Spectrum Brands Holdings, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Spectrum Brands Holdings, Inc. Evaluation of Disclosure Controls and Procedures. An evaluation was performed under the supervision and participation of SBH’s management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of SBH’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as of September 30, 2023. Based on that evaluation, SBH’s management, including the Principal Executive Officer and Principal Financial Officer, concluded that as of September 30, 2023, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Annual Report on Form 10-K was reported within the time periods specified by SEC rules and regulations, and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding the required disclosures. Notwithstanding the foregoing, there can be no assurance that SBH's controls and procedures will detect or uncover all failures of persons within SBH to disclose material information otherwise required to be set forth in SBH's periodic reports. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives. Management’s Annual Report on Internal Control over Financial Reporting . SBH’s management is responsible for establishing and maintaining adequate internal control over financial reporting for SBH, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of SBH’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only with proper authorizations; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of SBH’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. These inherent limitations are an intrinsic part of the financial reporting process. Therefore, although SBH's management is unable to eliminate this risk, it is possible to develop safeguards to reduce it. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. SBH’s management, under the oversight of the principal executive and principal financial officers, and Board of Directors, conducted an assessment of the effectiveness of our internal control over financial reporting based upon the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO 2013 Framework). Based on this assessment, management has concluded that its internal control over financial reporting was effective as of September 30, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. SBH's internal control over financial reporting as of September 30, 2023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its attestation report, which is included herein. Changes in Internal Control Over Financial Reporting . The Company is in the process of implementing a new global enterprise resource planning ("ERP") system, which will replace our existing operating and financial systems which will be implemented over the next several years. The implementation began with the pilot deployment in the fourth quarter of fiscal year 2023 and was limited to our GPC operations in Canada and Noblesville, Indiana. The implementation in other locations will continue over subsequent years. As the project continues, the Company continues to emphasize the maintenance of effective internal controls and assessment of the design and operating effectiveness of key control activities throughout development and deployment of each phase. Except as described above, there have been no changes in SBH's internal control over financial reporting (as defined in Rules 13a15(f) and 15d-15(f) under the Securities Exchange Act of 1934 as amended) that occurred during our fiscal fourth quarter that has materially affected, or is reasonably likely to materially affect, SBH's internal control over financial reporting. 48 Table of Contents SB/RH Holdings, LLC Evaluation of Disclosure Controls and Procedures. An evaluation was performed under the supervision and participation of SB/RH’s management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of SB/RH’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as of September 30, 2023. Based on that evaluation, SB/RH’s management, including the Principal Executive Officer and Principal Financial Officer, concluded that as of September 30, 2023 our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Annual Report on Form 10-K was reported within the time periods specified by SEC rules and regulations, and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding the required disclosures. Notwithstanding the foregoing, there can be no assurance that SB/RH's controls and procedures will detect or uncover all failures of persons within SB/RH to disclose material information otherwise required to be set forth in SB/RH's periodic reports. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives. Management’s Annual Report on Internal Control over Financial Reporting . SB/RH’s management is responsible for establishing and maintaining adequate internal control over financial reporting for SB/RH, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of SB/RH’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only with proper authorizations; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of SB/RH’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. These inherent limitations are an intrinsic part of the financial reporting process. Therefore, although SB/RH's management is unable to eliminate this risk, it is possible to develop safeguards to reduce it. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. SB/RH’s management, under the oversight of the principal executive and principal financial officers, and Board of Directors, conducted an assessment of the effectiveness of our internal control over financial reporting based upon the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO 2013 Framework). Based on this assessment, management has concluded that its internal control over financial reporting was effective as of September 30, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. Changes in Internal Control Over Financial Reporting . The Company is in the process of implementing a new global enterprise resource planning ("ERP") system, which will replace our existing operating and financial systems which will be implemented over the next several years. The implementation began with the pilot deployment in the fourth quarter of fiscal year 2023 and was limited to our GPC operations in Canada and Noblesville, Indiana. The implementation in other locations will continue over subsequent years. As the project continues, the Company continues to emphasize the maintenance of effective internal controls and assessment of the design and operating effectiveness of key control activities throughout development and deployment of each phase. Except as described above, there have been no changes in SB/RH's internal control over financial reporting (as defined in Rules 13a15(f) and 15d-15(f) under the Securities Exchange Act of 1934 as amended) that occurred during our fiscal fourth quarter that has materially affected, or is reasonably likely to materially affect, SB/RH's internal control over financial reporting. ITEM 9B. OTHER INFORMATION During the three month period ended September 30, 2023, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1" trading agreement. 49 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by Item 401 of Regulation S-K concerning the directors and executive officers of SBH is incorporated herein by reference to the disclosures which will be included in in a subsequent amendment to the Form 10-K, which will be filed no later than 120 days after the end of the SBH’s fiscal year ended September 30, 2023. Audit Committee and Audit Committee Financial Expert The information required by Items 407(d)(4) and 407(d)(5) of Regulation S-K is incorporated herein by reference from the disclosure which will be included in a subsequent amendment to the Form 10-K. Section 16(a) Beneficial Ownership Reporting Compliance The information required by Item 405 of Regulation S-K is incorporated herein by reference from the disclosure which will be included in a subsequent amendment to the Form 10-K. Code of Ethics We have adopted the Code of Ethics for the Principal Executive Officer and Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer and other senior finance organization employees. The Code of Ethics for the Principal Executive Officer and Senior Financial Officers is publicly available on our website at www.spectrumbrands.com under “Investor Relations—Corporate Governance.” We intend to disclose amendments to, and, if applicable, waivers of, this code of ethics on that section of our website. We have also adopted the Spectrum Brands Code of Business Conduct and Ethics that applies to all of our directors, officers and employees. The Spectrum Brands Code of Business Conduct and Ethics is publicly available on our website at www.spectrumbrands.com under “Investor Relations—Corporate Governance.” Any amendments to this code of ethics or any waiver of this code of ethics for executive officers or directors may be made only by our Board of Directors as a whole or our Audit Committee and will be promptly disclosed to our shareholders via that section of our website. ITEM 11. EXECUTIVE COMPENSATION Executive Compensation The information required by Item 402 of Regulation S-K is incorporated herein by reference from the disclosures which will be included in a subsequent amendment to the Form 10-K. Compensation Committee Interlocks and Insider Participation The information required by Item 407(e)(4) of Regulation S-K is incorporated herein by reference from the disclosure which will be included in a subsequent amendment to the Form 10-K. Report of the Compensation Committee of the Board of Directors The information required by Item 407(e)(5) of Regulation S-K is incorporated herein by reference from the disclosure which will be included in a subsequent amendment to the Form 10-K. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Ownership of Common Shares of Spectrum Brands Holdings, Inc. The information required by Item 404 of Regulation S-K is incorporated herein by reference from the disclosures which will be included in a subsequent amendment to the Form 10-K. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE Review, Approval or Ratification of Transactions with Related Persons The information required by Item 404 of Regulation S-K is incorporated herein by reference from the disclosures which will be included in a subsequent amendment to the Form 10-K. Director Independence The information required by Item 407(a) of Regulation S-K is incorporated herein by reference from the disclosures which will be included in a subsequent amendment to the Form 10-K. 50 Table of Contents TEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The following table summarizes the fees KPMG LLP, our independent registered public accounting firm, billed to the Company. (in millions) 2023 2022 Audit Fees $ 5.6 $ 5.6 Audit-Related Fees 2.4 5.1 Tax Fees — — All Other Fees 0.4 0.3 Total $ 8.4 $ 11.0 In the above table, in accordance with the SEC’s definition and rules, “Audit Fees” are fees paid to KPMG LLP for professional services for the audits of SBH and SB/RH, and our consolidated financial statements included in our Form 10-K and the review of our financial statements included in Forms 10-Q, or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements, such as issuance of comfort letters and statutory audits required for certain of our foreign subsidiaries. “Audit-Related Fees” are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, including the due diligence activities relating to mergers and acquisitions and the audit of standalone carve-out financial statements as required. “Tax Fees” are fees for tax compliance, tax advice, and tax planning. Such fees were attributable to services for tax compliance assistance and tax advice. “All Other Fees” are fees, if any, for any services not included in the first three categories. Pre-Approval of Independent Auditors Services and Fees The Audit Committee approved the audit services engagement performed by KPMG LLP for the year ended September 30, 2023. In accordance with the Audit Committee’s Pre-Approval Policy, the Audit Committee has pre-approved other specified audit, or audit related services, provided that the fees incurred by KPMG LLP in connection with any individual engagement do not exceed $200,000 in any 12-month period. The Audit Committee must approve for an engagement by engagement basis any individual non-audit or tax engagement in any 12-month period. The Audit Committee has delegated to its Chairman the authority to pre-approve any other specific audit or specific non-audit service which was not previously pre-approved by the Audit Committee, provided that any decision of the Chairman to pre-approve other audit or non-audit services shall be presented to the Audit Committee at its next scheduled meeting. PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES (a) The following documents are filed as part of or are included in this Annual Report on Form 10-K: 1. The financial statements of Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC listed in the Index to Consolidated Financial Statements, filed as part of this Annual Report on Form 10-K. 2. The exhibits listed in the Exhibit Index filed as part of this Annual Report on Form 10-K. 51 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE This report is a combined report of Spectrum Brands Holdings, Inc. (“SBH”) and SB/RH Holdings, LLC (“SB/RH”). The notes to the consolidated financial statements include consolidated SBH footnotes and certain footnotes related to SB/RH. Page Reports of Independent Registered Public Accounting Firm (PCAOB ID 185 ) 53 Spectrum Brands Holdings, Inc. Consolidated Financial Statements Consolidated Statements of Financial Position 58 Consolidated Statements of Income 59 Consolidated Statements of Comprehensive Income 60 Consolidated Statements of Shareholders’ Equity 61 Consolidated Statements of Cash Flows 62 SB/RH Holdings, LLC Consolidated Financial Statements Consolidated Statements of Financial Position 64 Consolidated Statements of Income 65 Consolidated Statements of Comprehensive Income 66 Consolidated Statements of Shareholder’s Equity 67 Consolidated Statements of Cash Flows 68 Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC Combined Combined Notes to Consolidated Financial Statements 70 52 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Spectrum Brands Holdings, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of financial position of Spectrum Brands Holdings, Inc. and subsidiaries (the Company) as of September 30, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended September 30, 2023, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended September 30, 2023, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated November 21, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Assessment of goodwill impairment for the Home and Personal Care (HPC) reporting unit As discussed in Note 2 to the consolidated financial statements, the Company assesses goodwill for impairment on an annual basis for each reporting unit and more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. If the carrying value of the reporting unit is more likely than not greater than the fair value of the reporting unit, a quantitative assessment is performed to determine the reporting unit fair value and measure the impairment. The fair value of the HPC reporting unit was estimated using an income approach and a market approach. The income approach is a discounted cash flow methodology which required estimation of future revenues, expenses, and capital expenditures and assumptions about the weighted average cost of capital and perpetuity growth rate. The market approach is a guideline public company method that assessed the value of the reporting unit based upon market multiples derived from financial results of selected comparable companies. As discussed in Note 11, the Company recorded an impairment charge of $111.1 million related to the HPC reporting unit for the year ended September 30, 2023 We identified the assessment of goodwill impairment in the HPC reporting unit as a critical audit matter. Our evaluation of certain assumptions used in the income approach, specifically the determination of (1) the discrete and long-term revenue growth rates used to estimate future revenues and (2) the discount rate, required a high degree of auditor judgment as they were based on subjective determinations of future market and economic conditions. Changes to these assumptions could have had a significant effect on the Company's assessment of the fair value of the reporting unit and the amount of impairment recorded. Additionally, the audit effort associated with the evaluation of the long-term growth rate and discount rate required specialized skill and knowledge. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the goodwill impairment assessment process, including controls over the determination of discrete and long-term revenue growth rates and the discount rate. We evaluated the Company's discrete revenue growth rate for the HPC reporting unit by comparing such rate to the Company's historical revenue growth rates and industry analyst reports. In addition, we involved valuation professionals with specialized skill and knowledge, who assisted in evaluating the Company's selection of the long-term revenue growth rate and discount rate by: • comparing the long-term revenue growth rate to long-term economic growth expectations using publicly available third-party data • comparing the discount rate determined by the Company to a discount rate range that was independently developed using publicly available market data • performing a sensitivity analysis to assess the impact of possible changes to the discount rate. Assessment of impairment of the Rejuvenate and PowerXL tradenames As discussed in Note 2 to the consolidated financial statements, the Company assesses indefinite lived intangible assets for impairment at least annually. If the carrying value is more likely than not greater than the fair value of the indefinite lived intangible asset, a quantitative assessment is performed to determine the fair value and measure impairment. The fair value of indefinite lived intangible assets is determined using an income approach, specifically the relief-from-royalty methodology which requires estimates of future revenues, royalty rates, and the discount rates. As discussed in Note 11, the indefinite lived intangible asset balance, consisting primarily of tradenames, was $778.4 million as of September 30, 2023. As a result of triggering events that occurred during the year ended September 30, 2023, impairment charges of $56.0 million and $45.0 million were recorded for the Rejuvenate and PowerXL tradenames, respectively. 53 Table of Contents We identified the assessment of impairment of the Rejuvenate and PowerXL tradenames as a critical audit matter. A high degree of challenging auditor judgment was required to evaluate the future revenues and discount rates used to estimate the fair value of these tradenames. Specifically the determination of (1) the discrete and long-term revenue growth rates used to estimate future revenues and (2) the discount rates included subjective determinations of future market and economic conditions. Changes to these assumptions could have a significant effect on the Company's assessment of the fair value of Rejuvenate and PowerXL tradenames. In addition, specialized skill and knowledge were needed to evaluate the long-term revenue growth rates and discount rates. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Rejuvenate and PowerXL tradename impairment process, including controls over the determination of discrete and long-term revenue growth rates and discount rates. We evaluated the Company's discrete revenue growth rates by comparing such rates for each tradename to the Company's historical revenue growth rates and industry analyst reports. We involved valuation professionals with specialized skill and knowledge, who assisted in evaluating the Company's long-term revenue growth rates and discount rates by: • comparing the long-term revenue growth rates to long-term economic growth expectations using publicly available third-party data • comparing the discount rates to discount rate ranges that were independently developed using publicly available market data for comparable entities • performing a sensitivity analysis to assess the impact of possible changes to the discount rates. /s/ KPMG LLP We have served as the Company’s auditor since 2011. Milwaukee, Wisconsin November 21, 2023 54 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Spectrum Brands Holdings, Inc.: Opinion on Internal Control Over Financial Reporting We have audited Spectrum Brands Holdings, Inc. and subsidiaries' (the Company) internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control –Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control –Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of September 30, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period ended September 30, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated November 21, 2023 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Milwaukee, Wisconsin November 21, 2023 55 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholder and Board of Directors SB/RH Holdings, LLC: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of financial position of SB/RH Holdings, LLC and subsidiaries (the Company) as of September 30, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholder’s equity, and cash flows for each of the years in the three-year period ended September 30, 2023, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended September 30, 2023, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Assessment of goodwill impairment for the Home and Personal Care (HPC) reporting unit As discussed in Note 2 to the consolidated financial statements, the Company assesses goodwill for impairment on an annual basis for each reporting unit and more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. If the carrying value of the reporting unit is more likely than not greater than the fair value of the reporting unit, a quantitative assessment is performed to determine the reporting unit fair value and measure the impairment. The fair value of the HPC reporting unit was estimated using an income approach and a market approach. The income approach is a discounted cash flow methodology which required estimation of future revenues, expenses, and capital expenditures and assumptions about the weighted average cost of capital and perpetuity growth rate. The market approach is a guideline public company method that assessed the value of the reporting unit based upon market multiples derived from financial results of selected comparable companies. As discussed in Note 11, the Company recorded an impairment charge of $111.1 million related to the HPC reporting unit for the year ended September 30, 2023 We identified the assessment of goodwill impairment in the HPC reporting unit as a critical audit matter. Our evaluation of certain assumptions used in the income approach, specifically the determination of (1) the discrete and long-term revenue growth rates used to estimate future revenues and (2) the discount rate, required a high degree of auditor judgment as they were based on subjective determinations of future market and economic conditions. Changes to these assumptions could have had a significant effect on the Company's assessment of the fair value of the reporting unit and the amount of impairment recorded. Additionally, the audit effort associated with the evaluation of the long-term growth rate and discount rate required specialized skill and knowledge. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the goodwill impairment assessment process, including controls over the determination of discrete and long-term revenue growth rates and the discount rate. We evaluated the Company's discrete revenue growth rate for the HPC reporting unit by comparing such rate to the Company's historical revenue growth rates and industry analyst reports. In addition, we involved valuation professionals with specialized skill and knowledge, who assisted in evaluating the Company's selection of the long-term revenue growth rate and discount rate by: • comparing the long-term revenue growth rate to long-term economic growth expectations using publicly available third-party data • comparing the discount rate determined by the Company to a discount rate range that was independently developed using publicly available market data • performing a sensitivity analysis to assess the impact of possible changes to the discount rate. Assessment of impairment of the Rejuvenate and PowerXL tradenames As discussed in Note 2 to the consolidated financial statements, the Company assesses indefinite lived intangible assets for impairment at least annually. If the carrying value is more likely than not greater than the fair value of the indefinite lived intangible asset, a quantitative assessment is performed to determine the fair value and measure impairment. The fair value of the indefinite lived intangible assets is determined using an income approach, specifically the relief-from-royalty methodology which requires estimates of future revenues, royalty rates, and the discount rates. As discussed in Note 11, the indefinite lived intangible asset balance, consisting primarily of tradenames, was $778.4 million as of September 30, 2023. As a result of triggering events that occurred during the year ended September 30, 2023, impairment charges of $56.0 million and $45.0 million were recorded for the Rejuvenate and PowerXL tradenames, respectively. 56 Table of Contents We identified the assessment of impairment of the Rejuvenate and PowerXL tradenames as a critical audit matter. A high degree of challenging auditor judgment was required to evaluate the future revenues and discount rates used to estimate the fair value of these tradenames. Specifically the determination of (1) the discrete and long-term revenue growth rates used to estimate future revenues and (2) the discount rates included subjective determinations of future market and economic conditions. Changes to these assumptions could have a significant effect on the Company's assessment of the fair value of Rejuvenate and PowerXL tradenames. In addition, specialized skill and knowledge were needed to evaluate the long-term revenue growth rates and discount rates. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Rejuvenate and PowerXL tradename impairment process, including controls over the determination of discrete and long-term revenue growth rates and discount rates. We evaluated the Company's discrete revenue growth rates by comparing such rates for each tradename to the Company's historical revenue growth rates and industry analyst reports. We involved valuation professionals with specialized skill and knowledge, who assisted in evaluating the Company's long-term revenue growth rates and discount rates by: • comparing the long-term revenue growth rates to long-term economic growth expectations using publicly available third-party data • comparing the discount rates to discount rate ranges that were independently developed using publicly available market data for comparable entities • performing a sensitivity analysis to assess the impact of possible changes to the discount rates. /s/ KPMG LLP We have served as the Company’s auditor since 1997. Milwaukee, Wisconsin November 21, 2023 57 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. Consolidated Statements of Financial Position September 30, 2023 and 2022 (in millions, except per share figures) (in millions) 2023 2022 Assets Cash and cash equivalents $ 753.9 $ 243.7 Short term investments 1,103.3 — Trade receivables, net 477.1 247.4 Other receivables 84.5 95.7 Inventories 462.8 780.6 Prepaid expenses and other current assets 44.3 51.2 Current assets of business held for sale — 1,816.7 Total current assets 2,925.9 3,235.3 Property, plant and equipment, net 275.1 263.8 Operating lease assets 110.8 82.5 Deferred charges and other 31.8 38.7 Goodwill 854.7 953.1 Intangible assets, net 1,060.1 1,202.2 Total assets $ 5,258.4 $ 5,775.6 Liabilities and Shareholders' Equity Current portion of long-term debt $ 8.6 $ 12.3 Accounts payable 396.6 453.1 Accrued wages and salaries 46.1 28.4 Accrued interest 20.6 27.6 Income tax payable 114.5 15.5 Other current liabilities 178.4 187.5 Current liabilities of business held for sale — 463.7 Total current liabilities 764.8 1,188.1 Long-term debt, net of current portion 1,546.9 3,144.5 Long-term operating lease liabilities 95.6 56.0 Deferred income taxes 174.8 60.1 Other long-term liabilities 158.0 57.8 Total liabilities 2,740.1 4,506.5 Commitments and contingencies (Note 20) Shareholders' equity Common stock, $ 0.01 par value; 200.0 million shares authorized; 53.8 million and 53.8 million shares issued, respectively. 0.5 0.5 Additional paid-in capital 1,920.8 2,032.5 Accumulated earnings 2,096.0 362.1 Accumulated other comprehensive loss, net of tax ( 249.4 ) ( 303.1 ) Treasury stock, 18.5 million and 13.0 million shares, respectively ( 1,250.3 ) ( 828.8 ) Total shareholders' equity 2,517.6 1,263.2 Noncontrolling interest 0.7 5.9 Total equity 2,518.3 1,269.1 Total liabilities and equity $ 5,258.4 $ 5,775.6 See accompanying notes to the consolidated financial statements. 