2015:



									Utilized
	October 1, 2014		Charge to Income			Other ⁽¹⁾			Cash			Non-Cash			June 30, 2015
2013 Restructuring
Severance and termination related costs	$	22.1	$	11.4		$	(1.9	)	$	(8.7	)	$	—		$	22.9
Asset impairment and accelerated depreciation	—		13.5			(0.5		)	—			(13.0		)	—
Other related costs	4.3		14.8			(0.2		)	(16.1		)	—			2.8
Net (gain) loss on asset sales	—		(11.0		)	0.5			13.9			(3.4		)	—
Total 2013 restructuring	$	26.4	$	28.7		$	(2.1	)	$	(10.9	)	$	(16.4	)	$	25.7


(1)	Includes the impact of currency translation.

The following table summarizes the 2013 Restructuring activities and related accrual (excluding certain information technology enablement and obsolescence charges related to the restructuring) for fiscal 2014:



								Utilized
	October 1, 2013		Charge to Income		Other ⁽¹⁾			Cash			Non-Cash			September 30, 2014
2013 Restructuring
Severance and termination related costs	$	16.3	$	32.6	$	(0.7	)	$	(26.1	)	$	—		$	22.1
Asset impairment and accelerated depreciation	—		4.7		—			—			(4.7		)	—
Other related costs	4.3		52.9		(0.1		)	(50.1		)	(2.7		)	4.3
Net (gain) loss on asset sales	—		2.4		—			4.9			(7.3		)	—
Total 2013 restructuring	$	20.6	$	92.6	$	(0.8	)	$	(71.3	)	$	(14.7	)	$	26.4


(1)	Includes the impact of currency translation.

Industrial Exit

In May 2015, the Board authorized the strategic decision to exit the Company's industrial blade product line, which is part of the Company's Personal Care segment, due to a shift of management focus to other segment products (the "Industrial Exit"). The Company expects to complete the exit of the business, through either sale or wind down, by the end of fiscal 2016. Impacted by this decision are operations in Verona, Virginia; Obregon, Mexico; and the United Kingdom. For the quarter and nine months ended June 30, 2015, the Company incurred $21.9 of non-cash asset impairment charges related to the Industrial Exit.

The Company does not include these costs in the results of its reportable segments. The estimated pre-tax impact of allocating such charges would have resulted in all $21.9 of non-cash asset impairment charges being fully allocated to the Personal Care segment for the quarter and nine months ended June 30, 2015.

The Company expects to incur $10.0 to $15.0 of pre-tax restructuring related charges for the Industrial Exit through the end of fiscal 2016. The remaining costs will include either severance and facility closure costs or asset impairment charges, depending on the outcome of the Company's efforts to sell this business.

Accruals related to the Industrial Exit were immaterial at June 30, 2015.

Note 5 - Venezuela

Effective January 1, 2010, the financial statements for the Company's Venezuelan subsidiary were consolidated under the rules governing the translation of financial information in a highly inflationary economy based on the use of the blended National Consumer Price Index in Venezuela. Under GAAP, an economy is considered highly inflationary if the cumulative inflation rate for a three-year period meets or exceeds 100 percent. If a subsidiary is considered to be in a highly inflationary economy, the financial statements of the subsidiary must be re-measured into the Company's reporting currency (U.S. dollar) and future exchange gains and losses from the re-measurement of monetary assets and liabilities are reflected in current earnings, rather than exclusively in the equity section of the balance sheet, until such time as the economy is no longer considered highly inflationary.

Prior to March 31, 2015, the Company included the results of its Venezuelan operations in its Consolidated Financial Statements using the consolidation method of accounting. The Company's Venezuelan earnings and cash flows were reflected in the Consolidated Financial Statements at the official exchange rate of 6.30 bolivars per U.S. dollar for the quarter and six months ended March 31, 2015, and for the quarter and nine months ended June 30, 2014.

Venezuelan exchange control regulations have resulted in an other-than-temporary lack of exchangeability between the Venezuelan bolivar and U.S. dollar, and have restricted the Company's Venezuelan operations' ability to pay dividends and settle intercompany obligations. The severe currency controls imposed by the Venezuelan government have significantly limited the Company's ability to realize the benefits from earnings of its Venezuelan operations and access the resulting liquidity provided by those earnings. The Company expects that this condition will continue for the foreseeable future. This lack of exchangeability has resulted in a lack of control over the Company's Venezuelan subsidiaries for accounting purposes. Therefore, in accordance with Accounting Standards Codification 810 -- Consolidation, the Company deconsolidated its Venezuelan subsidiaries on March 31, 2015 and began accounting for the investment in its Venezuelan operations using the cost method of accounting. As a result of deconsolidating its Venezuelan subsidiaries, the Company recorded a charge of $144.5 in the second fiscal quarter of 2015, which had no accompanying tax benefit. This charge included the write-off of the Company's investment in its Venezuelan subsidiaries, foreign currency translation losses of $33.7 previously recorded in accumulated other comprehensive income and the write-off of $33.8 of intercompany receivables. During the three months ended June 30, 2015, and in future periods, the Company's financial results will not include the operating results of its Venezuelan operations. Instead, the Company will record revenue for sales of inventory to its Venezuelan operations to the extent cash is received. Further, dividends from the Company's Venezuelan subsidiaries will be recorded as other income upon receipt of the cash.

