What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-06 · 479 added, 354 removed, 887 unchanged (48% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Financial Position

As of April 3, 2022, and September 30, 2021

As of July 3, 2022, and September 30, 2021

(in millions)

April 3, 2022 September 30, 2021

July 3, 2022 September 30, 2021

Cash and cash equivalents $ 247.6 $ 187.9

38 unchanged sentences

Condensed Consolidated Statements of Income

For the three and six month periods ended April 3, 2022 and April 4, 2021

Three Month Periods Ended Six Month Periods Ended

For the three and nine month periods ended July 3, 2022 and July 4, 2021

Three Month Periods Ended Nine Month Periods Ended

(in millions, except per share)

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Net sales $ 818.0 $ 743.8 $ 2,383.0 $ 2,240.3

Cost of goods sold 542.0 481.2 1,632.1 1,463.9

Restructuring and related charges 1.2 1.3 1.5 1.4

Gross profit 276.0 262.6 750.9 776.4

2 unchanged sentences

Research and development 6.1 7.8 22.0 22.2

Restructuring and related charges 15.2 3.0 32.3 11.9

Transaction related charges 20.2 8.2 35.1 27.2

Gain from contingent consideration liability ( 25.0 ) — ( 25.0 ) —

Total operating expenses 237.3 232.7 744.2 675.3

Operating (loss) income ( 8.1 ) 45.3 ( 32.0 ) 71.2

Operating income 38.7 29.9 6.7 101.1

Interest expense 26.0 20.4 72.4 96.4

Other non-operating income, net ( 0.9 ) ( 2.2 ) ( 0.3 ) ( 11.1 )

(Loss) income from continuing operations before income taxes ( 31.9 ) ( 5.3 ) ( 78.1 ) 6.3

Income tax benefit ( 6.8 ) ( 0.7 ) ( 22.8 ) ( 4.8 )

Net (loss) income from continuing operations ( 25.1 ) ( 4.6 ) ( 55.3 ) 11.1

Other non-operating expense (income), net 7.7 1.4 7.4 ( 9.8 )

Income (loss) from continuing operations before income taxes 5.0 8.1 ( 73.1 ) 14.5

Income tax expense (benefit) 2.0 10.0 ( 20.8 ) 5.3

Net income (loss) from continuing operations 3.0 ( 1.9 ) ( 52.3 ) 9.2

Income from discontinued operations, net of tax 29.9 32.6 109.8 130.1

Net income 32.9 30.7 57.5 139.3

Net (loss) income from continuing operations attributable to non-controlling interest — ( 0.9 ) — 0.1

Net income from continuing operations attributable to non-controlling interest — — — 0.1

Net income (loss) from discontinued operations attributable to non-controlling interest 0.2 — 0.7 ( 0.2 )

1 unchanged sentence

Amounts attributable to controlling interest

Net (loss) income from continuing operations attributable to controlling interest $ ( 25.1 ) $ ( 3.7 ) $ ( 55.3 ) $ 11.0

Net income (loss) from continuing operations attributable to controlling interest $ 3.0 $ ( 1.9 ) $ ( 52.3 ) $ 9.1

Net income from discontinued operations attributable to controlling interest 29.7 32.6 109.1 130.3

14 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

For the three and six month periods ended April 3, 2022 and April 4, 2021

For the three and nine month periods ended July 3, 2022 and July 4, 2021

Three Month Periods Ended

Six Month Periods Ended

Nine Month Periods Ended

(in millions)

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Net income $ 32.9 $ 30.7 $ 57.5 $ 139.3

Other comprehensive (loss) income

Other comprehensive income

Foreign currency translation adjustment

Foreign currency translation (loss) gain ( 51.5 ) 4.4 ( 68.8 ) 47.4

Unrealized gain (loss) from net investment hedge 24.8 ( 3.4 ) 47.3 ( 4.8 )

Foreign currency translation adjustment before tax ( 26.7 ) 1.0 ( 21.5 ) 42.6

Deferred tax effect ( 6.6 ) 0.9 ( 14.2 ) 1.2

Net unrealized (loss) gain on foreign currency translation ( 4.7 ) 17.2 ( 2.5 ) 41.9

Unrealized gain (loss) on derivative instruments

Foreign currency translation adjustment, net ( 33.3 ) 1.9 ( 35.7 ) 43.8

Unrealized (loss) gain on derivative instruments

Unrealized gain (loss) on hedging activity before reclassification 4.3 ( 1.0 ) 11.8 ( 7.6 )

Net reclassification for (gain) loss to income from continuing operations ( 4.9 ) 2.6 ( 8.5 ) 8.3

Net reclassification for gain to income from discontinued operations ( 0.7 ) ( 0.1 ) ( 1.2 ) ( 0.1 )

Unrealized gain (loss) on hedging instruments after reclassification 4.2 8.8 2.8 ( 0.9 )

Net reclassification for (gain) loss to income from discontinued operations ( 0.9 ) 0.2 ( 2.1 ) 0.2

Unrealized (loss) gain on hedging instruments after reclassification ( 1.5 ) 1.8 1.2 0.9

Deferred tax effect 0.9 ( 0.4 ) 4.3 ( 0.3 )

Net unrealized gain (loss) on hedging derivative instruments 3.2 6.4 6.3 ( 0.8 )

Net unrealized (loss) gain on hedging derivative instruments ( 0.6 ) 1.4 5.5 0.6

Defined benefit pension gain

1 unchanged sentence

Net reclassification for loss to income from continuing operations 1.1 1.1 3.1 3.3

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

Defined benefit pension gain after reclassification 3.3 0.8 7.1 1.7

4 unchanged sentences

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

Comprehensive income from discontinuing operations attributable to non-controlling interest — — 0.1 0.3

Comprehensive (loss) income from discontinuing operations attributable to non-controlling interest ( 0.3 ) 0.1 ( 0.2 ) 0.4

Comprehensive income attributable to controlling interest $ 1.8 $ 34.5 $ 30.4 $ 184.4

2 unchanged sentences

Condensed Consolidated Statements of Shareholders' Equity

For the six month period ended April 3, 2022

Six Month Period Ended April 3, 2022 Common Stock Additional

For the nine month period ended July 3, 2022

Common Stock Additional

Capital Accumulated

21 unchanged sentences

Dividends declared — — — ( 17.6 ) — — ( 17.6 ) — ( 17.6 )

Distribution of equity by subsidiary to NCI — — — — — — — ( 1.3 ) ( 1.3 )

Balances at April 3, 2022 40.8 $ 0.5 $ 2,033.2 $ 348.7 $ ( 231.3 ) $ ( 828.8 ) $ 1,322.3 $ 6.3 $ 1,328.6

Distribution of equity by subsidiary to non-controlling interest — — — — — — — ( 1.3 ) ( 1.3 )

Balances as of April 3, 2022 40.8 0.5 2,033.2 348.7 ( 231.3 ) ( 828.8 ) 1,322.3 6.3 1,328.6

Net income from continuing operations — — — 3.0 — — 3.0 — 3.0

Income from discontinued operations, net of tax — — — 29.7 — — 29.7 0.2 29.9

Other comprehensive loss, net of tax — — — — ( 31.1 ) — ( 31.1 ) ( 0.4 ) ( 31.5 )

Share based compensation — — ( 0.8 ) — — — ( 0.8 ) — ( 0.8 )

Dividends declared — — — ( 17.0 ) — — ( 17.0 ) — ( 17.0 )

Balances at July 3, 2022 40.8 $ 0.5 $ 2,032.4 $ 364.4 $ ( 262.4 ) $ ( 828.8 ) $ 1,306.1 $ 6.1 $ 1,312.2

See accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Shareholders' Equity

For the six month period ended April 4, 2021

Six Month Period Ended April 4, 2021 Common Stock Additional

For the nine month period ended July 4, 2021

Common Stock Additional

Capital Accumulated

13 unchanged sentences

Dividends declared — — — ( 18.4 ) — — ( 18.4 ) — ( 18.4 )

Dividends paid by subsidiary to NCI — — — — — — — ( 1.0 ) ( 1.0 )

Dividends paid by subsidiary to non-controlling interest — — — — — — — ( 1.0 ) ( 1.0 )

Balances as of January 3, 2021 42.7 0.5 2,043.2 297.6 ( 268.5 ) ( 637.1 ) 1,435.7 8.5 1,444.2

5 unchanged sentences

Dividends declared — — — ( 18.5 ) — — ( 18.5 ) — ( 18.5 )

Dividends paid by subsidiary to NCI — — — — — — — ( 0.3 ) ( 0.3 )

Balances at April 4, 2021 42.7 $ 0.5 $ 2,051.6 $ 315.7 $ ( 243.4 ) $ ( 637.0 ) $ 1,487.4 $ 7.2 $ 1,494.6

Dividends paid by subsidiary to non-controlling interest — — — — — — — ( 0.3 ) ( 0.3 )

Balances as of April 4, 2021 42.7 0.5 2,051.6 315.7 ( 243.4 ) ( 637.0 ) 1,487.4 7.2 1,494.6

Net loss from continuing operations — — — ( 1.9 ) — — ( 1.9 ) — ( 1.9 )

Income from discontinued operations, net of tax — — — 32.6 — — 32.6 — 32.6

Other comprehensive income, net of tax — — — — 3.8 — 3.8 0.1 3.9

Treasury stock repurchases ( 0.1 ) — — — — ( 10.2 ) ( 10.2 ) — ( 10.2 )

Restricted stock issued and related tax withholdings — — ( 1.1 ) — — 1.1 — — —

Share based compensation — — 7.5 — — — 7.5 — 7.5

Dividends declared — — — ( 18.3 ) — — ( 18.3 ) — ( 18.3 )

Balances at July 4, 2021 42.6 $ 0.5 $ 2,058.0 $ 328.1 $ ( 239.6 ) $ ( 646.1 ) $ 1,500.9 $ 7.3 $ 1,508.2

See accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the six month periods ended April 3, 2022 and April 4, 2021

Six Month Periods Ended

(in millions) April 3, 2022 April 4, 2021

For the nine month periods ended July 3, 2022 and July 4, 2021

Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021

Cash flows from operating activities

3 unchanged sentences

Adjustments to reconcile net (loss) income to net cash from operating activities:

Depreciation and amortization 51.1 57.2

Depreciation 36.6 39.2

Amortization 39.9 48.2

Share based compensation 11.4 21.4

2 unchanged sentences

Write-off of unamortized discount and debt issuance costs — 7.9

Gain from contingent consideration liability ( 25.0 ) —

Non-cash purchase accounting adjustments 7.8 4.7

3 unchanged sentences

Net cash provided by operating activities from discontinued operations 42.4 81.5

Net cash used by operating activities ( 206.9 ) ( 79.8 )

Net cash (used) provided by operating activities ( 138.4 ) 8.9

Cash flows from investing activities

11 unchanged sentences

Payment of debt issuance costs ( 7.6 ) ( 12.6 )

Payment of contingent consideration ( 1.9 ) —

Treasury stock purchases ( 134.0 ) ( 52.5 )

21 unchanged sentences

Condensed Consolidated Statements of Financial Position

As of April 3, 2022 and September 30, 2021

(in millions) April 3, 2022 September 30, 2021

As of July 3, 2022 and September 30, 2021

(in millions) July 3, 2022 September 30, 2021

Cash and cash equivalents $ 246.0 $ 186.2

11 unchanged sentences

Total assets $ 6,073.3 $ 5,417.7

Liabilities and Shareholders' Equity

Liabilities and Shareholder's Equity

Current portion of long-term debt $ 12.1 $ 12.0

11 unchanged sentences

Commitments and contingencies (Note 17)

Shareholders' equity

Shareholder's equity

Other capital 2,164.9 2,174.8

1 unchanged sentence

Accumulated other comprehensive loss, net of tax ( 262.3 ) ( 235.2 )

Total shareholders' equity 1,184.3 1,324.7

Total shareholder's equity 1,168.2 1,324.7

Non-controlling interest 7.7 8.7

4 unchanged sentences

Condensed Consolidated Statements of Income

For the three and six month periods ended April 3, 2022 and April 4, 2021

Three Month Periods Ended Six Month Periods Ended

(in millions) April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

For the three and nine month periods ended July 3, 2022 and July 4, 2021

Three Month Periods Ended Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Net sales $ 818.0 $ 743.8 $ 2,383.0 $ 2,240.3