58 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. Consolidated Statements of Income Years ended September 30, 2023, 2022 and 2021 (in millions, except per share figures) (in millions, except per share) 2023 2022 2021 Net sales $ 2,918.8 $ 3,132.5 $ 2,998.1 Cost of goods sold 1,994.5 2,142.1 1,963.5 Gross profit 924.3 990.4 1,034.6 Selling 544.7 597.6 518.5 General and administrative 332.4 371.4 389.2 Research and development 22.5 26.7 29.8 Gain from remeasurement of contingent consideration liability ( 1.5 ) ( 28.5 ) — Impairment of goodwill 111.1 — — Impairment of intangible assets 120.7 — — Total operating expenses 1,129.9 967.2 937.5 Operating (loss) income ( 205.6 ) 23.2 97.1 Interest expense 127.0 99.4 116.5 Interest income ( 38.3 ) ( 0.6 ) ( 1.1 ) Gain from debt repurchase ( 7.9 ) — — Other non-operating expense (income), net 3.8 14.7 ( 7.2 ) Loss from continuing operations before income taxes ( 290.2 ) ( 90.3 ) ( 11.1 ) Income tax benefit ( 56.5 ) ( 13.3 ) ( 26.4 ) Net (loss) income from continuing operations ( 233.7 ) ( 77.0 ) 15.3 Income from discontinued operations, net of tax 2,035.6 149.7 174.3 Net income 1,801.9 72.7 189.6 Net income from continuing operations attributable to non-controlling interest 0.1 0.2 0.2 Net income (loss) from discontinued operations attributable to non-controlling interest 0.3 $ 0.9 $ ( 0.2 ) Net income attributable to controlling interest $ 1,801.5 $ 71.6 $ 189.6 Amounts attributable to controlling interest Net (loss) income from continuing operations attributable to controlling interest $ ( 233.8 ) $ ( 77.2 ) $ 15.1 Net income from discontinued operations attributable to controlling interest 2,035.3 148.8 174.5 Net income attributable to controlling interest $ 1,801.5 $ 71.6 $ 189.6 Earnings Per Share Basic earnings per share from continuing operations $ ( 5.92 ) $ ( 1.89 ) $ 0.35 Basic earnings per share from discontinued operations 51.57 3.64 4.09 Basic earnings per share $ 45.65 $ 1.75 $ 4.44 Diluted earnings per share from continuing operations $ ( 5.92 ) $ ( 1.89 ) $ 0.35 Diluted earnings per share from discontinued operations 51.57 3.64 4.04 Diluted earnings per share $ 45.65 $ 1.75 $ 4.39 Dividend per share $ 1.68 $ 1.68 $ 1.68 Weighted Average Shares Outstanding Basic 39.5 40.9 42.7 Diluted 39.5 40.9 43.2 See accompanying notes to the consolidated financial statements . 59 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. Consolidated Statements of Comprehensive Income Years ended September 30, 2023, 2022 and 2021 (in millions) (in millions) 2023 2022 2021 Net income $ 1,801.9 $ 72.7 $ 189.6 Other comprehensive income Foreign currency translation adjustment Foreign currency translation gain (loss) 69.0 ( 147.8 ) 26.0 Unrealized (loss) gain on net investment hedge ( 31.7 ) 75.8 6.2 Foreign currency translation adjustment before tax 37.3 ( 72.0 ) 32.2 Deferred tax effect 7.0 ( 20.0 ) — Net unrealized gain (loss) on foreign currency translation 44.3 ( 92.0 ) 32.2 Unrealized (loss) gain on derivative instruments Unrealized (loss) gain on derivative instruments before reclassification ( 35.3 ) 30.7 0.1 Net reclassification for loss (gain) to income from continuing operations 12.2 ( 20.2 ) 9.2 Net reclassification for loss (gain) to income from discontinued operations 2.3 ( 2.4 ) 0.1 Unrealized (loss) gain on derivative instruments after reclassification ( 20.8 ) 8.1 9.4 Deferred tax effect 5.4 2.3 ( 6.6 ) Net unrealized (loss) gain on derivative instruments ( 15.4 ) 10.4 2.8 Defined benefit pension (loss) gain Defined benefit pension (loss) gain before reclassification ( 0.8 ) 18.3 11.7 Net reclassification for loss to income from continuing operations 0.8 3.6 4.8 Net reclassification for gain to income from discontinued operations ( 0.1 ) ( 0.1 ) ( 0.1 ) Defined benefit pension (loss) gain after reclassification ( 0.1 ) 21.8 16.4 Deferred tax effect ( 0.1 ) ( 8.9 ) ( 1.6 ) Net defined benefit pension (loss) gain ( 0.2 ) 12.9 14.8 Deconsolidation of discontinued operations and assets held for sale 26.1 — — Net change to derive comprehensive income for the periods 54.8 ( 68.7 ) 49.8 Comprehensive income 1,856.7 4.0 239.4 Comprehensive income (loss) from continuing operations attributable to non-controlling interest 0.3 ( 0.4 ) — Comprehensive (loss) income from discontinuing operations attributable to non-controlling interest — ( 0.5 ) 0.4 Deconsolidation of discontinued operations attributable to non-controlling interest 0.8 — — Comprehensive income attributable to controlling interest $ 1,855.6 $ 4.9 $ 239.0 See accompanying notes to the consolidated financial statements. 60 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. Consolidated Statements of Shareholders’ Equity Years ended September 30, 2023, 2022 and 2021 (in millions) Common Stock Additional Paid-in Capital Accumulated Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity Non- controlling Interest Total Equity (in millions) Shares Amount Balance at September 30, 2020 43.1 $ 0.5 $ 2,054.3 $ 243.9 $ ( 284.7 ) $ ( 606.5 ) $ 1,407.5 $ 8.3 $ 1,415.8 Net income from continuing operations — — — 15.1 — — 15.1 0.2 15.3 Income (loss) from discontinued operations, net of tax — — — 174.5 — — 174.5 ( 0.2 ) 174.3 Other comprehensive income, net of tax — — — — 49.4 — 49.4 0.4 49.8 Treasury stock repurchases ( 1.6 ) — — — — ( 125.8 ) ( 125.8 ) — ( 125.8 ) Restricted stock issued and related tax withholdings 0.3 — ( 20.2 ) — — 15.3 ( 4.9 ) — ( 4.9 ) Share based compensation — — 29.7 — — — 29.7 — 29.7 Dividend paid to common shareholders — — — ( 73.6 ) — — ( 73.6 ) — ( 73.6 ) Dividend paid by subsidiary to NCI — — — — — — — ( 1.6 ) ( 1.6 ) Balances at September 30, 2021 41.8 0.5 2,063.8 359.9 ( 235.3 ) ( 717.0 ) 1,471.9 7.1 1,479.0 Net (loss) income from continuing operations — — — ( 77.2 ) — — ( 77.2 ) 0.2 ( 77.0 ) Income from discontinued operations, net of tax — — — 148.8 — — 148.8 0.9 149.7 Other comprehensive loss, net of tax — — — — ( 67.8 ) — ( 67.8 ) ( 0.9 ) ( 68.7 ) Treasury stock repurchases ( 1.4 ) — — — — ( 134.0 ) ( 134.0 ) — ( 134.0 ) Restricted stock issued and related tax withholdings 0.4 — ( 46.7 ) — — 22.2 ( 24.5 ) — ( 24.5 ) Share based compensation — — 15.4 — — — 15.4 — 15.4 Dividend paid to common shareholders — — — ( 69.4 ) — — ( 69.4 ) — ( 69.4 ) Dividend paid by subsidiary to NCI — — — — — — — ( 1.4 ) ( 1.4 ) Balances at September 30, 2022 40.8 0.5 2,032.5 362.1 ( 303.1 ) ( 828.8 ) 1,263.2 5.9 1,269.1 Net (loss) income from continuing operations — — — ( 233.8 ) — — ( 233.8 ) 0.1 ( 233.7 ) Income from discontinued operations, net of tax — — — 2,035.3 — — 2,035.3 0.3 2,035.6 Sale and deconsolidation of assets held for sale — — — — 25.3 — 25.3 ( 5.9 ) 19.4 Other comprehensive income, net of tax — — — — 28.4 — 28.4 0.3 28.7 Treasury stock repurchases ( 0.4 ) — — — — ( 38.9 ) ( 38.9 ) — ( 38.9 ) Accelerated share repurchase ( 5.3 ) — ( 100.0 ) — — ( 400.0 ) ( 500.0 ) — ( 500.0 ) Restricted stock issued and related tax withholdings 0.2 — ( 30.3 ) — — 17.4 ( 12.9 ) — ( 12.9 ) Share based compensation — — 18.6 — — — 18.6 — 18.6 Dividend paid to common shareholders — — — ( 67.6 ) — — ( 67.6 ) — ( 67.6 ) Balances at September 30, 2023 35.3 $ 0.5 $ 1,920.8 $ 2,096.0 $ ( 249.4 ) $ ( 1,250.3 ) $ 2,517.6 $ 0.7 $ 2,518.3 See accompanying notes to the consolidated financial statements. 61 SPECTRUM BRANDS HOLDINGS, INC. Consolidated Statements of Cash Flows Years ended September 30, 2023, 2022 and 2021 (in millions) (in millions) 2023 2022 2021 Cash flows from operating activities Net income $ 1,801.9 $ 72.7 $ 189.6 Income from discontinued operations, net of tax 2,035.6 149.7 174.3 Net (loss) income from continuing operations ( 233.7 ) ( 77.0 ) 15.3 Adjustments to reconcile net (loss) income to net cash from operating activities: Depreciation 48.9 49.0 51.9 Amortization 42.3 50.3 65.1 Share based compensation 17.2 10.2 28.9 Write-off from impairment of goodwill 111.1 — — Write-off from impairment of intangible assets 120.7 — — Impairment of property plant and equipment and operating leases 10.8 — — Gain on sale of property plant and equipment ( 2.7 ) — — Gain on debt repurchase ( 7.9 ) — — Amortization of debt issuance costs and debt discount 6.9 7.1 5.6 Write-off of unamortized discount and debt issuance costs 10.9 — 7.9 Non-cash interest on short term investment ( 11.3 ) — — Gain from remeasurement of contingent consideration liability ( 1.5 ) ( 28.5 ) — Non-cash purchase accounting adjustments 1.9 8.3 7.3 Gain on equity investment — — ( 6.9 ) Deferred tax benefit ( 182.8 ) ( 44.6 ) ( 64.4 ) Net changes in operating assets and liabilities Receivables ( 224.2 ) ( 12.2 ) 65.9 Inventories 328.3 ( 153.7 ) ( 219.6 ) Prepaid expenses and other current assets 26.1 ( 34.8 ) ( 9.7 ) Accounts payable and accrued liabilities ( 154.5 ) ( 15.0 ) 116.0 Income tax and other 101.5 9.4 25.9 Net cash provided (used) by operating activities from continuing operations 8.0 ( 231.5 ) 89.2 Net cash (used) provided by operating activities from discontinued operations ( 417.7 ) 177.7 199.2 Net cash (used) provided by operating activities ( 409.7 ) ( 53.8 ) 288.4 Cash flows from investing activities Purchases of property, plant and equipment ( 59.0 ) ( 64.0 ) ( 43.6 ) Proceeds from disposal of property, plant and equipment 8.4 0.2 0.1 Proceeds from sale of discontinued operations, net of cash 4,334.7 — — Business acquisitions, net of cash acquired — ( 272.1 ) ( 429.9 ) Purchase of short term investments ( 1,092.0 ) — — Proceeds from sale of equity investment — — 73.1 Other investing activity ( 0.2 ) — ( 0.4 ) Net cash provided (used) by investing activities from continuing operations 3,191.9 ( 335.9 ) ( 400.7 ) Net cash used by investing activities from discontinued operations ( 11.8 ) ( 23.9 ) ( 22.8 ) Net cash provided (used) by investing activities 3,180.1 ( 359.8 ) ( 423.5 ) See accompany notes to the consolidated financial statements. 62 SPECTRUM BRANDS HOLDINGS, INC. Consolidated Statements of Cash Flows Years ended September 30, 2023, 2022 and 2021 (in millions) (in millions) 2023 2022 2021 Cash flows from financing activities Payment of debt, including premium on extinguishment $ ( 1,646.8 ) $ ( 12.7 ) $ ( 891.2 ) Proceeds from issuance of debt — 740.0 899.0 Payment of debt issuance costs ( 2.3 ) ( 7.6 ) ( 12.6 ) Treasury stock purchases ( 34.7 ) ( 134.0 ) ( 125.8 ) Accelerated share repurchase ( 500.0 ) — — Dividends paid to shareholders ( 66.5 ) ( 68.6 ) ( 71.5 ) Share based award tax withholding payments, net of proceeds upon vesting ( 13.0 ) ( 24.5 ) ( 8.3 ) Payment of contingent consideration — ( 1.9 ) — Other financing activities, net — — 3.5 Net cash (used) provided by financing activities from continuing operations ( 2,263.3 ) 490.7 ( 206.9 ) Net cash used by financing activities from discontinued operations ( 0.8 ) ( 3.1 ) ( 3.0 ) Net cash (used) provided by financing activities ( 2,264.1 ) 487.6 ( 209.9 ) Effect of exchange rate changes on cash and cash equivalents 3.7 ( 20.1 ) 1.3 Net change in cash, cash equivalents and restricted cash 510.0 53.9 ( 343.7 ) Cash, cash equivalents, and restricted cash, beginning of period 243.9 190.0 533.7 Cash, cash equivalents, and restricted cash, end of period $ 753.9 $ 243.9 $ 190.0 Supplemental disclosure of cash flow information Cash paid for interest associated with continued operations $ 123.1 $ 92.1 $ 86.4 Cash paid for interest associated with discontinued operations $ 45.3 $ 53.6 $ 50.0 Cash paid for taxes associated with continued operations $ 25.5 $ 32.6 $ 23.5 Cash paid for taxes associated with discontinued operations $ 449.2 $ 12.9 $ 11.5 Non cash investing activities Acquisition of property, plant and equipment through capital leases $ 3.2 $ 1.4 $ 9.4 Non cash financing activities Issuance of shares through stock compensation plan $ 32.6 $ 33.4 $ 17.9 See accompany notes to the consolidated financial statements. 63 SB/RH Holdings, LLC Consolidated Statements of Financial Position September 30, 2023 and 2022 (in millions) (in millions) 2023 2022 Assets Cash and cash equivalents $ 752.7 $ 242.4 Short term investments 1,103.3 — Trade receivables, net 477.1 247.4 Other receivables 174.6 183.1 Inventories 462.8 780.6 Prepaid expenses and other current assets 44.3 51.2 Current assets of business held for sale — 1,816.7 Total current assets 3,014.8 3,321.4 Property, plant and equipment, net 275.1 263.8 Operating lease assets 110.8 82.5 Deferred charges and other 31.8 38.1 Goodwill 854.7 953.1 Intangible assets, net 1,060.1 1,202.2 Total assets $ 5,347.3 $ 5,861.1 Liabilities and Shareholder's Equity Current portion of long-term debt $ 8.6 $ 12.3 Accounts payable 396.7 453.3 Accrued wages and salaries 46.0 28.4 Accrued interest 20.6 27.6 Income tax payable 36.8 12.8 Other current liabilities 172.2 184.5 Current liabilities of business held for sale — 463.7 Total current liabilities 680.9 1,182.6 Long-term debt, net of current portion 1,546.9 3,144.5 Long-term operating lease liabilities 95.6 56.0 Deferred income taxes 176.3 279.3 Other long-term liabilities 157.9 65.6 Total liabilities 2,657.6 4,728.0 Commitments and contingencies (Note 20) Shareholder's equity Other capital 2,168.9 2,164.6 Accumulated earnings (deficit) 767.8 ( 736.0 ) Accumulated other comprehensive loss, net of tax ( 249.3 ) ( 303.0 ) Total shareholder's equity 2,687.4 1,125.6 Noncontrolling interest 2.3 7.5 Total equity 2,689.7 1,133.1 Total liabilities and equity $ 5,347.3 $ 5,861.1 See accompanying notes to the consolidated financial statements 64 SB/RH Holdings, LLC Consolidated Statements of Income Years ended September 30, 2023, 2022 and 2021 (in millions) (in millions) 2023 2022 2021 Net Sales $ 2,918.8 $ 3,132.5 $ 2,998.1 Cost of goods sold 1,994.5 2,142.1 1,963.5 Gross profit 924.3 990.4 1,034.6 Selling 544.7 597.6 518.5 General and administrative 330.1 368.7 385.5 Research and development 22.5 26.7 29.8 Gain from remeasurement of contingent consideration liability ( 1.5 ) ( 28.5 ) — Impairment of goodwill 111.1 — — Impairment of intangible assets 120.7 — — Total operating expenses 1,127.6 964.5 933.8 Operating (loss) income ( 203.3 ) 25.9 100.8 Interest expense 120.5 99.8 116.8 Interest income ( 38.3 ) ( 0.6 ) ( 0.2 ) Gain on debt repurchase ( 7.9 ) — — Other non-operating expense (income), net 3.8 14.6 ( 8.1 ) Loss from continuing operations before income taxes ( 281.4 ) ( 87.9 ) ( 7.7 ) Income tax benefit ( 55.1 ) ( 12.9 ) ( 25.0 ) Net (loss) income from continuing operations ( 226.3 ) ( 75.0 ) 17.3 Income from discontinued operations, net of tax 2,035.6 149.7 174.3 Net income 1,809.3 74.7 191.6 Net income from continuing operations attributable to non-controlling interest 0.1 0.2 0.2 Net income (loss) from discontinued operations attributable to non-controlling interest 0.3 0.9 ( 0.2 ) Net income attributable to controlling interest $ 1,808.9 $ 73.6 $ 191.6 Amounts attributable to controlling interest Net (loss) income from continuing operations attributable to controlling interest $ ( 226.4 ) $ ( 75.2 ) $ 17.1 Net income from discontinued operations attributable to controlling interest 2,035.3 148.8 174.5 Net income attributable to controlling interest $ 1,808.9 $ 73.6 $ 191.6 See accompanying notes to the consolidated financial statements 65 SB/RH Holdings, LLC Consolidated Statements of Comprehensive Income Years ended September 30, 2023, 2022 and 2021 (in millions) (in millions) 2023 2022 2021 Net income $ 1,809.3 $ 74.7 $ 191.6 Other comprehensive income Foreign currency translation adjustment Foreign currency translation gain (loss) 69.0 ( 147.8 ) 26.0 Unrealized (loss) gain on net investment hedge ( 31.7 ) 75.8 6.2 Foreign currency translation adjustment before tax 37.3 ( 72.0 ) 32.2 Deferred tax effect 7.0 ( 20.0 ) — Net unrealized gain (loss) on foreign currency translation 44.3 ( 92.0 ) 32.2 Unrealized (loss) gain on derivative instruments Unrealized (loss) gain on derivative instruments before reclassification ( 35.3 ) 30.7 0.1 Net reclassification for loss (gain) to income from continuing operations 12.2 ( 20.2 ) 9.2 Net reclassification for loss (gain) to income from discontinued operations 2.3 ( 2.4 ) 0.1 Unrealized (loss) gain on derivative instruments after reclassification ( 20.8 ) 8.1 9.4 Deferred tax effect 5.4 2.3 ( 6.6 ) Net unrealized (loss) gain on derivative instruments ( 15.4 ) 10.4 2.8 Defined benefit pension (loss) gain Defined benefit pension (loss) gain before reclassification ( 0.8 ) 18.3 11.7 Net reclassification for loss to income from continuing operations 0.8 3.6 4.8 Net reclassification for gain to income from discontinued operations ( 0.1 ) ( 0.1 ) ( 0.1 ) Defined benefit pension (loss) gain after reclassification ( 0.1 ) 21.8 16.4 Deferred tax effect ( 0.1 ) ( 8.9 ) ( 1.6 ) Net defined benefit pension (loss) gain ( 0.2 ) 12.9 14.8 Deconsolidation of discontinued operations and assets held for sale 26.1 — — Net change to derive comprehensive income for the period 54.8 ( 68.7 ) 49.8 Comprehensive income 1,864.1 6.0 241.4 Comprehensive income (loss) from continuing operations attributable to non-controlling interest 0.3 ( 0.4 ) — Comprehensive (loss) income from discontinuing operations attributable to non-controlling interest — ( 0.5 ) 0.4 Deconsolidation of discontinued operations attributable to non-controlling interest 0.8 — — Comprehensive income attributable to controlling interest $ 1,863.0 $ 6.9 $ 241.0 See accompanying notes to the consolidated financial statements 66 SB/RH Holdings, LLC Consolidated Statements of Shareholder’s Equity Years ended September 30, 2023, 2022 and 2021 (in millions) (in millions) Other Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Shareholder's Equity Non- controlling Interest Total Equity Balances at September 30, 2020 $ 2,154.1 $ ( 614.2 ) $ ( 284.6 ) $ 1,255.3 $ 9.9 $ 1,265.2 Net income from continuing operations — 17.1 — 17.1 0.2 17.3 Income (loss) from discontinued operations, net of tax — 174.5 — 174.5 ( 0.2 ) 174.3 Other comprehensive income, net of tax — — 49.4 49.4 0.4 49.8 Restricted stock issued and related tax withholdings ( 7.3 ) — — ( 7.3 ) — ( 7.3 ) Share based compensation 28.0 — — 28.0 — 28.0 Dividends paid to parent — ( 192.3 ) — ( 192.3 ) — ( 192.3 ) Dividend paid by subsidiary to NCI — — — — ( 1.6 ) ( 1.6 ) Balances at September 30, 2021 2,174.8 ( 614.9 ) ( 235.2 ) 1,324.7 8.7 1,333.4 Net (loss) income from continuing operations — ( 75.2 ) — ( 75.2 ) 0.2 ( 75.0 ) Income from discontinued operations, net of tax — 148.8 — 148.8 0.9 149.7 Other comprehensive loss, net of tax — — ( 67.8 ) ( 67.8 ) ( 0.9 ) ( 68.7 ) Restricted stock issued and related tax withholdings ( 24.5 ) — — ( 24.5 ) — ( 24.5 ) Share based compensation 14.3 — — 14.3 — 14.3 Dividends paid to parent — ( 194.7 ) — ( 194.7 ) — ( 194.7 ) Dividend paid by subsidiary to NCI — — — — ( 1.4 ) ( 1.4 ) Balances at September 30, 2022 2,164.6 ( 736.0 ) ( 303.0 ) 1,125.6 7.5 1,133.1 Net (loss) income from continuing operations — ( 226.4 ) — ( 226.4 ) 0.1 ( 226.3 ) Income from discontinued operations, net of tax — 2,035.3 — 2,035.3 0.3 2,035.6 Sale and deconsolidation of discontinued operations — — 25.3 25.3 ( 5.9 ) 19.4 Other comprehensive income, net of tax — — 28.4 28.4 0.3 28.7 Restricted stock issued and related tax withholdings ( 12.9 ) — — ( 12.9 ) — ( 12.9 ) Share based compensation 17.2 — — 17.2 — 17.2 Dividends paid to parent — ( 305.1 ) — ( 305.1 ) — ( 305.1 ) Balances at September 30, 2023 $ 2,168.9 $ 767.8 $ ( 249.3 ) $ 2,687.4 $ 2.3 $ 2,689.7 See accompanying notes to the consolidated financial statements. 67 SB/RH Holdings, LLC Consolidated Statements of Cash Flows Years ended September 30, 2023, 2022 and 2021 (in millions) (in millions) 2023 2022 2021 Cash flows from operating activities Net income $ 1,809.3 $ 74.7 $ 191.6 Income from discontinued operations, net of tax 2,035.6 149.7 174.3 Net (loss) income from continuing operations ( 226.3 ) ( 75.0 ) 17.3 Adjustments to reconcile net (loss) income to net cash from operating activities: Depreciation 48.9 49.0 51.9 Amortization 42.3 50.3 65.1 Share based compensation 15.7 9.1 27.2 Write-off from impairment of goodwill 111.1 — — Write-off from impairment of intangible assets 120.7 — — Impairment of property, plant and equipment and operating lease assets 10.8 — — Gain on sale of property, plant and equipment ( 2.7 ) — — Gain from repurchase of debt ( 7.9 ) — — Amortization of debt issuance costs and debt discount 6.9 7.1 5.6 Write-off of unamortized discount and debt issuance costs 10.9 — 7.9 Non-cash interest on short-term investment ( 11.3 ) — — Gain from remeasurement of contingent consideration liability ( 1.5 ) ( 28.5 ) — Non-cash purchase accounting adjustments 1.9 8.3 7.3 Gain on equity investment — — ( 6.9 ) Deferred tax benefit ( 181.4 ) ( 44.2 ) ( 63.0 ) Net changes in operating assets and liabilities Receivables ( 239.9 ) ( 41.4 ) 57.3 Inventories 328.3 ( 153.7 ) ( 219.6 ) Prepaid expenses and other 26.1 ( 34.8 ) ( 9.6 ) Accounts payable and accrued liabilities ( 150.7 ) ( 19.6 ) 115.0 Income tax and other ( 193.3 ) 9.9 26.2 Net cash (used) provided by operating activities from continuing operations ( 291.4 ) ( 263.5 ) 81.7 Net cash provided by operating activities from discontinued operations ( 419.5 ) 177.7 199.2 Net cash (used) provided by operating activities ( 710.9 ) ( 85.8 ) 280.9 Cash flows from investing activities Purchases of property, plant and equipment ( 59.0 ) ( 64.0 ) ( 43.6 ) Proceeds from disposal of property, plant and equipment 8.4 0.2 0.1 Proceeds from sale of discontinued operations, net of cash 4,334.7 — — Business acquisitions, net of cash acquired — ( 272.1 ) ( 429.9 ) Purchase of short-term investments ( 1,092.0 ) — — Proceeds from sale of equity investment — — 73.1 Other investing activities ( 0.2 ) — ( 0.4 ) Net cash provided (used) by investing activities from continuing operations 3,191.9 ( 335.9 ) ( 400.7 ) Net cash used by investing activities from discontinued operations ( 11.8 ) ( 23.9 ) ( 22.8 ) Net cash provided (used) by investing activities 3,180.1 ( 359.8 ) ( 423.5 ) 68 SB/RH Holdings, LLC Consolidated Statements of Cash Flows Years ended September 30, 2023, 2022 and 2021 (in millions) (in millions) 2023 2022 2021 Cash flows from financing activities Payment of debt, including premium on extinguishment $ ( 1,646.8 ) $ ( 12.7 ) $ ( 891.2 ) Payment of intercompany debt ( 7.8 ) — — Proceeds from issuance of debt — 740.0 899.0 Payment of debt issuance costs ( 2.3 ) ( 7.6 ) ( 12.6 ) Payment of cash dividends to parent ( 305.1 ) ( 194.7 ) ( 192.3 ) Payment of contingent consideration — ( 1.9 ) — Net cash (used) provided by financing activities from continuing operations ( 1,962.0 ) 523.1 ( 197.1 ) Net cash used by financing activities from discontinued operations ( 0.8 ) ( 3.1 ) ( 3.0 ) Net cash (used) provided by financing activities ( 1,962.8 ) 520.0 ( 200.1 ) Effect of exchange rate changes on cash and cash equivalents 3.7 ( 20.1 ) 1.3 Net change in cash, cash equivalents and restricted cash 510.1 54.3 ( 341.4 ) Cash, cash equivalents, and restricted cash, beginning of period 242.6 188.3 529.7 Cash, cash equivalents, and restricted cash, end of period $ 752.7 $ 242.6 $ 188.3 Supplemental disclosure of cash flow information Cash paid for interest associated with continued operations $ 123.1 $ 92.1 $ 86.4 Cash paid for interest associated with discontinued operations $ 45.3 $ 53.6 $ 50.0 Cash paid for taxes associated with continued operations $ 25.5 $ 32.6 $ 23.5 Cash paid for taxes associated with discontinued operations $ 449.2 $ 12.9 $ 11.5 Non cash investing activities Acquisition of property, plant and equipment through capital leases $ 3.2 $ 1.4 $ 9.4 See accompanying notes to the consolidated financial statements. 69 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS This report is a combined report of Spectrum Brands Holdings, Inc. (“SBH”) and SB/RH Holdings, LLC (“SB/RH”) (collectively, the “Company”). The notes to the consolidated financial statements that follow include both consolidated SBH and SB/RH notes, unless otherwise indicated. NOTE 1 - DESCRIPTION OF BUSINESS The Company is a diversified global branded consumer products company. We manage the businesses in three vertically integrated, product-focused segments: (i) Home and Personal Care (“HPC”), (ii) Global Pet Care (“GPC”), and (iii) Home and Garden (“H&G”). The Company manufactures, markets and/or distributes its products globally in the North America (“NA”), Europe, Middle East & Africa (“EMEA”), Latin America (“LATAM”) and Asia-Pacific (“APAC”) regions through a variety of trade channels, including retailers, wholesalers and distributors. We enjoy strong name recognition under our various brands and patented technologies across multiple product categories. Global and geographic strategic initiatives and financial objectives are determined at the corporate level. Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a president responsible for sales and marketing initiatives and the financial results for all respective brands and product lines within that segment. The segments are supported through center-led shared service enabling functions consisting of finance and accounting, information technology, legal and human resource, supply chain and commercial operations. See Note 21 – Segment Information for more information pertaining to segments of continuing operations. The following is an overview of the consolidated business, by segment, summarizing product types and brands: Segment Products Brands GPC Companion Animal: Dog and cat chews, treats, wet and dry foods. Dog and cat clean-up, behavioral training aides, health and grooming products. Indoor bird and other small animal food and care products. Aquatics: Consumer and commercial aquarium kits, stand-alone tanks; aquatics equipment such as filtration systems, heaters and pumps; and aquatics consumables such as fish food, water management and care. Companion Animal: Good'n'Fun®, DreamBone®, GOOD BOY®, SmartBones®, IAMS® (Europe only), EUKANUBA® (Europe only), Nature's Miracle®, FURminator®, Dingo®, 8IN1® (8-in-1), Meowee!®, and Wild Harvest™. Aquatics: Tetra®, Marineland®, Instant Ocean®, GloFish®, and OmegaSea®. H&G Household: Household pest control solutions such as spider and scorpion killers; ant and roach killers; flying insect killers; insect foggers; wasp and hornet killers; and bedbug, flea and tick control products. Controls: Outdoor insect and weed control solutions, and animal repellents such as aerosols, granules, and ready-to-use sprays or hose-end ready-to-sprays. Repellents: Personal use pesticides and insect repellent products, including aerosols, lotions, pump sprays and wipes, yard sprays and citronella candles. Cleaning: Household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes and markers. Household: Hot Shot®, Black Flag®, Real-Kill®, Ultra Kill®, The Ant Trap® (TAT), and Rid-A-Bug®. Controls: Spectracide®, Garden Safe®, Liquid Fence®, and EcoLogic®. Repellents: Cutter® and Repel®. Cleaning: Rejuvenate® HPC Home Appliances: Small kitchen appliances including toaster ovens, coffeemakers, slow cookers, air fryers, blenders, hand mixers, grills, food processors, juicers, toasters, irons, kettles, and bread makers, cookware, and cookbooks. Personal Care: Hair dryers, flat irons and straighteners, rotary and foil electric shavers, personal groomers, mustache and beard trimmers, body groomers, nose and ear trimmers, women's shavers, haircut kits and intense pulsed light hair removal systems. Home Appliances: Black+Decker®, Russell Hobbs®, George Foreman®, PowerXL®, Emeril Legasse®, Copper Chef ®, Toastmaster®, Juiceman®, Farberware®, and Breadman® Personal Care: Remington® SB/RH is a wholly-owned subsidiary of SBH and represents substantially all of its assets, liabilities, revenues, expenses and operations. Spectrum Brands, Inc. (“SBI”), a wholly-owned subsidiary of SB/RH, incurred certain debt guaranteed by SB/RH and domestic subsidiaries of SBI. See Note 12 - Debt for more information pertaining to debt. SBI represents all of SB/RH assets, liabilities, revenues, expenses and operations. The reportable segments of SB/RH are consistent with the reportable segments of SBH. On September 8, 2021, the Company entered into a definitive Asset and Stock Purchase Agreement (the "Purchase Agreement") with ASSA ABLOY AB ("ASSA") to sell its HHI segment for cash proceeds of $ 4.3 billion, subject to customary purchase price adjustments. The HHI segment consisted of residential locksets and door hardware, including knobs, levers, deadbolts, handle sets, and electronic and connected locks under the Kwikset®, Weiser®, Baldwin®, Tell Manufacturing®, and EZSET® brands; kitchen and bath faucets and accessories under the Pfister® brand; and builders' hardware consisting of hinges, metal shapes, security hardware, rack and sliding door hardware, and gate hardware under the National Hardware® and FANAL® brands. On June 20, 2023, the Company completed its divestiture of its HHI segment. Refer to Note 3 - Divestitures included in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report, for further discussion pertaining the HHI divestiture. 70 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES Principles of Consolidation and Fiscal Year End The consolidated financial statements include the financial statements of the Company and its majority owned subsidiaries and have been prepared in accordance with Accounting Principles Generally Accepted in the United States (“GAAP”). All intercompany transactions have been eliminated. The Company’s fiscal year ends September 30 and reports its results using fiscal quarters whereby each three month quarterly reporting period is approximately thirteen weeks in length and ends on a Sunday. The exceptions are the first quarter, which begins on October 1, and the fourth quarter, which ends on September 30. For the year ended September 30, 2023, the fiscal quarters were comprised of the three months ended January 1, 2023, April 2, 2023, July 2, 2023, and September 30, 2023. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid temporary instruments purchased with original maturities of three months or less from date of purchase to be cash equivalents. Short-Term Investments The Company determines the balance sheet classification of its investments at the time of purchase and evaluates the classification at each balance sheet date. Money market funds, certificates of deposit, and time deposits with original maturities of greater than three months but no more than twelve months from the date of purchase are carried at cost, which approximates fair value, and are recognized in the consolidated balance sheets as short-term investments. Receivables Trade accounts receivable are carried at net realizable value. The Company extends credit to its customers based upon an evaluation of the customer’s financial condition and credit history, but generally does not require collateral. The Company monitors its customers’ credit and financial condition based on changing economic conditions and will make adjustments to credit policies as required. Provisions for losses on uncollectible trade receivables are determined based on ongoing evaluations of the Company’s receivables, principally on the basis of historical collection experience and evaluations of the risks of nonpayment or return for a given customer. See Note 8 - Receivables for further detail. Inventories Inventories are valued at the lower of cost or net realizable value. Cost of inventories is determined using the first-in, first-out (FIFO) method. See Note 9 - Inventory for further detail. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation is calculated on the straight-line basis over the estimated useful lives of the assets. Property, plant and equipment held under finance leases are depreciated on a straight-line basis over the shorter of the lease term or estimated useful life of the asset; such amortization is included in depreciation expense. The Company uses accelerated depreciation methods for income tax purposes. Useful lives for property, plant and equipment are as follows: Asset Type Range Buildings and improvements 20 - 40 years Machinery, tooling and equipment 2 - 15 years Computer software 3 - 5 years Expenditures which substantially increase value or extend useful lives are capitalized. Expenditures for maintenance and repairs are charged to operations as incurred. The Company records gains and losses on the disposition or retirement of property, plant and equipment based on the net book value and any proceeds received. Long-lived fixed assets held and used are reviewed for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Circumstances such as the discontinuation of a product or product line, a sudden or consistent decline in the sales forecast for a product, changes in technology or in the way an asset is being used, a history of operating or cash flow losses or an adverse change in legal factors or in the business climate, among others, may trigger an impairment review. If such indicators are present, the Company performs undiscounted cash flow analyses to determine if impairment exists. The asset value would be deemed impaired if the undiscounted cash flows generated did not exceed the carrying value of the respective asset group. If impairment is determined to exist, any related impairment loss is calculated based on fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. See Note 10 - Property, plant and equipment for further detail. Internal Use Software and Cloud Computing Arrangements The costs incurred towards internal-use software development in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs incurred to develop internal-use software are capitalized and recognized as Property Plant and Equipment on the Company's Consolidated Statements of Financial Position. Other costs associated with training and data conversion are generally expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the software. Maintenance and enhancement costs, including those costs in the post-implementation stages, are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the software that result in added functionality, in which case the costs are capitalized and depreciated on a straight-line basis over the estimated useful life of the software. 71 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued) Costs incurred towards the implementation of cloud computing arrangements, including software-as-a-service ("SaaS"), or other similar SaaS type services, such as platform as a service, infrastructure as a service and other hosting arrangements where we do not take possession of the software and instead gain access to the software remotely, are accounted for consistent with internal-use software development. Unlike internal-use software development costs, the amounts capitalized are recognized as a deferred balance similar to a prepayment or other deferred assets. Amortization of such costs are calculated on a straight-line basis over the applicable term of such arrangements, recognized as operating expense and not considered depreciation or amortization expense. If there is no software license provided by the contract, then the arrangement is considered a service contract and expensed as incurred. Goodwill Goodwill reflects the excess of acquisition cost over the aggregate fair value assigned to identifiable net assets acquired. Goodwill is not amortized, but instead is assessed for impairment at least annually and as triggering events or indicators of potential impairment are identified. Goodwill has been assigned to reporting units for purposes of impairment testing based upon the relative fair value of the asset to each reporting unit. Our reporting units are consistent with our reportable segments. See Note 21 - Segment Information for further discussion. Goodwill is tested for impairment in the fourth quarter of our fiscal year by either performing a qualitative assessment or a quantitative test for some, or all reporting units. The Company evaluates qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. In performing a qualitative assessment, the Company considers events and circumstances, including, but not limited to, macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in customers, changes in market value, composition or carrying amount of a reporting unit’s net assets, and considering any changes in the market price of the Company’s common stock. If the Company determines that it is more likely than not the carrying value is greater than the fair value of a reporting unit after assessing the totality of facts and circumstances, a quantitative assessment is performed to determine the reporting unit fair value and measure the impairment. If the Company determines that it is more likely than not the fair value is greater than the carrying amount, then a quantitative assessment is not required. In estimating the fair value of our reporting units for a quantitative impairment assessment, we use both an income approach and a market approach. The income approach is a discounted cash flow methodology, which requires us to estimate future revenues, expenses, and capital expenditures and make assumptions about our weighted average cost of capital and perpetuity growth rate, among other variables. The market approach is a guideline public company method that assesses value of our reporting unit based upon market multiples derived from financial results of selected comparable companies. We test the aggregate estimated fair value of our reporting units by comparison to our total market capitalization, including both equity and debt capital. The fair value of each reporting unit is compared to its carrying value, including goodwill. If the fair value of a reporting unit is less than its carrying value, an impairment loss would be recognized equal to that excess; however the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. See Note 11 - Goodwill and Intangible Assets for further detail. Intangible Assets Intangible assets are recorded at cost or at estimated fair value if acquired in a business combination. Customer lists, proprietary technology and certain trade name intangibles are amortized, using the straight-line method, over their estimated useful lives. The ranges of useful lives for definite-lived intangibles assets are as follows: Asset Type Range Customer relationships 9 - 20 years Technology assets 8 - 18 years Tradenames 5 - 12 years Definite-lived intangible assets held and used are reviewed for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be recoverable. If indicators of potential impairment are identified, the Company performs an undiscounted cash flow analysis to determine if impairment exists. The asset value would be deemed impaired if the undiscounted cash flows expected to be generated by the asset did not exceed the carrying value of the respective asset group. If impairment is determined to exist, any related impairment loss is calculated based on fair value. Certain trade name intangible assets have an indefinite life and are not amortized, but instead are assessed for impairment at least annually, in the fourth quarter of our fiscal year by either performing a qualitative assessment or a quantitative test for some or all indefinite lived intangible assets. The Company evaluates qualitative factors to determine whether it is more likely than not that the fair value of the indefinite lived intangible assets is less than its carrying amount. In performing a qualitative assessment, the Company considers events and circumstances, including, but not limited to, macroeconomic conditions, industry and market conditions, cost factors, changes in strategy and overall financial performance. If the Company determines that it is more likely than not the carrying value is greater than the fair value of an indefinite lived intangible asset, a quantitative assessment is performed to determine the fair value and measure the impairment. If the Company determines that it is more likely than not the fair value is greater than the carrying amount, then a quantitative assessment is not required. The quantitative impairment analysis of indefinite lived intangible assets compares the estimated fair value of the identified trade names to their carrying value to determine if impairment exists. If the fair value is less than the carrying value, an impairment loss is recorded for the excess. The fair value of indefinite-lived intangible assets is determined using an income approach, the relief-from-royalty methodology, which requires us to make estimates and assumptions about future revenues, royalty rates, and the discount rate, among others. See Note 11 - Goodwill and Intangible Assets for further detail. Assets Held for Sale and Discontinued Operations An asset, group of assets, or qualifying business are considered held for sale when they meet all the applicable criteria; including: (i) having the authority to sell, (ii) being available to sell in their present condition, (iii) having an active program to locate buyers, (iv) being actively marketed at current fair value, and (v) considered probable of selling within one year. Assessment for held for sale are performed at least quarterly or when events or changes in business circumstances indicate that a change in classification may be necessary. 72 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued) Assets and liabilities of a qualifying business are excluded from the net assets of continuing operations, separated in a disposal group and classified as held for sale in the period in which the held for sale criteria was met. Corporate debt is not included as a component of the disposal group, regardless of repayment provisions, and only debt directly attributable to the divested operations may be included as held for sale. Assets and liabilities held for sale are recorded at the lower of its carrying amount or estimated fair value less expected cost to sell and any unrecognized other comprehensive loss. Assets held for sale do not experience any subsequent depreciation or amortization after being classified as held for sale. Assets held for sale are reviewed for impairment at least quarterly, and if the carrying amount of the disposal group exceeds the estimated fair value less cost to sell, a loss is recognized. If a business is classified as held for sale after the balance sheet date but before the financial statements are issued or are available to be issued, the business continues to be classified as held and used in those financial statements when issued or when available to be issued. The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the business is sold and meets the criteria for being classified as held for sale. Assets and liabilities of a disposal group classified as held for sale and related to discontinued operations are presented as held for sale for all current and prior periods presented within the statement of a financial position. The results of discontinued operations are reported in Income From Discontinued Operations, Net of Tax in the accompanying Consolidated Statements of Income for the current and prior periods commencing in the period in which the business meets the held for sale criteria, and includes any gain or loss recognized on closing, or adjustment of the carrying amount to fair value less cost to sell while being held for sale. Loss realized upon change of classification to held for sale is recognized as a loss to continuing operations. Income from discontinued operations includes only direct costs attributable to the divested business and excludes any indirect cost allocation associated with any shared or corporate led functions unless otherwise dedicated to the divested business. Transactions between the businesses held for sale and businesses held for use that are expected to continue to exist after the disposal are not eliminated to appropriately reflect the continuing operations and balances held for sale. Interest costs from corporate debt, excluding premium payments or loss on extinguishment of debt, may be included as a component of income from discontinued operations specifically attributable to interest from corporate debt that is obligated to be repaid following the completion of a divestiture; plus the allocation of interest cost from corporate debt not directly attributable to or related to other operations based on the ratio of net assets of the disposal group held for sale to the consolidated net assets plus consolidated debt, excluding debt assumed in transaction, required to be repaid, or directly attributable to other operations of the Company. Adjustments to discontinued operations subsequent to the completion of a transaction or disposition are generally attributable to contingencies and indemnifications directly related to the disposal transaction, operations of the discontinued operations, or settlement of obligations directly related to the disposal. Amounts within accumulated other comprehensive income directly associated with a divested business are not realized as a component of Income from Discontinued Operations until completion of the sale or disposition. See Note 3 - Divestitures for further detail. Debt Issuance Costs Debt issuance costs are deferred and amortized to interest expense using the effective interest method over the lives of the related debt agreements. Debt issuance costs are included as a reduction to Long Term Debt, Net of Current Portion in the Consolidated Statements of Financial Position. Amortization of debt issuance costs is recognized as a component of Interest Expense in the Consolidated Statements of Income. See Note 12 - Debt for further detail. Derivative Financial Instruments Derivative financial instruments are used by the Company principally in the management of its foreign currency exposures. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. Derivative assets and liabilities are reported at fair value in the Consolidated Statements of Financial Position. When hedge accounting is elected at inception, the Company formally designates the financial instrument as a hedge of a specific underlying exposure and documents both the risk management objectives and strategies for undertaking the hedge. Depending on the nature of derivatives designated as hedging instruments, changes in fair value are either offset against the change in fair value of the hedged assets or liability through earnings, or recognized in equity through other comprehensive income until the hedged item is recognized. Derivative instruments that hedge the exposure to variability in expected future cash flows and are designated as cash flow hedges, and the entire change in the fair value of the hedging instrument is recorded as a component of Accumulated Other Comprehensive (Loss) Income (“AOCI”) in Shareholders’ Equity. Those amounts are subsequently reclassified to earnings in the same line item in the Consolidated Statement of Income as impacted by the hedge item when the hedged item affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. For derivatives that do not qualify for hedge accounting treatment, the change in the fair value is recognized in earnings. See Note 14 - Derivatives for further detail. Treasury Stock Treasury stock purchases are stated at average cost and presented as a separate reduction of equity. See Note 17 - Shareholder's Equity for further detail. Noncontrolling Interest Noncontrolling interest recognized in the consolidated equity of the Company is the minority interest ownership in equity of a consolidated subsidiary that is not attributable, directly or indirectly, to the parent company; and recognized separate from Shareholders’ Equity in the Consolidated Statement of Financial Position. Income from a consolidated subsidiary with a minority interest ownership is allocated to the minority interest and considered attributable to the noncontrolling interest in the Consolidated Statement of Income. Business Combinations and Acquisition Accounting The Company accounts for acquisitions by applying the acquisition method of accounting when the transaction or event is considered a business combination, which requires that the assets acquired and liabilities assumed constitute a business. A defined business is generally an acquired group of assets with inputs and processes that make it capable of generating a return or economic benefit for the acquirer. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their fair values as of the closing date of the acquisition. See Note 4 – Acquisitions for further detail. 73 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued) Revenue Recognition Product Sales Our customers mostly consist of retailers, wholesalers and distributors with the intention to sell and distribute to an end consumer. The Company recognizes revenue from the sale of products upon transfer of control to the customer. A portion of our business is also sold direct-to-consumer through direct response television, brand websites, and other online marketplaces. For the majority of our product sales, the transfer of control is recognized when we ship the product from our facilities to the customer unless we retain title and risk of loss upon shipment and we arrange and paid for freight such that we retain physical possession and control during delivery. Licensing Revenue The Company also sells licenses of its brands to third-party sellers and manufacturers for the development, production, sales & distribution of products that are not directly managed or offered by the Company. The Company maintains all right of ownership of the intellectual property and contracts with its customer for the use of the intellectual property in their operations. Revenue derived from the right-to-access licenses is recognized using the over time revenue recognition method, applying the ‘as-invoiced’ practical expedient method at the amount we are able to bill using a time-elapsed measure of progress, taking into consideration any minimum guarantee provisions under the contract, as it appropriately depicts its performance of providing access to the Company’s brands, trade names, logos, etc. Other Revenue Other revenue consists primarily of installation or maintenance services that are provided to certain customers in the GPC segment and extended warranty coverage for certain HPC products sold directly to consumers. The GPC services are often associated with the sale of product but are also provided separately and are considered a distinct performance obligation separate from product sales. The HPC extended warranty coverage is sold as a separate contract and is recognized as a separate performance obligation that is distinct from the product. The extended warranty is initially recognized as deferred revenue and amortized to Net Sales over the anticipated term of the performance of obligation. The HPC extended warranties' term is anywhere between 1 and 7 years, with the majority of the warranties realized within the first year of the term. Variable Consideration and Cash Paid to Customers The Company measures revenue as the amount of consideration for which it expects to be entitled in exchange for transferring goods or providing services. Certain retailers and/or end customers may receive cash or non-cash incentives such as rebates, volume or trade discounts, cooperative advertising, price protection, coupons, and other customer-related programs, including service level penalties, which are accounted for as variable consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of revenue recognized will not occur when the uncertainty is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the anticipated performance and all information (historical, current and forecasted) that is reasonably available. The estimated liability for sales discounts and other programs and allowances is calculated using the expected value method or most likely amount and recorded at the time of sale as a reduction of net sales and trade receivables. The Company may also enter into various arrangements, primarily with retail customers, which require the Company to make upfront cash payments to secure the right to distribute through such customers. The Company defers the cost of these payments, provided they are supported by a volume-based arrangement with the retailer with a period of 12 months or longer, and amortizes the associated payment over the appropriate time or volume-based term of the arrangement. Deferred payments are recognized as a contract asset and are reported in the Consolidated Statements of Financial Position as Deferred Charges and Other Assets with related amortization treated as a reduction in Net Sales. Product Returns In the normal course of business, the Company may allow customers to return product per the provisions in a sale agreement. 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. For the anticipated value of the returns, the Company will recognize a return liability in Other Current Liabilities and a separate return asset included in the Prepaid Expenses and Other Current Assets, when applicable. See Note 6 - Revenue Recognition for further discussion on product returns. Product returns do not include provisions for standard warranties provided to end-consumers of the Company's products, which are recognized as a component of the Cost of Goods Sold. See Note 20 - Commitments and Contingencies for further discussion on standard product warranty. Practical Expedients and Exemptions: • The Company does not adjust the promised amount of consideration for the effects of a significant financing component, as the period between the transfer of a promised good or service to a customer and the customer’s payment for the good or service is one year or less. • The Company does not assess whether promised goods or services are performance obligations if they are not material in the context of the contract with the customer. • The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. The estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period is not material. • The Company generally expenses sales commissions and other contract and fulfillment costs when the amortization period is less than one year. The Company records these costs within Selling Expenses. For costs amortized over a period longer than one year, such as fixtures which are more permanent in nature, the Company defers and amortizes over the supportable period based upon historical assumptions and analysis. The costs for permanent displays are incorporated into the pricing of product sold to customer. • The Company excludes all sales taxes that are assessed by a governmental authority from the transaction price. See Note 6 – Revenue Recognition for further detail. 74 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued) Shipping and Handling Costs Shipping and handling costs include costs incurred with third-party carriers to transport products to customers and salaries and overhead costs related to activities to prepare the Company’s products for shipment at the Company’s distribution facilities. Shipping and handling costs were $ 272.6 million, $ 274.2 million and $ 216.3 million during the years ended September 30, 2023, 2022 and 2021, respectively. The Company accounts for shipping and handling activities, which occur after control of the related goods transfers, as fulfillment activities instead of assessing such activities as performance obligations. Shipping and handling costs are included in Selling Expenses in the Consolidated Statements of Income. Advertising Costs Advertising costs include agency fees and other costs to create advertisements, as well as costs paid to third parties to print or broadcast the Company’s advertisements and are expensed as incurred. The Company incurred advertising costs of $ 59.1 million, $ 64.1 million and $ 54.0 million during the years ended September 30, 2023, 2022 and 2021, respectively. Advertising costs are included in Selling Expenses in the Company’s Consolidated Statements of Income. Research and Development Costs Research and development costs are charged to expense in the period they are incurred. Environmental Expenditures Environmental expenditures that relate to current operations or to conditions caused by past operations are expensed or capitalized as appropriate. The Company determines its liability for environmental matters on a site-by-site basis and records a liability at the time when it is probable that a liability has been incurred and such liability can be reasonably estimated. The estimated liability is not reduced for possible recoveries from insurance carriers. Environmental costs include initial site surveys, costs for remediation and restoration and ongoing monitoring costs, as well as fines, damages and other costs, when applicable and estimable. Adjustments to initial estimates are recorded, from time to time, to reflect changing circumstances and estimates based upon additional information developed in subsequent periods. Estimated environmental remediation expenditures are included in the determination of the net realizable value recorded for assets held for sale. See Note 20 - Commitments and Contingencies for further discussion. Exit and Disposal Costs 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 termination benefits, such as a one-time involuntary severance or retention bonuses, one-time contract termination costs (excluding leases), and other costs associated with non-termination type costs related to restructuring initiatives such as incremental costs for the sale or termination of a line of business, closure or consolidation of operating facilities or business locations in a country or region, relocation of business activities and employees from one location to another, change in management structure, significant third-party provider or a fundamental reorganization that affects the nature and focus of operations, among others. Restructuring charges associated with manufacturing are recorded as Cost of Goods Sold. Restructuring charges associated with administrative functions are recorded as operating expenses, such as initiatives impacting sales, marketing, distribution or other non-manufacturing related functions. Liabilities from restructuring charges are recorded for estimated costs of facility closures, significant organizational adjustments and measures undertaken by management to exit certain activities. Costs for such activities are estimated by management after evaluating detailed analyses of the costs to be incurred. Such liabilities or asset reductions could include amounts for items such as severance costs and related benefits, and other items directly related to the exit activities. Impairment of property and equipment and other assets as a result of a such initiatives is recognized as a reduction of the appropriate asset. See Note 5 - Restructuring Charges for further detail. Leases The Company determines if an arrangement is a lease at inception, considering whether the contract conveys a right to control the use of the identified asset for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating leases are included in Operating Lease Assets, Other Current Liabilities and Long-Term Operating Lease Liabilities on the Consolidated Statement of Financial Position. Finance leases are included in Property, Plant and Equipment, Current Portion of Long-Term Debt, and Long-Term Debt, Net of Current Portion on the Consolidated Statement of Financial Position. Right of use ("ROU") lease assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. ROU lease liabilities are classified between current and long-term liabilities based on their payment terms. The ROU operating lease asset includes prepaid rent and reflects the unamortized balance of lease incentives. Our leases may include renewal options, and we include the renewal option in the lease term if we conclude that it is reasonably certain that we will exercise that option. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease payments that do not depend on an index or a rate, such as the Company’s proportionate share of actual costs for utilities, common area maintenance, insurance, and property taxes, are excluded from the measurement of the lease liability, unless subject to fixed minimum requirements, and are recognized as variable lease cost when the obligation for that payment is incurred. As most of the Company’s leases do not provide the lease implicit rates, the Company uses its incremental borrowing rates as the discount rate, adjusted as applicable, based on the information available at the lease commencement dates to determine the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate the Company would incur to borrow, on a collateralized basis and in a similar economic environment, over the term of a lease. The Company may use the lease implicit rate, if readily determinable, as the discount rate to determine the present value of lease payments. 