Note 6 - Share-based Payments

Total compensation costs charged against income for the Company's share-based compensation arrangements were $5.5 and $18.9, respectively, for the quarter and nine months ended June 30, 2015 and $6.4 and $23.7, respectively, for the quarter and nine months ended June 30, 2014 and were recorded in SG&A. The total income tax benefit recognized for share-based compensation arrangements was $2.0 and $7.0, respectively, for the quarter and nine months ended June 30, 2015 and $2.3 and $8.8, respectively, for the quarter and nine months ended June 30, 2014.

Restricted Share Equivalents

In November 2014, the Company granted restricted share equivalent ("RSE") awards to key Personal Care and Household Products executives and employees. The grant included approximately 0.1 shares that vest ratably over four years and approximately 0.1 shares which will vest on the second anniversary of the date of the grant. The closing share price on the date of the grant used to determine the award fair value was $128.47.

In November 2013, the Nominating and Executive Compensation Committee of the Board (the "Committee") granted three-year performance RSE awards subject to achievement of certain performance conditions over the three-year period commencing October 1, 2013, the beginning of the Company's fiscal 2014 (the "2013 Awards"). On April 27, 2015, the Committee authorized the conversion of the 2013 Awards into time-based RSE awards at target values. This conversion was contingent upon the Separation, which occurred on July 1, 2015. As a result of the modification of the 2013 Awards, the Company will incur an incremental charge of $5.3 during the fourth quarter of fiscal 2015, and incremental expense of $4.3 over the remaining vesting period of the 2013 Awards.

Subsequent Event

In connection with the Separation and the Employee Matters Agreement entered into with New Energizer, existing RSE awards for all employees were modified, with RSE awards for employees remaining with Edgewell converted into new RSE awards of the Company at a ratio calculated using the volume-weighted-average-price for the five-day periods immediately preceding and following the Separation. There was no change to the vesting terms of the modified awards. A total of 0.4 existing RSE awards were converted into 0.5 new RSE awards. As a result of this modification, the Company will incur an immaterial incremental charge during the fourth quarter of fiscal 2015, and will recognize share-based compensation expense of $23.9 over the remaining vesting period of the modified awards. Outstanding RSE awards granted to employees remaining with New Energizer were canceled and replaced with New Energizer RSE awards. Any remaining share-based compensation expense related to New Energizer RSE awards will be incurred by New Energizer.

In July 2015, the Company granted RSE and non-qualified stock option ("NQSO") awards to certain executives and employees remaining with the Company after the Separation. The grant included approximately 0.3 RSE awards, 0.2 of which vest ratably over four years with the remainder vesting either ratably over, or at the end of, three years. The grant also included approximately 0.4 NQSO awards, which will vest ratably over three years. The grant-date fair value of awards was $40.2, which will be recognized over the applicable vesting period.

Note 7 - (Loss) Earnings per Share

Basic (loss) earnings per share is based on the average number of common shares outstanding during the period. Diluted (loss) earnings per share is based on the average number of shares used for the basic (loss) earnings per share calculation, adjusted for the dilutive effect of share options and RSE awards.

The following table sets forth the computation of basic and diluted (loss) earnings per share for the quarter and nine months ended June 30, 2015 and 2014, respectively.



	Quarter Ended June 30,					Nine Months Ended June 30,
	2015			2014		2015			2014
Numerator:
Net (loss) earnings	$	(72.5	)	$	64.5	$	(55.9	)	$	270.9
Denominator:
Basic weighted-average shares outstanding	62.2			61.7		62.1			62.1
Effect of dilutive securities:
Share options	—			0.1		—			—
RSEs	—			0.6		—			0.5
Total dilutive securities	—			0.7		—			0.5
Diluted weighted-average shares outstanding	62.2			62.4		62.1			62.6
Basic (loss) earnings per share	$	(1.17	)	$	1.05	$	(0.90	)	$	4.36
Diluted (loss) earnings per share	$	(1.17	)	$	1.03	$	(0.90	)	$	4.33

For the quarter and nine months ended June 30, 2015, the calculation of Diluted weighted-average shares outstanding excludes 0.4 of RSEs that would have otherwise been dilutive because the Company reported a net loss. For the quarter and nine months ended June 30, 2014 the number of shares considered anti-dilutive was immaterial.

Note 8 - Goodwill and Intangibles

The following table sets forth goodwill by segment as of October 1, 2014 and June 30, 2015.



	Household Products			Personal Care			Total
Balance at October 1, 2014	$	37.1		$	1,450.3		$	1,487.4
Household Products acquisition	2.3			—			2.3
Cumulative translation adjustment	(0.7		)	(23.7		)	(24.4		)
Balance at June 30, 2015	$	38.7		$	1,426.6		$	1,465.3

Total amortizable intangible assets at June 30, 2015 were as follows:



	Gross Carrying Amount		Accumulated Amortization		Net
Tradenames and brands	$	15.7	$	12.9	$	2.8
Technology and patents	77.0		64.7		12.3
Customer-related and other	151.1		72.5		78.6
Total amortizable intangible assets	$	243.8	$	150.1	$	93.7

During the quarter, the Company recorded a $2.5 impairment of Tradenames and brands and a $5.6 impairment of Customer-related intangibles associated with its Industrial business. For further information on the Company's Industrial Exit activities, see Note 4 to the Condensed Financial Statements.

