What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-09 compared with 2024-02-08 · 393 added, 228 removed, 735 unchanged (46% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Financial Position

As of December 31, 2023 and September 30, 2023

As of March 31, 2024 and September 30, 2023

(in millions)

December 31, 2023 September 30, 2023

March 31, 2024 September 30, 2023

Cash and cash equivalents $ 745.7 $ 753.9

38 unchanged sentences

Condensed Consolidated Statements of Income

For the three month periods ended December 31, 2023 and January 1, 2023

Three Month Periods Ended

For the three and six month periods ended March 31, 2024 and April 2, 2023

Three Month Periods Ended Six Month Periods Ended

(in millions, except per share)

December 31, 2023 January 1, 2023

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Net sales $ 718.5 $ 729.2 $ 1,410.7 $ 1,442.5

2 unchanged sentences

Selling, general & administrative 223.5 224.5 439.4 448.1

Impairment of intangible assets 39.0 67.0 43.0 67.0

Representation and warranty insurance proceeds ( 65.0 ) — ( 65.0 ) —

Gain from remeasurement of contingent consideration liability — — — ( 1.5 )

Total operating expenses 197.5 291.5 417.4 513.6

Operating income (loss) 75.9 ( 77.0 ) 101.0 ( 97.2 )

2 unchanged sentences

Gain from debt repurchase — — ( 4.7 ) —

Other non-operating expense (income), net 4.0 ( 1.4 )

Other non-operating expense, net 1.1 1.4 5.2 0.1

Income (loss) from continuing operations before income taxes 75.4 ( 109.8 ) 105.3 ( 161.9 )

3 unchanged sentences

Net income (loss) 60.9 ( 53.6 ) 90.1 ( 74.1 )

Net income from continuing operations attributable to non-controlling interest 0.1 0.3

Net (loss) income from continuing operations attributable to non-controlling interest ( 0.2 ) 0.1 ( 0.1 ) 0.3

Income from discontinued operations attributable to non-controlling interest, net of tax — — — 0.2

18 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

For the three month periods ended December 31, 2023 and January 1, 2023

For the three and six month periods ended March 31, 2024 and April 2, 2023

Three Month Periods Ended

Six Month Periods Ended

(in millions)

December 31, 2023 January 1, 2023

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Net income (loss) $ 60.9 $ ( 53.6 ) $ 90.1 $ ( 74.1 )

1 unchanged sentence

Foreign currency translation adjustment

Foreign currency translation gain 36.7 60.5

Unrealized loss from net investment hedge ( 21.3 ) ( 33.9 )

Foreign currency translation (loss) gain ( 12.0 ) 27.1 24.8 87.6

Unrealized income (loss) from net investment hedge 11.6 ( 12.5 ) ( 9.7 ) ( 46.4 )

Foreign currency translation adjustment before tax ( 0.4 ) 14.6 15.1 41.2

1 unchanged sentence

Foreign currency translation adjustment, net ( 3.3 ) 18.3 17.8 53.7

Unrealized loss on derivative instruments

Unrealized loss on hedging activity before reclassification ( 10.6 ) ( 25.4 )

Net reclassification for loss (gain) to income from continuing operations 5.1 ( 2.5 )

Unrealized loss on hedging instruments after reclassification ( 5.5 ) ( 27.9 )

Deferred tax effect 1.5 7.2

Net unrealized loss on hedging derivative instruments ( 4.0 ) ( 20.7 )

Defined benefit pension loss

Defined benefit pension loss before reclassification ( 1.1 ) ( 2.3 )

Unrealized gain (loss) on derivative instruments

Unrealized gain (loss) on derivative instruments before reclassification 1.4 ( 7.1 ) ( 9.2 ) ( 32.5 )

Net reclassification for loss to income from continuing operations 4.8 4.9 9.9 2.4

Defined benefit pension loss after reclassification ( 0.9 ) ( 1.4 )

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

Unrealized gain (loss) on derivative instruments after reclassification 6.2 ( 2.3 ) 0.7 ( 30.2 )

Deferred tax effect ( 1.6 ) 0.7 ( 0.1 ) 7.8

Net defined benefit pension loss ( 0.7 ) ( 0.2 )

Net unrealized gain (loss) on derivative instruments 4.6 ( 1.6 ) 0.6 ( 22.4 )

Defined benefit pension gain (loss)

Defined benefit pension gain (loss) before reclassification 0.3 0.1 ( 0.9 ) ( 2.1 )

Net reclassification for loss (gain) to income from continuing operations 0.2 ( 0.7 ) 0.4 0.2

Defined benefit pension gain (loss) after reclassification 0.5 ( 0.6 ) ( 0.5 ) ( 1.9 )

Deferred tax effect 0.1 0.1 0.3 1.3

Net defined benefit pension gain (loss) 0.6 ( 0.5 ) ( 0.2 ) ( 0.6 )

Net change to derive comprehensive income for the period 1.9 16.2 18.2 30.7

Comprehensive income (loss) 62.8 ( 37.4 ) 108.3 ( 43.4 )

Comprehensive income from continuing operations attributable to non-controlling interest 0.1 0.2

Comprehensive (loss) income from continuing operations attributable to non-controlling interest ( 0.1 ) 0.1 — 0.3

Comprehensive income from discontinued operations attributable to non-controlling interest — 0.1 — 0.2

3 unchanged sentences

Condensed Consolidated Statements of Shareholders' Equity

For the three month period ended December 31, 2023

For the six month period ended March 31, 2024

Common Stock Additional

17 unchanged sentences

Balances as of December 31, 2023 30.8 0.5 1,993.6 2,110.6 ( 233.2 ) ( 1,570.7 ) 2,300.8 0.9 2,301.7

Net income (loss) from continuing operations — — — 50.1 — — 50.1 ( 0.2 ) 49.9

Income from discontinued operations, net of tax — — — 11.0 — — 11.0 — 11.0

Other comprehensive income (loss), net of tax — — — — 2.0 — 2.0 ( 0.1 ) 1.9

Treasury stock repurchases ( 1.2 ) — — — — ( 97.6 ) ( 97.6 ) — ( 97.6 )

Excise tax on net share repurchases — — — — — ( 1.0 ) ( 1.0 ) — ( 1.0 )

Share based compensation — — 4.5 — — — 4.5 — 4.5

Dividends declared — — — ( 12.9 ) — — ( 12.9 ) — ( 12.9 )

Balances as of March 31, 2024 29.6 $ 0.5 $ 1,998.1 $ 2,158.8 $ ( 231.2 ) $ ( 1,669.3 ) $ 2,256.9 $ 0.6 $ 2,257.5

See accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Shareholders' Equity

For the three month period ended January 1, 2023

For the six month period ended April 2, 2023

Common Stock Additional

14 unchanged sentences

Balances as of January 1, 2023 41.0 $ 0.5 2,011.5 323.9 ( 288.9 ) ( 814.2 ) 1,232.8 6.6 1,239.4

Net (loss) income from continuing operations — — — ( 75.1 ) — — ( 75.1 ) 0.1 ( 75.0 )

Income from discontinued operations, net of tax — — — 21.4 — — 21.4 — 21.4

Other comprehensive income, net of tax — — — — 16.0 — 16.0 0.2 16.2

Share based compensation — — 4.7 — — — 4.7 — 4.7

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

Balances as of April 2, 2023 41.0 $ 0.5 $ 2,016.2 $ 252.6 $ ( 272.9 ) $ ( 814.2 ) $ 1,182.2 $ 6.9 $ 1,189.1

See accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the three month periods ended December 31, 2023 and January 1, 2023

Three Month Periods Ended

(in millions) December 31, 2023 January 1, 2023

For the six month periods ended March 31, 2024 and April 2, 2023

Six Month Periods Ended

(in millions) March 31, 2024 April 2, 2023

Cash flows from operating activities

2 unchanged sentences

Net income (loss) from continuing operations 67.4 ( 115.0 )

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

Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities from continuing operations:

Depreciation 28.8 24.1

2 unchanged sentences

Impairment of intangible assets 43.0 67.0

Impairment of property, plant and equipment and operating lease assets 0.5 4.5

Gain from debt repurchase ( 4.7 ) —

Non-cash purchase accounting adjustments 0.9 0.9

Non-cash accrual for representation and warranty proceeds ( 15.0 ) —

Amortization of debt issuance costs and debt discount 1.7 4.0

3 unchanged sentences

Net changes in operating assets and liabilities ( 83.7 ) 198.0

Net cash provided (used) by operating activities from continuing operations 18.1 ( 57.0 )

Net cash used by operating activities from discontinued operations ( 22.4 ) ( 7.2 )

Net cash used by operating activities ( 4.3 ) ( 64.2 )

Net cash provided by operating activities from continuing operations 80.7 148.6

Net cash (used) provided by operating activities from discontinued operations ( 81.5 ) 29.0

Net cash (used) provided by operating activities ( 0.8 ) 177.6

Cash flows from investing activities

2 unchanged sentences

Proceeds from sale of short term investments 1,292.0 —

Purchase price settlement from sale of HHI ( 26.9 ) —

Other investing activity ( 0.1 ) —

Net cash provided (used) by investing activities from continuing operations 544.1 ( 25.9 )

3 unchanged sentences

Payment of debt ( 177.9 ) ( 21.7 )

Proceeds from issuance of debt — 90.0

Payment of debt issuance costs ( 3.2 ) ( 2.3 )

2 unchanged sentences

Share based award tax withholding payments, net of proceeds upon vesting ( 5.4 ) ( 10.5 )

Net cash (used) provided by financing activities from continuing operations ( 439.8 ) 56.8

Net cash used by financing activities from continuing operations ( 553.8 ) ( 68.9 )

Net cash used by financing activities from discontinued operations — ( 0.7 )

Net cash (used) provided by financing activities ( 439.8 ) 56.4

Net cash used by financing activities ( 553.8 ) ( 69.6 )

Effect of exchange rate changes on cash and cash equivalents 2.3 9.7

14 unchanged sentences

Condensed Consolidated Statements of Financial Position

As of December 31, 2023 and September 30, 2023

(in millions) December 31, 2023 September 30, 2023

As of March 31, 2024 and September 30, 2023

(in millions) March 31, 2024 September 30, 2023

Cash and cash equivalents $ 744.6 $ 752.7

2 unchanged sentences

Other receivables 113.6 84.5

Receivable due from parent 180.3 90.1

Inventories 454.3 462.8

32 unchanged sentences

Condensed Consolidated Statements of Income

For the three month periods ended December 31, 2023 and January 1, 2023

Three Month Periods Ended

(in millions) December 31, 2023 January 1, 2023

For the three and six month periods ended March 31, 2024 and April 2, 2023

Three Month Periods Ended Six Month Periods Ended

(in millions) March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Net sales $ 718.5 $ 729.2 $ 1,410.7 $ 1,442.5

2 unchanged sentences

Selling, general and administrative 222.9 223.8 438.4 447.4

Impairment of intangible assets 39.0 67.0 43.0 67.0

Representation and warranty insurance proceeds ( 65.0 ) — ( 65.0 ) —

Gain from remeasurement of contingent consideration liability — — — ( 1.5 )

Total operating expenses 196.9 290.8 416.4 512.9

Operating income (loss) 76.5 ( 76.3 ) 102.0 ( 96.5 )

2 unchanged sentences

Gain from debt repurchase — — ( 4.7 ) —

Other non-operating expense (income), net 4.0 ( 1.4 )

Other non-operating expense, net 1.1 1.4 5.2 0.1

Income (loss) from continuing operations before income taxes 76.0 ( 109.2 ) 106.3 ( 161.3 )

3 unchanged sentences

Net income (loss) 61.4 ( 53.3 ) 91.2 ( 73.6 )

Net income from continuing operations attributable to non-controlling interest 0.1 0.3

Net (loss) income from continuing operations attributable to non-controlling interest ( 0.2 ) 0.1 ( 0.1 ) 0.3

Income from discontinued operations attributable to non-controlling interest, net of tax — — — 0.2

7 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

For the three month periods ended December 31, 2023 and January 1, 2023

For the three and six month periods ended March 31, 2024 and April 2, 2023

Three Month Periods Ended

Six Month Periods Ended

(in millions)

December 31, 2023 January 1, 2023

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Net income (loss) $ 61.4 $ ( 53.3 ) $ 91.2 $ ( 73.6 )

1 unchanged sentence

Foreign currency translation adjustment

Foreign currency translation gain 36.7 60.5

Unrealized loss from net investment hedge ( 21.3 ) ( 33.9 )

Foreign currency translation (loss) gain ( 12.0 ) 27.1 24.8 87.6

Unrealized income (loss) from net investment hedge 11.6 ( 12.5 ) ( 9.7 ) ( 46.4 )

Foreign currency translation adjustment before tax ( 0.4 ) 14.6 15.1 41.2

1 unchanged sentence

Foreign currency translation adjustment, net ( 3.3 ) 18.3 17.8 53.7

Unrealized loss on derivative instruments

Unrealized loss on hedging activity before reclassification ( 10.6 ) ( 25.4 )

Net reclassification for loss (gain) to income from continuing operations 5.1 ( 2.5 )

Unrealized loss on hedging instruments after reclassification ( 5.5 ) ( 27.9 )

Deferred tax effect 1.5 7.2

Net unrealized loss on hedging derivative instruments ( 4.0 ) ( 20.7 )

Defined benefit pension loss

Defined benefit pension loss before reclassification ( 1.1 ) ( 2.3 )

Unrealized gain (loss) on derivative instruments

Unrealized gain (loss) on derivative instruments before reclassification 1.4 ( 7.1 ) ( 9.2 ) ( 32.5 )

Net reclassification for loss to income from continuing operations 4.8 4.9 9.9 2.4

Defined benefit pension loss after reclassification ( 0.9 ) ( 1.4 )

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

Unrealized gain (loss) on derivative instruments after reclassification 6.2 ( 2.3 ) 0.7 ( 30.2 )

Deferred tax effect ( 1.6 ) 0.7 ( 0.1 ) 7.8

Net defined benefit pension loss ( 0.7 ) ( 0.2 )

Net unrealized gain (loss) on derivative instruments 4.6 ( 1.6 ) 0.6 ( 22.4 )

Defined benefit pension gain (loss)

Defined benefit pension gain (loss) before reclassification 0.3 0.1 ( 0.9 ) ( 2.1 )

Net reclassification for loss (gain) to income from continuing operations 0.2 ( 0.7 ) 0.4 0.2

Defined benefit pension gain (loss) after reclassification 0.5 ( 0.6 ) ( 0.5 ) ( 1.9 )

Deferred tax effect 0.1 0.1 0.3 1.3

Net defined benefit pension gain (loss) 0.6 ( 0.5 ) ( 0.2 ) ( 0.6 )

