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Item 9A. Controls and Procedures

2021-11-23 compared with 2020-11-18 · 949 added, 1106 removed, 1892 unchanged (52% of the section changed)

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An evaluation was performed under the supervision and participation of SBH’s management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of SBH’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as of September 30, 2021.

Based on that evaluation, SBH’s management, including the Principal Executive Officer and Principal Financial Officer, concluded that due to the material weakness in our internal control over financial reporting described below, SBH's disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act was being recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it was accumulated for and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding the required disclosures.

However, giving the full consideration to the material weaknesses, management has concluded that the Consolidated Financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, SBH's financial position, results of operations and cash flows for periods disclosed in conformity with U.S.

generally accepted accounting principles.

Based on that evaluation, SBH’s management, including the Principal Executive Officer and Principal Financial Officer, concluded that as of September 30, 2021, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Annual Report on Form 10-K was reported within the time periods specified by SEC rules and regulations, and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding the required disclosures.

Notwithstanding the foregoing, there can be no assurance that SBH's controls and procedures will detect or uncover all failures of persons within SBH to disclose material information otherwise required to be set forth in SBH's periodic reports.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and circumvention or overriding of the controls and procedures.

Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives.

Management’s Annual Report on Internal Control over Financial Reporting .

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

These inherent limitations are an intrinsic part of the financial reporting process.

Therefore, although SBH's management is unable to eliminate this risk, it is possible to develop safeguards to reduce it.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected on a timely basis.

SBH’s management, under the oversight of the principal executive and principal financial officers, and Board of Directors, conducted an assessment of the effectiveness of our internal control over financial reporting based upon the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO 2013 Framework).

Based on this assessment, we identified a material weakness in internal control over financial reporting related to ineffective information technology general controls (ITGCs) related to user access and role change reviews over certain information technology (IT) systems in the EMEA region.

As a result, our business process automated and manual controls that are dependent on the ineffective ITGCs are also considered ineffective because they could have been adversely impacted.

These control deficiencies were due to an ineffective risk assessment and communication of control activities related to the transfer of ITGC operations provided under transition service agreements (TSAs) within the EMEA region.

The material weakness did not result in any identified misstatements to the financial statements and there were no changes to previously released financial results.

Based on this material weakness, we concluded that as September 30, 2020, the internal control over financial reporting was not effective.

Based on this assessment, management has concluded that its internal control over financial reporting was effective as of September 30, 2021 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S.

SBH's internal control over financial reporting as of September 30, 2021 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its attestation report, which is included herein.

Under guidelines established by the SEC, companies are allowed to exclude acquisitions from their first assessment of internal control over financial reporting following the date of the acquisition.

SBH’s management excluded the acquisition of Omega Sea, which was completed on March 10, 2020, from the assessment of the effectiveness of internal control over financial reporting.

SBH’s management excluded the acquisitions of Armitage Pet Products, which was completed on October 26, 2020, and For Life Products, LLC, which was completed on May 28, 2021, from the assessment of the effectiveness of internal control over financial reporting.

The total assets of $532.8 million and total net sales of $117.4 million associated with the acquisitions are included in the consolidated financial statements of SBH as of and for the year ended September 30, 2021.

Our independent registered public accounting firm, KPMG, LLP, who audited the consolidated financial statements included in this annual report, has expressed an adverse report on the operating effectiveness of SBH's internal control over financial reporting as of September 30, 2020.

KPMG LLP's report appears on page 55 of this annual report on Form 10-K.

Management's Remediation Plan.

To remediate the material weakness described above, SBH has been and will be implementing revised controls that will include (1) developing and enhancing IT compliance oversight capabilities with specific focus over identification and execution of appropriate ITGCs within the EMEA region;

(2) enhancing user access reviews and role change testing control activities and policies within the EMEA IT operations, including documentation evidencing the specific control procedures to be performed;

and (3) maintaining process and control documentation underlying user access reviews and role change processes within the EMEA region to promote knowledge transfer and transition upon personnel changes.

In addition, we would validate the underlying data and financial reports generated by the impacted information systems supporting business process controls and operations in the EMEA region.

The Audit Committee of the Board of Directors and the Board of Directors has reviewed and discussed these matters with management.

The Audit Committee will oversee management's efforts to remediate the identified material weakness.

The material weakness will be considered remediated when management concludes that, through testing, the applicable remedial controls are designed and implemented effectively.

We expect remediation of this material weakness will be completed during fiscal year 2021.

Changes in Internal Control Over Financial Reporting .

Other than the changes related to the material weakness occurring in earlier periods and identified during the quarter ended September 30, 2020, as described above, there have been no changes in SBH's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended) during the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect SBH's internal control over financial reporting.

As disclosed in Part II Item 9A Controls and Procedures in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, we identified a material weakness in internal control over financial reporting related to ineffective information technology general controls (ITGCs) related to user access and role change reviews over certain information technology (IT) systems in the EMEA region.

During the year ended September 30, 2021, we implemented our previously-disclosed remediation plan that included (1) developing and enhancing IT compliance oversight capabilities with specific focus over identification and execution of appropriate ITGCs within the EMEA region;

(2) enhancing user access reviews and role change testing control activities with focus in the EMEA region including enhanced documentation, training and knowledge sharing access reviews and role change testing control activities and policies within the EMEA IT operations, including documentation evidencing the specific control procedures to be performed;

and (3) maintaining process and control documentation underlying user access reviews and roll change processes within the EMEA region to promote knowledge transfer and transition upon personnel changes.

In addition, we validated the underlying data and financial reports generated by the impacted information systems supporting business process controls and operations in the EMEA region.

Other than those described above, there were no additional changes to our internal control over financial reporting that occurred during the year ended September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

SB/RH Holdings, LLC

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An evaluation was performed under the supervision and participation of SB/RH’s management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of SB/RH’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as of September 30, 2021.

Based on that evaluation, SB/RH’s management, including the Principal Executive Officer and Principal Financial Officer, concluded that due to the material weakness in our internal control over financial reporting described below, SB/RH's disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act was being recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it was accumulated for and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding the required disclosures.

However, giving the full consideration to the material weaknesses, management has concluded that the Consolidated Financial statements included in this Annual Report on Form 10-K present fairly, in all material respects, SB/RH's financial position, results of operations and cash flows for periods disclosed in conformity with U.S.

generally accepted accounting principles.

Based on that evaluation, SB/RH’s management, including the Principal Executive Officer and Principal Financial Officer, concluded that as of September 30, 2021 our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Annual Report on Form 10-K was reported within the time periods specified by SEC rules and regulations, and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding the required disclosures.

Notwithstanding the foregoing, there can be no assurance that SB/RH's controls and procedures will detect or uncover all failures of persons within SB/RH to disclose material information otherwise required to be set forth in SB/RH's periodic reports.

Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives.

Management’s Annual Report on Internal Control over Financial Reporting .

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

These inherent limitations are an intrinsic part of the financial reporting process.

Therefore, although SB/RH's management is unable to eliminate this risk, it is possible to develop safeguards to reduce it.

SB/RH’s management, under the oversight of the principal executive and principal financial officers, and Board of Directors, conducted an assessment of the effectiveness of our internal control over financial reporting based upon the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO 2013 Framework).

As a result, our business process automated and manual controls that are dependent on the ineffective ITGCs are also considered ineffective because they could have been adversely impacted.

The material weakness did not result in any identified misstatements to the financial statements and there were no changes to previously released financial results.

Based on this material weakness, we concluded that as September 30, 2020, the internal control over financial reporting was not effective.

Under guidelines established by the SEC, companies are allowed to exclude acquisitions from their first assessment of internal control over financial reporting following the date of the acquisition.

SB/RH’s management excluded the acquisition of Omega Sea, which was completed on March 10, 2020, from the assessment of the effectiveness of internal control over financial reporting.

SB/RH’s management excluded the acquisitions of Armitage Pet Products, which was completed on October 26, 2020, and For Life Products, LLC, which was completed on May 28, 2021, from the assessment of the effectiveness of internal control over financial reporting.

The total assets of $532.8 million and total net sales of $117.4 million associated with the acquisitions are included in the consolidated financial statements of SB/RH as of and for the year ended September 30, 2021.

This annual report does not include an attestation report of SB/RH's registered public accounting firm due to the established rules of the SEC.

Management's Remediation Plan.

To remediate the material weakness described above, SB/RH has been and will be implementing revised controls that will include (1) developing and enhancing IT compliance oversight capabilities with specific focus over identification and execution of appropriate ITGCs within the EMEA region;

In addition, we would validate the underlying data and financial reports generated by the impacted information systems supporting business process controls and operations in the EMEA region.

The Audit Committee of the Board of Directors and the Board of Directors has reviewed and discussed these matters with management.

The Audit Committee will oversee management's efforts to remediate the identified material weakness.

The material weakness will be considered remediated when management concludes that, through testing, the applicable remedial controls are designed and implemented effectively.

We expect remediation of this material weakness will be completed during fiscal year 2021.

Changes in Internal Control Over Financial Reporting .

Other than the changes related to the material weakness occurring in earlier periods and identified during the quarter ended September 30, 2020, as described above, there have been no changes in SB/RH's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended) during the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect SB/RH's internal control over financial reporting.

In addition, we validated the underlying data and financial reports generated by the impacted information systems supporting business process controls and operations in the EMEA region.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 401 of Regulation S-K concerning the directors and executive officers of SBH is incorporated herein by reference to the disclosures which will be included in in a subsequent amendment to the Form 10-K, which will be filed not later than 120 days after the end of the SBH’s fiscal year ended September 30, 2020.

The information required by Item 401 of Regulation S-K concerning the directors and executive officers of SBH is incorporated herein by reference to the disclosures which will be included in in a subsequent amendment to the Form 10-K, which will be filed no later than 120 days after the end of the SBH’s fiscal year ended September 30, 2021.

Audit Committee and Audit Committee Financial Expert

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Total $ 9.9 $ 5.1

In the above table, in accordance with the SEC’s definition and rules, “Audit Fees” are fees paid to KPMG LLP for professional services for the of audit SBH and SB/RH, and our consolidated financial statements included in our Form 10-K and the review of our financial statements included in Form 10-Q, or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements, such as issuance of comfort letters and statutory audits required for certain of our foreign subsidiaries.

“Audit-Related Fees” are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, including the due diligence activities relating to mergers and acquisitions and including the audit of standalone carve-out financial statements used as part of our GBL and GAC divestitures..

In the above table, in accordance with the SEC’s definition and rules, “Audit Fees” are fees paid to KPMG LLP for professional services for the audits of SBH and SB/RH, and our consolidated financial statements included in our Form 10-K and the review of our financial statements included in Forms 10-Q, or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements, such as issuance of comfort letters and statutory audits required for certain of our foreign subsidiaries.

“Audit-Related Fees” are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, including the due diligence activities relating to mergers and acquisitions and the audit of standalone carve-out financial statements as required.

“Tax Fees” are fees for tax compliance, tax advice, and tax planning.

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and SB/RH Holdings, LLC listed in the Index to Consolidated Financial Statements, filed as part of this Annual Report on Form 10-K.

The financial statement schedule of Spectrum Brands Holdings, Inc.

and SB/RH Holdings, LLC listed in the Index to Consolidated Financial Statements, filed as part of this Annual Report on Form 10-K.

The exhibits listed in the Exhibit Index filed as part of this Annual Report on Form 10-K.

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 30, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated November 18, 2020 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated November 22, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Carrying value of certain indefinite-lived intangible assets

As discussed in Notes 2 and 11 to the consolidated financial statements, the indefinite-lived intangible assets balance as of September 30, 2020 was $ 1,007.5 million, which includes certain tradenames in the Global Pet Care (GPC) and Home & Hardware Improvement (HHI) segments.

The Company performs impairment testing of its indefinite-lived intangible assets on an annual basis and whenever events or changes in circumstances indicate that the carrying value of such asset might exceed its fair value.

At September 30, 2020 there are approximately $ 136.9 million of intangible assets that could be deemed at risk of future impairment due to the limited excess fair value.

We identified the assessment of the carrying value of indefinite-lived intangible assets for certain tradenames in the GPC and HHI segments as a critical audit matter.

The estimated fair values of these tradenames had limited excess compared to their carrying values, which indicated a greater risk that the tradenames may be impaired, and required a higher degree of auditor judgment.

In addition, minor changes to the following key assumptions used by the Company to calculate the fair value of the tradenames would have had a significant effect on the Company’s assessment of the carrying values of the tradenames:

• discount rate

• royalty rate

• forecasted revenue growth rates.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter.

This included controls related to the determination of the fair value of certain tradenames in the GPC and HHI segments, and the development of the discount rate, royalty rate, and forecasted revenue growth rates.

We performed sensitivity analyses over the discount rate, royalty rate, and forecasted revenue growth rates assumptions to assess the impact of changes to those assumptions on the Company’s determination of the fair value of the tradenames.

We evaluated the Company’s forecasted revenue growth rates by comparing them to the forecasted revenue growth rates in the Company’s and its peer companies’ analyst reports.

Additionally, we compared the Company’s historical revenue growth rates for the tradenames to actual results to assess the Company’s ability to accurately forecast.

We involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company’s discount and royalty rates by comparing them against a discount rate range and royalty rate range that was independently developed using publicly available market data for comparable entities

• developing an estimate of the tradenames’ fair values using the revenue forecasts for the tradenames and the independently developed discount and royalty rates, and compared the results to the Company’s fair value estimates.

Recoverability of deferred tax assets associated with the Company’s net operating losses

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Recoverability of deferred tax assets associated with the Company's net operating

As discussed in Note 16 to the consolidated financial statements, the Company had $734.0 million of deferred tax assets as of September 30, 2021.

The deferred tax assets arise primarily due to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as, net operating losses, capital losses, and other carryforwards.

The deferred tax assets arose primarily due to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as, net operating losses, capital losses, and other carryforwards.

The Company records a valuation allowance on the deferred tax assets not expected to be recoverable.

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and subsidiaries’ (the Company) internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, because of the effect of the material weakness, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of September 30, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of September 30, 2021 and 2020, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended September 30, 2021, and the related notes (collectively, the consolidated financial statements), and our report dated November 22, 2021, expressed an unqualified opinion on those consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

A material weakness has been identified and included in management’s assessment related to ineffective information technology general controls related to user access and role change reviews over certain information technology systems in the Company’s EMEA region.

As a result, business process automated and manual controls that are dependent on the affected general information technology controls were also ineffective because they could have been adversely impacted.

The material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2020 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

The Company acquired Armitage Pet Care Limited and For Life Products, LLC during 2021, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2021, the internal control over financial reporting for both Armitage Pet Care Limited and For Life Products, LLC associated with total assets of $532.8 million and total revenues of $117.4 million included in the consolidated financial statements of the Company as of and for the year ended September 30, 2021.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Armitage Pet Care Limited and For Life Products, LLC.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

Carrying value of certain indefinite-lived intangible assets

At September 30, 2020 there are approximately $ 136.9 million of intangible assets that could be deemed at risk of future impairment due to the limited excess fair value.

We identified the assessment of the carrying value of indefinite-lived intangible assets for certain tradenames in the GPC and HHI segments as a critical audit matter.

• discount rate

• royalty rate

• forecasted revenue growth rates.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter.

We evaluated the Company’s forecasted revenue growth rates by comparing them to the forecasted revenue growth rates in the Company’s and its peer companies’ analyst reports.

Additionally, we compared the Company’s historical revenue growth rates for the tradenames to actual results to assess the Company’s ability to accurately forecast.

We involved valuation professionals with specialized skills and knowledge, who assisted in:

Critical Audit Matter

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

Recoverability of deferred tax assets associated with the Company's net operating losses

As discussed in Note 16 to the consolidated financial statements, the Company had $412.7 million of deferred tax assets as of September 30, 2021.

The Company records a valuation allowance on the deferred tax assets not expected to be recoverable.

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Prepaid expenses and other current assets 40.8 30.9

Current assets of business held for sale 1,810.0 500.8

Total current assets 2,913.6 1,728.1

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Operating lease assets 56.5 58.0

Investments 66.9 230.8

Deferred charges and other 38.8 98.7

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Intangible assets, net 1,204.1 1,046.7

Noncurrent assets of business held for sale — 1,293.0

Total assets $ 5,340.4 $ 5,107.3

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Accrued interest 29.9 38.5

Indemnification payable to Energizer 33.0 230.8

Other current liabilities 211.9 164.7

Current liabilities of business held for sale 454.3 303.6

Total current liabilities 1,164.1 944.9

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Other long-term liabilities 99.0 111.1

Noncurrent liabilities of business held for sale — 125.1

Total liabilities 3,861.4 3,691.5

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Transaction related charges 56.3 23.1 20.9

Loss on assets held for sale 26.8 — —

Loss on sale of Coevorden operations — 26.8 —

Write-off from impairment of goodwill — — 116.0

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Total operating expenses 937.5 869.5 972.0

Operating income 243.4 72.2 224.2

Operating income (loss) 97.1 8.6 ( 152.4 )

Interest expense 116.5 93.7 158.4

Gain from extinguishment of Salus CLO debt — ( 76.2 ) —

Other non-operating expense (income), net 19.7 43.9 ( 4.1 )

Income (loss) from continuing operations before income taxes 155.4 ( 193.8 ) ( 35.7 )

Income tax expense (benefit) 70.9 ( 7.1 ) ( 462.7 )

Other non-operating (income) expense, net ( 8.3 ) 16.2 43.4

Loss from continuing operations before income taxes ( 11.1 ) ( 25.1 ) ( 354.2 )

Income tax (benefit) expense ( 26.4 ) 27.3 ( 52.0 )

Net income (loss) from continuing operations 15.3 ( 52.4 ) ( 302.2 )

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Net income 189.6 98.5 495.8

Net income attributable to non-controlling interest 0.7 1.3 103.7

Net income from continuing operations attributable to non-controlling interest 0.2 0.3 0.8

Net (loss) income from discontinued operations attributable to non-controlling interest $ ( 0.2 ) $ 0.4 $ 0.5

Net income attributable to controlling interest $ 189.6 $ 97.8 $ 494.5

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Other comprehensive income

Foreign currency translation loss ( 18.5 ) ( 30.8 ) ( 45.8 )

Foreign currency translation gain (loss) 32.2 ( 18.5 ) ( 30.8 )

Deferred tax effect — 0.1 ( 4.7 )

Deferred tax valuation allowance — — ( 0.2 )

Net unrealized loss on foreign currency translation ( 18.4 ) ( 35.5 ) ( 38.1 )

Net unrealized gain (loss) on foreign currency translation 32.2 ( 18.4 ) ( 35.5 )

Unrealized gain (loss) on derivative instruments

Unrealized (loss) gain on hedging activity before reclassification ( 6.2 ) 12.6 10.2

Net reclassification for (gain) loss to income from continuing operations ( 5.0 ) ( 11.1 ) 8.5

Unrealized gain (loss) on derivative instruments before reclassification 0.1 ( 6.2 ) 12.6

Net reclassification for loss (gain) to income from continuing operations 9.2 ( 4.6 ) ( 10.4 )

Net reclassification for loss (gain) to income from discontinued operations 0.1 ( 0.4 ) ( 0.2 )

Unrealized (loss) gain on hedging instruments after reclassification ( 11.2 ) 2.0 17.1

Unrealized gain (loss) on derivative instruments after reclassification 9.4 ( 11.2 ) 2.0

Deferred tax effect ( 6.6 ) 11.7 ( 5.4 )

Net unrealized gain (loss) on hedging derivative instruments 0.5 ( 3.4 ) 10.0

Defined benefit pension (loss) gain

Defined benefit pension loss before reclassification ( 5.2 ) ( 27.6 ) ( 3.0 )

Net unrealized gain (loss) on derivative instruments 2.8 0.5 ( 3.4 )

Defined benefit pension gain (loss)

Defined benefit pension gain (loss) before reclassification 11.7 ( 5.2 ) ( 27.6 )

Net reclassification for loss to income from continuing operations 4.8 4.6 2.1

Net reclassification for loss to income from discontinued operations — 0.2 0.7

Defined benefit pension (loss) gain after reclassification ( 0.9 ) ( 25.4 ) 2.3

Deferred tax effect ( 0.3 ) 4.1 1.5

Net defined benefit pension (loss) gain ( 1.2 ) ( 21.3 ) 3.8

Unrealized investment gain

Unrealized investment gain before reclassification — — 26.0

Net reclassification for gain to income from discontinued operations — — ( 6.3 )

Unrealized gain on investments after reclassification — — 19.7

Adjustments to intangible assets — — ( 0.9 )

Net reclassification for (gain) loss to income from discontinued operations ( 0.1 ) ( 0.3 ) 0.1

Defined benefit pension gain (loss) after reclassification 16.4 ( 0.9 ) ( 25.4 )

Deferred tax effect ( 1.6 ) ( 0.3 ) 4.1

Net unrealized gain on investments — — 12.1

Net defined benefit pension gain (loss) 14.8 ( 1.2 ) ( 21.3 )

Deconsolidation of discontinued operations and assets held for sale — 8.1 21.9

Net change to derive comprehensive loss for the periods ( 11.0 ) ( 38.3 ) ( 458.1 )

Net change to derive comprehensive income for the periods 49.8 ( 11.0 ) ( 38.3 )

Comprehensive income 239.4 87.5 457.5

Comprehensive income (loss) attributable to non-controlling interest 0.4 ( 0.5 ) ( 2.8 )

Comprehensive income (loss) from continuing operations attributable to non-controlling interest — 0.1 ( 0.2 )

Comprehensive income (loss) from discontinuing operations attributable to non-controlling interest 0.4 0.3 ( 0.3 )

Comprehensive income attributable to controlling interest $ 239.0 $ 87.1 $ 458.0

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Balance at September 30, 2018 53.4 $ 0.5 $ 1,996.7 $ ( 180.1 ) $ ( 235.8 ) $ — $ 1,581.3 $ 8.3 $ 1,589.6

Net income from continuing operations — — — 356.5 — — 356.5 70.5 427.0

Net (loss) income from continuing operations — — — ( 303.0 ) — — ( 303.0 ) 0.8 ( 302.2 )

Income from discontinued operations, net of tax — — — 797.5 — — 797.5 0.5 798.0

Other comprehensive loss, net of tax — — — — ( 59.7 ) — ( 59.7 ) ( 0.5 ) ( 60.2 )

Sale and deconsolidation of HRG - Insurance Operations — — — — ( 445.9 ) — ( 445.9 ) ( 446.4 ) ( 892.3 )

Purchase of subsidiary stock — — ( 117.3 ) — ( 5.7 ) — ( 123.0 ) ( 165.0 ) ( 288.0 )

Exercise of stock options and warrants 2.6 — 20.7 — — — 20.7 — 20.7

Sale and deconsolidation of discontinued operations — — — — 21.9 — 21.9 — 21.9

Treasury stock repurchases ( 4.9 ) — — — — ( 268.5 ) ( 268.5 ) — ( 268.5 )

Restricted stock issued and related tax withholdings 0.3 — 2.1 ( 0.2 ) — 7.6 9.5 — 9.5

2 unchanged sentences

Dividend paid by subsidiary to NCI — — — — — — — ( 1.1 ) ( 1.1 )

Reverse stock split adjustment ( 170.4 ) ( 1.7 ) 1.7 — — — — — —

Spectrum Merger share exchange 20.6 0.2 721.7 — ( 83.8 ) — 638.1 ( 638.4 ) ( 0.3 )

Cumulative adjustment for adoption of new accounting standards — — — ( 3.1 ) — — ( 3.1 ) — ( 3.1 )

Balances at September 30, 2019 48.8 0.5 2,031.1 223.8 ( 273.6 ) ( 260.9 ) 1,720.9 8.0 1,728.9

2 unchanged sentences

Sale and deconsolidation of discontinued operations — — — — 8.1 — 8.1 — 8.1

Other comprehensive loss, net of tax — — — — ( 59.7 ) — ( 59.7 ) ( 0.5 ) ( 60.2 )

Other comprehensive (loss) income, net of tax — — — — ( 19.5 ) — ( 19.5 ) 0.4 ( 19.1 )

Treasury stock repurchases ( 4.2 ) — — — — ( 239.8 ) ( 239.8 ) — ( 239.8 )

Accelerated share repurchase final settlement ( 2.0 ) — ( 0.2 ) — — ( 124.8 ) ( 125.0 ) — ( 125.0 )

Restricted stock issued and related tax withholdings 0.5 — ( 14.2 ) — — 19.0 4.8 — 4.8

2 unchanged sentences

Dividend paid by subsidiary to NCI — — — — — — — ( 0.8 ) ( 0.8 )

Cumulative adjustment for adoption of new accounting standards — — — ( 3.1 ) — — ( 3.1 ) — ( 3.1 )

Cumulative adjustment for adoption of new accounting standards (Note 2) — — — ( 0.3 ) 0.3 — — — —

Balances at September 30, 2020 43.1 0.5 2,054.3 243.9 ( 284.7 ) ( 606.5 ) 1,407.5 8.3 1,415.8

Net income from continuing operations — — — 15.1 — — 15.1 0.2 15.3

Income from discontinued operations, net of tax — — — 14.0 — — 14.0 — 14.0

Sale and deconsolidation of assets held for sale — — — — 8.1 — 8.1 — 8.1

Other comprehensive (loss) income, net of tax — — — — ( 19.5 ) — ( 19.5 ) 0.4 ( 19.1 )

Income (loss) from discontinued operations, net of tax — — — 174.5 — — 174.5 ( 0.2 ) 174.3

Other comprehensive income, net of tax — — — — 49.4 — 49.4 0.4 49.8

Treasury stock repurchases ( 1.6 ) — — — — ( 125.8 ) ( 125.8 ) — ( 125.8 )

Accelerated share repurchase final settlement ( 2.0 ) — ( 0.2 ) — — ( 124.8 ) ( 125.0 ) — ( 125.0 )

Restricted stock issued and related tax withholdings 0.3 — ( 20.2 ) — — 15.3 ( 4.9 ) — ( 4.9 )

2 unchanged sentences

Dividend paid by subsidiary to NCI — — — — — — — ( 1.6 ) ( 1.6 )

Cumulative adjustment for adoption of new accounting standards (Note 2) — — — ( 0.3 ) 0.3 — — — —

Balances at September 30, 2021 41.8 $ 0.5 $ 2,063.8 $ 359.9 $ ( 235.3 ) $ ( 717.0 ) $ 1,471.9 $ 7.1 $ 1,479.0

14 unchanged sentences

Unrealized loss on equity investments held — 7.5 12.1

Realized loss on equity investments sold 9.3 — —

Loss on assets held for sale 26.8 — —

Realized (gain) loss on equity investments sold ( 6.9 ) 9.3 —

Loss on sale of Coevorden operations — 26.8 —

Write-off from impairment of goodwill — — 116.0

4 unchanged sentences

Purchase accounting inventory adjustment 7.3 — —

GPC safety recall inventory write-off — — 4.1

Dividends from subsidiaries classified as discontinued operations — — 3.1

Deferred tax expense (benefit) 46.8 ( 6.5 ) ( 556.5 )

Deferred tax (benefit) expense ( 64.4 ) 24.6 ( 36.0 )

Net changes in operating assets and liabilities

4 unchanged sentences

Other 25.9 ( 19.4 ) 42.0

Net cash provided by operating activities from continuing operations 290.1 83.5 117.1

Net cash provided (used) by operating activities from discontinued operations 0.2 ( 82.4 ) 226.2

Net cash provided (used) by operating activities from continuing operations 89.2 201.8 ( 42.6 )

Net cash provided by operating activities from discontinued operations 199.2 88.5 43.7

Net cash provided by operating activities 288.4 290.3 1.1

2 unchanged sentences

Proceeds from disposal of property, plant and equipment 0.1 4.2 2.1

Proceeds from sale of assets held for sale 29.0 — —

Proceeds from sale of Coevorden operations — 29.0 —

Proceeds from sale of discontinued operations, net of cash — 3.6 2,859.5

2 unchanged sentences

Other investing activity ( 0.4 ) 2.3 ( 0.3 )

Net cash provided by investing activities from continuing operations 108.3 2,802.9 1,474.6

Net cash (used) provided by investing activities from continuing operations ( 400.7 ) 125.2 2,820.9

Net cash used by investing activities from discontinued operations ( 22.8 ) ( 16.9 ) ( 23.3 )

Net cash provided by investing activities 108.3 2,797.6 1,272.7

Net cash (used) provided by investing activities ( 423.5 ) 108.3 2,797.6

(in millions)

6 unchanged sentences

Accelerated share repurchase — ( 125.0 ) —

Purchases of subsidiary stock, net — — ( 288.0 )

Dividends paid to shareholders ( 71.5 ) ( 75.2 ) ( 85.5 )

4 unchanged sentences

Net cash used by financing activities from continuing operations ( 206.9 ) ( 495.1 ) ( 2,721.6 )

Net cash (used) provided by financing activities from discontinued operations — ( 2.2 ) 110.4

Net cash used by financing activities from discontinued operations ( 3.0 ) ( 2.0 ) ( 3.0 )

Net cash used by financing activities ( 209.9 ) ( 497.1 ) ( 2,724.6 )

6 unchanged sentences

Supplemental disclosure of cash flow information

Cash paid for interest $ 127.1 $ 208.1 $ 314.1

Cash paid for taxes $ 42.1 $ 53.9 $ 53.8

Cash paid for interest associated with continued operations $ 86.4 $ 81.4 $ 116.6

Cash paid for interest associated with discontinued operations $ 50.0 $ 45.7 $ 91.5

Cash paid for taxes associated with continued operations $ 23.5 $ 20.2 $ 41.6

Cash paid for taxes associated with discontinued operations $ 11.5 $ 21.9 $ 12.3

Non cash investing activities

13 unchanged sentences

Prepaid expenses and other current assets 40.8 30.9

Current assets of business held for sale 1,810.0 500.8

Total current assets 2,994.6 1,805.1

1 unchanged sentence

Operating lease assets 56.5 58.0

Investments 66.9 230.8

Deferred charges and other 35.1 98.7

1 unchanged sentence

Intangible assets, net 1,204.1 1,046.7

Noncurrent assets of business held for sale — 1,293.0

Total assets $ 5,417.7 $ 5,184.3

4 unchanged sentences

Accrued interest 29.9 38.5

Indemnification payable to Energizer 33.0 230.8

Income tax payable 7.3 238.7

Other current liabilities 214.4 162.2

Current liabilities of business held for sale 454.3 303.6

Total current liabilities 1,166.8 942.3

3 unchanged sentences

Other long-term liabilities 106.3 118.0

Noncurrent liabilities of business held for sale — 125.1

Total liabilities 4,084.3 3,919.1

24 unchanged sentences

Transaction related charges 56.3 23.1 20.9

Loss on assets held for sale 26.8 — —

Loss on sale of Coevorden operations — 26.8 —

Write-off from impairment of goodwill — — 116.0

1 unchanged sentence

Total operating expenses 933.8 862.5 967.3

Operating income 250.3 77.0 302.3

Operating income (loss) 100.8 15.6 ( 147.7 )