Cost of goods sold 542.0 481.2 1,632.1 1,463.9

Restructuring and related charges 1.2 1.3 1.5 1.4

Gross profit 276.0 262.6 750.9 776.4

2 unchanged sentences

Research and development 6.1 7.8 22.0 22.2

Restructuring and related charges 15.2 3.0 32.3 11.9

Transaction related charges 20.2 8.2 35.1 27.2

Gain from contingent consideration liability ( 25.0 ) — ( 25.0 ) —

Total operating expenses 236.5 231.1 742.3 672.5

Operating (loss) income ( 7.3 ) 46.0 ( 30.8 ) 72.6

Operating income 39.5 31.5 8.6 103.9

Interest expense 26.1 20.5 72.7 96.6

Other non-operating income, net ( 0.9 ) ( 2.2 ) ( 0.4 ) ( 11.1 )

(Loss) income from continuing operations before income taxes ( 31.2 ) ( 4.7 ) ( 77.1 ) 7.6

Income tax benefit ( 6.6 ) ( 0.5 ) ( 22.4 ) ( 4.4 )

Net (loss) income from continuing operations ( 24.6 ) ( 4.2 ) ( 54.7 ) 12.0

Other non-operating expense (income), net 7.7 1.4 7.3 ( 9.8 )

Income (loss) from continuing operations before income taxes 5.7 9.6 ( 71.4 ) 17.1

Income tax expense (benefit) 2.0 10.6 ( 20.4 ) 6.1

Net income (loss) from continuing operations 3.7 ( 1.0 ) ( 51.0 ) 11.0

Income from discontinued operations, net of tax 29.8 32.7 109.7 130.3

Net income 33.5 31.7 58.7 141.3

Net (loss) income from continuing operations attributable to non-controlling interest — ( 0.9 ) — 0.1

Net income from continuing operations attributable to non-controlling interest — — — 0.1

Net income (loss) from discontinued operations attributable to non-controlling interest 0.2 — 0.7 ( 0.2 )

1 unchanged sentence

Amounts attributable to controlling interest

Net (loss) income from continuing operations attributable to controlling interest $ ( 24.6 ) $ ( 3.3 ) $ ( 54.7 ) $ 11.9

Net income (loss) from continuing operations attributable to controlling interest $ 3.7 $ ( 1.0 ) $ ( 51.0 ) $ 10.9

Net income from discontinued operations attributable to controlling interest 29.6 32.7 109.0 130.5

3 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

For the three and six month periods ended April 3, 2022 and April 4, 2021

For the three and nine month periods ended July 3, 2022 and July 4, 2021

Three Month Periods Ended

Six Month Periods Ended

Nine Month Periods Ended

(in millions)

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Net income $ 33.5 $ 31.7 $ 58.7 $ 141.3

Other comprehensive (loss) income

Other comprehensive income

Foreign currency translation adjustment

Foreign currency translation (loss) gain ( 51.5 ) 4.4 ( 68.8 ) 47.4

Unrealized gain (loss) from net investment hedge 24.8 ( 3.4 ) 47.3 ( 4.8 )

Foreign currency translation adjustment before tax ( 26.7 ) 1.0 ( 21.5 ) 42.6

Deferred tax effect ( 6.6 ) 0.9 ( 14.2 ) 1.2

Net unrealized (loss) gain on foreign currency translation ( 4.7 ) 17.2 ( 2.5 ) 41.9

Unrealized gain (loss) on derivative instruments

Foreign currency translation adjustment, net ( 33.3 ) 1.9 ( 35.7 ) 43.8

Unrealized (loss) gain on derivative instruments

Unrealized gain (loss) on hedging activity before reclassification 4.3 ( 1.0 ) 11.8 ( 7.6 )

Net reclassification for (gain) loss to income from continuing operations ( 4.9 ) 2.6 ( 8.5 ) 8.3

Net reclassification for gain to income from discontinued operations ( 0.7 ) ( 0.1 ) ( 1.2 ) ( 0.1 )

Unrealized gain (loss) on hedging instruments after reclassification 4.2 8.8 2.8 ( 0.9 )

Net reclassification for (gain) loss to income from discontinued operations ( 0.9 ) 0.2 ( 2.1 ) 0.2

Unrealized (loss) gain on hedging instruments after reclassification ( 1.5 ) 1.8 1.2 0.9

Deferred tax effect 0.9 ( 0.4 ) 4.3 ( 0.3 )

Net unrealized gain (loss) on hedging derivative instruments 3.2 6.4 6.3 ( 0.8 )

Net unrealized (loss) gain on hedging derivative instruments ( 0.6 ) 1.4 5.5 0.6

Defined benefit pension gain

1 unchanged sentence

Net reclassification for loss to income from continuing operations 1.1 1.1 3.1 3.3

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

Defined benefit pension gain after reclassification 3.3 0.8 7.1 1.7

4 unchanged sentences

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

Comprehensive income from discontinuing operations attributable to non-controlling interest — — 0.1 0.3

Comprehensive (loss) income from discontinuing operations attributable to non-controlling interest ( 0.3 ) 0.1 ( 0.2 ) 0.4

Comprehensive income attributable to controlling interest $ 2.4 $ 35.5 $ 31.6 $ 186.4

1 unchanged sentence

SB/RH HOLDINGS, LLC

Condensed Consolidated Statements of Shareholders' Equity

For the six month period ended April 3, 2022

Six Month Period Ended April 3, 2022 (in millions) Other

Condensed Consolidated Statements of Shareholder's Equity

For the nine month period ended July 3, 2022

(in millions) Other

Capital Accumulated

16 unchanged sentences

Dividends paid to parent — ( 41.2 ) — ( 41.2 ) — ( 41.2 )

Distribution of equity by subsidiary to NCI — — — — ( 1.3 ) ( 1.3 )

Balances at April 3, 2022 $ 2,166.1 $ ( 750.6 ) $ ( 231.2 ) $ 1,184.3 $ 7.9 $ 1,192.2

Distribution of equity by subsidiary to non-controlling interest — — — — ( 1.3 ) ( 1.3 )

Balances as of April 3, 2022 2,166.1 ( 750.6 ) ( 231.2 ) 1,184.3 7.9 1,192.2

Net income from continuing operations — 3.7 — 3.7 — 3.7

Income from discontinued operations, net of tax — 29.6 — 29.6 0.2 29.8

Other comprehensive loss, net of tax — — ( 31.1 ) ( 31.1 ) ( 0.4 ) ( 31.5 )

Share based compensation ( 1.2 ) — — ( 1.2 ) — ( 1.2 )

Dividends paid to parent — ( 17.1 ) — ( 17.1 ) — ( 17.1 )

Balances at July 3, 2022 $ 2,164.9 $ ( 734.4 ) $ ( 262.3 ) $ 1,168.2 $ 7.7 $ 1,175.9

See accompanying notes to the condensed consolidated financial statements

SB/RH HOLDINGS, LLC

Condensed Consolidated Statements of Shareholders' Equity

For the six month period ended April 4, 2021

Six Month Period Ended April 4, 2021 (in millions) Other

Condensed Consolidated Statements of Shareholder's Equity

For the nine month period ended July 4, 2021

(in millions) Other

Capital Accumulated

1 unchanged sentence

Comprehensive

Shareholders'

Shareholder's

Interest Total Equity

6 unchanged sentences

Dividends paid to parent — ( 60.1 ) — ( 60.1 ) — ( 60.1 )

Dividends paid by subsidiary to NCI — — — — ( 1.0 ) ( 1.0 )

Dividends paid by subsidiary to non-controlling interest — — — — ( 1.0 ) ( 1.0 )

Balances as of January 3, 2021 2,154.5 ( 601.8 ) ( 268.4 ) 1,284.3 10.1 1,294.4

4 unchanged sentences

Dividends paid to parent — ( 16.1 ) — ( 16.1 ) — ( 16.1 )

Dividends paid by subsidiary to NCI — — — — ( 0.3 ) ( 0.3 )

Balances at April 4, 2021 $ 2,162.5 $ ( 580.8 ) $ ( 243.3 ) $ 1,338.4 $ 8.8 $ 1,347.2

Dividends paid by subsidiary to non-controlling interest — — — — ( 0.3 ) ( 0.3 )

Balances as of April 4, 2021 2,162.5 ( 580.8 ) ( 243.3 ) 1,338.4 8.8 1,347.2

Net loss from continuing operations — ( 1.0 ) — ( 1.0 ) — ( 1.0 )

Income from discontinued operations, net of tax — 32.7 — 32.7 — 32.7

Other comprehensive income, net of tax — — 3.8 3.8 0.1 3.9

Share based compensation 6.9 — — 6.9 — 6.9

Dividends paid to parent — ( 28.1 ) — ( 28.1 ) — ( 28.1 )

Balances at July 4, 2021 $ 2,169.4 $ ( 577.2 ) $ ( 239.5 ) $ 1,352.7 $ 8.9 $ 1,361.6

See accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the six month periods ended April 3, 2022 and April 4, 2021

Six Month Periods Ended

(in millions) April 3, 2022 April 4, 2021

For the nine month periods ended July 3, 2022 and July 4, 2021

Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021

Cash flows from operating activities

3 unchanged sentences

Adjustments to reconcile net (loss) income to net cash from operating activities:

Depreciation and amortization 51.1 57.2

Depreciation 36.6 39.2

Amortization 39.9 48.2

Share based compensation 10.7 20.2

1 unchanged sentence

Amortization of debt issuance costs and debt discount 5.1 4.3

Gain from contingent consideration liability ( 25.0 ) —

Write-off of unamortized discount and debt issuance costs — 7.9

4 unchanged sentences

Net cash provided by operating activities from discontinued operations 42.3 81.7

Net cash used by operating activities ( 239.3 ) ( 86.2 )

Net cash (used) provided by operating activities ( 170.8 ) 2.5

Cash flows from investing activities

11 unchanged sentences

Payment of debt issuance costs ( 7.6 ) ( 12.6 )

Payment of contingent consideration ( 1.9 ) —

Payment of cash dividends to parent ( 177.5 ) ( 104.3 )

29 unchanged sentences

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

As a result, the fiscal period end date for the three and six month periods included within this Quarterly Report for the Company are April 3, 2022 and April 4, 2021.

As a result, the fiscal period end date for the three and nine month periods included within this Quarterly Report for the Company are July 3, 2022 and July 4, 2021.

Newly Adopted Accounting Standards

14 unchanged sentences

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

The Company is evaluating the effect of adopting this new accounting guidance.

Transaction related charges

Transaction related charges consist of costs from (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 not specified above 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 2 – Divestitures and Note 3 – Acquisitions for further discussion.

The following table summarizes transaction related charges incurred by the Company during the three and six month periods ended April 3, 2022 and April 4, 2021:

Three Month Periods Ended Six Month Periods Ended

(in millions) April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Tristar acquisition and integration $ 12.7 $ — $ 14.4 $ —

HHI divestiture and separation 1.2 — 5.5 —

Rejuvenate acquisition and integration 2.0 — 6.3 —

Armitage acquisition and integration 0.5 2.0 1.2 6.8

Other 3.8 6.2 7.7 20.4

Total transaction related charges $ 20.2 $ 8.2 $ 35.1 $ 27.2

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

We do not anticipate the adoption will have a material impact on the Company consolidated financial statements.

NOTE 2 – DIVESTITURES

The following table summarizes the components of Income from Discontinued Operations, Net of Tax in the accompanying Condensed Consolidated Statements of Income for the three and six month periods ended April 3, 2022 and April 4, 2021:

Three Month Periods Ended Six Month Periods Ended

(in millions) April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

The following table summarizes the components of Income from Discontinued Operations, Net of Tax in the accompanying Condensed Consolidated Statements of Income for the three and nine month periods ended July 3, 2022 and July 4, 2021:

Three Month Periods Ended Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Income from discontinued operations before income taxes – HHI $ 57.9 $ 65.7 $ 188.9 $ 229.4

8 unchanged sentences

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 group.