Net change to derive comprehensive income for the period 1.9 16.2 18.2 30.7

Comprehensive income (loss) 63.3 ( 37.1 ) 109.4 ( 42.9 )

Comprehensive income from continuing operations attributable to non-controlling interest 0.1 0.2

Comprehensive (loss) income from continuing operations attributable to non-controlling interest ( 0.1 ) 0.1 — 0.3

Comprehensive income from discontinued operations attributable to non-controlling interest — 0.1 — 0.2

3 unchanged sentences

Condensed Consolidated Statements of Shareholder's Equity

For the three month period ended December 31, 2023

For the six month period ended March 31, 2024

(in millions) Other

11 unchanged sentences

Balances as of December 31, 2023 2,167.3 551.5 ( 233.1 ) 2,485.7 2.5 2,488.2

Net income (loss) from continuing operations — 50.6 — 50.6 ( 0.2 ) 50.4

Income from discontinued operations, net of tax — 11.0 — 11.0 — 11.0

Other comprehensive income (loss), net of tax — — 2.0 2.0 ( 0.1 ) 1.9

Share based compensation 4.1 — — 4.1 — 4.1

Dividends paid to parent — ( 110.2 ) — ( 110.2 ) — ( 110.2 )

Balances as of March 31, 2024 $ 2,171.4 $ 502.9 $ ( 231.1 ) $ 2,443.2 $ 2.2 $ 2,445.4

See accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Shareholder's Equity

For the three month period ended January 1, 2023

For the six month period ended April 2, 2023

(in millions) Other

12 unchanged sentences

Balances as of January 1, 2023 2,158.0 ( 773.8 ) ( 288.8 ) 1,095.4 8.2 1,103.6

Net (loss) income from continuing operations — ( 75.3 ) — ( 75.3 ) 0.1 ( 75.2 )

Income from discontinued operations, net of tax — 21.9 — 21.9 — 21.9

Other comprehensive income, net of tax — — 16.0 16.0 0.2 16.2

Share based compensation 4.4 — — 4.4 4.4

Dividends paid to parent — ( 17.2 ) — ( 17.2 ) — ( 17.2 )

Balances as of April 2, 2023 $ 2,162.4 $ ( 844.4 ) $ ( 272.8 ) $ 1,045.2 $ 8.5 $ 1,053.7

See accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the three month periods ended December 31, 2023 and January 1, 2023

Three Month Periods Ended

(in millions) December 31, 2023 January 1, 2023

For the six month periods ended March 31, 2024 and April 2, 2023

Six Month Periods Ended

(in millions) March 31, 2024 April 2, 2023

Cash flows from operating activities

2 unchanged sentences

Net income (loss) from continuing operations 68.5 ( 115.0 )

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

Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities from continuing operations:

Depreciation 28.8 24.1

2 unchanged sentences

Impairment of intangible assets 43.0 67.0

Non-cash purchase accounting adjustments 0.5 0.5

Impairment of property, plant and equipment and operating lease assets 0.5 4.5

Gain from debt repurchase ( 4.7 ) —

Non-cash purchase accounting adjustments 0.9 0.9

Non-cash accrual for representation and warranty proceeds ( 15.0 ) —

Amortization of debt issuance costs and debt discount 1.7 4.0

3 unchanged sentences

Net changes in operating assets and liabilities ( 100.4 ) 187.5

Net cash provided (used) by operating activities from continuing operations 1.8 ( 67.6 )

Net cash used by operating activities from discontinued operations ( 22.4 ) ( 7.1 )

Net cash used by operating activities ( 20.6 ) ( 74.7 )

Net cash provided by operating activities from continuing operations 64.4 138.2

Net cash (used) provided by operating activities from discontinued operations ( 81.5 ) 29.0

Net cash (used) provided by operating activities ( 17.1 ) 167.2

Cash flows from investing activities

2 unchanged sentences

Proceeds from sale of short term investments 1,292.0 —

Purchase price settlement from sale of HHI ( 26.9 ) —

Other investing activities ( 0.1 ) —

Net cash provided (used) by investing activities from continuing operations 544.1 ( 25.9 )

3 unchanged sentences

Payment of debt ( 177.9 ) ( 21.7 )

Proceeds from issuance of debt — 90.0

Payment of debt issuance costs ( 3.2 ) ( 2.3 )

Payment of cash dividends to parent ( 356.3 ) ( 34.4 )

Net cash (used) provided by financing activities from continuing operations ( 423.4 ) 67.3

Net cash used by financing activities from continuing operations ( 537.4 ) ( 58.4 )

Net cash used by financing activities from discontinued operations — ( 0.7 )

Net cash (used) provided by financing activities ( 423.4 ) 66.9

Net cash used by financing activities ( 537.4 ) ( 59.1 )

Effect of exchange rate changes on cash and cash equivalents 2.3 9.7

23 unchanged sentences

For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

SBH’s and SB/RH’s fiscal year ends September 30 and the Company reports its results using fiscal quarters whereby each three month quarterly reporting period is approximately thirteen weeks in length and ends on a Sunday.

SBH’s and SB/RH’s fiscal year ends on September 30 and the Company 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.

As a result, the fiscal period end date for the three month periods included within this Quarterly Report for the Company are December 31, 2023 and January 1, 2023, respectively.

As a result, the fiscal period end date for the three and six month periods included within this Quarterly Report for the Company are March 31, 2024 and April 2, 2023, respectively.

Newly Adopted Accounting Standards

3 unchanged sentences

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 roll-forward information, which is effective for fiscal years beginning after December 15, 2023.

We adopted the ASU in fiscal 2023, except for the disclosure of roll-forward information, which was adopted during the first quarter of fiscal 2024.

The following table summarizes the roll-forward of the supplier finance program for the three month period ended December 31, 2023:

We adopted the ASU during the year ended September 30, 2023, except for the disclosure of roll-forward information, which was adopted during the first quarter of fiscal 2024.

The following table summarizes the roll-forward of the supplier finance program for the six month period ended March 31, 2024:

(in millions)

2 unchanged sentences

Confirmed invoices paid during the period ( 38.4 )

Outstanding payment obligations as of December 31, 2023

Outstanding payment obligations as of March 31, 2024

The outstanding payment obligations under the supplier finance program are included in Accounts Payable in the Company's Condensed Statement of Financial Position.

4 unchanged sentences

Early adoption is permitted, and the amendments should be applied retrospectively.

This ASU will be effective for our Form 10-K for fiscal 2025 and our Form 10-Q for the first quarter of fiscal 2026.

This ASU will be effective for our Form 10-K for the year ending September 30, 2025 and our Form 10-Q for the first quarter of the year ending September 30, 2026.

We are currently evaluating the impact this ASU may have on our consolidated financial statement disclosures.

4 unchanged sentences

however, retrospective application is also permitted.

This ASU will be effective for our Form 10-K for fiscal 2026.

This ASU will be effective for our Form 10-K for the year ending September 30, 2026.

We are currently evaluating the impact this ASU may have on our consolidated financial statement disclosures.

In March 2024, the U.S.

Securities and Exchange Commission ("SEC") adopted final rules under SEC Release Nos.

33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors , which requires registrants to disclose certain climate-related information in registration statements and annual reports.

The final rules include requirements to disclose material climate-related risks, activities to mitigate or adapt to such risks, information about the board of directors' oversight of climate-related risks and management's role in managing material climate-related risks, and information on any climate-related targets or goals that are material to the registrant's business, results of operations, or financial condition.

In addition, the rules would require certain climate-related disclosure as it relates to severe weather events and other natural conditions and carbon offsets and renewable energy credits.