Interest expense 116.8 93.2 106.1

Other non-operating expense, net 19.7 44.2 5.2

Income (loss) from continuing operations before income taxes 86.6 ( 129.2 ) 130.1

Income tax expense (benefit) 58.1 10.7 ( 76.8 )

Other non-operating (income) expense, net ( 8.3 ) 16.3 43.6

Loss from continuing operations before income taxes ( 7.7 ) ( 93.9 ) ( 297.4 )

Income tax (benefit) expense ( 25.0 ) 14.5 ( 36.1 )

Net income (loss) from continuing operations 17.3 ( 108.4 ) ( 261.3 )

Income (loss) from discontinued operations, net of tax 14.0 682.5 ( 24.0 )

Income from discontinued operations, net of tax 174.3 150.9 803.9

Net income 191.6 42.5 542.6

Net income attributable to non-controlling interest 0.7 1.3 1.4

Net income from continuing operations attributable to non-controlling interest 0.2 0.3 0.8

Net (loss) income from discontinued operations attributable to non-controlling interest ( 0.2 ) 0.4 0.5

Net income attributable to controlling interest $ 191.6 $ 41.8 $ 541.3

1 unchanged sentence

Net income (loss) from continuing operations attributable to controlling interest $ 17.1 $ ( 108.7 ) $ ( 262.1 )

Net income (loss) from discontinued operations attributable to controlling interest 14.0 682.5 ( 24.0 )

Net income from discontinued operations attributable to controlling interest 174.5 150.5 803.4

Net income attributable to controlling interest $ 191.6 $ 41.8 $ 541.3

7 unchanged sentences

Other comprehensive income

Foreign currency translation loss ( 18.5 ) ( 30.8 ) ( 45.8 )

Foreign currency translation gain (loss) 32.2 ( 18.5 ) ( 30.8 )

Deferred tax effect — 0.1 ( 4.7 )

Deferred tax valuation allowance — — ( 0.2 )

Net unrealized loss on foreign currency translation ( 18.4 ) ( 35.5 ) ( 38.1 )

Net unrealized gain (loss) on foreign currency translation 32.2 ( 18.4 ) ( 35.5 )

Unrealized gain (loss) on derivative instruments

Unrealized (loss) gain on hedging activity before reclassification ( 6.2 ) 12.6 10.2

Net reclassification for (gain) loss to income from continuing operations ( 5.0 ) ( 11.1 ) 8.5

Unrealized gain (loss) on derivative instruments before reclassification 0.1 ( 6.2 ) 12.6

Net reclassification for loss (gain) to income from continuing operations 9.2 ( 4.6 ) ( 10.4 )

Net reclassification for loss (gain) to income from discontinued operations 0.1 ( 0.4 ) ( 0.2 )

Unrealized (loss) gain on hedging instruments after reclassification ( 11.2 ) 2.0 17.1

Unrealized gain (loss) on derivative instruments after reclassification 9.4 ( 11.2 ) 2.0

Deferred tax effect ( 6.6 ) 11.7 ( 5.4 )

Net unrealized gain (loss) on hedging derivative instruments 0.5 ( 3.4 ) 10.0

Defined benefit pension (loss) gain

Defined benefit pension loss before reclassification ( 5.2 ) ( 27.6 ) ( 3.0 )

Net unrealized gain (loss) on derivative instruments 2.8 0.5 ( 3.4 )

Defined benefit pension gain (loss)

Defined benefit pension gain (loss) before reclassification 11.7 ( 5.2 ) ( 27.6 )

Net reclassification for loss to income from continuing operations 4.8 4.6 2.1

Net reclassification for loss to income from discontinued operations — 0.2 0.7

Defined benefit pension (loss) gain after reclassification ( 0.9 ) ( 25.4 ) 0.2

Net reclassification for (gain) loss to income from discontinued operations ( 0.1 ) ( 0.3 ) 0.1

Defined benefit pension gain (loss) after reclassification 16.4 ( 0.9 ) ( 25.4 )

Deferred tax effect ( 1.6 ) ( 0.3 ) 4.1

Net defined benefit pension (loss) gain ( 1.2 ) ( 21.3 ) 1.7

Net defined benefit pension gain (loss) 14.8 ( 1.2 ) ( 21.3 )

Deconsolidation of discontinued operations and assets held for sale — 8.1 21.9

Net change to derive comprehensive loss for the period ( 11.0 ) ( 38.3 ) ( 26.4 )

Net change to derive comprehensive income for the period 49.8 ( 11.0 ) ( 38.3 )

Comprehensive income 241.4 31.5 504.3

Comprehensive income (loss) attributable to non-controlling interest 0.4 ( 0.5 ) ( 0.3 )

Comprehensive income (loss) from continuing operations attributable to non-controlling interest — 0.1 ( 0.2 )

Comprehensive income (loss) from discontinuing operations attributable to non-controlling interest 0.4 0.3 ( 0.3 )

Comprehensive income attributable to controlling interest $ 241.0 $ 31.1 $ 504.8

11 unchanged sentences

Balances at September 30, 2018 $ 2,073.0 $ ( 235.5 ) $ ( 235.7 ) $ 1,601.8 $ 9.9 $ 1,611.7

Net income from continuing operations — 205.5 — 205.5 1.4 206.9

Net (loss) income from continuing operations — ( 262.1 ) — ( 262.1 ) 0.8 ( 261.3 )

Loss from discontinued operations, net of tax — 803.4 — 803.4 0.5 803.9

Sale and deconsolidation of discontinued operations — — 21.9 21.9 — 21.9

Other comprehensive loss, net of tax — — ( 59.7 ) ( 59.7 ) ( 0.5 ) ( 60.2 )

2 unchanged sentences

Dividends paid to parent — ( 717.4 ) — ( 717.4 ) — ( 717.4 )

Dividend paid by subsidiary to NCI — — — — ( 1.1 ) ( 1.1 )

Cumulative adjustment for adoption of new accounting standards — ( 3.1 ) — ( 3.1 ) — ( 3.1 )

Balances at September 30, 2019 2,113.3 ( 414.7 ) ( 273.5 ) 1,425.1 9.6 1,434.7

2 unchanged sentences

Sale and deconsolidation of discontinued operations — — 8.1 8.1 — 8.1

Other comprehensive loss, net of tax — — ( 59.7 ) ( 59.7 ) ( 0.5 ) ( 60.2 )

Other comprehensive (loss) income, net of tax — — ( 19.5 ) ( 19.5 ) 0.4 ( 19.1 )

Restricted stock issued and related tax withholdings 4.5 — — 4.5 — 4.5

6 unchanged sentences

Income from discontinued operations, net of tax — 174.5 — 174.5 ( 0.2 ) 174.3

Sale and deconsolidation of discontinued operations — — 8.1 8.1 — 8.1

Other comprehensive (loss) income, net of tax — — ( 19.5 ) ( 19.5 ) 0.4 ( 19.1 )

Other comprehensive income, net of tax — — 49.4 49.4 0.4 49.8

Restricted stock issued and related tax withholdings ( 7.3 ) — — ( 7.3 ) — ( 7.3 )

2 unchanged sentences

Dividend paid by subsidiary to NCI — — — — ( 1.6 ) ( 1.6 )

Cumulative adjustment for adoption of new accounting standards (Note 2) — ( 0.3 ) 0.3 — — —

Balances at September 30, 2021 $ 2,174.8 $ ( 614.9 ) $ ( 235.2 ) $ 1,324.7 $ 8.7 $ 1,333.4

8 unchanged sentences

Net income $ 191.6 $ 42.5 $ 542.6

Income (loss) from discontinued operations, net of tax 14.0 682.5 ( 24.0 )

Income from discontinued operations, net of tax 174.3 150.9 803.9

Net income (loss) from continuing operations 17.3 ( 108.4 ) ( 261.3 )

3 unchanged sentences

Unrealized loss on equity investments held — 7.5 12.1

Realized loss on equity investments sold 9.3 — —

Loss on assets held for sale 26.8 — —

Realized (gain) loss on equity investments sold ( 6.9 ) 9.3 —

Loss on sale of Coevorden operations — 26.8 —

Write-off from impairment of goodwill — — 116.0

3 unchanged sentences

Purchase accounting inventory adjustment 7.3 — —

GPC safety recall inventory write-off — — 4.1

Deferred tax expense (benefit) 34.0 11.3 ( 170.9 )

Deferred tax (benefit) expense ( 63.0 ) 11.8 ( 20.1 )

Net changes in operating assets and liabilities

4 unchanged sentences

Other 26.2 ( 12.3 ) 38.1

Net cash provided by operating activities from continuing operations 80.0 97.2 223.7

Net cash provided (used) by operating activities from discontinued operations 0.2 ( 82.4 ) 128.8

Net cash provided (used) by operating activities from continuing operations 81.7 ( 8.3 ) ( 34.9 )

Net cash provided by operating activities from discontinued operations 199.2 88.5 49.7

Net cash provided by operating activities 280.9 80.2 14.8

2 unchanged sentences

Proceeds from disposal of property, plant and equipment 0.1 4.2 2.1

Proceeds from sale of assets held for sale 29.0 — —

Proceeds from sale of Coevorden operations — 29.0 —

Proceeds from sale of discontinued operations, net of cash — 3.6 2,859.5

2 unchanged sentences

Other investing activities ( 0.4 ) 2.3 ( 0.3 )

Net cash provided (used) by investing activities from continuing operations 108.3 2,802.9 ( 72.2 )

Net cash (used) provided by investing activities from continuing operations ( 400.7 ) 125.2 2,820.9

Net cash used by investing activities from discontinued operations ( 22.8 ) ( 16.9 ) ( 23.3 )

Net cash provided (used) by investing activities 108.3 2,797.6 ( 99.2 )

Net cash (used) provided by investing activities ( 423.5 ) 108.3 2,797.6

Cash flows from financing activities

5 unchanged sentences

Payment of contingent consideration — ( 197.0 ) ( 8.9 )

Net cash (used) provided by financing activities from continuing operations ( 285.8 ) ( 2,694.2 ) 89.3

Net cash used by financing activities from continuing operations ( 197.1 ) ( 283.8 ) ( 2,693.4 )

Net cash used by financing activities from discontinued operations ( 3.0 ) ( 2.0 ) ( 3.0 )

Net cash (used) provided by financing activities ( 285.8 ) ( 2,696.4 ) 84.5

Net cash used by financing activities ( 200.1 ) ( 285.8 ) ( 2,696.4 )

Effect of exchange rate changes on cash and cash equivalents 1.3 5.1 ( 8.4 )

3 unchanged sentences

Supplemental disclosure of cash flow information

Cash paid for interest $ 127.1 $ 179.9 $ 208.4

Cash paid for taxes $ 42.1 $ 53.9 $ 53.8

Cash paid for interest associated with continued operations $ 86.4 $ 81.4 $ 88.4

Cash paid for interest associated with discontinued operations $ 50.0 $ 45.7 $ 91.5

Cash paid for taxes associated with continued operations $ 23.5 $ 20.2 $ 41.6

Cash paid for taxes associated with discontinued operations $ 11.5 $ 21.9 $ 12.3

Non cash investing activities

9 unchanged sentences

The Company is a diversified global branded consumer products company.

We manage the businesses in four vertically integrated, product-focused segments:

(i) Hardware & Home Improvement (“HHI”), (ii) Home and Personal Care (“HPC”), (iii) Global Pet Care (“GPC”), and (iv) Home and Garden (“H&G”).

The Company manufactures, markets and/or distributes its products globally in the North America (“NA”), Europe, Middle East & Africa (“EMEA”), Latin America (“LATAM”) and Asia-Pacific (“APAC”) regions through a variety of trade channels, including retailers, wholesalers and distributors, original equipment manufacturers (“OEMs”), and construction companies.

We manage the businesses in three vertically integrated, product-focused segments:

(i) Home and Personal Care (“HPC”), (ii) Global Pet Care (“GPC”), and (iii) Home and Garden (“H&G”).

We enjoy strong name recognition in our regions under our various brands and patented technologies across multiple product categories.

Global and geographic strategic initiatives and financial objectives are determined at the corporate level.

Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a president or general manager responsible for sales and marketing initiatives and the financial results for all product lines within that segment.

Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a president responsible for sales and marketing initiatives and the financial results for all product lines within that segment.

The segments are supported through center-led corporate shared service operations consisting of finance and accounting, information technology, legal and human resource, supply chain and commercial operations.

See Note 22 – Segment Information for more information pertaining to segments of continuing operations.

The following is an overview of the consolidated business, by segment, summarizing product types and brands:

Residential locksets and door hardware including knobs, levers, deadbolts, handle sets, including electronic and connected locks.

Plumbing & Accessories:

Kitchen and bath faucets and accessories.

Builders' Hardware:

Hinges, metal shapes, security hardware, track and sliding door hardware, gate hardware.

Kwikset®, Weiser®, Baldwin®, Tell Manufacturing®, and EZSET®

Plumbing & Accessories:

Builders' Hardware:

National Hardware®, FANAL®

Products Brands

Home Appliances:

6 unchanged sentences

Remington®, and LumaBella®

Companion Animal:

GPC Companion Animal:

Rawhide chews, dog and cat clean-up, training, health and grooming products, small animal food and care products, rawhide-free dog treats, and wet and dry pet food for dogs and cats.

3 unchanged sentences

Companion Animal:

8IN1® (8-in-1), Dingo®, Nature's Miracle®, Wild Harvest™, Littermaid®, Jungle®, Excel®, FURminator®, IAMS® (Europe only), Eukanuba® (Europe only), Healthy-Hide®, DreamBone®, SmartBones®, ProSense®, Perfect Coat®, eCOTRITION®, Birdola® and Digest-eeze®.

Tetra®, Marineland®, Whisper®, Instant Ocean®, GloFish®, OmegaOne® and OmegaSea®

7 unchanged sentences

Personal use pesticides and insect repellent products, including aerosols, lotions, pump sprays and wipes, yard sprays and citronella candles.

Household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes and markers.

Hot Shot®, Black Flag®, Real-Kill®, Ultra Kill®, The Ant Trap® (TAT), and Rid-A-Bug®.

1 unchanged sentence

Cutter® and Repel®.

SB/RH is a wholly owned subsidiary of SBH..

SB/RH is a wholly owned subsidiary of SBH and represents substantially all of its assets, liabilities, revenues, expenses and operations.

Spectrum Brands, Inc.

1 unchanged sentence

See Note 12 - Debt for more information pertaining to debt.

SBI represents all of SB/RH assets, liabilities, revenues, expenses and operations.

The reportable segments of SB/RH are consistent with the segments of SBH.

On September 8, 2021, the Company entered into a definitive Asset and Stock Purchase Agreement with ASSA ABLOY AB ("ASSA") to sell its Hardware and Home Improvement ("HHI") segment for cash proceeds of $ 4.3 billion, subject to customary purchase price adjustments.

HHI consists of residential locksets and door hardware, including knobs, levers, deadbolts, handle sets, and electronic and connected locks under the Kwikset®, Weiser®, Baldwin®, Tell Manufacturing®, and EZSET® brands;

kitchen and bath faucets and accessories under the Pfister® brand;

and builders' hardware consisting of hinges, metal shapes, security hardware, rack and sliding door hardware, and gate hardware under the National Hardware® and FANAL® brands.

The Company's assets and liabilities associated with the HHI disposal group have been classified as held for sale and the HHI operations have been classified as discontinued operations for all periods presented and notes to the consolidated financial statements have been updated for all periods presented to exclude information pertaining to discontinued operations and reflect only the continuing operations of the Company.

Refer to Note 3 – Divestitures for more information on the HHI divestiture including the assets and liabilities classified as held for sale and income from discontinued operations.

SPECTRUM BRANDS HOLDINGS INC.

7 unchanged sentences

The exceptions are the first quarter, which begins on October 1, and the fourth quarter, which ends on September 30.

For the year ended September 30, 2020, the fiscal quarters were comprised of the three months ended December 29, 2019, March 29, 2020, June 28, 2020 and September 30, 2020.

For the year ended September 30, 2021, the fiscal quarters were comprised of the three months ended January 3, 2021, April 4, 2021, July 4, 2021, and September 30, 2021.

Use of Estimates

14 unchanged sentences

Depreciation is calculated on the straight-line basis over the estimated useful lives of the assets.

Property, plant and equipment held under capital leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset;

Property, plant and equipment held under finance leases are depreciated on a straight-line basis over the shorter of the lease term or estimated useful life of the asset;

such amortization is included in depreciation expense.

14 unchanged sentences

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

During the year ended September 30, 2020, the Company recognized a triggering event for the sale of its dog and cat food ("DCF") production facility and distribution center in Coevorden, Netherlands on March 29, 2020, resulting in a loss on assets held for sale, including property, plant and equipment associated with the operations that were sold.

See Note 3 - Divestitures , for further detail.

Goodwill reflects the excess of acquisition cost over the aggregate fair value assigned to identifiable net assets acquired.

3 unchanged sentences

See Note 22 - Segment Information for further discussion.

The Company performs its annual impairment test in the fourth quarter of its fiscal year.

The fair value of each reporting unit is compared to its carrying value, including goodwill.

In estimating the fair value of our reporting units, we use a discounted cash flow methodology, which requires us to estimate future revenues, expenses, and capital expenditures and make assumptions about our weighted average cost of capital and perpetuity growth rate, among other variables.

We test the aggregate estimated fair value of our reporting units by comparison to our total market capitalization, including both equity and debt capital.

If the fair value of a reporting unit is less than its carrying value, an impairment loss would be recognized equal to that excess;

however the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.

See Note 11 - Goodwill and Intangible Assets for further detail.

Goodwill is tested for impairment in the fourth quarter of its fiscal year by either performing a qualitative assessment or a quantitative test for some, or all reporting units.

The Company evaluates qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

In performing a qualitative assessment, the Company considers events and circumstances, including, but not limited to, macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in customers, changes in market value, composition or carrying amount of a reporting unit’s net assets, and considering any changes in the market price of the Company’s common stock.

If the Company determines that it is more likely than not the carrying value is greater than the fair value of a reporting unit after assessing the totality of facts and circumstances, a quantitative assessment is performed to determine the reporting unit fair value and measure the impairment.

If the Company determines that it is more likely than not the fair value is greater than the carrying amount, then a quantitative assessment is not required.

SPECTRUM BRANDS HOLDINGS INC.

2 unchanged sentences

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

In estimating the fair value of our reporting units for a quantitative impairment assessment, we use a discounted cash flow methodology, which requires us to estimate future revenues, expenses, and capital expenditures and make assumptions about our weighted average cost of capital and perpetuity growth rate, among other variables.

We test the aggregate estimated fair value of our reporting units by comparison to our total market capitalization, including both equity and debt capital.

The fair value of each reporting unit is compared to its carrying value, including goodwill.

If the fair value of a reporting unit is less than its carrying value, an impairment loss would be recognized equal to that excess;

however the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.

See Note 11 - Goodwill and Intangible Assets for further detail.

Intangible Assets

9 unchanged sentences

If impairment is determined to exist, any related impairment loss is calculated based on fair value.

During the year ended September 30, 2020, the Company recognized a triggering event for the sale of its DCF production facility and distribution center in Coevorden, Netherlands on March 29, 2020, resulting in a $ 7.6 million impairment loss recognized on definite-lived intangible assets due to the incremental cash flow risk associated with the commercial DCF business following the divestiture, which consisted of the remaining carrying cost of the definite lived intangibles assets associated with the commercial DCF business.

See Note 3 - Divestitures , for further detail.

Certain trade name intangible assets have an indefinite life and are not amortized, but instead are assessed for impairment at least annually and as triggering events or indicators of potential impairment are identified.

The Company performs its annual impairment test in the fourth quarter of its fiscal year.

In applying the impairment test, the Company completes what is referred to as the "Step 0" analysis, which involves evaluating qualitative factors including macroeconomic conditions, industry and market conditions, cost factors, and overall financial performance.

If our "Step 0" analysis indicates it is more likely than not that the fair value is less than the carrying amounts we would perform a quantitative impairment test.

The quantitative impairment analysis of indefinite lived intangible assets compares the estimated fair value of the identified trade names to their carrying value to determine if potential impairment exists.

Certain trade name intangible assets have an indefinite life and are not amortized, but instead are assessed for impairment at least annually, in the fourth quarter of its fiscal year by either performing a qualitative assessment or a quantitative test for some or all indefinite lived intangible assets.

The Company evaluates qualitative factors to determine whether it is more likely than not that the fair value of the indefinite lived intangible assets is less than its carrying amount.

In performing a qualitative assessment, the Company considers events and circumstances, including, but not limited to, macroeconomic conditions, industry and market conditions, cost factors, changes in strategy and overall financial performance.

If the Company determines that it is more likely than not the carrying value is greater than the fair value of an indefinite lived intangible asset, a quantitative assessment is performed to determine the fair value and measure the impairment.

If the Company determines that it is more likely than not the fair value is greater than the carrying amount, then a quantitative assessment is not required.

The quantitative impairment analysis of indefinite lived intangible assets compares the estimated fair value of the identified trade names to their carrying value to determine if impairment exists.

If the fair value is less than the carrying value, an impairment loss is recorded for the excess.

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Assets Held for Sale and Discontinued Operations

The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the business is sold and classified as held for sale, in accordance with the criteria of Accounting Standard Codification (“ASC”) Topic 205 Presentation of Financial Statements and ASC Topic 360 Property, Plant and Equipment (“ASC 360”).

Assets and liabilities of a business classified as held for sale are recorded at the lower of its carrying amount or estimated fair value less cost to sell.

If the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized.

Assets and liabilities related to a business classified as held for sale are segregated in the current and prior balance sheets in the period in which the business is classified as held for sale.

The results of discontinued operations are reported in Income From Discontinued Operations, Net of Tax in the accompanying Consolidated Statements of Income for the current and prior periods commencing in the period in which the business meets the criteria, and includes any gain or loss recognized on closing, or adjustment of the carrying amount to fair value less cost to sell.

Transactions between the businesses held for sale and businesses held for use that are expected to continue to exist after the disposal are not eliminated to appropriately reflect the continuing operations and balances held for sale.

An asset, group of assets, or qualifying business are considered held for sale when they meet all the applicable criteria;

(i) having the authority to sell, (ii) being available to sell in their present condition, (iii) having an active program to locate buyers, (iv) being actively marketed at current fair value, and (v) considered probable of selling within one year.

Assessment for held for sale are performed at least quarterly or when events or changes in business circumstances indicate that a change in classification may be necessary.

Assets and liabilities of a qualifying business are excluded from the net assets of continuing operations, separated in a disposal group and classified as held for sale in the period in which the held for sale criteria was met.

Corporate debt is not included as a component of the disposal group, regardless of repayment provisions, and only debt directly attributable to the divested operations may be included as held for sale.

Assets and liabilities held for sale are recorded at the lower of its carrying amount or estimated fair value less expected cost to sell and any unrecognized other comprehensive loss.

Assets held for sale do not experience any subsequent depreciation or amortization after being classified as held for sale.

Assets held for sale are reviewed for impairment at least quarterly, and if the carrying amount of the disposal group exceeds the estimated fair value less cost to sell, a loss is recognized.

If a business is classified as held for sale after the balance sheet date but before the financial statements are issued or are available to be issued, the business continues to be classified as held and used in those financial statements when issued or when available to be issued.

Assets and liabilities of a disposal group classified as held for sale and related to discontinued operations are presented as held for sale for all current and prior periods presented within the statement of a financial position.

The results of discontinued operations are reported in Income From Discontinued Operations, Net of Tax in the accompanying Consolidated Statements of Income for the current and prior periods commencing in the period in which the business meets the held for sale criteria, and includes any gain or loss recognized on closing, or adjustment of the carrying amount to fair value less cost to sell while being held for sale.

Loss realized upon change of classification to held for sale is recognized as a loss to continuing operations.

Income from discontinued operations includes only direct costs attributable to the divested business and excludes any indirect cost allocation associated with any shared or corporate led functions unless otherwise dedicated to the divested business.

Interest costs from corporate debt, excluding premium payments or loss on extinguishment of debt, may be included as a component of income from discontinued operations specifically attributable to interest from corporate debt that is obligated to be repaid following the completion of a divestiture;

plus the allocation of interest cost from corporate debt not directly attributable to or related to other operations based on the ratio of net assets of the disposal group held for sale to the consolidated net assets plus consolidated debt, excluding debt assumed in transaction, required to be repaid, or directly attributable to other operations of the Company.

Amounts within accumulated other comprehensive income directly associated with a divested business are not realized as a component of Income from Discontinued Operations until completion of the sale or disposition.

See Note 3 - Divestitures for further detail.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

Debt Issuance Costs

Debt issuance costs are deferred and amortized to interest expense using the effective interest method over the lives of the related debt agreements.

Debt issuance costs for SBH were $ 36.5 million and $ 33.0 million as of September 30, 2020 and 2019, respectively, and $ 36.5 million and $ 31.5 million for SB/RH as of September 30, 2020 and 2019, respectively.

Debt issuance costs are included in Long Term Debt, Net of Current Portion in the Consolidated Statements of Financial Position.

Amortization of debt issuance costs is recognized as Interest Expense in the Consolidated Statements of Income.

Debt issuance costs for the Company were $ 35.6 million and $ 36.5 million as of September 30, 2021 and 2020, respectively.

Debt issuance costs are included as a reduction to Long Term Debt, Net of Current Portion in the Consolidated Statements of Financial Position.

Amortization of debt issuance costs is recognized as a component of Interest Expense in the Consolidated Statements of Income.

See Note 12 - Debt for further detail.

Financial Instruments

Derivative financial instruments are used by the Company principally in the management of its foreign currency and raw material price exposures.

Derivative financial instruments are used by the Company principally in the management of its foreign currency exposures.

The Company does not hold or issue derivative financial instruments for trading or speculative purposes.

2 unchanged sentences

Depending on the nature of derivatives designated as hedging instruments, changes in fair value are either offset against the change in fair value of the hedged assets or liability through earnings, or recognized in equity through other comprehensive income until the hedged item is recognized.

Pursuant to the adoption of ASU 2017-12 on October 1, 2019, for derivative instruments that hedge the exposure to variability in expected future cash flows and are designated as cash flow hedges, the entire change in the fair value of the hedging instrument is recorded as a component of Accumulated Other Comprehensive (Loss) Income (“AOCI”) in Stockholders’ Equity.

Derivative instruments that hedge the exposure to variability in expected future cash flows and are designated as cash flow hedges, and the entire change in the fair value of the hedging instrument is recorded as a component of Accumulated Other Comprehensive (Loss) Income (“AOCI”) in Stockholders’ Equity.

Those amounts are subsequently reclassified to earnings in the same line item in the Consolidated Statement of Income as impacted by the hedge item when the hedged item affects earnings.

3 unchanged sentences

Treasury Stock

Treasury stock purchases are stated at cost and presented as a separate reduction of equity.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

Treasury stock purchases are stated at average cost and presented as a separate reduction of equity.

Noncontrolling Interest

8 unchanged sentences

Revenue Recognition

The Company applies the guidance codified in Accounting Standards Update (“ASU”) No.

2014-09, “Revenue from Contracts with Customers (Topic 606)”, which was adopted on October 1, 2018 using the modified retrospective method of the adoption.

The following are changes to the Company’s revenue recognition accounting policies from those previously disclosed in Note 2 – Significant Accounting Policies and Practices to the Company’s Annual Report on Form 10-K for year ended September 30, 2018 and Form 8-K issued on April 5, 2019.

Product Sales

1 unchanged sentence

The Company recognizes revenue from the sale of products upon transfer of control to the customer.

For the majority of our product sales, the transfer of control is recognized when we ship the product from our facilities to the customer.

Timing of revenue recognition for a majority of the Company’s sales continues to be consistent.

Before the adoption of Topic 606 on October 1, 2018, the Company deferred recognition of revenue if title and risk of loss were retained upon shipment, but the customer arranged and paid for freight such that they had physical possession and control.

Under Topic 606 , the Company recognizes revenue at the time of shipment for these transactions.

This change did not have a material impact on the Company’s adoption of the new standard or comparability to revenue in prior periods.

For the majority of our product sales, the transfer of control is recognized when we ship the product from our facilities to the customer unless we retain title and risk of loss upon shipment and we arrange and paid for freight such that we retain physical possession and control during delivery.

Licensing Revenue

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The Company maintains all right of ownership of the intellectual property and contracts with its customer for the use of the intellectual property in their operations.

Under Topic 606 , revenue derived from the right-to-access licenses is recognized using the over time revenue recognition method.

We elected to recognize revenue under the ‘as-invoiced’ practical expedient method at the amount we are able to bill using a time-elapsed measure of progress.

The Company has assessed that recognizing revenue based on a time-elapsed measure of progress, taking into consideration any minimum guarantee provisions under the contract, appropriately depicts its performance of providing access to the Company’s brands, trade names, logos, etc.

This change did not have a material impact on the Company’s adoption of the new standard on October 1, 2018 or comparability to revenue recognition in prior periods.

Revenue derived from the right-to-access licenses is recognized using the over time revenue recognition method, applying the ‘as-invoiced’ practical expedient method at the amount we are able to bill using a time-elapsed measure of progress, taking into consideration any minimum guarantee provisions under the contract, as it appropriately depicts its performance of providing access to the Company’s brands, trade names, logos, etc.

Other Revenue

7 unchanged sentences

The estimated liability for sales discounts and other programs and allowances is calculated using the expected value method or most likely amount and recorded at the time of sale as a reduction of net sales.

The Company also enters into various arrangements, primarily with retail customers, which require the Company to make upfront cash payments to secure the right to distribute through such customers.

The Company capitalizes these payments, provided they are supported by a volume-based arrangement with the retailer with a period of 12 months or longer, and amortizes the associated payment over the appropriate time or volume-based term of the arrangement.

Capitalized payments are recognized as a contract asset and are reported in the Consolidated Statements of Financial Position as Deferred Charges and Other Assets and related amortization is treated as a reduction in Net Sales.

Product Returns

In the normal course of business, the Company may allow customers to return product per the provisions in a sale agreement.

Estimated product returns are recorded as a reduction in reported revenues at the time of sale based upon historical product return experience, adjusted for known trends, to arrive at the amount of consideration expected to receive.

For the anticipated value of the returns, the adoption of Topic 606 resulted in the recognition of a return asset included in the Prepaid Expenses and Other Current Assets and the returns liability recognized in Other Current Liabilities.

The Company recognized an expected returns liability of $ 23.1 million and $ 19.2 million as of September 30, 2020 and 2019, respectively, most of which the Company does not expect or anticipate a returned asset.