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 have 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 agreements and reverse transition services agreements.

The consummation of the acquisition is subject to certain customary closing 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 Company is engaged with antitrust regulators in the ongoing regulatory review of the transaction.

Although the timing and outcome of the regulatory process cannot be predicted, the Company currently expects the merger review process to last for several months.

As such, though there can be no assurance when the transaction will close, if at all, the Company does expect the transaction to close before September 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.

3 unchanged sentences

NOTE 2 – DIVESTITURES (continued)

The following table summarizes the assets and liabilities of the HHI disposal group classified as held for sale as of April 3, 2022 and September 30, 2021:

Hardware and Home Improvement ("HHI")

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 HHI Transaction, 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.

The Company and ASSA have agreed to enter into related agreements ancillary to the HHI Transaction that will become effective upon the consummation of the HHI Transaction, including customary transition services agreements ("TSA") and reverse TSAs.

The consummation of the HHI Transaction is subject to certain customary closing 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, (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 HHI Transaction is not subject to any financing condition.

Pursuant to the ASPA, either party may terminate the ASPA if the HHI Transaction has not occurred on or prior to December 8, 2022 (the “End Date”).

On July 14, 2022, the parties entered into an amendment to the ASPA (the “Amendment”) pursuant to which the End Date was extended to June 30, 2023.

Except for the foregoing amendment to the End Date, the ASPA remains in full force and effect as written, including with respect to a termination fee of $ 350 million.

The Company continues to engage with antitrust regulators in the regulatory review of the HHI Transaction and the extension is intended to provide the parties with additional time (to the extent needed) to satisfy the conditions related to receipt of governmental clearances.

The parties are committed to closing the HHI Transaction and the Company and ASSA both continue to expect that they will obtain all the required governmental clearances and will close the HHI Transaction.

The following table summarizes the assets and liabilities of the HHI disposal group classified as held for sale as of July 3, 2022 and September 30, 2021:

(in millions)

April 3, 2022 September 30, 2021

July 3, 2022 September 30, 2021

Trade receivables, net $ 144.7 $ 130.2

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Total liabilities of business held for sale $ 460.3 $ 454.3

The following table summarizes the components of income from discontinued operations before income taxes associated with the HHI divestiture in the accompanying Condensed Consolidated Statements of Operations for the three and six month periods ended April 3, 2022 and April 4, 2021:

Three Month Periods Ended Six Month Periods Ended

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 2 – DIVESTITURES (continued)

The following table summarizes the components of income from discontinued operations before income taxes associated with the HHI divestiture in the accompanying Condensed Consolidated Statements of Operations for the three and nine month periods ended July 3, 2022 and July 4, 2021:

Three Month Periods Ended Nine Month Periods Ended

(in millions)

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Net sales $ 417.0 $ 418.9 $ 1,212.4 $ 1,217.2

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Interest expense 0.9 0.8 2.5 2.5

Other non-operating expense, net 1.3 1.0 2.9 3.7

Other non-operating (income) expense, net ( 0.9 ) 1.5 2.0 5.2

Income from discontinued operations before income taxes $ 57.9 $ 65.7 $ 188.9 $ 229.4

2 unchanged sentences

No impairment loss was recognized on the assets 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 for the three and six month periods ended April 3, 2022 and April 4, 2021:

Three Month Periods Ended Six Month Periods Ended

The following table presents significant non-cash items and capital expenditures of discontinued operations from the HHI divestiture for the three and nine month periods ended July 3, 2022 and July 4, 2021:

Three Month Periods Ended Nine Month Periods Ended

(in millions)

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Depreciation and amortization $ — $ 8.4 $ — $ 25.5

1 unchanged sentence

Purchases of property, plant and equipment $ 5.6 $ 5.5 $ 18.1 $ 17.0

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 2 – DIVESTITURES (continued)

Income from discontinued operations before income taxes – Other includes incremental pre-tax loss on sale for changes to tax and legal indemnifications and other agreed-upon funding under the acquisition agreement for sale and divestiture of its Global Batteries & Lighting ("GBL") and Global Auto Care ("GAC") divisions to Energizer Holdings, Inc.

Loss from discontinued operations before income taxes – other includes incremental pre-tax loss for changes to tax and legal indemnifications and other agreed-upon funding under the acquisition agreements for the sale and divestiture of the Global Batteries & Lighting ("GBL") and Global Auto Care ("GAC") divisions to Energizer Holdings, Inc.

("Energizer") during the year ended September 30, 2019.

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

As of April 3, 2022 and September 30, 2021, the Company recognized $ 26.5 million and $ 36.5 million, respectively, related to indemnification payables in accordance with the acquisition agreements, including $ 9.8 million and $ 17.3 million, respectively, within Other Current Liabilities, primarily attributable to current income tax indemnifications, and $ 16.7 million and $ 19.2 million, respectively, within Other Long-Term Liabilities on the Company’s Condensed Consolidated Statements of Financial Position, primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits.

Subsequently, effective January 2, 2020, Energizer closed its divestitures of the European based Varta® consumer battery business in the EMEA region to Varta AG and transferred all respective rights and indemnifications attributable to the Varta® consumer battery business provided by the GBL sale to Varta AG.

The Company entered into a series of transaction service agreements ("TSA") and reverse TSAs with Energizer to 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.

As of July 3, 2022 and September 30, 2021, the Company recognized $ 25.5 million and $ 36.5 million, respectively, related to indemnification payables in accordance with the acquisition agreements, including $ 9.4 million and $ 17.3 million within Other Current Liabilities, respectively, and $ 16.1 million and $ 19.2 million, within Other Long-Term Liabilities, respectively, on the Company’s Condensed Consolidated Statements of Financial Position, primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits.

The Company entered into a series of TSAs and reverse TSAs with Energizer to 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.

TSAs associated with the Varta® consumer battery business were transferred to Varta AG as part of the subsequent divestiture by Energizer.

Charges associated with TSAs are recognized as bundled service costs under a fixed fee structure by the respective service or function and geographic location, including one-time pass-through charges for warehousing, freight, amongst others, with variable expiration dates up 24 months.

Charges associated with TSAs and reverse TSAs are recognized as a reduction to or increase in the respective operating costs as a component of operating expense or cost of goods sold depending upon the functions supported by or provided to the Company.

Additionally, due to the commingled nature of the shared administrative functions, cash would be received and/or paid on behalf of the respective counterparty's operations, resulting in cash flow being commingled with operating cash flow of the Company which would settle on a net basis with TSA charges.

During the three month period ended April 4, 2021, the Company recognized net gain of $ 0.1 million, consisting of TSA charges of $ 0.1 million.

During the six month period ended April 4, 2021, the Company recognized net loss of $ 1.7 million, consisting of TSA charges of $ 0.9 million and reverse TSA costs of $ 2.6 million.

Charges associated with TSAs were recognized as bundled service costs under a fixed fee structure by the respective service or function and geographic location, including one-time pass-through charges for warehousing, freight, amongst others, with variable expiration dates up to 24 months.

Charges associated with TSAs and reverse TSAs are recognized as a reduction to or increase in the respective costs, as a component of operating expense or cost of goods sold, depending upon the functions supported by or provided to the Company.

Additionally, due to the commingled nature of the shared administrative functions, cash would be received or paid on behalf of the respective counterparty's operations, resulting in cash flow being commingled with operating cash flow of the Company which would settle on a net basis with TSA charges.

During the nine month period ended July 4, 2021, the Company recognized net loss of $ 1.7 million, consisting of TSA charges of $ 0.9 million and reverse TSA costs of $ 2.6 million.

The Company exited all outstanding TSAs and reverse TSAs in January 2021.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 3 – ACQUISITIONS

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The PowerXL® and Copper Chef® brands were acquired outright by the Company while the Emeril Legasse® brand remains subject to a trademark license agreement with the license holder (the "Emeril License").

Pursuant to the Emeril License, the Company will continue to license the Emeril Lagasse® brands in the US, Canada, Mexico, and the United Kingdom for certain designated product categories of household appliances within the HPC segment, including small kitchen food preparation products, indoor and outdoor grills and grill accessories, and cookbooks.

Pursuant to the Emeril License, the Company will continue to license the Emeril Legasse® brands in the US, Canada, Mexico, and the United Kingdom for certain designated product categories of household appliances within the Home and Personal Care ("HPC") segment, including small kitchen food preparation products, indoor and outdoor grills and grill accessories, and cookbooks.

The Emeril License is set to expire effective December 31, 2022 with options of up to three one-year renewal periods following the initial expiration.

Under the terms of the agreement, we agreed to pay the license holder a percentage of sales, with minimum annual royalty payments of $ 1.5 million, increasing to $ 1.8 million in subsequent renewal periods.

The net assets and operating results of the Tristar Business, since the acquisition date of February 18, 2022, are included in the Company’s Condensed Consolidated Statements of Income and reported within the HPC reporting segment for the three and six month periods ended April 3, 2022.

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 February 18, 2022 acquisition date.

The Company has recorded a preliminary allocation of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of the February 18, 2022 acquisition date.

The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of $ 104.7 million was recorded as goodwill, which is deductible for tax purposes.

1 unchanged sentence

The preliminary fair values recorded were determined based upon a valuation with estimates and assumptions used in such valuation that are subject to change within the measurement period (up to one year from the acquisition date).

The primary areas of acquisition account that are not finalized relate to amounts for purchase price, intangible assets, deferred taxes, goodwill, and components of working capital.

The primary areas of acquisition accounting that are not finalized relate to amounts for deferred taxes, goodwill, and components of working capital.

The calculation of preliminary purchase price is as follows:

(in millions) Amount

Cash paid $ 314.6

Estimated purchase price settlement ( 39.1 )

Cash paid at closing $ 314.6

Cash received for purchase price settlement ( 42.2 )

Contingent consideration 30.0

Total purchase price $ 302.4

As of the transaction date, the Company recorded a contingent consideration liability of $ 30.0 million to reflect the estimated fair value of the contingent consideration for the earn-out payments.

The fair value was determined using a Monte Carlo simulation model to value the earn-out based on the likelihood of reaching specific targets.

The fair value measurement is determined based on significant unobservable inputs and thus represents a Level 3 fair value measurement.

The key assumptions considered include the estimated amount and timing of projected gross profits, volatility, estimated discount rates, and risk-free interest rate.

The inputs and assumptions may not be observable in the market, but reflect the assumptions the Company believes would be made by a market participant.

Subsequently, the Company and the acquired Tristar Business have experienced a marginal downturn in operating results during the three month period ended July 3, 2022 that was attributable to significant shifts in retail customer purchasing due to high levels of retail inventory and lower replenishment orders, especially with key significant mass retail customers, along with continued inflationary cost pressures and incremental margin risk from promotional spending, have adjusted the forecasted results of the Tristar Business and further impacted the value of the contingent consideration.

As a result, the fair value of the contingent consideration liability as of July 3, 2022 was estimated to be $ 5.0 million and the Company recognized a decrease of $ 25.0 million for the three and nine month periods ended July 3, 2022.

As of July 3, 2022, the current portion of the contingent consideration of $ 3.5 million was classified as Other Current Liabilities and the long-term portion of $ 1.5 million was classified as Other Long-Term Liabilities on the Company’s Condensed Consolidated Statements of Financial Position.

SPECTRUM BRANDS HOLDINGS, INC.

3 unchanged sentences

NOTE 3 - ACQUISITIONS (continued)

The Company recorded a contingent consideration liability of $ 30.0 million as of the date of the acquisition to reflect the estimated fair value of the contingent consideration for the earn-out payments.

The fair value was determined using a Monte Carlo simulation model to value the earn-out based on the likelihood of reaching specific targets.

The fair value measurement is determined based on significant unobservable inputs and thus represents a Level 3 fair value measurement.

The key assumptions considered include the estimated amount and timing of projected gross profits, volatility, estimated discount rates, and risk-free interest rate.

In each reporting period after the acquisition, the Company will reassess the value of the contingent consideration liability and may recognize an increase or decrease in the fair value in its consolidated statements of earnings after the measurement period.