Certain large registrants are also required to disclose Scope 1 and Scope 2 greenhouse gas ("GHG") emissions when material.

While the SEC voluntarily stayed the rules due to pending judicial review, the rules in their current form would be effective for the Company beginning in our Form 10-K for the year ending September 30, 2026.

The Company is currently assessing the impact that these rules may have on the Company's consolidated financial statements.

SPECTRUM BRANDS HOLDINGS, INC.

3 unchanged sentences

NOTE 2 – DIVESTITURES

The following table summarizes the components of Income from Discontinued Operations, Net of Tax in the Condensed Consolidated Statements of Income for the three month periods ended December 31, 2023 and January 1, 2023:

Three Month Periods Ended

(in millions) December 31, 2023 January 1, 2023

The following table summarizes the components of Income from Discontinued Operations, Net of Tax in the Condensed Consolidated Statements of Income for the three and six month periods ended March 31, 2024 and April 2, 2023:

Three Month Periods Ended Six Month Periods Ended

(in millions) March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Income from discontinued operations before income taxes – HHI $ 15.2 $ 59.5 $ 15.2 $ 104.4

Income (loss) from discontinued operations before income taxes – Other 10.3 ( 0.6 )

(Loss) income from discontinued operations before income taxes – Other — ( 1.4 ) 10.3 ( 2.0 )

Interest expense on corporate debt allocated to discontinued operations — 17.8 — 34.0

Income from discontinued operations before income taxes 15.2 40.3 25.5 68.4

Income tax (benefit) expense from discontinued operations ( 1.4 ) 8.6

Income tax expense from discontinued operations 4.2 18.9 2.8 27.5

Income from discontinued operations, net of tax 11.0 21.4 22.7 40.9

10 unchanged sentences

The consummation of the acquisition was not subject to any financing condition.

The following table summarizes the components of income from discontinued operations before income taxes associated with the HHI divestiture for the three month period ended January 1, 2023:

During the three and six month period ended March 31, 2024, the Company recognized $ 15.2 million in income from discontinued operations before income taxes - HHI related to a gain realized by a subsequently agreed reduction on accrued fees associated with the transaction that was previously recognized as a component of the gain on sale when the transaction closed in the prior year.

The following table summarizes the components of income from discontinued operations before income taxes associated with the HHI divestiture for the three and six month period ended April 2, 2023:

Three Month Period Ended

(in millions)

January 1, 2023

April 2, 2023 April 2, 2023

Net sales $ 383.3 $ 746.1

7 unchanged sentences

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

The following table presents significant non-cash items and capital expenditures of discontinued operations from the HHI divestiture for the three month period ended January 1, 2023:

The following table presents significant non-cash items and capital expenditures of discontinued operations from the HHI divestiture for the three and six month period ended April 2, 2023:

Three Month Period Ended

(in millions)

January 1, 2023

April 2, 2023 April 2, 2023

Share based compensation $ 0.3 $ 1.1

6 unchanged sentences

The Company and ASSA entered into customary TSAs that became effective upon the consummation of the transaction.

The TSA 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;

The TSAs support various shared back office administrative functions, including finance, sales and marketing, information technology, human resources, real estate and supply chain, customer service and procurement;

supporting both the transferred HHI operations and the continuing operations of the Company.

2 unchanged sentences

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 three month period ended December 31, 2023 the Company recognized a net income of $ 7.9 million associated with TSA charges.

The TSAs have 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 following the close of the transaction.

The Company recognized net income of $ 7.9 million and $ 15.9 million associated with TSA charges during the three and six month periods ended March 31, 2024, respectively.

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 December 31, 2023 and September 30, 2023, the Company had a net receivable of $ 7.0 million and $ 4.0 million, respectively, included in Other Receivables on the Company's Condensed 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 for outstanding settlements associated with the purchase agreement, including tax indemnifications for outstanding settlements with tax authorities and uncertain tax benefit obligations, among others.

As of December 31, 2023, the Company recognized $ 26.9 million, included within Accounts Payable, and $ 2.6 million, included within Other Long-Term Liabilities, on the Company’s Condensed Consolidated Statements of Financial Position.

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.

Income 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.

The Company also maintains a net payable or receivable with ASSA for net working capital attributable to commingled cash flow during the transaction period.

As of March 31, 2024 and September 30, 2023, the Company had a net receivable of $ 25.0 million and $ 4.0 million, respectively, included in Other Receivables on the Company's Condensed Consolidated Statement of Financial Position consisting of amounts due from ASSA for commingled cash flow and net TSA charges, including amounts subject to repayment by the Company.

The Company has also recognized net payables to ASSA for outstanding settlements associated with the Purchase Agreement, including tax indemnifications for outstanding settlements with tax authorities and uncertain tax benefit obligations, among others.

As of March 31, 2024, the Company recognized $ 2.7 million, included with Other Long-Term Liabilities, on the Company's Condensed Consolidated Statements of Financial Position.

During the three month period ended March 31, 2024, the Company paid $ 26.9 million to complete the purchase price settlement in accordance with the Purchase Agreement.

Income from discontinued operations before income taxes – other includes incremental pre-tax gain 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, 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.

During the three month period ended December 31, 2023, the Company realized gain within the income from discontinued operations from the reversal of certain tax indemnification liabilities following the receipt of audit results and other tax settlements associated with entities transferred as part of the GBL divestiture and for periods prior to the sale for which the Company has indemnified.

As of December 31, 2023 and September 30, 2023, the Company recognized $ 14.8 million and $ 25.3 million, respectively, related to indemnification payables in accordance with the acquisition agreements, primarily attributable to uncertain tax benefit obligations and outstanding settlements with tax authorities that were transferred and indemnified in accordance with the acquisition agreement, including $ 14.2 million and $ 8.6 million within Other Current Liabilities, respectively, and $ 0.6 million and $ 16.7 million, within Other Long-Term Liabilities, respectively, on the Company’s Condensed Consolidated Statements of Financial Position.

During the six month period ended March 31, 2024, the Company realized a gain attributable to a proposed settlement on outstanding tax audits that were previously recognized as uncertain tax benefit obligations at the time of sale and indemnified in accordance with the acquisition agreement.

As of March 31, 2024, the Company recognized $ 14.4 million related to indemnification payables in accordance with the acquisition agreements, primarily attributable to uncertain tax benefit obligations and outstanding settlements with tax authorities that were transferred, included within Other Current Liabilities on the Company's Condensed Consolidated Statements of Financial Position.

As of September 30, 2023, the Company recognized $ 25.3 million, including $ 8.6 million within Other Current Liabilities and $ 16.7 million, within Other Long-Term Liabilities on the Company’s Condensed Consolidated Statements of Financial Position.