Prior to the adoption of Topic 606 , the reserve for product returns was recognized net of anticipated value of returned product as a reduction to Trade Receivable, Net on the Company’s Consolidated Statement of Financial Position.

SPECTRUM BRANDS HOLDINGS INC.

2 unchanged sentences

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

The Company may also enter into various arrangements, primarily with retail customers, which require the Company to make upfront cash payments to secure the right to distribute through such customers.

The Company defers the cost of these payments, provided they are supported by a volume-based arrangement with the retailer with a period of 12 months or longer, and amortizes the associated payment over the appropriate time or volume-based term of the arrangement.

Deferred payments are recognized as a contract asset and are reported in the Consolidated Statements of Financial Position as Deferred Charges and Other Assets with related amortization treated as a reduction in Net Sales.

Product Returns

In the normal course of business, the Company may allow customers to return product per the provisions in a sale agreement.

For the anticipated value of the returns, the Company will recognize a return liability in Other Current Liabilities and a separate return asset included in the Prepaid Expenses and Other Current Assets, when applicable.

As of September 30, 2021 and 2020, the Company recognized an expected returns liability of $ 11.8 million and $ 12.8 million, respectively, most of which the Company does not expect or anticipate a return asset.

Product returns do not include provisions for warranties provided to end-consumers of the Company's products, which are recognized as a component of the Company's cost of goods sold.

See Note 21 - Commitments and Contingencies for further discussion on product warranty.

Practical Expedients and Exemptions:

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Impairment of property and equipment and other current or long-term assets as a result of restructuring related initiatives are recognized as a reduction of the appropriate asset.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

Restructuring and related charges associated with manufacturing and related initiatives are recorded in Cost of Goods Sold.

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See Note 5 - Restructuring and Related Charges for further detail.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

The Company determines if an arrangement is a lease at inception, considering whether the contract conveys a right to control the use of the identified asset for a period of time in exchange for consideration.

Leases are classified as operating or finance leases at the commencement date of the lease.

Operating leases are included in Operating Lease Assets, Other Current Liabilities and Long-Term Operating Lease Liabilities on the Consolidated Statement of Financial Position.

Finance leases are included in Property, Plant and Equipment, Current Portion of Long-Term Debt, and Long-Term Debt, Net of Current Portion on the Consolidated Statement of Financial Position.

Right of use ("ROU") lease assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.

ROU lease liabilities are classified between current and long-term liabilities based on their payment terms.

The ROU operating lease asset includes prepaid rent and reflects the unamortized balance of lease incentives.

Our leases may include renewal options, and we include the renewal option in the lease term if we conclude that it is reasonably certain that we will exercise that option.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease expense for operating leases is recognized on a straight-line basis over the lease term.

Variable lease payments that do not depend on an index or a rate, such as the Company’s proportionate share of actual costs for utilities, common area maintenance, insurance, and property taxes, are excluded from the measurement of the lease liability, unless subject to fixed minimum requirements and are recognized as variable lease cost when the obligation for that payment is incurred.

As most of the Company’s leases do not provide the lease implicit rates, the Company uses its incremental borrowing rates as the discount rate, adjusted as applicable, based on the information available at the lease commencement dates to determine the present value of lease payments.

The incremental borrowing rate represents an estimate of the interest rate the Company would incur to borrow, on a collateralized basis and in a similar economic environment, over the term of a lease.

The Company may use the lease implicit rate, if readily determinable, as the discount rate to determine the present value of lease payments.

See Note 13 – Leases for additional information.

We review the impairment of our ROU lease assets consistent with the approach applied for our other long-lived assets.

ROU lease assets are reviewed for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Circumstances such as the discontinuation of a product or product line, a sudden or consistent decline in the sales forecast for a product, changes in technology or in the way an asset is being used, early termination or exit of a lease agreement, a history of operating or cash flow losses or an adverse change in legal factors or in the business climate, among others, may trigger an impairment review.

If such indicators are present, the Company performs an undiscounted cash flow analysis to determine if impairment exists.

The asset value would be deemed impaired if the undiscounted cash flows generated did not exceed the carrying value of the respective asset group.

If impairment is determined to exist, any related impairment loss is calculated based on fair value.

Transaction related charges

Transaction related charges consist of transaction costs from (1) qualifying acquisition transactions associated with the completion of the purchase of net assets or equity interest of a business such as a business combination, equity investment, joint venture or purchase of non-controlling interest;

(2) subsequent integration related project costs directly associated with an acquired business including costs for integration of acquired operations into the Company’s shared service platforms, termination of redundant positions and locations, employee transition costs, integration related professional fees and other post business combination expenses;

and (3) divestiture support and separation costs consisting of incremental costs incurred by the continuing operations after completion of the transaction to facilitate separation of shared operations, development of transferred shared service operations, platforms and personnel transferred under the transaction.

Divestiture-related charges prior to completion of the transaction are recognized as a component of Income from Discontinued Operations, net of tax.

Transaction costs include, but are not limited to, banking, advisory, legal, accounting, valuation, and other professional fees directly related to the respective transactions.

Additionally, transaction related charges include costs attributable to the plan to market and sell the HPC operations that was subsequently classified as continuing operations for all periods presented.

Transaction related charges consist of costs towards (1) a qualifying strategic transaction or business development opportunity, including an acquisition or divestiture, whether or not consummated, associated with the purchase or sale of net assets or equity interest of a business such as a business combination, equity investment, joint venture or purchase or sale of non-controlling interest;

(2) subsequent integration related project costs directly associated with an acquisition including realized costs for the integration of acquired operations into the Company’s shared service platforms, termination of redundant or duplicative positions and locations, operations and/or products, employee transition costs, professional fees, and other post business combination expenses;

and (3) divestiture support and separation costs consisting of incremental costs incurred to facilitate separation of a divested business or operation, including the development of shared service operations impacted by a separation, including impacts to shared platforms and personnel impacted by the transaction.

Qualifying cost types include, but are not limited to, banking, advisory, legal, accounting, valuation, or other professional fees;

and including impairment loss on existing assets considered duplicative or redundant and directly attributable to the respective transactions.

See Note 3 - Divestitures and Note 4 – Acquisitions for further discussion.

The following table summarizes transaction related charges incurred by the Company during the years ended September 30, 2021, 2020 and 2019:

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2021 2020 2019

Coevorden operations divestiture $ 5.5 $ — $ —

GBL post divestiture separation 10.2 9.5 —

HPC divestiture 3.9 7.3 14.9

HHI divestiture and separation $ 9.6 $ — $ —

Rejuvenate acquisition and integration 10.8 — —

Armitage acquisition and integration 10.9 — —

Coevorden operations divestiture and separation 5.4 5.5 —

GBL divestiture and separation 3.2 10.2 9.5

PetMatrix integration — — —

Omega Sea acquisition 1.6 — —

Other integration 1.9 5.0 10.4

Omega Sea acquisition and integration 0.2 1.6 —

Other 16.2 5.8 11.4

Total transaction-related charges $ 56.3 $ 23.1 $ 20.9

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

Income taxes are accounted for under the asset and liability method.

13 unchanged sentences

Exchange losses on foreign currency transactions were $ 1.5 million, $ 7.1 million, and $ 40.5 million for the years ended September 30, 2021, 2020 and 2019, respectively.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

Correction of immaterial error

During the fiscal third quarter of the year ended September 30, 2020, the Company identified an out of period error in Income from Discontinued Operations, net of tax, of $ 22.6 million as part of the return-to-provision adjustments.

These adjustments correct an error in computing the tax on the gain on sale included in the year end tax provision for discontinued operations recognized in the fiscal year ended September 30, 2019.

The Company has concluded that the misstatements are not material to the consolidated financial statements.

The Company has updated the Consolidated Statement of Financial Position and Consolidated Statements of Income as of and for the year ended September 30, 2019 within this filing to reflect the corrected numbers as follows:

September 30, 2019

SBH (in millions) As reported Adjustment As Adjusted

Deferred charges and other $ 51.7 $ 15.5 $ 67.2

Total assets 5,230.5 15.5 5,246.0

Other current liabilities 216.0 ( 1.8 ) 214.2

Current liabilities 1,141.9 ( 1.8 ) 1,140.1

Deferred income taxes 55.9 ( 5.3 ) 50.6

Total liabilities 3,524.2 ( 7.1 ) 3,517.1

Accumulated earnings 201.2 22.6 223.8

Total shareholders' equity 1,698.3 22.6 1,720.9

Total equity 1,706.3 22.6 1,728.9

Total liabilities and equity 5,230.5 15.5 5,246.0

September 30, 2019

SB/RH (in millions) As reported Adjustment As Adjusted

Income tax payable $ 240.5 $ ( 1.8 ) $ 238.7

Current liabilities 1,356.0 ( 1.8 ) 1,354.2

Deferred income taxes 272.2 ( 20.8 ) 251.4

Total liabilities 3,879.1 ( 22.6 ) 3,856.5

Accumulated deficit ( 437.3 ) 22.6 ( 414.7 )

Total shareholder's equity 1,402.5 22.6 1,425.1

Total equity 1,412.1 22.6 1,434.7

September 30, 2019

SBH (in millions, except per share) As reported Adjustment As Adjusted

Income from discontinued operations, net of tax $ 659.9 $ 22.6 $ 682.5

Net income 473.2 22.6 495.8

Net income from discontinued operations attributable to controlling interest 659.9 22.6 682.5

Net income attributable to controlling interest 471.9 22.6 494.5

Basic earnings per share from discontinued operations 13.02 0.45 13.47

Basic earnings per share 9.31 0.45 9.76

Diluted earnings per share from discontinued operations 13.02 0.45 13.47

Diluted earnings per share 9.31 0.45 9.76

September 30, 2019

SB/RH (in millions) As reported Adjustment As Adjusted

Income from discontinued operations, net of tax $ 659.9 $ 22.6 $ 682.5

Net income 520.0 22.6 542.6

Net income from discontinued operations attributable to controlling interest 659.9 22.6 682.5

Net income attributable to controlling interest 518.7 22.6 541.3

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

Newly Adopted Accounting Standards

In February 2016, the FASB issued ASU No.

2016-02 , Leases (Topic 842) , which superseded the lease requirements in ASC 840, Leases.

This ASU requires lessees to recognize lease assets and liabilities on the balance sheet, as well as to disclose key information about leasing arrangements.

Although the new ASU requires both operating and finance leases to be disclosed on the balance sheet, a distinction between the two types still exists as the economics of leases can vary.

In July 2018, the FASB issued ASU No.

2018-11, “Leases (Topic 842):

Targeted Improvements” , which provided entities with an alternative modified transition method, for which, comparative periods, including the disclosures related to those periods, are not restated.

The Company adopted ASU No.

2016-02 and ASU 2018-11 as of October 1, 2019, using a modified retrospective approach, which allowed for the recognition of a cumulative effect of applying the new standard as an adjustment to the opening balance sheet of retained earnings, while continuing to present all prior periods under previous lease accounting guidance.

The Company’s adoption of the new standard resulted in the recognition of additional right-of-use (“ROU”) lease assets of $ 107.5 million and additional lease liabilities of $ 113.0 million, with no material cumulative effect adjustment to equity as of the date of adoption.

The difference between ROU assets and lease liabilities was driven primarily by prepaid lease payments, deferred and accrued lease incentives, and restructuring related accruals that were reclassified to the ROU asset balance as of October 1, 2019.

The income tax accounting impact of ASC 842 adoption resulted in recording of deferred tax assets and tax liabilities of $ 29.7 million as of October 1, 2019.

The adoption of the new standard did not have a material impact on the Consolidated Statements of Income and Consolidated Statements of Cash Flows.

As allowed under the new accounting standard, the Company elected to apply the package of practical expedients to carry forward the original lease determinations, lease classifications, and accounting of initial direct costs for all asset classes at the time of adoption.

The Company elected to apply the practical expedient for all of its leases to account for the lease and non-lease components as a single, combined lease component.

Therefore, all fixed payments associated with the lease, including non-lease components, are included in the ROU asset and the lease liability.

Any variable payments related to the lease are recognized as lease expense when and as incurred.

The Company also elected not to apply the recognition requirements to leases of twelve months or less.

These leases are expensed on a straight-line basis and no operating lease liability is recorded.

In accordance with Topic 842, the Company determines if an arrangement is a lease at inception, considering whether the contract conveys a right to control the use of the identified asset for a period of time in exchange for consideration.

Leases are classified as operating or finance leases at the commencement date of the lease.

ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.

Lease liabilities are classified between current and long-term liabilities based on their payment terms.

The operating lease ROU asset includes prepaid rent and reflects the unamortized balance of lease incentives.

Our leases may include renewal options, and we include the renewal option in the lease term if we conclude that it is reasonably certain that we will exercise that option.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease expense for operating leases is recognized on a straight-line basis over the lease term.

The Company may use the lease implicit rate, if readily determinable, as the discount rate to determine the present value of lease payments.

As of October 1, 2019, the Company used an average discount rate of approximately 4.6 %, based on an estimate of the Company’s incremental borrowing rate.

See Note 13 – Leases for additional information.

We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets.

Long-lived fixed assets held and used are reviewed for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Circumstances such as the discontinuation of a product or product line, a sudden or consistent decline in the sales forecast for a product, changes in technology or in the way an asset is being used, a history of operating or cash flow losses or an adverse change in legal factors or in the business climate, among others, may trigger an impairment review.

If such indicators are present, the Company performs an undiscounted cash flow analysis to determine if impairment exists.

The asset value would be deemed impaired if the undiscounted cash flows generated did not exceed the carrying value of the respective asset group.

If impairment is determined to exist, any related impairment loss is calculated based on fair value.

In February 2018, the FASB issued ASU No.

2018-02 , Income Statement-Reporting Comprehensive Income (Topic 220):

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”), which allows for an optional reclassification from AOCI to retained earnings for stranded tax effects as a result of the Tax Cuts and Jobs Act (the “Tax Reform Act”).

Effective October 1, 2019, we adopted ASU No.

2018-02 and elected to reclassify the income tax effects of the Tax Reform Act from AOCI to Retained Earnings, which resulted in reclassification of $ 0.3 million from AOCI to Retained Earnings.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities .

This guidance amends certain rules for hedging relationships, expands the types of strategies that are eligible for hedge accounting treatment to more closely align the results of hedge accounting with risk management activities and amends disclosure requirements related to fair value and net investment hedges.

The Company adopted this guidance effective October 1, 2019.

The adoption of the guidance did not have a material impact on the Company’s financial statements and related disclosures.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued)

Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , which was further updated and clarified by the FASB through issuance of additional related ASUs.

Topic 326 introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses:

Measurement of Credit Losses on Financial Instruments , which was further updated and clarified by the FASB through the issuance of additional related ASUs.

The ASU introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables.

The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information, and reasonable and supportable forecasts.

This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models, and methods for estimating expected credit losses.

This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, which is the first quarter of our fiscal year ending September 30, 2021 for the Company.

The Company does not expect that the adoption of this guidance will have a material impact on the Company’s consolidated financial statements other than requiring enhanced disclosures.

The guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019.

The Company adopted ASU 2016-13 on a modified retrospective basis effective October 1, 2020.

The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements.

Refer to Note 8 - Receivables and Concentration of Credit Risk for further discussion on the Company's receivables and allowance for uncollectible receivables.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract .

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ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license.

ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted, which is the year ending September 30, 2021 for the Company.

We are currently evaluating the effect of this standard on our Consolidated Financial Statements.

The impact will be based on future implementation costs for cloud computing arrangements, which we currently do not expect to have a material impact on our consolidated financial statements and related disclosures.

ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019.

The Company adopted ASU 2018-15 prospectively to all implementation costs incurred after October 1, 2020, the date of adoption.

Before the adoption of the standard, the implementation costs in cloud computing arrangements were expensed as incurred.

Effective October 1, 2020, implementation costs attributable to cloud computer arrangements are recognized as Deferred Charges and Other on the Consolidated Statements of Financial Position and subsequently amortized over the respective term of the cloud computing arrangement.

The adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20):

Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans .

ASU 2018-14 requires entities to disclose the weighted-average interest crediting rates used, reasons for significant gains and losses affecting benefit obligations, and an explanation of any other significant changes in the benefit obligation or plan assets.

The amendment also removed certain previously required disclosures.

The Company adopted this guidance as of September 30, 2021.

The provisions of the new standard have been recognized in Note 15 - Employee Benefit Plans for all periods.

Recently Issued Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation.

The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued.

In January 2021, the FASB issued ASU 2021-01, which adds implementation guidance to clarify certain optional expedients in Topic 848.

The ASUs can be adopted no later than December 31, 2022 with early adoption permitted.

The Company is currently evaluating the impacts of adoption of the new guidance to its consolidated financial statements.

In December 2019, the FASB issued ASU No.

2019-12 “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes" .

The new standard simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods.

The new standard also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group.

The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis.

The Company is currently evaluating the impacts of adoption of the new guidance to its consolidated financial statements.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – DIVESTITURES

2 unchanged sentences

2021 2020 2019

Income from discontinued operations before income taxes - GBL $ 4.2 $ 974.9 $ 21.8

Income from discontinued operations before income taxes - HHI $ 288.2 $ 227.8 $ 220.6

(Loss) income from discontinued operations before income taxes - GBL ( 7.2 ) 4.2 997.6

Loss from discontinued operations before income taxes - GAC ( 0.1 ) ( 0.1 ) ( 115.7 )

Income from discontinued operations before income taxes - HRG Insurance Operations — — 476.4

Interest on corporate debt allocated to discontinued operations 44.5 47.3 83.0

Income from discontinued operations before income taxes 236.4 184.6 1,019.5

Income tax (benefit) expense from discontinued operations ( 9.9 ) 176.7 21.3

Income tax expense from discontinued operations 62.1 33.7 221.5

Income from discontinued operations, net of tax 174.3 150.9 798.0

Income from discontinued operations, net of tax attributable to noncontrolling interest — — 33.2

(Loss) income from discontinued operations, net of tax attributable to noncontrolling interest ( 0.2 ) 0.4 0.5

Income from discontinued operations, net of tax attributable to controlling interest $ 174.5 $ 150.5 $ 797.5

During the year ended September 30, 2020, the Company recognized incremental pre-tax gain on sale for changes to tax and legal indemnifications and other agreed-upon funding under the acquisition agreement.

During the year ended September 30, 2020, the Company recognized an $ 10.5 million tax benefit to discontinued operations from the return to provision adjustments related to the divestitures of GBL, primarily from changes to US GILTI on the non-US portions of the sold business.

On January 2, 2019, the Company completed the sale of its GBL business pursuant to the GBL acquisition agreement with Energizer for cash proceeds of $ 1,956.2 million, resulting in a pre-tax gain on sale of $ 989.8 million, during the year ended September 30, 2019, including the settlement of customary purchase price adjustments for working capital and assumed indebtedness, recognition of tax and legal indemnifications under the acquisition agreement and an estimated contingent purchase price adjustment for the settlement of the planned divestiture of the Varta® consumer batteries business by Energizer.

Interest from corporate debt allocated to discontinued operations includes interest on Term Loans required to be paid down using proceeds received on disposal on sale of a business, and interest expense from corporate debt not directly attributable to or related to other operations based on the ratio of net assets of the disposal group held for sale to the consolidated net assets plus consolidated debt, excluding debt assumed in transaction, required to be repaid, or directly attributable to other operations of the Company.

Corporate debt, including Term Loans required to be paid down, are not classified as held for sale as they are not directly attributable to the identified disposal groups.

For the year ended September 30, 2019, SBH recognized interest expense associated with corporate debt directly held by the SBH parent company and not included as part of the consolidated financial statements of SB/RH.

As a result, there was only $ 75.2 million of interest on corporate debt from SB/RH allocated to discontinued operations, excluding allocated interest attributable to debt held directly by the SBH parent company, and further impacting the intraperiod income tax expense from discontinued operations to $ 223.4 million as part of the SB/RH Consolidated Statement of Income for the year ended September 30, 2019 .

The Company paid down the outstanding debt held by SBH parent company following the divestitures of GBL and GAC during the year ended September 30, 2019 and for the years ended September 30, 2021 and September 30, 2020, all corporate debt and applicable interest allocated to discontinued operations was attributable to debt held by SBI, a wholly owned subsidiary of both SBH and SB/RH.

On September 8, 2021, the Company entered into a definitive Asset and Stock Purchase Agreement (the "ASPA") with ASSA ABLOY AB ("ASSA") to sell its HHI segment for cash proceeds of $ 4.3 billion, subject to customary purchase price adjustments.

The Company's assets and liabilities associated with the HHI disposal group has been classified as held for sale and the respective operations have been classified as discontinued operations and reported separately for all periods presented.

The ASPA provides that ASSA will purchase the equity of certain subsidiaries of the Company, and acquire certain assets and assume certain liabilities of other subsidiaries used or held for the purpose of the HHI business.

The Company and ASSA have made customary representations and warranties and have agreed to customary covenants relating to the acquisition.

Among other things, prior to the consummation of the acquisition, the Company will be subject to certain business conduct restrictions with respect to its operation of the HHI business.

The Company and ASSA have agreed to indemnify each other for losses arising from certain breaches of the ASPA and for certain other matters.

In particular, the Company has agreed to indemnify ASSA for certain liabilities relating to the assets retained by the Company, and ASSA has agreed to indemnify the Company for certain liabilities assumed by ASSA, in each case as described in the ASPA.

The Company and ASSA have agreed to enter into related agreements ancillary to the acquisition that will become effective upon the consummation of the acquisition, including a customary transition services agreement and reverse transition services agreement.

The consummation of the acquisition is subject to certain customary conditions, including, among other things, (i) the absence of a material adverse effect on HHI, (ii) the expiration or termination of required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the receipt of certain other antitrust approvals in certain specified foreign jurisdictions (the conditions contained in (ii) and (iii) together, the “Antitrust Conditions”), (iv) the accuracy of the representations and warranties of the parties generally subject to a customary material adverse effect standard (as described in the ASPA) or other customary materiality qualifications), (v) the absence of governmental restrictions on the consummation of the acquisition in certain jurisdictions, and (vi) material compliance by the parties with their respective covenants and agreements under the ASPA.

The consummation of the transaction is not subject to any financing condition.

The transaction is expected to be consummated prior to September 30, 2022.

The ASPA also contains certain termination rights, including the right of either party to terminate the ASPA if the consummation of the acquisition has not occurred on or before December 8, 2022 (the “Termination Date”).

Further, if the acquisition has not been consummated by the Termination Date and all conditions precedent to ASSA's obligation to consummate the acquisition have otherwise been satisfied except for one or more of the Antitrust Conditions, then ASSA would be required to pay the Company a termination fee of $ 350 million.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – DIVESTITURES (continued)

The following table summarizes the assets and liabilities of the HHI disposal group classified as held for sale as of September 30, 2021 and 2020:

(in millions)

Trade receivables, net $ 130.2 $ 201.4

Other receivables 12.1 27.8

Inventories 332.2 239.0

Prepaid expenses and other current assets 39.1 32.6

Property, plant and equipment, net 143.5 140.9

Operating lease assets 55.5 45.8

Deferred charges and other 11.7 16.5

Goodwill 710.9 704.8

Intangible assets, net 374.8 385.0

Total assets of business held for sale $ 1,810.0 $ 1,793.8

Current portion of long-term debt $ 1.5 $ 1.4

Accounts payable 206.6 195.0

Accrued wages and salaries 41.7 33.3

Other current liabilities 75.9 73.9

Long-term debt, net of current portion 54.4 55.3

Long-term operating lease liabilities 48.6 39.2

Deferred income taxes 7.8 10.2

Other long-term liabilities 17.8 20.4

Total liabilities of business held for sale $ 454.3 $ 428.7

The following table summarizes the components of income from discontinued operations before income taxes associated with the HHI divestiture in the accompanying Consolidated Statements of Operations for the years ended September 30, 2021, 2020 and 2019:

(in millions)

2021 2020 2019

Net sales $ 1,615.8 $ 1,342.1 $ 1,355.7

Cost of goods sold 1,025.3 850.3 868.4

Gross profit 590.5 491.8 487.3

Operating expenses 293.1 257.1 262.8

Operating income 297.4 234.7 224.5

Interest expense 3.4 3.5 3.4

Other non-operating expense, net 5.8 3.4 0.5

Income from discontinued operations before income taxes $ 288.2 $ 227.8 $ 220.6

Beginning in September 2021, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with the HHI disposal group classified as held for sale.

Interest expense consists of interest from debt directly attributable to HHI operations that primarily consist of interest from finance leases.

No impairment loss was recognized on the asset held for sale as the purchase price of the business less estimated cost to sell is more than its carrying value.

The following table presents significant non-cash items and capital expenditures of discontinued operations from the HHI divestiture:

(in millions)

2021 2020 2019

Depreciation and amortization $ 31.1 $ 33.9 $ 33.5

Share and incentive based compensation $ 0.8 $ 6.0 $ 5.0

Purchases of property, plant and equipment $ 22.8 $ 16.9 $ 18.0

On January 2, 2019, the Company completed the sale of its GBL business pursuant to the GBL acquisition agreement with Energizer for cash proceeds of $ 1,956.2 million, resulting in a pre-tax gain on sale of $ 989.8 million, during the year ended September 30, 2019, including the settlement of customary purchase price adjustments for working capital and assumed indebtedness, recognition of tax and legal indemnifications under the acquisition agreement and an estimated contingent purchase price adjustment of $ 200 million for the settlement of the planned divestiture of the Varta® consumer batteries business by Energizer.

The results of operations and gain on sale for disposal of the GBL business were recognized as a component of discontinued operations.

The GBL acquisition agreement provided for a purchase price adjustment that was contingent upon the completion of the divestiture of the Varta® consumer battery, chargers, portable power and portable lighting business in the EMEA region by Energizer, including manufacturing and distribution facilities in Germany.

The purchase price adjustment included a potential downward adjustment equal to 75 % of the difference between the divestiture sale price and the target sale price of $ 600 million, not to exceed $ 200 million, or a potential upward adjustment equal to 25 % of the excess purchase price.

Effective January 2, 2020, Energizer closed its divestiture of the Varta® consumer batteries business to Varta Aktiengesellschaft (“Varta AG”) with an aggregate purchase price of € 180 million and, in accordance with the terms and conditions of the GBL acquisition agreement, the Company was obligated to contribute up to $ 200 million to Energizer in connection with the sale.

The Company settled the outstanding balance with Energizer for $ 197 million during the year ended September 30, 2020.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – DIVESTITURES (continued)

The Company settled the outstanding balance with Energizer for $ 197 million and recognized an incremental adjustment to gain on sale of $ 3.0 million as a component of income from discontinued operations, net of tax, during the year ended September 30, 2020.

The Company and Energizer agreed to indemnify each other for losses arising from certain breaches of the GBL acquisition agreement and for certain other matters.

The Company agreed to indemnify Energizer for certain liabilities relating to the assets retained by the Company, and Energizer agreed to indemnify the Company for certain liabilities assumed by Energizer, in each case as described in the acquisition agreement.

As of September 30, 2020, the Company has recognized $ 50.2 million related to indemnifications in accordance with the acquisition agreement, including $ 33.0 million within Indemnification Payable to Energizer on the Company’s Consolidated Statement of Financial Position primarily attributable to current income tax indemnifications and $ 17.2 million within Other Long-Term Liabilities on the Company’s Consolidated Statement of Financial Position primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits.

As of September 30, 2021 and 2020, the Company recognized $ 35.0 million and $ 50.2 million, respectively, related to indemnifications in accordance with the acquisition agreement, including $ 17.3 million and $ 33.0 million, respectively, within Other Current Liabilities on the Company’s Consolidated Statement of Financial Position primarily attributable to current income tax indemnifications and $ 17.7 million and $ 17.2 million, respectively, within Other Long-Term Liabilities on the Company’s Consolidated Statement of Financial Position primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits.

During the years ended September 30, 2021 and 2020, the Company recognized incremental pre-tax loss on sale for changes to tax and legal indemnifications and other agreed-upon funding under the GBL acquisition agreement with Energizer.

During the year ended September 30, 2020, the Company recognized a $ 10.5 million tax benefit to discontinued operations from the return to provision adjustments related to the divestitures of GBL, primarily from changes to US GILTI on the non-US portions of the sold business.

The Company and Energizer entered into related agreements that became effective upon the consummation of the acquisition including a customary transition services agreement (“TSA”) and reverse TSA.

1 unchanged sentence

See Note 17 – Related Party Transactions for additional discussion.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – DIVESTITURES (continued)

The following table summarizes the components of income from discontinued operations before income taxes associated with the GBL divestiture in the accompanying Consolidated Statements of Operations for the years ended September 30, 2019 and 2018 with the close of the GBL divestiture on January 2, 2019.

The following table summarizes the components of income from discontinued operations before income taxes associated with the GBL operations in the accompanying Consolidated Statements of Operations for the years ended September 30, 2019 with the close of the GBL divestiture on January 2, 2019.

(in millions)

$ 249.0 $ 870.5

Cost of goods sold

5 unchanged sentences

Income from discontinued operations before income taxes

$ 974.9 $ 21.8

Beginning in January 2018, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with GBL, therefore no depreciation and amortization was recognized during the year ended September 30, 2019, before the close of the transaction.

For the year ended September 30, 2018, depreciation and amortization expense of $ 8.3 million, was recognized.

Interest expense consists of interest from debt directly held by subsidiaries of the business held for sale, including interest from capital leases, and interest on Term Loans required to be paid down using proceeds received on disposal on sale of a business.

The Company paid down the Term Loans after the completion of the GBL divestiture.

See Note 12 – Debt for further discussion.

No impairment loss was recognized as the proceeds from the disposal of the business were more than the carrying value.

During the years ended September 30, 2020 and 2019, the Company recognized adjustments to gain on sale for changes to tax and legal indemnifications and other agreed-upon funding under the acquisition agreement for the period following the completion of the sale on January 2, 2019.

During the year ended September 30, 2019, the Company incurred transaction costs of $ 12.9 million associated with the divestiture, which were recognized as a component of income from discontinued operations.

During the year ended September 30, 2018, the Company incurred transaction costs of $ 60.7 million.

The Company ceased the recognition of depreciation and amortization of long-lived assets associated with the GBL disposal group when classified as held for sale prior to the year ended September 30, 2019 and therefore no depreciation and amortization was recognized from the GBL disposal group during the year ended September 30, 2019 prior to close of the transaction.

Interest expense consists of interest from debt directly attributable to GBL operations that primarily consist of interest from finance leases.

Additionally, the Company incurred transaction costs of $ 12.9 million associated with the divestiture, which were recognized as a component of income from discontinued operations for the year ended September 30, 2019.

Transaction costs were expensed as incurred and include fees for investment banking services, legal, accounting, due diligence, tax, valuation and various other services necessary to complete the transaction.