Changes may result from changes in actual results and projected forecasts.

The inputs and assumptions may not be observable in the market, but reflect the assumptions the Company believes would be made by a market participant.

There were no changes in the contingent consideration liability during the three and six month periods ended April 3, 2022 following the acquisition date of February 18, 2022.

As of April 3, 2022, the current portion of the contingent consideration was classified as Other Current Liabilities for the calendar year 2022 payment of $ 25.0 million and the long-term portion as Other Long-Term Liabilities for the calendar year 2023 payment of $ 5.0 million on the Company’s Condensed Consolidated Statements of Financial Position.

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:

(in millions) Purchase Price Allocation

(in millions) Amount

Cash and cash equivalents $ 0.3

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Operating lease assets 23.3

Deferred charges and other 2.5

Goodwill 104.7

5 unchanged sentences

Net assets acquired $ 302.4

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

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

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

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The discount rate applied to the projected cash flow was 12 % based upon a weighted average cost of capital for the overall business and income taxes were estimated at the applicable statutory rate.

During the three and nine month periods ended July 3, 2022, the Company has recognized $ 65.8 million and $ 101.6 million of net sales from the acquired Tristar Business since the transaction date.

The following pro forma financial information summarizes the combined results of operations for the Company and the acquired Tristar Business as though the companies were combined as of the beginning of the Company’s fiscal 2021.

The unaudited pro forma financial information was as follows:

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 3 - ACQUISITIONS (continued)

Three Month Period Ended Six Month Period Ended

(in millions) April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Three Month Periods Ended Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Proforma net sales $ 818.0 $ 839.9 $ 2,583.1 $ 2,687.9

Proforma net (loss) income from continuing operations ( 26.0 ) 6.1 ( 33.3 ) 21.2

Proforma net income (loss) from continuing operations 3.3 ( 2.0 ) ( 29.9 ) 21.1

Proforma net income 33.2 30.6 79.9 151.3

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The pro forma financial information includes, where applicable, adjustments for:

(i) additional amortization expense that would have been recognized related to the acquired intangible assets, (ii) additional operating expense from the excess fair value adjustments on ROU operating lease assets for below market rents (iv) additional cost of sales related to the inventory valuation adjustment, (v) transaction costs and other one-time non-recurring costs and (vi) the estimated income tax effect on the acquired Tristar Business and pro forma adjustments.

(i) additional amortization expense that would have been recognized related to the acquired intangible assets, (ii) additional operating expense from the excess fair value adjustments on operating lease assets for below market rents (iv) additional cost of sales related to the inventory valuation adjustment, (v) transaction costs and other one-time non-recurring costs and (vi) the estimated income tax effect on the acquired Tristar Business and pro forma adjustments.

During the nine month period ended July 3, 2022, the Company recognized $ 13.5 million of transaction costs attributable to the acquisition of the Tristar Business, included in General and Administrative Expense on the Condensed Consolidated Statement of Income.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 3 - ACQUISITIONS (continued)

Through the acquisition of the Tristar Business, the Company acquired substantially all of the operations, employees and net assets of Tristar Products, Inc.

2 unchanged sentences

Charges for TSA services are recognized as a reduction to the respective operating costs as a component of operating expense or cost of goods sold depending upon the functions supported by the acquired Tristar Business.

During the three and six month periods ended April 3, 2022, the Company recognized TSA income of $ 0.5 million.

Additionally, the Company assumed the cash accounts supporting both the acquired Tristar Business and the excluded product groups, and due to the commingled nature of operations, cash would be received and/or paid on behalf of the excluded product groups' operations, resulting in cash flow being commingled with operating cash flow of the Company which would settle on a net basis with TSA charges.

As of April 3, 2022, there was an outstanding payable to Tristar Products, Inc.

of $ 0.7 million included within Other Current Liabilities on the Company’s Condensed Consolidated Statements of Financial Position.

NOTE 4 – RESTRUCTURING AND RELATED CHARGES

Global Productivity Improvement Program – During the year ended September 30, 2019, the Company initiated a company-wide, multi-year program, which consists of various restructuring related initiatives to redirect resources and spending to drive growth, identify cost savings and pricing opportunities through standardization and optimization, develop organizational and operating optimization, and reduce overall operational complexity across the Company.

Since the announcement of the project and completion of the Company’s divestitures of 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 from Energizer TSAs and reverse TSAs.

Refer to Note 2 – Divestitures for further discussion of continuing involvement with Energizer.

The initiative includes review of global processes and organization design and structures;

headcount reductions and transfers;

and rightsizing the Company’s shared operations and commercial business strategy in certain regions and local jurisdictions;

among others.

Total cumulative costs incurred associated with the project were $ 156.3 million as of April 3, 2022, with approximately $ 0.9 million forecasted in the foreseeable future.

The project costs are anticipated to be incurred through the fiscal year ending September 30, 2022.

GPC Distribution Center Transitions – During the year ended September 30, 2021, the GPC segment entered into an initiative to update its supply chain and distribution operations within the US to optimize and improve fill rates, address capacity needs attributable to recent and projected growth in the business, improve product availability to meet increasing customer demand and improve overall operational effectiveness and throughput.

The initiative includes the transition of its third party logistics (3PL) service provider at its existing Edwardsville, IL distribution center, incorporating new facilities into the distribution footprint by expanding warehouse capacity and securing additional space, and updating engagement and processes with suppliers and its transportation and logistics handlers.

Costs incurred to facilitate the transition of service providers include one-time implementation and start-up costs, 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, and incremental costs for various disruptions in the operations during the transition period, including supplemental transportation and storage costs.

Due to the continued supply chain constraints impacting product availability experienced by the GPC segment, the Company has extended the initiative and expanded the project to include additional long-term capacity to be available later in the 2022 fiscal year.

Total cumulative costs incurred associated with the project were $ 27.4 million as of April 3, 2022, with approximately $ 5.3 million forecasted in the foreseeable future.

The project costs are anticipated to be incurred through the remainder of the year ending September 30, 2022.

Other Restructuring Activities – The Company may enter into small, less significant initiatives and restructuring related activities primarily to reduce costs and improve margins throughout the organization.

During the three and nine month periods ended July 3, 2022, the Company recognized TSA income of $ 0.3 million and $ 0.8 million, respectively.

Additionally, the Company assumed the cash accounts supporting both the acquired Tristar Business and the excluded product groups, and due to the commingled nature of operations, cash would be received or paid on behalf of the excluded product groups' operations, resulting in cash flow being commingled with operating cash flow of the Company which would settle on a net basis with TSA charges.

As of July 3, 2022, there was an outstanding receivable from Tristar Products, Inc.

of $ 1.3 million included within Other Receivables on the Company’s Condensed Consolidated Statements of Financial Position.

NOTE 4 – RESTRUCTURING CHARGES

The Company regularly enters into various restructuring initiatives, optimization projects, strategic transactions, and other business development activities that may include the recognition of exit or disposal costs.

Exit or disposal costs include, but are not limited to, the costs of one-time termination benefits, such as a severance or retention bonuses, one-time contract termination costs (excluding leases), and other costs associated with exit or disposal activity such as the sale or termination of a line of business, closure of an operating facility or business location in a country or region, relocation of business activities from one location to another, change in management structure, and a fundamental reorganization that affects the nature and focus of operations.

During the three month period ended July 3, 2022, the Company entered into a new initiative in response to changes observed within consumer products and retail markets, continued inflationary cost pressures and headwinds, and to facilitate changes in the management structure for enabling functions of the consolidated group, resulting in the realization of headcount reduction.

Total cumulative costs associated with the new restructuring initiative were $ 8.1 million.

Substantially all costs associated with the initiative have been recognized with no further significant costs expected to be incurred.

During the year ended September 30, 2021, the GPC segment entered into an initiative to update its supply chain and distribution operations within the U.S.

to address capacity needs, and optimize and improve fill rates attributable to recent growth in the business and consumer demand, and improve overall operational effectiveness and throughput.

The initiative includes the transition of its third party logistics (3PL) service provider at its existing distribution center, incorporating new facilities into the distribution footprint by expanding warehouse capacity and securing additional space to support long-term distribution and fulfillment, plus updating engagement and processes with suppliers and its transportation and logistics handlers.

Incremental costs include one-time transition, implementation and start-up cost with the new 3PL service provider, including the integration of provider systems and technology, incentive-based compensation to maintain performance during transition, duplicative and redundant costs, and incremental costs for various disruptions in the operations during the transition period including supplemental transportation and storage costs, and incremental detention and demurrage costs.

Costs attributable to the initiative are expected to be incurred through the end of the fiscal year ending September 30, 2022.

Total cumulative costs associated with the initiative were $ 35.5 million with expected costs of approximately $ 4 million expected to be incurred.

During the year ended September 30, 2019, the Company initiated the Global Productivity Improvement Program, which is a company-wide, multi-year program, consisting of various initiatives to redirect resources and spending to drive growth, identify cost savings and pricing opportunities through standardization and optimization, develop organizational and operating optimization, and reduce overall operational complexity across the Company.

With the Company's divestitures of GBL and GAC during the year ended September 30, 2019, the project focus includes the transition of the Company's continuing operations in a post-divestiture environment and exiting of TSAs, which were fully exited in January 2022.

The initiatives include review of global processes and organization design and structures, headcount reductions and transfers, and rightsizing the Company’s shared operations and commercial business strategy, and exit of certain internal production to third-party suppliers, among others, resulting in the recognition of severance benefits and other exit and disposal costs to facilitate such activity.

As of July 3, 2022, total cumulative exit and disposal costs associated with the project were $ 157.5 million with the project being substantially complete and no significant anticipated costs expected to be incurred.

The Company may enter into small, less significant initiatives to reduce costs and improve margins throughout the organization.

Individually these activities are not substantial and occur over a shorter time period (generally less than 12 months).

The following summarizes restructuring and related charges for the three and six month periods ended April 3, 2022 and April 4, 2021:

Three Month Periods Ended Six Month Periods Ended

The following summarizes restructuring charges for the three and nine month periods ended July 3, 2022 and July 4, 2021:

Three Month Periods Ended Nine Month Periods Ended

(in millions)

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Fiscal 2022 restructuring $ 8.1 $ — $ 8.1 $ —

GPC distribution center transition 8.1 3.9 24.1 3.9

Global productivity improvement program 1.2 4.8 5.2 15.7

GPC distribution transition 5.6 — 15.9 —

Other restructuring activities 8.5 2.4 13.8 2.4

Total restructuring and related charges $ 16.4 $ 4.3 $ 33.8 $ 13.3

Other project costs 0.1 1.4 14.0 3.8

Total restructuring charges $ 17.5 $ 10.1 $ 51.4 $ 23.4

Cost of goods sold $ 0.4 $ 0.3 $ 1.4 $ 1.7

Operating expense 15.2 3.0 32.3 11.9

Selling expense 8.1 3.5 24.1 3.5

General and administrative expense 9.0 6.3 25.9 18.2

SPECTRUM BRANDS HOLDINGS, INC.

2 unchanged sentences

(in millions, unaudited)

NOTE 4 - RESTRUCTURING AND RELATED CHARGES (continued)

The following is a summary of restructuring and related charges for the three and six month periods ended April 3, 2022 and April 4, 2021, by cost type.

(in millions) Termination

NOTE 4 - RESTRUCTURING CHARGES (continued)

The following is a summary of restructuring charges by segment for the three and nine month periods ended July 3, 2022 and July 4, 2021.

Three Month Periods Ended Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

HPC $ 4.2 $ 2.1 $ 8.5 $ 6.2

GPC 11.6 3.9 31.1 6.0

H&G 0.6 — 0.6 —

Corporate 1.1 4.1 11.2 11.2

Total restructuring charges $ 17.5 $ 10.1 $ 51.4 $ 23.4

The following is a summary of restructuring charges by cost type for the three and nine month periods ended July 3, 2022 and July 4, 2021.

