Divestment

6 Months Ended

Mar. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

As discussed in Note 1, Description of Business and Basis of Presentation, the Divestment Business was classified as discontinued operations in the accompanying Consolidated (Condensed) Statements of Earnings and Comprehensive Income.

On May 29, 2019, the Company entered into a definitive purchase agreement with VARTA AG to sell the Divestment Business for €180.0, subject to approval by the European Commission and certain purchase price adjustments. On January 2, 2020, the Company sold the business to VARTA AG. Total cash proceeds, including related hedging arrangements, net of the final working capital settlement, were $323.1 from Varta AG and Spectrum. Spectrum contributed proceeds pursuant to the terms of the Battery Acquisition agreement.

During the three and six months ended March 31, 2020, the Company recorded a pre-tax loss of $137.6 for the divestment, which included the estimated working capital settlement, contractual adjustments and recognition of tax and other indemnifications under the definitive purchase agreement. Under the definitive purchase agreement, the Company indemnified VARTA AG for certain tax liabilities that existed as of the divestment date. As previously disclosed, Spectrum has further indemnified the Company for those liabilities that arose from the tax years prior to the Company's acquisition of the Divestment Business. An indemnification asset and liability, where necessary, has been recorded to reflect these arrangements.

The following table summarizes the components of Net loss from discontinued operations in the accompanying Consolidated (Condensed) Statement of Earnings and Comprehensive Income for the quarter and six months ended March 31, 2020:


	For the Quarter Ended March 31,		For the Six Months Ended March 31,
	2020		2020
Net sales	$	—	$	115.8
Cost of products sold	—		88.2
Gross profit	—		27.6
Selling, general and administrative expense	0.6		18.0
Advertising and sales promotion expense	—		0.3
Research and development expense	—		0.8

Interest expense	6.9		12.1

Loss on sale of disposition	137.6		137.6
Other items, net	—		(3.9)
Loss before income taxes	(145.1)		(137.3)
Income tax benefit	(13.7)		(6.2)
Net loss from discontinued operations	$	(131.4)	$	(131.1)

Included in the Net loss from discontinued operations for the quarter and six months ended March 31, 2020, are

divestment related pre-tax costs of $0.6 and $1.7, respectively. Also included in the Net loss from discontinued operations for the quarter and six months ended March 31, 2020 is the write off of $6.9 of deferred financing fees related to the pre-payment of debt from the divestment proceeds. For the six months ended March 31, 2020 the Net

loss from discontinued operations included $5.0 of allocated pre-tax interest expense.