After the completion of the divestiture, the Company incurred incremental costs to facilitate separation of shared operations, development of transferred shared service operations, platforms and personnel transferred under the transaction, which have been recognized as Transaction Related Charges as part of continuing operations on the Company’s Consolidated Statement of Income.

See Note 2 – Significant Accounting Policies and Practices for further detail.

On January 28, 2019, the Company completed the sale of its GAC business pursuant to the GAC acquisition agreement with Energizer for $ 938.7 million in cash proceeds and $ 242.1 million in stock consideration of common stock of Energizer, resulting in the write-down of net assets held for sale of $ 111.0 million during the year ended September 30, 2019, including the estimated settlement of customary purchase price adjustments for working capital and assumed indebtedness, and recognition of tax and legal indemnifications in accordance with the GAC acquisition agreement.

The results of operations and write-down of net assets held for sale for the disposal of the GAC business were recognized as a component of discontinued operations.

On January 28, 2019, the Company completed the sale of its GAC business pursuant to the GAC acquisition agreement with Energizer for $ 938.7 million in cash proceeds and $ 242.1 million in stock consideration of common stock of Energizer, resulting in a loss on sale of business of $ 111.0 million during the year ended September 30, 2019, including the estimated settlement of customary purchase price adjustments for working capital and assumed indebtedness, and recognition of tax and legal indemnifications in accordance with the GAC acquisition agreement.

The results of operations and loss on the disposal of the GAC business were recognized as a component of discontinued operations.

The Company and Energizer agreed to indemnify each other for losses arising from certain breaches of the GAC acquisition agreement and for certain other matters.

As of September 30, 2020, the Company has recognized $ 1.4 million related to indemnifications in accordance with the acquisition agreement within Other Long-Term Liabilities on the Company’s Consolidated Statement of Financial Position primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits.

As of September 30, 2021 and 2020, the Company recognized $ 1.5 million and $ 1.4 million, respectively, related to indemnifications in accordance with the acquisition agreement within Other Long-Term Liabilities on the Company’s Consolidated Statement of Financial Position primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits.

The Company and Energizer entered into related agreements ancillary to the GAC acquisition that became effective upon the consummation of the acquisition, including a TSA and reverse TSA, a supply agreement with the Company’s H&G business, as well as a shareholder agreement.

The TSA and reverse TSA are recognized as a component of continuing operations for periods following the completion of the GAC sale.

The supply agreement with the Company’s H&G business is recognized as a component of net sales and continuing operations.

The supply agreement with the Company’s H&G business was recognized as a component of net sales and continuing operations.

The supply agreement had a contracted term of 24 months, and expired in January 2021.

Sales from the Company’s H&G segment to GAC discontinued operations prior to the divestiture have been recognized as a component of net sales and continuing operations for all comparable periods.

4 unchanged sentences

NOTE 3 – DIVESTITURES (continued)

The following table summarizes the components of income from discontinued operations before income taxes associated with the GAC divestiture in the accompanying Consolidated Statements of Operations for the years ended September 30, 2019, and 2018, with the close of the GAC divestiture on January 28, 2019:

The following table summarizes the components of income from discontinued operations before income taxes associated with the GAC business in the accompanying Consolidated Statements of Operations for the year ended 2019, with the close of the GAC divestiture on January 28, 2019:

(in millions)

$ 87.7 $ 465.6

Cost of goods sold

Operating expenses

Operating (loss) income

Operating loss ( 0.5 )

Interest expense

Other non-operating expense, net

Write-down of assets of business held for sale to fair value less cost to sell

Reclassification of accumulated other comprehensive income

Income from discontinued operations before income taxes $ ( 115.7 ) $ ( 31.9 )

Beginning in November 2018, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with GAC, resulting in $ 1.4 million of depreciation and amortization recognized during the year ended September 30, 2019.

During the year ended September 30, 2018, the Company recognized depreciation and amortization of $ 16.3 million.

Interest expense consists of interest from debt directly held by subsidiaries of the business held for sale, including interest from capital leases.

During the year ended September 30, 2019, the Company recognized a $ 111.0 million write-down on net assets held for sale associated with the GAC divestiture attributable to the expected fair value to be realized from the sale, net of transaction costs.

The impairment was primarily driven by the change in value of stock consideration to be received as a component of the purchase price from Energizer.

During the year ended September 30, 2019, the Company incurred transaction costs of $ 8.8 million associated with the divestiture which have been recognized as a component of income from discontinued operations on the Consolidated Statements of Income.

No transactions costs associated with divestiture were incurred during the year ended September 30, 2018.

Transaction costs are expensed as incurred and include fees for investment banking services, legal, accounting, due diligence, tax, valuation and various other services necessary to complete the transactions.

After the completion of the divestiture, the Company incurred incremental costs to facilitate separation of shared operations, development of transferred shared service operations, platforms and personnel transferred under the transaction which have been recognized as Transaction Related Charges as part of continuing operations on the Company’s Consolidated Statement of Income.

See Note 2 – Significant Accounting Policies and Practices for further detail.

HRG - Insurance Operations

On November 30, 2017, Fidelity & Guaranty Life (“FGL”), a former majority owned subsidiary of HRG, completed its merger (the “FGL Merger”) with CF Corporation and its related entities (collectively, the “CF Entities”) in accordance with its previously disclosed Agreement and Plan of Merger (the “FGL Merger Agreement”), pursuant to which, except for certain shares specified in the FGL Merger Agreement, each issued and outstanding share of common stock of FGL was automatically canceled and converted into the right to receive $ 31.10 in cash, without interest.

The total consideration received by HRG Group Inc.

as a result of the completion of the FGL Merger was $ 1,488.3 million.

In addition, pursuant to a share purchase agreement, as of November 30, 2017, Front Street Re (Delaware) Ltd.

sold to the CF Entities all of the issued and outstanding shares of Front Street for $ 65 million, which was subject to reduction for customary transaction expenses.

In addition, $ 6.5 million of the purchase price was deposited in escrow for a period of 15 months to support any indemnification claims that might be made (if any) by the CF entities.

The operations of FGL were classified as held for sale in the accompanying Consolidated Statement of Financial Position at September 30, 2017 and as discontinued operations through November 30, 2017 in the accompanying Consolidated Statements of Operations and Consolidated Statements of Cash Flows.

Additionally, HRG, FS Holdco II Ltd.

(“FS Holdco”) and the CF Entities entered into an agreement (the “338 Agreement”) on May 24, 2017 pursuant to which the CF Entities agreed that FS Holdco may, at its option, cause the relevant CF Entity and FS Holdco to make a joint election under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended, with respect to the FGL Merger and the deemed share purchases of FGL’s subsidiaries (the “338 Tax Election”).

Pursuant to the 338 Agreement, if FS Holdco elects to make the 338 Tax Election, FS Holdco and/or CF Corporation will be required to make a payment for the election to the other.

On March 8, 2018, FS Holdco exercised the 338 Tax Election and the CF Entities were required to pay FS Holdco $ 26.6 million during the three month period ended June 30, 2018.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – DIVESTITURES (continued)

The following table summarizes the components of Income from Discontinued Operations – HRG Insurance Operations, in the accompanying Consolidated Statements of Income for the year ending September 30, 2018:

(in millions) 2018

Insurance premiums $ 6.8

Net investment income 181.9

Net investment gains 154.8

Total revenues 378.6

Operating costs and expenses

Benefits and other changes in policy reserves 241.3

Selling, acquisition, operating and general expenses 52.8

Amortization of intangibles 35.8

Total operating costs and expenses 329.9

Operating income 48.7

Interest expense and other 4.0

Write-down of assets of business held for sale to fair value less cost to sell ( 14.2 )

Loss on sale of business

Reclassification of accumulated other comprehensive income

Income from discontinued operations before income taxes $ 476.4

Upon the completion of the FGL Merger, HRG deconsolidated its ownership interest in FGL, which resulted in the reclassification of $ 445.9 million of accumulated other comprehensive income attributable from unrealized gains on FGL investment portfolio, net of offsets to income from discontinued operations during the year ended September 30, 2018.

Additionally, subsequent to the close of the FGL Merger, the Company recognized a $ 5.9 million tax benefit allocated to HRG insurance operations discontinued operations during the year ended September 30, 2018, associated with the reversal of valuation allowance realized with the completion of the Spectrum Merger.

Loss from discontinued operations before income taxes $ ( 115.7 )

Beginning in November 2018, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with the GAC disposal group classified as held for sale.

During the year ended September 30, 2019, there is depreciation and amortization expense included in income from discontinued operations of $ 1.4 million.

Interest expense consists of interest from debt directly attributable to GAC operations that primarily consists of interest from finance leases.

During the year ended September 30, 2019, the Company recognized a $ 111.0 million loss on sale associated with the GAC divestiture attributable to the expected fair value to be realized from the sale, net of transaction costs.

Additionally, the Company incurred transaction costs of $ 8.8 million associated with the divestiture, which were recognized as a component of income from discontinued operations for the year ended September 30, 2019.

Coevorden Operations

5 unchanged sentences

The Company will continue to operate its commercial DCF business following the divestiture of the Coevorden Operations and entered into a manufacturing agreement with UPP to supply the continuing DCF business, subject to an incremental tolling charge.

Additionally, the Company will lease and operate the distribution center on behalf of UPP for up to 18 months following the divestiture under a lease agreement.

Additionally, the Company leases and operates the distribution center on behalf of UPP for up to 18 months following the divestiture under a lease agreement.

NOTE 4 – ACQUISITIONS

Rejuvenate Acquisition

On May 28, 2021, the Company acquired all ownership interests in For Life Products, LLC ("FLP") for a purchase price of $ 301.5 million.

FLP is a leading manufacturer of household cleaning, maintenance, and restoration products sold under the Rejuvenate® brand.

The net assets and operating results of FLP, since the acquisition date of May 28, 2021, are included in the Company’s Consolidated Statements of Income and reported within the H&G reporting segment for the year ended September 30, 2021.

The Company has recorded an allocation of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of the May 28, 2021 acquisition date.

The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of $ 147.0 million was recorded as goodwill, which is deductible for tax purposes.

Goodwill includes value associated with profits earned from market expansion capabilities, synergies from integration and streamlining operational activities, the going concern of the business and the value of the assembled workforce.

SPECTRUM BRANDS HOLDINGS INC.

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – ACQUISITIONS

NOTE 4 – ACQUISITIONS (continued)

The calculation of purchase price and purchase price allocation is as follows:

(in millions) Amount

Cash consideration $ 301.5

(in millions) Purchase Price Allocation

Cash and cash equivalents $ 1.4

Trade receivables, net 10.2

Inventories 15.4

Prepaid expenses and other current assets 0.3

Property, plant and equipment, net 0.4

Goodwill 147.0

Intangible assets, net 128.7

Accounts payable ( 1.7 )

Accrued wages and salaries ( 0.1 )

Other current liabilities ( 0.1 )

Net assets acquired $ 301.5

The values allocated to intangible assets and the weighted average useful lives are as follows:

(in millions) Carrying Amount Weighted Average Useful Life (Years)

Tradenames $ 119.0 Indefinite

Customer relationships 8.4 14 years

Technology 1.3 11 years

Total intangibles acquired $ 128.7

The Company performed a valuation of the acquired inventories, tradenames, technology, and customer relationships.

The fair value measurements are based on significant inputs not observable in the market, and therefore, represent Level 3 measurements.

The following is a summary of significant inputs to the valuation:

Inventory – Acquired inventory consists of branded finished goods that were valued based on the comparative sales method, which estimates the expected sales price of the finished goods inventory, reduced for all costs expected to be incurred in its completion or disposition and a profit on those costs.

Tradename – The Company valued the tradename, Rejuvenate®, using an income approach, the relief-from-royalty method.

Under this method, the asset value was determined by estimating the hypothetical royalties that would have to be paid if the tradename was not owned.

A royalty rate of 12 % for valuation of Rejuvenate® was selected based on consideration of several factors, including prior transactions, related trademarks and tradenames, other similar trademark licensing, and transaction agreements and the relative profitability and perceived contribution of the tradename.

The discount rate applied to the projected cash flow was 10.5 % based on the a weighted-average cost of capital for the overall business.

The resulting discounted cash flows were then tax-effected at the applicable statutory rate.

Customer relationships – The Company valued customer relationships using the multi-period excess earnings method under a market participant distributor method of the income approach.

In determining the fair value of the customer relationships, the multi-period excess earnings approach values the intangible asset at the present value of the incremental after-tax cash flows attributable only to the customer relationship after deducting contributory asset charges.

Only expected sales from current customers were used, which are estimated using average annual expected growth rate of 4 %.

The Company assumed a customer attrition rate of 5 %, which is supported by historical attrition rates.

The discount rate applied to the projected cash flow was 10.5 % and income taxes were estimated at the applicable statutory rate.

Technology – The Company valued technology using an income approach, the relief-from-royalty method.

Under this method, the asset value was determined by estimating the hypothetical royalties that would have to be paid if the technology was not owned.

A royalty rate of 3 % was selected based on consideration of several factors, including prior transactions, related licensing agreements and the importance of the technology and profit levels, among other considerations.

The discount rate applied to the projected cash flow was 10.5 % and income taxes were estimated at the applicable statutory rate.

Pro forma results have not been presented as the Rejuvenate acquisition is not considered individually significant to the consolidated results of the Company.

Armitage Acquisition

On October 26, 2020, the Company acquired all of the stock of Armitage Pet Care Ltd ("Armitage") for approximately $ 187.7 million.

Armitage is a premium pet treats and toys business headquartered in Nottingham, United Kingdom, including a portfolio of brands that include Armitage's dog treats brand, Good Boy®, cat treats brand, Meowee!® and Wildbird®, bird feed products, among others, that are predominantly sold within the United Kingdom.

The net assets and operating results of Armitage, since the acquisition date of October 26, 2020, are included in the Company’s Consolidated Statements of Income and reported within the GPC reporting segment for the year ended September 30, 2021.

The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of $ 90.7 million was recorded as goodwill, which is not deductible for foreign tax purposes.

Goodwill includes value associated with profits earned from market and expansion capabilities, synergies from integration and streamlining operational activities, the going concern of the business and the value of the assembled workforce.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – ACQUISITIONS (continued)

The calculation of purchase price and purchase price allocation is as follows:

(in millions) Amount

Cash paid $ 187.7

Debt assumed 51.0

Cash consideration $ 136.7

(in millions) Purchase Price Allocation

Cash and cash equivalents $ 6.9

Trade receivables, net 16.7

Other receivables 1.9

Inventories 16.3

Prepaid expenses and other current assets 0.2

Property, plant and equipment, net 3.0

Operating lease assets 0.1

Deferred charges and other 0.9

Goodwill 90.7

Intangible assets, net 88.6

Accounts payable ( 9.2 )

Accrued wages and salaries ( 1.5 )

Other current liabilities ( 7.0 )

Long-term debt, net of current portion ( 51.0 )

Long-term operating lease liabilities ( 0.1 )

Deferred income taxes ( 18.0 )

Other long-term liabilities ( 1.8 )

Net assets acquired $ 136.7

The values allocated to intangible assets and the weighted average useful lives are as follows:

(in millions) Carrying Amount Weighted Average Useful Life (Years)

Tradenames $ 74.3 Indefinite

Customer relationships 14.3 12 years

Total intangibles acquired $ 88.6

The Company performed a valuation of the acquired inventories, tradenames, and customer relationships.

The fair value measurements are based on significant inputs not observable in the market, and therefore, represent Level 3 measurements.

The following is a summary of significant inputs to the valuation:

Inventory - Acquired inventory consists of branded finished goods that were valued based on the comparative sales method, which estimates the expected sales price of the finished goods inventory, reduced for all costs expected to be incurred in its completion or disposition and a profit on those costs.

Tradenames - The Company valued the tradenames, the Good Boy® brand and the Wildbird® and Other brand portfolio, using an income approach, the relief-from-royalty method.

Under this method, the asset value was determined by estimating the hypothetical royalties that would have to be paid if the tradenames were not owned.

Royalty rates of 8 % for valuation of Good Boy® and 3 % for Wildbird® and Other were selected based on consideration of several factors, including prior transactions, related trademarks and tradenames, other similar trademark licensing, and transaction agreements and the relative profitability and perceived contribution of the tradenames.

The discount rate applied to the projected cash flow was 11 % based on the a weighted-average cost of capital for the overall business.

The resulting discounted cash flows were then tax-effected at the applicable statutory rate.

Customer relationships - The Company valued customer relationships using an income and cost approach, the avoided cost and lost profits method.

The underlying premise of the method is that the economic value of the asset can be estimated based on consideration of the total costs that would be avoided by having this asset in place.

These costs primarily consider the costs that would be incurred to re-create the customer relationships in terms of employee salaries and the revenues and associated profits forgone due to the absence of the relationships for a period of time.

Pro forma results have not been presented as the Armitage acquisition is not considered individually significant to the consolidated results of the Company.

Omega Sea Acquisition

On March 10, 2020, the Company entered into an asset purchase agreement with Omega Sea, LLC (“Omega”), a manufacturer and marketer of premium fish foods and consumable goods for the home and commercial aquarium markets, primarily consisting of the Omega brand, for a purchase price of approximately $ 16.9 million.

The results of Omega’s operations since March 10, 2020 are included in the Company’s Consolidated Statements of Income and reported within the GPC reporting segment for the year ended September 30, 2020.

The Company has recorded an allocation of the purchase price to the Company’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of March 10, 2020, the acquisition date.

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Pro forma results have not been presented as the Omega acquisition is not considered individually significant to the consolidated results of the Company.

Spectrum Merger

Effective July 13, 2018, the Company completed the planned Spectrum Merger.

Prior to the Spectrum Merger, the Company was a holding company, doing business as HRG and conducting its operations principally through its majority owned subsidiaries.

In accordance with the Agreement and Plan of Merger (the “Merger Agreement”), HRG, through, HRG SPV Sub I, Inc., a Delaware corporation and direct wholly owned subsidiary of HRG (“Merger Sub”), merged with and into Spectrum Legacy, with Spectrum Legacy continuing as a wholly owned subsidiary of HRG.

The certificate of incorporation of HRG was amended and restated, pursuant to which, among other things, the corporate name of HRG was changed to “Spectrum Brands Holdings, Inc.”, the Board of Directors of Spectrum Legacy were designated as the Board of Directors of the Company with an individual designated by Jefferies Financial Group (“Jefferies”, formerly Leucadia National Corporation) and the officers of Spectrum Legacy became officers of SBH.

Further, HRG subsequently began operating under the name of Spectrum Brands Holdings, Inc.

and the NYSE ticker symbol of HRG Common Stock changed to “SPB”.

Immediately prior to the close of the Spectrum Merger, each issued and outstanding share of HRG common stock was, by means of a reverse stock split, combined into a fraction of a share of HRG Common Stock equal to (i) the number of shares of common stock, par value $ 0.01 per share, of Spectrum Legacy common stock held by HRG and its subsidiaries, adjusted for HRG’s net indebtedness as of closing, certain transaction expenses of HRG that are unpaid as of closing and a $ 200.0 million upward adjustment, divided by (ii) as of immediately prior to the reverse stock split, the number of outstanding shares of HRG common stock on a fully-diluted basis.

Each share of Spectrum Legacy common stock issued and outstanding (other than shares held in treasury of Spectrum Legacy or held by HRG) were converted into the right to receive one share of newly issued HRG common stock and exchanged for HRG common stock.

See Note 22 – Earnings Per Share - SBH for further detail on the conversion rate and reverse stock split.

Each restricted stock award, restricted stock unit and performance stock unit granted under an equity plan of Spectrum Legacy, whether vested or unvested, were assumed by SBH and automatically converted into a corresponding equity-based award in SBH with the right to hold or acquire shares of common stock equal to the number of shares of Spectrum Legacy common stock previously underlying such award.

Each new award is subject to the same terms and conditions as the corresponding Spectrum Legacy award.

SBH assumed all rights and obligations in respect of each equity-based plan of Spectrum Legacy.

The modification of the Spectrum Legacy awards to account for the exchange did not result in incremental expense and the recognized shared based compensation expense associated with the awards are based upon the fair value at the original grant date.

See Note 19 – Share Based Compensation for further discussion over share based awards.

Prior to the close, each stock option, warrant and restricted stock award granted under an equity-based plan of HRG outstanding and unvested immediately prior to the closing became fully vested and each stock option and warrant became exercisable.

Each exercisable award that is unexercised shall be adjusted (including to give effect to the reverse stock split) and shall remain outstanding, subject to the same terms and conditions as applied to the corresponding award.

Immediately prior to the reverse stock split, each HRG restricted stock award became fully vested and treated as a share of HRG common stock for purposes of the reverse stock split and the Merger.

As a result, there are no unvested HRG equity based awards outstanding and all previously unrecognized stock compensation was recognized effective the date of close.

See Note 19 – Share Based Compensation for further discussion over HRG share based awards.

The Spectrum Merger was accounted for as an acquisition of a non-controlling interest.

Prior to completion of the Spectrum Merger, the Company recognized non-controlling interest and income attributable to non-controlling interest in the Consolidated Financial Statements of SBH for the minority ownership of Spectrum Legacy.

Effective July 13, 2018, Spectrum Legacy is a wholly owned subsidiary of SBH and all recognized non-controlled interest associated with Spectrum Legacy is part of SBH’s shareholder’s equity and income after completion of the Spectrum Merger was fully recognized as income attributable to controlling interest of SBH.

As previously discussed, the presentation of the Company’s consolidated financial statements and certain notes to the consolidated financial statements have been updated to reflect the presentation of Spectrum Legacy’s historical financial statements.

During the years ended September 30, 2018, the Company incurred costs of $ 45.9 million associated with the Spectrum Merger and recognized as General and Administrative Expenses on the Consolidated Statements of Income of SBH.

Armitage Acquisition

On October 26, 2020, the Company completed the acquisition of Armitage Pet Care Ltd ("Armitage") for approximately $ 187 million.

Armitage is a premium pet treats and toys business in Nottingham, United Kingdom including a portfolio of brands that include Armitage's dog treats brand, Good Boy®, and cat treats brand, Meowee!®, among others, that are predominantly sold within the United Kingdom.

The net assets and operating results of Armitage will be included in the financial statements subsequent to the balance sheet date of September 30, 2020 and included within the GPC reporting segment for all subsequent periods.

Pro forma results have not been presented as the Armitage acquisition is not considered individually significant to the consolidated results of the Company.

SPECTRUM BRANDS HOLDINGS, INC.

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Since the announcement of the project and completion of the Company’s divestitures in GBL and GAC during the year ended September 30, 2019, the project focus includes the transitioning of the Company’s continuing operations in a post-divestiture environment and separation with Energizer TSAs and reverse TSAs.

Refer to Note 3 – Divestitures and Note 17 – Related Party Transactions for further discussion of continuing involvement with Energizer.

Refer to Note 3 – Divestitures and Note 17 – Related Party Transactions for further discussion.

The initiative includes review of global processes, opportunity spending and organization design and structures;

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The project costs are anticipated to be incurred through the fiscal year ending September 30, 2022.

HHI Distribution Center Consolidation – During the year ended September 30, 2017, the Company implemented an initiative within the HHI segment to consolidate certain operations and reduce operating costs.

The initiative included headcount reductions and the exit of certain facilities, including such incremental costs to consolidate or close facilities, relocate employees, cost to retrain employees to use newly deployed assets or systems, lease termination costs, and redundant or incremental transitional operating costs and customer fines and penalties incurred during transition, among others.

Total cumulative costs associated with this initiative was $ 81.7 million.

The project was completed as of December 30, 2018.

GPC Rightsizing Initiative – During the year ending September 30, 2017, the Company implemented a rightsizing initiative within the GPC segment to streamline certain operations and reduce operating costs.

The initiative includes headcount reductions and the rightsizing of certain facilities.

Total costs associated with this initiative of $ 20.3 million have been incurred and completed as of September 30, 2018.

GPC Edwardsville 3PL Transition - During the year ended September 30, 2021, the GPC segment entered into an initiative to transition its third party logistics (3PL) service provide at its Edwardsville, IL distribution center to optimize its operations and improve fill rates to meet customer requirements and handle projected growth.

Costs incurred to facilitate the transition service providers include one-time implementation and start-up costs with the new service provider, including the integration of the provider systems and technology, incremental compensation and incentive-based compensation to maintain performance during the transition period, duplicative and redundant costs between providers, and incremental costs for various disruptions in the operations during the transition period, including supplemental transportation and storage costs as the new 3PL operations are fully integrated and transitioned.

Total cumulative costs incurred associated with the project were $ 11.5 million as of September 30, 2021, with approximately $ 12.2 million forecasted in the foreseeable future.

The project costs are anticipated to be incurred through the first half of the fiscal year ending September 30, 2022.

SAP S4 ERP Transformation - During the year ended September 30, 2021, the Company entered into an initiative to transform its enterprise-wide operating system to SAP S4.

The initiative is a multi-year project that will include various project costs, including software configuration and implementation costs that would be recognized as a capital expenditure or deferred cost in accordance with applicable accounting policies.

Certain restructuring related costs associated with the initiative include project development and management costs, and professional services with business partners engaged towards planning, design and business process review that would not qualify as software implementation costs.

The Company is currently in the planning and design stage of the project.

Total cumulative costs incurred associated with the project were $ 4.3 million as of September 30, 2021 with approximately $ 13.0 million forecasted in the foreseeable future.

The project is a multi-year implementation with various phases that will be realized throughout the project timeline, depending upon business unit and/or jurisdiction, and is anticipated to be incurred through September 30, 2024.

Other Restructuring Activities – The Company may enter into small, less significant initiatives and restructuring related activities to reduce costs and improve margins throughout the organization.

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Global productivity improvement program $ 21.2 $ 71.1 $ 59.9

HHI distribution center consolidation

GPC rightsizing initiative

GPC Edwardsville 3PL transition 11.5 — —

SAP S4 ERP transformation 4.3 — —

Other restructuring activities 3.3 0.5 1.1

Total restructuring and related charges $ 40.3 $ 71.6 $ 61.0

$ 72.6 $ 65.7 $ 75.6

Cost of goods sold $ 1.9 $ 13.8 $ 2.5

$ 14.3 $ 2.8 $ 3.6

Operating expense 38.4 57.8 58.5

58.3 62.9 72.0

The following summarizes restructuring and related charges for the years ended September 30, 2021, 2020, and 2019, and cumulative costs of restructuring initiatives as of September 30, 2021, by cost type.

Termination costs consist of involuntary employee termination benefits and severance pursuant to a one-time benefit arrangement recognized as part of a restructuring initiative.

Other costs consist of non-termination type costs related to restructuring initiatives such as incremental costs to consolidate or close facilities, relocate employees, cost to retrain employees to use newly deployed assets or systems, lease termination costs, and redundant or incremental transitional operating costs and customer fines and penalties during transition, among others:

Other costs consist of non-termination type costs related to restructuring initiatives such as incremental costs to consolidate or close facilities, relocate employees, cost to retrain employees to use newly deployed assets or systems, transition of third-party providers, pervasive system implementations and redundant or incremental transitional operating costs, among others:

(in millions)

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Future costs to be incurred

5.8 25.2 31.0

SPECTRUM BRANDS HOLDINGS, INC.

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Accrual balance at September 30, 2019 $ 6.6 $ 27.0 $ 33.6

Adoption of ASU 842 — ( 4.2 ) ( 4.2 )

Provisions 4.0 41.6 45.6

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Accrual balance at September 30, 2020 $ 3.9 $ 6.3 $ 10.2

Adoption of ASU 842 (Note 2)

— ( 4.2 ) ( 4.2 )

Provisions 5.7 4.6 10.3

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Accrual balance at September 30, 2021 $ 4.6 $ 5.6 $ 10.2

Effective October 1, 2019, the Company adopted ASU 842 resulting in the recognition of ROU operating lease liabilities for outstanding payments on operating leases.

Amounts previously recognized as a restructuring accrual associated with lease termination costs were recognized as a reduction of the ROU operating lease asset realized upon adoption of ASU 842 for the respective lease and the outstanding lease payments are captured as ROU operating lease liabilities.

The following summarizes restructuring and related charges by segment for the years ended September 30, 2021, 2020, and 2019, cumulative costs of restructuring initiatives as of September 30, 2021 and future expected costs to be incurred by segment:

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The Company generates all of its revenue from contracts with customers.

The following table disaggregates our revenue for the years ended September 30, 2020, by the Company’s key revenue streams, segments and geographic region (based upon destination):

The following table disaggregates our revenue for the year ended September 30, 2021, by the Company’s key revenue streams, segments and geographic region (based upon destination):

September 30, 2021

(in millions) HHI HPC GPC H&G Total

(in millions) HPC GPC H&G Total

Product Sales

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September 30, 2020

(in millions) HHI HPC GPC H&G Total

(in millions) HPC GPC H&G Total

Product Sales

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Total Revenue $ 1,107.6 $ 962.6 $ 551.9 $ 2,622.1

The Company has a broad range of customers including many large retail outlet chains, three of which exceed 10% of consolidated Net Sales.

These three customers represented 34.8 %, 34.4 % and 31.3 % of the Company’s Net Sales during years ended September 30, 2020, 2019 and 2018, respectively.

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 6 – REVENUE RECOGNITION (continued)

On October 1, 2018, the Company adopted Topic 606 applying the modified retrospective method to all contracts that were not completed as of October 1, 2018.

Results for reporting periods beginning after October 1, 2018 are presented under Topic 606 , while prior period amounts were not adjusted and continue to be reported under the accounting standards in effect for the prior period.

The adoption of Topic 606 did not have a material impact to its period revenue or net income on an ongoing basis.

Refer to Note 2 – Significant Accounting Policies and Practices for further discussion of the revenue recognition of Topic 606 .

The following table disaggregates our revenue for the year ended September 30, 2019, by the Company’s key revenue streams, segments and geographic region (based upon destination):

September 30, 2019

(in millions) HPC GPC H&G Total

Product Sales

NA $ 428.6 $ 586.1 $ 502.0 $ 1,516.7

EMEA 429.3 222.6 — 651.9

LATAM 139.5 13.4 4.4 157.3

APAC 61.0 36.6 — 97.6

Licensing 9.7 6.8 1.7 18.2

Other — 4.7 — 4.7

Total Revenue $ 1,068.1 $ 870.2 $ 508.1 $ 2,446.4

The Company has a broad range of customers including many large mass retail customers.

During the year ended September 30, 2021, there were two large retail customers each exceeding 10% of consolidated Net Sales and representing 31.4 % of consolidated Net Sales.

During the year ended September 30, 2020, there were two large retail customers each exceeding 10% of consolidated Net Sales and representing 31.8 % of consolidated Net Sales.

During the year ended September 30, 2019, there was one large retail customer exceeding 10% of consolidated Net Sales and representing 20.9 % of consolidated Net Sales.

A significant portion of our product sales from our HPC segment, primarily in the NA and LATAM regions, are subject to the continued use and access of the Black and Decker® brand (B&D) through a license agreement with Stanley Black and Decker, and its continued renewal.