Estimated amortization expense for amortizable intangible assets (all Personal Care) for the remainder of fiscal 2015 and the fiscal years ending September 30, 2016, 2017, 2018, 2019 and 2020 is approximately $3.6, $14.7, $14.3, $6.8, $5.5 and $4.9, respectively, and $43.9 thereafter.

The Company had indefinite-lived intangible assets of $1,715.3 ($1,637.6 in Personal Care and $77.7 in Household Products) at June 30, 2015, a decrease of $11.8 from September 30, 2014, due to changes in foreign currency translation rates.

Goodwill and intangible assets deemed to have an indefinite life are not amortized, but reviewed annually for impairment of value or when indicators of a potential impairment are present. The Company continuously monitors changing business conditions, which may indicate that the remaining useful life of goodwill and other intangible assets may warrant revision or carrying amounts may require adjustment. As a result of the Separation, the Company is in the process of allocating Personal Care goodwill to the relevant reporting units, using the relative fair value approach, and of reviewing goodwill for impairment as of July 1, 2015. Historically, no impairment has resulted from testing of goodwill; however, this is the first time that testing will be performed individually for goodwill allocated to each of the Company's new reporting units. Similarly, no impairments have historically resulted from the annual review of intangible assets, although, testing of the Company's Playtex® and Wet Ones® brand names has shown previously that determined fair values were relatively close to the carrying values of $663.0 and $214.0, respectively. The Company expects to complete the impairment testing during the fourth quarter of fiscal 2015.

Note 9 - Income Taxes

The Company's nine month effective tax rate for 2015 was negative 18.9% as compared to 27.9% for 2014. The negative tax rate for 2015 is a result of having incurred tax expense on a net loss. The tax rate for 2015 was unfavorably impacted by the Venezuela deconsolidation charge of $144.5 during the second quarter of fiscal 2015, which had no accompanying tax benefit. This charge had a 28.0% impact on the Company's effective tax rate in the nine months ended June 30, 2015.

Note 10 - Pension Plans and Other Postretirement Benefits

The Company has several defined benefit pension plans covering employees in the U.S. and certain employees in other countries. The plans provide retirement benefits based on years of service and on earnings.

The Company also sponsors or participates in a number of other non-U.S. pension and postretirement arrangements, including various retirement and termination benefit plans, some of which are required by local law or coordinated with government-sponsored plans, which are not significant in the aggregate and, therefore, are not included in the information presented below.

The Company's net periodic pension benefit cost for these plans are as follows:



	Quarter Ended June 30,						Nine Months Ended June 30,
	2015			2014			2015			2014
Service cost	$	2.2		$	3.4		$	6.6		$	10.5
Interest cost	12.0			13.5			36.0			40.8
Expected return on plan assets	(17.6		)	(17.1		)	(53.0		)	(51.6		)
Amortization of prior service cost	0.1			—			0.2			—
Amortization of unrecognized net loss	2.4			4.6			7.2			13.9
Settlement charge	0.1			0.1			0.1			0.2
Net periodic benefit cost	$	(0.8	)	$	4.5		$	(2.9	)	$	13.8

Effective January 1, 2014, benefits under the U.S. pension plan were frozen and future service benefits are no longer being accrued. As a result, the amortization period for unrecognized gains and losses was changed for fiscal 2015 and beyond from the average remaining service period of active employees to the average remaining life expectancy of all plan participants. Because unrecognized losses currently exist, this change will result in a decrease in future pension expense.

Note 11 - Debt

The Company's total borrowings were $2,535.0 at June 30, 2015, including $836.0 tied to variable interest rates. The Company maintains total committed debt facilities of $3,265.3.

The detail of long-term debt was as follows:



	June 30, 2015		September 30, 2014
Private Placement Notes	$	—	$	900.0
Senior Notes, fixed interest rate of 4.7%, due 2021	600.0		600.0
Senior Notes, fixed interest rate of 4.7%, due 2022, net of discount ⁽¹⁾	499.0		498.9
New Energizer Senior Notes, fixed interest rate of 5.5%, due 2025	600.0		—
New Energizer Term Loan, net of discount ⁽¹⁾	399.0		—
Netherlands Credit Facility	269.0		—
Revolving Facility	145.0		—
Total long-term debt, including current maturities	2,512.0		1,998.9
Less current portion	4.0		230.0
Total long-term debt	$	2,508.0	$	1,768.9


(1)	At June 30, 2015, balances for the Senior Notes due 2022 and for the New Energizer Term Loan are each reflected net of discount of approximately $1.0.

Notes payable at September 30, 2014 consisted of notes payable to financial institutions with original maturities of less than ninety days of $289.5 and had a weighted-average interest rate of 2.1%. The Company had outstanding international borrowings recorded within Notes payable of $23.0 and $21.0 as of June 30, 2015 and September 30, 2014, respectively.

At September 30, 2014, Notes payable included outstanding advances of $133.5 under the Company's $150.0 receivables securitization program, which was terminated in May 2015 (as discussed below). These advances are not considered debt for purposes of the Company's debt compliance covenants.

Separation Related Debt Transactions

Receivables Securitization Program

On May 6, 2015, the Company entered into a payoff and termination agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd. as administrative agent. The Company borrowed $129.1 from its Prior Revolving Facility (as defined below) to terminate the receivables securitization program.