NOTE 3 – REVENUE RECOGNITION

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

The following table disaggregates our revenue for the three month periods ended December 31, 2023 and January 1, 2023, by the Company’s key revenue streams, segments and geographic region (based upon destination):

Three Month Period Ended December 31, 2023 Three Month Period Ended January 1, 2023

The following table disaggregates our revenue for the three and six month periods ended March 31, 2024 and April 2, 2023, by the Company’s key revenue streams, segments and geographic region (based upon destination):

Three Month Period Ended March 31, 2024 Three Month Period Ended April 2, 2023

(in millions)

8 unchanged sentences

$ 289.9 $ 160.7 $ 267.9 $ 718.5 $ 296.7 $ 153.3 $ 279.2 $ 729.2

Six Month Period Ended March 31, 2024 Six Month Period Ended April 2, 2023

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

Product Sales

NA $ 348.0 $ 228.4 $ 240.1 $ 816.5 $ 360.8 $ 220.2 $ 286.1 $ 867.1

EMEA 193.0 — 245.2 438.2 181.0 — 236.5 417.5

LATAM 5.8 3.2 88.1 97.1 7.7 3.5 80.6 91.8

APAC 12.7 — 33.9 46.6 16.9 — 35.2 52.1

Licensing 4.7 1.1 3.6 9.4 5.0 0.9 4.3 10.2

Service and other 2.6 — 0.3 2.9 2.9 — 0.9 3.8

Total Revenue $ 566.8 $ 232.7 $ 611.2 $ 1,410.7 $ 574.3 $ 224.6 $ 643.6 $ 1,442.5

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

During the three month periods ended December 31, 2023 and January 1, 2023, there were two large retail customers, each exceeding 10% of consolidated Net Sales and representing 38.2 % and 36.2 % of consolidated Net Sales, respectively.

A significant portion of our product sales from our HPC segment are subject to the continued use and access to the Black & Decker ("B&D") brand through a license agreement with Stanley Black and Decker.

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

Net sales from B&D product sales consisted of $ 94.1 million , or 13.6 % of consolidated net sales, and $ 86.7 million, or 12.2 % of consolidated Net Sales, for the three month periods ended December 31, 2023 and January 1, 2023, respectively.

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

In the normal course of business, the Company may allow customers to return products 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 be received.

The allowance for product returns as of December 31, 2023 and September 30, 2023 was $ 16.3 million and $ 12.8 million, respectively.

During the three month periods ended March 31, 2024 and April 2, 2023, there were two large retail customers, each exceeding 10% of consolidated Net Sales and representing 33.5 % of consolidated Net Sales in each period.

During the six month periods ended March 31, 2024 and April 2, 2023, there were two large retail customers exceeding 10% of consolidated Net Sales and representing 35.8 % and 34.8 % of consolidated Net Sales, respectively.

All segments sell products to the two large retail customers exceeding 10% of consolidated Net Sales.

SPECTRUM BRANDS HOLDINGS, INC.

2 unchanged sentences

(in millions, unaudited)

NOTE 3 – REVENUE RECOGNITION (continued)

A significant portion of our product sales from our HPC segment are subject to the continued use and access to the Black & Decker® ("B+D") brand through a trademark license agreement with Stanley Black and Decker ("SBD").

Net sales from B+D product sales consisted of $ 78.6 million , or 10.9 % of consolidated net sales, and $ 85.1 million, or 11.7 % of consolidated Net Sales, for the three month periods ended March 31, 2024 and April 2, 2023, respectively.

Net sales from B+D product sales consisted of $ 172.5 million, or 12.2 %, and $ 171.9 million, or 11.9 %, of consolidated Net Sales for the six month periods ended March 31, 2024 and April 2, 2023, respectively.

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

The Company recently entered into a new trademark license agreement with SBD for the B+D brand during the subsequent period, see Note 18 - Subsequent Event for further detail .

In the normal course of business, the Company may allow customers to return products or take credit for product returns per the provisions in a sale agreement.

The allowance for product returns as of March 31, 2024 and September 30, 2023 was $ 15.3 million and $ 12.8 million, respectively.

The increase in the allowance for product returns are attributable to the additional returns estimated for the recently re-issued product recalls with the HPC segment in collaboration with the U.S.

Consumer Product Safety Commission ("CPSC"), further discussed in Note 15 - Commitments and Contingencies .

NOTE 4 – RECEIVABLES AND CONCENTRATION OF CREDIT RISK

The allowance for credit losses on the Company's trade receivables as of December 31, 2023 and September 30, 2023 was $ 7.8 million and $ 7.7 million, respectively.

The allowance for credit losses on the Company's trade receivables as of March 31, 2024 and September 30, 2023 was $ 7.0 million and $ 7.7 million, respectively.

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

As of December 31, 2023 and September 30, 2023, there were two large retail customers exceeding 10% of consolidated Net Trade Receivables and representing 47.9 % and 39.8 % of the Company's consolidated Net Trade Receivables, respectively.

As of March 31, 2024 and September 30, 2023, there were two large retail customers exceeding 10% of consolidated Net Trade Receivables and representing 43.7 % and 39.8 % of the Company's consolidated Net Trade Receivables, respectively.

NOTE 5 – INVENTORIES

1 unchanged sentence

(in millions)

December 31, 2023 September 30, 2023

March 31, 2024 September 30, 2023

Raw materials

5 unchanged sentences

Property, plant and equipment consist of the following:

(in millions) December 31, 2023 September 30, 2023

(in millions) March 31, 2024 September 30, 2023

Land, buildings and improvements $ 84.8 $ 83.4

6 unchanged sentences

Property, plant and equipment, net $ 269.5 $ 275.1

Depreciation expense from property, plant, and equipment for the three month periods ended December 31, 2023 and January 1, 2023, was $ 14.4 million and $ 12.2 million, respectively.

Depreciation expense from property, plant, and equipment for the three month periods ended March 31, 2024 and April 2, 2023, was $ 14.3 million and $ 11.9 million, respectively;

and for the six month periods ended March 31, 2024 and April 2, 2023 was $ 28.8 million and $ 24.1 million, respectively.

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

3 unchanged sentences

Foreign currency impact 3.6 — 3.6

As of December 31, 2023 $ 517.5 $ 342.6 $ 860.1

As of March 31, 2024 $ 515.7 $ 342.6 $ 858.3

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 7 - GOODWILL AND INTANGIBLE ASSETS (continued)

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

December 31, 2023 September 30, 2023

March 31, 2024 September 30, 2023

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

6 unchanged sentences

Total Intangible Assets $ 1,482.4 $ ( 480.1 ) $ 1,002.3 $ 1,516.3 $ ( 456.2 ) $ 1,060.1

During the three month period ended December 31, 2023, the Company identified a triggering event attributable to a change in brand strategy shifting actual and projected future revenues resulting in recognition of a $ 4.0 million impairment on intangible assets.

Amortization expense from the intangible assets for the three month periods ended December 31, 2023 and January 1, 2023 was $ 11.1 million and $ 10.4 million, respectively.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 7 - GOODWILL AND INTANGIBLE ASSETS (continued)

During the three month period ended March 31, 2024, the Company and H&G segment identified a triggering event for our Rejuvenate® tradename attributable to a loss of a key distribution expansion opportunity resulting in a significant shift in the projected distribution strategy that reduced the anticipated near-term sales opportunities and expectations, resulting in the recognition of a $ 39.0 million impairment on the indefinite lived intangible asset.

During the six month period ended March 31, 2024, the Company and the HPC segment identified a triggering event attributable to a change in brand strategy for a non-core tradename, resulting in recognition of a $ 4.0 million impairment on the indefinite intangible assets.

Amortization expense from the intangible assets for the three month periods ended March 31, 2024 and April 2, 2023 was $ 11.1 million and $ 10.5 million, respectively;

and for the six month periods ended March 31, 2024 and April 2, 2023 was $ 22.2 million and $ 20.9 million, respectively.

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

2 unchanged sentences

Debt with external lenders consists of the following:

December 31, 2023 September 30, 2023

March 31, 2024 September 30, 2023

(in millions) Amount Rate Amount Rate

14 unchanged sentences

Long-term debt, net of current portion $ 1,374.4 $ 1,546.9

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 8 - DEBT (continued)

Credit Agreement

13 unchanged sentences

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).