Net sales from B&D product sales consist of $ 400.2 million, $ 337.7 million, and $ 324.6 million for the years ended September 30, 2021, 2020 and 2019, respectively.

All other significant brands and tradenames used in the Company’s commercial operations are directly owned and not subject to further restrictions.

In the normal course of business, the Company may allow customers to return product or take credit for product returns per the provisions in a sale agreement.

The following is a rollforward of the allowance for product returns for the years ended September 30, 2021, 2020 and 2019:

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NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values of the Company’s financial assets and liabilities are defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.

The fair value of the Company’s financial assets and liabilities are defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.

Fair value measurements are classified using a fair value hierarchy that is based upon the observability of inputs used in measuring fair value.

Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed assumptions about hypothetical transactions in the absence of market data.

The Company utilizes valuation techniques that attempt to maximize the use of observable inputs and minimize the use of unobservable inputs.

Fair value measurements are classified under the following hierarchy:

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• Level 3 - Significant inputs to the valuation model are unobservable.

The Company utilizes valuation techniques that attempt to maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company’s derivatives are valued on a recurring basis using internal models, which are based on market observable inputs including interest rate curves and both forward and spot prices for currencies and commodities, which are generally based on quoted or observed market prices (Level 2).

The fair value of certain derivative financial instruments is estimated using pricing models based on contracts with similar terms and risks.

Modeling techniques assume market correlation and volatility, such as using prices of one delivery point to calculate the price of the contract’s different delivery point.

The nominal value of interest rate transactions is discounted using applicable forward interest rate curves.

In addition, by applying a credit reserve which is calculated based on credit default swaps or published default probabilities for the actual and potential asset value, the fair value of the Company’s derivative financial instrument assets reflects the risk that the counterparties to these contracts may default on the obligations.

Likewise, by assessing the requirements of a reserve for non-performance which is calculated based on the probability of default by the Company, the Company adjusts its derivative contract liabilities to reflect the price at which a potential market participant would be willing to assume the Company’s liabilities.

The Company has not changed the valuation techniques used in measuring the fair value of any financial assets and liabilities during the year.

The carrying values and estimated fair values for financial instruments as of September 30, 2021 and 2020 are as follows:

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— 2.5 — 2.5 2.5 — 13.5 — 13.5 13.5

— 2,595.4 — 2,595.4 2,476.3 — 2,468.8 — 2,468.8 2,351.3

— 2,595.4 — 2,595.4 2,476.3 — 2,391.8 — 2,391.8 2,276.0

Investments consist of our investment in Energizer common stock and is valued at quoted market prices for identical instruments in an active market.

As part of consideration received for the GAC divestiture, the Company received 5.3 million shares of Energizer common stock, valued at $ 242.1 million on January 28, 2019, the effective close date of the GAC divestiture.

Unrealized income (loss) from changes in fair value, realized income (loss) from sale of equity investments, plus dividend income from equity investments, are recognized as components of Other Non-Operating Expense, Net on the Consolidated Statements of Income.

During the year ended September 30, 2020, the Company sold 3.6 million shares of Energizer common stock for proceeds of $ 147.1 million.

As of September 30, 2020, the company holds 1.7 million shares of Energizer common stock.

The following is a summary of income recognized from equity investments for the years ended September 30, 2020 and 2019:

Debt — 2,628.2 — 2,628.2 2,506.3 — 2,538.7 — 2,538.7 2,419.5

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Investments consist of our investment in Energizer common stock and is valued at quoted market prices for identical instruments in an active market.

Unrealized income or loss from changes in fair value, realized income or loss from sale of equity investments, plus dividend income from equity investments, are recognized as components of Other Non-Operating (Income) Expense, Net on the Consolidated Statements of Income.

During the year ended September 30, 2021, the Company sold 1.7 million shares of Energizer common stock for cash proceeds of $ 73.1 million.

During the year ended September 30, 2020, the Company sold 3.6 million shares of Energizer common stock for cash proceeds of $ 147.1 million.

The Company sold its remaining investment in Energizer common stock in January 2021 and as of September 30, 2021, the company holds no shares of Energizer common stock.

The following is a summary of income recognized from equity investments included in Other Non-Operating (Income) Expense, Net on the Company's Consolidated Statements of Income for the years ended September 30, 2021, 2020, and 2019:

(in millions)

2021 2020 2019

Unrealized loss on equity investments held $ — $ ( 7.5 ) $ ( 12.1 )

Realized loss on equity investments sold ( 9.3 ) —

Loss on equity investments ( 16.8 ) ( 12.1 )

Realized gain (loss) on equity investments sold 6.9 ( 9.3 ) —

Gain (loss) on equity investments 6.9 ( 16.8 ) ( 12.1 )

Dividend income from equity investments 0.2 5.0 4.8

Loss from equity investments $ ( 11.8 ) $ ( 7.3 )

The carrying values of goodwill, intangible assets and other long-lived assets are tested annually or more frequently if an event occurs that indicates an impairment loss may have been incurred, using fair value measurements with unobservable inputs (Level 3).

Gain (loss) from equity investments $ 7.1 $ ( 11.8 ) $ ( 7.3 )

The Company’s derivative instruments are valued on a recurring basis using internal models, which are based on market observable inputs including interest rate curves and both forward and spot prices for currencies and commodities, which are generally based on quoted or observed market prices (Level 2).

The fair value of certain derivative financial instruments is estimated using pricing models based on contracts with similar terms and risks.

Modeling techniques assume market correlation and volatility, such as using prices of one delivery point to calculate the price of the contract’s different delivery point.

The Company has not changed the valuation techniques used in measuring the fair value of any financial assets and liabilities during the year.

See Note 14 – Derivatives for additional detail.

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See Note 12 – Debt for additional detail.

See Note 4 – Acquisitions for additional detail.

The carrying values of cash and cash equivalents, receivables, accounts payable and short term debt approximate fair value based on the short-term nature of these assets and liabilities.

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The Company has a broad range of customers including many large retail outlet chains, some of which exceed 10% of consolidated Net Trade Receivables.

There were two customers that exceed 10% of the Company'consolidated Net Trade Receivables representing 28 % and three customers representing 30 % of the Company’s Trade Receivables as of September 30, 2020 and 2019, respectively.

There was one customer that exceeds 10% of the Company's consolidated Net Trade Receivables representing 14.7 % and two customers representing 33.2 % of the Company’s Trade Receivables as of September 30, 2021 and 2020, respectively.

We have entered into various factoring agreements and early pay programs with our customers to sell our trade receivables under non-recourse agreements in exchange for cash proceeds.

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The aggregate gross amount factored under these facilities was $ 1,328.7 million, $ 1,206.5 million and $ 1,222.3 million for the years ended September 30, 2021, 2020 and 2019, respectively.

The cost of factoring such trade receivables was $ 5.7 million for the year ended September 30, 2020, and $ 9.4 million for the years ended September 30, 2019 and 2018 and reflected in the Consolidated Statements of Income as General and Administrative Expense.

The cost of factoring such trade receivables was $ 3.5 million, $ 4.8 million, and $ 7.4 million for the years ended September 30, 2021, 2020, and 2019, respectively, and are reflected in the Consolidated Statements of Income as General and Administrative Expense.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - INVENTORY

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Machinery, equipment and other

Capital leases

Finance leases 146.1 145.4

Construction in progress

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Depreciation expense from property, plant and equipment for the years ended September 30, 2021, 2020 and 2019 was $ 51.9 million, $ 59.3 million, and $ 76.4 million, respectively.

During the first quarter of the year ended September 30, 2019 the Company recognized incremental depreciation of $ 13.5 million attributable to depreciation on property plant and equipment of assets of HPC that were previously held for sale.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

During the year ended September 30, 2019 the Company recognized incremental depreciation of $ 13.5 million attributable to cumulative depreciation on property plant and equipment of HPC assets that were previously deferred when classified as held for sale.

NOTE 11 - GOODWILL AND INTANGIBLE ASSETS

Goodwill, by segment, consists of the following:

(in millions) HHI GPC H&G HPC Total

(in millions) GPC H&G Total

As of September 30, 2019 $ 430.4 $ 195.6 $ 626.0

Omega Sea acquisition (Note 4) 8.6 — 8.6

Allocated to Coevorden Operations divestiture (Note 3) ( 10.6 ) — ( 10.6 )

Foreign currency impact 3.2 — 3.2

Impairment — — — ( 116.0 ) ( 116.0 )

Deferred tax impact — — ( 0.9 ) — ( 0.9 )

As of September 30, 2020 $ 431.6 $ 195.6 $ 627.2

Rejuvenate acquisition (Note 4) — 147.0 147.0

Armitage acquisition (Note 4) 90.7 — 90.7

Foreign currency impact 2.3 — 2.3

Omega Sea acquisition (Note 4) — 8.6 — — 8.6

Allocated to Assets Held for Sale - Coevorden Operations (Note 3) — ( 10.6 ) — — ( 10.6 )

As of September 30, 2021 $ 524.6 $ 342.6 $ 867.2

The fair values of the HHI, GPC, and H&G reporting units exceeded their carrying values by 32 %, 52 %, and 134 %, respectively, and we did no t recognize an impairment or deemed the respective units as 'at risk' of impairment for the year ended September 30, 2020.

The Company considered the impact of the COVID-19 pandemic on its future cash flows when preparing its annual goodwill impairment test;

however, the full extent of the impact the pandemic may have on the Company's business, operations, and financial condition is currently unknown.

The duration and severity of the COVID-19 pandemic could result in future impairment charges not currently considered.

During the year ended September 30, 2019, the Company recognized an impairment loss on goodwill of the HPC reporting unit of $ 116.0 million.

The goodwill loss was a result of HPC being previously held for sale and subsequent separation of the business from the Global Batteries and Appliances ("GBA") reporting unit following the GBL divestiture, as well as competitive pressure and reduced margin realization and decline in operating results during the year ended September 30, 2019.

There were no impairments recognized during the years ended September 30, 2021 and 2020.

During the year ended September 30, 2019, the Company recognized an impairment loss on goodwill from the HPC reporting unit of $ 116.0 million as a result of HPC being previously held for sale in addition to competitive market pressures, reduced margin realization and decline in operating results during the year ended September 30, 2019.

There are no reporting units that were deemed at risk of impairment as of September 30, 2021 as all reporting units have significant excess of fair value over carrying value.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 - GOODWILL AND INTANGIBLE ASSETS (continued)

The carrying value of indefinite lived intangible and definite lived intangible assets subject to amortization and accumulated amortization are as follows:

16 unchanged sentences

$ 1,724.1 $ ( 520.0 ) $ 1,204.1 $ 1,553.9 $ ( 507.2 ) $ 1,046.7

During the year ended September 30, 2020, the Company recognized an impairment of $ 16.6 million on indefinite-lived intangible assets of tradenames associated with the commercial DCF business following the divestiture of the Coevorden Operations.

During the year ended September 30, 2019, the Company recognized an impairment of $ 18.8 million and $ 16.6 million on indefinite life intangible assets due to the reduction in value on certain tradenames associated with the with the HPC and GPC segments, respectively, primarily due to reduced sales volume and response to changes in management’s strategy.

During the year ended September 30, 2018 the Company recognized $ 20.3 million impairment on certain tradenames associated with the GPC segment driven by lost sales volumes attributable to safety recall and increased market competition.

As of September 30, 2020, there are approximately $ 136.9 million of intangible assets the could be deemed at risk of future impairment due to the limited excess fair value.

For definite lived intangible assets, the Company recognized an impairment of $ 7.6 million due to the incremental cash flow risk associated with the commercial DCF business following the divestiture of the Coevorden Operations, which consisted of the remaining carrying cost of the definite lived intangibles assets associated with the commercial DCF business.

There were no additional impairments identified during the year ended September 30, 2020.

Amortization expense from the intangible assets for the years ended September 30, 2020, 2019 and 2018 was $ 68.0 million, $ 83.4 million and $ 53.0 million, respectively.

During the year ended September 30, 2019, there was an incremental amortization expense of $ 15.5 million recognized attributable to amortization expense on intangible assets of HPC that were previously held for sale.

Refer Note 21 - Segment Information for further discussion.

There were no impairments recognized for intangible assets during the year ended September 30, 2021.

During the year ended September 30, 2020, the Company recognized an impairment loss of $ 16.6 million on indefinite-lived intangible assets and an impairment of $ 7.6 million on definite lived intangible assets due to the incremental cash flow risk associated with the commercial DCF business following the divestiture of the Coevorden Operations.

During the year ended September 30, 2019, the Company recognized an impairment loss of $ 18.8 million and $ 16.6 million on indefinite life intangible assets associated with the with the HPC and GPC segments, respectively, due to the reduction in value on certain tradenames primarily due to reduced sales volume and response to changes in management’s strategy.

As of September 30, 2021, there were no material intangible assets that would be deemed at risk of future impairment due to limited excess fair value.

Amortization expense from intangible assets for the years ended September 30, 2021, 2020 and 2019 was $ 65.1 million, $ 55.3 million and $ 70.8 million, respectively.

During the year ended September 30, 2019, there was an incremental amortization expense of $ 15.5 million recognized attributable to cumulative amortization expense on intangible assets of HPC that were previously deferred when classified as held for sale.

Excluding the impact of any future acquisitions or changes in foreign currency, the Company anticipates the annual amortization expense of intangible assets for the next five fiscal years will be as follows:

(in millions)

SPECTRUM BRANDS HOLDINGS INC.

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 - GOODWILL AND INTANGIBLE ASSETS (continued)

(in millions)

NOTE 12 - DEBT

Debt for SBH and SB/RH as of September 30, 2020 and 2019 consists of the following:

2020 2019 2020 2019

Debt as of September 30, 2021 and 2020 consists of the following:

(in millions)

1 unchanged sentence

Revolver Facility, variable rate, expiring June 30, 2025 $ — — % $ — — %

6.625 % Notes, due November 15, 2022

— — % 117.4 6.6 % — — % 117.4 6.6 %

Term Loan Facility, variable rate, due March 3, 2028 398.0 2.5 % — — %

6.125 % Notes, due December 15, 2024

8 unchanged sentences

300.0 5.5 % 300.0 5.5 %

3.875 % Notes, due March 15, 2031

500.0 3.9 % — — %

Other notes and obligations — — % 3.2 7.6 %

Obligations under capital leases 160.5 5.6 % 165.6 5.6 % 160.5 5.6 % 165.6 5.6 %

Obligations under finance leases 101.9 4.9 % 103.7 5.3 %

Total Spectrum Brands, Inc.

debt 2,542.8 2,456.0

Spectrum Brands Holdings, Inc.

Salus - unaffiliated long-term debt of consolidated VIE — — % 77.0 — % — — % — — %

Total SBH debt 2,512.8 2,384.5 2,512.8 2,307.5

Unamortized discount on debt ( 0.9 ) —

2 unchanged sentences

Long-term debt, net of current portion $ 2,494.3 $ 2,405.6

The Company’s aggregate scheduled maturities of debt obligations are as follows:

The Company’s aggregate scheduled maturities of debt obligations are as follows, excluding obligations under capital leases.

See Note 13 - Leases for scheduled maturities of obligations under capital leases:

(in millions)

2021 $ 3.2 $ 3.2

2025 1,250.0 1,250.0

1,099.1 1,099.1

Total long-term debt $ 2,440.9

Revolver Facility

On June 30, 2020, the Company entered into the Amended and Restated Credit Agreement, which refinances the Company’s previously existing credit facility, and includes certain modified terms from the previously existing revolving credit facility.

The maturity was extended to June 30, 2025, and the facility was reduced from $ 890.0 million to $ 600.0 million (with a U.S.

On June 30, 2020, SBI entered into the Amended and Restated Credit Agreement ("Credit Agreement"), dated June 30, 2020, which refinances the previously existing credit facility, and includes certain modified terms from the previously existing revolving credit facility.

The maturity date was extended to June 30, 2025, and the facility was reduced from $ 890.0 million to $ 600.0 million (with a U.S.

dollar tranche and a multicurrency tranche).

1 unchanged sentence

As of September 30, 2021, the Revolver Facility is subject to either adjusted LIBOR plus margin ranging from 1.75 % to 2.75 % per annum, or base rate plus margin ranging from 0.75 % to 1.75 % per annum.

The LIBOR borrowings are subject to a 0.75 % LIBOR floor.

Our Revolver Facility allows for the LIBOR rate to be phased out and replaced with the Secured Overnight Financing Rate and therefore we do not anticipate a material impact by the expected upcoming LIBOR transition.

The Credit Agreement was otherwise provided on the same terms and conditions as the previously existing Revolver Facility.

The Company incurred $ 3.5 million in connection with the Credit Agreement, which have been capitalized as debt issuance costs and amortized over the remaining term of the Credit Agreement.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - DEBT (continued)

The Credit Agreement, solely with respect to the Revolver Facility, contains a financial covenant test on the last day of each fiscal quarter on the maximum total leverage ratio.

2 unchanged sentences

As of September 30, 2021, we were in compliance with all covenants under the Credit Agreement.

Pursuant to a guarantee agreement, SB/RH and the material wholly-owned domestic subsidiaries of SBI have guaranteed SBI’s obligations under the Senior Credit Agreement and related loan documents.

Pursuant to a guarantee agreement, SB/RH and the material wholly-owned domestic subsidiaries of SBI have guaranteed SBI’s obligations under the Credit Agreement and related loan documents.

Pursuant to a security agreement, SBI and such subsidiary guarantors have pledged substantially all of their respective assets to secure such obligations and, in addition, SB/RH has pledged the capital stock of SBI to secure such obligations.

The Senior Credit Agreement also provides for customary events of default including payment defaults and cross-defaults to other material indebtedness.

The Credit Agreement also provides for customary events of default including payment defaults and cross-defaults to other material indebtedness.

As a result of borrowings and payments under the Revolver Facility, at September 30, 2021, the Company had borrowing availability of $ 575.4 million, net outstanding letters of credit of $ 24.6 million.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - DEBT (continued)

Term Loan Facility

On March 3, 2021, SBI entered into the first amendment (the "Amended Credit Agreement") to the Credit Agreement.

The Amended Credit Agreement includes certain modified terms from the existing Credit Agreement to provide for a new term loan facility (the “Term Loan Facility”).

The Term Loan Facility is in an aggregate principal amount of $ 400.0 million and will mature on March 3, 2028.

The Term Loan Facility is subject to a rate per annum equal to either (1) the LIBO Rate (as defined in the Amended Credit Agreement), subject to a 0.50 % floor, adjusted for statutory reserves, plus a margin of 2.00 % per annum or (2) the Alternate Base Rate (as defined in the Amended Credit Agreement), plus a margin of 1.00 % per annum.

The Term Loan Facility allows for the LIBO rate to be phased out and replaced with the Secured Overnight Financing Rate and therefore we do not anticipate a material impact to the expected upcoming LIBOR transition.

The Term Loan Facility was issued net of a $ 1.0 million discount and the Company incurred $ 5.1 million of debt issuance costs, which is being amortized with a corresponding charge to interest expense over the remaining life of the loan.

Pursuant to a guarantee agreement, SB/RH and the direct and indirect wholly-owned material domestic subsidiaries of SBI have guaranteed SBI’s obligations under the Amended Credit Agreement and related loan documents.

Pursuant to the Security Agreement, dated as of June 23, 2015, SBI and such subsidiary guarantors have pledged substantially all of their respective assets to secure such obligations and, in addition, SB/RH has pledged the capital stock of SBI to secure such obligations.

Subject to certain mandatory prepayment events, the Term Loan Facility is subject to repayment according to scheduled amortizations, with the final payment of amount outstanding, plus accrued and unpaid interest, due at maturity.

The Amended Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on SBI and its restricted subsidiaries’ ability to incur indebtedness, create liens, make investments, pay dividends or make certain other distributions, and merge or consolidate or sell assets, in each case subject to certain exceptions set forth in the Amended Credit Agreement.

3.875 % Notes

On March 3, 2021, SBI issued $ 500.0 million aggregate principal amount of 3.875 % Senior Notes due 2031 (the " 3.875 % Notes") and entered into the indenture governing the 3.875 % Notes (the “2031 Indenture”).

The 3.875 % Notes mature on March 15, 2031 and are unconditionally guaranteed, on a senior unsecured basis, by SB/RH and by SBI’s existing and future domestic subsidiaries that guarantee indebtedness under the Amended Credit Agreement.

SBI may redeem all or part of the 3.875 % Notes at any time on or after March 15, 2026 at certain fixed redemption prices as set forth in the 2031 Indenture.

In addition, prior to March 15, 2026, SBI may redeem the Notes at a redemption price equal to 100 % of the principal amount plus a “make-whole” premium, plus accrued and unpaid interest.

Before March 15, 2024, the Company may redeem up to 35 % of the aggregate principal notes with cash equal to the net proceeds that SBI raises in equity offerings at specified redemption price as set forth in the 2031 Indenture.

Further, the 2031 Indenture requires SBI to make an offer to repurchase all outstanding 3.875 % Notes upon the occurrence of a change of control of SBI, as defined in the 2031 Indenture.

The 2031 Indenture contains covenants limiting, among other things, the ability of the Company and its direct and indirect restricted subsidiaries to incur additional indebtedness, create liens, engage in sale-leaseback transactions, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, make investments or certain other restricted payments, sell assets, issue or sell stock of restricted subsidiaries, enter in transactions with affiliates, or effect a merger or consolidation.

In addition, the 2031 Indenture provides for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or an acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency.

The Company recorded $ 7.6 million of fees in connection with the offering of the 3.875 % Notes, which have been capitalized as debt issuance costs and are being amortized over the remaining life of the 3.875 % Notes.

Spectrum 5.50 % Notes

12 unchanged sentences

The 5.00 % Notes are guaranteed by SB/RH as well as by SBI’s existing and future domestic subsidiaries.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - DEBT (continued)

On or after October 1, 2024, SBI may redeem some or all of the Notes at certain fixed redemption prices.

15 unchanged sentences

Further, the indenture governing the 4.00 % Notes (the “2026 Indenture”) requires SBI to make an offer, in cash, to repurchase all or a portion of the applicable outstanding notes for a specified redemption price, including a redemption premium, upon the occurrence of a change of control of SBI, as defined in the 2026 Indenture.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - DEBT (continued)

The 2026 Indenture contains customary covenants that limit, among other things, the incurrence of additional indebtedness, payment of dividends on or redemption or repurchase of equity interests, the making of certain investments, expansion into unrelated businesses, creation of liens on assets, merger or consolidation with another company, transfer or sale of all or substantially all assets, and transactions with affiliates.

17 unchanged sentences

The Company recorded $ 19.7 million of fees in connection with the offering of the 5.75 % Notes, which have been capitalized as debt issuance costs and are being amortized over the remaining life of the 5.75 % Notes.

Using the proceeds received from the Term Loan Facility and 3.875 % Notes, the Company redeemed $ 550.0 million aggregate principal amount of the 5.75 % Notes in a cash tender offer, with a make whole premium of $ 17.7 million and a write-off of unamortized debt issuance costs of $ 5.7 million recognized as Interest Expense on the Company's Consolidated Statements of Income for the year ended September 30, 2021.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - DEBT (continued)

Spectrum 6.125 % Notes

11 unchanged sentences

The Company recorded $ 4.6 million of fees in connection with the offering of the 6.125 % Notes, which have been capitalized as debt issuance costs and are being amortized over the remaining life of the 6.125 % Notes.

Spectrum 6.625 % Notes

On December 17, 2012, in connection with the acquisition of HHI Business, the Company assumed $ 570 million aggregate principal amount of 6.625 % Notes at par value, due November 15, 2022 (the “ 6.625 % Notes”).

The 6.625 % Notes are unsecured and guaranteed by SB/RH, as well as by existing and future domestic restricted subsidiaries.

The Company may redeem all or a part of the 6.625 % Notes, upon not less than 30 or more than 60 days notice, at specified redemption prices.

Further, the indenture governing the 6.625 % Notes (the “2020/22 Indenture”) requires the Company to make an offer, in cash, to repurchase all or a portion of the applicable outstanding notes for a specified redemption price, including a redemption premium, upon the occurrence of a change of control of the Company, as

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - DEBT (continued)

defined in such indenture.

Subsequent to the year ended September 30, 2017 and effective November 15, 2017, the 6.625 % Notes became callable by the Company.

On March 21, 2019, the Company completed the prepayment of $ 285.0 million of the $ 570.0 million aggregate principal amount of its 6.625 % Notes, plus accrued and unpaid interest, using proceeds received from the GAC divestiture, recognizing a loss on extinguishment of the debt of $ 9.6 million attributable to a $ 6.3 million premium on repayment of the debt and a non-cash charge of $ 3.3 million attributable to the write-off of deferred financing costs associated with the debt.

On September 24, 2019, the Company repurchased a total of $ 167.6 million aggregate principal amount or approximately 58.8 % of the outstanding aggregate principal amount of the 6.625 % Notes in a cash tender offer.

In connection with the tender, the Company recognized a loss on extinguishment of debt of $ 4.6 million attributable to a $ 2.9 million premium on repayment of the debt and a non-cash charge of $ 1.7 million attributable to the write-off of deferred financing costs associated with the debt.

On September 24, 2019, we amended the 6.625 % Notes indenture to eliminate substantially all of the restrictive covenants and certain events of default.

On November 15, 2019, SBI completed the tender and call of its 6.625 % Notes with an outstanding principal of $ 117.4 million, recognizing a loss on extinguishment of the debt of $ 2.6 million including a non-cash charge of $ 1.1 million attributable to the write-off of deferred financing costs associated with the debt for the year ended September 30, 2020.

In February 2013, September 2013 and February 2015, Salus completed a collateralized loan obligation (“CLO”) securitization of up to $ 578.5 million notional aggregate principal amount.

The outstanding notional aggregate principal amount of was taken up by unaffiliated entities, including HRG’s former subsidiary, FGL, and consisted entirely of subordinated debt.

Using the proceeds received from the Term Loan Facility and 3.875 % Notes, the Company redeemed $ 250.0 million aggregate principal amount of the 6.125 % Notes in a cash tender offer, with a make whole premium of $ 5.7 million and a write-off of unamortized debt issuance costs of $ 2.1 million recognized as Interest Expense on the Company's Consolidated Statements of Income for the year ended September 30, 2021.

In February 2013, September 2013 and February 2015, Salus Capital Partners completed a collateralized loan obligation (“CLO”) securitization of up to $ 578.5 million notional aggregate principal amount.

The outstanding notional aggregate principal amount of was taken up by unaffiliated entities, including a former subsidiary of HRG Group, Inc.

and consisted entirely of subordinated debt.

The obligations of the Salus CLO securitization were secured by the assets of the variable interest entity (the "VIE"), which primarily consisted of asset-based loan receivables and carry residual interest subject to maintenance of certain covenants.

1 unchanged sentence

The CLO has effectively distributed the remaining assets and as of June 3, 2020, the CLO was discharged of its obligation under the indentures as there were no assets that remained with the CLO to service the outstanding debt and no recourse to the Company.

Following the discharge of the debt, there are no substantial net assets remaining with the VIE.

During the year ended September 30, 2020, the CLO realized a non-cash gain on extinguishment of debt of $ 76.2 million attributable to the discharge of the debt, consisting of $ 77.0 million for the carrying value of the outstanding debt upon discharge, and $ 0.1 million for the unamortized discount on the associated debt and $ 0.7 million for debt issuance costs.

Following the discharge of the debt, there are no substantial net assets remaining with the VIE and the CLO realized a non-cash gain on extinguishment of debt of $ 76.2 million attributable to the discharge of the debt, consisting of $ 77.0 million for the carrying value of the outstanding debt upon discharge, and $ 0.1 million for the unamortized discount on the associated debt and $ 0.7 million for debt issuance costs for the year ended September 30, 2020.

NOTE 13 - LEASES

The Company has leases primarily pertaining to land, buildings and equipment that expire at various times through February 2047.

We have identified embedded operating leases within certain logistic agreements for warehouses and IT services arrangements and recognized assets identified in the arrangements as part of operating ROU assets on the Company’s Consolidated Statement of Financial Position as of September 30, 2020.

We elected to exclude certain supply chain contracts that contain embedded leases for manufacturing facilities or dedicated manufacturing lines from our ROU asset and liability calculation based on the insignificant impact to our financial statements.

The following is a summary of the Company’s leases recognized on the Company’s Consolidated Statement of Financial Position as of September 30, 2020:

The Company has leases primarily pertaining to manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery, computers, and office equipment that expire at various times through June 2035.

We have identified embedded operating leases within certain third-party logistic agreements for warehouses and information technology services arrangements and recognized right of use assets identified in the arrangements as part of Operating Lease Assets on the Company’s Consolidated Statement of Financial Position.

The following is a summary of the Company’s leases recognized on the Company’s Consolidated Statement of Financial Position as of September 30, 2021 and 2020:

(in millions) Line Item 2021 2020

8 unchanged sentences

As of September 30, 2021, the Company had no significant commitments related to leases executed that have not yet commenced.

The Company records its operating lease and amortization of finance lease ROU assets within Cost of Goods Sold or Operating Expenses in the Consolidated Statement of Income depending on the nature and use of the underlying asset.

The Company records its finance interest cost within interest expense in the Consolidated Statement of Income.

SPECTRUM BRANDS HOLDINGS, INC.

2 unchanged sentences

NOTE 13 - LEASES (continued)

The components of lease costs recognized in the Consolidated Statement of Income for the year ended September 30, 2020 are as follows:

The Company records its finance interest cost within interest expense in the Consolidated Statement of Income.

The components of lease costs recognized in the Consolidated Statement of Income for the year ended September 30, 2021 and 2020 are as follows:

(in millions) 2021 2020

5 unchanged sentences

Total lease cost $ 46.2 $ 42.9

During the year ended September 30, 2020, the Company recognized income attributable to leases and sub-leases of $ 2.1 million, including $ 1.3 million from the sublease of the Company’s Corporate Headquarters in Middleton, Wisconsin with a related party, Energizer.

During the year ended September 30, 2021 and 2020 the Company recognized income attributable to leases and sub-leases of $ 2.3 million and $ 2.1 million, respectively.

Income from leases and sub-leases is recognized as Other Non-Operating Income on the Consolidated Statement of Income.