(in millions)

Benefits Other

For the three month period ended April 3, 2022 $ 1.2 $ 15.2 $ 16.4

For the three month period ended April 4, 2021 0.4 3.9 4.3

For the six month period ended April 3, 2022 1.9 31.9 33.8

For the six month period ended April 4, 2021 3.3 10.0 13.3

The following is a rollforward of the accrual related to all restructuring and related activities, included within Other Current Liabilities, by cost type for the six month period ended April 3, 2022.

For the three month period ended July 3, 2022 $ 8.5 $ 9.0 $ 17.5

For the three month period ended July 4, 2021 5.0 5.1 10.1

For the nine month period ended July 3, 2022 10.4 41.0 51.4

For the nine month period ended July 4, 2021 8.3 15.1 23.4

The following is a rollforward of the accrual for restructuring charges by cost type for the nine month period ended July 3, 2022.

(in millions) Termination

4 unchanged sentences

Foreign currency and other ( 1.5 ) ( 1.8 ) ( 3.3 )

Accrual balance at April 3, 2022 $ 2.0 $ 7.7 $ 9.7

The following summarizes restructuring and related charges by segment for the three and six month periods ended April 3, 2022 and April 4, 2021, by the Company’s segments:

(in millions) HPC GPC H&G Corporate Total

For the three month period ended April 3, 2022 $ 3.7 $ 8.2 $ — $ 4.5 $ 16.4

For the three month period ended April 4, 2021 1.5 0.6 — 2.2 4.3

For the six month period ended April 3, 2022 4.3 19.6 — 9.9 33.8

For the six month period ended April 4, 2021 4.1 2.1 — 7.1 13.3

Accrual balance at July 3, 2022 $ 8.1 $ 2.3 $ 10.4

NOTE 5 – REVENUE RECOGNITION

The Company generates all of its revenue from contracts with customers.

The following table disaggregates our revenue for the three and six month periods ended April 3, 2022 and April 4, 2021, by the Company’s key revenue streams, segments and geographic region (based upon destination):

Three Month Period Ended April 3, 2022 Three Month Period Ended April 4, 2021

The following table disaggregates our revenue for the three and nine month periods ended July 3, 2022 and July 4, 2021, by the Company’s key revenue streams, segments and geographic region (based upon destination):

Three Month Period Ended July 3, 2022 Three Month Period Ended July 4, 2021

(in millions)

8 unchanged sentences

$ 329.3 $ 290.2 $ 198.5 $ 818.0 $ 274.4 $ 257.3 $ 212.1 $ 743.8

Six Month Period Ended April 3, 2022 Six Month Period Ended April 4, 2021

Nine Month Period Ended July 3, 2022 Nine Month Period Ended July 4, 2021

(in millions) HPC GPC H&G Total HPC GPC H&G Total

10 unchanged sentences

See Note 17 - Commitments and Contingencies for further information regarding the Company’s standard warranties.

With the acquisition of the Tristar Business, the Company also sells extended warranty coverage for certain Tristar products that are sold directly to consumers, which it accounts for as service warranties.

In most cases, the extended warranty is sold as a separate contract and separate performance obligation that is distinct from the product.

The extended warranty transaction revenue is initially recognized as deferred revenue and amortized on a straight-line basis to Net Sales over the life of the contracts following the standard warranty period.

Revenue attributable to extended warranties was first recognized with the acquisition of the Tristar

SPECTRUM BRANDS HOLDINGS, INC.

3 unchanged sentences

NOTE 5 – REVENUE RECOGNITION (continued)

Business on February 18, 2022.

In most cases, the extended warranty is sold as a separate contract and separate performance obligation that is distinct from the product.

Revenue attributable to extended warranties was first recognized with the acquisition of the Tristar Business on February 18, 2022.

See Note 3 - Acquisitions for more details.

As of April 3, 2022, the Company had $ 1.3 million service warranty revenue deferred and included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

As of July 3, 2022, the Company had $ 1.2 million service warranty revenue deferred and included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

The Company has a broad range of customers including many large mass retail customers.

During the three month periods ended April 3, 2022 and April 4, 2021, there were two large retail customers each exceeding 10% of consolidated Net Sales and representing 33.3 % and 32.2 % of consolidated Net Sales, respectively.

During the six month periods ended April 3, 2022 and April 4, 2021, there were two large retail customers each exceeding 10% of consolidated Net Sales and representing 33.1 % and 33.0 % of consolidated Net Sales, respectively.

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 to the Black and Decker® brand (B&D) through a license agreement with Stanley Black and Decker.

The license agreement was recently renewed through June 30, 2025, including a sell-off period from April 1, 2025 to June 30, 2025 whereby the Company can continue to sell and distribute but no longer produce products subject to the License Agreement.

Net sales from B&D product sales consist of $ 98.0 million and $ 93.7 million for the three month periods ended April 3, 2022 and April 4, 2021, respectively.

Net sales from B&D product sales consist of $ 229.8 million and $ 205.3 million for the six month periods ended April 3, 2022 and April 4, 2021, respectively.

During the three month period ended July 3, 2022 there were two large retail customers each exceeding 10% of consolidated Net Sales and representing 34.3 % of consolidated Net Sales.

During the three month period ended July 4, 2021 there was one large retail customer exceeding 10% of consolidated Net Sales and representing 20.4 % of consolidated Net Sales.

During the nine month periods ended July 3, 2022 and July 4, 2021, there were two large retail customers each exceeding 10% of consolidated Net Sales and representing 33.3 % and 31.4 % of consolidated Net Sales, respectively.

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 to the Black & Decker ("B&D") brand through a license agreement with Stanley Black and Decker.

The license agreement was renewed through June 30, 2025, including a sell-off period from April 1, 2025 to June 30, 2025 whereby the Company can continue to sell and distribute but no longer produce products subject to the license agreement.

Net sales from B&D product sales consist of $ 102.4 million and $ 91.9 million for the three month periods ended July 3, 2022 and July 4, 2021, respectively.

Net sales from B&D product sales consist of $ 332.4 million and $ 297.2 million for the nine month periods ended July 3, 2022 and July 4, 2021, respectively.

All other significant brands and tradenames used in the Company’s commercial operations are directly owned and not subject to further restrictions.

1 unchanged sentence

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 be received.

The allowance for product returns as of April 3, 2022, and September 30, 2021 was $ 21.1 million and $ 11.8 million, respectively.

The increase in allowance for product returns balance is due to the acquisition of the Tristar Business.

The allowance for product returns as of July 3, 2022, and September 30, 2021 was $ 20.2 million and $ 11.8 million, respectively.

The increase in allowance for product returns is due to the acquisition of the Tristar Business on February 18, 2022.

See Note 3 - Acquisitions for further discussion on the Tristar Business acquisition.

NOTE 6 – RECEIVABLES AND CONCENTRATION OF CREDIT RISK

The allowance for uncollectible receivables as of April 3, 2022 and September 30, 2021 was $ 10.3 million and $ 6.7 million, respectively.

The allowance for credit losses on the Company's trade receivables as of July 3, 2022 and September 30, 2021 was $ 11.2 million and $ 6.7 million, respectively.

The increase in allowance for credit losses is primarily due to the acquisition of the Tristar Business and increased recoverability risk from Russia commercial operations.

See Note 3 - Acquisitions for further discussion on the Tristar Business acquisition.

The Company has a broad range of customers including many large mass retail customers.

As of April 3, 2022 and September 30, 2021 there was one large retail customers exceeding 10% of consolidated Net Trade Receivables and representing 14.4 % and 14.7 %, respectively, of consolidated Net Trade Receivables.

As of July 3, 2022 and September 30, 2021 there was one large retail customer exceeding 10% of consolidated Net Trade Receivables and representing 17.1 % and 14.7 %, respectively, of consolidated Net Trade Receivables.

NOTE 7 – INVENTORIES

1 unchanged sentence

(in millions)

April 3, 2022 September 30, 2021

July 3, 2022 September 30, 2021

Raw materials

5 unchanged sentences

Property, plant and equipment consist of the following:

(in millions) April 3, 2022 September 30, 2021

(in millions) July 3, 2022 September 30, 2021

Land, buildings and improvements $ 76.3 $ 83.5

5 unchanged sentences

Property, plant and equipment, net $ 260.9 $ 260.2

Depreciation expense from property, plant, and equipment for the three month periods ended April 3, 2022 and April 4, 2021 was $ 12.2 million and $ 13.4 million, respectively;

and for the six month periods ended April 3, 2022 and April 4, 2021 was $ 24.4 million and $ 26.4 million, respectively.

Depreciation expense from property, plant, and equipment for the three month periods ended July 3, 2022 and July 4, 2021 was $ 12.3 million and $ 12.8 million, respectively, and for the nine month periods ended July 3, 2022 and July 4, 2021 was $ 36.6 million and $ 39.2 million, respectively.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 9 – GOODWILL AND INTANGIBLE ASSETS

4 unchanged sentences

Foreign currency impact — ( 12.6 ) — ( 12.6 )

As of April 3, 2022 $ 103.7 $ 520.7 $ 342.6 $ 967.0

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 9 - GOODWILL AND INTANGIBLE ASSETS (continued)

The carrying value of indefinite-lived intangibles and definite-lived intangibles assets subject to amortization and accumulated amortization are as follows:

April 3, 2022 September 30, 2021

As of July 3, 2022 $ 104.7 $ 512.0 $ 342.6 $ 959.3

The carrying value and accumulated amortization of intangible assets are as follows:

July 3, 2022 September 30, 2021

(in millions) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net

6 unchanged sentences

Total Intangible Assets $ 1,786.2 $ ( 553.6 ) $ 1,232.6 $ 1,724.1 $ ( 520.0 ) $ 1,204.1

There were no triggering events and no impairments of goodwill and intangible assets identified during the three and six month periods ended April 3, 2022.

Amortization expense from the intangible assets for the three month periods ended April 3, 2022 and April 4, 2021 was $ 13.5 million and $ 16.8 million, respectively;

and for the six month periods ended April 3, 2022 and April 4, 2021 was $ 26.7 million and $ 30.9 million, respectively.

There were no triggering events or impairments of goodwill and intangible assets identified during the three and nine month periods ended July 3, 2022.

Amortization expense from the intangible assets for the three month periods ended July 3, 2022 and July 4, 2021 was $ 13.1 million and $ 17.4 million, respectively, and for the nine month periods ended July 3, 2022 and July 4, 2021 was $ 39.9 million and $ 48.2 million, respectively.

Excluding the impact of any future acquisitions, dispositions or changes in foreign currency, the Company estimates annual amortization expense of intangible assets for the next five fiscal years will be as follows:

(in millions) Amortization

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 10 – DEBT

Debt consists of the following:

April 3, 2022 September 30, 2021

July 3, 2022 September 30, 2021

(in millions) Amount Rate Amount Rate

Spectrum Brands Inc.

Revolver Facility, variable rate, expiring June 30, 2025 $ 775.0 4.1 % $ — — %

17 unchanged sentences

Long-term debt, net of current portion $ 3,209.6 $ 2,494.3

Borrowings from the initial revolver capacity of $ 600 million under the Revolver Facility are subject to either adjusted London Inter-Bank Offered Rate ("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;

Borrowings from the original revolver capacity of $ 600 million under the Revolver Facility are subject to either adjusted London Inter-Bank Offered Rate ("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;

and borrowings under the incremental revolver capacity of $ 500 million, per the third amendment to the Credit Agreement discussed below, are subject to Secured Overnight Financing Rate ("SOFR") plus margin ranging from 1.75 % to 2.75 % per annum or base rate plus margin ranging from 0.75 % to 1.75 %.

1 unchanged sentence

Our Revolver Facility allows for the LIBOR rate to be phased out and replaced with the SOFR and therefore we do not anticipate a material impact by the expected upcoming LIBOR transition.

As a result of borrowings and payments under the Revolver Facility, the Company had borrowing availability of $ 308.4 million at April 3, 2022, net of outstanding letters of credit of $ 16.6 million.

As a result of borrowings and payments under the Revolver Facility, the Company had borrowing availability of $ 307.3 million at July 3, 2022, net of outstanding letters of credit of $ 17.7 million.

The Term Loan Facility is subject to a rate per annum equal to either (1) the LIBO Rate (as defined in the 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 Credit Agreement), plus a margin of 1.00 % per annum.