During the three month period ended December 31, 2023, the Company incurred $ 4.0 million in fees in connection with the closing of the Credit Agreement, with $ 3.2 million in fees capitalized and amortized as debt issuance costs over the term of the Credit Agreement.

As of December 31, 2023, the Company's Revolver Facility has a borrowing availability of $ 486.9 million, net of outstanding letters of credit of $ 13.1 million.

During the six month period ended March 31, 2024, the Company incurred $ 4.0 million in fees in connection with the closing of the Credit Agreement, with $ 3.2 million in fees capitalized and amortized as debt issuance costs over the term of the Credit Agreement.

As of March 31, 2024, the Company's Revolver Facility has a borrowing availability of $ 490.3 million, net of outstanding letters of credit of $ 9.7 million.

Debt Repurchase

During the three month period ended December 31, 2023, the Company repurchased Senior Notes on the open market, at a discount, which are ultimately retired upon receipt.

During the six month period ended March 31, 2024, the Company repurchased Senior Notes 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 from debt repurchase on the Company's Condensed Consolidated Statements of Income, net any write-off of related deferred financing costs.

For the three month period ended December 31, 2023, the Company repurchased $ 179.0 million of outstanding Senior Notes, consisting of $ 8.1 million of the 5.00 % Senior Notes due October 1, 2029, $ 132.8 million of the 5.50 % Senior Notes due July 15, 2030, and $ 38.1 million of the 3.875 % Senior Notes, due March 15, 2031.

As a result of repurchasing outstanding debt notes during the three month period ended December 31, 2023, there was a gain of $ 4.7 million related to realized gain on the settlement of the obligations recorded, net write-off from associated deferred issuance costs.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

For the six month period ended March 31, 2024, the Company repurchased $ 180.1 million of outstanding Senior Notes, consisting of $ 8.1 million of the 5.00 % Senior Notes due October 1, 2029, $ 132.8 million of the 5.50 % Senior Notes due July 15, 2030, and $ 39.2 million of the 3.875 % Senior Notes, due March 15, 2031.

As a result of repurchasing outstanding debt notes during the six month period ended March 31, 2024, there was a gain of $ 4.7 million related to realized gain on the settlement of the obligations recorded, net write-off from associated deferred issuance costs.

NOTE 9 – DERIVATIVES

7 unchanged sentences

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

At December 31, 2023, the Company had a series of foreign exchange derivative contracts outstanding through June 2025.

At March 31, 2024, the Company had a series of foreign exchange derivative contracts outstanding through September 2025.

The derivative net loss estimated to be reclassified from AOCI into earnings over the next 12 months is $ 4.1 million, net of tax.

At December 31, 2023 and September 30, 2023, the Company had foreign exchange derivative contracts designated as cash flow hedges with a notional value of $ 329.3 million and $ 320.2 million, respectively.

The following table summarizes the impact of designated cash flow hedges and the pre-tax gain (loss) recognized in the Condensed Consolidated Statements of Income for the three month periods ended December 31, 2023 and January 1, 2023, respectively:

At March 31, 2024 and September 30, 2023, the Company had foreign exchange derivative contracts designated as cash flow hedges with a notional value of $ 324.8 million and $ 320.2 million, respectively.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 9 – DERIVATIVES (continued)

The following table summarizes the impact of designated cash flow hedges and the pre-tax gain (loss) recognized in the Condensed Consolidated Statements of Income for the three and six month periods ended March 31, 2024 and April 2, 2023, respectively:

Unrealized Gain (Loss) in OCI Before Reclassification Reclassified Gain (Loss) to Continuing Operations

For the three month periods ended (in millions)

December 31, 2023 January 1, 2023 Line Item December 31, 2023 January 1, 2023

March 31, 2024 April 2, 2023 Line Item March 31, 2024 April 2, 2023

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

1 unchanged sentence

Total $ 1.4 $ ( 7.4 ) $ ( 4.8 ) $ ( 4.9 )

Unrealized Gain (Loss) in OCI Before Reclassification Reclassified Gain (Loss) to Continuing Operations

For the six month periods ended (in millions)

March 31, 2024 April 2, 2023 Line Item March 31, 2024 April 2, 2023

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

Foreign exchange contracts ( 9.2 ) ( 33.2 ) Cost of goods sold ( 10.0 ) ( 2.5 )

Total $ ( 9.2 ) $ ( 33.1 ) $ ( 9.9 ) $ ( 2.4 )

Derivative Contracts Not Designated as Hedges for Accounting Purposes

The Company periodically enters into foreign exchange forward 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, Australian Dollars, Canadian Dollars, Colombian Peso, Euros, Hungarian Forint, Japanese Yen, Mexican Pesos, Pounds Sterling, Singapore Dollar, Swiss Franc, Turkish Lira, or U.S.

These obligations generally require the Company to exchange foreign currencies for, among others, Canadian Dollars, Colombian Peso, Euros, Hungarian Forint, Czech Koruna, Japanese Yen, Mexican Pesos, Pounds Sterling, Singapore Dollar, Swiss Franc, Turkish Lira, or U.S.

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

The gain or 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 December 31, 2023, the Company had a series of forward exchange contracts outstanding through April 2024.

At December 31, 2023 and September 30, 2023, the Company had $ 709.5 million and $ 671.5 million, respectively, of notional value of such foreign exchange derivative contracts outstanding.

The following summarizes the impact of derivative instruments not designated as hedges for accounting purposes on the accompanying Condensed Consolidated Statements of Income for the three month periods ended December 31, 2023 and January 1, 2023, pre-tax:

(in millions) Line Item December 31, 2023 January 1, 2023

Foreign exchange contracts Other non-operating expense (income), net $ ( 13.1 ) $ ( 22.3 )

At March 31, 2024, the Company had a series of forward exchange contracts outstanding through April 2024.

At March 31, 2024 and September 30, 2023, the Company had $ 690.8 million and $ 671.5 million, respectively, of notional value of such foreign exchange derivative contracts outstanding.

The following summarizes the gain (loss) realized from derivative instruments not designated as hedges for accounting purposes on the accompanying Condensed Consolidated Statements of Income for the three and six month periods ended March 31, 2024 and April 2, 2023, pre-tax:

Three Month Periods Ended Six Month Periods Ended

(in millions) Line Item March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Foreign exchange contracts Other non-operating expense, net $ 5.5 $ ( 0.1 ) $ ( 7.6 ) $ ( 22.3 )

Fair Value of Derivative Instruments

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

(in millions) Line Item December 31, 2023 September 30, 2023

(in millions) Line Item March 31, 2024 September 30, 2023

Derivative Assets

11 unchanged sentences

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

The Company considers these exposures when measuring its credit reserve on its derivative assets, which were not significant as of December 31, 2023.

The Company considers these exposures when measuring its credit reserve on its derivative assets, which were not significant as of March 31, 2024.

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

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

As of March 31, 2024 and September 30, 2023, there was no cash collateral outstanding and no posted standby letters of credit related to such liability positions.

SPECTRUM BRANDS HOLDINGS, INC.

3 unchanged sentences

NOTE 9 – DERIVATIVES (continued)

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

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

As of December 31, 2023 and September 30, 2023, there was no cash collateral outstanding and no posted standby letters of credit related to such liability positions.

Net Investment Hedge

4 unchanged sentences

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.

As of December 31, 2023, the full principal amount was designated as a net investment hedge and considered fully effective.