The following is a summary of the Company’s cash paid for amounts included in the measurement of lease liabilities recognized in the Consolidated Statement of Cash Flow, including supplemental non-cash activity related to operating leases, for the year ended September 30, 2020:

(in millions) 2021 2020

4 unchanged sentences

Acquisition of operating lease asset through lease obligations 15.3 23.6

The following is a summary of weighted-average lease term and discount rate at September 30, 2020:

The following is a summary of weighted-average lease term and discount rate at September 30, 2021 and 2020:

Weighted average remaining lease term

Operating leases 6.6 years

Finance leases 15.6 years

Operating leases 4.6 years 5.5 years

Finance leases 10.4 years 10.4 years

Weighted average discount rate

15 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - LEASES (continued)

As of September 30, 2019, minimum commitments under the Company’s leases, as required under prior lease guidance, were as follows:

(in millions) Finance Leases Operating Leases

2020 $ 17.5 $ 25.0

2021 19.7 23.2

2022 16.5 20.6

2023 15.5 17.8

2024 15.4 10.8

Thereafter 179.9 37.5

Total lease payments 264.5 134.9

Amount representing interest ( 98.9 ) —

Total minimum lease payments $ 165.6 $ 134.9

NOTE 14 - DERIVATIVES

2 unchanged sentences

Cash Flow Hedges

Commodity Swaps.

The Company is exposed to risk from fluctuating prices for raw materials, specifically zinc and brass used in its manufacturing processes of its HHI segment.

The Company hedges a portion of the risk associated with the purchase of these materials using commodity swaps.

The hedge contracts are designated as cash flow hedges with the fair value changes recorded in AOCI and as a hedge asset or liability, as applicable.

The unrecognized changes in fair value of the hedge contracts are reclassified from AOCI into earnings when the hedged purchase of raw materials also affects earnings.

The swaps effectively fix the floating price on a specified quantity of raw materials through a specified date.

At September 30, 2020, the Company had a series of brass and zinc swap contracts outstanding through February 28, 2022.

The derivative net gain estimated to be reclassified from AOCI into earnings over the next 12 months is $ 0.6 million, net of tax.

The Company had the following commodity swap contracts outstanding as of September 30, 2020 and 2019:

(in millions, except notional)

Notional Contract Value

Brass swap contracts 949.0 Metric Tons $ 4.4 904.9 Metric Tons $ 4.4

Zinc swap contracts 1,552.0 Metric Tons 3.4 — Metric Tons —

Foreign exchange contracts.

5 unchanged sentences

At September 30, 2021, the Company had a series of foreign exchange derivative contracts outstanding through March 31, 2023.

The derivative net loss estimated to be reclassified from AOCI into earnings over the next 12 months is $ 2.8 million, net of tax.

The derivative net gain estimated to be reclassified from AOCI into earnings over the next 12 months is $ 3.7 million, net of tax.

At September 30, 2021 and 2020, the Company had foreign exchange derivative contracts designated as cash flow hedges with a notional value of $ 279.9 million and $ 231.2 million, respectively.

Interest Rate Swaps.

During the year ended September 30, 2019, the Company had a series of U.S.

dollar denominated interest rate swaps outstanding which effectively fixed the interest on floating rate debt related to the 2022 Term Loan, exclusive of lender spreads, at 1.76 % for a notional principal amount of $ 300.0 million through May 8, 2020.

On January 4, 2019, the underlying debt and related hedge were settled following the close of GBL divestiture.

As a result, the Company recognized a gain of $ 3.6 million during the year ended September 30, 2019, recognized as a component of discontinued operations as interest expense from the Term Loans allocated to discontinued operations per Note 3 – Divestitures.

As of September 30, 2020 and 2019, there are no outstanding interest rate swaps hedges.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - DERIVATIVES (continued)

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the effective portion of the derivative is reported as a component of Accumulated Other Comprehensive Income (“AOCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

The following table summarizes the impact of the effective and ineffective portions of designated hedges and the gain (loss) recognized in the Consolidated Statement of Income for the years ended September 30, 2021, 2020 and 2019:

For the year ended September 30, 2020 Effective Portion

in OCI Reclassified to Continuing Operations Reclassified to

Operations Ineffective portion

Continuing Operations

(in millions) Line Item Gain (Loss) Line Item Gain (Loss)

Commodity swaps $ 0.9 Cost of goods sold $ ( 0.2 ) $ — Cost of goods sold $ — $ —

Foreign exchange contracts 0.1 Net sales ( 0.1 ) — Net sales — —

Foreign exchange contracts ( 7.2 ) Cost of goods sold 5.3 — Cost of goods sold — —

Total $ ( 6.2 ) $ 5.0 $ — $ — $ —

Effective Portion

For the year ended September 30, 2019 Gain (Loss)

in OCI Reclassified to Continuing Operations Reclassified to

Operations Ineffective portion

Continuing Operations Discontinued

(in millions)

Line Item Gain (Loss)

Interest rate swaps $ ( 0.6 ) Interest expense $ — $ 2.2 Interest expense $ — $ 1.7

Commodity swaps ( 1.1 ) Cost of goods sold ( 0.4 ) ( 4.4 ) Cost of goods sold — —

Foreign exchange contracts ( 0.4 ) Net sales ( 0.2 ) — Net sales — —

Foreign exchange contracts 14.7 Cost of goods sold 11.7 0.5 Cost of goods sold — —

Total $ 12.6 $ 11.1 $ ( 1.7 ) $ — $ 1.7

Effective Portion

For the year ended September 30, 2018 Gain (Loss)

in OCI Reclassified to Continuing Operations Reclassified to

Operations Ineffective portion

Continuing Operations Discontinued

(in millions)

Line Item Gain (Loss)

Interest rate swaps $ 4.0 Interest expense $ — $ 1.1 Interest expense $ — $ 1.2

Commodity swaps ( 4.5 ) Cost of goods sold 0.7 2.4 Cost of goods sold — —

Foreign exchange contracts ( 0.1 ) Net sales 0.1 — Net sales — —

Foreign exchange contracts 10.8 Cost of goods sold ( 9.3 ) ( 1.9 ) Cost of goods sold — —

Gain (Loss) in OCI Reclassified to Continuing Operations

(in millions) 2021 2020 2019 Line Item 2021 2020 2019

Foreign exchange contracts $ 0.1 $ 0.1 $ ( 0.4 ) Net sales $ 0.1 $ ( 0.1 ) $ ( 0.2 )

Foreign exchange contracts ( 2.0 ) ( 7.2 ) 14.7 Cost of goods sold ( 9.3 ) 4.7 10.6

Total $ ( 1.9 ) $ ( 7.1 ) $ 14.3 $ ( 9.2 ) $ 4.6 $ 10.4

5 unchanged sentences

The gain or loss on the derivative hedge contracts is recorded in earnings as an offset to the change in value of the related liability or asset at each period end.

At September 30, 2020, the Company had a series of forward exchange contracts outstanding through October 29, 2020.

At September 30, 2021, the Company had a series of forward exchange contracts outstanding through July 20, 2022.

At September 30, 2021 and 2020, the Company had $ 198.4 million and $ 752.0 million, respectively, of notional value for such foreign exchange derivative contracts outstanding.

4 unchanged sentences

Other non-operating (income) expense $ ( 3.2 ) $ ( 10.8 ) $ 45.5

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - DERIVATIVES (continued)

Fair Value of Derivative Instruments

2 unchanged sentences

Derivative Assets

Commodity swaps - designated as hedge Other receivables $ 0.7 $ —

Commodity swaps - designated as hedge Deferred charges and other 0.1 —

Foreign exchange contracts - designated as hedge

6 unchanged sentences

Derivative Liabilities

Commodity swaps - designated as hedge

Accounts payable

Foreign exchange contracts - designated as hedge

5 unchanged sentences

Total Derivative Liabilities

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - DERIVATIVES (continued)

The Company is exposed to the risk of default by the counterparties with which it transacts and generally does not require collateral or other security to support financial instruments subject to credit risk.

12 unchanged sentences

The following summarizes the gain (loss) from the net investment hedge recognized in Other Comprehensive Income for the year ended September 30, 2021, 2020 and 2019, pre-tax:

(Loss) gain in OCI (in millions) 2020 2019 2018

Gain (Loss) in OCI (in millions) 2021 2020 2019

Net investment hedge $ 6.2 $ ( 33.0 ) $ 29.8

1 unchanged sentence

During the year ended September 30, 2020, the Company recognized a pre-tax loss of $ 1.2 million in earnings related to the translation of the undesignated portion of debt obligation.

No pre-tax gain (loss) related to the translation of the undesignated portion of debt obligation was recognized in earnings during the year ended September 30, 2021.

SPECTRUM BRANDS HOLDINGS, INC.

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Benefit obligation, beginning of year $ 76.0 $ 80.2 $ 158.7 $ 153.4

Obligations assumed from acquisition

Service cost 0.5 0.7 1.5 1.7

Interest cost 1.8 2.2 2.1 1.9

Actuarial loss (gain) 2.3 10.3 ( 0.9 ) 27.5

Actuarial (gain) loss ( 2.6 ) 2.3 ( 3.4 ) ( 2.5 )

Settlements and curtailments — ( 4.6 ) — ( 1.6 )

5 unchanged sentences

Fair value of plan assets, beginning of year 64.6 68.6 120.5 112.1

Assets assumed from acquisition

Actual return on plan assets 9.0 5.1 4.6 0.8

14 unchanged sentences

Rate of compensation increase N/A N/A 2.50 %

2.25 - 6.00 %

The net loss in Accumulated Other Comprehensive Loss expected to be recognized in continuing operations during the year ended September 30, 2021 is $ 4.4 million.

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 15 - EMPLOYEE BENEFIT PLANS (continued)

The following table summarizes the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for defined benefit plans with projected benefit obligations in excess of plan assets:

Plans Non U.S.

(in millions) 2021 2020 2021 2020

Projected benefit obligation $ 71.4 $ 76.1 $ 106.2 $ 86.8

Accumulated benefit obligation 71.4 76.1 100.6 81.3

Fair value of plan assets 69.6 64.6 65.1 45.5

The following table contains the components of net periodic benefit cost from defined benefit plans for the years ended September 30, 2021, 2020 and 2019:

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2.25 - 2.50 %

1.37 - 7.00 %

The discount rate is used to calculate the projected benefit obligation.

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Cash & cash equivalents $ 0.6 $ — $ — $ 0.6 $ 0.6 $ — $ — $ 0.6

$ 9.3 $ — $ — $ 9.3 $ 8.3 $ — $ — $ 8.3

11.9 10.7 — 22.6 16.8 13.1 — 29.9

Equity 8.1 8.3 — 16.4 11.9 10.7 — 22.6

Fixed income securities 29.6 9.9 — 39.5 22.3 6.4 — 28.7

22.3 6.4 — 28.7 21.6 — — 21.6

Foreign equity 4.8 — — 4.8 7.2 — — 7.2

7.2 — — 7.2 11.4 — — 11.4

Foreign fixed income securities — 23.6 — 23.6 1.3 24.7 — 26.0

1.3 24.7 — 26.0 2.1 23.6 — 25.7

Life insurance contracts — 42.6 — 42.6 — 42.1 — 42.1

— 42.1 — 42.1 — 37.4 — 37.4

1.7 56.2 — 57.9 2.2 52.1 — 54.3

Annuity policy — — 18.8 18.8 — — — —

Other — 70.7 — 70.7 1.7 56.2 — 57.9

Total plan assets $ 43.1 $ 155.1 $ 18.8 $ 217.0 $ 45.0 $ 140.1 $ — $ 185.1

$ 53.7 $ 140.1 $ — $ 193.8 $ 62.4 $ 126.2 $ — $ 188.6

The following benefit payments are expected to be paid:

(in millions)

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 15 - EMPLOYEE BENEFIT PLANS (continued)

Subsequent to the Armitage acquisition and in accordance with the purchase agreement, the Company purchased a group annuity contract using plan assets and escrow funds withheld as part of the acquisition to cover the projected benefit obligation assumed in the purchase.

The transaction represents an annuity buy-in, in accordance with U.K.

pension regulations, where the assets of the plan were invested in a bulk-purchase annuity policy with an insurance company, under which the Company retains both the fair value of the annuity contract and the pension benefit obligations related to this plan.

Following the buy-in, individual policies will replace the bulk annuity policy in a buy-out transaction, which is expected to be completed during the year ending September 30, 2022 where the Company would de-recognize the assets and liabilities of the pension plan and realize a settlement gain or loss as a component of the net periodic pension cost.

As of September 30, 2021, the fair value of the annuity contract is based on the calculated pension benefit obligation covered (Level 3).

The following benefit payments are expected to be paid:

(in millions)

Plans Non U.S.

2022 $ 4.5 $ 3.9

2027-2031 20.5 31.5

Defined Contribution Plans

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136.1 16.9 15.5 136.1 16.9 15.5

Income (loss) from operations before income taxes $ 155.4 $ ( 193.8 ) $ ( 35.7 ) $ 86.6 $ ( 129.2 ) $ 130.1

Loss from continuing operations before income taxes $ ( 11.1 ) $ ( 25.1 ) $ ( 354.2 ) $ ( 7.7 ) $ ( 93.9 ) $ ( 297.4 )

The components of income tax expense for the years ended September 30, 2021, 2020 and 2019 are as follows:

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Total current tax expense (benefit) 38.0 2.7 ( 16.0 ) 38.0 2.7 ( 16.0 )

Deferred tax expense (benefit):

Deferred tax (benefit) expense:

( 64.8 ) 9.1 ( 19.6 ) ( 63.4 ) ( 5.1 ) ( 7.1 )

2 unchanged sentences

( 5.5 ) 14.4 ( 13.2 ) ( 5.5 ) 15.8 ( 9.8 )

Total deferred tax expense (benefit)

Total deferred tax (benefit) expense

( 64.4 ) 24.6 ( 36.0 ) ( 63.0 ) 11.8 ( 20.1 )

Income tax expense (benefit)

Income tax (benefit) expense

$ ( 26.4 ) $ 27.3 $ ( 52.0 ) $ ( 25.0 ) $ 14.5 $ ( 36.1 )

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The following reconciles the total income tax expense, based on the U.S.

Federal statutory income tax rate of 21 % for the year ended September 30, 2020, 21 % for the year ended September 30, 2019, and 24.5 % for the year ended September 30, 2018, with the Company’s recognized income tax expense:

Federal statutory income tax rate of 21 % with the Company’s recognized income tax expense:

(in millions)

2021 2020 2019 2021 2020 2019

Statutory federal income tax expense (benefit) $ 32.6 $ ( 40.7 ) $ ( 8.8 ) $ 18.2 $ ( 27.1 ) $ 31.9

Statutory federal income tax benefit $ ( 2.3 ) $ ( 5.3 ) $ ( 74.4 ) $ ( 1.6 ) $ ( 19.7 ) $ ( 62.4 )

Permanent items 13.9 13.6 2.6 13.9 13.6 2.7

4 unchanged sentences

State effective rate change 2.6 7.2 4.6 2.6 7.8 4.6

Tax reform act - U.S.

rate change — — ( 166.7 ) — — ( 181.7 )

Global intangible low tax income inclusion 6.0 8.6 — 6.0 8.6 —

UK effective rate change 8.2 — — 8.2 — —

GILTI 4.9 3.7 2.6 4.9 3.7 2.6

GILTI impact of retroactive law changes ( 18.1 ) — — ( 18.1 ) — —

Foreign dividend received deduction tax law change — — 95.9 — — 95.9

2 unchanged sentences

Change in valuation allowance ( 27.1 ) 9.9 ( 29.9 ) ( 27.1 ) 9.8 ( 30.0 )

Unrecognized tax (benefit) expense

( 7.0 ) 6.2 ( 0.1 ) ( 7.0 ) 6.2 ( 0.1 )

Unrecognized tax expense (benefit) 0.2 ( 8.5 ) 7.5 0.2 ( 8.5 ) 7.5

Share based compensation adjustments ( 0.7 ) 0.1 4.3 0.1 0.5 4.3

3 unchanged sentences

Return to provision adjustments and other, net 1.2 3.3 ( 1.8 ) 1.1 6.5 ( 1.1 )

Income tax expense (benefit) $ 70.9 $ ( 7.1 ) $ ( 462.7 ) $ 58.1 $ 10.7 $ ( 76.8 )

Income tax (benefit) expense $ ( 26.4 ) $ 27.3 $ ( 52.0 ) $ ( 25.0 ) $ 14.5 $ ( 36.1 )

SPECTRUM BRANDS HOLDINGS, INC.

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Employee benefits $ 36.7 $ 34.8 $ 36.6 $ 33.2

$ 38.0 $ 37.6 $ 36.3 $ 36.0

Restructuring

0.4 0.9 0.4 0.9

Inventories and receivables 25.1 18.3 25.1 18.3

19.7 16.8 19.7 16.8

Marketing and promotional accruals 17.0 14.9 17.0 14.9

14.9 10.6 14.9 10.6

Property, plant and equipment 0.6 2.3 0.6 2.3

27.3 5.9 27.3 5.9

Unrealized losses 19.1 19.1 19.1 19.1

19.8 12.8 19.8 12.8

13.6 19.0 13.6 19.0

Investment in subsidiaries

0.2 0.3 0.2 0.3

Intangibles 10.0 13.6 10.0 13.6

Operating lease liabilities 25.9 23.1 25.9 23.1

Net operating loss and other carry forwards

563.5 511.7 245.5 186.5

40.3 32.7 39.2 31.9

Other 36.1 39.1 32.9 38.1

Total deferred tax assets 734.0 676.9 412.7 349.1

689.8 688.0 361.8 384.8

Deferred tax liabilities

Property, plant and equipment 9.4 8.2 9.4 8.2

30.1 11.1 30.1 11.1

Unrealized gains 10.5 13.6 10.5 13.6

13.5 9.0 13.5 9.0

296.8 311.8 296.8 311.8

Intangibles 287.9 287.1 287.9 287.2

Operating lease assets 23.5 20.5 23.5 20.5

Investment in partnership 69.6 63.3 69.3 63.0

63.3 37.6 63.0 55.0

Taxes on unremitted foreign earnings 1.8 1.4 1.8 1.4

4.6 5.0 4.6 5.0

17.2 10.9 17.2 10.8

Other 24.1 16.6 24.0 16.6

Total deferred tax liabilities 426.8 410.7 426.4 410.5

425.5 385.4 425.2 402.7

Net deferred tax liabilities 307.2 266.2 ( 13.7 ) ( 61.4 )

264.3 302.6 ( 63.4 ) ( 17.9 )

Valuation allowance ( 349.4 ) ( 302.5 ) ( 245.1 ) ( 198.2 )

( 306.8 ) ( 307.0 ) ( 202.4 ) ( 202.8 )

Net deferred tax liabilities, net valuation allowance $ ( 42.2 ) $ ( 36.3 ) $ ( 258.8 ) $ ( 259.6 )

$ ( 42.5 ) $ ( 4.4 ) $ ( 265.8 ) $ ( 220.7 )

Deferred charges and other $ 17.3 $ 18.9 $ 13.6 $ 18.9

$ 22.9 $ 46.2 $ 22.9 $ 30.7

Deferred taxes (noncurrent liability) 59.5 55.2 272.4 278.5

65.4 50.6 288.7 251.4

On November 20, 2020, the U.S.

Treasury and the Internal Revenue Service issued Final Regulations (“November 2020 Regulations”) under Internal Revenue Code Sections 245A and 951A related to the treatment of previously disqualified basis under the GILTI regime.

The November 2020 Regulations are effective for Fiscal 2022, but the Company can elect to apply them to Fiscal 2018 through Fiscal 2021.

The Company expects that the sale of the HHI segment will allow use of tax benefits for years prior to Fiscal 2020 that would have been subject to federal and state tax limitations on the use of carryforwards absent the HHI sale.

The Company expects to satisfy the requirements necessary to apply the Regulations retroactively and has therefore estimated and recorded a benefit of $ 11.4 million for the impact on years prior to Fiscal 2021 in the year ended September 30, 2021, with a benefit of $ 5.8 million recorded in the fourth quarter ended September 30, 2021 due to the HHI sale.

The Company also expects to apply the Regulations to Fiscal 2021 and has included the impact in Fiscal 2021 income tax expense.

On July 20, 2020, Final Regulations were issued under Internal Revenue Code Section 951A relating to the treatment of income that is subject to a high rate of tax under the global intangible low taxed income (“GILTI“) regime (“July 2020 Regulations“).

The July 2020 Regulations are effective for Fiscal 2021, but the Company can elect to apply them to Fiscal 2019 and Fiscal 2020.

The Company expects to apply the July 2020 Regulations to Fiscal 2020 and has therefore estimated and recorded a Fiscal 2020 benefit of $ 4.4 million.

The Company would need to file an amended return to apply the July 2020 Regulations to Fiscal 2019, which is not anticipated to have a material impact on its overall tax position.

The Company has applied the July 2020 Regulations to Fiscal 2020 and recorded a Fiscal 2020 benefit of $ 4.4 million.

The Company expects to apply the July 2020 Regulations to Fiscal 2019 by filing an amended return.

Therefore a benefit of $ 6.7 million has been recorded for the year ended September 30, 2021.

On June 14, 2019, the U.S.

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The Company also recorded $ 70.7 million of foreign tax credits, but concluded it is more likely than not these credits will expire unused and therefore recorded a $ 70.7 million valuation allowance against the deferred tax assets.

On December 22, 2017, the Tax Reform Act was signed into law.

The legislation significantly changed U.S.

tax law by, among other things, lowering corporate income tax rates, implementing a dividends received deduction for dividends from foreign subsidiaries and imposing a tax on deemed repatriated accumulated earnings of foreign subsidiaries.

The Tax Reform Act reduced the U.S.

corporate income tax rate from a maximum of 35 % to a flat 21 % rate, effective January 1, 2018.

The Tax Reform Act of December 22, 2017 included a tax on deemed repatriated accumulated earnings of foreign subsidiaries.

The Company’s $ 25.1 million mandatory repatriation tax is payable over 8 years.

1 unchanged sentence

As of September 30, 2021, $ 18.9 million of the mandatory repatriation liability is still outstanding and $ 2.0 million is due and payable in the next 12 months but will be offset by previous payments and credits.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse.

As a result of the reduction in the U.S.

corporate income tax rate from 35 % to 21 % under the Tax Reform Act, the Company revalued its ending net deferred tax liabilities at December 31, 2017 and recognized $ 166.7 million of tax benefit in the Company’s net income from continuing operations for the year ended September 30, 2018.

SPECTRUM BRANDS HOLDINGS, INC.

2 unchanged sentences

NOTE 16 - INCOME TAXES (continued)

In response to the enactment of the Tax Reform Act, the SEC staff issued Staff Accounting Bulletin No.

118 (“SAB 118”) to address the application of U.S.

GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act.

SAB 118 allows registrants to record provisional amounts during a one year measurement period in a manner similar to accounting for business combinations.

The measurement period ended December 30, 2018, and the Company did not recognize changes in Fiscal 2019 to the provisional tax impacts prior to the closing of the measurement period.

Portions of the Tax Reform Act are unclear or have not yet been clarified and interpretations and regulations continue to be issued, some of which are also subject to legal challenges.

The issuance of new regulations or the invalidation of existing regulations could have a material impact on what the Company has recorded to date.

During the year ended September 30, 2019, the Company recorded an increase of $ 12.2 million to tax expense from impairment of $ 116.0 million of book goodwill.

7 unchanged sentences

and foreign deferred taxes on these earnings to the extent they cannot be repatriated in a tax-free manner.

As of September 30, 2020, and 2019, the Company provided $ 4.6 and $ 5.0 million, respectively, of residual foreign taxes on undistributed foreign earnings.

As of September 30, 2021, and 2020, the Company provided $ 1.8 million and $ 1.4 million, respectively, of residual foreign taxes on undistributed foreign earnings.

As a result of the June 2019 Regulations and the deemed mandatory repatriation, the Company does not have significant prior year untaxed, undistributed earnings from its foreign operations at September 30, 2021.

$ 500.6 million of the Company’s undistributed earnings were taxed in the U.S.

There were $ 500.6 million of the Company’s undistributed earnings taxed in the U.S.

as a result of the mandatory deemed repatriation that was part of the Tax Reform Act, and the remaining earnings were taxed as a result of the June 2019 Regulations.

The Company estimates it did not generate untaxed, undistributed foreign earnings for the year ended September 30, 2020 due to GILTI inclusions under the Tax Reform Act.

The Company recorded GILTI inclusions for the tax year ended September 30, 2021 of $ 23.4 million.

The Company estimates it generated untaxed, undistributed foreign earnings due to high-tax exceptions to GILTI inclusions under the Tax Reform Act for the year ended September 30, 2021 of $ 23.2 million and has cumulative untaxed, undistributed foreign earnings due to high-tax exceptions as of September 30, 2021 of $ 62.1 million.

As of September 30, 2021, the Company has U.S.

federal net operating loss carryforwards (“NOLs”) of $ 1,247.7 million with a federal tax benefit of $ 262.0 million and tax benefits related to state NOLs of $ 73.3 million.

federal net operating and capital loss carryforwards (“NOLs”) of $ 1,389.3 million with a federal tax benefit of $ 291.7 million and tax benefits related to state NOLs of $ 69.6 million.

These NOLs expire through years ending in 2041.

As of September 30, 2021, the Company has $ 27.4 million of federal research and development credit carryforwards.

$ 0.8 million of the credits expire in the Company’s fiscal years 2023-2030 and the remainder begin expiring in the Company’s fiscal year ending September 30, 2031.

$ 0.4 million of the credits expire Fiscal 2023 and the remainder begin expiring in the Company’s fiscal year ending September 30, 2031.

As of September 30, 2021, the Company has foreign NOLs of $ 398.0 million and tax benefits of $ 97.7 million, which will expire beginning in the Company's fiscal year ending September 30, 2022.

During the fiscal year ending September 30, 2021, the Company recorded $ 324.2 million of additional foreign net operating losses due to a tax-deductible impairment in Luxembourg of subsidiary stock but recorded a full valuation allowance on the tax benefits of those losses since they are expected to expire unused.

Certain of the foreign NOLs have indefinite carryforward periods.

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The Company has provided a full valuation allowance against these deferred tax assets.

The expected gain from the sale of the HHI segment increases the likelihood that the Company can use certain deferred tax assets including federal net operating losses subject to certain limits, state net operating losses previously expected to expire unused, and state research and development credits also previously expected to expire unused;

therefore, the Company released $ 29.2 million of valuation allowance on these deferred tax assets in Fiscal 2021.

The income recognized for the year ended September 30, 2019 as a result of the June 2019 Regulations, the U.S.

2 unchanged sentences

therefore, the Company released the $ 36.7 million of valuation allowance on these losses in Fiscal 2019.

As a result of the Spectrum Merger in fiscal year 2018, the Company and Spectrum Legacy joined in the filing of a U.S.

consolidated tax return starting July 13, 2018.

The form of the Spectrum Merger allows for the Company’s capital and net operating loss carryforwards to be able to be used to offset future income and the U.S.

tax gain on the sale of the GBL business to Energizer.

As a result, during the year ended September 30, 2018, the Company released $ 365.3 million of valuation allowance on its U.S.

federal net deferred tax assets since it is now more likely than not that the assets will be realized.

The Company also recorded $ 12.3 million of state tax benefit related to net operating loss and credit carryforwards as a result of the Spectrum Merger since it is more likely than not that those carryforwards will generate tax benefits after the Spectrum Merger.

The Company also released $ 4.9 million of valuation allowance against its U.S.

federal and state capital losses as a result of the announced sale of the GBL business to Energizer during the year ended September 30, 2018.

As of September 30, 2021, the valuation allowance is $ 349.4 million, of which $ 253.0 million is related to U.S.

4 unchanged sentences

net deferred tax assets and $ 29.2 million is related to foreign net deferred tax assets.

During the year ended September 30, 2020, the Company decreased its valuation allowance for deferred tax assets by $ 0.2 million of which $ 10.1 million is related to an increase in valuation allowance against U.S.

net deferred tax assets and $ 10.3 million related to a decrease in the valuation allowance against foreign net deferred tax assets.

During the year ended September 30, 2019, the Company increased its valuation allowance for deferred tax assets by $ 24.4 million, of which $ 26.2 million was related to an increase in valuation allowance against U.S.

During the year ended September 30, 2021, the Company increased its valuation allowance for deferred tax assets by $ 46.9 million of which $ 30.6 million is related to a decrease in valuation allowance against U.S.

net deferred tax assets and $ 77.5 million related to an increase in the valuation allowance against foreign net deferred tax assets.

During the year ended September 30, 2020, the Company decreased its valuation allowance for deferred tax assets by $ 0.2 million, of which $ 10.1 million was related to an increase in valuation allowance against U.S.

net deferred tax assets and $ 10.3 million related to a decrease in the valuation allowance against foreign net deferred tax assets.

8 unchanged sentences

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

As of September 30, 2020, and 2019 the Company had $ 2.4 million and $ 2.7 million, respectively, of accrued interest and penalties related to uncertain tax positions.

The impact on income tax expense related to interest and penalties for the years ended September 30, 2020, 2019 and 2018 was a net decrease of $ 0.3 million, a net decrease of $ 0.1 million and a net increase of $ 0.3 million, respectively.

As of September 30, 2021, and 2020 the Company had $ 1.5 million, of accrued interest and penalties related to uncertain tax positions.

There was no impact on income tax expense related to interest and penalties for the years ended September 30, 2021.

The impact during the years ended September 30, 2020 and 2019 was a net decrease of $ 1.0 million and a net increase of $ 0.2 million, respectively.

The following table summarizes the changes to the amount of unrecognized tax benefits for the years ended September 30, 2021, 2020 and 2019:

12 unchanged sentences

$ 18.0 $ 13.8 $ 20.7

During the tax year ended September 30, 2018, the Company reduced unrecognized tax benefits recorded against its deferred tax assets by $ 1.9 million for the change in the U.S.

tax rate from 35 % to 21 %.

The September 30, 2021 Consolidated Statement of Financial Position for SB/RH Holdings, LLC contains $ 8.0 million of income taxes payable to its parent company, calculated as if SB/RH Holdings, LLC were a separate taxpayer.

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NOTE 17 - RELATED PARTIES

Energizer Holdings, Inc.

Effective the close of the GBL divestiture on January 2, 2019, and GAC divestiture on January 28, 2019, the Company and Energizer entered into a series of TSAs and reverse TSAs that support various shared back office administrative functions including finance, sales and marketing, information technology, human resources, real estate and supply chain, customer service and procurement;

to support both the transferred GBL operations and the continuing operations of Spectrum, respectively, within the various regions in which they operate.

Effective the close of the GBL divestiture on January 2, 2019, and GAC divestiture on January 28, 2019, the Company and Energizer entered into a series of TSAs and reverse TSAs that support various shared administrative functions including finance, sales and marketing, information technology, human resources, real estate and supply chain, customer service and procurement;

to support both the divested business operations and the continuing operations of the Company, within the various regions in which they operate.

Charges associated with TSAs and reverse TSAs are recognized as bundled service costs under a fixed fee structure by the respective service or function and geographic location and one-time pass-through charges, including warehousing, freight, among others, to and from Energizer that settle on a net basis between the two parties.

The TSAs and reverse TSAs were further expanded to incorporate the activity and operations attributable to the close of the GAC divestiture.