Bridge Facility

On April 29, 2015, the Company entered into a 364-day Term Loan Credit Agreement to borrow up to $1,000.0 under a senior unsecured loan facility (the "Bridge Facility"). In connection with entering into the Bridge Facility, the Company issued an irrevocable notice of prepayment to the holders of its Private Placement Notes in the outstanding principal amount of $820.0. On May 29, 2015, the Company borrowed $1,000.0 under the Bridge Facility. Approximately $890.5 was used to prepay the Company's Private Placement Notes (including make-whole and accrued interest, as discussed below), with the balance used to pay down borrowings under the Prior Revolving Facility (as defined below).

On June 30, 2015, the Company terminated its Bridge Facility, repaying the $1,000.0 of loans outstanding, together with accrued interest, using cash proceeds received from New Energizer (see discussion of New Energizer Borrowings below) in connection with the Separation, and from cash on hand. No early termination penalties were incurred by the Company in connection with the termination of the Bridge Facility.

Private Placement Notes

On May 29, 2015, the Company completed the prepayment of its (i) $150.0 5.23% Senior Notes, Series 2005-D, (ii) $140.0 6.24% Senior Notes, Series 2006-D, (iii) $70.0 6.36% Senior Notes, Series 2007-E, (iv) $150.0 6.48% Senior Notes, Series 2007-F and (v) $310.0 6.55% Senior Notes, Series 2007-G (collectively, the "Private Placement Notes") using funds borrowed from the Bridge Facility. The prepayment amount included make-whole payments of $61.4 and accrued interest of $9.1.

Replacement of Credit Facility

On June 1, 2015, the Company entered into a five-year senior unsecured revolving credit facility with JPMorgan Chase Bank, N.A., as administrative agent, and Bank of America, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Citibank, N.A., as co-syndication agents, to borrow up to $600.0 under a senior unsecured revolving loan (the "Revolving Facility"). The Revolving Facility will be used for general corporate purposes, including refinancing existing indebtedness and paying transaction fees and expenses in connection with the Separation. Borrowings under the Revolving Facility bear interest at a rate per annum equal to, at the option of the Company, (i) LIBOR plus the applicable margin of 1.075% to 1.575%, based on total leverage, or (ii) the Alternate Base Rate (as defined in the agreement) plus the applicable margin of 0.075% to 0.575%, based on total leverage. The Revolving Facility includes a $25.0 sublimit for the issuance of letters of credit and a $10.0 sublimit for swingline loans, both on customary terms. Obligations are jointly and severally guaranteed by certain of the Company's domestic subsidiaries.

On June 30, 2015, the Company terminated its existing revolving credit facility (the "Prior Revolving Facility"). Obligations outstanding under the Prior Revolving Facility at that date were repaid with advances from the Revolving Facility. No early termination penalties were incurred in connection with the termination of the Prior Revolving Facility.

As of June 30, 2015, the Company had outstanding borrowings of $145.0 under the Revolving Facility, recorded in Long-term debt, and $2.6 of outstanding letters of credit. Taking into account outstanding borrowings and outstanding letters of credit, $452.4 remains available as of June 30, 2015.

Netherlands Credit Facility

On June 12, 2015, Edgewell Personal Care Netherlands, B.V. ("Edgewell Netherlands"), a wholly-owned subsidiary of the Company, and the Company entered into a credit agreement with the Bank of Tokyo-Mitsubishi UFJ, Ltd., as administrative agent and as lender, pursuant to which Edgewell Netherlands may borrow up to €270.0 under a senior unsecured revolving loan (the "Netherlands Credit Facility"). Borrowings under the Netherlands Credit Facility bear interest at a rate per annum equal to LIBOR plus the applicable margin of 2.00% to 2.25%, based on the Company's credit rating. Borrowings under the Netherlands Credit Facility are available to Edgewell Netherlands until the first anniversary of the effective date of the agreement, and any outstanding loans will be payable on the second anniversary of the effective date of the agreement. Obligations of Edgewell Netherlands under the Netherlands Credit Facility are guaranteed by the Company. As of June 30, 2015, the Company had outstanding borrowings of €241.3 (approximately $269.0) under the Netherlands Credit Facility, recorded in Long-term debt.

New Energizer Borrowings

Revolving Facility and Term Loan. Effective June 30, 2015, New Energizer entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and other financial institutions, which provides for a five-year $250.0 senior secured revolving credit facility (the "New Energizer Revolving Facility") and a seven-year $400.0 senior secured term loan B facility (the "New Energizer Term Loan").

The New Energizer Revolving Facility includes a $25.0 sublimit for the issuance of letters of credit and a $10.0 sublimit for swingline loans, both on customary terms. New Energizer will have the right, from time to time, to increase the size or add certain incremental revolving or term loan facilities under certain circumstances, subject to customary terms and conditions. Borrowings under the New Energizer Revolving Facility will bear interest at a rate per annum equal to, at the option of New Energizer, (i) LIBOR plus the applicable margin of approximately 1.50% to 2.25%, based on total leverage, or (ii) the Base Rate, as defined in the agreement, plus the applicable margin. The New Energizer Term Loan will bear interest at a rate per annum equal to, at the option of New Energizer, (i) LIBOR plus the applicable margin of approximately 2.50%, subject to a 0.75% LIBOR floor, or (ii) the Base Rate, as defined in the agreement, plus the applicable margin. The loans and commitments under the New Energizer Term Loan require quarterly principal payments at a rate of 0.25% of the original principal balance. Obligations under the New Energizer Revolving Facility and New Energizer Term Loan are jointly and severally guaranteed by certain of New Energizer's existing and future direct and indirectly wholly-owned U.S. subsidiaries, and there is a first priority perfected lien on substantially all of the assets and property of New Energizer and its guarantors and proceeds therefrom excluding certain excluded assets.