75 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued) We review the impairment of our ROU lease assets consistent with the approach applied for our other long-lived assets. ROU lease assets are reviewed for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Circumstances such as the discontinuation of a product or product line, a sudden or consistent decline in the sales forecast for a product, changes in technology or in the way an asset is being used, early termination or exit of a lease agreement, a history of operating or cash flow losses or an adverse change in legal factors or in the business climate, among others, may trigger an impairment review. If such indicators are present, the Company performs an undiscounted cash flow analysis to determine if impairment exists. The asset value would be deemed impaired if the undiscounted cash flows generated did not exceed the carrying value of the respective asset group. If impairment is determined to exist, any related impairment loss is calculated based on fair value. See Note 13 – Leases for additional information. Supplier Financing Program As part of ongoing efforts to maximize working capital, the Company works with its suppliers to optimize the terms and conditions, which may include the extension of payment terms. There is an agreement with a third-party administrator to provide an accounts payable tracking system and facilitate a supplier financing program, which allows participating suppliers the ability to monitor and voluntarily elect to sell the Company's payment obligations to a designated third-party financial institution. Participating suppliers can sell one or more of the payment obligations at their sole discretion, and the Company's rights and obligations to its suppliers are not impacted. The Company has no economic interest in a supplier’s decision to enter into these agreements. The Company's rights and obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by suppliers’ decisions to sell amounts under these arrangements. As of September 30, 2023, the Company had $ 17.9 million in outstanding payment obligations that were sold to a financial institution by participating suppliers and are included in Accounts Payable in the Company's Consolidated Statement of Financial Position. During the year ended September 30, 2023, the Company paid $ 91.0 million to a financial institution for payment obligations that were settled through the supplier financing program. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 % likely of being realized. Changes in recognition or measurement are reflected in income tax expense in the period in which the change in judgment occurs. Accrued interest expense and penalties related to uncertain tax positions are recorded in Income Tax Expense. See Note 16 - Income Taxes for further detail. Foreign Currency Translation Local currencies are considered the functional currencies for most of the Company’s operations outside the United States. Assets and liabilities of the Company’s foreign subsidiaries are translated at the rate of exchange existing at year-end, with revenues, expenses and cash flows translated at the average of the monthly exchange rates. Adjustments resulting from translation of the financial statements are recorded as a component of equity in Accumulated Other Comprehensive Income (“AOCI”), including the effects of exchange rate changes on intercompany balances of a long-term investment nature. Foreign currency transaction gains and losses for transactions denominated in a currency other than the functional currency are reported in Other Non-Operating Expense, Net in the Consolidated Statements of Income in the period they occur. Exchange losses on foreign currency transactions were $ 5.1 million, $ 14.5 million, and $ 1.5 million for the years ended September 30, 2023, 2022 and 2021, respectively. Newly Adopted Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, which adds implementation guidance to clarify certain optional expedients in Topic 848. The adoptions did not have a material impact on the consolidated financial statements. In September 2022, the FASB issued ASU 2022-04, Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations to enhance transparency about the use of supplier finance programs. Under the ASU, an entity that provide for a supplier finance program in connection with the purchase of goods and services is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. The amendments in ASU 2022-04 are effective for all entities for fiscal years beginning after December 15, 2022, including interim periods within those financial years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. The Company has adopted the general disclosures of ASU 2022-04 in the current fiscal year and will adopt the rollforward disclosure in the next fiscal year. 76 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (continued) Recently Issued Accounting Standards In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This ASU requires that an acquirer recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606 “Revenue from Contracts with Customers” (Topic 606) as if it had originated the contracts. Generally, this would result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements if the acquiree prepared financial statements in accordance with US GAAP. This standard is effective for fiscal years beginning after December 15, 2023 including interim periods within the fiscal year. Early adoption is permitted. The standard is applied prospectively to business combinations occurring on or after the effective date of the amendments. The impact will be based on future business combinations after the Company adopts the standard. NOTE 3 – DIVESTITURES The following table summarizes the components of Income from Discontinued Operations, Net of Tax in the accompanying Consolidated Statement of Income for the years ended September 30, 2023, 2022, and 2021: (in millions) 2023 2022 2021 Income from discontinued operations before income taxes - HHI $ 136.9 $ 253.3 $ 288.2 Gain on sale of discontinued operations before income taxes – HHI 2,824.2 — — Loss from discontinued operations before income taxes - Other ( 2.4 ) ( 3.8 ) ( 7.3 ) Interest on corporate debt allocated to discontinued operations 49.4 46.4 44.5 Income from discontinued operations before income taxes 2,909.3 203.1 236.4 Income tax expense from discontinued operations 873.7 53.4 62.1 Income from discontinued operations, net of tax 2,035.6 149.7 174.3 Income (loss) from discontinued operations, net of tax attributable to noncontrolling interest 0.3 0.9 ( 0.2 ) Income from discontinued operations, net of tax attributable to controlling interest $ 2,035.3 $ 148.8 $ 174.5 Interest on corporate debt allocated to discontinued operations includes interest on Term Loans required to be paid down using proceeds received on disposal on sale of a business, and interest expense from corporate debt not directly attributable to or related to other operations based on the ratio of net assets of the disposal group held for sale to the consolidated net assets plus consolidated debt, excluding debt assumed in transaction, required to be repaid, or directly attributable to other operations of the Company. Corporate debt, including Term Loans, is not classified as held for sale as it is not directly attributable to the identified disposal groups. Hardware and Home Improvement ("HHI") On September 8, 2021, the Company entered into a definitive Asset and Stock Purchase Agreement (the "Purchase Agreement") with ASSA ABLOY AB ("ASSA") to sell its HHI segment for cash proceeds of $ 4.3 billion, subject to customary purchase price adjustments. On June 20, 2023, the Company completed the divestiture resulting in the recognition of a gain on sale of $ 2.8 billion included as a component of Income From Discontinued Operations, Net of Tax. The Company's assets and liabilities associated with the HHI disposal group prior to the transaction close were classified as held for sale and the respective operations were classified as discontinued operations and reported separately during the year ended September 30, 2023 through the transaction close. In accordance with the ASPA, ASSA purchased the equity of certain subsidiaries of the Company, and acquired certain assets and assumed 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. 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. Further, the Company and ASSA entered into related agreements ancillary to the acquisition that became effective upon the consummation of the acquisition, including a customary transition services agreement agreement. 77 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 – DIVESTITURES (continued) The following table summarizes the assets and liabilities of the HHI disposal group classified as held for sale as of September 30, 2022: (in millions) 2022 Assets Trade receivables, net $ 135.5 Other receivables 6.7 Inventories 327.1 Prepaid expenses and other current assets 33.1 Property, plant and equipment, net 166.6 Operating lease assets 63.6 Deferred charges and other 11.7 Goodwill 698.6 Intangible assets, net 373.8 Total assets of business held for sale $ 1,816.7 Liabilities Current portion of long-term debt $ 1.4 Accounts payable 224.7 Accrued wages and salaries 32.7 Other current liabilities 79.9 Long-term debt, net of current portion 54.6 Long-term operating lease liabilities 46.9 Deferred income taxes 10.1 Other long-term liabilities 13.4 Total liabilities of business held for sale $ 463.7 The following table summarizes the components of income from discontinued operations before income taxes associated with the HHI divestiture in the accompanying Consolidated Statements of Income for the years ended September 30, 2023, 2022 and 2021, through the date of disposal: (in millions) 2023 2022 2021 Net sales $ 1,042.5 $ 1,652.3 $ 1,615.8 Cost of goods sold 701.6 1,096.3 1,025.3 Gross profit 340.9 556.0 590.5 Operating expenses 199.4 298.0 293.1 Operating income 141.5 258.0 297.4 Interest expense 2.4 3.4 3.4 Other non-operating expense, net 2.2 1.3 5.8 Income from discontinued operations before income taxes $ 136.9 $ 253.3 $ 288.2 Beginning in September 2021, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with the HHI disposal group classified as held for sale. Interest expense consists of interest from debt directly attributable to HHI operations that primarily consist of interest from finance leases. No impairment loss was recognized on the asset held for sale as the purchase price of the business less estimated cost to sell is more than its carrying value. The following table presents significant non-cash items and capital expenditures of discontinued operations from the HHI divestiture for the years ended September 30, 2023, 2022 and 2021, through the date of disposal: (in millions) 2023 2022 2021 Depreciation and amortization $ — $ — $ 31.1 Share based compensation $ 1.5 $ 5.3 $ 0.8 Purchases of property, plant and equipment $ 11.9 $ 23.9 $ 22.8 78 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 – DIVESTITURES (continued) The Company and ASSA entered into customary transition services agreement ("TSA") that became effective upon the consummation of the transaction that supports various shared back office administrative functions, including finance, sales and marketing, information technology, human resources, real estate and supply chain, customer service and procurement; supporting both the transferred HHI operations and the continuing operations of the Company. Charges associated with TSAs are recognized as bundled service costs under a fixed fee structure by the respective service or function and also include one time pass-through charges including warehousing, freight, among others. TSA charges are settled periodically between the Company and ASSA on a net basis. Charges to ASSA are recognized as a reduction of the respective operating expense incurred and charges from ASSA are recognized as an operating expense depending upon the function supported by ASSA. The TSA has an overall expected time period of 12 months following the close of the transaction with variability in expiration dependent upon the completed transition of the respective service or function, and may provide up to 12 additional months for a total duration of up to 24 months. During the year ended September 30, 2023, the Company recognized income of $ 9.2 million associated with TSA charges. Additionally, the Company and ASSA will receive cash and make payments on behalf of the respective counterparty's operations as part of the shared administrative functions, resulting in cash flow being commingled with the operating cash flow of the Company. The Company recognizes a net payable or receivable with ASSA for any outstanding TSA charges and net working capital attributable to commingled cash flow. As of September 30, 2023, the Company has a net receivable of $ 4.0 million included in Other Receivables on the Company's Consolidated Statement of Financial Position consisting of amounts due from ASSA for cash flow settlement from commingled operations and net TSA charges including amounts subject to repayment by the Company. Further, the Company has recognized payables to ASSA related to indemnifications in accordance with the purchase agreement, primarily attributable to outstanding settlements with tax authorities, uncertain tax benefit obligations and our purchase price settlement. As of September 30, 2023, the Company recognized $ 27.3 million, included within Accounts Payable, and $ 2.6 million, included within Other Long-Term Liabilities, on the Company’s Consolidated Statements of Financial Position. Other 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. The Company and Energizer agreed to indemnify each other for losses arising from certain breaches of the acquisition agreement and for certain other matters. 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. 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. As of September 30, 2023 and 2022, the Company recognized $ 25.3 million and $ 22.3 million respectively, related to indemnification payables in accordance with the acquisition agreements, including $ 8.6 million and $ 7.0 million within Other Current Liabilities, respectively, and $ 16.7 million and $ 15.3 million, within Other Long-Term Liabilities, respectively, on the Company’s Consolidated Statements of Financial Position, primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits. NOTE 4 – ACQUISITIONS On February 18, 2022, the Company acquired all of the membership interests in HPC Brands, LLC, which consist of the home appliances and cookware business of Tristar Products, Inc. (the "Tristar Business") for a purchase price of $ 325.0 million, net of customary purchase price adjustments and transaction costs, plus a potential earn-out payment of up to $ 100.0 million if certain gross profit targets are achieved in calendar year 2022, and another earn-out payment of $ 25.0 million if certain other gross profit targets are achieved in calendar year 2023. The acquisition of the Tristar Business was funded by a combination of cash on hand and incremental borrowings incurred as a new tranche under the Company's existing credit agreement. See Note 12 - Debt for further detail on the amendment to the credit agreement. The Tristar Business includes a portfolio of home appliances and cookware products sold under the PowerXL®, Emeril Legasse®, and Copper Chef® brands. 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 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 had an expiration of December 31, 2023, with options for one-year renewal periods following the initial expiration through December 31, 2025. Under the terms of the agreement, we agreed to pay the license holder a percentage of sales, with minimum annual royalty payments of $ 1.6 million, that increase 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 Consolidated Statements of Income and reported within the HPC reporting segment for the year ended September 30, 2023. 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 excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of $ 111.1 million was recorded as goodwill, which is deductible for tax purposes. Goodwill includes value associated with profits earned from market and expansion capabilities including the success of new product launches through direct response television and direct to consumer channels, new brand development and products brought to market by the Company, synergies from integration and streamlining operational activities, the going concern of the business, and the value of the assembled workforce. The calculation of the purchase price is as follows: (in millions) Purchase Price Cash paid at closing $ 314.6 Cash received for purchase price settlement ( 42.2 ) Contingent consideration 30.0 Total purchase price $ 302.4 79 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 – ACQUISITIONS (continued) 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. After the acquisition date, the Company and the acquired Tristar Business experienced a downturn in operating results attributable to significant shifts in retail customer purchasing resulting from high retail inventory levels and lower replenishment orders, especially with significant mass retail customers, along with continued inflationary cost pressures and incremental margin risk from promotional spending. As a result, the Company has adjusted the forecasted results of the Tristar Business, which impacted the value of the contingent consideration and recognized a gain on remeasurement of contingent consideration of $ 1.5 million and $ 28.5 million, during the years ended September 30, 2023 and 2022, respectively. The following table summarizes the final fair value of assets acquired and liabilities assumed as of the date of acquisition: (in millions) Purchase Price Allocation Cash and cash equivalents $ 0.3 Trade receivables, net 45.7 Other receivables 0.4 Inventories 102.0 Prepaid expenses and other current assets 4.4 Property, plant and equipment, net 0.4 Operating lease assets 23.3 Goodwill 111.1 Intangible assets, net 95.0 Deferred charges and other 4.8 Accounts payable ( 52.5 ) Accrued wages and salaries ( 0.6 ) Other current liabilities ( 20.8 ) Long-term operating lease liabilities ( 11.1 ) Net assets acquired $ 302.4 The values allocated to intangible assets and the weighted average useful lives are as follows: (in millions) Carrying Amount Weighted Average Useful Life (Years) Tradename $ 66.0 Indefinite Customer relationships 29.0 13 years Total intangibles acquired $ 95.0 The Company performed a valuation of the acquired inventories, tradenames, and customer relationships. The fair value measurements are based on significant inputs not observable in the market, and therefore, represent Level 3 measurements. The following is a summary of significant inputs to the valuation: Inventory – Acquired inventory consists of branded finished goods that were valued based on the comparative sales method, which estimates the expected sales price of the finished goods inventory, reduced for all costs expected to be incurred in its completion or disposition and a profit on those costs. Tradename – The Company valued the PowerXL® tradename using an income approach, the relief-from-royalty method. Under this method, the asset value was determined by estimating the hypothetical royalties that would have to be paid if the tradenames were not owned. Royalty rate of 3 % for valuation of PowerXL® was selected based on consideration of several factors, including prior transactions, related trademarks and tradenames, other similar trademark licensing and transaction agreements and the relative profitability and perceived contribution of the tradenames. The discount rate applied to the projected cash flow was 16 % based on the implied transaction internal rate of return for the overall business, excluding cost synergies. The resulting discounted cash flows were then tax-effected at the applicable statutory rate. Customer relationships – The Company values customer relationships using the multi-period excess earnings method under a market participant distributor method of the income approach. In determining the fair value of the customer relationships, the multi-period excess earnings approach values the intangible asset at the present value of the incremental after-tax cash flows attributable only to the customer relationship after deducting contributory asset charges. Only expected sales from current retail customers were used, which are estimated using average annual expected growth rate of 2.7 %. The Company assumed a customer attrition rate of 5 %, which is supported by historical attrition rates. The discount rate applied to the projected cash flow was 12 % based upon a weighted average cost of capital for the overall business and income taxes were estimated at the applicable statutory rate. 80 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 – ACQUISITIONS (continued) During the year ended September 30, 2022, the Company has recognized $ 189.7 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: (in millions) 2022 2021 Proforma net sales $ 3,332.6 $ 3,588.1 Proforma net (loss) income from continuing operations ( 80.4 ) 51.4 Proforma net income 69.3 225.7 Proforma diluted earnings from continuing operations per share ( 1.96 ) 1.19 Proforma diluted earnings per share 1.69 5.22 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 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 year ended September 30, 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 Consolidated Statement of Income. NOTE 5 - RESTRUCTURING CHARGES During the year ended September 30, 2023, the Company entered into an initiative in response to the continuing pressures within the consumer products and retail markets and adjusted strategic initiatives within certain segments, resulting in the realization of headcount reductions. Total cumulative exit and disposal costs associated with the initiative were $ 7.4 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, 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 reductions. Total cumulative costs associated with the initiative were $ 10.2 million. Substantially all costs associated with the initiative have been recognized, with no further significant costs expected to be incurred. Additionally, during the year ended September 30, 2022, the Company initiated the exit of its in-country commercial operations in Russia, predominantly supporting the HPC segment, including costs for severance and other exit and disposal activity to close the operations. Total cumulative costs associated with the initiative were $ 1.4 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, 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. As of September 30, 2022, total cumulative costs associated with the initiative were $ 41.9 million, with the project being complete and no further costs to be incurred. During the year ended September 30, 2019, the Company initiated the Global Productivity Improvement Program, which was 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 in GBL and GAC during the year ended September 30, 2019, the project focus included 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 initiative included a 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 supplies, among others, resulting in recognition of severance benefits and other exit and disposal costs to facilitate such activity. As of September 30, 2022, total cumulative costs associated with the project were $ 157.3 million with the project being complete and no further costs 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). 81 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 - RESTRUCTURING CHARGES (continued) The following summarizes restructuring charges for the years ended September 30, 2023, 2022, and 2021: (in millions) 2023 2022 2021 Fiscal 2023 restructuring $ 7.4 $ — $ — Fiscal 2022 restructuring 0.4 9.8 — Russia dissolution 0.8 0.6 — GPC distribution center transition — 30.4 11.5 Global productivity improvement program — 5.1 21.2 Other project costs 1.3 13.9 7.6 Total restructuring and related charges $ 9.9 $ 59.8 $ 40.3 Reported as: Cost of goods sold $ 0.5 $ 1.2 $ 1.9 Selling expense — 30.4 11.5 General and administrative expense 9.4 28.2 26.9 The following summarizes restructuring charges by reportable segment for the years ended September 30, 2023, 2022, and 2021: (in millions) 2023 2022 2021 GPC $ 4.0 $ 37.9 $ 15.2 H&G 0.2 0.7 0.4 HPC 5.2 10.0 9.1 Corporate 0.5 11.2 15.6 Total restructuring charges $ 9.9 $ 59.8 $ 40.3 The following is a summary of restructuring charges by cost type for the years ended September 30, 2023, 2022, and 2021. (in millions) Termination Benefits Other Costs Total For the year ended September 30, 2023 $ 8.3 $ 1.6 $ 9.9 For the year ended September 30, 2022 12.0 47.8 59.8 For the year ended September 30, 2021 7.7 32.6 40.3 The following is a rollforward of the accrual for restructuring charges by cost type for the years ended September 30, 2023, 2022, and 2021, included in Other Current Liabilities on the Consolidated Statements of Financial Position. (in millions) Termination Benefits Other Costs Total Accrual balance at September 30, 2021 $ 4.6 $ 5.6 $ 10.2 Provisions 8.0 ( 4.3 ) 3.7 Cash expenditures ( 6.3 ) ( 0.7 ) ( 7.0 ) Non-cash items ( 2.6 ) ( 0.3 ) ( 2.9 ) Accrual balance at September 30, 2022 $ 3.7 $ 0.3 $ 4.0 Provisions 7.6 0.6 8.2 Cash expenditures ( 8.1 ) ( 0.3 ) ( 8.4 ) Non-cash items 0.2 ( 0.1 ) 0.1 Accrual balance at September 30, 2023 $ 3.4 $ 0.5 $ 3.9 82 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 6 - REVENUE RECOGNITION The Company generates all of its revenue from contracts with customers. The following tables disaggregate our revenue for the years ended September 30, 2023, 2022 and 2021 by the Company’s key revenue streams, segments and geographic regions (based upon destination): September 30, 2023 (in millions) GPC H&G HPC Total Product Sales NA $ 710.7 $ 527.1 $ 514.4 $ 1,752.2 EMEA 361.3 — 465.0 826.3 LATAM 18.0 7.3 181.5 206.8 APAC 33.3 — 73.3 106.6 Licensing 10.0 2.1 7.8 19.9 Other 5.7 — 1.3 7.0 Total Revenue $ 1,139.0 $ 536.5 $ 1,243.3 $ 2,918.8 September 30, 2022 (in millions) GPC H&G HPC Total Product Sales NA $ 749.8 $ 576.8 $ 609.7 $ 1,936.3 EMEA 353.6 — 460.7 814.3 LATAM 19.3 8.0 216.1 243.4 APAC 36.5 0.1 71.9 108.5 Licensing 9.9 2.2 10.3 22.4 Other 6.2 — 1.4 7.6 Total Revenue $ 1,175.3 $ 587.1 $ 1,370.1 $ 3,132.5 September 30, 2021 (in millions) GPC H&G HPC Total Product Sales NA $ 699.9 $ 598.6 $ 493.5 $ 1,792.0 EMEA 359.8 — 512.1 871.9 LATAM 15.8 7.0 170.6 193.4 APAC 38.9 — 72.7 111.6 Licensing 9.8 2.5 11.2 23.5 Other 5.7 — — 5.7 Total Revenue $ 1,129.9 $ 608.1 $ 1,260.1 $ 2,998.1 A significant portion of our product sales from our HPC segment, primarily in the NA and LATAM regions, are subject to the continued use and access of the Black+Decker® ("B&D") brand through a license agreement with Stanley Black & 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 $ 350.4 million, $ 417.3 million, and $ 400.2 million for the years ended September 30, 2023, 2022 and 2021, respectively. All other brands and tradenames used in the Company’s commercial operations are either directly owned and not subject to further restrictions, or do not aggregate to a significant portion of total product sales for the Company. The Company has a broad range of customers including many large mass retail customers. During the year ended September 30, 2023, 2022 and 2021, there were two large retail customers, each exceeding 10% of consolidated Net Sales and representing 33.9 %, 32.9 %, and 31.4 % of consolidated Net Sales, respectively. In the normal course of business, the Company may allow customers to return product or take credit for product returns per the provisions in a sale agreement. Estimated product returns are recorded as a reduction in reported revenues at the time of sale based upon historical product return experience, adjusted for known trends, to arrive at the amount of consideration expected to receive. The following is a rollforward of the liability for product returns for the years ended September 30, 2023, 2022 and 2021: (in millions) Beginning Balance Charged to Profit & Loss Deductions Other Adjustments Ending Balance September 30, 2023 $ 15.5 $ 8.7 $ ( 11.2 ) $ ( 0.2 ) $ 12.8 September 30, 2022 11.8 12.4 ( 19.8 ) 11.1 15.5 September 30, 2021 12.8 1.5 ( 2.9 ) 0.4 11.8 Other adjustments includes foreign currency translation and the liability for product returns assumed as part of the acquisition of the Tristar Business during the year ended September 30, 2022. See Note 4 - Acquisitions for further discussion on the Tristar Business acquisition. 83 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS The fair value measurements of the Company’s financial assets and liabilities are defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Fair value measurements are classified using a fair value hierarchy that is based on the observability of inputs used in measuring fair value. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed assumptions about hypothetical transactions in the absence of market data. The Company utilizes valuation techniques that attempt to maximize the use of observable inputs and minimize the use of unobservable inputs. Fair value measurements are classified under the following hierarchy: • Level 1 - Unadjusted quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 - Significant inputs to the valuation model are unobservable. The carrying values and estimated fair values for financial instruments as of September 30, 2023 and 2022 are as follows: September 30, 2023 September 30, 2022 (in millions) Level 1 Level 2 Level 3 Fair Value Carrying Amount Level 1 Level 2 Level 3 Fair Value Carrying Amount Derivative Assets $ — $ 3.3 $ — $ 3.3 $ 3.3 $ — $ 22.2 $ — $ 22.2 $ 22.2 Derivative Liabilities — 9.0 — 9.0 9.0 — 6.0 — 6.0 6.0 Debt — 1,418.6 — 1,418.6 1,555.5 — 2,815.9 — 2,815.9 3,156.8 The Company’s derivative instruments are valued on a recurring basis using internal models, which are based on market observable inputs, including both forward and spot prices for currencies and commodities, which are generally based on quoted or observed market prices (Level 2). The fair value of certain derivative financial instruments is estimated using pricing models based on contracts with similar terms and risks. Modeling techniques assume market correlation and volatility, such as using prices of one delivery point to calculate the price of the contract’s different delivery point. In addition, by applying a credit reserve which is calculated based on credit default swaps or published default probabilities for the actual and potential asset value, the fair value of the Company’s derivative financial instrument assets reflects the risk that the counterparties to these contracts may default on the obligations. Likewise, by assessing the requirements of a reserve for non-performance, which is calculated based on the probability of default by the Company, the Company adjusts its derivative contract liabilities to reflect the price at which a potential market participant would be willing to assume the Company’s liabilities. The Company has not changed the valuation techniques used in measuring the fair value of any financial assets and liabilities during the year. See Note 14 – Derivatives for additional detail. The fair value measurements of the Company’s debt represent non-active market exchange-traded securities which are valued at quoted input prices that are directly observable or indirectly observable through corroboration with observable market data (Level 2). See Note 12 – Debt for additional detail. The carrying values of goodwill, intangible assets and other long-lived assets are tested annually or more frequently if an event occurs that indicates an impairment loss may have been incurred, using fair value measurements with unobservable inputs (Level 3). See Note 4 – Acquisitions and Note 11 - Goodwill and Intangible Assets for additional detail. The carrying values of cash and cash equivalents, short term investments, receivables, accounts payable and short term debt approximate fair value based on the short-term nature of these assets and liabilities. 84 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 8 - RECEIVABLES The allowance for doubtful accounts as of September 30, 2023 and 2022 was $ 7.7 million and $ 7.3 million, respectively. The following is a rollforward of the allowance for doubtful accounts for the years ended September 30, 2023, 2022 and 2021: (in millions) Beginning Balance Charged to Profit & Loss Deductions Other Adjustments Ending Balance September 30, 2023 $ 7.3 $ 5.0 $ ( 1.4 ) $ ( 3.2 ) $ 7.7 September 30, 2022 6.7 4.2 ( 4.9 ) 1.3 7.3 September 30, 2021 5.3 1.9 ( 0.4 ) ( 0.1 ) 6.7 Other adjustments includes foreign currency translation and the allowance for doubtful accounts assumed as part of the acquisition of the Tristar Business during the year ended September 30, 2022. See Note 4 - Acquisitions for further discussion on the Tristar Business acquisition. The Company has a broad range of customers including many large retail outlet chains, some of which exceed 10% of consolidated Net Trade Receivables. As of September 30, 2023, there were two customers that exceeded 10% of the Company's consolidated Net Trade Receivables representing 39.8 % of the Company’s Trade Receivables. As of September 30, 2022, there were two customers that exceeded 10% of the Company's consolidated Net Trade Receivables representing 21.9 % of the Company’s Trade Receivables. We have entered into various factoring agreements and early pay programs with our customers to sell our trade receivables under non-recourse agreements in exchange for cash proceeds and is an integral part of our financing for working capital. These transactions are treated as a sale and accounted for as a reduction in trade receivables because the agreements transfer effective control and risk related to the receivables to the buyers. A loss on sale is recognized for any discount and fees associated with the transfer, recognized as General and Administrative Expense on the Company's Consolidated Statements of Income, with cash proceeds recognized as cash flow from operating activities on the Company's Statements of Cash Flows. In some instances, we may continue to service the transferred receivable after the factoring has occurred, but in most cases we do not service any factored accounts. Any servicing of the trade receivable does not constitute significant continuing involvement or preclude the recognition of a sale and we do not carry any material servicing assets or liabilities on the Company's Consolidated Statements of Financial Position. The cost of factoring such trade receivables was $ 15.1 million, $ 10.2 million, and $ 3.5 million for the years ended September 30, 2023, 2022, and 2021, respectively. NOTE 9 - INVENTORY Inventories as of September 30, 2023 and 2022 consist of the following: (in millions) 2023 2022 Raw materials $ 55.8 $ 72.3 Work-in-process 6.2 10.5 Finished goods 400.8 697.8 Inventories $ 462.8 $ 780.6 During the year ended September 30, 2023, the Company and HPC recognized an incremental inventory loss of $ 20.6 million for the disposal of select product SKUs and models associated with the acquired brands from the Tristar Business acquisition after assessing, among other things, performance and quality standards and the business risks associated with the continued support and distribution of such products. HPC management has suspended any further sale of the selected products as part of a shift in its strategy of distribution and development of products within its brand portfolio and avoid deterioration and further reduction in the value of acquired brands and supported products. NOTE 10 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of September 30, 2023 and 2022 consist of the following: (in millions) 2023 2022 Land, buildings and improvements $ 83.4 $ 75.7 Machinery, tooling and equipment 330.1 312.4 Computer software 136.2 81.7 Finance leases 136.9 139.8 Construction in progress 18.1 54.7 Property, plant and equipment $ 704.7 $ 664.3 Accumulated depreciation ( 429.6 ) ( 400.5 ) Property, plant and equipment, net $ 275.1 $ 263.8 Depreciation expense from property, plant and equipment for the years ended September 30, 2023, 2022 and 2021 was $ 48.9 million, $ 49.0 million, and $ 51.9 million, respectively. During the year ended September 30, 2023, the Company completed the sale of two facilities in its EMEA region, primarily consisting of office space supporting the GPC segment, with total proceeds of $ 5.2 million and resulting in a gain on sale of $ 2.7 million, included as General and Administrative Expense on the Consolidated Statements of Income for the year ended September 30, 2023. During the year ended September 30, 2023, the Company recognized a $ 3.9 million impairment charge on idle equipment associated with the early exit of a GPC warehouse lease, included as Selling Expense on the Consolidated Statements of Income for the year ended September 30, 2023. 85 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 11 - GOODWILL AND INTANGIBLES Goodwill, by segment, consists of the following: (in millions) GPC H&G HPC Total As of September 30, 2021 $ 524.6 $ 342.6 $ — $ 867.2 Tristar Business acquisition (Note 4) — — 108.1 108.1 Foreign currency impact ( 22.2 ) — — ( 22.2 ) As of September 30, 2022 $ 502.4 $ 342.6 $ 108.1 $ 953.1 Impairment — — ( 111.1 ) ( 111.1 ) Tristar Business acquisition adjustment (Note 4) — — 3.0 3.0 Foreign currency impact 9.7 — — 9.7 As of September 30, 2023 $ 512.1 $ 342.6 $ — $ 854.7 During the year ended September 30, 2023, the Company recognized an impairment of the HPC goodwill that was attributable to a declining trend in operating performance results, challenging retail environment with increased competition, lower distribution, and excess retail inventory levels impacting pricing and promotional spending, resulting in a reduction in actual and projected sales and margin realization within its current and forecasted cash flows and a full impairment of the identified goodwill for the HPC reporting unit and segment. The carrying value of indefinite lived intangible and definite lived intangible assets subject to amortization and accumulated amortization are as follows: 2023 2022 (in millions) Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Amortizable intangible assets Customer relationships $ 635.0 $ ( 412.9 ) $ 222.1 $ 627.8 $ ( 373.9 ) $ 253.9 Technology assets 75.3 ( 35.9 ) 39.4 75.3 ( 30.8 ) 44.5 Tradenames 27.6 ( 7.4 ) 20.2 10.6 ( 5.1 ) 5.5 Total amortizable intangible assets 737.9 ( 456.2 ) 281.7 713.7 ( 409.8 ) 303.9 Indefinite-lived intangible assets - tradenames 778.4 — 778.4 898.3 — 898.3 Total intangible assets $ 1,516.3 $ ( 456.2 ) $ 1,060.1 $ 1,612.0 $ ( 409.8 ) $ 1,202.2 During the year ended September 30, 2023, the Company and H&G segment recognized an impairment loss of $ 56.0 million associated with the Rejuvenate® tradename attributable to a significant shift in consumer purchasing activity and retail inventory management efforts with certain retail customers within the year that make up a significant concentration of revenue for the brand and further reducing the anticipated near-term sales for the brand, a shift in the projected timing and realization of long-term projected revenues and changes in strategic distribution opportunities, as well as a change in the amount and timing of product innovations being introduced to customers. During the year ended September 30, 2023, the Company and HPC segment recognized an impairment loss of $ 45.0 million associated with the PowerXL® tradename driven by the reduction in the sales from a decrease in distribution with retail customers, significant pricing adjustments and required incremental promotional spending activity resulting in a substantial shift in actual and projected future revenues for the brand as well as a decrease in realized sales due to the continuation of retail inventory reduction efforts, lowered consumer demand, increased competition, and adverse macro-economic factors. Additionally, during the year ended September 30, 2023, the Company and HPC segment recognized an impairment loss of $ 19.7 million associated with the George Foreman® tradename due to shifts in market demand for related product categories as well as a change in the Company's brand portfolio strategy and projected utilization of the tradename going forward. As a result of the change in the Company's strategy and utilization of the George Foreman® tradename, the Company has converted the George Foreman® tradename from an indefinite-lived tradename to a definite-lived tradename. Amortization expense from intangible assets for the years ended September 30, 2023, 2022 and 2021 was $ 42.3 million, $ 50.3 million and $ 65.1 million, respectively. Excluding the impact of any future acquisitions or changes in foreign currency, the Company anticipates the annual amortization expense of intangible assets for the next five fiscal years will be as follows: (in millions) Amortization 2024 $ 43.2 2025 41.1 2026 39.5 2027 39.5 2028 37.8 86 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 - DEBT Debt as of September 30, 2023 and 2022 consists of the following: 2023 2022 (in millions) Amount Rate Amount Rate Spectrum Brands, Inc. Revolver Facility, variable rate, expiring June 30, 2025 $ — — % $ 740.0 5.7 % Term Loan Facility, variable rate, due March 3, 2028 — — % 394.0 5.2 % 5.75 % Notes, due July 15, 2025 — — % 450.0 5.8 % 4.00 % Notes, due October 1, 2026 448.8 4.0 % 417.1 4.0 % 5.00 % Notes, due October 1, 2029 297.2 5.0 % 300.0 5.0 % 5.50 % Notes, due July 15, 2030 288.5 5.5 % 300.0 5.5 % 3.875 % Notes, due March 15, 2031 453.0 3.9 % 500.0 3.9 % Obligations under finance leases 86.4 5.3 % 92.7 5.1 % Total Spectrum Brands, Inc. debt 1,573.9 3,193.8 Unamortized discount on debt — ( 0.8 ) Debt issuance costs ( 18.4 ) ( 36.2 ) Less current portion ( 8.6 ) ( 12.3 ) Long-term debt, net of current portion $ 1,546.9 $ 3,144.5 The Company’s aggregate scheduled maturities of debt obligations are as follows, excluding obligations under capital leases. See Note 13 - Leases for scheduled maturities of obligations under capital leases: (in millions) Amount 2024 $ — 2025 — 2026 — 2027 448.8 2028 — Thereafter 1,038.7 Total long-term debt $ 1,487.5 Revolver Facility On June 30, 2020, SBI entered into the Amended and Restated Credit Agreement ("Credit Agreement"), which refinances the previously existing credit facility, and includes certain modified terms from the previously existing revolving credit facility. The maturity date was extended to June 30, 2025, and the facility was reduced from $ 890.0 million to $ 600.0 million (with a U.S. dollar tranche and a multicurrency tranche) (the "Initial Revolving Credit Facility Tranche"). The interest rate margins applicable to the facility were changed and a London Inter-Bank Offered Rate ("LIBOR") floor of 0.75 % was installed. The Credit Agreement, solely with respect to the Revolver Facility, contains a financial covenant test on the last day of each fiscal quarter on the maximum total leverage ratio. This is calculated as the ratio of (i) the principal amount of third-party debt for borrowed money (including unreimbursed letter of credit drawings), capital leases and purchase money debt, at period-end, less cash and cash equivalents, to (ii) adjusted EBITDA for the trailing twelve months. The maximum total leverage ratio should be no greater than 6.0 to 1.0. On November 17, 2022, the Company entered into the fourth amendment to the Credit Agreement to temporarily increase the maximum consolidated total net leverage ratio permitted to be no greater than 7.0 to 1.0 before returning to 6.0 to 1.0 at the earliest of (i) September 29, 2023, or (ii) 10 business days after the closing of the HHI divestiture or receipt of the related termination fee. The waiver expired 10 business days after the close of the HHI divestiture and the maximum permitted consolidated total net leverage returned to 6.0 to 1.0. As of September 30, 2023, we were in compliance with all covenants under the Credit Agreement. The Company incurred $ 2.3 million in connection with the fourth amendment and recognized as interest expense for the year ended September 30, 2023. Pursuant to a guarantee agreement, SB/RH and the material wholly-owned domestic subsidiaries of SBI have guaranteed SBI’s obligations under the Credit Agreement and related loan documents. Pursuant to a security agreement, SBI and such subsidiary guarantors have pledged substantially all of their respective assets to secure such obligations and, in addition, SB/RH has pledged the capital stock of SBI to secure such obligations. The Credit Agreement also provides for customary events of default including payment defaults and cross-defaults to other material indebtedness. On December 10, 2021, the Company entered into the second amendment to the Credit Agreement. 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 Average ("SONIA") replaced the LIBOR as a reference rate for Revolving Loans and Letters of Credit denominated in Pounds Sterling and Euro Interbank Offered Rate ("EURIBOR") replaced LIBOR as a reference rate for Revolving Loans and Letters of Credit denominated in Euro. 87 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 - DEBT (continued) On February 3, 2022, the Company entered into a third amendment to the Credit Agreement. The third amendment provides for incremental capacity on the Revolver Facility of $ 500 million (the "Incremental Revolving Credit Facility Tranche") that was used to support the acquisition of the Tristar Business and the continuing operations and existing working capital requirements of the Company. See Note 4 - Acquisitions for further discussion on the Tristar Business acquisition. Borrowings under the incremental capacity were subject to the same terms and conditions as the existing Revolver Facility, with a maturity date of June 30, 2025, other than a difference in borrowing rate which were subject to SOFR plus margin ranging from 1.75 % to 2.75 %, or base rate plus margin ranging from 0.75 % to 1.75 % per annum, with an increase by 25 basis points 270 days after the effective date of the third amendment and an additional 25 basis points on each 90 day anniversary of such date. The SOFR was subject to a 0.50 % floor. The Company incurred $ 7.6 million in connection with the third amendment, which have been capitalized as debt issuance costs and were amortized over the remaining term of the Credit Agreement. On June 20, 2023, following the close of the HHI divestiture, the Company repaid $ 470.0 million of revolving loans that were drawn under the Initial Revolving Credit Facility Tranche, which constituted the repayment of all outstanding revolving loans under such tranche and repayment of $ 245.0 million of revolving loans that were drawn under the Incremental Revolving Credit Facility Tranche, which constituted the repayment of all outstanding revolving loans under such tranche. The Company terminated all revolving loan commitments under the Incremental Revolving Credit Facility Tranche while the revolving loan commitments under the Initial Revolving Credit Facility Tranche were not terminated. The Company recognized $ 4.5 million for the year ended September 30, 2023 from the write-down of deferred financing costs associated with the termination of the Incremental Revolving Credit Facility Tranche, recognized as Interest Expense on the Company's Consolidated Statements of Income. Further, on June 20, 2023, the Company entered into the fifth amendment to the Credit Agreement to transition from LIBOR to SOFR borrowing rates used on borrowings from the Revolver Facility. As a result, as of September 30, 2023, borrowings from the Revolver Facility are subject to adjusted SOFR plus margin ranging from 1.75 % to 2.75 % per annum, or base rate plus margin ranging from 0.75 % to 1.75 % per annum. The SOFR borrowings are subject to a 0.1 % adjustment rate and a 0.75 % SOFR floor. As a result of borrowings and payments under the Revolver Facility, as of September 30, 2023, the Company had borrowing availability of $ 586.9 million, net of outstanding letters of credit of $ 13.1 million. On October 19, 2023, SBI and SB/RH entered into the Second Amended and Restated Credit Agreement (the “Subsequent Credit Agreement”), by and among the Company, SB/RH Holdings, Royal Bank of Canada, as the administrative agent, and the lenders party thereto from time to time. The proceeds of the Subsequent Credit Agreement will be used for working capital needs and other general corporate purposes. The Subsequent Credit Agreement refinanced the Company’s previous Credit Agreement and includes certain modified terms from the the previous Credit Agreement, including extending the maturity to October 19, 2028, and the Revolver Facility was reduced to $ 500.0 million (with a U.S. dollar tranche and a multicurrency tranche). The Subsequent Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on SBI and its restricted subsidiaries' ability to incur indebtedness, create liens, make investments, pay dividends or make certain other distributions, and merge or consolidate or sell assets, in each case subject to certain expectations set forth in the Subsequent Credit Agreement.. The aggregate commitment amount with respect to (a) the U.S. dollar tranche of the Revolving Facility is $ 400 million and (b) the multi-currency tranche of the Revolving Facility is $ 100 million. The commitment fee rate will be equal to 0.20 % of the unused commitments under the Revolving Facility (which may be increased to a maximum rate equal to 0.40 % based on certain total net leverage ratios specified in the Credit Agreement). All outstanding amounts under the U.S. dollar tranche (if funded in U.S. dollars) will bear interest, at the option of the Company, at a rate per annum equal to (x) SOFR, plus a margin ranging between 1.00 % to 2.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement) or (y) the Alternate Base Rate (as defined in the Credit Agreement), plus a margin ranging between 0.00 % to 1.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement). The multi-currency tranche (if funded in Euros) will bear interest at a rate per annum equal to the EURIBOR Rate, plus a margin ranging between 1.00 % to 2.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement). The multi-currency tranche (if funded in Canadian dollars) will bear interest, at the option of the Company, at a rate per annum equal to (x) CORRA (Canadian Overnight Repo Rate Average), plus a margin ranging between 1.00 % to 2.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement) or (y) the Canadian Prime Rate, plus a margin ranging between 0.00 % to 1.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement). The multi-currency tranche (if funded in Pounds Sterling) will bear interest at a rate per annum equal to the SONIA, plus a margin ranging between 1.00 % to 2.00 % per annum (based on certain total net leverage ratios specified in the Credit Agreement). As of the closing date of the Subsequent Credit Agreement, the borrowing availability of the Revolver Facility is $ 486.9 million, net of outstanding letters of credit of $ 13.1 million. Term Loan Facility On March 3, 2021, SBI entered into the first amendment (the "Amended Credit Agreement") to the Credit Agreement. The Amended Credit Agreement included certain modified terms from the existing Credit Agreement to provide for a new term loan facility (the “Term Loan Facility”). The Term Loan Facility was in an aggregate principal amount of $ 400.0 million and with a maturity date of March 3, 2028. The Term Loan Facility was subject to a rate per annum equal to either (1) the LIBOR, subject to a 0.50 % floor, adjusted for statutory reserves, plus a margin of 2.00 % per annum or (2) the Alternate Base Rate (as defined in the Amended Credit Agreement), plus a margin of 1.00 % per annum. The Term Loan Facility was issued net of a $ 1.0 million discount and the Company incurred $ 5.1 million of debt issuance costs, which was being amortized with a corresponding charge to interest expense over the remaining life of the loan. Pursuant to a guarantee agreement, SB/RH and the direct and indirect wholly-owned material domestic subsidiaries of SBI had guaranteed SBI’s obligations under the Amended Credit Agreement and related loan documents. Pursuant to the Security Agreement, dated as of June 23, 2015, SBI and such subsidiary guarantors had pledged substantially all of their respective assets to secure such obligations and, in addition, SB/RH had pledged the capital stock of SBI to secure such obligations. 88 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 - DEBT (continued) Subject to certain mandatory prepayment events, the Term Loan Facility is subject to repayment according to scheduled amortizations, with the final payment of amount outstanding, plus accrued and unpaid interest, due at maturity. The Amended Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on SBI and its restricted subsidiaries’ ability to incur indebtedness, create liens, make investments, pay dividends or make certain other distributions, and merge or consolidate or sell assets, in each case subject to certain exceptions set forth in the Amended Credit Agreement. On June 20, 2023, following the close of the HHI divestiture, the Company repaid the $ 392.0 million outstanding amount of term loans, which constituted the repayment of all outstanding term loans under the Credit Agreement and the Term Loan Facility was terminated. The Company recognized $ 4.1 million for the year ended September 30, 2023 from the write-down of deferred financing costs and original issuance discount associated with the extinguishment of the Term Loan Facility, recognized as Interest Expense on the Company's Consolidated Statements of Income Spectrum 5.75 % Notes On May 20, 2015, SBI issued $ 1,000 million aggregate principal amount of 5.75 % Notes at par value, due July 15, 2025 (the “ 5.75 % Notes”). The 5.75 % Notes are guaranteed by SB/RH as well as by SBI’s existing and future domestic subsidiaries. SBI may redeem all or a part of the 5.75 % Notes, at any time on or after July 15, 2020, at specified redemption prices. In addition, prior to July 15, 2020, SBI may redeem the notes at a redemption price equal to 100 % of the principal amount plus a “make-whole” premium. SBI is also entitled to redeem up to 35 % of the aggregate principal amount of the notes before July 15, 2018 with an amount of cash equal to the net proceeds that SBI raises in equity offerings at specified redemption prices. Further, the indenture governing the 5.75 % Notes (the “2025 Indenture”) requires SBI to make an offer, in cash, to repurchase all or a portion of the applicable outstanding notes for a specified redemption price, including a redemption premium, upon the occurrence of a change of control of SBI, as defined in the 2025 Indenture. The 2025 Indenture contained customary covenants that limit, among other things, the incurrence of additional indebtedness, payment of dividends on or redemption or repurchase of equity interests, the making of certain investments, expansion into unrelated businesses, creation of liens on assets, merger or consolidation with another company, transfer or sale of all or substantially all assets, and transactions with affiliates. In addition, the 2025 Indenture provided for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or on acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency. Events of default under the 2025 Indenture arising from certain events of bankruptcy or insolvency will automatically cause the acceleration of the amounts due under the 5.75 % Notes. If any other event of default under the 2025 Indenture occurs and is continuing, the trustee for the 2025 Indenture or the registered holders of at least 25 % in the then aggregate outstanding principal amount of the 5.75 % Notes, may declare the acceleration of the amounts due under those notes. The Company recorded $ 19.7 million of fees in connection with the offering of the 5.75 % Notes, which had been capitalized as debt issuance costs and were being amortized over the remaining life of the 5.75 % Notes. During the year ended September 30, 2021, using the proceeds received from the Term Loan Facility and 3.875 % Notes, the Company redeemed $ 550.0 million aggregate principal amount of the 5.75 % Notes in a cash tender offer, with a make whole premium of $ 17.7 million and a write-off of unamortized debt issuance costs of $ 5.7 million recognized as Interest Expense on the Company's Consolidated Statements of Income. During the year ended September 30, 2023, following the close of the HHI divestiture, the Company redeemed the remaining $ 450.0 million aggregate principal amount of 5.75 % Senior Notes due 2025 then outstanding in full, at the redemption price, calculated in accordance with the indenture governing the 5.75 %.Notes, plus accrued and unpaid interest, with a write down of unamortized debt issuance costs of $ 2.2 million, recognized as Interest Expense on the Company's Consolidated Statements of Income. Spectrum 4.00 % Notes On September 20, 2016, SBI issued € 425 million aggregate principal amount of 4.00 % Notes at par value, due October 1, 2026. The 4.00 % Notes are guaranteed by SB/RH as well as by SBI’s existing and future domestic subsidiaries. SBI may redeem all or a part of the 4.00 % Notes, at any time on or after October 1, 2021 at specified redemption prices. In addition, prior to October 1, 2021, SBI may redeem the notes at a redemption price equal to 100 % of the principal amounts plus a “make-whole” premium. SBI is also entitled to redeem up to 35 % of the aggregate principal amount of the notes before October 1, 2019 with an amount of cash equal to the net proceeds that SBI raises in equity offerings at specified redemption prices. Further, the indenture governing the 4.00 % Notes (the “2026 Indenture”) requires SBI to make an offer, in cash, to repurchase all or a portion of the applicable outstanding notes for a specified redemption price, including a redemption premium, upon the occurrence of a change of control of SBI, as defined in the 2026 Indenture. The 2026 Indenture contains customary covenants that limit, among other things, the incurrence of additional indebtedness, payment of dividends on or redemption or repurchase of equity interests, the making of certain investments, expansion into unrelated businesses, creation of liens on assets, merger or consolidation with another company, transfer or sale of all or substantially all assets, and transactions with affiliates. In addition, the 2026 Indenture provides for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or on acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency. Events of default under the 2026 Indenture arising from certain events of bankruptcy or insolvency will automatically cause the acceleration of the amounts due under the 4.00 % Notes. If any other event of default under the 2026 Indenture occurs and is continuing, the trustee for the 2026 Indenture or the registered holders of at least 25 % in the then aggregate outstanding principal amount of the 4.00 % Notes, may declare the acceleration of the amounts due under those notes. As of September 30, 2023, we were in compliance with all covenants under the indentures governing the 4.00 % Notes. The Company recorded $ 7.7 million of fees in connection with the offering of the 4.00 % Notes, which have been capitalized as debt issuance costs and are being amortized over the remaining life of the 4.00 % Notes. 