The following summarizes the unrealized gain (loss) from the net investment hedge recognized in Other Comprehensive Income for the three month periods ended December 31, 2023 and January 1, 2023, pre-tax:

Unrealized Gain (Loss) in OCI (in millions) December 31, 2023 January 1, 2023

As of March 31, 2024, the full principal amount was designated as a net investment hedge and considered fully effective.

The following summarizes the unrealized gain (loss) from the net investment hedge recognized in Other Comprehensive Income for the three and six month periods ended March 31, 2024 and April 2, 2023, pre-tax:

Three Month Periods Ended Six Month Periods Ended

Unrealized Gain (Loss) in OCI (in millions) March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Net investment hedge $ 11.6 $ ( 12.5 ) $ ( 9.7 ) $ ( 46.4 )

1 unchanged sentence

The Company has not changed the valuation techniques used in measuring the fair value of any financial assets and liabilities during the year.

The carrying value and estimated fair value of financial instruments as of December 31, 2023 and September 30, 2023 according to the fair value hierarchy are as follows:

December 31, 2023 September 30, 2023

The carrying value and estimated fair value of financial instruments as of March 31, 2024 and September 30, 2023 according to the fair value hierarchy are as follows:

March 31, 2024 September 30, 2023

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

10 unchanged sentences

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.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 11 – SHAREHOLDERS' EQUITY

Share Repurchases

The following summarizes the activity of common stock repurchases for the three month periods ended December 31, 2023 and January 1, 2023:

December 31, 2023 January 1, 2023

The following summarizes the activity of common stock repurchases for the three and six month periods ended March 31, 2024.

There was no repurchase activity for the three and six month periods ended April 2, 2023.

March 31, 2024

Three Month Periods Ended

1 unchanged sentence

Open Market Purchases 1.2 $ 80.62 $ 97.6

March 31, 2024

Six Month Periods Ended (in millions except per share data) Number of

Repurchased Average

Per Share Amount

Open Market Purchases 4.5 $ 75.41 $ 340.5

ASR 1.3 65.84 83.2

Total Purchases 5.8 73.32 $ 423.7

During the three month period ended December 31, 2023, SBH entered into a $ 200.0 million rule 10b5-1 repurchase plan to facilitate daily market share repurchases through November 15, 2024, until the cap is reached or until the plan is terminated.

As of December 31, 2023, there has been $ 11.1 million repurchased pursuant to the 10b5-1 repurchase plan.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 11 – SHAREHOLDER’S EQUITY (continued)

During the six month period ended March 31, 2024, SBH entered into a $ 200.0 million rule 10b5-1 repurchase plan to facilitate daily market share repurchases through November 15, 2024, until the cap is reached or until the plan is terminated.

As of March 31, 2024, there has been $ 108.7 million repurchased pursuant to the 10b5-1 repurchase plan.

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 $ 500.0 million of the Company’s common stock, par value $ 0.01 per share.

7 unchanged sentences

NOTE 12 – SHARE BASED COMPENSATION

The following is a summary of share based compensation expense included in net loss from continuing operations for the three month periods ended December 31, 2023 and January 1, 2023 for SBH and SB/RH, respectively.

(in millions) December 31, 2023 January 1, 2023

The following is a summary of share based compensation expense included in Selling, General & Administrative on the Company's Condensed Consolidated Statements of Income for the three and six month periods ended March 31, 2024 and April 2, 2023 for SBH and SB/RH, respectively.

Three Month Periods Ended Six Month Periods Ended

(in millions) March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

SBH $ 4.5 $ 4.5 $ 8.4 $ 7.7

11 unchanged sentences

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

The following is a summary of RSU grants issued during the three month period ended December 31, 2023:

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 12 – SHARE BASED COMPENSATION (continued)

The following is a summary of RSU grants issued during the six month period ended March 31, 2024:

(in millions, except per share data) Units Weighted

8 unchanged sentences

Total grants 0.44 66.83 $ 29.5 0.42 66.86 $ 28.1

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 13 – ACCUMULATED OTHER COMPREHENSIVE INCOME

The change in the components of AOCI for the three month period ended December 31, 2023, was as follows:

The change in the components of AOCI for the six month period ended March 31, 2024, was as follows:

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

9 unchanged sentences

Balance at December 31, 2023 ( 195.2 ) ( 2.6 ) ( 35.4 ) ( 233.2 )

Other comprehensive (loss) income before reclassification ( 0.4 ) 1.4 0.3 1.3

Net reclassification for loss to income from continuing operations — 4.8 0.2 5.0

Other comprehensive (loss) income before tax ( 0.4 ) 6.2 0.5 6.3

Deferred tax effect ( 2.9 ) ( 1.6 ) 0.1 ( 4.4 )

Other comprehensive (loss) income , net of tax ( 3.3 ) 4.6 0.6 1.9

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

Other comprehensive (loss) income attributable to controlling interest ( 3.2 ) 4.6 0.6 2.0

Balance at March 31, 2024 $ ( 198.4 ) $ 2.0 $ ( 34.8 ) $ ( 231.2 )

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

(in millions) Derivative Instruments Defined Benefit Pension Total

(in millions) Three Month Period Ended March 31, 2024 Six Month Period Ended March 31, 2024

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

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

1 unchanged sentence

Other non-operating expense (income), net — ( 0.2 ) ( 0.2 ) — ( 0.4 ) ( 0.4 )

The change in the components of AOCI for the three month period ended January 1, 2023, was as follows:

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 13 – ACCUMULATED OTHER COMPREHENSIVE INCOME (continued)

The change in the components of AOCI for the six month period ended April 2, 2023, was as follows:

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

10 unchanged sentences

Balance at January 1, 2023 ( 250.8 ) ( 3.9 ) ( 34.2 ) ( 288.9 )

Other comprehensive income (loss) before reclassification 14.6 ( 7.1 ) 0.1 7.6

Net reclassification for loss (gain) to income from continuing operations — 4.9 ( 0.7 ) 4.2

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

Other comprehensive income (loss) before tax 14.6 ( 2.3 ) ( 0.6 ) 11.7

Deferred tax effect 3.7 0.7 0.1 4.5

Other comprehensive income (loss), net of tax 18.3 ( 1.6 ) ( 0.5 ) 16.2

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

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

Other comprehensive income (loss) attributable to controlling interest 18.1 ( 1.6 ) ( 0.5 ) 16.0

Balance at April 2, 2023 $ ( 232.7 ) $ ( 5.5 ) $ ( 34.7 ) $ ( 272.9 )

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

(in millions) Derivative Instruments Defined Benefit Pension Total

(in millions) Three Month Period Ended April 2, 2023 Six Month Period Ended April 2, 2023

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

Net Sales $ — $ — $ — $ 0.1 $ — $ 0.1

1 unchanged sentence

Other non-operating expense (income), net — 0.7 0.7 — ( 0.2 ) ( 0.2 )

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

Income from discontinued operations, net of tax 0.1 — 0.1 0.1 — 0.1

NOTE 14 – INCOME TAXES

The effective tax rate for the three month periods ended December 31, 2023 and January 1, 2023, was as follows:

Effective tax rate December 31, 2023 January 1, 2023

The effective tax rate for the three and six month periods ended March 31, 2024 and April 2, 2023, was as follows:

Three Month Periods Ended Six Month Periods Ended

Effective tax rate March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

SBH 33.8 % 31.7 % 36.0 % 29.0 %

SB/RH 33.7 % 31.2 % 35.5 % 28.7 %

The estimated annual effective tax rate applied to the three month periods ended December 31, 2023, differs from the US federal statutory rate of 21 % principally due to income earned outside the U.S.

