Property, Plant and Equipment

9 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

Property, plant and equipment at June 30, 2016 and September 30, 2015 consisted of the following:



	Successor			Predecessor
	June 30, 2016			September 30, 2015
Land	$	55.7		$	41.2
Plants and buildings	93.7			78.3
Machinery and equipment ⁽¹⁾	135.2			167.8
Software and computer equipment	43.5			68.8
Construction in progress	14.0			12.9
Total	342.1			369.0
Less accumulated depreciation	(3.0		)	(137.8		)
Property, plant and equipment, net	$	339.1		$	231.2

⁽¹⁾ Includes $25.1 million and $13.1 million, respectively, related to equipment acquired under capital leases.

In connection with the Business Combination, property, plant and equipment of the Predecessor was adjusted to fair market value. See Note 3.

Depreciation expense recognized on the property, plant and equipment described above was as follows:



	Successor		Predecessor
	Three Months Ended June 30, 2016	Nine Months Ended June 30, 2016	April 1 Through June 8, 2016	October 1, 2015 Through June 8, 2016	Three Months Ended June 30, 2015	Nine Months Ended June 30, 2015
Depreciation expense	3.0	3.0	7.5	27.1	9.2	27.8

Equipment Lease

In May 2015, the Predecessor entered into the Ryder Lease for transportation equipment. The Ryder Lease covers the rental of 202 tractors, which replaced a significant portion of the Company’s private fleet of tractors and has a term of seven years. The Ryder Lease is accounted for as a capital lease and requires minimum annual payments of approximately $5.5 million per year. The Company is permitted to terminate the lease of an individual tractor on the anniversary of its delivery date, provided that certain conditions are met. In the event the Company terminates the lease of an individual tractor in accordance with the terms of the Ryder Lease, the Company may elect to purchase the individual tractor at a predetermined residual value or return the tractor to Ryder, subject to an adjustment based on the then-current market value of the individual tractor.

Facility Lease

The Company is currently in discussions with the Illinois Tollway Authority regarding the sale of one of the Company’s facilities under an eminent domain proceeding numbered Illinois State Tollway Authority v. Nexeo Solutions, LLC, Case No. 15 L 50521, Parcel No. WA-12-012. The sale is expected to be finalized during fiscal year 2017. The Company does not expect to record a loss in connection with this transaction.

In March 2016, in connection with the relocation of the operations currently managed at the facility described above, the Predecessor entered into a lease agreement for a new facility in Montgomery, Illinois. The lease has a term of 15 years, with annual payments beginning at $1.1 million per year and annual escalations of 2.5% per year. The lease agreement includes three renewal options of five years each. The lease term is expected to begin in November 2016. This lease agreement will be accounted for as a capital lease.