89 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 - DEBT (continued) Spectrum 5.00 % Notes On September 24, 2019, SBI issued $ 300.0 million aggregate principal amount of 5.00 % Senior Notes due October 1, 2029. The 5.00 % Notes are guaranteed by SB/RH as well as by SBI’s existing and future domestic subsidiaries. On or after October 1, 2024, SBI may redeem some or all of the Notes at certain fixed redemption prices. In addition, prior to October 1, 2024, SBI may redeem the Notes at a redemption price equal to 100 % of the principal amount plus a “make-whole” premium. SBI may redeem up to 35 % of the Notes, including additional notes, with an amount of cash equal to the net proceeds of equity offerings at specified redemption prices. Further, the indenture governing the 5.00 % Notes (the “2029 Indenture”) requires SBI to make an offer, in cash, to repurchase all or a portion of the applicable outstanding notes for a specified redemption price, including a redemption premium, upon the occurrence of a change of control of SBI, as defined in the 2029 Indenture. The 2029 Indenture contains covenants that limit, among other things, the incurrence of additional indebtedness, payment of dividends on or redemption or repurchase of equity interests, the making of certain investments, expansion into unrelated businesses, creation of liens on assets, merger or consolidation with another company, transfer or sale of all or substantially all assets, and transactions with affiliates. In addition, the 2029 Indenture proves for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or on acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency. Events of default under the 2029 Indenture arising from certain events of bankruptcy or insolvency will automatically cause the acceleration of the amounts due under the 5.00 % Notes. If any other event of default under the 2029 Indenture occurs and is continuing, the trustee for the 2029 Indenture or the registered holders of at least 25 % in the then aggregate outstanding principal amount of the 5.00 % Notes, may declare the acceleration of the amounts due under those notes. As of September 30, 2023, we were in compliance with all covenants under the indentures governing the 5.00 % Notes. The Company recorded $ 4.1 million of fees in connection with the offering of the 5.00 % Notes, which have been capitalized as debt issuance costs and are being amortized over the remaining life of the 5.00 % Notes. Spectrum 5.50 % Notes On June 30, 2020, SBI issued $ 300.0 million aggregate principal amount of 5.50 % Senior Notes due 2030 (the " 5.50 % Notes") and entered into the indenture governing the 5.50 % Notes (the “2030 Indenture”). The 5.50 % Notes mature on July 15, 2030 and are unconditionally guaranteed, on a senior unsecured basis, by SB/RH and by SBI’s existing and future domestic subsidiaries that guarantee indebtedness under the Credit Agreement . The proceeds from the 5.50 % Notes were used for repayment of the Revolver Facility obligation. SBI may redeem all or part of the 5.50 % Notes at any time on or after July 15, 2025 at certain fixed redemption prices as set forth in the 2030 Indenture. In addition, prior to July 15, 2025, SBI may redeem the Notes at a redemption price equal to 100 % of the principal amount plus a “make-whole” premium, plus accrued and unpaid interest. Before July 15, 2023, the Company may redeem up to 35 % of the aggregate principal notes with cash equal to the net proceeds that SBI raises in equity offerings at specified redemption price as set forth in the 2030 Indenture. Further, the 2030 Indenture requires SBI to make an offer to repurchase all outstanding 5.50 % Notes upon the occurrence of a change of control of SBI, as defined in the 2030 Indenture. The 2030 Indenture contains covenants limiting, among other things, the incurrence of additional indebtedness, payments of dividends on or redemption or repurchase of equity interests, the making of certain investments, expansion into unrelated businesses, creation of liens on assets, merger or consolidation with another company, transfer or sale of all or substantially all assets, and transactions with affiliates. In addition, the 2030 Indenture provides for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or an acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency. The Company recorded $ 6.2 million of fees in connection with the offering of the 5.50 % Notes, which have been capitalized as debt issuance costs and amortized over the remaining life of the 5.50 % Notes. 3.875 % Notes On March 3, 2021, SBI issued $ 500.0 million aggregate principal amount of 3.875 % Senior Notes due 2031 (the " 3.875 % Notes") and entered into the indenture governing the 3.875 % Notes (the “2031 Indenture”). The 3.875 % Notes mature on March 15, 2031 and are unconditionally guaranteed, on a senior unsecured basis, by SB/RH and by SBI’s existing and future domestic subsidiaries that guarantee indebtedness under the Amended Credit Agreement. SBI may redeem all or part of the 3.875 % Notes at any time on or after March 15, 2026 at certain fixed redemption prices as set forth in the 2031 Indenture. In addition, prior to March 15, 2026, SBI may redeem the Notes at a redemption price equal to 100 % of the principal amount plus a “make-whole” premium, plus accrued and unpaid interest. Before March 15, 2024, the Company may redeem up to 35 % of the aggregate principal notes with cash equal to the net proceeds that SBI raises in equity offerings at specified redemption price as set forth in the 2031 Indenture. Further, the 2031 Indenture requires SBI to make an offer to repurchase all outstanding 3.875 % Notes upon the occurrence of a change of control of SBI, as defined in the 2031 Indenture. The 2031 Indenture contains covenants limiting, among other things, the ability of the Company and its direct and indirect restricted subsidiaries to incur additional indebtedness, create liens, engage in sale-leaseback transactions, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, make investments or certain other restricted payments, sell assets, issue or sell stock of restricted subsidiaries, enter in transactions with affiliates, or effect a merger or consolidation. In addition, the 2031 Indenture provides for customary events of default, including failure to make required payments, failure to comply with certain agreements or covenants, failure to make payments when due or an acceleration of certain other indebtedness, and certain events of bankruptcy and insolvency. The Company recorded $ 7.6 million of fees in connection with the offering of the 3.875 % Notes, which have been capitalized as debt issuance costs and are being amortized over the remaining life of the 3.875 % Notes. 90 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 - DEBT (continued) Debt Repurchase During the year ended September 30, 2023, the Company initiated a process of repurchasing Senior Notes available for sale on the open market, at a discount, which are ultimately retired upon receipt. The repurchase of the Company's debt obligations are treated as an extinguishment, with any realized discount recognized as a gain on debt repurchase on the Company's Consolidated Statements of Income, net any write-off of related deferred financing costs. For the year ended September 30, 2023, the Company repurchased $ 61.4 million of outstanding Senior Notes, consisting of $ 2.8 million of the 5.00 % Senior Notes due October 1, 2029, $ 11.5 million of the 5.50 % Senior Notes due July 15, 2030, and $ 47.1 million of the 3.875 % Senior Notes, due March 15, 2031. As a result of repurchasing outstanding debt notes during the year ended September 30, 2023, there was a gain of $ 7.9 million related to realized gain on the settlement of the obligations recorded, net write-off from associated deferred issuance costs. NOTE 13 - LEASES The Company has leases primarily pertaining to manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery, computers, and office equipment that expire at various times through June 2035. We have embedded operating leases within certain third-party logistic agreements for certain warehousing and information technology services arrangements and recognized right of use assets identified in the arrangements as part of Operating Lease Assets on the Company’s Consolidated Statement of Financial Position. We elected to exclude certain supply chain contracts that contain embedded leases for manufacturing facilities or dedicated manufacturing lines from our ROU asset and liability calculation based on the insignificant impact to our consolidated financial statements. The following is a summary of the Company’s leases recognized on the Company’s Consolidated Statement of Financial Position as of September 30, 2023 and 2022: (in millions) Line Item 2023 2022 Assets Operating Operating lease assets $ 110.8 $ 82.5 Finance Property, plant and equipment, net 66.2 73.4 Total leased assets $ 177.0 $ 155.9 Liabilities Current Operating Other current liabilities $ 26.9 $ 25.8 Finance Current portion of long-term debt 8.6 8.3 Long-term Operating Long-term operating lease liabilities 95.6 56.0 Finance Long-term debt, net of current portion 77.8 84.4 Total lease liabilities $ 208.9 $ 174.5 As of September 30, 2023, the Company had an additional $ 19.4 million in commitments related to an operating lease executed that has not yet commenced. The lease is expected to commence during fiscal 2024. The Company records its operating lease and amortization of finance lease ROU assets within Cost of Goods Sold or Operating Expenses in the Consolidated Statement of Income depending on the nature and use of the underlying asset. The Company records its finance interest cost within interest expense in the Consolidated Statement of Income. During the year ended September 30, 2023, the Company recognized a $ 5.2 million impairment charge on a right of use operating lease asset for a GPC warehouse having a maturity date of December 2029, due to the exit of the GPC operations from the facility and the intention to sub-lease to a third-party, included as Selling Expense on the Consolidated Statements of Income for the year ended September 30, 2023. The partial impairment was measured using projected discounted cash flow for the facility, including an assumed sub-lease tenant, yet to be identified, at rental rates that are comparable to current market conditions. The components of lease costs recognized in the Consolidated Statement of Income for the year ended September 30, 2023, 2022, and 2021 are as follows: (in millions) 2023 2022 2021 Operating lease cost $ 37.0 $ 26.3 $ 19.8 Finance lease cost Amortization of leased assets 10.2 10.5 11.3 Interest on lease liability 4.8 5.2 5.3 Variable lease cost 12.4 10.8 9.8 Total lease cost $ 64.4 $ 52.8 $ 46.2 During the year ended September 30, 2023, 2022, and 2021 the Company recognized income attributable to leases and sub-leases of $ 2.4 million, $ 2.7 million, and $ 2.3 million, respectively. Income from leases and sub-leases is recognized as Other Non-Operating Income on the Consolidated Statement of Income. 91 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 13 - LEASES (continued) The following is a summary of the Company’s cash paid for amounts included in the measurement of lease liabilities recognized in the Consolidated Statement of Cash Flow, including supplemental non-cash activity related to operating leases, for the year ended September 30, 2023, 2022, and 2021: (in millions) 2023 2022 2021 Operating cash flow from operating leases $ 30.3 $ 25.3 $ 20.7 Operating cash flows from finance leases 4.8 5.1 5.4 Financing cash flows from finance leases 9.5 8.9 12.0 Supplemental non-cash flow disclosure Acquisition of operating lease asset through lease obligations 66.9 30.4 15.3 The following is a summary of weighted-average lease term and discount rate at September 30, 2023 and 2022: 2023 2022 Weighted average remaining lease term Operating leases 4.6 years 4.5 years Finance leases 8.7 years 9.7 years Weighted average discount rate Operating leases 5.5 % 3.8 % Finance leases 5.3 % 5.1 % At September 30, 2023, future lease payments under operating and finance leases were as follows: (in millions) Finance Leases Operating Leases 2024 $ 12.6 $ 33.3 2025 12.7 30.5 2026 12.3 26.4 2027 12.3 23.3 2028 12.2 19.3 Thereafter 46.3 7.6 Total lease payments 108.4 140.4 Amount representing interest ( 22.0 ) ( 17.9 ) Total minimum lease payments $ 86.4 $ 122.5 NOTE 14 - DERIVATIVES Derivative financial instruments are used by the Company principally in the management of its foreign currency exchange rate exposures. The Company does not hold or issue derivative financial instruments for trading purposes. Cash Flow Hedges The Company periodically enters into forward foreign exchange contracts to hedge a portion of the risk from forecasted foreign currency denominated third-party and intercompany sales or payments. These obligations generally require the Company to exchange foreign currencies for Australian Dollars, Canadian Dollars, Euros, Japanese Yen, Mexican Peso, Pound Sterling or U.S. Dollars. These foreign exchange contracts are cash flow hedges of fluctuating foreign exchange related to sales of products or raw material purchases. Until the sale or purchase is recognized, the fair value of the related hedge is recorded in AOCI and as a derivative hedge asset or liability, as applicable. At the time the sale or purchase is recognized, the fair value of the related hedge is reclassified as an adjustment to Net Sales or purchase price variance in Cost of Goods Sold on the Consolidated Statements of Income. At September 30, 2023, the Company had a series of foreign exchange derivative contracts outstanding through June 2025. The derivative net loss estimated to be reclassified from AOCI into earnings over the next 12 months is $ 5.0 million, net of tax. At September 30, 2023 and 2022, the Company had foreign exchange derivative contracts designated as cash flow hedges with a notional value of $ 320.2 million and $ 289.5 million, respectively. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the effective portion of the derivative is reported as a component of AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The following table summarizes the impact of the effective and ineffective portions of designated hedges and the gain or loss recognized in the Consolidated Statement of Income for the years ended September 30, 2023, 2022 and 2021: Gain (Loss) in OCI Reclassified to Continuing Operations (in millions) 2023 2022 2021 Line Item 2023 2022 2021 Foreign exchange contracts $ 0.3 $ 0.2 $ 0.1 Net sales $ 0.2 $ 0.1 $ 0.1 Foreign exchange contracts ( 34.8 ) 30.9 ( 2.0 ) Cost of goods sold ( 12.4 ) 20.1 ( 9.3 ) Total $ ( 34.5 ) $ 31.1 $ ( 1.9 ) $ ( 12.2 ) $ 20.2 $ ( 9.2 ) 92 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 14 - DERIVATIVES (continued) Derivative Contracts Not Designated As Hedges for Accounting Purposes The Company periodically enters into forward and swap foreign exchange contracts to economically hedge a portion of the risk from third-party and intercompany payments resulting from existing obligations. These obligations generally require the Company to exchange foreign currencies for, among others, Canadian Dollars, Euros, Japanese Yen, Mexican Peso, Colombian Peso, Hungarian Forint, Pound Sterling, or U.S. Dollars. These foreign exchange contracts are fair value hedges of a related liability or asset recorded in the accompanying Consolidated Statements of Financial Position. The gain or loss on the derivative hedge contracts is recorded in earnings as an offset to the change in value of the related liability or asset at each period end. At September 30, 2023, the Company had a series of forward exchange contracts outstanding through February 2024. At September 30, 2023 and 2022, the Company had $ 671.5 million and $ 513.7 million, respectively, of notional value for such foreign exchange derivative contracts outstanding. The following table summarizes the gain or loss associated with derivative contracts not designated as hedges in the Consolidated Statements of Income for the years ended September 30, 2023, 2022 and 2021. (in millions) Line Item 2023 2022 2021 Foreign exchange contracts Other non-operating expense (income) $ ( 14.3 ) $ 25.6 $ ( 3.2 ) Fair Value of Derivative Instruments The fair value of the Company’s outstanding derivative instruments in the Consolidated Statements of Financial Position are as follows: (in millions) Line Item 2023 2022 Derivative Assets Foreign exchange contracts - designated as hedge Other receivables $ 1.4 $ 14.4 Foreign exchange contracts - designated as hedge Deferred charges and other 0.1 0.4 Foreign exchange contracts - not designated as hedge Other receivables 1.8 7.4 Total Derivative Assets $ 3.3 $ 22.2 Derivative Liabilities Foreign exchange contracts - designated as hedge Accounts payable $ 8.1 $ — Foreign exchange contracts - designated as hedge Other long term liabilities — 1.0 Foreign exchange contracts - not designated as hedge Accounts payable 0.9 5.0 Total Derivative Liabilities $ 9.0 $ 6.0 The Company is exposed to the risk of default by the counterparties with which it transacts and generally does not require collateral or other security to support financial instruments subject to credit risk. The Company monitors counterparty credit risk on an individual basis by periodically assessing each counterparty’s credit rating exposure. 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 for the years ended September 30, 2023 and 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 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 September 30, 2023, and 2022, there was no cash collateral outstanding and had 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. 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 September 30, 2023 and September 30, 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 year ended September 30, 2023, 2022 and 2021, pre-tax: Gain (Loss) in OCI (in millions) 2023 2022 2021 Net investment hedge $ ( 31.7 ) $ 75.8 $ 6.2 Net gains or losses from the net investment hedge are reclassified from AOCI into earnings upon a liquidation event or deconsolidation of Euro denominated subsidiaries. 93 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 15 - EMPLOYEE BENEFIT PLANS Defined Benefit Plans The Company has various defined benefit pension plans covering some of its employees. Plans generally provide benefits of stated amounts for each year of service. The Company funds its pension plans in accordance with the requirements of the defined benefit pension plans and, where applicable, in amounts sufficient to satisfy the minimum funding requirements of applicable laws. Additionally, in compliance with the Company’s funding policy, annual contributions to defined benefit plans are equal to the actuarial recommendations or statutory requirements in the respective countries. The Company sponsors or participates in a number of other non-U.S. pension arrangements, including various retirement and termination benefit plans, some of which are covered by local law or coordinated with government-sponsored plans, which are not significant in the aggregate. The following tables provide additional information on the pension plans as of September 30, 2023 and 2022: U.S. Plans Non U.S. Plans (in millions) 2023 2022 2023 2022 Changes in benefit obligation: Benefit obligation, beginning of year $ 53.5 $ 71.4 $ 101.1 $ 176.1 Service cost 0.6 0.5 0.8 1.2 Interest cost 2.8 1.9 4.6 2.1 Actuarial gain ( 1.7 ) ( 16.1 ) ( 4.5 ) ( 45.7 ) Benefits paid ( 4.3 ) ( 4.2 ) ( 4.2 ) ( 4.4 ) Foreign currency exchange rate changes — — 8.7 ( 28.2 ) Benefit obligation, end of year 50.9 53.5 106.5 101.1 Changes in plan assets: Fair value of plan assets, beginning of year 50.3 69.6 93.1 147.4 Actual return on plan assets 2.9 ( 15.2 ) ( 1.1 ) ( 30.1 ) Employer contributions 0.1 0.1 6.8 4.8 Benefits paid ( 4.3 ) ( 4.2 ) ( 4.2 ) ( 4.4 ) Foreign currency exchange rate changes — — 8.1 ( 24.6 ) Fair value of plan assets, end of year 49.0 50.3 102.7 93.1 Funded Status $ ( 1.9 ) $ ( 3.2 ) $ ( 3.8 ) $ ( 8.0 ) Amounts recognized in statement of financial position Deferred charges and other $ — $ — $ 9.6 $ 4.6 Other accrued expenses 0.1 0.1 — — Other long-term liabilities 1.8 3.1 13.4 12.6 Accumulated other comprehensive loss 9.4 10.9 23.8 21.8 Weighted average assumptions Discount rate 5.72 % 5.37 % 4.00 - 5.20 % 3.70 - 5.20 % Rate of compensation increase N/A N/A 2.75 % 2.75 % The following table summarizes the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for defined benefit plans with projected benefit obligations in excess of plan assets: U.S. Plans Non U.S. Plan (in millions) 2023 2022 2023 2022 Projected benefit obligation $ 50.9 $ 53.5 $ 57.0 $ 51.8 Accumulated benefit obligation 50.9 53.5 57.0 49.0 Fair value of plan assets 49.0 50.3 43.5 39.2 94 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 15 - EMPLOYEE BENEFIT PLANS (continued) The following table contains the components of net periodic benefit cost from defined benefit plans for the years ended September 30, 2023, 2022 and 2021: U.S. Plans Non U.S. Plans (in millions) 2023 2022 2021 2023 2022 2021 Service cost $ 0.6 $ 0.5 $ 0.5 $ 0.8 $ 1.2 $ 1.5 Interest cost 2.8 1.9 1.8 4.6 2.1 2.1 Expected return on assets ( 3.1 ) ( 3.2 ) ( 3.7 ) ( 3.9 ) ( 4.0 ) ( 4.0 ) Recognized net actuarial loss — 0.8 1.4 0.8 2.8 3.4 Net periodic benefit cost $ 0.3 $ — $ — $ 2.3 $ 2.1 $ 3.0 Weighted average assumptions Discount rate 5.37 % 2.70 % 2.46 % 3.70 - 5.20 % 1.00 - 2.00 % 0.70 - 1.75 % Expected return on plan assets 5.25 % 5.00 % 6.00 % 2.54 - 5.58 % 0.99 - 4.06 % 0.70 - 3.40 % Rate of compensation increase N/A N/A N/A 2.75 % 2.50 % 2.25 % The discount rate is used to calculate the projected benefit obligation. The discount rate used is based on the rate of return on government bonds as well as current market conditions of the respective countries where the plans are established. The expected return on plan assets is based on the Company’s expectation of the long-term average rate of return of the capital market in which the plans invest. The expected return reflects the target asset allocations and considers the historical returns earned for each asset category. The components of net periodic benefit cost other than the service cost component are recognized as Other Non-Operating (Income) Expense, Net on the Statement of Income. The Company established formal investment policies for the assets associated with these plans. Policy objectives include maximizing long-term return at acceptable risk levels, diversifying among asset classes, if appropriate, and among investment managers, as well as establishing relevant risk parameters within each asset class. Specific asset class targets are based on the results of periodic asset/liability studies. The investment policies permit variances from the targets within certain parameters. The plan assets currently do not include holdings of the Company’s common stock. Below is a summary allocation of defined benefit plan assets as of September 30, 2023 and 2022: U.S. Plans Non U.S. Plans Asset Type 2023 2022 2023 2022 Equity Securities 30 % 31 % — % — % Fixed Income Securities 70 % 69 % 49 % 42 % Other — % — % 51 % 58 % Total 100 % 100 % 100 % 100 % The fair value of defined benefit plan assets by asset category as of September 30, 2023 and 2022 are as follows: September 30, 2023 September 30, 2022 (in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash & cash equivalents $ 0.3 $ — $ — $ 0.3 $ 0.2 $ — $ — $ 0.2 Equity 4.6 5.7 — 10.3 4.9 6.1 — 11.0 Fixed income securities 24.2 7.8 — 32.0 25.1 8.1 — 33.2 Foreign equity 4.5 — — 4.5 4.4 — — 4.4 Foreign fixed income securities — 50.8 — 50.8 — 39.4 — 39.4 Life insurance contracts — 40.7 — 40.7 — 36.7 — 36.7 Annuity policy — — 10.4 10.4 — — 10.6 10.6 Other — 2.7 — 2.7 — 7.9 — 7.9 Total plan assets $ 33.6 $ 107.7 $ 10.4 $ 151.7 $ 34.6 $ 98.2 $ 10.6 $ 143.4 Level 3 assets consistent of a purchased group annuity using plan assets and escrow funds withheld as part of the acquisition of Armitage during the year ended September 30, 2021, to cover the projected benefit obligation assumed in the purchase. The transaction represents an annuity buy-in, in accordance with United Kingdom ("UK") pension regulations, where the assets of the plan were invested in a bulk-purchase annuity policy with an insurance company, under which the Company retains both the fair value of the annuity contract and the pension benefit obligations related to this plan. Following the buy-in, individual policies will replace the bulk annuity policy in a buy-out transaction, which is expected to be completed in a subsequent period, where the Company would de-recognize the assets and liabilities of the pension plan and realize a settlement gain or loss as a component of the net periodic pension cost. As of September 30, 2023, the fair value of the annuity contract is based on the calculated pension benefit obligation covered. 95 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 15 - EMPLOYEE BENEFIT PLANS (continued) The following benefit payments are expected to be paid: (in millions) U.S. Plans Non U.S. Plans 2024 $ 4.9 $ 4.4 2025 4.2 4.7 2026 4.2 5.0 2027 4.2 5.7 2028 4.2 5.9 2029 - 2033 19.9 30.8 Defined Contribution Plans The Company sponsored defined contribution plans in which eligible participants may defer a fixed amount or a percentage of their eligible compensation, subject to limitations, pursuant to Section 401(k) of the Internal Revenue Code. The Company made discretionary matching contributions of eligible compensation. The Company also sponsors defined contribution plans for eligible employees of certain foreign subsidiaries. Contributions are discretionary and evaluated annually. Aggregate contributions charged to operations, including discretionary amounts, for the years ended September 30, 2023, 2022 and 2021, were $ 7.5 million, $ 7.4 million, and $ 6.0 million, respectively. NOTE 16 - INCOME TAXES Income tax expense (benefit) was calculated based upon the following components of income (loss) from continuing operations before income taxes for the years ended September 30, 2023, 2022 and 2021: SBH SB/RH (in millions) 2023 2022 2021 2023 2022 2021 United States $ ( 399.8 ) $ ( 263.0 ) $ ( 147.2 ) $ ( 391.0 ) $ ( 260.6 ) $ ( 143.8 ) Outside the United States 109.6 172.7 136.1 109.6 172.7 136.1 Loss from continuing operations before income taxes $ ( 290.2 ) $ ( 90.3 ) $ ( 11.1 ) $ ( 281.4 ) $ ( 87.9 ) $ ( 7.7 ) The components of income tax expense (benefit) for the years ended September 30, 2023, 2022 and 2021 are as follows: SBH SB/RH (in millions) 2023 2022 2021 2023 2022 2021 Current tax expense: U.S. Federal $ 81.8 $ 7.7 $ 3.0 $ 81.8 $ 7.7 $ 3.0 Foreign 44.9 24.7 32.6 44.9 24.7 32.6 State and local ( 0.4 ) ( 1.1 ) 2.4 ( 0.4 ) ( 1.1 ) 2.4 Total current tax expense 126.3 31.3 38.0 126.3 31.3 38.0 Deferred tax (benefit) expense: U.S. Federal ( 197.7 ) ( 26.5 ) ( 64.8 ) ( 196.3 ) ( 25.8 ) ( 63.4 ) Foreign 5.0 ( 1.2 ) 5.9 5.0 ( 1.2 ) 5.9 State and local 9.9 ( 16.9 ) ( 5.5 ) 9.9 ( 17.2 ) ( 5.5 ) Total deferred tax benefit ( 182.8 ) ( 44.6 ) ( 64.4 ) ( 181.4 ) ( 44.2 ) ( 63.0 ) Income tax benefit $ ( 56.5 ) $ ( 13.3 ) $ ( 26.4 ) $ ( 55.1 ) $ ( 12.9 ) $ ( 25.0 ) 96 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 16 - INCOME TAXES (continued) The following reconciles the total income tax expense, based on the U.S. Federal statutory income tax rate of 21 % with the Company’s recognized income tax expense: SBH SB/RH (in millions) 2023 2022 2021 2023 2022 2021 U.S. Statutory federal income tax benefit $ ( 60.9 ) $ ( 19.0 ) $ ( 2.3 ) $ ( 59.1 ) $ ( 18.5 ) $ ( 1.6 ) Permanent items 5.0 ( 1.7 ) 13.9 5.0 ( 1.7 ) 13.9 Goodwill impairment 2.8 — — 2.8 — — Foreign statutory rate vs. U.S. statutory rate ( 1.6 ) ( 4.7 ) ( 6.2 ) ( 1.6 ) ( 4.7 ) ( 6.2 ) State income taxes, net of federal effect ( 14.5 ) ( 8.3 ) ( 8.7 ) ( 14.5 ) ( 8.6 ) ( 8.7 ) State effective rate change ( 4.0 ) 1.2 2.6 ( 4.0 ) 1.2 2.6 UK effective rate change — — 8.2 — — 8.2 GILTI 2.1 16.5 4.9 2.1 16.5 4.9 GILTI impact of retroactive law changes — ( 3.2 ) ( 18.1 ) — ( 3.2 ) ( 18.1 ) Residual tax on foreign earnings 1.5 4.8 2.6 1.5 4.8 2.6 Change in valuation allowance 0.2 3.6 ( 27.1 ) 0.2 4.3 ( 27.1 ) Unrecognized tax expense 3.8 2.2 0.2 3.8 2.2 0.2 Share based compensation adjustments 0.3 ( 5.6 ) ( 0.7 ) 0.4 ( 5.3 ) 0.1 Research and development tax credits ( 1.8 ) ( 1.9 ) ( 2.4 ) ( 1.8 ) ( 1.9 ) ( 2.4 ) Partnership outside basis adjustment 7.0 1.2 5.5 7.0 1.2 5.5 Return to provision adjustments and other, net 3.6 1.6 1.2 3.1 0.8 1.1 Income tax benefit $ ( 56.5 ) $ ( 13.3 ) $ ( 26.4 ) $ ( 55.1 ) $ ( 12.9 ) $ ( 25.0 ) The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of September 30, 2023 and 2022 are as follows: SBH SB/RH (in millions) 2023 2022 2023 2022 Deferred tax assets Employee benefits $ 22.9 $ 25.9 $ 21.6 $ 25.9 Inventories and receivables 31.9 42.0 31.9 42.0 Marketing and promotional accruals 5.3 16.0 5.3 16.0 Property, plant and equipment 2.8 0.9 2.8 0.9 Unrealized losses 30.5 31.9 30.5 31.9 Intangibles 9.3 11.1 9.3 11.1 Operating lease liabilities 27.6 23.0 27.6 23.0 Net operating loss and other carry forwards 331.6 577.4 227.9 255.6 Other 17.0 29.4 16.5 27.5 Total deferred tax assets 478.9 757.6 373.4 433.9 Deferred tax liabilities Property, plant and equipment 7.9 18.1 7.9 18.1 Unrealized gains 11.1 24.4 11.1 24.4 Intangibles 167.2 303.3 167.2 303.3 Operating lease assets 24.6 22.4 24.6 22.4 Investment in partnership 80.3 73.7 80.1 73.4 Taxes on unremitted foreign earnings 1.2 2.0 1.2 2.0 Other 13.0 12.0 13.0 12.0 Total deferred tax liabilities 305.3 455.9 305.1 455.6 Net deferred tax liabilities 173.6 301.7 68.3 ( 21.7 ) Valuation allowance ( 333.4 ) ( 337.4 ) ( 229.6 ) ( 233.7 ) Net deferred tax liabilities, net valuation allowance $ ( 159.8 ) $ ( 35.7 ) $ ( 161.3 ) $ ( 255.4 ) Reported as: Deferred charges and other $ 15.0 $ 24.4 $ 15.0 $ 23.9 Deferred taxes (noncurrent liability) 174.8 60.1 176.3 279.3 97 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 16 - INCOME TAXES (continued) During Fiscal 2022, the Company became aware of ongoing legal challenges to the validity of the IRC Section 245A temporary regulations (“June 2019 Regulations”) adopted by the Treasury Department in June of 2019. During the year ended September 30, 2022, the Company