2 unchanged sentences

The second amendment includes certain modified terms from the existing Credit Agreement to provide for an alternate rate of interest to the Eurocurrency Rate applicable to Revolving Loans and Letters of Credit in Euro and Pounds Sterling.

Pursuant to the second amendment, Sterling Overnight Index

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 10 - DEBT (continued)

Average ("SONIA") replaced LIBO Rate as a reference rate for Revolving Loans and Letters of Credit denominated in Pounds Sterling and Euro Interbank Offered Rate ("EURIBOR") replaced LIBO Rate as a reference rate for Revolving Loans and Letters of Credit denominated in Euro.

Pursuant to the second amendment, Sterling Overnight Index Average ("SONIA") replaced LIBO Rate as a reference rate for Revolving Loans and Letters of Credit denominated in Pounds Sterling and Euro Interbank Offered Rate ("EURIBOR") replaced LIBO Rate as a reference rate for Revolving Loans and Letters of Credit denominated in Euro.

The Company currently has no borrowing under the Revolver Facility denominated in Euro or Pounds Sterling.

5 unchanged sentences

The Company incurred $ 7.6 million in connection with the third amendment, which have been capitalized as debt issuance costs and will be amortized over the remaining term of the Credit Agreement.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 11 – DERIVATIVES

8 unchanged sentences

At the time the sale or purchase is recognized, the fair value of the related hedge is reclassified as an adjustment to purchase price variance in Cost of Goods Sold or Net Sales on the Condensed Consolidated Statements of Income.

At April 3, 2022, the Company had a series of foreign exchange derivative contracts outstanding through September 29, 2023.

At July 3, 2022, the Company had a series of foreign exchange derivative contracts outstanding through December 29, 2023.

The derivative net gain estimated to be reclassified from AOCI into earnings over the next 12 months is $ 6.5 million, net of tax.

At April 3, 2022 and September 30, 2021, the Company had foreign exchange derivative contracts designated as cash flow hedges with a notional value of $ 276.7 million and $ 279.9 million, respectively.

The following table summarizes the impact of designated cash flow hedges and the pre-tax gain (loss) recognized in the Condensed Consolidated Statements of Income for the three and six month periods ended April 3, 2022 and April 4, 2021, respectively:

Gain in OCI Reclassified Gain (Loss) to Continuing Operations

For the three month periods ended (in millions) April 3, 2022 April 4, 2021 Line Item April 3, 2022 April 4, 2021

At July 3, 2022 and September 30, 2021, the Company had foreign exchange derivative contracts designated as cash flow hedges with a notional value of $ 106.7 million and $ 279.9 million, respectively.

The following table summarizes the impact of designated cash flow hedges and the pre-tax gain (loss) recognized in the Condensed Consolidated Statements of Income for the three and nine month periods ended July 3, 2022 and July 4, 2021, respectively:

Gain (Loss) in OCI Reclassified Gain (Loss) to Continuing Operations

For the three month periods ended (in millions) July 3, 2022 July 4, 2021 Line Item July 3, 2022 July 4, 2021

Foreign exchange contracts $ 0.1 $ — Net sales $ 0.1 $ 0.1

2 unchanged sentences

Gain (Loss) in OCI Reclassified Gain (Loss) to Continuing Operations

For the six month periods ended (in millions)

April 3, 2022 April 4, 2021 Line Item April 3, 2022 April 4, 2021

For the nine month periods ended (in millions)

July 3, 2022 July 4, 2021 Line Item July 3, 2022 July 4, 2021

Foreign exchange contracts $ 0.2 $ 0.1 Net sales $ 0.1 $ 0.1

1 unchanged sentence

Total $ 12.0 $ ( 9.5 ) $ 8.5 $ ( 8.3 )

During the three and nine month periods ended July 3, 2022, the Company settled certain cash flow hedges prior to their stated maturity that were in place to hedge forecasted U.S.

Dollar denominated inventory purchases in exchange for Euros, but were subsequently discontinued due to changes in the Company's forecasted purchasing strategy of finished goods inventory within the EMEA region.

As a result, there was a realized gain of $ 8.2 million during the three and nine month periods ended July 3, 2022 and recognized as a component of Cost of Goods Sold, included in the activity summarized above.

Derivative Contracts Not Designated as Hedges for Accounting Purposes

1 unchanged sentence

These obligations generally require the Company to exchange foreign currencies for U.S.

Dollars, Canadian Dollars, Euros, Pounds Sterling, Australian Dollars, Polish Zlotys, Mexican Pesos, or Japanese Yen, among others.

Dollars, Canadian Dollars, Euros, Pounds Sterling, Australian Dollars Mexican Pesos, Japanese Yen, Colombian Peso, Polish Zlotys, Hungarian Forint, or Turkish Lira, among others.

These foreign exchange contracts are fair value hedges of a related liability or asset recorded in the accompanying Condensed Consolidated Statements of Financial Position.

The gain or gain 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 April 3, 2022, the Company had a series of forward exchange contracts outstanding through July 20, 2022.

At April 3, 2022 and September 30, 2021, the Company had $ 109.8 million and $ 198.4 million, respectively, of notional value of such foreign exchange derivative contracts outstanding.

The following summarizes the impact of derivative instruments on the accompanying Condensed Consolidated Statements of Income for the three and six month periods ended April 3, 2022 and April 4, 2021, pre-tax:

Three Month Periods Ended Six Month Periods Ended

(in millions) Line Item April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

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 July 3, 2022, the Company had a series of forward exchange contracts outstanding through December 23, 2022.

At July 3, 2022 and September 30, 2021, the Company had $ 332.7 million and $ 198.4 million, respectively, of notional value of such foreign exchange derivative contracts outstanding.

The following summarizes the impact of derivative instruments on the accompanying Condensed Consolidated Statements of Income for the three and nine month periods ended July 3, 2022 and July 4, 2021, pre-tax:

Three Month Periods Ended Nine Month Periods Ended

(in millions) Line Item July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Foreign exchange contracts Other non-operating expense (income) $ 6.2 $ 2.5 $ 5.3 $ ( 6.0 )

6 unchanged sentences

The fair value of the Company’s outstanding derivative contracts recorded in the Condensed Consolidated Statements of Financial Position is as follows:

(in millions) Line Item April 3, 2022 September 30, 2021

(in millions) Line Item July 3, 2022 September 30, 2021

Derivative Assets

5 unchanged sentences

Foreign exchange contracts – designated as hedge Accounts payable $ — $ 0.1

Foreign exchange contracts – designated as hedge Other long term liabilities 0.1 —

Foreign exchange contracts – not designated as hedge Accounts payable 6.8 2.4

3 unchanged sentences

The maximum loss due to credit risk equals the fair value of the gross asset derivatives that are concentrated with certain domestic and foreign financial institution counterparties.

The Company considers these exposures when measuring its credit reserve on its derivative assets, which were not significant as of April 3, 2022.

The Company considers these exposures when measuring its credit reserve on its derivative assets, which were not significant as of July 3, 2022.

The Company’s standard contracts do not contain credit risk related contingent features whereby the Company would be required to post additional cash collateral because of a credit event.

However, the Company is typically required to post collateral in the normal course of business to offset its liability positions.

As of April 3, 2022, and September 30, 2021, there was no cash collateral outstanding and no posted standby letters of credit related to such liability positions.

As of July 3, 2022, and September 30, 2021, there was no cash collateral outstanding and no posted standby letters of credit related to such liability positions.

Net Investment Hedge

SBI has € 425.0 million aggregate principle amount of 4.00 % Notes designated as a non-derivative economic hedge, or net investment hedge, of the translation of the Company’s net investments in Euro denominated subsidiaries at the time of issuance.

Spectrum Brands, Inc.

has € 425.0 million aggregate principle amount of 4.00 % Notes designated as a non-derivative economic hedge, or net investment hedge, of the translation of the Company’s net investments in Euro denominated subsidiaries at the time of issuance.

The hedge effectiveness is measured on the beginning balance of the net investment and re-designated every three months.

Any gains and losses attributable to the translation of the Euro denominated debt designated as net investment hedge are recognized as a component of foreign currency translation within AOCI, and gains and losses attributable to the translation of the undesignated portion are recognized as foreign currency translation gains or losses within Other Non-Operating Expense (Income).

As of April 3, 2022, the full principal amount was designated as a net investment hedge and considered fully effective.

The following summarizes the gain (loss) from the net investment hedge recognized in Other Comprehensive Income for the three and six month periods ended April 3, 2022 and April 4, 2021, pre-tax:

Three Month Periods Ended Six Month Periods Ended

Gain (loss) in OCI (in millions) April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

As of July 3, 2022, the full principal amount was designated as a net investment hedge and considered fully effective.

The following summarizes the gain (loss) from the net investment hedge recognized in Other Comprehensive Income for the three and nine month periods ended July 3, 2022 and July 4, 2021, pre-tax:

Three Month Periods Ended Nine Month Periods Ended

Gain (Loss) in OCI (in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Net investment hedge $ 24.8 $ ( 3.4 ) $ 47.3 $ ( 4.8 )

6 unchanged sentences

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 value and estimated fair value of financial and derivative instruments as of April 3, 2022 and September 30, 2021 according to the fair value hierarchy are as follows:

April 3, 2022 September 30, 2021

The carrying value and estimated fair value of financial instruments as of July 3, 2022 and September 30, 2021 according to the fair value hierarchy are as follows:

July 3, 2022 September 30, 2021

(in millions) Level 1 Level 2 Level 3 Fair Value Carrying

4 unchanged sentences

The fair value measurements of the Company’s debt represent non-active market exchanged traded securities which are valued at quoted input prices that are directly observable or indirectly observable through corroboration with observable market data.

See Note 10 – Debt for additional detail on outstanding debt of SBH and SB/RH.

See Note 10 – Debt for additional detail on outstanding debt.

See Note 11 – Derivatives for additional detail on derivative assets and liabilities.

3 unchanged sentences

The Company sold its remaining investment in Energizer common stock in January 2021.

The following is a summary of income recognized as a component of Other Non-Operating Income in the Company's Condensed Consolidated Statements of Income:

Three Month Period Ended Six Month Period Ended

(in millions) April 4, 2021 April 4, 2021

The following is a summary of amounts recognized as a component of Other Non-Operating Expense (Income) in the Company's Condensed Consolidated Statements of Income:

Nine Month Period Ended

(in millions) July 4, 2021

Realized gain on equity investments sold $ 6.9

7 unchanged sentences

As part of our share repurchase programs, the Company purchased treasury shares in open market purchases at market fair value, private purchases from Company employees, significant shareholders or beneficial interest owners at fair value.

The following summarizes the activity of common stock repurchases for the three and six month periods ended April 3, 2022 and April 4, 2021:

April 3, 2022 April 4, 2021

The following summarizes the activity of common stock repurchases for the three and nine month periods ended July 3, 2022 and July 4, 2021:

July 3, 2022 July 4, 2021

Three Month Periods Ended

1 unchanged sentence

Open Market Purchases — $ — $ — 0.1 $ 88.22 $ 10.2

April 3, 2022 April 4, 2021

Six Month Periods Ended

July 3, 2022 July 4, 2021

Nine Month Periods Ended

(in millions except per share data)

7 unchanged sentences

During the fourth quarter ended September 30, 2021, SBH entered into a $ 150.0 million rule 10b5-1 repurchase plan to facilitate daily market share repurchases through September 16, 2022, until the cap is reached or until the plan is terminated.

The Company completed share repurchases of $ 150.0 million under the rule 10b5-1 repurchase plan during the three month period ended April 3, 2022.

The Company completed share repurchases of $ 150.0 million under the rule 10b5-1 repurchase plan during the nine month period ended July 3, 2022.

SPECTRUM BRANDS HOLDINGS, INC.

3 unchanged sentences

NOTE 14 – SHARE BASED COMPENSATION

The following is a summary of share based compensation expense for the three and six month periods ended April 3, 2022 and April 4, 2021 for SBH and SB/RH, respectively.