Charges to Energizer for TSA services are recognized as a reduction of the respective operating costs incurred by Spectrum and recognized as a component of operating expense or cost of goods sold depending upon the functions being supported by Spectrum.

Charges from Energizer for reverse TSA services are recognized as operating expenses or cost of goods sold depending upon the functions being supported by Energizer.

The TSAs and reverse TSAs have an overall expected time period of 12 months following the close of the transaction with some variability in expiration dependent upon the completed transition of the respective service or function and its geographic location and provide up to 12 additional months for a total duration of up to 24 months.

Effective January 2, 2020, Energizer closed its divestiture of the European based Varta® consumer battery business in the EMEA region to Varta AG, which also transferred TSAs and reverse TSAs associated with the divested entities to be assumed by Varta AG.

Charges to Energizer for TSA services are recognized as a reduction of the respective operating costs incurred by the Company and recognized as a component of operating expense or cost of goods sold depending upon the functions being supported by the Company.

Charges from Energizer for reverse TSA services are recognized as operating expenses or cost of goods sold depending upon the functions supported by Energizer.

Effective January 2, 2020, Energizer closed its divestiture of the European based Varta® consumer battery business to Varta AG, which also transferred TSAs and reverse TSAs associated with the divested entities to be assumed by Varta AG.

As a result, a portion of the TSA and reverse TSA charges with Energizer were transferred to Varta AG.

During the year ended September 30, 2020, the Company recognized net loss of $ 3.9 million, consisting of TSA charges of $ 9.6 million and reverse TSA costs of $ 13.5 million.

During the year ended September 30, 2019 the Company recognized net income of $ 5.2 million, consisting of TSA charges of $ 19.1 million and reverse TSA costs of $ 13.9 million.

In addition to the TSAs and reverse TSAs, the Company, Energizer, and Varta AG will receive cash and/or make payments on behalf of the respective counterparty’s operations as part of the shared administrative functions, resulting in cash flow being commingled with the operating cash flow of the Company.

The Company recognizes a net payable or receivable with Energizer and Varta AG for any outstanding TSA and reverse TSA related services and net working capital attributable to commingled cash flow.

As of September 30, 2020 and 2019, the Company had net receivable of $ 5.4 million and net receivable of $ 12.8 million, respectively, with Energizer included in Other Receivables on the Company’s Statement of Financial Position.

As of September 30, 2020, the Company had net payable of $ 1.0 million with Varta AG included in Other Current Liabilities on the Company’s Statement of Financial Position.

The Company’s H&G segment continues to manufacture certain GAC related products at its facilities and sell the products to Energizer as a third-party supplier on an ongoing basis, at inventory cost plus contracted markup, as agreed upon in the supply agreement.

The supply agreement has a contracted term of 24 months and may be subject to early termination by either party at any time with written notice.

Material and inventory on hand to support the supply agreement is recognized as inventory of the Company.

During the years ended September 30, 2020 and 2019, the Company recognized $ 18.9 million and $ 12.5 million, respectively, of revenue attributable to the Energizer supply agreement as a component of H&G revenue after completion of the GAC divestiture.

As of September 30, 2020 and 2019, the Company had outstanding receivables of $ 4.4 million and $ 4.9 million, respectively, from Energizer in Trade Receivables, Net on the Company’s Statement of Financial Position associated with the H&G supply agreement.

The Company had exited all outstanding TSAs with Energizer and Varta by January 2021.

The following table summarizes the TSA income and expenses during the years ended September 30, 2021, 2020 and 2019:

(in millions) 2021 2020 2019

TSA income $ 0.9 $ 9.6 $ 19.1

TSA expense 2.6 13.5 13.9

Net TSA (loss) income $ ( 1.7 ) $ ( 3.9 ) $ 5.2

Additionally, the Company, Energizer, and Varta AG receive cash and/or make payments on behalf of the respective counterparty’s operations as part of the shared operating activity, resulting in cash flow being commingled with the operating cash flow of the Company.

The Company recognizes a net payable or receivable with Energizer and Varta AG for any outstanding TSA charges and net working capital attributable to the commingled operations and cash flow.

As of September 30, 2021 and 2020, the Company had net payable of $ 2.9 million with Energizer included in Other Current Liabilities and net receivable of $ 5.4 million included in Other Receivables on the Company’s Statement of Financial Position, respectively.

As of September 30, 2021 and 2020, the Company had net receivable of $ 1.7 million with Varta AG included in Other Receivables and net payable $ 1.0 million included in Other Current Liabilities on the Company’s Statement of Financial Position.

The Company’s H&G segment continued to manufacture certain GAC related products at its facilities and sell the products to Energizer as a third-party supplier on an ongoing basis, at inventory cost plus contracted markup, as agreed upon in the supply agreement.

The supply agreement had a contracted term of 24 months and expired in January 2021 with no renewal.

Material and inventory on hand to support the supply agreement was recognized as inventory of the Company.

During the years ended September 30, 2021, 2020 and 2019, the Company recognized $ 6.0 million, $ 18.9 million, and $ 12.5 million, respectively, of revenue attributable to the Energizer supply agreement as a component of H&G revenue after completion of the GAC divestiture.

As of September 30, 2021 the Company had no outstanding receivables from Energizer associated with the H&G supply agreement.

As of September 30, 2020, the Company had outstanding receivable of $ 4.4 million from Energizer in Trade Receivables, Net on the Company’s Statement of Financial Position associated with the H&G supply agreement.

SPECTRUM BRANDS HOLDINGS, INC.

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 - RELATED PARTIES (continued)

As a condition to the consummation of the GAC acquisition and receipt of 5.3 million shares of Energizer common stock as consideration, the Company entered into the Energizer Shareholder Agreement, which contains a 24 -month standstill provision that prohibits the Company from engaging in certain transactions involving Energizer to control or influence management, board of directors or policies of Energizer.

Additionally, for a period of 18 months following the closing of the GAC acquisition, the Company is required to vote in favor of Energizer’s board of director nominees and in accordance with the Energizer board’s recommendations on all other matters at any meeting of Energizer’s shareholders.

Additionally, pursuant to the Energizer Shareholder Agreement, the Company has agreed not to transfer any of its Shares or other equity securities in Energizer, or engage in certain hedging transactions from the closing of the GAC acquisition until the day that is twelve months after the GAC closing date and, following such period, subject to certain limitations, not to transfer any such Energizer shares or other equity securities to any person or entity who would thereafter beneficially own more than 4.9 % of Energizer’s outstanding shares of equity securities after giving effect to such transaction.

Following the 18 month anniversary of the closing of the GAC acquisition, Energizer will have the right to repurchase any or all of the shares held by the Company for a purchase price per share equal to the greater of the volume-weighted average sales price per share for the 10 consecutive trading days beginning on the 12 th trading day immediately preceding notice of the repurchase from Energizer and 100 % of the volume-weighted average sale price per share of the common stock for the 10 consecutive trading days immediately preceding the date of the GAC agreement.

The Company’s investment in Energizer common stock is recognized at its fair value in Investments on the Company’s Consolidated Statement of Financial Position, with any unrealized gains or losses attributable to changes in the market price and dividend income received from Energizer being recognized as Other Non-Operating Income on the Company’s Consolidated Statements of Income.

See Note 7 – Fair value of Financial Instruments for additional discussion on the Company’s investment in Energizer common stock.

Jefferies Financial Group

On October 16, 2017, HRG entered into an engagement letter with Jefferies LLC (“Jefferies”), a wholly owned subsidiary of Jefferies Financial Group, which owned more than 10 % of the outstanding common stock of the Company to act as co-advisor to the Company (with the other co-advisors acting as lead financial advisor to HRG) with respect to HRG’s review of strategic alternatives.

Under the Jefferies engagement letter, and effective as of the closing date of the Spectrum Merger, Jefferies received a $ 3.0 million transaction fee, including reimbursement for all reasonable out of pocket expenses incurred by Jefferies in connection therewith.

In addition, HRG agreed to indemnify Jefferies for certain liabilities in connection with such engagement.

Effective on October 11, 2019 (the “Distribution Date”), Jefferies distributed 7,514,477 SBH shares through a special pro rata dividend (the “Distribution”) to Jefferies’ stockholders of record as of the close of business on September 30, 2019 (the “Record Date”).

Stockholders of Jefferies received approximately 0.025 of a share of the Company’s common stock for each share of Jefferies common stock held as of the Record Date.

Based on closing market prices on September 13, 2019, the dividend reflects a distribution of approximately $ 1.50 , or 7.4 %, per Jefferies share.

Additionally, following the Distribution and pursuant to the Shareholder Agreement by and between Jefferies Financial Group and the Company dated February 24, 2018, Joseph S.

Steinberg, resigned from the Company’s Board of Directors.

During the first quarter of the fiscal year ended September 30, 2019, the Company repurchased 158,318 shares of common stock from David Maura, Chairman and Chief Executive Officer of the Company, for $ 8.0 million at the current market price of the Company’s stock, at an average repurchase price of $ 50.53 per share.

NOTE 18 – SHAREHOLDER’S EQUITY

Share Repurchases

The Company has a share repurchase program that is executed through purchases made from time to time either in the open market or otherwise.

On July 24, 2018, the Board of Directors approved a $ 1.0 billion common stock repurchase program.

SBH has a share repurchase program that is executed through purchases made from time to time either in the open market or otherwise.

On May 4, 2021, the Board of Directors approved a $ 1.0 billion common stock repurchase program.

The authorization is effective for 36 months.

As part of the share repurchase program, the Company purchased treasury shares in open market purchases at market fair value, in private purchases from Company employees at fair value, and through an accelerated share repurchase (“ASR”) agreement with a third-party financial institution.

As part of the share repurchase program, SBH purchased treasury shares in open market purchases at market fair value, in private purchases from employees or significant shareholders at fair value, and through an accelerated share repurchase (“ASR”) agreement with a third-party financial institution.

The following summarizes the activity of common stock repurchases under the program for the year ended September 30, 2021 and 2020:

(in millions except per share data) Number of

Open Market Purchases 0.9 $ 93.13 $ 80.3 4.1 $ 56.97 $ 230.6

Private Purchases 0.7 66.63 45.5 0.1 62.30 9.2

ASR — — — 2.0 61.47 124.8

Total Purchases 1.6 $ 81.43 $ 125.8 6.2 $ 58.57 $ 364.6

On November 18, 2019, SBH entered into an ASR to repurchase $ 125.0 million of the Company’s common stock.

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The total number of shares repurchased under the ASR program was 2.0 million at an average cost per share of $ 61.59 , based on the volume-weighted average share price of the Company’s common stock during the calculation period of the ASR program, less the applicable contractual discount.

The following summarizes the activity of common stock repurchases under the program for the year ended September 30, 2020 and 2019:

(in millions except per share data) Number of

Open Market Purchases 4.1 $ 56.97 $ 230.6 4.6 $ 54.22 $ 250.0

Private Purchases 0.1 62.30 9.2 0.3 56.02 18.5

ASR 2.0 61.47 124.8 — — —

Total Purchases 6.2 $ 58.57 $ 364.6 4.9 $ 54.34 $ 268.5

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19 – SHARE BASED COMPENSATION

Equity based incentive and performance compensation awards provided to employees, directors, officers and consultants were issued pursuant to the following awards plans:

• HRG Group, Inc.

2011 Omnibus Equity Award Plans as approved and amended by the HRG Legacy stockholders (the "HRG Equity Plan").

• Harbinger Group, Inc.

2014 Warrant Plan, as approved by the HRG Legacy stockholders (the "HRG Warrant Plan").

• Spectrum Brands Holdings, Inc.

2011 Omnibus Equity Awards Plan as approved and amended by the Spectrum Legacy stockholders, (the "Spectrum Equity Plan").

• Spectrum Brands Holdings, Inc.

Equity based incentive and performance compensation awards provided to employees, directors, officers and consultants were issued pursuant to the Spectrum Brands Holdings, Inc.

2011 Omnibus Equity Awards Plan as approved and amended by the Spectrum Legacy stockholders, (the "Spectrum Equity Plan") and the Spectrum Brands Holdings, Inc.

2020 Omnibus Equity Plan, as approved by the Spectrum stockholders (the "New 2020 Equity Plan").

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(number of shares, in millions) Authorized Available

HRG Group 2011 Omnibus Equity Award Plans 2.7 0.8

Harbinger Group, Inc.

2014 Warrant Plan 3.0 —

Spectrum Brands Holdings, Inc.

2 unchanged sentences

2020 Omnibus Equity Plan 1.2 1.2

Effective at the close of the Spectrum Merger, each stock option, warrant and restricted stock award granted under the HRG Equity Plan and HRG Warrant Plan that was outstanding and unvested immediately prior to the closing became fully vested and exercisable.

Each exercisable award that was unexercised was adjusted (including to give effect to the reverse stock split) and remains outstanding, subject to the same terms and conditions as applied in the corresponding awards.

Each restricted stock award became fully vested and treated as a share of HRG common stock for purposes of the reverse stock split and Spectrum Merger.

Further, effective at the close of the Spectrum Merger, each restricted stock award, restricted stock unit and performance stock unit under the Spectrum Equity Plan, whether vested or unvested, were assumed by SBH and automatically converted into a corresponding equity-based award in SBH with the right to hold or acquire shares of common stock equal to the number of shares of Spectrum Legacy common stock previously underlying such award.

Each new award is subject to the same terms and conditions as the corresponding Spectrum Legacy award.

SBH assumed all rights and obligation in respect of each equity-based plan of Spectrum Legacy.

Share based compensation expense is recognized as General and Administrative Expenses on the Consolidated Statements of Income.

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SB/RH $ 27.2 $ 30.5 $ 42.6

The Company measures share based compensation expense of its Restricted Stock Units (“RSUs”) based on the fair value of the awards, as determined based on the market price of the Company’s shares of common stock on the grant date and recognized these costs on a straight-line basis over the requisite period of the awards.

Certain RSUs are performance-based awards that are dependent upon achieving specified financial metrics over a designated period of time.

Restricted Stock Units ("RSUs")

The Company recognizes share based compensation expense from the issuance of its RSUs, primarily under its Long-Term Incentive Plan ("LTIP"), based on the fair value of the awards, as determined by the market price of the Company’s shares of common stock on the designated grant date and recognized on a straight-line basis over the requisite service period of the awards.

Certain RSUs are time-based grants that provide for either 3-year cliff vesting or graded vesting depending upon the vesting conditions and forfeitures provided by the grant.

Certain RSUs are performance-based awards that are dependent upon achieving specified financial metrics (adjusted EBITDA, return on adjusted equity, and adjusted free cash flow) over a designated period of time.

Additionally, the Company regularly issues individual RSU awards under its equity plan to its Board members and individual employees for recognition, incentive, or retention purposes, when needed, which are primarily conditional upon time-based service conditions and included as a component of share-based compensation.

During the year ended September 30, 2019, the Company also provided for bridge awards, that are special awards to certain employees, for transitioning to the LTIP from previous equity incentive compensation plans.

Bridge awards have both performance conditions dependent upon achieving specified financial targets (adjusted EBITDA and adjusted free cash flow) in fiscal years ended September 30, 2019 and 2020, and time-based service conditions.

All Bridge awards were fully vested during the year ended September 30, 2021 and paid in either RSUs or cash, or both, based upon an employee election when granted.

Bridge awards elected to be payable in RSU were recognized as equity awards and included as a component of share-based compensation expense.

Bridge awards elected to be payable in cash were not recognized as equity awards and excluded from share-based compensation expense.

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 19 – SHARE BASED COMPENSATION (continued)

Additionally, in prior years, the Company provided for a portion of its annual management incentive compensation plan ("MIP") to be paid in restricted stock units with immediate vesting, in lieu of cash payment.

During the year ended September 30, 2020, the Company changed its MIP payout policy that previously provided for the issuance of stock for a designated pool of recipients to be fully funded through cash distribution with no stock issuance.

As a result, there was no portion of annual MIP paid in common stock for the years ended September 30, 2021 and 2020.

Share based compensation expense associated with the annual MIP was $ 15.2 million for the year ended September 30, 2019.

Certain RSUs are performance-based awards that are dependent upon achieving specified financial metrics over a designated period of time.

As of September 30, 2021, the remaining unrecognized pre-tax compensation cost for SBH and SB/RH is $ 34.6 million.

The following is a summary of the RSU activity for the years ended September 30, 2021, 2020 and 2019:

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Total grants 0.6 $ 76.78 $ 44.9 0.6 $ 76.83 $ 43.3

Beginning in the year ended September 30, 2019, the Company provided to certain employees RSU grants issued under a Long-Term Incentive Plan (“LTIP”), with a 3 -year, cliff vesting schedule and having both performance conditions dependent upon achieving specified financial targets (adjusted EBITDA, return on equity, and adjusted free cash flow) and time-based service.

The Company also provided for bridge awards, that are special awards to certain employees, for transitioning to the LTIP from previous equity incentive compensation plans.

Bridge awards vest annually, on November 21, 2019 and November 21, 2020, and have both performance conditions dependent upon achieving specified financial targets in fiscal year 2019 and 2020, respectively, (adjusted EBITDA and adjusted free cash flow) and time-based service conditions.

Bridge awards are payable in either RSUs or cash, or both, based upon an employee election.

Bridge awards elected to be payable in RSU are recognized as equity awards and included as a component of share-based compensation expense.

In addition to RSU awards, the Company also provides for a portion of its annual management incentive compensation plan ("MIP") to be paid in common stock of the Company, in lieu of cash payment, and is recognized as a liability plan.

Share based compensation expense associated with the annual MIP was $ 16.9 million and $ 9.5 million for the years ended September 30, 2019 and 2018, respectively.

During the year ended September 30, 2020, the Company made a change to our annual MIP payout that previously provided for the issuance of stock for a designated pool of recipients in lieu of cash and will instead be fully funded through cash distribution with no stock issuance.

As a result, there was no portion of annual MIP to paid in common stock for the year ended September 30, 2020.

As of September 30, 2020, the remaining unrecognized pre-tax compensation cost for SBH and SB/RH is $ 34.0 million.

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 19 – SHARE BASED COMPENSATION (continued)

HRG Legacy Equity Plans

The following is a summary of HRG stock option awards, warrants, and restricted stock awards during the years ended September 30, 2020, 2019, and 2018:

Stock Options Warrants Restricted Stock Awards

Stock Options

All stock options awards are fully vested and exercisable, with no new awards being granted during the years ended September 30, 2021, 2020 and 2019, and no remaining unrecognized pre-tax compensation as of September 30, 2021.

The following is a summary of outstanding stock option awards during the years ended September 30, 2021, 2020, and 2019:

Stock Options

(in millions, except per share data) Options Weighted

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Grant Date Fair Value

Units Weighted

Price Weighted

Grant Date Fair Value

Units Weighted

As of September 30, 2017 4.0 $ 9.69 $ 3.88 0.6 $ 13.13 $ 3.22 0.1 $ 13.36 $ 1.9

Granted — — — — — — 0.1 16.85 0.4

Vested and exercisable at September 30, 2018 $ 0.24 $ 73.29 $ 4.78

Forfeited ( 0.01 ) 67.83 4.94

Vested and exercisable at September 30, 2019 0.23 73.51 4.79

Exercised ( 0.01 ) 52.83 3.55

As of As of As of July 13, 2018 1.5 $ 11.80 $ 4.78 — $ — $ — — $ — $ —

Vested and exercisable at September 30, 2020 0.22 73.96 4.82

During the year ended September 30, 2018, HRG stock option awards with a fair value $ 0.8 million vested.

The intrinsic value of HRG share options exercised during the year ended September 30, 2018 was $ 21.5 million which HRG received $ 19.9 million in cash settlement.

As of September 30, 2020, there are $ 0.2 million vested and exercisable HRG options outstanding with a weighted average exercise price of $ 73.96 , as converted due to the reverse stock split to facilitate the Spectrum Merger.

HRG measures shared based compensation expense of its restricted stock awards based on the fair value of the awards, as determined based on the market price of the HRG shares of common stock on the grant date and recognizes these costs on a straight-line basis over the requisite period of the awards.

There is no remaining unrecognized pre-tax compensation cost associated with HRG share-based awards as of September 30, 2020.

Exercised ( 0.06 ) 52.83 3.55

Vested and exercisable at September 30, 2021 $ 0.16 $ 82.36 $ 5.32

The intrinsic value of share options exercised during the years ended September 30, 2021 and 2020 was $ 2.5 million and $ 0.1 million, respectively.

Cash received from the options exercises during the years ended September 30, 2021 and 2020 was $ 3.4 million and $ 0.3 million, respectively.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20 - ACCUMULATED OTHER COMPREHENSIVE INCOME

The changes in the components of accumulated other comprehensive income (loss), net of taxes, was as follows:

(in millions) Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total

Balance at September 30, 2018 $ ( 192.5 ) $ 7.4 $ ( 50.7 ) $ ( 235.8 )

Other comprehensive (loss) income before reclassification ( 30.8 ) 12.6 ( 27.6 ) ( 45.8 )

Net reclassification for (gain) loss to income from continuing operations — ( 10.4 ) 2.1 ( 8.3 )

Net reclassification for (gain) loss to income from discontinued operations — ( 0.2 ) 0.1 ( 0.1 )

Other comprehensive (loss) income before tax ( 30.8 ) 2.0 ( 25.4 ) ( 54.2 )

Deferred tax effect ( 4.7 ) ( 5.4 ) 4.1 ( 6.0 )

Other comprehensive loss, net of tax ( 35.5 ) ( 3.4 ) ( 21.3 ) ( 60.2 )

Sale and deconsolidation of GBL and GAC discontinued operations (Note 3) 11.6 0.9 9.4 21.9

other comprehensive loss from continuing operations attributable to non-controlling interest ( 0.2 ) — — ( 0.2 )

other comprehensive loss from discontinued operations attributable to non-controlling interest ( 0.3 ) — — ( 0.3 )

Other comprehensive loss attributable to controlling interest ( 23.4 ) ( 2.5 ) ( 11.9 ) ( 37.8 )

Balance as of September 30, 2019 ( 215.9 ) 4.9 ( 62.6 ) ( 273.6 )

Other comprehensive loss before reclassification ( 18.5 ) ( 6.2 ) ( 5.2 ) ( 29.9 )

Net reclassification for (gain) loss to income from continuing operations — ( 4.6 ) 4.6 —

Net reclassification for gain to income from discontinued operations — ( 0.4 ) ( 0.3 ) ( 0.7 )

Other comprehensive loss before tax ( 18.5 ) ( 11.2 ) ( 0.9 ) ( 30.6 )

Deferred tax effect 0.1 11.7 ( 0.3 ) 11.5

Other comprehensive (loss) income, net of tax ( 18.4 ) 0.5 ( 1.2 ) ( 19.1 )

Adoption of ASU 2018-02 (Note 2) — ( 1.8 ) 2.1 0.3

Sale and deconsolidation of Coevorden operations (Note 3) 8.1 — — 8.1

other comprehensive income from continuing operations attributable to non-controlling interest 0.1 — — 0.1

other comprehensive income from discontinued operations attributable to non-controlling interest 0.3 — — 0.3

Other comprehensive (loss) income attributable to controlling interest ( 10.7 ) ( 1.3 ) 0.9 ( 11.1 )

Balance as of September 30, 2020 ( 226.6 ) 3.6 ( 61.7 ) ( 284.7 )

Other comprehensive income before reclassification 32.2 0.1 11.7 44.0

Net reclassification for loss to income from continuing operations — 9.2 4.8 14.0

Net reclassification for loss (gain) to income from discontinued operations — 0.1 ( 0.1 ) —

Other comprehensive income before tax 32.2 9.4 16.4 58.0

Deferred tax effect — ( 6.6 ) ( 1.6 ) ( 8.2 )

Other comprehensive income, net of tax 32.2 2.8 14.8 49.8

other comprehensive income from discontinued operations attributable to non-controlling interest 0.4 — — 0.4

Other comprehensive income attributable to controlling interest 31.8 2.8 14.8 49.4

Balance as of September 30, 2021 $ ( 194.8 ) $ 6.4 $ ( 46.9 ) $ ( 235.3 )

See Note 14 - Derivatives for further detail on the Company’s hedging activity.

See Note 15 - Employee Benefit Plans for further detail over the Company’s defined benefit plans.

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 21 - COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

Shareholder Litigation.

On August 16, 2019, a state court class action complaint was filed in the Circuit Court of Dane County, Wisconsin against the Company and certain of the Company's current and former directors and officers.

The complaint alleged that certain financial statements contained misstatements in violation of the Securities Act of 1933.

During the year ended September 30, 2020, the Company recognized $ 0.9 million for a proposed settlement, net third-party insurance coverage and payment, which has been paid and is being held in escrow pending a final approval by the Circuit Court of Dane County.

Separately, on July 12, 2019, an amended consolidated class action complaint filed earlier in 2018 was filed in the United States District Court for the Western District of Wisconsin by the Public School Teachers’ Pension & Retirement Fund of Chicago and the Cambridge Retirement against Spectrum Brands’ Legacy, Inc.

On July 12, 2019, an amended consolidated class action complaint filed earlier in 2018 was filed in the United States District Court for the Western District of Wisconsin (the “Court”) by the Public School Teachers’ Pension & Retirement Fund of Chicago and the Cambridge Retirement against Spectrum Brands’ Legacy, Inc.

(“Spectrum Legacy”).

The complaint alleges that the defendants violated the Securities Exchange Act of 1934 by making misrepresentations and omissions in Spectrum Legacy’s financial statements.

The complaint alleges that the defendants violated the Securities Exchange Act of 1934.

The amended complaint added HRG Group, Inc.

(“HRG”) as a defendant and asserted additional claims against the Company on behalf of a purported class of HRG shareholders.

(“HRG”), the predecessor to the Company, as a defendant and asserted additional claims against the Company on behalf of a purported class of HRG shareholders.

The class period of the consolidated amended complaint is from January 26, 2017 to November 19, 2018, and the plaintiffs seek an unspecified amount of compensatory damages, interest, attorneys’ and expert fees and costs.

During the year ended September 30, 2020, the Company reached a proposed settlement resulting in an insignificant loss, net of third-party insurance coverage and payment, pending final approval by the United States District Court.

In February 2021, the Court declined to approve the proposed settlement without prejudice because the Court determined that as a procedural matter the plaintiff’s counsel had not taken the appropriate actions to be appointed to represent the purported class of HRG shareholders.

The court subsequently appointed separate counsel to represent the HRG shareholder class.

In August 2021, the Company reached an agreement in principle, subject to final documentation and approval of the Court, to settle the claims of the Spectrum Legacy class, the cost of which will be defrayed by third-party insurance.

In October 2021, the Company reached an agreement in principle, subject to final documentation and approval of the Court, to settle the claims of the HRG class, the cost of which will be defrayed by third-party insurance.

Environmental.

The Company has provided for an estimated cost of $ 11.6 million and $ 12.2 million, as of September 30, 2020 and 2019, respectively, associated with environmental remediation activities primarily with some of its former manufacturing sites, included in Other Long-Term Liabilities on the Consolidated Statement of Position.

The Company has provided for an estimated cost of $ 11.3 million and $ 11.6 million, as of September 30, 2021 and 2020, respectively, associated with environmental remediation activities primarily with some of its former manufacturing sites, included in Other Long-Term Liabilities on the Consolidated Statement of Financial Position.

The Company believes that any additional liability in excess of the amounts provided that may result from resolution of these matters, will not have a material adverse effect on the consolidated financial condition, results of operations or cash flows of the Company.

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Estimated warranty costs incorporate replacement parts, products and delivery, and are recorded as a cost of goods sold at the time of product shipment based on historical and projected warranty claim rates, claims experience and any additional anticipated future costs on previously sold products.

The Company recognized $ 10.9 million and $ 7.2 million of warranty accruals as of September 30, 2020 and 2019, respectively, included in Other Current Liabilities on the Consolidated Statement of Financial Statement.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company recognized $ 0.4 million of warranty accruals as of September 30, 2021 and 2020, included in Other Current Liabilities on the Consolidated Statement of Financial Statement.

During the year ended September 30, 2021, the Company recognized legal reserves at our H&G division of approximately $ 3.2 million attributable to significant and unusual non-recurring claims with no previous history or precedent, included in Other Current Liabilities on the Consolidated Statement of Financial Position.

NOTE 22 - SEGMENT INFORMATION

The Company identifies its segments based upon the internal organization that is used by management for making operating decisions and assessing performance as the source of its reportable segments.

The Company manages its continuing operations in four vertically integrated, product-focused reporting segments:

(i) HHI, which consists of the Company’s worldwide hardware, security and plumbing business;

(ii) GPC, which consists of the Company’s worldwide pet care business;

(iii) H&G, which consists of the Company’s home and garden and insect control business and (iv) HPC, which consists of the Company’s worldwide small kitchen and personal care appliances businesses.

The Company manages its continuing operations in three vertically integrated, product-focused reporting segments:

(i) GPC, which consists of the Company’s worldwide pet care business;

(ii) H&G, which consists of the Company’s home and garden and insect control business and (iii) HPC, which consists of the Company’s worldwide small kitchen and personal care appliances businesses.

Global strategic initiatives and financial objectives for each reportable segment are determined at the corporate level.

Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a president or general manager responsible for the sales and marketing initiatives and financial results for product lines within the segment.

Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a president responsible for the sales and marketing initiatives and financial results for product lines within the segment.

Net sales relating to the segments for the years ended September 30, 2021, 2020 and 2019 are as follows:

(in millions) 2021 2020 2019

2020 2019 2018

$ 1,342.1 $ 1,355.7 $ 1,377.7

1,107.6 1,068.1 1,110.4

962.6 870.2 820.5

551.9 508.1 500.1

$ 3,964.2 $ 3,802.1 $ 3,808.7

HPC $ 1,260.1 $ 1,107.6 $ 1,068.1

GPC 1,129.9 962.6 870.2

H&G 608.1 551.9 508.1

Net sales $ 2,998.1 $ 2,622.1 $ 2,446.4

The Chief Operating Decision Maker of the Company uses Adjusted EBITDA as the primary operating metric in evaluating the business and making operating decisions.

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Adjusted EBITDA further excludes:

• Stock based and other incentive compensation costs that consist of costs associated with long-term compensation arrangements and other equity based compensation based upon achievement of long-term performance metrics;

and generally consist of non-cash, stock-based compensation.

During the years ended September 30, 2021, 2020, and 2019, other incentive compensation also includes incentive bridge awards issued due to changes in the Company’s LTIP that allowed for cash based payment upon employee election but does not qualify for share-based compensation.

All bridge awards fully vested in November 2020.

See Note 19 - Share Based Compensation for further details.

Additionally, the Company issued certain incentive bridge awards due to changes in the Company’s long-term compensation plans that allow for cash based payment upon employee election which have been included in the adjustment but do not qualify for shared-based compensation.;

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 22 - SEGMENT INFORMATION (continued)

• Restructuring and related charges, which consist of project costs associated with the restructuring initiatives across the Company's segments.