filed a protective amended U.S. income tax return consistent with the June 2019 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 for the year ended September 30, 2022. Should the June 2019 Regulations ultimately be found invalid, the Company estimates that, as of September 30, 2023, it would recognize a tax benefit of approximately $ 57.0 million. On November 20, 2020, the U.S. Treasury and the Internal Revenue Service issued Final Regulations (“November 2020 Regulations”) under Internal Revenue Code Sections 245A and 951A related to the treatment of previously disqualified basis under the GILTI regime. The November 2020 Regulations are effective for Fiscal 2022, but the Company can elect to apply them to Fiscal 2018 through Fiscal 2021. The Company has satisfied the requirements necessary to apply the Regulations retroactively and had therefore estimated and recorded a benefit of $ 11.4 million for the impact on years prior to Fiscal 2021 in the year ended September 30, 2021, with a benefit of $ 5.8 million recorded in the fourth quarter ended September 30, 2021 due to the HHI sale. The Company applied the Regulations to Fiscal 2021 and has included the impact in Fiscal 2021 income tax expense. The Company completed and filed the amended return implementing these November 2020 Regulations during Fiscal 2022 and recorded an additional $ 3.2 million tax benefit in the year ended September 30, 2022 for years prior to Fiscal 2020. On July 20, 2020, Final Regulations were issued under Internal Revenue Code Section 951A relating to the treatment of income that is subject to a high rate of tax under the global intangible low taxed income (“GILTI“) regime (“July 2020 Regulations“). The July 2020 Regulations are effective for Fiscal 2021, but the Company can elect to apply them to Fiscal 2019 and Fiscal 2020. The sale of the HHI segment allowed use of tax benefits for years prior to Fiscal 2020 that would have been subject to federal and state tax limitations on the use of carryforwards absent the HHI sale. The Company implemented the July 2020 Regulations for Fiscal 2019 by filing an amended return. Therefore, a benefit of $ 6.7 million was recorded for the year ended September 30, 2021. The Tax Reform Act of December 22, 2017, included a tax on deemed repatriated accumulated earnings of foreign subsidiaries. The Company’s mandatory repatriation tax is payable over 8 years. The first payment was due January 2019. As of September 30, 2023, $ 15.0 million of the mandatory repatriation liability is still outstanding and $ 3.9 million is due and payable in the next 12 months. To the extent necessary, the Company intends to utilize free cash flow from foreign subsidiaries in order to support management's plans to voluntarily accelerate pay down of U.S. debt, fund distributions to shareholders, fund U.S. acquisitions and satisfy ongoing U.S. operational cash flow requirements. The Company annually estimates the available earnings, permanent reinvestment classification and the availability of and management’s intent to use alternative mechanisms for repatriation for each jurisdiction in which the Company does business. Accordingly, the Company is providing residual U.S. and foreign deferred taxes on these earnings to the extent they cannot be repatriated in a tax-free manner. As of September 30, 2023, and 2022, the Company provided $ 1.2 million and $ 2.0 million, respectively, of residual foreign taxes on undistributed foreign earnings. As a result of the June 2019 Regulations and the deemed mandatory repatriation, the Company does not have significant prior year untaxed, undistributed earnings from its foreign operations at September 30, 2023. There were $ 500.6 million of the Company’s undistributed earnings taxed in the U.S. as a result of the mandatory deemed repatriation that was part of the Tax Reform Act, and the remaining earnings were taxed as a result of the June 2019 Regulations. The Company recorded GILTI inclusions for the tax year ended September 30, 2023 of $ 10.1 million. The Company estimates it generated untaxed, undistributed foreign earnings due to high-tax exceptions to GILTI inclusions under the Tax Reform Act for the year ended September 30, 2023 of $ 41.9 million and has cumulative untaxed, undistributed foreign earnings due to high-tax exceptions as of September 30, 2023 of $ 138.9 million. As of September 30, 2023, the Company has U.S. federal net operating carryforwards (“NOLs”) of $ 640.9 million with a federal tax benefit of $ 134.6 million and tax benefits related to state NOLs and capital loss carryforwards of $ 41.4 million. These NOLs expire through years ending in 2042. As of September 30, 2023, the Company has foreign NOLs of $ 346.8 million and tax benefits of $ 85.1 million, which will expire beginning in the Company's fiscal year ending September 30, 2025. During the fiscal year ending September 30, 2021, the Company recorded $ 324.2 million of additional foreign net operating losses due to a tax-deductible impairment in Luxembourg of subsidiary stock but recorded a full valuation allowance on the tax benefits of those losses since they are expected to expire unused. Certain of the foreign NOLs have indefinite carryforward periods. A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability of the Company to generate sufficient taxable income of the appropriate character in the future and in the appropriate taxing jurisdictions. The Company has had multiple changes of ownership, as defined under Section 382 of the Internal Revenue Code of 1986, as amended, that subject the Company’s U.S. federal and state NOLs and other tax attributes to certain limitations. The annual limitation is based on a number of factors including the value of the Company’s stock (as defined for tax purposes) on the date of the ownership change, its net unrealized gain position on that date, the occurrence of realized gains in years subsequent to the ownership change and the effects of subsequent ownership changes (as defined for tax purposes), if any. Due to these limitations, the Company estimates, as of September 30, 2023, that $ 640.9 million of the total U.S. federal NOLs with a federal tax benefit of $ 134.6 million and $ 15.1 million of the tax benefit related to state NOLs will expire unused even if the Company generates sufficient income to otherwise use all of its NOLs. The Company also projects, as of September 30, 2023, that $ 83.6 million of tax benefits related to foreign NOLs will not be used. The Company has provided a full valuation allowance against these deferred tax assets. The gain from the sale of the HHI segment allowed the Company to use certain deferred tax assets including federal net operating losses subject to certain limits, state net operating losses previously expected to expire unused, and state research and development credits also previously expected to expire unused; therefore, the Company released $ 29.2 million of valuation allowance on these deferred tax assets in Fiscal 2021. 98 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 16 - INCOME TAXES (continued) As of September 30, 2023, the valuation allowance is $ 333.4 million, of which $ 244.7 million is related to U.S. net deferred tax assets and $ 88.7 million is related to foreign net deferred tax assets. As of September 30, 2022, the valuation allowance was $ 337.4 million, of which $ 257.5 million was related to U.S. net deferred tax assets and $ 79.9 million is related to foreign net deferred tax assets. As of September 30, 2021, the valuation allowance was $ 349.4 million, of which $ 253.0 million is related to U.S. net deferred tax assets and $ 96.4 million is related to foreign net deferred tax assets. During the year ended September 30, 2023, the Company decreased its valuation allowance for deferred tax assets by $ 4.0 million of which $ 12.8 million is related to a decrease in valuation allowance against U.S. net deferred tax assets and $ 8.8 million related to an increase in the valuation allowance against foreign net deferred tax assets. During the year ended September 30, 2022, the Company decreased its valuation allowance for deferred tax assets by $ 12.0 million, of which $ 4.5 million was related to an increase in valuation allowance against U.S. net deferred tax assets and $ 16.5 million related to a decrease in the valuation allowance against foreign net deferred tax assets. As of September 30, 2023, the Company has recorded $ 40.5 million of valuation allowance against its U.S. state net operating losses. The total amount of unrecognized tax benefits at September 30, 2023 and 2022 are $ 121.1 million and $ 100.9 million, respectively. If recognized in the future, $ 98.6 million of the unrecognized tax benefits as of September 30, 2023 will impact the effective tax rate. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2023, and 2022 the Company had $ 1.7 million and $ 1.4 million of accrued interest and penalties related to uncertain tax positions. The impact on income tax expense related to interests and penalties for the year ended September 30, 2023 and 2022 was a net increase of $ 0.3 million and a net decrease of $ 0.1 million, respectively. There was no impact on income tax expense related to interest and penalties for the years ended September 30, 2021. The following table summarizes the changes to the amount of unrecognized tax benefits for the years ended September 30, 2023, 2022 and 2021: (in millions) 2023 2022 2021 Unrecognized tax benefits, beginning of year $ 100.9 $ 18.0 $ 13.8 Gross increase – tax positions in prior period 21.5 84.4 4.1 Gross decrease – tax positions in prior period ( 34.4 ) ( 2.9 ) ( 0.2 ) Gross increase – tax positions in current period 33.4 1.7 1.2 Settlements — — ( 0.2 ) Lapse of statutes of limitations ( 0.3 ) ( 0.3 ) ( 0.7 ) Unrecognized tax benefits, end of year $ 121.1 $ 100.9 $ 18.0 The $ 84.4 million increase for unrecognized tax positions relating to prior periods during the year ended September 30, 2022 includes $ 67.3 million related to the protective amended U.S. tax return filed consistent with the June 2019 Regulations being invalid. For the year ended September 30, 2023, the Company recorded a decrease to the June 2019 Regulations position of $ 33.0 million, which is included in the $ 34.4 million decrease for unrecognized tax positions relating to prior periods during the year ended September 30, 2023, and represents the impact of Fiscal 2023 activity on the position. The Company also recorded $ 27.3 million during the year ended September 30, 2023 for uncertain tax positions related to the state tax on the sale of HHI. The September 30, 2023 Consolidated Statement of Financial Position for SB/RH Holdings, LLC contains $ 77.8 million of income taxes receivable from its parent company, calculated as if SB/RH Holdings, LLC were a separate taxpayer. The Company files income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions and is subject to ongoing examination by the various taxing authorities. The Company’s major taxing jurisdictions are the U.S., United Kingdom and Germany. In the U.S., federal tax filings for years prior to and including the Company’s fiscal year ended September 30, 2017 are closed. However, the federal NOLs from the Company’s fiscal years ended September 30, 2012 through December 31, 2015 are subject to Internal Revenue Service examination until the year that such net operating loss carryforwards are utilized, and those years are closed for audit. In addition, certain losses from 2002 to 2010 of entities acquired by the Company were able to be used in Fiscal 2019 and are subject to Internal Revenue Service examination until Fiscal 2019 is closed to audit. Filings in various U.S. state and local jurisdictions are also subject to audit and to date no significant audit matters have arisen. As of September 30, 2023, certain of the Company’s legal entities are undergoing income tax audits. The Company cannot predict the ultimate outcome of the examinations; however, it is reasonably possible that during the next twelve months some portion of previously unrecognized tax benefits could be recognized. 99 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 17 - SHAREHOLDER'S EQUITY SBH has a share repurchase program that is executed through purchases made from time to time either in the open market or otherwise. On May 4, 2021, the Board of Directors approved a $ 1 billion common stock repurchase program. The authorization is effective for 36 months. On June 17, 2023, the Company’s Board of Directors approved the termination of the Company’s existing share repurchase program and the authorization of a new share repurchase program for up to $ 1.0 billion of Common Stock (the “Maximum Amount”). The new share repurchase program went into effect on June 17, 2023 until the earlier of the Maximum Amount being repurchased thereunder or the suspension, termination or replacement of the program by the Company’s Board of Directors. As part of the share repurchase programs, SBH purchased treasury shares in open market purchases at market fair value in private purchases from employees or significant shareholders at fair value and through an accelerated share repurchase (“ASR”) agreement with a third-party financial institution. The following summarizes the activity of common stock repurchases under the program for the years ended September 30, 2023, 2022 and 2021, excluding the recognition of a 1% excise tax on annual net share repurchases (effective during the year ended September 30, 2023), recognized as a component of Treasury Stock on the Company's Consolidated Statement of Financial Position: 2023 2022 2021 (in millions except per share data) Number of Shares Repurchased Average Price Per Share Amount Number of Shares Repurchased Average Price Per Share Amount Number of Shares Repurchased Average Price Per Share Amount Open Market Purchases 0.4 $ 81.60 $ 34.7 1.4 $ 97.34 $ 134.0 0.9 $ 93.13 $ 80.3 Private Purchases — — — — — — 0.7 66.63 45.5 ASR 5.3 74.86 400.0 — — — — — — Total Purchases 5.7 75.36 $ 434.7 1.4 97.34 $ 134.0 1.6 81.43 $ 125.8 On June 20, 2023, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution to repurchase an aggregate of $ 500 million of the Company’s common stock, par value $ 0.01 per share. The Company funded the share repurchases under the ASR Agreement, which are being made pursuant to the Company’s new $ 1.0 billion share repurchase program, with cash on-hand following the closing of the sale of the Company’s HHI segment. Pursuant to the agreement, the Company paid $ 500.0 million to the financial institution at inception of the agreement and took delivery of 5.3 million shares, which represented 80 % of the total shares the company expected to receive based on the market price at the time of the initial delivery. The transaction was accounted for as an equity transaction. The fair value of the initial shares received of $ 400.0 million were recorded as a treasury stock transaction, with the remainder of $ 100.0 million recorded as a reduction to additional paid-in capital. Upon initial receipt of the shares, there was an immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share. Upon settlement of the ASR agreement, the financial institution may deliver additional shares, or the Company may deliver shares, with the final number of shares delivered determined with reference to the volume weighted average price per share of our common stock over the term of the agreement, less a negotiated discount. The Company received notification from the financial institution that they have completed the accelerated stock buyback effective November 16, 2023 which will result in a final settlement of 1.3 million shares to be transferred on November 21, 2023. 100 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 18 - SHARE BASED COMPENSATION Equity based incentive and performance compensation awards provided to employees, directors, officers and consultants, including the restricted stock units and stock options further discussed below, were issued pursuant to the Spectrum Brands Holdings, Inc. 2011 Omnibus Equity Awards Plan as approved and amended by the Spectrum Legacy stockholders, and the Spectrum Brands Holdings, Inc. 2020 Omnibus Equity Plan, as approved by the Spectrum stockholders. The following is a summary of the authorized and available shares per the respective plans: (number of shares, in millions) Authorized Available Spectrum Brands Holdings, Inc. 2011 Omnibus Equity Awards Plan 7.1 0.2 Spectrum Brands Holdings, Inc. 2020 Omnibus Equity Plan 2.6 2.1 During the year ended September 30, 2023, the Company amended and restated its 2020 Omnibus Equity Plan to increase the maximum number of shares of common stock available for issuance. The amendment to the 2020 Omnibus Equity Plan authorized the issuance of up to an additional 1.4 million shares of common stock of Spectrum Brands Holdings, Inc., effective August 8, 2023. Compensation costs for share-based payment arrangements are recognized as General and Administrative Expenses on the Consolidated Statements of Income. The following is a summary of the share based compensation expense for the years ended September 30, 2023, 2022 and 2021: (in millions) 2023 2022 2021 SBH $ 17.2 $ 10.2 $ 28.9 SB/RH $ 15.7 $ 9.1 $ 27.2 Restricted Stock Units ("RSUs") The Company recognizes share based compensation expense from the issuance of RSUs, primarily under its Long-Term Incentive Plan ("LTIP"). RSUs granted under the LTIP include a combination of time-based grants and performance-based grants. 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 RSUs provide for either a three year cliff vesting or graded vesting depending upon the vesting conditions provided by the grant and the performance-based RSUs 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 actual number of shares that will ultimately vest for the performance-based RSUs is dependent on the level of achievement of the specified performance conditions upon completion of the designated performance period. The Company assessed the probability of achievement of the performance conditions and recognized 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. 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. RSUs are exercised upon completion of the vesting conditions. Shares issued upon exercise of RSUs are sourced from treasury shares when available. The Company regularly issues annual RSU grants under its LTIP during the first quarter of the fiscal year. The following is a summary of the RSUs granted during the fiscal year ending September 30, 2023. SBH SB/RH (in millions, except per share data) Units Weighted Average Grant Date Fair Value Fair Value at Grant Date Units Weighted Average Grant Date Fair Value Fair Value at Grant Date Time-based grants Vesting in less than 12 months 0.13 $ 56.66 $ 7.3 0.10 $ 58.76 $ 5.8 Vesting in more than 12 months 0.14 50.85 7.2 0.14 50.85 7.2 Total time-based grants 0.27 53.60 14.5 0.24 54.08 13.0 Performance-based grants 0.28 50.87 14.1 0.28 50.87 14.1 Total grants 0.55 $ 52.22 $ 28.6 0.52 $ 52.36 $ 27.1 101 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 18 – SHARE BASED COMPENSATION (continued) The following is a summary of RSU activity for the years ended September 30, 2023, 2022 and 2021: SBH SB/RH (in millions, except per share data) Shares Weighted Average Grant Date Fair Value Fair Value at Grant Date Shares Weighted Average Grant Date Fair Value Fair Value at Grant Date Outstanding and nonvested as of September 30, 2020 1.40 $ 56.41 $ 79.3 1.38 $ 56.33 $ 77.7 Granted 0.59 76.78 44.9 0.56 76.83 43.3 Forfeited ( 0.20 ) 65.52 ( 13.2 ) ( 0.20 ) 65.52 ( 13.2 ) Vested and exercised ( 0.33 ) 53.53 ( 17.8 ) ( 0.30 ) 52.82 ( 16.2 ) Outstanding and nonvested as of September 30, 2021 1.46 64.00 93.2 1.44 63.85 91.6 Granted 0.33 95.30 32.3 0.32 95.24 31.2 Forfeited ( 0.18 ) 78.90 ( 13.8 ) ( 0.18 ) 78.90 ( 13.8 ) Vested and exercised ( 0.60 ) 55.09 ( 33.4 ) ( 0.60 ) 54.34 ( 31.8 ) Outstanding and nonvested as of September 30, 2022 1.01 77.22 78.3 0.98 77.03 77.2 Granted 0.55 52.22 28.6 0.52 52.36 27.1 Forfeited ( 0.21 ) 71.99 ( 15.0 ) ( 0.21 ) 71.99 ( 15.0 ) Vested and exercised ( 0.46 ) 70.98 ( 32.7 ) ( 0.44 ) 70.33 ( 31.6 ) Outstanding and nonvested as of September 30, 2023 0.89 $ 66.29 $ 59.2 0.85 $ 66.87 $ 57.7 As of September 30, 2023, the remaining unrecognized pre-tax compensation cost associated with outstanding RSUs is $ 38.6 million for both SBH and SB/RH that would expected to be recognized over a weighted average period of 1.4 years for SBH and SBRH, contingent upon realization of performance goals for performance based grants. If performance goals are not met, compensation cost may be not recognized, and previously recognized compensation cost would be reversed. Stock Options All stock options awards are fully vested and exercisable. The Company does not regularly grant new stock option awards and there were no awards granted during the years ended September 30, 2023, 2022 and 2021. Shares issued upon exercise of stock option awards are sourced from treasury shares when available. The following is a summary of outstanding stock option awards during the years ended September 30, 2023, 2022, and 2021: Stock Options (in millions, except per share data) Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Vested and exercisable at September 30, 2020 $ 0.22 $ 73.96 $ 4.82 Exercised ( 0.06 ) 52.83 3.55 Vested and exercisable at September 30, 2021 0.16 82.36 5.32 Vested and exercisable at September 30, 2022 0.16 82.36 5.32 Vested and exercisable at September 30, 2023 $ 0.16 $ 82.36 $ 5.32 No options were exercised during the years ended September 30, 2023 and 2022. The intrinsic value of share options exercised during the year ended September 30, 2021 was $ 2.5 million, with cash received from the options exercises of $ 3.4 million. As of the year ended September 30, 2023, the aggregate intrinsic value of outstanding and exercisable options was $ 0.4 million, with the remaining contractual term of 1.3 years . 102 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 19 - ACCUMULATED OTHER COMPREHENSIVE INCOME The changes in the components of accumulated other comprehensive income (loss), net of taxes, was as follows: (in millions) Foreign Currency Translation Derivative Instruments Defined Benefit Pension Total Balance at September 30, 2020 $ ( 226.6 ) $ 3.6 $ ( 61.7 ) $ ( 284.7 ) Other comprehensive income before reclassification 32.2 0.1 11.7 44.0 Net reclassification for loss to income from continuing operations — 9.2 4.8 14.0 Net reclassification for loss (gain) to income from discontinued operations — 0.1 ( 0.1 ) — Other comprehensive income before tax 32.2 9.4 16.4 58.0 Deferred tax effect — ( 6.6 ) ( 1.6 ) ( 8.2 ) Other comprehensive income, net of tax 32.2 2.8 14.8 49.8 Less: other comprehensive income from discontinued operations attributable to non-controlling interest 0.4 — — 0.4 Other comprehensive income attributable to controlling interest 31.8 2.8 14.8 49.4 Balance as of September 30, 2021 ( 194.8 ) 6.4 ( 46.9 ) ( 235.3 ) Other comprehensive (loss) income before reclassification ( 72.0 ) 30.7 18.3 ( 23.0 ) Net reclassification for loss (gain) to income from continuing operations — ( 20.2 ) 3.6 ( 16.6 ) Net reclassification for loss (gain) to income from discontinued operations — ( 2.4 ) ( 0.1 ) ( 2.5 ) Other comprehensive income before tax ( 72.0 ) 8.1 21.8 ( 42.1 ) Deferred tax effect ( 20.0 ) 2.3 ( 8.9 ) ( 26.6 ) Other comprehensive (loss) income, net of tax ( 92.0 ) 10.4 12.9 ( 68.7 ) Less: other comprehensive loss from continuing operations attributable to non-controlling interest ( 0.4 ) — — ( 0.4 ) Less: other comprehensive loss from discontinued operations attributable to non-controlling interest ( 0.5 ) — — ( 0.5 ) Other comprehensive (loss) income attributable to controlling interest ( 91.1 ) 10.4 12.9 ( 67.8 ) Balance as of September 30, 2022 ( 285.9 ) 16.8 ( 34.0 ) ( 303.1 ) Other comprehensive income (loss) before reclassification 37.3 ( 35.3 ) ( 0.8 ) 1.2 Net reclassification for loss to income from continuing operations — 12.2 0.8 13.0 Net reclassification for loss (gain) to income from discontinued operations — 2.3 ( 0.1 ) 2.2 Other comprehensive income (loss) before tax 37.3 ( 20.8 ) ( 0.1 ) 16.4 Deferred tax effect 7.0 5.4 ( 0.1 ) 12.3 Deferred tax valuation allowance — — — — Other comprehensive income (loss), net of tax 44.3 ( 15.4 ) ( 0.2 ) 28.7 Deconsolidation of discontinued operations 26.6 — ( 0.5 ) 26.1 Net change to determine comprehensive income for the period 70.9 ( 15.4 ) ( 0.7 ) 54.8 Less: other comprehensive income from continuing operations attributable to non-controlling interest 0.3 — — 0.3 Less: Deconsolidation of discontinued operations 0.8 — — 0.8 Other comprehensive income (loss) attributable to controlling interest 69.8 ( 15.4 ) ( 0.7 ) 53.7 Balance as of September 30, 2023 $ ( 216.1 ) $ 1.4 $ ( 34.7 ) $ ( 249.4 ) The following table presents reclassifications of the gain (loss) on the Consolidated Statements of Income from AOCI for the periods indicated: (in millions) 2023 2022 2021 Defined Benefit Pension Derivative Instruments Total Defined Benefit Pension Derivative Instruments Total Defined Benefit Pension Derivative Instruments Total Net Sales $ — $ 0.2 $ 0.2 $ — $ 0.1 $ 0.1 $ — $ 0.1 $ 0.1 Cost of goods sold — ( 12.4 ) ( 12.4 ) — 20.1 20.1 — ( 9.3 ) ( 9.3 ) Other non-operating expense (income), net ( 0.8 ) — ( 0.8 ) ( 3.6 ) — ( 3.6 ) ( 4.8 ) — ( 4.8 ) Income from discontinued operations, net of tax 0.1 ( 2.3 ) ( 2.2 ) 0.1 2.4 2.5 0.1 ( 0.1 ) — See Note 14 - Derivatives for further detail on the Company’s hedging activity. See Note 15 - Employee Benefit Plans for further detail over the Company’s defined benefit plans. 103 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 20 - COMMITMENTS AND CONTINGENCIES The Company is a defendant in various litigation matters generally arising out of the ordinary course of business. Based on information currently available, the Company does not believe that any additional matters or proceedings presently pending will have a material adverse effect on its results of operations, financial condition, liquidity or cash flows. Environmental. 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 September 30, 2023, there was an environmental remediation liability of $ 5.4 million with $ 1.5 million included in Other Current Liabilities and $ 3.9 million included in Other Long-Term Liabilities on the Consolidated Statements of Financial Position. As of September 30, 2022, there was an environmental remediation liability of $ 8.8 million with $ 4.7 million included in Other Current Liabilities and $ 4.1 million included in Other Long-Term Liabilities on the Consolidated Statement of Financial Position. The Company’s environmental remediation liabilities are measured at the expected value of future cash outflows discounted to their present value using a discount rate of 5 %. Based on current estimates, the expected payments for environmental remediation for the next five years and thereafter at September 30, 2023 are as follows: (in millions) Amount 2024 $ 1.6 2025 2.4 2026 0.4 2027 0.3 2028 0.3 Thereafter 1.6 Total payments 6.6 Amount representing interest ( 1.2 ) Total environmental obligation $ 5.4 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. Product Liability. The Company may be named as a defendant in lawsuits involving product liability claims. 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 September 30, 2023, and 2022, the Company recognized $ 3.0 million and $ 3.4 million in product liability, respectively, included in Other Current Liabilities on the Consolidated Statement of Financial Position. The Company believes that any additional liability in excess of the amounts provided that may result from resolution of these matters will not have a material adverse effect on the consolidated financial condition, results of operations or cash flows of the Company. Product Warranty . The Company recognizes an estimated liability for standard warranty on certain products when we recognize revenue on the sale of the warranted products. 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 September 30, 2023 and 2022, included in Other Current Liabilities on the Consolidated Statement of Financial Statement. Product Safety Recall. During the fourth quarter of the year ended September 30, 2022, the HPC segment initiated voluntary product recalls in collaboration with the U.S. Consumer Product Safety Commission (" CPSC"), suspending sales of the affected products and issuing a stop sale with its customers. The Company has assessed the incremental costs attributable to the recall, including the anticipated returns from customers for existing retail inventory, write-off of inventory on hand, and other costs to facilitate the recall such as notification, shipping and handling, rework and destruction of affected products, as needed, and evaluated the probability of redemption. As a result, the Company recognized $ 6.0 million and $ 7.5 million in Other Current Liabilities on the Consolidated Statement of Financial Position associated with the costs for the recalls as of September 30, 2023 and 2022. Additionally, as of September 30, 2023 and 2022, the Company has indemnification provisions that are contractually provided by third-parties for the affected products and, as a result, the Company has also recognized $ 7.1 million and $ 4.7 million in Other Receivables, respectively, on the Consolidated Statement of Financial Position related to recovery from such indemnification provisions. 104 Table of Contents SPECTRUM BRANDS HOLDINGS, INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 21 - SEGMENT INFORMATION The Company identifies its segments based upon the internal organization that is used by management for making operating decisions and assessing performance as the source of its reportable segments. The Company manages its continuing operations in three vertically integrated, product-focused reporting segments: (i) GPC, which consists of the Company’s global pet care business; (ii) H&G, which consists of the Company’s home and garden, insect control and cleaning products business and (iii) HPC, which consists of the Company’s global small kitchen and personal care appliances businesses. Global strategic initiatives and financial objectives for each reportable segment are determined at the corporate level. Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a president responsible for the sales and marketing initiatives and financial results for product lines within the segment. The segments are supported through center-led corporate shared service operations consisting of finance and accounting, information technology, legal and human resource, supply chain and commercial operations. Net sales relating to the segments for the years ended September 30, 2023, 2022 and 2021 are as follows: (in millions) 2023 2022 2021 GPC $ 1,139.0 $ 1,175.3 $ 1,129.9 H&G 536.5 587.1 608.1 HPC 1,243.3 1,370.1 1,260.1 Net sales $ 2,918.8 $ 3,132.5 $ 2,998.1 The Chief Operating Decision Maker of the Company uses Adjusted EBITDA as the primary operating metric in evaluating the business and making operating decisions. EBITDA is calculated by excluding the Company’s income tax expense, interest expense, depreciation expense and amortization expense (from intangible assets) from net income. Adjusted EBITDA further excludes: • Share based compensation costs consist of costs associated with long-term compensation arrangements that generally consist of non-cash stock based compensation. See Note 18 - Share Based Compensation for further details; • 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 supporting the Company's business units excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations, including but not limited to, information technology, human resources, finance and accounting, supply chain, and commercial operations. Amounts attributable to unallocated shared costs would be mitigated through subsequent strategic or restructuring initiatives, TSAs, elimination of extraneous costs, or re-allocations or absorption of existing continuing operations following the completed sale of the discontinued operations. See Note 3 - 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 operating lease assets with below market rent, among others; • Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations, including impairments from property, plant and equipment, operating and finance leases, and goodwill and other intangible assets; See Note 10 - Property, Plant and Equipment, Note 11 -= Goodwill and Intangible Assets and Note 13 - Leases for further details; . • Non-cash gain from the remeasurement of the contingent consideration liability associated with the Tristar Business acquisition recognized during the years ended September 30, 2023 and 2022, associated with the Tristar Business acquisition. See Note 4 - Acquisitions for further details; • Non-cash gain realized from the repurchase of debt obligations at a discount, net deferred financing costs, during the year ended September 30, 2023. See Note 12 - Debt 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 and HPC segments attributable to significant and unusual nonrecurring claims with no previous history or precedent recognized during the years ended September 30, 2023 2022 and 2021. See Note 20 – Commitments and Contingencies for further details; • Impact from the early settlement of foreign currency cash flow hedges in the prior year, resulting in subsequent assumed losses at the original stated maturities of foreign currency cash flow hedges in our EMEA region that were settled early due to changes in the Company's legal entity organizational structure and forecasted purchasing strategy of HPC finished goods inventory within the region, resulting in the recognition of excluded gains during the year ended September 30, 2022 intended to mitigate costs through the year ending September 30, 2023; • Incremental costs recognized by the HPC segment during the year ended September 30, 2023 for the approved disposal of select product SKUs and models associated with the acquired brands from the Tristar Business acquisition after assessing, among other things, performance and quality standards and the business risks associated with the continued support and distribution of such products. HPC management has suspended further sale of the selected products as part of a shift in its strategy for distribution and development of products within its brand portfolio and avoid deterioration and further reduction in the value of the acquired brands and supported products; 105 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 21 - SEGMENT INFORMATION (continued) • Incremental costs recognized by the HPC segment attributable to the realization of product recalls initiated by the Company with costs realized during the years ended September 30, 2023 and 2022. See Note 20 - Commitments and Contingencies for further details; • Gains attributable to the Company’s investment in Energizer common stock. During the year ended September 30, 2021, the Company sold its remaining shares in Energizer common stock; and • Other adjustments primarily attributable to (1) costs associated with Salus as they are not considered a components of the continuing commercial products company (2) key executive severance related costs; (3) asset write-off for exit of certain GPC brands within China during year ended September 30, 2022, and (4) write-off of cost based investment previously held by the GPC segment during the year ended September 30, 2022. Segment Adjusted EBITDA in relation to the Company’s reportable segments for SBH for the years ended September 30, 2023, 2022, and 2021, is as follows: SBH (in millions, unaudited) 2023 2022 2021 GPC $ 190.6 $ 168.6 $ 212.1 H&G 72.5 86.2 124.0 HPC 43.1 69.6 102.6 Total Segment Adjusted EBITDA 306.2 324.4 438.7 Corporate 3.2 41.3 46.9 Interest expense 127.0 99.4 116.5 Depreciation 48.9 49.0 51.9 Amortization 42.3 50.3 65.1 Share based compensation 17.2 10.2 29.4 Tristar acquisition and integration 11.5 24.3 0.1 Rejuvenate acquisition and integration — 6.8 10.8 Armitage acquisition and integration — 1.4 10.9 Omega production integration — 4.6 1.3 HHI divestiture 8.4 6.3 9.6 HPC separation initiatives 4.2 19.1 14.2 Coevorden operations divestiture 2.7 8.8 11.6 Fiscal 2023 restructuring 7.4 — — Fiscal 2022 restructuring 0.4 9.8 — Global ERP transformation 11.4 13.1 4.3 GPC distribution center transition — 35.8 15.2 Global productivity improvement program — 5.1 21.2 Russia closing initiative 3.2 1.9 — HPC brand portfolio transitions 2.5 1.3 — Other project costs 11.2 12.1 7.4 Impairment of equipment and operating lease assets 10.8 — — Impairment of goodwill 111.1 — — Impairment of intangible assets 120.7 — — Unallocated shared costs 18.0 27.6 26.9 Non-cash purchase accounting adjustments 1.9 8.3 7.3 Gain from remeasurement of contingent consideration liability ( 1.5 ) ( 28.5 ) — Legal and environmental 3.0 1.5 6.0 Gain from debt repurchase ( 7.9 ) — — HPC product disposal 20.6 — — Early settlement of foreign currency cash flow hedges 4.9 ( 5.1 ) — HPC product recall 7.7 5.5 — Gain on Energizer investment — — ( 6.9 ) Salus and other 5.6 4.8 0.1 Loss from operations before income taxes $ ( 290.2 ) $ ( 90.3 ) $ ( 11.1 ) 106 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 21 - SEGMENT INFORMATION (continued) Segment Adjusted EBITDA in relation to the Company’s reportable segments for SB/RH for the years ended September 30, 2023, 2022, and 2021, is as follows: SB/RH (in millions) 2023 2022 2021 GPC $ 190.6 $ 168.6 $ 212.1 H&G 72.5 86.2 124.0 HPC 43.1 69.6 102.6 Total Segment Adjusted EBITDA 306.2 324.4 438.7 Corporate 2.6 39.9 44.9 Interest expense 120.5 99.8 116.8 Depreciation 48.9 49.0 51.9 Amortization 42.3 50.3 65.1 Share and incentive based compensation 15.7 9.1 27.7 Tristar acquisition and integration 11.5 24.3 0.1 Rejuvenate acquisition and integration — 6.8 10.8 Armitage acquisition and integration — 1.4 10.9 Omega production integration — 4.6 1.3 HHI divestiture 8.4 6.3 9.6 HPC separation initiatives 4.2 19.1 14.2 Coevorden operations divestiture 2.7 8.8 11.6 Fiscal 2023 restructuring 7.4 — — Fiscal 2022 restructuring 0.4 9.8 — Global ERP transformation 11.4 13.1 4.3 GPC distribution center transition — 35.8 15.2 Global productivity improvement program — 5.1 21.2 Russia closing initiative 3.2 1.9 — HPC brand portfolio transitions 2.5 1.3 — Other project costs 11.2 12.1 7.4 Unallocated shared costs 18.0 27.6 26.9 Non-cash purchase adjustment 1.9 8.3 7.3 Gain from remeasurement of contingent consideration liability ( 1.5 ) ( 28.5 ) — Impairment of equipment and operating lease assets 10.8 — — Impairment of goodwill 111.1 — — Impairment of intangible assets 120.7 — — Legal and environmental 3.0 1.5 6.0 HPC product disposal 20.6 — — Gain from debt repurchase ( 7.9 ) — — Gain on early settlement of cash flow hedges 4.9 ( 5.1 ) — HPC Product Recall 7.7 5.5 — Gain on Energizer investment — — ( 6.9 ) Other 5.4 4.5 0.1 Loss from operations before income taxes $ ( 281.4 ) $ ( 87.9 ) $ ( 7.7 ) 107 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 21 - SEGMENT INFORMATION (continued) Other financial information relating to the segments of SBH and SB/RH are as follows for the years ended September 30, 2023, 2022 and 2021 and as of September 30, 2023 and 2022: Depreciation and amortization (in millions) 2023 2022 2021 GPC $ 37.4 $ 37.4 $ 39.2 H&G 18.8 18.6 19.2 HPC 20.4 28.7 44.0 Total segments 76.6 84.7 102.4 Corporate and shared operations 14.6 14.6 14.6 Total depreciation and amortization $ 91.2 $ 99.3 $ 117.0 Capital expenditures (in millions) 2023 2022 2021 GPC $ 10.1 $ 17.7 $ 18.6 H&G 3.8 8.2 3.6 HPC 7.2 11.6 9.3 Total segment capital expenditures 21.1 37.5 31.5 Corporate and shared operations 37.9 26.5 12.1 Total capital expenditures $ 59.0 $ 64.0 $ 43.6 SBH SB/RH Segment total assets (in millions) 2023 2022 2023 2022 GPC $ 1,436.4 $ 1,461.8 $ 1,436.4 $ 1,461.8 H&G 803.7 846.5 803.7 846.5 HPC 945.0 1,231.0 945.0 1,231.0 Total segment assets 3,185.1 3,539.3 3,185.1 3,539.3 Corporate and shared operations 2,073.3 419.6 2,162.2 505.1 Total assets $ 5,258.4 $ 3,958.9 $ 5,347.3 $ 4,044.4 Net sales SBH and SB/RH for the years ended September 30, 2023, 2022 and 2021 and long-lived asset information as of September 30, 2023 and 2022 by geographic area are as follows: Net sales to external parties - Geographic Disclosure (in millions) 2023 2022 2021 United States $ 1,722.4 $ 1,901.6 $ 1,750.8 Europe/MEA 830.7 820.0 877.8 Latin America 206.8 243.3 193.4 Asia-Pacific 106.6 108.5 112.0 North America - Other 52.3 59.1 64.1 Net sales $ 2,918.8 $ 3,132.5 $ 2,998.1 Long-lived assets - Geographic Disclosure (in millions) 2023 2022 United States $ 321.4 $ 279.7 Europe/MEA 53.7 52.8 Latin America 2.6 3.2 Asia-Pacific 8.2 10.6 Total long-lived assets $ 385.9 $ 346.3 108 Table of Contents SPECTRUM BRANDS HOLDINGS INC. SB/RH HOLDINGS, LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 22 - EARNINGS PER SHARE - SBH Basic earnings per share is computed by dividing net income attributable to controlling interest by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the dilution that would occur if share-based awards were converted into common shares that then shared in the net income of the entity available to common shareholders, as long as their effect is not antidilutive. In computing diluted earnings per share, basic earnings per share is adjusted for the assumed issuance of potentially diluted share-based awards. The Company uses the treasury stock method to reflect dilution of restricted stock units. Performance based restricted stock units are excluded if the performance targets upon which the issuance of the shares is contingent have not been achieved and the respective performance period has not been completed as of the end of the current period. The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive shares for the years ended September 30, 2023, 2022 and 2021, are as follows: (in millions, except per share amounts) 2023 2022 2021 Numerator Net (loss) income from continuing operations attributable to controlling interest $ ( 233.8 ) $ ( 77.2 ) $ 15.1 Income from discontinued operations attributable to controlling interest 2,035.3 148.8 174.5 Net income attributable to controlling interest $ 1,801.5 $ 71.6 $ 189.6 Denominator Weighted average shares outstanding - basic 39.5 40.9 42.7 Dilutive shares — — 0.5 Weighted average shares outstanding - diluted 39.5 40.9 43.2 Earnings per share Basic earnings per share from continuing operations $ ( 5.92 ) $ ( 1.89 ) $ 0.35 Basic earnings per share from discontinued operations 51.57 3.64 4.09 Basic earnings per share $ 45.65 $ 1.75 $ 4.44 Diluted earnings per share from continuing operations $ ( 5.92 ) $ ( 1.89 ) $ 0.35 Diluted earnings per share from discontinued operations 51.57 3.64 4.04 Diluted earnings per share $ 45.65 $ 1.75 $ 4.39 Weighted average number of anti-dilutive shares excluded from denominator 0.2 0.2 — 109 Table of Contents Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SPECTRUM BRANDS HOLDINGS, INC. By: /s/ David M. Maura David M. Maura Chief Executive Officer and Chairman of the Board DATE: November 21, 2023 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the above-stated date. Signature Title /s/ David M. Maura David M. Maura Chief Executive Officer and Chairman of the Board (Principal Executive Officer) /s/ Jeremy W. Smeltser Jeremy W. Smeltser Executive Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) /s/ Leslie L. Campbell Leslie L. Campbell Director /s/ Joan Chow Joan Chow Director /s/ Sherianne James Sherianne James Director /s/ Gautam Patel Gautam Patel Director /s/ Terry L. Polistina Terry L. Polistina Director /s/ Hugh R. Rovit Hugh R. Rovit Director 110 Table of Contents Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SB/RH HOLDINGS, LLC By: Spectrum Brands Holdings, Inc., its Sole Member By: /s/ David M. Maura David M. Maura Chief Executive Officer and Director DATE: November 21, 2023 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Sole Member of the registrant and in the capacities indicated and on the above-stated date. Signature Title /s/ David M. Maura David M. Maura Chief Executive Officer and Chairman of the Board (Principal Executive Officer) /s/ Jeremy W. Smeltser Jeremy W. Smeltser Executive Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) /s/ Leslie L. Campbell Leslie L. Campbell Director /s/ Joan Chow Joan Chow Director /s/ Sherianne James Sherianne James Director /s/ Gautam Patel Gautam Patel Director /s/ Terry L. Polistina Terry L. Polistina Director /s/ Hugh R. Rovit Hugh R. Rovit Director 111 Table of Contents EXHIBIT INDEX Exhibit 2.1 Agreement and Plan of Merger, dated as of February 24, 2018, by and among Spectrum Brands Legacy, Inc. (f.k.a. Spectrum Brands Holdings, Inc.), Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.), HRG SPV Sub I, Inc. and HRG SPV Sub II, LLC (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on February 26, 2018 (File No. 001-4219)) (Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request). Exhibit 2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of June 8, 2018, by and among Spectrum Brands Holdings, Inc., HRG Group, Inc., HRG SPV Sub I, Inc. and HRG SPV Sub II, LLC (incorporated herein by reference to Exhibit 2.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on July 13, 2018 (File No. 001-4219)). Exhibit 2.3 Acquisition Agreement, dated as of November 15, 2018, by and among Spectrum Brands Holdings, Inc. and Energizer Holdings, Inc. (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. on November 19, 2018 (File No. 001-4219)) (Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request) . Exhibit 2.4 Amended and Restated Acquisition Agreement, dated as of November 15, 2018, by and between Energizer Holdings, Inc. and Spectrum Brands Holdings, Inc. (incorporated herein by reference to Exhibit 2.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc on November 19, 2018 (File No. 001-4219) (Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request) . Exhibit 2.5 Asset and Stock Purchase Agreement, dated as of September 8, 2021, by and between Spectrum Brands, Inc. and ASSA ABLOY AB (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. on September 8, 2021 (File No. 001-4219) (Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request) . Exhibit 2.6 Amendment No. 1 to Asset and Stock Purchase Agreement dated as of July 14, 2022, by and between Spectrum Brands, Inc. and ASSA ABLOY AB (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. on July 14, 2022 (File No. 001-4219) (Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request) . Exhibit 3.1 Amended and Restated Certificate of Incorporation of Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a HRG Group, Inc.) on July 13, 2018 (File No. 001-4219). Exhibit 3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporate of the Registrant, filed with the Secretary of State of the State of Delaware on August 3, 2021 (incorporated here in by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. on August 3, 2021 (File No. 001-4219)). Exhibit 3.3 Third Restated By-Laws of Spectrum Brands Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. on May 17, 2019 (File No. 001-04219)). Exhibit 3.4 Certificate of Formation of SB/RH Holdings, LLC (incorporated herein by reference to Exhibit 3.29 to the Registration Statement on Form S-4 filed with the SEC by Spectrum Brands, Inc. on December 3, 2013 (File No. 333-192634)). Exhibit 3.5 Operating Agreement of SB/RH Holdings, LLC (incorporated herein by reference to Exhibit 3.30 to the Registration Statement on Form S-4 filed with the SEC by Spectrum Brands, Inc. on December 3, 2013 (File No. 333-192634)). Exhibit 3.6 Certificate of Designation of Series B Preferred Stock of Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.), as filed with the Secretary of State of Delaware on February 26, 2018. (incorporated herein by reference to Exhibit 3.3 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on July 13, 2018 (File No. 001-4219)). Exhibit 4.1 Indenture governing Spectrum Brands, Inc.’s 4.000% Senior Notes due 2026, dated as of September 20, 2016, among Spectrum Brands, Inc., the guarantors named therein, U.S. Bank National Association, as trustee, Elavon Financial Services DAC, UK Branch, as paying agent and Elavon Financial Services DAC, as registrar and transfer agent (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc. (f.k.a. Spectrum Brands Holdings, Inc.) on December 8, 2014 (File No. 001-34757)). Exhibit 4.2 Indenture governing Spectrum Brands, Inc.’s 5.00% Senior Notes due 2029, dated as of September 24, 2019, among Spectrum Brands, Inc., the guarantors named therein and US Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on September 24, 2019 (File No. 001-4219)). Exhibit 4.3 Indenture governing Spectrum Brands, Inc.’s 5.50% Senior Notes due 2030, dated as of June 30, 2020, among Spectrum Brands, Inc., the guarantors named therein and US Bank National Association, as trustee (filed by incorporation by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on June 30, 2020 (File No. 001-4219)). Exhibit 4.4 Indenture governing the 3.875% Senior Notes due 2031, dated as of March 3, 2021, among Spectrum Brands, Inc., the guarantors party thereto and US Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. on March 3, 2021 (File No. 001-4219). Exhibit 4.5 Rights Agreement, dated as of February 24, 2018, between Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) and American Stock Transfer & Trust Company, LLC, as Rights Agent, which includes the Form of Certificate of Designation of Series B Preferred Stock of Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) as Exhibit A, the Form of Right Certificate as Exhibit B and the Summary of Terms of the Rights Agreement as Exhibit C (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on February 26, 2018 (File No. 001-4219)). Exhibit 4.6 Description of Capital Stock of Spectrum Brands, Holdings, Inc. (incorporated herein by reference to Exhibit 4.8 to Amendment No. 1 to the Annual Report on Form 10-K/A filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on January 28, 2020 (File No. 001-4219)). Exhibit 10.1 Amended and Restated Credit Agreement, dated as of June 30, 2020 among the Company, SB/RH Holdings, the guarantors party thereto, the lenders party thereto from time to time, and Royal Bank of Canada, as the administrative agent (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. on June 30, 2020 (File No. 001-4219)) . Exhibit 10.2 First Amendment to Amended and Restated Credit Agreement, dated as of March 3, 2021 (to the Amended and Restated Credit Agreement dated as of June 30, 2020), by and among the Company, SB/RH Holdings, Royal Bank of Canada, as the administrative agent and the lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands ). Exhibit 10.3 Second Amendment to Amended and Restated Credit Agreement, dated as of December 10, 2021 (to the Amended and Restated Credit Agreement dated as of June 30, 2020) by and among the Company, SB/RH Holdings, the guarantors party thereto, the lenders party thereto from time to time, and Royal Bank of Canada, as the administrative agent. (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands on February 4, 2022 (File No. 001-4219)) . 112 Table of Contents Exhibit 10.4 Third Amendment to Amended and Restated Credit Agreement, dated as of February 3, 2022 (to the Amended and Restated Credit Agreement dated as of June 30, 2020), by and among the Company, SB/RH Holdings, Royal Bank of Canada, as the administrative agent, the guarantors party thereto and the lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands on February 18, 2022 (File No. 001-4219)) . Exhibit 10.5 Fourth Amendment to Amended and Restated Credit Agreement, dated as of November 17, 2022 (to the Amended and Restated Credit Agreement dated as of June 30, 2020), by and among the Company, SB/RH Holdings, Royal Bank of Canada, as the administrative agent, the guarantors party thereto and the lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands on November 18, 2022 (File No. 001-4219)) . Exhibit 10.6 Fifth Amendment to Amended and Restated Credit Agreement, dated as of June 20, 2023 (to the Amen d ed and Restated Credit Agreement dated as of June 30, 2020), by and among the Company, SB/RH Holdings, Royal Bank of Canada, as the administrative agent, the guarantors party thereto and the lenders party thereto (incorporated herein by reference to Exhibit 10. 1 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands on August 11, 2023 (File No. 001-04219)). Exhibit 10.7 Security Agreement, dated as of June 23, 2015, by and among Spectrum Brands, Inc., SB/RH Holdings, LLC, the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as collateral agent (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc. (f.k.a. Spectrum Brands Holdings, Inc.) on June 23, 2015 (File No. 001-34757)). Exhibit 10.8 Loan Guaranty, dated as of June 23, 2015, by and among SB/RH Holdings, LLC, the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as administrative agent and collateral agent (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc. (f.k.a. Spectrum Brands Holdings, Inc.) on June 23, 2015 (File No. 001-34757)). Exhibit 10.9 M aster Confirmation -Uncoll ared Accelerated Share Repurcha se , between Spectrum B rands Holdings, Inc. and Goldman Sachs & Co. LLC, dated June 20, 2023 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands on June 20, 2023 (file No. 001-04219)). Exhibit 10.10 Second Amended and Restated Credit Agreement, dated as of October 19, 2023 among the Company, SB/RH Holdings, the lenders party thereto from time to time, and Royal Bank o f Canada, as administrative agent ((incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands on October 19, 2023 (File No. 001-04219)). Exhibit 10.11+ Amended & Restated Spectrum Brands Holdings, Inc. 2011 Omnibus Equity Award Plan (incorporated herein by reference to Exhibit 4.8 to the Registration Statement filed on Form S-8 with the SEC by Spectrum Brands Legacy, Inc. (f.k.a. Spectrum Brands Holdings, Inc.) on February 1, 2017 (File No. 333-215850)). Exhibit 10.12+ Form of Restricted Stock Unit Agreement under the Amended & Restated Spectrum Brands Holdings, Inc. 2011 Omnibus Equity Award Plan (incorporated herein by reference to Exhibit 4.9 to the Registration Statement filed on Form S-8 with the SEC by Spectrum Brands Legacy, Inc. (f.k.a. Spectrum Brands Holdings, Inc.) on February 1, 2017 (File No. 333-215850)). Exhibit 10.13+ Form of Performance Compensation Award Agreement under the Amended & Restated Spectrum Brands Holdings, Inc. 2011 Omnibus Equity Award Plan (incorporated herein by reference to Exhibit 4.10 to the Registration Statement filed on Form S-8 filed with the SEC by Spectrum Brands Legacy, Inc. (f.k.a. Spectrum Brands Holdings, Inc.) on February 1, 2017 (File No. 333-215850)). Exhibit 10.14+ Spectrum Brands Holdings, Inc. 2020 Omnibus Equity Plan (incorporated herein by reference to Exhibit 4.1 to the Registration Statement on Form S-8 filed with the SEC by Spectrum Brands Holdings, Inc.) on August 7, 2020 (File No. 333- 242343). Exhibit 10.15+ Amended and Restated Employment Agreement dated April 25, 2018, by and between Spectrum Brands, Inc., Spectrum Brands Holdings, Inc. and David M. Maura (filed by incorporation by reference to Exhibit 10.1 to a Current Report on Form 8-K filed with the SEC by Spectrum Brands Legacy, Inc. (f.k.a. Spectrum Brands Holdings, Inc.) on May 1, 2018 (File No. 001-34757)). Exhibit 10.16+ Employment Agreement, dated as of September 13, 2018, by and among Ehsan Zargar, Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) and Spectrum Brands, Inc. (incorporated herein by reference to Exhibit 10.41 to the Annual Report on Form 10-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on November 23, 2018 (File NO. 001-4219)). Exhibit 10.17+ Form of Agreement with David Maura and Ehsan Zargar Regarding Certain Provisions of Such Executive’s Respective Prior Separation Agreements with HRG Group, Inc. (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on February 7, 2019 (File No. 001-4219)). Exhibit 10.18+ Employment Agreement, dated as of September 9, 2019, by and between Spectrum Brands Holdings, Inc. and Jeremy W. Smeltser. (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.(f.k.a. HRG Group, Inc.) on September 9, 2019 (File No. 001-4219)). Exhibit 10.19+ Employment Agreement, dated as of September 9, 2019, by and between Spectrum Brands Holdings, Inc. and Randal D. Lewis. (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc.(f.k.a. HRG Group, Inc.) on September 9, 2019 (File No. 001-4219)). Exhibit 10.20+ Separation Agreement, dated as of August 30, 2022, by and between Spectrum Brands Holdings, Inc. and Randal D. Lewis. (incorporated herein by reference to Exhibit 10.16 to the Annual Report on Form 10-K with the SEC by Spectrum Brands Holdings, Inc. (f.k.a HRG Group, Inc.) on November 22, 2022 (File No. 001-4219)). Exhibit 10.21+ Letter Agreement, dated as of September 9, 2019, by and between Spectrum Brands Holdings, Inc. and Rebeckah Long. (incorporated herein by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group,Inc.) on September 9, 2019 (File No. 001-4219)). Exhibit 10.22+ Severance Agreement, dated as of September 9, 2019, by and between Spectrum Brands Holdings, Inc. and Rebeckah Long. (incorporated herein by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on September 9, 2019 (File No. 001-4219)). Exhibit 10.23+ Separation Agreement, dated as of August 30, 2022, by and between Spectrum Brands Holdings, Inc. and Rebeckah Long. (incorporated here in by reference to Exhibit 10.18 to the Annual Report on Form 10-K with the SEC by Spectrum Brands Holdings, Inc. (f.k.a. HRG Group, Inc.) on November 22, 2022 (File No. 001-4219)). Exhibit 10.24+ Form of Restricted Stock Unit Award Agreement effective as of December 22, 2020 (incorporated herein by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands Holdings, Inc. on May 7, 2021 (File No. 001-4219)). Exhibit 10.25+ Form of Performance Based Restricted Stock Unit Agreement effective as of December 22, 2020 (incorporated herein by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands Holdings, Inc. on May 7, 2021 (File No. 001-4219)). Exhibit 10.26+ Form of Service Based Restricted Stock Unit Agreement effective as of December 22, 2020 (incorporated herein by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the SEC by Spectrum Brands Holdings, Inc. on May 7, 2021 (File No. 001-4219)). Exhibit 21.1*** Subsidiaries of Registrant Exhibit 21.2* List of Guarantor Subsidiaries Exhibit 23.1* Consent of Independent Registered Public Accounting Firm 113 Table of Contents Exhibit 31.1* Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Spectrum Brands Holdings, Inc. Exhibit 31.2* Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 the Sarbanes-Oxley Act of 2002. Spectrum Brands Holdings, Inc. Exhibit 31.3* Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. SB/RH Holdings, LLC Exhibit 31.4* Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 the Sarbanes-Oxley Act of 2002. SB/RH Holdings, LLC Exhibit 32.1* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Spectrum Brands Holdings, Inc. Exhibit 32.2* Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Spectrum Brands Holdings, Inc. Exhibit 32.3* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. SB/RH Holdings, LLC Exhibit 32.4* Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. SB/RH Holdings, LLC _____________________________ * Filed herewith ** In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K shall be deemed to be furnished and not filed. *** Filed herewith, with respect to Spectrum Brands Holdings, Inc. SB/RH Holdings, LLC meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and has therefore omitted the list of subsidiaries exhibit otherwise required by Item 601 of Regulation S-K as allowed under General Instruction I(2)(b). + Denotes a management contract or compensatory plan or arrangement. 114