Three Month Periods Ended Six Month Periods Ended

(in millions) April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

The following is a summary of share based compensation expense for the three and nine month periods ended July 3, 2022 and July 4, 2021 for SBH and SB/RH, respectively.

Three Month Periods Ended Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

SBH $ ( 0.7 ) $ 7.7 $ 11.4 $ 21.4

SB/RH $ ( 1.1 ) $ 7.1 $ 10.7 $ 20.2

The Company recognizes share based compensation expense from the issuance of Restricted Stock Units (“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.

The Company recognizes share based compensation expense from the issuance of Restricted Stock Units (“RSUs”), primarily under its Long-Term Incentive Plan ("LTIP").

RSUs granted under the LTIP include time-based grants and performance-based grants.

The Company regularly issues annual RSU grants under its LTIP during the first quarter of the fiscal year.

Compensation cost is 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.

Time-based RSU awards provide for either three year cliff vesting or graded vesting depending upon the vesting conditions and forfeitures provided by the grant.

Performance-based RSU awards that are dependent upon achieving specified financial metrics (adjusted EBITDA, return on adjusted equity, and/or adjusted free cash flow) by the end of the three year vesting period.

Performance-based RSU awards are dependent upon achieving specified financial metrics (adjusted EBITDA, return on adjusted equity, and/or adjusted free cash flow) by the end of the three year vesting period.

The Company assesses the probability of achievement of the performance conditions and recognizes expense for the awards based on the probable achievement of such metrics.

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, valued based on the fair value of the awards as determined by the market price of the Company's share of common stock on the designated grant price date and recognized as a component of share-based compensation on a straight-line basis over the requisite service period of the award.

The Company regularly issues annual grants under its LTIP during the first quarter of the fiscal year.

The following is a summary of RSU grants issued during the six month period ended April 3, 2022:

RSUs are subject to forfeiture if employment terminates prior to vesting with forfeitures recognized as they occur.

RSUs have dividend equivalents credited to the recipient and are paid only to the extent the RSU vests and the related stock is issued.

Shares issued upon exercise of RSUs are sourced from treasury shares when available.

The following is a summary of RSU grants issued during the nine month period ended July 3, 2022:

(in millions, except per share data) Units Weighted

13 unchanged sentences

NOTE 15 – ACCUMULATED OTHER COMPREHENSIVE INCOME

The change in the components of accumulated other comprehensive income (loss), net of taxes, for the six month periods ended April 3, 2022 and April 4, 2021 was as follows:

The change in the components of AOCI for the nine month period ended July 3, 2022 was as follows:

(in millions) Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total

19 unchanged sentences

Balance at April 3, 2022 $ ( 197.2 ) $ 12.7 $ ( 46.8 ) $ ( 231.3 )

Other comprehensive (loss) income before reclassification ( 26.7 ) 4.3 2.3 ( 20.1 )

Net reclassification for (gain) loss to income from continuing operations — ( 4.9 ) 1.1 ( 3.8 )

Net reclassification for gain to income from discontinued operations — ( 0.9 ) ( 0.1 ) ( 1.0 )

Other comprehensive (loss) income before tax ( 26.7 ) ( 1.5 ) 3.3 ( 24.9 )

Deferred tax effect ( 6.6 ) 0.9 ( 0.9 ) ( 6.6 )

Other comprehensive (loss) income, net of tax ( 33.3 ) ( 0.6 ) 2.4 ( 31.5 )

other comprehensive loss from continuing operations attributable to non-controlling interest ( 0.1 ) — — ( 0.1 )

other comprehensive loss from discontinued operations attributable to non-controlling interest ( 0.3 ) — — ( 0.3 )

Other comprehensive (loss) income attributable to controlling interest ( 32.9 ) ( 0.6 ) 2.4 ( 31.1 )

Balance at July 3, 2022 $ ( 230.1 ) $ 12.1 $ ( 44.4 ) $ ( 262.4 )

The following table presents reclassifications of the gain (loss) on the Condensed Consolidated Statements of Income from AOCI for the periods indicated:

(in millions) Three Month Period Ended July 3, 2022 Nine Month Period Ended July 3, 2022

Defined Benefit Pension Derivative Instruments Total Defined Benefit Pension Derivative Instruments Total

Net Sales $ — $ 0.1 $ 0.1 $ — $ 0.1 $ 0.1

Cost of goods sold — 4.8 4.8 — 8.4 8.4

Other non-operating expense (income), net ( 1.1 ) — ( 1.1 ) ( 3.1 ) — ( 3.1 )

Income from discontinued operations, net of tax 0.1 0.9 1.0 0.1 2.1 2.2

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 15 – ACCUMULATED OTHER COMPREHENSIVE INCOME (continued)

The change in the components of AOCI for the nine month period ended July 4, 2021 was as follows:

(in millions) Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total

20 unchanged sentences

Balance at April 4, 2021 ( 185.0 ) 2.8 ( 61.2 ) ( 243.4 )

Other comprehensive income (loss) before reclassification 1.0 ( 1.0 ) ( 0.2 ) ( 0.2 )

Net reclassification for loss to income from continuing operations — 2.6 1.1 3.7

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

Other comprehensive income before tax 1.0 1.8 0.8 3.6

Deferred tax effect 0.9 ( 0.4 ) ( 0.2 ) 0.3

Other comprehensive income, net of tax 1.9 1.4 0.6 3.9

other comprehensive income from discontinued operations attributable to non-controlling interest 0.1 — — 0.1

Other comprehensive income attributable to controlling interest 1.8 1.4 0.6 3.8

Balance at July 4, 2021 $ ( 183.2 ) $ 4.2 $ ( 60.6 ) $ ( 239.6 )

The following table presents reclassifications of the gain (loss) on the Condensed Consolidated Statements of Income from AOCI for the periods indicated:

(in millions) Three Month Period Ended July 4, 2021 Nine Month Period Ended July 4, 2021

Defined Benefit Pension Derivative Instruments Total Defined Benefit Pension Derivative Instruments Total

Net Sales $ — $ 0.1 $ 0.1 $ — $ 0.1 $ 0.1

Cost of goods sold — ( 2.7 ) ( 2.7 ) — ( 8.4 ) ( 8.4 )

Other non-operating expense (income), net ( 1.1 ) — ( 1.1 ) ( 3.3 ) — ( 3.3 )

Income from discontinued operations, net of tax 0.1 ( 0.2 ) ( 0.1 ) 0.1 ( 0.2 ) ( 0.1 )

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 16 – INCOME TAXES

The effective tax rate for the three and six month periods ended April 3, 2022 and April 4, 2021 was as follows:

Three Month Periods Ended Six Month Periods Ended

Effective tax rate April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

The effective tax rate for the three and nine month periods ended July 3, 2022 and July 4, 2021 was as follows:

Three Month Periods Ended Nine Month Periods Ended

Effective tax rate July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

SBH 40.2 % 122.4 % 28.5 % 36.3 %

SB/RH 34.9 % 110.3 % 28.6 % 35.7 %

The estimated annual effective tax rate applied to the three and six month periods ended April 3, 2022 differs from the US federal statutory rate of 21 % principally due to income earned outside the U.S.

The estimated annual effective tax rate applied to the three and nine month periods ended July 3, 2022 differs from the US federal statutory rate of 21 % principally due to income earned outside the U.S.

that is subject to U.S.

tax, including the U.S.

tax on global intangible low taxed income (“GILTI”), certain nondeductible expenses, foreign rates that differ from the US federal statutory rate, and state income taxes.

tax on global intangible low taxed income (“GILTI”), certain nondeductible expenses, foreign rates that differ from the U.S.

federal statutory rate, and state income taxes.

The Company has U.S.

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The Company’s federal effective tax rate on GILTI is therefore 21 %.

During the six month period ended April 3, 2022, the Company recorded a $ 3.2 million tax benefit as an adjustment to the estimated benefit recorded in Fiscal 2021 for the Final Regulations issued under Internal Revenue Code Section 951A relating to the treatment of income that is subject to a high rate of tax under the GILTI regime.

The Company completed and filed the amended return implementing these Regulations during the six month period ending April 3, 2022.

The Company also recorded a $ 2.5 million tax benefit during the six month period ended April 3, 2022 for windfalls associated with the vesting of share compensation during the year.

During the nine month period ended July 3, 2022, the Company recorded a $ 3.2 million tax benefit as an adjustment to the estimated benefit recorded in Fiscal 2021 for the Final Regulations issued under Internal Revenue Code Section 951A relating to the treatment of income that is subject to a high rate of tax under the GILTI regime.

The Company completed and filed the amended return implementing these Regulations during the nine month period ending July 3, 2022.

The Company also recorded a $ 2.5 million tax benefit during the nine month period ended July 3, 2022 for windfalls associated with the vesting of share compensation during the year.

The Company generated a pretax loss on continuing operations year to date, so additional discrete tax benefits result in an increase to the tax rate.

As of April 3, 2022, and September 30, 2021, there was $ 1.8 million of income tax receivable and $ 8.0 million of income taxes payable, respectively, with its parent company, on the SB/RH Condensed Consolidated Statements of Financial Position, calculated as if SB/RH were a separate taxpayer.

In addition, the Company recorded $ 2.2 million of tax expense during the three and nine month periods ended July 3, 2022 for taxes associated with preparing the Company for a strategic separation of the HPC segment.

The Company expects to record additional taxes related to the transactions necessary to prepare for a strategic separation in the three month period ending September 30, 2022.

On April 4, 2022, the U.S.

District Court for the District of Colorado ruled that the IRC Section 245A temporary regulations (“245A Regulations”) adopted by the Treasury Department in June of 2019 were invalid.

The ruling is expected to be appealed, and the Company has been advised that similar challenges are ongoing in other U.S.

Subsequent to the end of the quarter, the Company filed a protective amended U.S.

income tax return consistent with the 245A Regulations being invalid.

The Company has determined that this position is not more likely than not to be upheld and therefore did not record a tax benefit for this amended return in the period ended July 3, 2022.

Should the 245A Regulations ultimately be found invalid, the Company estimates it would recognize a tax benefit of approximately $ 64.2 million.

As of July 3, 2022, and September 30, 2021, there was $ 8.3 million of income tax receivable and $ 8.0 million of income taxes payable, respectively, with its parent company, on the SB/RH Condensed Consolidated Statements of Financial Position, calculated as if SB/RH were a separate taxpayer.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 17 – COMMITMENTS AND CONTINGENCIES

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In October 2021, the Company reached an agreement in principle to settle the claims of the HRG class, the cost of which also has been defrayed by third-party insurance.

In March 2022, the court granted approval to both settlements with formal opinion and order forthcoming.

Environmental.

The Company has provided for an estimated cost of $ 10.5 million and $ 11.3 million as of April 3, 2022 and September 30, 2021, respectively, associated with environmental remediation activities at some of its current and former manufacturing sites, included in Other Long-Term Liabilities on the Condensed Consolidated Statements of Financial Position.

In March 2022, the court granted approval to both settlements.

Environmental Liability.

The Company has realized commitments attributable to environmental remediation activities primarily associated with former manufacturing sites of the Company's HPC segment.

In coordination with local and federal regulatory agencies, we have conducted testing on certain sites which have resulted in the identification of contamination that has been attributed to historic activities at the properties, resulting in the realization of incremental costs to be assumed by the Company towards the remediation of these properties and the recognition of an environmental remediation liability.

We have not conducted invasive testing at all sites and locations and have identified an environmental remediation liability to the extent such remediation requirements have been identified and are considered estimable.

As of July 3, 2022, there was an environmental remediation liability of $ 10.8 million with $ 7.4 million included in Other Current Liabilities and $ 3.4 million included in Other Long-Term Liabilities on the Condensed Consolidated Statements of Financial Position.

As of September 30, 2021, there was an environmental remediation liability of $ 11.3 million included in Other Long-Term Liabilities on the Condensed Consolidated Statements 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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The Company has recorded and maintains an estimated liability in the amount of management’s estimate for aggregate exposure for such liabilities based upon probable loss from loss reports, individual cases, and losses incurred but not reported.

As of April 3, 2022 and September 30, 2021, the Company recognized $ 3.3 million and $ 3.0 million in product liability, respectively, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

As of July 3, 2022 and September 30, 2021, the Company recognized $ 3.6 million and $ 3.0 million in product liability, respectively, included in Other Current Liabilities on the Condensed Consolidated Statements 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 $ 0.3 million and $ 0.4 million of warranty accruals as of April 3, 2022 and September 30, 2021, respectively, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

The Company recognized $ 0.3 million and $ 0.4 million of warranty accruals as of July 3, 2022 and September 30, 2021, respectively, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 18 – SEGMENT INFORMATION

Net sales relating to the segments for the three and six month periods ended April 3, 2022 and April 4, 2021 are as follows:

Three Month Periods Ended Six Month Periods Ended

(in millions) April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Net sales relating to the segments for the three and nine month periods ended July 3, 2022 and July 4, 2021 are as follows:

Three Month Periods Ended Nine Month Periods Ended

(in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

HPC $ 329.3 $ 274.4 1,025.2 950.8

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• Stock based compensation costs consist of costs associated with long-term incentive compensation arrangements that generally consist of non-cash, stock-based compensation.

During the six month period ended April 4, 2021, compensation costs included incentive bridge awards previously issued due to changes in the Company’s LTIP that allowed for cash based payment upon employee election but do not qualify for shared-based compensation, which were fully vested in November 2020.

During the nine month period ended July 4, 2021, compensation costs included incentive bridge awards previously issued due to changes in the Company’s LTIP that allowed for cash based payment upon employee election but do not qualify for shared-based compensation, which were fully vested in November 2020.

See Note 14 – Share Based Compensation for further details;

• Restructuring and related charges consist of project costs associated with the restructuring initiatives across the Company's segments.

See Note 4 – Restructuring and Related Charges for further details;

• Transaction related charges are attributable to costs from qualifying strategic transaction or business opportunities, including an acquisition or divestiture, whether or not consummated, subsequent integration related project costs, divestiture support and incremental separation costs.

See Note 1 – Basis of Presentation & Significant Accounting Policies for further details;

• Incremental costs towards the SAP S/4 HANA ERP transformation to implement our enterprise-wide operating systems to SAP S/4 HANA on a global basis.

This is a multi-year project that includes various costs, including software configuration and implementation costs that would be recognized as capital expenditures or deferred costs in accordance with applicable accounting policies, with certain costs recognized as operating expense associated with 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 has substantially completed the design phase of the project and is currently moving into the build phase;

• Incremental amounts attributable to strategic transactions and business development initiatives including, but not limited to, the acquisition or divestitures of a business, costs to effect and facilitate a transaction, including such cost to integrate or separate the respective business.

These amounts are excluded from our performance metrics as they are reflective of incremental investment by the Company towards business development activities, incremental costs attributable to such transactions and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments;

• Incremental amounts realized towards restructuring and optimization projects including, but not limited to, costs towards the development and implementation of strategies to optimize operations and improve efficiency, reduce costs, increase revenues, increase or maintain our current profit margins, including recognition of one-time exit or disposal costs.

These amounts are excluded from our ongoing performance metrics as they are reflective of incremental investment by the Company towards significant initiatives controlled by management, incremental costs directly attributable to such initiatives, indirect impact or disruption to operating performance during implementation, and are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments;

• Unallocated shared costs associated with discontinued operations from certain shared and center-led administrative functions 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.

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See Note 2 – Divestitures for further details;

• Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value, and the incremental value in ROU operating lease assets with below market rent, among others;

• Non-cash purchase accounting adjustments recognized in earnings from continuing operations subsequent to an acquisition, including, but not limited to, the costs attributable to the step-up in inventory value, and the incremental value in operating lease assets with below market rent, among others;

• Non-cash gain from the reduction in the contingent consideration liability recognized during the three and nine month periods ended July 3, 2022 associated with the Tristar Business acquisition.

See Note 3 - Acquisitions in the Notes to the Condensed Consolidated Financial Statements for further details;

• Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations;

• Gains attributable to the Company's investment in Energizer common stock during the three and six month periods ended April 4, 2021, with such remaining shares sold in January 2021.

• Gains attributable to the Company's investment in Energizer common stock during the nine month period ended July 4, 2021, with such remaining shares sold in January 2021.

See Note 12 – Fair Value of Financial Instruments for further details;

• Incremental reserves for non-recurring litigation or environmental remediation activity including the 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 six month period ended April 4, 2021 and the subsequent remeasurement during the six month period ended April 3, 2022;

• 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 the GPC commercial operations and distribution in Europe;

• Incremental reserves for non-recurring litigation or environmental remediation activity including the 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 nine month period ended July 4, 2021 and the subsequent remeasurement during the nine month period ended July 3, 2022;

• Proforma adjustment for operating losses of the Company's in-country Russia operations that were directly attributable to the Company's closing initiatives in Russia and constraints applied to the in-country commercial operations resulting in a substantial decrease to in-country sales and incremental operating losses being realized;

• Realized gain from early settlement on certain cash flow hedges in our EMEA region prior to their stated maturity during the three and nine month periods ended July 3, 2022 due to change in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods inventory within the region.

See Note 11- Derivatives in Notes to the Condensed Consolidated Financial Statement for further details;

• Other adjustments are primarily attributable to:

(1) incremental trade spend reserves realized from the transition and integration of the Rejuvenate business into the H&G segment and the Company's systems and processes during the three and six month periods ended April 3, 2022, (2) incremental fines and penalties realized for delayed shipments attributable to the GPC distribution transition initiative during the three and six month periods ended April 3, 2022, and (3) costs associated with Salus as they are not considered a component of the continuing commercial products company.

(1) costs associated with Salus as they are not considered a component of the continuing commercial products company and (2) other key executive severance related costs.

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 18 - SEGMENT INFORMATION (continued)

Segment Adjusted EBITDA for the reportable segments for SBH for the three and six month periods ended April 3, 2022 and April 4, 2021, are as follows:

Three Month Periods Ended Six Month Periods Ended

SBH (in millions) April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Segment Adjusted EBITDA for the reportable segments for SBH for the three and nine month periods ended July 3, 2022 and July 4, 2021, are as follows:

Three Month Periods Ended Nine Month Periods Ended

SBH (in millions) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

HPC $ 3.6 $ 11.8 41.6 88.1

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Interest expense 26.0 20.4 72.4 96.4

Depreciation and amortization 25.7 30.2 51.1 57.2

Depreciation 12.3 12.8 36.6 39.2

Amortization 13.1 17.4 39.9 48.2

Share and incentive based compensation ( 0.7 ) 7.7 11.4 21.9

Restructuring and related charges 16.4 4.3 33.8 13.3

Transaction related charges 20.2 8.2 35.1 27.2

Tristar acquisition and integration 5.6 — 20.0 —

Rejuvenate acquisition and integration — 5.8 7.0 5.8

Armitage acquisition and integration 0.1 1.0 1.4 7.7

Omega integration 0.1 — 1.5 —

HHI divestiture 0.6 — 6.1 —

HPC separation initiatives 10.7 ( 0.5 ) 15.4 14.2

Coevorden operations separation 1.9 2.9 7.3 7.7

Fiscal 2022 restructuring 8.1 — 8.1 —

Global ERP transformation 3.4 0.9 9.4 1.6

GPC distribution center transition 8.4 7.7 28.3 7.7

Global productivity improvement program 1.2 4.8 5.2 15.7

HPC brand portfolio transitions 0.3 — 0.3 —

Russia closing initiatives — — 3.6 —

Other project costs 4.1 2.4 10.7 8.1

Unallocated shared costs 7.0 6.7 20.7 20.2

Non-cash purchase accounting adjustments 4.3 1.3 7.8 4.7

Gain from contingent consideration liability ( 25.0 ) — ( 25.0 ) —

Gain on Energizer investment — — — ( 6.9 )

Legal and environmental remediation reserves — — ( 0.5 ) 6.0

Coevorden tolling related charges 1.5 1.5 3.0 3.1

Other 2.2 0.2 4.8 0.1

(Loss) income from continuing operations before income taxes $ ( 31.9 ) $ ( 5.3 ) $ ( 78.1 ) $ 6.3

Segment Adjusted EBITDA for reportable segments for SB/RH for the three and six month periods ended April 3, 2022 and April 4, 2021 are as follows:

Three Month Periods Ended Six Month Periods Ended

Proforma in-country Russia operations 0.4 — 0.4 —

Gain on early settlement of cash flow hedges ( 8.2 ) — ( 8.2 ) —

Salus and other 1.4 — 1.7 0.1

Income (loss) from continuing operations before income taxes $ 5.0 $ 8.1 $ ( 73.1 ) $ 14.5

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 18 - SEGMENT INFORMATION (continued)

Segment Adjusted EBITDA for reportable segments for SB/RH for the three and nine month periods ended July 3, 2022 and July 4, 2021 are as follows:

Three Month Periods Ended Nine Month Periods Ended

SB/RH (in millions)

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

HPC $ 3.6 $ 11.8 41.6 88.1

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Interest expense 26.1 20.5 72.7 96.6

Depreciation and amortization 25.7 30.2 51.1 57.2

Depreciation 12.3 12.8 36.6 39.2

Amortization 13.1 17.4 39.9 48.2

Share and incentive based compensation ( 1.1 ) 7.1 10.7 20.7

Restructuring and related charges 16.4 4.3 33.8 13.3

Transaction related charges 20.2 8.2 35.1 27.2

SAP S/4 HANA ERP Transformation 3.2 — 3.2 —

Tristar acquisition and integration 5.6 — 20.0 —

Rejuvenate acquisition and integration — 5.8 7.0 5.8

Armitage acquisition and integration 0.1 1.0 1.4 7.7

Omega integration 0.1 — 1.5 —

HHI divestiture 0.6 — 6.1 —

HPC separation initiatives 10.7 ( 0.5 ) 15.4 14.2

Coevorden operations separation 1.9 2.9 7.3 7.7

Fiscal 2022 restructuring 8.1 — 8.1 —

Global ERP transformation 3.4 0.9 9.4 1.6

GPC distribution center transition 8.4 7.7 28.3 7.7

Global productivity improvement program 1.2 4.8 5.2 15.7

HPC brand portfolio transitions 0.3 — 0.3 —

Russia in-country closing initiatives — — 3.6 —

Other project costs 4.1 2.4 10.7 8.1

Unallocated shared costs 7.0 6.7 20.7 20.2

Non-cash purchase accounting adjustments 4.3 1.3 7.8 4.7

Gain from contingent consideration liability ( 25.0 ) — ( 25.0 ) —

Gain on Energizer investment — — — ( 6.9 )

Legal and environmental remediation reserves — — ( 0.5 ) 6.0

Coevorden tolling related charges 1.5 1.5 3.0 3.1

Proforma in-country Russia operations 0.4 — 0.4 —

Gain on early settlement of cash flow hedges ( 8.2 ) — ( 8.2 ) —

Other 1.5 — 1.4 0.1

(Loss) income from continuing operations before income taxes $ ( 31.2 ) $ ( 4.7 ) $ ( 77.1 ) $ 7.6

Income (loss) from continuing operations before income taxes $ 5.7 $ 9.6 $ ( 71.4 ) $ 17.1

SPECTRUM BRANDS HOLDINGS, INC.

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NOTE 19 – EARNINGS PER SHARE – SBH

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive shares for the three and six month periods ended April 3, 2022 and April 4, 2021 are as follows:

Three Month Periods Ended Six Month Periods Ended

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive shares for the three and nine month periods ended July 3, 2022 and July 4, 2021 are as follows:

Three Month Periods Ended Nine Month Periods Ended

(in millions, except per share amounts)

April 3, 2022 April 4, 2021 April 3, 2022 April 4, 2021

Net (loss) income from continuing operations attributable to controlling interest $ ( 25.1 ) $ ( 3.7 ) $ ( 55.3 ) $ 11.0

July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021

Net income (loss) from continuing operations attributable to controlling interest $ 3.0 $ ( 1.9 ) $ ( 52.3 ) $ 9.1

Income from discontinued operations attributable to controlling interest 29.7 32.6 109.1 130.3

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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-Q

Item 1. Financial Statements