See Note 5 - Restructuring and Related Charges for further details;

• Transaction related charges that consist of (1) transaction costs from qualifying acquisition transactions during the period, or subsequent integration related project costs directly associated with an acquired business;

and (2) divestiture related transaction costs that are recognized in continuing operations and post-divestiture separation costs consisting of incremental costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred as part of the divestitures and exiting of transition service arrangements (TSAs) and reverse TSAs.

• Transaction related charges that consist of (1) transaction costs from acquisitions or subsequent project costs directly associated with integration of an acquired business with the consolidated group;

and (2) transaction costs from divestitures and subsequent project costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred and exiting of transition service arrangements (TSAs) and reverse TSAs.

See Note 2 – Significant Accounting Policies and Practices for further details;

• Gains and losses attributable to the Company’s investment in Energizer common stock, acquired as part of consideration received from the Company’s sale and divestiture of GAC during the year ended September 30, 2019.

See Note 3 – Divestitures and Note 7 – Fair Value of Financial Instruments for further details;

• Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations (when applicable);

• Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations after an acquisition (when applicable);

• Foreign currency gains and losses attributable to multicurrency loans for the years ended September 30, 2020 and 2019, that were entered into with foreign subsidiaries in exchange for the receipt of divestiture proceeds by the parent company and the distribution of the respective foreign subsidiaries’ net assets as part of the GBL and GAC divestitures.

The Company has entered into various hedging arrangements to mitigate the volatility of foreign exchange risk associated with such loans;

• Incremental reserves associated with environmental remediation activity of legacy properties and former manufacturing sites assumed by the organization which had previously been exited by the Company, plus legal settlement costs associated with retained litigation from the Company's divested GAC operations realized during the year ended September 30, 2019.

See Note 20 – Commitments and Contingencies for further discussion;

• Legal and litigation costs associated with Salus during the years ended September 30, 2020, 2019, and 2018 as it is not considered a component of the continuing commercial products company, but continues to be consolidated by the Company after completion of the Spectrum Merger until the Salus operations can be wholly dissolved and/or deconsolidated;

• Unallocated shared costs associated with discontinued operations from certain shared and center-led administrative functions supporting the Company's business units excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations, including but not limited to, information technology, human resources, finance and accounting, supply chain, and commercial operations.

Amounts attributable to unallocated shared costs would be mitigated through subsequent strategic or restructuring initiatives, TSAs, elimination of extraneous costs or re-allocation or absorption by existing continuing operations following the completed sale of the discontinued operations.

See Note 3 - Divestitures for further details;

• Gains and losses attributable to the Company’s investment in Energizer common stock.

During the year ended September 30, 2021, the Company sold its remaining shares in Energizer common stock.

See Note 7 – Fair Value of Financial Instruments for further details;

• Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations;

• Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations after an acquisition;

• Incremental reserves for non-recurring litigation or environmental remediation activity including (1) proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual nonrecurring claims with no previous history or precedent recognized during the year ended September 30, 2021, (2) environmental remediation reserves realized during the year ended September 30, 2019 on legacy properties and former manufacturing sites assumed by the organization which had previously been exited by the Company, and (3) legal settlement costs associated with retained litigation from the Company's divested GAC operations realized during the year ended September 30, 2019.

See Note 21 – Commitments and Contingencies for further details;

• Incremental costs realized under a three-year tolling agreement entered into with the buyer in consideration with the divestiture of the Coevorden Operations on March 29, 2020, for the continued production of dog and cat food products purchased to support GPC commercial operations and distribution in Europe.

See Note 3 - Divestitures for further details;

• Gain on extinguishment of the Salus CLO debt due to the discharge of the obligation during the year ended September 30, 2020.

See Note 12 - Debt for further details;

• Incremental costs associated with a safety recall in GPC during the year ended September 30, 2019 and 2018;

• Incremental costs directly associated with the Spectrum Merger during the year ended September 30, 2018;

• Non-recurring HRG net operating costs incurred during the year ended September 30, 2018 considered to be redundant or duplicative as a result of the Spectrum Merger and not considered a component of the continuing commercial products company post-merger, including compensation and benefits, directors fees, professional fees, insurance, public company costs, amongst others, and including interest and other non-recurring income that was eliminated following the transaction;

• Other adjustments primarily consisting of costs attributable to (1) expenses and cost recovery for flood damage at the Company's facilities in Middleton, Wisconsin recognized during the years ended September 30, 2020, 2019, and 2018;

• Other adjustments primarily consisting of costs attributable to (1) incremental fines and penalties realized for delayed shipments following the transition of a third-party logistics service provider in GPC during the year ended September 30, 2021;

(2) costs associated with Salus operations during the years ended September 30, 2021, 2020 and 2019 as they are not considered a component of continuing commercial products company;

(3) expenses and cost recovery for flood damage at the Company's facilities in Middleton, Wisconsin recognized during the years ended September 30, 2020 and 2019;

(4) incremental costs for separation of a key executives during the years ended September 30, 2020 and 2019;

(3) operating margin on H&G sales to GAC discontinued operations during the year ended September 30, 2019 and 2018;

(4) certain fines and penalties for delayed shipments following the completion of a GPC distribution center consolidation in EMEA during the year ended September 30, 2019.

(5) costs associated with a safety recall in GPC during the year ended September 30, 2019;

(6) operating margin on H&G sales to GAC discontinued operations during the year ended September 30, 2019;

and (7) certain fines and penalties for delayed shipments following the completion of a GPC distribution center consolidation in EMEA during the year ended September 30, 2019.

SPECTRUM BRANDS HOLDINGS INC.

5 unchanged sentences

2021 2020 2019

HHI $ 256.3 $ 253.7 $ 254.7

HPC $ 102.6 $ 92.2 $ 87.2

8 unchanged sentences

Transaction related charges 56.3 23.1 20.9

Loss on assets held for sale 26.8 — —

Unallocated shared costs 26.9 17.4 15.7

(Gain) loss on Energizer investment ( 6.9 ) 16.8 12.1

Inventory acquisition step-up 7.3 — —

Loss on sale of Coevorden operations — 26.8 —

Write-off from impairment of goodwill — — 116.0

Write-off from impairment of intangible assets — 24.2 35.4

Loss on Energizer investment 16.8 12.1 —

Foreign currency loss on multicurrency divestiture loans 3.8 36.2 —

Legal and environmental remediation reserves 6.0 — 10.0

Inventory acquisition step-up — — 0.8

GPC safety recall — 0.7 18.9

Spectrum merger related transaction charges — — 45.9

Non-recurring HRG operating costs — — 18.9

Salus 0.6 1.6 1.1

Foreign currency loss on multicurrency divestiture loans — 3.8 36.2

Salus CLO debt extinguishment — ( 76.2 ) —

Coevorden tolling related charges 6.2 — —

Other 3.9 ( 3.0 ) 6.9

Income (loss) from operations before income taxes $ 155.4 $ ( 193.8 ) $ ( 35.7 )

Loss from operations before income taxes $ ( 11.1 ) $ ( 25.1 ) $ ( 354.2 )

SB/RH (in millions)

2021 2020 2019

HHI $ 256.3 $ 253.7 $ 254.7

HPC $ 102.6 $ 92.2 $ 87.2

8 unchanged sentences

Transaction related charges 56.3 23.1 20.9

Loss on assets held for sale 26.8 — —

Unallocated shared costs 26.9 17.4 15.7

(Gain) loss on Energizer investment ( 6.9 ) 16.8 12.1

Inventory acquisition step-up 7.3 — —

Loss on sale of Coevorden operations — 26.8 —

Write-off from impairment of goodwill — — 116.0

Write-off from impairment of intangible assets — 24.2 35.4

Loss on Energizer investment 16.8 12.1 —

Foreign currency loss on multicurrency divestiture loans 3.8 36.2 —

Legal and environmental remediation reserves 6.0 — 10.0

Inventory acquisition step-up — — 0.8

GPC safety recall — 0.7 18.9

Foreign currency loss on multicurrency divestiture loans — 3.8 36.2

Coevorden tolling related charges 6.2 — —

Other 3.9 ( 3.7 ) 4.1

Income (loss) from operations before income taxes $ 86.6 $ ( 129.2 ) $ 130.1

Loss from operations before income taxes $ ( 7.7 ) $ ( 93.9 ) $ ( 297.4 )

SPECTRUM BRANDS HOLDINGS INC.

5 unchanged sentences

2021 2020 2019

HHI $ 33.9 $ 33.5 $ 40.0 $ 33.9 $ 33.5 $ 40.0

HPC $ 44.0 $ 35.2 $ 64.6

6 unchanged sentences

2021 2020 2019

HHI $ 16.9 $ 18.0 $ 15.6 $ 16.9 $ 18.0 $ 15.6

HPC $ 9.3 $ 10.7 $ 11.0

6 unchanged sentences

2021 2020 2021 2020

HHI $ 1,786.5 $ 1,611.0 $ 1,786.5 $ 1,611.0

HPC $ 879.4 $ 824.6 $ 879.4 $ 824.6

5 unchanged sentences

Net sales SBH and SB/RH for the years ended September 30, 2021, 2020 and 2019 and long-lived asset information as of September 30, 2021 and 2020 by geographic area are as follows:

SBH and SB/RH

Net sales to external parties - Geographic Disclosure (in millions)

1 unchanged sentence

United States $ 1,750.8 $ 1,627.4 $ 1,478.8

$ 2,822.5 $ 2,649.5 $ 2,627.2

683.9 656.6 669.4

Europe/MEA 877.8 683.9 655.8

Latin America 193.4 147.9 157.2

182.3 205.4 212.1

Asia-Pacific 112.0 101.8 97.9

North America - Other 64.1 61.1 56.7

171.2 168.5 173.9

104.3 122.1 126.1

$ 3,964.2 $ 3,802.1 $ 3,808.7

Net sales $ 2,998.1 $ 2,622.1 $ 2,446.4

Long-lived assets - Geographic Disclosure (in millions)

2020 2019 2020 2019

United States $ 234.3 $ 236.4

$ 354.7 $ 308.3 $ 354.7 $ 308.3

58.3 83.0 58.3 83.0

Europe/MEA 64.4 58.3

Latin America 3.8 3.1

15.1 19.3 15.1 19.3

North America - Other

3.5 1.1 3.5 1.1

68.7 41.2 68.7 41.2

Asia-Pacific 14.2 15.8

Total long-lived assets $ 316.7 $ 313.6

$ 500.3 $ 452.9 $ 500.3 $ 452.9

Long-lived assets as of September 30, 2020 includes both property, plant, and equipment and ROU operating lease assets with the adoption of Topic 842.

See Note 2 - Significant Accounting Policies and Practices for further discussion.

SPECTRUM BRANDS HOLDINGS INC.

24 unchanged sentences

Weighted average number of anti-dilutive shares excluded from denominator — 0.2 0.2

As part of the Spectrum Merger, using (i) the 20 -trading-day volume-weighted average price per share of Spectrum Legacy common stock ending on July 12, 2018, (ii) the number of shares of Spectrum Legacy common stock outstanding, the number of shares of Spectrum Legacy common stock held by HRG and its subsidiaries and the number of shares of Spectrum Legacy common stock outstanding as of July 12, 2018, (iii) $ 328.2 million of HRG net indebtedness and transaction expenses at closing, and (iv) a $ 200.0 million upward adjustment contemplated by the Merger Agreement, each HRG stockholder received a reverse stock split of approximately 0.1613 of each share of HRG stock.

Each share of Spectrum Legacy common stock and outstanding was converted into the right to receive one share of newly issued HRG common stock and exchange for HRG common stock.

Due to the share exchange with Spectrum Legacy common stock shareholders, the total outstanding shares of the Company effectively increased 20.6 million shares in addition to the Company’s outstanding shares post-reverse stock split previously discussed.

See Note 4 – Acquisitions for further discussion on Spectrum Merger.

SPECTRUM BRANDS HOLDINGS INC.

4 unchanged sentences

Quarter Ended

SBH 2020 (in millions, except per share) September 30, 2020 June 28, 2020 March 29, 2020

December 29, 2019

SBH 2021 (in millions, except per share) September 30, 2021 July 4, 2021 April 4, 2021 January 3, 2021

Revenue $ 757.8 $ 743.8 $ 760.3 $ 736.2

Gross profit 258.2 262.6 261.0 252.8

Net income (loss) attributable to controlling interest from continuing operations 43.7 137.1 ( 58.4 ) ( 38.6 )

Net income attributable to controlling interest from discontinued operations 1.7 8.0 1.4 2.8

Net income (loss) attributable to controlling interest $ 45.4 $ 145.1 $ ( 57.0 ) $ ( 35.8 )

Net income (loss) from continuing operations attributable to controlling interest 6.0 ( 1.8 ) ( 3.7 ) 14.7

Net income from discontinued operations attributable to controlling interest 44.2 32.5 40.4 57.4

Net income attributable to controlling interest $ 50.2 $ 30.7 $ 36.7 $ 72.1

Basic earnings per share from continuing operations $ 0.14 $ ( 0.04 ) $ ( 0.09 ) $ 0.34

5 unchanged sentences

Quarter Ended

SBH 2019 (in millions, except per share) September 30, 2019 June 30, 2019 March 31, 2019

December 30, 2018

SBH 2020 (in millions, except per share) September 30, 2020 June 28, 2020 March 29, 2020 December 29, 2019

Revenue $ 736.9 $ 702.7 $ 608.7 $ 573.8

Gross profit 254.2 252.4 200.2 171.4

Net loss attributable to controlling interest from continuing operations ( 79.0 ) ( 24.7 ) ( 55.0 ) ( 29.3 )

Net (loss) income attributable to controlling interest from discontinued operations ( 16.7 ) ( 1.2 ) 783.6 ( 83.2 )

Net (loss) income attributable to controlling interest $ ( 95.7 ) $ ( 25.9 ) $ 728.6 $ ( 112.5 )

Net (loss) income from continuing operations attributable to controlling interest ( 9.6 ) 126.1 ( 107.6 ) ( 61.6 )

Net income from discontinued operations attributable to controlling interest 55.0 19.0 50.7 25.8

Net income (loss) attributable to controlling interest $ 45.4 $ 145.1 $ ( 56.9 ) $ ( 35.8 )

Basic earnings per share from continuing operations $ ( 0.22 ) $ 2.93 $ ( 2.39 ) $ ( 1.29 )

6 unchanged sentences

Quarter Ended

SB/RH 2020 (in millions) September 30, 2020 June 28, 2020 March 29, 2020

December 29, 2019

SB/RH 2021 (in millions) September 30, 2021 July 4, 2021 April 4, 2021 January 3, 2021

Revenue $ 757.8 $ 743.8 $ 760.3 $ 736.2

Gross profit 258.2 262.6 261.0 252.8

Net income (loss) attributable to controlling interest from continuing operations 40.6 80.8 ( 55.8 ) ( 37.7 )

Net loss attributable to controlling interest from continuing operations 6.2 ( 0.9 ) ( 3.2 ) 15.1

Net income attributable to controlling interest from discontinued operations 44.0 32.6 40.4 57.4

Net income (loss) attributable to controlling interest $ 42.3 $ 88.8 $ ( 54.4 ) $ ( 34.9 )

Net income attributable to controlling interest $ 50.2 $ 31.7 $ 37.2 $ 72.5

Quarter Ended

SB/RH 2019 (in millions) September 30, 2019 June 30, 2019 March 31, 2019

December 30, 2018

SB/RH 2020 (in millions) September 30, 2020 June 28, 2020 March 29, 2020 December 29, 2019

Revenue $ 736.9 $ 702.7 $ 608.7 $ 573.8

Gross profit 254.2 252.4 200.2 171.4

Net loss attributable to controlling interest from continuing operations ( 79.7 ) ( 28.9 ) ( 13.4 ) ( 19.2 )

Net (loss) income attributable to controlling interest from discontinued operations ( 16.7 ) ( 1.2 ) 783.6 ( 83.2 )

Net (loss) income attributable to controlling interest $ ( 96.4 ) $ ( 30.1 ) $ 770.2 $ ( 102.4 )

SPECTRUM BRANDS HOLDINGS INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 23 - QUARTERLY RESULTS (UNAUDITED) (continued)

The Company has concluded that the misstatements are not material to the consolidated financial statements.

The Company has updated the Consolidated Statement of Financial Position and Consolidated Statements of Income as of and for the three month period and year ended September 30, 2019 within this filing to reflect the corrected numbers.

Refer Note 2 – Significant Accounting Policies and Practices for more information.

The following summarizes the impact to the net income on the Company’s consolidated financial statements for the three month period ended September 30, 2019:

Three Month Period Ended September 30, 2019

SBH (in millions, except per share) As reported Adjustment As Adjusted

Net loss attributable to controlling interest from discontinued operations $ ( 39.3 ) $ 22.6 $ ( 16.7 )

Net loss attributable to controlling interest ( 118.3 ) 22.6 ( 95.7 )

Basic earnings per share from discontinued operations ( 0.81 ) 0.46 ( 0.35 )

Basic earnings per share ( 2.43 ) 0.46 ( 1.97 )

Diluted earnings per share from discontinued operations ( 0.81 ) 0.46 ( 0.35 )

Diluted earnings per share ( 2.43 ) 0.46 ( 1.97 )

Three Month Period Ended September 30, 2019

SB/RH (in millions) As reported Adjustment As Adjusted

Net (loss) income attributable to controlling interest from discontinued operations $ ( 39.3 ) $ 22.6 $ ( 16.7 )

Net (loss) income attributable to controlling interest ( 119.0 ) 22.6 ( 96.4 )

Net (loss) income attributable to controlling interest from continuing operations ( 13.5 ) 70.1 ( 106.0 ) ( 59.3 )

Net income attributable to controlling interest from discontinued operations 55.9 18.7 51.6 24.4

Net income (loss) income attributable to controlling interest $ 42.4 $ 88.8 $ ( 54.4 ) $ ( 34.9 )

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

12 unchanged sentences

(Principal Accounting Officer)

/s/ Gautam Patel

/s/ Norman S.

/s/ Leslie L.

/s/ Joan Chow

/s/ Sherianne James

Sherianne James

/s/ Gautam Patel

13 unchanged sentences

(Principal Accounting Officer)

/s/ Gautam Patel

/s/ Norman S.

/s/ Leslie L.

/s/ Joan Chow

/s/ Sherianne James

Sherianne James

/s/ Gautam Patel

EXHIBIT INDEX

18 unchanged sentences

and Spectrum Brands Holdings, Inc.

(incorporate herein by reference to Exhibit 2.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc on November 19, 2018 (File No.

(incorporated herein by reference to Exhibit 2.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc on November 19, 2018 (File No.

001-4219) (Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request.)

Exhibit 2.5* Asset and Stock Purchase Agreement, dated as of September 8, 2021, by and between Spectrum Brands, Inc.

and ASSA ABLOY AB (Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request.)

Exhibit 3.1* Amended and Restated Certificate of Incorporation of Spectrum Brands Holdings, Inc.

HRG Group, Inc.) (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.

HRG Group, Inc.) on July 13, 2018 (File No.

HRG Group, Inc.)

Exhibit 3.2 Third Restated By-Laws of Spectrum Brands Holdings, Inc.

11 unchanged sentences

HRG Group, Inc.) on July 13, 2018 (File No.

Exhibit 4.1 Indenture governing Spectrum Brands, Inc.’s 6.375% Senior Notes due 2020 and 6.625% Senior Notes due 2022, dated as of November 16, 2012, between Spectrum Brands Escrow Corp.

and US Bank National Association, as trustee (filed by incorporation by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands, Inc.

on November 21, 2012 (File No.

Exhibit 4.2 Indenture governing Spectrum Brands, Inc.’s 6.125% Senior Notes due 2024, dated as of December 4, 2014, among Spectrum Brands, Inc., the guarantors named therein and US Bank National Association, as trustee (filed by incorporation by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Exhibit 4.1 Indenture governing Spectrum Brands, Inc.’s 6.125% Senior Notes due 2024, dated as of December 4, 2014, among Spectrum Brands, Inc., the guarantors named therein and US Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on December 8, 2014 (File No.

Exhibit 4.3 Indenture governing Spectrum Brands, Inc.’s 5.750% Senior Notes due 2025, dated as of May 20, 2015, among Spectrum Brands, Inc., the guarantors named therein and US Bank National Association, as trustee (filed by incorporation by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Exhibit 4.2 Indenture governing Spectrum Brands, Inc.’s 5.750% Senior Notes due 2025, dated as of May 20, 2015, among Spectrum Brands, Inc., the guarantors named therein and US Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on May 20, 2015 (File No.

Exhibit 4.3 Indenture governing Spectrum Brands, Inc.’s 4.000% Senior Notes due 2026, dated as of September 20, 2016, among Spectrum Brands, Inc., the guarantors named therein, U.S.

Bank National Association, as trustee, Elavon Financial Services DAC, UK Branch, as paying agent and Elavon Financial Services DAC, as registrar and transfer agent (filed by incorporation by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Bank National Association, as trustee, Elavon Financial Services DAC, UK Branch, as paying agent and Elavon Financial Services DAC, as registrar and transfer agent (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on December 8, 2014 (File No.

Exhibit 4.5 Indenture governing Spectrum Brands, Inc.’s 5.00% Senior Notes due 2029, dated as of September 24, 2019, among Spectrum Brands, Inc., the guarantors named therein and US Bank National Association, as trustee (filed by incorporation by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.

Exhibit 4.4 Indenture governing Spectrum Brands, Inc.’s 5.00% Senior Notes due 2029, dated as of September 24, 2019, among Spectrum Brands, Inc., the guarantors named therein and US Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.

HRG Group, Inc.) on September 24, 2019 (File No.

3 unchanged sentences

HRG Group, Inc.) on February 26, 2018 (File No.

Exhibit 4.6 Description of Capital Stock of Spectrum Brands, Holdings, Inc.

(incorporated herein by reference to Exhibit 4.8 to Amendment No.

1 to the Annual Report on Form 10-K/A filed with the SEC by Spectrum Brands Holdings, Inc.

HRG Group, Inc.) on January 28, 2020 (File No.

Exhibit 4.7 Indenture governing the 3.875% Senior Notes due 2031, dated as of March 3, 2021, among Spectrum Brands, Inc., the guarantors party thereto and US Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.

on March 3, 2021 (File No.

Exhibit 10.1 Amended and Restated Credit Agreement, dated as of June 30, 2020 among the Company, SB/RH Holdings, the guarantors party thereto, the lenders party thereto from time to time, and Royal Bank of Canada, as the administrative agent (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.

on June 30, 2020 (File No.

Exhibit 10.2 Security Agreement, dated as of June 23, 2015, by and among Spectrum Brands, Inc., SB/RH Holdings, LLC, the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as collateral agent (filed by incorporation by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Exhibit 10.2 First Amendment to Amended and Restated Credit Agreement, dated as of March 3, 2021 (to the Amended and Restated Credit Agreement dated as of June 30, 2020), by and among the Company, SB/RH Holdings, Royal Bank of Canada, as the administrative agent and the lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands

Exhibit 10.3 Security Agreement, dated as of June 23, 2015, by and among Spectrum Brands, Inc., SB/RH Holdings, LLC, the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as collateral agent (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on June 23, 2015 (File No.

Exhibit 10.3 Loan Guaranty, dated as of June 23, 2015, by and among SB/RH Holdings, LLC, the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as administrative agent and collateral agent (filed by incorporation by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Exhibit 10.4 Loan Guaranty, dated as of June 23, 2015, by and among SB/RH Holdings, LLC, the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as administrative agent and collateral agent (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on June 23, 2015 (File No.

Exhibit 10.4+ Employment Agreement dated September 1, 2014 between Spectrum Brands, Inc.

and Douglas L.

Martin (filed by incorporation by reference to Exhibit 99.1 to the Current Report on Form 8-K/A filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on September 2, 2014 (File No.

Exhibit 10.5+ Amended and Restated Employment Agreement dated as of December 15, 2016, by and between Spectrum Brands, Inc.

and Douglas L.

Martin (filed by incorporation by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on December 19, 2016 (File No.

001- 34757)).

Exhibit 10.5+ Spectrum Brands Holdings, Inc.

2011 Omnibus Equity Award Plan, as amended on January 28, 2014 (filed by incorporation by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

2011 Omnibus Equity Award Plan, as amended on January 28, 2014 (incorporated herein by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on February 3, 2014 (File No.

Exhibit 10.6+ Amended & Restated Spectrum Brands Holdings, Inc.

2011 Omnibus Equity Award Plan (filed by incorporation by reference to Exhibit 4.8 to the Registration Statement filed on Form S-8 with the SEC by Spectrum Brands Legacy, Inc.

2011 Omnibus Equity Award Plan (incorporated herein by reference to Exhibit 4.8 to the Registration Statement filed on Form S-8 with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on February 1, 2017 (File No.

1 unchanged sentence

Exhibit 10.7+ Form of Restricted Stock Unit Agreement under the Amended & Restated Spectrum Brands Holdings, Inc.

2011 Omnibus Equity Award Plan (filed by incorporation by reference to Exhibit 4.9 to the Registration Statement filed on Form S-8 with the SEC by Spectrum Brands Legacy, Inc.

2011 Omnibus Equity Award Plan (incorporated herein by reference to Exhibit 4.9 to the Registration Statement filed on Form S-8 with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on February 1, 2017 (File No.

1 unchanged sentence

Exhibit 10.8+ Form of Performance Compensation Award Agreement under the Amended & Restated Spectrum Brands Holdings, Inc.

2011 Omnibus Equity Award Plan (filed by incorporation by reference to Exhibit 4.10 to the Registration Statement filed on Form S-8 filed with the SEC by Spectrum Brands Legacy, Inc.

2011 Omnibus Equity Award Plan (incorporated herein by reference to Exhibit 4.10 to the Registration Statement filed on Form S-8 filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on February 1, 2017 (File No.

1 unchanged sentence

Exhibit 10.9+ Spectrum Brands Holdings, Inc.

2020 Omnibus Equity Plan (filed by incorporation by reference to Exhibit 4.1 to the Registration Statement on Form S-8 filed with the SEC by Spectrum Brands Holdings, Inc.) on August 7, 2020 (File No.

Exhibit 10.11+ Severance Agreement, dated as of November 19, 2012, by and between Spectrum Brands, Inc.

and Nathan E.

Fagre (filed by incorporation by reference to Exhibit 10.47 to the Annual Report on Form 10-K filed with the SEC by Spectrum Brands, Inc.

on November 21, 2012 (File No.

Exhibit 10.12+ Amended and Restated Severance Agreement dated as of December 15, 2016, by and between Spectrum Brands, Inc.

and Nathan E.

Fagre (filed by incorporation by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on December 19, 2016 (File No.

Exhibit 10.13+ Amended and Restated Severance Agreement dated as of December 15, 2016 by and between Spectrum Brands, Inc.

and Stacey L.

Neu (filed by incorporation by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on December 19, 2016 (File No.

Exhibit 10.14+ Employment Agreement, dated March 16, 2015, among Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.), Spectrum Brands, Inc.

and Andreas Rouve (filed by incorporation by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on May 1, 2015 (File No.

Exhibit 10.15+ Amended and Restated Employment Agreement dated as of December 15, 2016 by and between Spectrum Brands, Inc., Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) and Andreas Rouvé (filed by incorporation by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on December 19, 2016 (File No.

2020 Omnibus Equity Plan (incorporated herein by reference to Exhibit 4.1 to the Registration Statement on Form S-8 filed with the SEC by Spectrum Brands Holdings, Inc.) on August 7, 2020 (File No.

333- 242343).

Exhibit 10.10+ Employment Agreement dated January 20, 2016 by and among Spectrum Brands, Inc.

Maura (filed by incorporation by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Maura (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc.

Spectrum Brands Holdings, Inc.) on January 21, 2016 (File No.

6 unchanged sentences

HRG Group, Inc.) on July 13, 2018 (File No.

Exhibit 10.19+ Release Agreement, dated as of July 13, 2018, by and between George Nicholson and Spectrum Brands Holdings, Inc.

HRG Group, Inc.) (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.

HRG Group, Inc.) on July 13, 2018 (File No.

Exhibit 10.20+ Separation Agreement, dated as of September 13, 2018, by and among Nathan E.

Fagre, Spectrum Brands Holdings, Inc.

HRG Group, Inc.) and Spectrum Brands, Inc.

(incorporated herein by reference to Exhibit 10.39 to the Annual Report on Form 10-K filed with the SEC by Spectrum Brands Holdings, Inc.

HRG Group, Inc.) on November 23, 2018 (File NO.

Exhibit 10.21+ Separation Agreement, dated as of September 13, 2018, by and among Stacey L.

Neu, Spectrum Brands Holdings, Inc.

HRG Group, Inc.) and Spectrum Brands, Inc.

(incorporated herein by reference to Exhibit 10.40 to the Annual Report on Form 10-K filed with the SEC by Spectrum Brands Holdings, Inc.

HRG Group, Inc.) on November 23, 2018 (File NO.

Exhibit 10.13+ Employment Agreement, dated as of September 13, 2018, by and among Ehsan Zargar, Spectrum Brands Holdings, Inc.

5 unchanged sentences

HRG Group, Inc.) on November 23, 2018 (File NO.

Exhibit 10.24 Energizer Shareholder Agreement, dated as of January 28, 2019, by and among Spectrum Brands Holdings, Inc., Energizer Holdings, Inc.

and Spectrum Brands, Inc.

(incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.

HRG Group, Inc.) on February 1, 2019 (File No.

Exhibit 10.15+ Form of Agreement with David Maura and Ehsan Zargar Regarding Certain Provisions of Such Executive’s Respective Prior Separation Agreements with HRG Group, Inc.

1 unchanged sentence

HRG Group, Inc.) on February 7, 2019 (File No.

Exhibit 10.26+ Separation Agreement, dated as of September 9, 2019, by and among Spectrum Brands, Inc., Spectrum Brands Holdings, Inc.

and Douglas L.

(incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.

HRG Group, Inc.) on September 9, 2019 (File No.

Exhibit 10.16+ Employment Agreement, dated as of September 9, 2019, by and between Spectrum Brands Holdings, Inc.

14 unchanged sentences

HRG Group, Inc.) on September 9, 2019 (File No.

Exhibit 10.20+ Form of Restricted Stock Unit Award Agreement effective as of December 22, 2020 (incorporated herein by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands Holdings, Inc.

on May 7, 2021 (File No.

Exhibit 10.21+ Form of Performance Based Restricted Stock Unit Agreement effective as of December 22, 2020 (incorporated herein by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands Holdings, Inc.

on May 7, 2021 (File No.

Exhibit 10.22+ Form of Service Based Restricted Stock Unit Agreement effective as of December 22, 2020 (incorporated herein by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands Holdings, Inc.

on May 7, 2021 (File No.

Exhibit 21.1*** Subsidiaries of Registrant

28 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures