The following tables provide additional information on the Company’s pension plans as of September 30, 2016 and 2015, which principally relate to Spectrum Brands:
|
| | | | | | | | | | | | | | | | |
| | U.S. Plans | | Non U.S. Plans |
| | 2016 | | 2015 | | 2016 | | 2015 |
Change in benefit obligation | | | | | | | | |
Projected benefit obligation, beginning of year | | $ | 93.2 |
| | $ | 91.0 |
| | $ | 184.4 |
| | $ | 196.2 |
|
Obligations assumed from acquisitions | | — |
| | — |
| | — |
| | 0.6 |
|
Transfer of obligation | | — |
| | — |
| | — |
| | (1.8 | ) |
Service cost | | 0.6 |
| | 0.8 |
| | 2.6 |
| | 2.6 |
|
Interest cost | | 3.7 |
| | 3.7 |
| | 5.7 |
| | 6.2 |
|
Actuarial loss | | 6.8 |
| | 3.1 |
| | 36.0 |
| | 10.6 |
|
Curtailments | | — |
| | — |
| | — |
| | (0.9 | ) |
Benefits paid | | (5.6 | ) | | (5.4 | ) | | (6.1 | ) | | (11.8 | ) |
Foreign currency exchange rate changes | | — |
| | — |
| | (12.0 | ) | | (17.3 | ) |
Projected benefit obligation, end of year | | $ | 98.7 |
| | $ | 93.2 |
| | $ | 210.6 |
| | $ | 184.4 |
|
Change in plan assets | | | | | | | | |
Fair value of plan assets, beginning of year | | $ | 72.6 |
| | $ | 78.0 |
| | $ | 116.9 |
| | $ | 126.5 |
|
Actual return on plan assets | | 6.5 |
| | (1.0 | ) | | 8.9 |
| | 3.6 |
|
Employer contributions | | 4.2 |
| | 1.0 |
| | 6.6 |
| | 7.8 |
|
Benefits paid | | (5.6 | ) | | (5.4 | ) | | (6.1 | ) | | (11.8 | ) |
Foreign currency exchange rate changes | | — |
| | — |
| | (11.3 | ) | | (9.2 | ) |
Fair value of plan assets, end of year | | $ | 77.7 |
| | $ | 72.6 |
| | $ | 115.0 |
| | $ | 116.9 |
|
Accrued Benefit Cost / Funded Status | | $ | (21.0 | ) | | $ | (20.6 | ) | | $ | (95.6 | ) | | $ | (67.5 | ) |
Weighted average assumptions: | | | | | | | | |
Discount rate | | 2.8% to 3.5% | | 3.4% to 4.3% | | 1.0% to 13.5% | | 1.8% to 13.8% |
Expected return on plan assets | | 7.0% | | 7.0% to 7.3% | | 1.0% to 3.7% | | 3.5% to 5.3% |
Rate of compensation increase | | N/A | | N/A | | 2.3% to 7.0% | | 2.3% to 5.5% |
The net underfunded status as of September 30, 2016 and 2015 of $116.6 and $88.1, respectively, is recognized in the accompanying Consolidated Balance Sheets within “Employee benefit obligations.” Included in AOCI as of September 30, 2016 and 2015 were unrecognized net losses of $45.2, net of tax expense of $12.1 and noncontrolling interest of $30.4, and $28.5, net of tax expense of $1.3 and noncontrolling interest of $18.6, respectively, which have not yet been recognized as components of net periodic pension cost. The net loss in AOCI expected to be recognized during Fiscal 2017 is $3.1.
The following table contains the components of net periodic benefit costs during Fiscal 2016, 2015 and 2014:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | U.S. Plans | | Non U.S. Plans |
| | Fiscal | | Fiscal |
| | 2016 | | 2015 | | 2014 | | 2016 | | 2015 | | 2014 |
Components of net periodic cost: | | | | | | | | | | | | |
Service cost | | $ | 0.6 |
| | $ | 0.8 |
| | $ | 0.5 |
| | $ | 2.6 |
| | $ | 2.6 |
| | $ | 3.0 |
|
Interest cost | | 3.7 |
| | 3.7 |
| | 3.8 |
| | 5.7 |
| | 6.2 |
| | 7.4 |
|
Expected return on assets | | (5.2 | ) | | (5.6 | ) | | (5.2 | ) | | (4.2 | ) | | (5.2 | ) | | (5.8 | ) |
Curtailment gain | | — |
| | — |
| | — |
| | 0.1 |
| | 0.7 |
| | (0.1 | ) |
Recognized net actuarial loss | | 0.7 |
| | 0.2 |
| | 0.1 |
| | 0.8 |
| | 1.3 |
| | 1.4 |
|
Net periodic cost | | $ | (0.2 | ) | | $ | (0.9 | ) | | $ | (0.8 | ) | | $ | 5.0 |
| | $ | 5.6 |
| | $ | 5.9 |
|
Weighted average assumptions: | | | | | | | | | | | | |
Discount rate | | 3.4% to 4.3% | | 3.5% to 4.2% | | 3.6% to 4.7% | | 1.8% to 13.8% | | 2.0% to 13.5% | | 2.3% to 12.5% |
Expected return on plan assets | | 7.0% to 7.3% | | 7.3% to 7.5% | | 7.3% to 7.8% | | 1.8% to 4.5% | | 2.0% to 5.3% | | 4.0% to 5.8% |
Rate of compensation increase | | N/A | | N/A | | N/A | | 2.3% to 5.5% | | 2.3% to 5.5% | | 2.3% to 5.5% |
The discount rate is used to calculate the projected benefit obligation. The discount rate used is based on the rate of return on government bonds as well as current market conditions of the respective countries where the plans are established. The expected return on plan assets is based on the Company’s expectation of the long-term average rate of return of the capital market in which the plans invest. The expected return reflects the target asset allocations and considers the historical returns earned for each asset category.