As of June 30, 2015, the Company did not have outstanding borrowings under the New Energizer Revolving Facility, and had $11.3 of outstanding letters of credit. Taking into account outstanding letters of credit, $238.7 remains available as of June 30, 2015.

Senior Notes. On June 1, 2015, New Energizer completed the issuance and sale of $600.0 5.50% Senior Notes due 2025 (the "New Energizer Senior Notes"). The New Energizer Senior Notes were issued pursuant to an indenture dated as of June 1, 2015, among New Energizer, certain subsidiary guarantors of New Energizer and The Bank of New York Mellon Trust Company, N.A. The New Energizer Senior Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by each of New Energizer's domestic restricted subsidiaries that is a borrower or guarantor under the New Energizer Revolving Facility and New Energizer Term Loan. The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. New Energizer may redeem some or all of the New Energizer Senior Notes under certain circumstances, as outlined in the indenture.

New Energizer expects that the New Energizer Revolving Facility will be used for working capital and for general corporate purposes. The proceeds of the New Energizer Term Loan and the New Energizer Senior Notes were transferred to the Company in connection with the contribution of certain assets to New Energizer immediately prior to the completion of the Separation, and were used by the Company to repay borrowings under the Bridge Facility.

Debt Covenants

The credit agreements governing the Company's and New Energizer's debt contain certain customary representations and warranties, financial covenants, covenants restricting the ability to take certain actions, affirmative covenants and provisions relating to events of default. If the Company fails to comply with these covenants or with other requirements of these credit agreements, the lenders may have the right to accelerate the maturity of the debt. Acceleration under one of the Company's facilities would trigger cross defaults on its other borrowings.

As of June 30, 2015, the Company was, and expects to remain, in compliance with the provisions and covenants associated with its debt agreements.

Debt Maturities

Aggregate maturities of long-term debt, including current maturities, at June 30, 2015 were as follows: $4.0 in one year, $273.0 in two years, $4.0 in three years, $4.0 in four years, $149.0 in five years and $2,080.0 thereafter.

Note 12 - Shareholders' Equity

Beginning in September 2000, the Board approved a series of resolutions authorizing the repurchase of shares of Company common stock, with no commitments by the Company to repurchase such shares. In May 2015, the Board approved a new authorization for the Company to acquire up to ten million shares, replacing the prior Board authorization from April 2012. During the quarter ended June 30, 2015, the Company did not repurchase any shares of the Company's common stock, other than a small number of shares related to the net settlement of certain share-based compensation awards for tax withholding purposes. The Company has ten million shares remaining under the Board authorization to repurchase its common shares in the future. Future share repurchases, if any, would be made in the open market, privately negotiated transactions or otherwise, in such amounts and at such times as the Company deems appropriate based upon prevailing market conditions, business needs and other factors.

On November 3, 2014, the Board declared a dividend for the first quarter of fiscal 2015 of $0.50 per share of common stock, which was paid on December 16, 2014. The dividend paid totaled $31.1.

On January 26, 2015, the Board declared a dividend for the second quarter of fiscal 2015 of $0.50 per share of common stock, which was paid on March 18, 2015. The dividend paid totaled $31.1.

On April 27, 2015, the Board declared a dividend for the third quarter of fiscal 2015 of $0.50 per share of common stock, which was paid on June 10, 2015. The dividend paid totaled $31.1.

On May 21, 2015, the Board declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of common stock of the Company. The Rights were issued on June 1, 2015 to the shareholders of record on such date, and accompanied each new share of common stock issued between that date and the date of the Separation. Each Right allows the holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock (a "Preferred Share") for $450.0 once the Rights become exercisable, which will give the shareholder approximately the same dividend, voting and liquidation rights as would one share of the Company common stock. Holders of Preferred Shares do not have any dividend, voting or liquidation rights prior to exercise. The Rights, which are scheduled to expire December 31, 2015, will not be exercisable until ten days after the public announcement that a person or group has become an "Acquiring Person" by obtaining beneficial ownership of 10% or more of the outstanding Company common stock. The Rights Agreement and the Rights are discussed further in the Company's Current Report on Form 8-K dated May 26, 2015.

Subsequent Events

On July 1, 2015, the Company distributed 100% of the outstanding shares of common stock of New Energizer to its shareholders. For further information on the Separation, see Note 1 to the Condensed Financial Statements.

Note 13 - Financial Instruments and Risk Management

At times, the Company enters into contractual arrangements (derivatives) to reduce its exposure to foreign currency, interest rate and commodity price risks. The section below outlines the types of derivatives that existed at June 30, 2015 and September 30, 2014, as well as the Company's objectives and strategies for holding derivative instruments.

Commodity Price Risk

The Company uses raw materials that are subject to price volatility. At times, the Company has used, and may in the future use, hedging instruments to reduce exposure to variability in cash flows associated with future purchases of certain materials and commodities. At June 30, 2015 and September 30, 2014, there were no open derivative or hedging instruments for future purchases of raw materials or commodities.

Foreign Currency Risk

A significant share of the Company's sales are tied to currencies other than the U.S. dollar, the Company's reporting currency. As such, a weakening of currencies relative to the U.S. dollar can have a negative impact to reported earnings. Conversely, strengthening of currencies relative to the U.S. dollar can improve reported results. The primary currencies to which the Company is exposed include the Euro, the Japanese Yen, the British Pound, the Canadian Dollar and the Australian Dollar.

Additionally, the Company's foreign subsidiaries enter into internal and external transactions that create non-functional currency balance sheet positions at the foreign subsidiary level. These exposures are generally the result of intercompany purchases, intercompany loans and, to a lesser extent, external purchases, and are revalued in the foreign subsidiary's local currency at the end of each period. Changes in the value of the non-functional currency balance sheet positions in relation to the foreign subsidiary's local currency results in an exchange gain or loss recorded in Other financing items, net. The primary currency to which the Company's foreign subsidiaries are exposed is the U.S. dollar.

Interest Rate Risk

The Company has interest rate risk with respect to interest expense on variable rate debt. At June 30, 2015, the Company had $836.0 of variable rate debt outstanding, which was primarily outstanding borrowings under the Company's Revolving Facility, Netherlands Credit Facility and the New Energizer Term Loan.

Cash Flow Hedges

At June 30, 2015, the Company maintained a cash flow hedging program related to foreign currency risk. These derivative instruments have a high correlation to the underlying exposure being hedged and have been deemed highly effective for accounting purposes in offsetting the associated risk.

The Company enters into a series of forward currency contracts to hedge the cash flow uncertainty of forecasted inventory purchases due to currency fluctuations. These transactions are accounted for as cash flow hedges. The Company had an unrealized pre-tax gain of $12.8 and $14.5 at June 30, 2015 and September 30, 2014, respectively, on these forward currency contracts accounted for as cash flow hedges included in Accumulated other comprehensive loss. Assuming foreign exchange rates versus the U.S. dollar remain at June 30, 2015 levels over the next twelve months, approximately $12.8 of the pre-tax gain included in Accumulated other comprehensive loss at June 30, 2015, is expected to be included in Other financing items, net. Contract maturities for these hedges extend into fiscal year 2016. There were 70 open foreign currency contracts at June 30, 2015 with a total notional value of $225.7.

Derivatives not Designated in Hedging Relationships

The Company held a share option with a major financial institution to mitigate the impact of changes in certain of the Company's deferred compensation liabilities, which were tied to the Company's common share price. The contract matured in November 2014. Period activity related to the share option is classified in the same category in the cash flow statement as the period activity associated with the Company's deferred compensation liability, which is cash flow from operations.

The Company enters into foreign currency derivative contracts which are not designated as cash flow hedges for accounting purposes to hedge balance sheet exposures. Any gains or losses on these contracts are expected to be offset by exchange gains or losses on the underlying exposures, thus they are not subject to significant market risk. The change in estimated fair value of the foreign currency contracts for the quarter and nine months ended June 30, 2015 resulted in income of $1.4 and $6.8, respectively, and expense of $8.5 and income of $2.2, respectively, for the quarter and nine months ended June 30, 2014, and was recorded in Other financing items, net. There were 14 open foreign currency derivative contracts which were not designated as cash flow hedges at June 30, 2015, with a total notional value of $313.5.

The following table provides estimated fair values as of June 30, 2015 and September 30, 2014, and the amounts of gains and losses on derivative instruments classified as cash flow hedges for the quarter and nine months ended June 30, 2015 and 2014:



	At June 30, 2015		Quarter Ended June 30, 2015					Nine Months Ended June 30, 2015
Derivatives designated as Cash Flow Hedging Relationships	Estimated Fair Value, Asset (Liability) ^{(1) (2)}		Gain (Loss) Recognized in OCI ⁽³⁾			Gain (Loss) Reclassified From OCI into Income(Effective Portion) ^{(4) (5)}		Gain (Loss) Recognized in OCI ⁽³⁾			Gain (Loss) Reclassified From OCI into Income(Effective Portion) ^{(4) (5)}
Foreign currency contracts	$	12.8	$	(4.6	)	$	9.5	$	22.3		$	24.0

	At September 30, 2014		Quarter Ended June 30, 2014					Nine Months Ended June 30, 2014
Derivatives designated as Cash Flow Hedging Relationships	Estimated Fair Value, Asset (Liability) ^{(1) (2)}		Gain (Loss) Recognized in OCI ⁽³⁾			Gain (Loss) Reclassified From OCI into Income(Effective Portion) ^{(4) (5)}		Gain (Loss) Recognized in OCI ⁽³⁾			Gain (Loss) Reclassified From OCI into Income(Effective Portion) ^{(4) (5)}
Foreign currency contracts	$	14.5	$	(4.4	)	$	0.3	$	(1.0	)	$	5.2


(1)	All derivative assets are presented in Other current assets or Other assets.


(2)	All derivative liabilities are presented in Other current liabilities or Other liabilities.


(3)	OCI is defined as Other comprehensive (loss) income.


(4)	Gain (loss) reclassified to income was recorded as follows: foreign currency contracts in Other financing items, net.


(5)	Each of these derivative instruments had a high correlation to the underlying exposure being hedged for the periods indicated and had been deemed highly effective in offsetting associated risk.

The following table provides estimated fair values as of June 30, 2015 and September 30, 2014, and the amounts of gains and losses on derivative instruments not classified as cash flow hedges for the quarter and nine months ended June 30, 2015 and 2014, respectively.



	At June 30, 2015			Quarter Ended June 30, 2015			Nine Months Ended June 30, 2015
Derivatives not designated as Cash Flow Hedging Relationships	Estimated Fair Value Asset (Liability)			Gain (Loss) Recognized in Income ⁽¹⁾			Gain (Loss) Recognized in Income ⁽¹⁾
Share option ⁽²⁾	$	—		$	—		$	0.5
Foreign currency contracts	(4.7		)	1.4			6.8
Total	$	(4.7	)	$	1.4		$	7.3

	At September 30, 2014			Quarter Ended June 30, 2014			Nine Months Ended June 30, 2014
Derivatives not designated as Cash Flow Hedging Relationships	Estimated Fair Value Asset (Liability)			Gain (Loss) Recognized in Income ⁽¹⁾			Gain (Loss) Recognized in Income ⁽¹⁾
Share option ⁽²⁾	$	5.6		$	6.6		$	11.8
Foreign currency contracts	3.3			(8.5		)	2.2
Total	$	8.9		$	(1.9	)	$	14.0


(1)	Gain (loss) recognized in income was recorded as follows: share option in SG&A and foreign currency contracts in Other financing items, net.


(2)	The Company held a share option with a major financial institution, which matured in November 2014 and was subsequently not renewed.

The following table provides financial assets and liabilities as of June 30, 2015 and September 30, 2014 as required by applicable accounting guidance for balance sheet offsetting:



Offsetting of derivative assets

		At June 30, 2015									At September 30, 2014
Description	Balance Sheet location	Gross amounts of recognized assets			Gross amounts offset in the Balance Sheet			Net amounts of assets presented in the Balance Sheet			Gross amounts of recognized assets			Gross amounts offset in the Balance Sheet			Net amounts of assets presented in the Balance Sheet
Foreign Currency Contracts	Other Current Assets, Other Assets	$	15.7		$	(1.3	)	$	14.4		$	19.8		$	(0.4	)	$	19.4

Offsetting of derivative liabilities

		At June 30, 2015									At September 30, 2014
Description	Balance Sheet location	Gross amounts of recognized liabilities			Gross amounts offset in the Balance Sheet			Net amounts of liabilities presented in the Balance Sheet			Gross amounts of recognized liabilities			Gross amounts offset in the Balance Sheet			Net amounts of liabilities presented in the Balance Sheet
Foreign Currency Contracts	Other Current Liabilities, Other Liabilities	$	(6.5	)	$	0.2		$	(6.3	)	$	(1.8	)	$	0.2		$	(1.6	)

Fair Value Hierarchy

Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

Under the fair value accounting guidance hierarchy, an entity is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The following table sets forth the Company's financial assets and liabilities, which are carried at fair value, as of June 30, 2015 and September 30, 2014 that are measured on a recurring basis during the period, segregated by level within the fair value hierarchy:



	Level 2
	June 30, 2015			September 30, 2014
Assets (Liabilities) at estimated fair value:
Deferred compensation	$	(152.5	)	$	(157.3	)
Derivatives - foreign currency contracts	8.1			17.8
Share option	—			5.6
Net Liabilities at estimated fair value	$	(144.4	)	$	(133.9	)

The Company held a share option with a major financial institution, which matured in November 2014 and was subsequently not renewed.

At June 30, 2015 and September 30, 2014, the Company had no level 1 or level 3 financial assets or liabilities.

At June 30, 2015 and September 30, 2014, the fair market value of fixed rate long-term debt was $1,654.7 and $2,056.5, respectively, compared to its carrying value of $1,699.0 and $1,998.9, respectively. The estimated fair value of the long-term debt is estimated using yields obtained from independent pricing sources for similar types of borrowing arrangements. The estimated fair value of fixed rate long-term debt has been determined based on level 2 inputs.

Due to the nature of cash and cash equivalents and short-term borrowings, including notes payable, carrying amounts on the balance sheets approximate fair value. The estimated fair value of cash and cash equivalents and short-term borrowings have been determined based on level 2 inputs.

At June 30, 2015, the estimated fair value of foreign currency contracts is the amount that the Company would receive or pay to terminate the contracts, considering first the quoted market prices of comparable agreements or, in the absence of quoted market prices, factors such as interest rates, currency exchange rates and remaining maturities. The estimated fair value of the deferred compensation liability is determined based upon the quoted market prices of the investment options that are offered under the plan.

Note 14 - Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive income (loss) ("AOCI"), net of tax, by component:



	Foreign Currency Translation Adjustments			Pension and Post-retirement Activity			Hedging Activity			Total
Balance at September 30, 2014	$	(78.2	)	$	(202.8	)	$	9.9		$	(271.1	)
OCI before reclassifications	(140.1		)	4.6			(17.8		)	(153.3		)
Venezuela deconsolidation charge	33.7			—			—			33.7
Reclassifications to earnings	—			4.4			16.8			21.2
Balance at June 30, 2015	$	(184.6	)	$	(193.8	)	$	8.9		$	(369.5	)

The following table presents the reclassifications out of AOCI:



	Amount Reclassified from AOCI ⁽¹⁾
Details of AOCI Components	Quarter Ended June 30, 2015			Nine Months Ended June 30, 2015			Quarter Ended June 30, 2014			Nine Months Ended June 30, 2014			Affected Line Item in the Consolidated Statements of Earnings
Gains and losses on cash flow hedges
Foreign exchange contracts	$	9.5		$	24.0		$	0.3		$	5.2		Other financing items, net
	9.5			24.0			0.3			5.2			Total before tax
	(2.9		)	(7.2		)	(0.2		)	(2.4		)	Tax expense
	$	6.6		$	16.8		$	0.1		$	2.8		Net of tax
Amortization of defined benefit pension and postretirement items
Actuarial losses	2.2			6.6			4.5			13.8			(2)
Settlement gain	—			—			0.1			0.2			(2)
	2.2			6.6			4.6			14.0			Total before tax
	(0.7		)	(2.2		)	(1.7		)	(5.0		)	Tax expense
	$	1.5		$	4.4		$	2.9		$	9.0		Net of tax
Foreign currency translation adjustments
Venezuela deconsolidation charge	$	—		$	33.7		$	—		$	—		Venezuela deconsolidation charge
	$	—		$	33.7		$	—		$	—

Total reclassifications for the period	$	8.1		$	54.9		$	3.0		$	11.8		Net of tax


(1)	Amounts in parentheses indicate debits to profit (loss).


(2)	These AOCI components are included in the computation of net periodic benefit cost (see Note 10 for further details).

Note 15 - Supplemental Financial Statement Information



	June 30, 2015			September 30, 2014
Inventories
Raw materials and supplies	$	95.5		$	92.6
Work in process	148.3			120.3
Finished products	382.4			404.0
Total inventories	$	626.2		$	616.9
Other Current Assets
Miscellaneous receivables	$	63.8		$	74.4
Deferred income tax benefits	137.6			136.3
Prepaid expenses	131.7			117.3
Value added tax collectible from customers	43.8			48.0
Income taxes receivable	138.5			71.1
Other	32.6			41.6
Total other current assets	$	548.0		$	488.7
Property, Plant and Equipment
Land	$	37.9		$	42.5
Buildings	286.5			296.4
Machinery and equipment	1,765.1			1,804.6
Construction in progress	72.5			53.4
Total gross property	2,162.0			2,196.9
Accumulated depreciation	(1,461.0		)	(1,445.2		)
Total property, plant and equipment, net	$	701.0		$	751.7
Other Current Liabilities
Accrued advertising, sales promotion and allowances	$	135.9		$	106.0
Accrued trade allowances	85.0			82.6
Accrued salaries, vacations and incentive compensation	81.4			113.2
Income taxes payable	56.5			42.5
Returns reserve	43.1			45.4
2013 restructuring reserve	25.7			26.4
Spin restructuring reserve	31.3			—
Separation accrual	6.8			12.9
Other	188.4			228.1
Total other current liabilities	$	654.1		$	657.1
Other Liabilities
Pensions and other retirement benefits	$	295.5		$	342.3
Deferred compensation	152.5			157.3
Other non-current liabilities	102.8			93.1
Total other liabilities	$	550.8		$	592.7

Note 16 - Recently Issued Accounting Pronouncements

On July 22, 2015, the Financial Accounting Standards Board ("FASB") issued a new Accounting Standards Update ("ASU"), which aligns the measurement of inventory under GAAP more closely with International Financial Reporting Standards. Under the new guidance, an entity that measures inventory using the first-in, first-out or average cost should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The update will be effective for the Company beginning October 1, 2017, with early adoption permitted. The Company is in the process of evaluating the impact the revised guidance will have on its financial statements.

On April 7, 2015, the FASB issued a new ASU, which requires 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. The update will be effective for the Company beginning October 1, 2016, and early adoption is permitted for financial statements that have not been previously issued. Retrospective application is required, and an entity is required to comply with the applicable disclosures for a change in accounting principles upon adoption. The Company does not expect the revised guidance to have a material impact on its financial statements.

On May 28, 2014, the FASB issued a new ASU which provides a single comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries and across capital markets. On July 9, 2015, the FASB voted to approve a one-year deferral of the effective date of the ASU, and expects to issue a final ASU formally amending the effective date by the end of the third quarter of 2015. The update will now be effective for the Company beginning October 1, 2018. The Company is in the process of evaluating the impact the revised guidance will have on its financial statements.

Note 17 - Legal Proceedings and Contingencies

The Company and its affiliates are subject to a number of legal proceedings in various jurisdictions arising out of its operations during the ordinary course of business. Many of these legal matters are in preliminary stages and involve complex issues of law and fact, and may proceed for protracted periods of time. The amount of liability, if any, from these proceedings cannot be determined with certainty. The Company reviews its legal proceedings and claims, regulatory reviews and inspections and other legal proceedings on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for its financial statements to not be misleading. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company believes that its liability, if any, arising from such pending legal proceedings, asserted legal claims and known potential legal claims which are likely to be asserted, is not reasonably likely to be material to the Company's financial position, results of operations, or cash flows, taking into account established accruals for estimated liabilities.

Note 18 - Guarantor and Non-Guarantor Financial Information