The estimated annual effective tax rate applied to the three and six month periods ended March 31, 2024, differs from the US federal statutory rate of 21 % principally due to income earned outside the U.S.

that is subject to U.S.

tax, including the U.S.

tax on global intangible low taxed income (“GILTI”), and certain nondeductible expenses.

tax on global intangible low taxed income (“GILTI”), state income taxes, and certain nondeductible expenses.

The Company is projecting a U.S.

1 unchanged sentence

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

As of December 31, 2023 and September 30, 2023, there was $ 88.7 million and $ 77.8 million of U.S.

As of March 31, 2024 and September 30, 2023, there was $ 88.7 million and $ 77.8 million of U.S.

federal income taxes receivable from its parent company on the SB/RH Condensed Consolidated Statements of Financial Position, calculated as if SB/RH were a separate taxpayer.

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 15 – COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

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 December 31, 2023, there was an environmental remediation liability of $ 5.3 million, with $ 1.4 million included in Other Current Liabilities and $ 3.9 million included in Other Long-Term Liabilities on the Condensed Consolidated Statements of Financial Position.

As of March 31, 2024, there was an environmental remediation liability of $ 4.9 million, with $ 1.1 million included in Other Current Liabilities and $ 3.8 million included in Other Long-Term Liabilities on the Condensed Consolidated Statements of Financial Position.

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 Condensed Consolidated Statements of Financial Position.

3 unchanged sentences

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 December 31, 2023 and September 30, 2023, the Company recognized $ 2.8 million and $ 3.0 million, respectively, in product liability, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

As of March 31, 2024 and September 30, 2023, the Company recognized $ 2.6 million and $ 3.0 million, respectively, in product liability, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

The Company believes that any additional liability in excess of the amounts provided that may result from resolution of these matters will not have a material adverse effect on the consolidated financial condition, results of operations or cash flows of the Company.

2 unchanged sentences

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 of warranty accruals as of December 31, 2023 and September 30, 2023, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

Product Safety Recall.

During 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 $ 3.8 million and $ 6.0 million as of December 31, 2023 and September 30, 2023, respectively, in Other Current Liabilities on the Consolidated Statement of Financial Position associated with the costs for the recalls.

Additionally, 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 $ 6.1 million and $ 7.1 million as of December 31, 2023 and September 30, 2023, respectively, in Other Receivables on the Condensed Consolidated Statement of Financial Position related to recovery from such indemnification provisions.

The Company recognized $ 0.2 million and $ 0.3 million of warranty accruals as of March 31, 2024 and September 30, 2023, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.

Product Safety Recalls.

During the years ended September 30, 2022 and 2023, the Company and its HPC segment initiated voluntary product safety recalls in collaboration with the U.S.

Consumer Product Safety Commission (" CPSC") for specific products, 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 of retail inventory from customers, write-off of affected inventory, and other costs to facilitate the recall such as notification, shipping and handling, consumer refunds, and rework and destruction of affected products, as needed, and evaluated the probability of redemption.

Certain products were remediated through the issuance of replacement parts and did not require a full recall of the affected product, with costs included to facilitate the remediation, rework and related shipping and handling.

During the three month period ended March 31, 2024, the Company was required by the CPSC to reissue a recall that was previously remediated through the issuance of a replacement part in accordance with previously agreed-up remediation plans with the CPSC, expanding the requirements to issue a complete recall of the affected product.

As a result, the reissued recall resulted in the recognition of incremental costs and reserves to address inventory returns from customers, write-off of the affected inventory, consumer refunds and other costs to facilitate the reissued recall.

As a result, the Company recognized $ 6.2 million and $ 6.0 million as of March 31, 2024 and September 30, 2023, respectively, in Other Current Liabilities on the Consolidated Statement of Financial Position associated with the estimated costs for the recalls.

Additionally, for certain products affected by the recalls, 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 $ 6.7 million and $ 7.1 million as of March 31, 2024 and September 30, 2023, respectively, in Other Receivables on the Condensed Consolidated Statement of Financial Position related to recovery from such indemnification provisions.

Representation and Warranty Insurance Proceeds.

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") pursuant to a Membership Interest Purchase agreement dated February 3, 2022 (the "Acquisition Agreement").

During the year ended September 30, 2023, the Company submitted a claim under its representation and warranty insurance policies, seeking coverage for losses resulting from breaches of certain representations and warranties in the Acquisition Agreement.

During the three and six month periods ended March 31, 2024, the Company recognized a gain of $ 65.0 million on the Condensed Consolidated Statement of Income attributable to insurance proceeds received from its representation and warranty insurance policies.

As of March 31, 2024, the Company has recognized cash receipts of $ 50.0 million associated with the insurance proceeds and $ 15.0 million as Other Receivables on the Condensed Statement of Financial Position based on the settlement agreement for the remaining portion which was received in April 2024.

SPECTRUM BRANDS HOLDINGS, INC.

3 unchanged sentences

NOTE 16 – SEGMENT INFORMATION

Net sales relating to the segments for the three month periods ended December 31, 2023 and January 1, 2023, are as follows:

(in millions) December 31, 2023 January 1, 2023

Net sales relating to the segments for the three and six month periods ended March 31, 2024 and April 2, 2023, are as follows:

Three Month Periods Ended Six Month Periods Ended

(in millions) March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

GPC $ 289.9 $ 296.7 $ 566.8 $ 574.3

160.7 153.3 232.7 224.6

HPC 267.9 279.2 611.2 643.6

5 unchanged sentences

See Note 12 – Share Based Compensation for further details;

• Incremental amounts attributable to strategic transactions, restructuring and optimization 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, development and implementation of strategies to optimize operations, reduce costs, increase revenues, improve profit margins, including recognition of one-time exit or disposal costs.

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

• Incremental project costs associated with strategic transactions, restructuring and optimization 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, development and implementation of strategies to optimize operations, reduce costs, increase revenues, improve profit margins, including recognition of one-time exit or disposal costs.

These amounts are excluded from our performance metrics as they are reflective of incremental investment by the Company towards strategic initiatives and business development activities.

Incremental costs directly attributable to such initiatives are not considered recurring or reflective of the continuing ongoing operations of the consolidated group or segments.

Refer to the Strategic transactions, restructuring and optimization initiatives discussion within the Overview section, included elsewhere in this Quarterly Report, for further discussion;

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

• Non-cash gain from the reduction in the contingent consideration liability associated with the Tristar Business acquisition;

During the three and six month periods ended March 31, 2024 and April 2, 2023, the Company recognized non-cash expense due to the incremental value recognized as part of the Tristar Business acquisition on right of use operating leases with below market rent;

• 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, when applicable.

• Incremental costs recognized by the HPC segment attributable to the realization of product recalls initiated in the prior year.

See Note 15 - Commitments and Contingencies for further details;

During the three and six month period ended March 31, 2024, the Company recognized impairments of its Rejuvenate® and a non-core HPC tradename indefinite lived intangible assets, along with an impairment charge on a right of use operating lease asset associated with an HPC facility that was exited prior to end of its term.

See Note 7 - Goodwill and Intangibles, for further details.

During the three and six month period ended April 2, 2023, the Company recognized impairment of indefinite lived intangible assets for its Rejuvenate® and PowerXL® indefinite lived tradenames, along with an impairment on idle equipment associated with the early exit of a GPC warehouse lease and impairments on right of use operating lease assets associated with GPC and HPC facilities that were exited prior to the end of their term;

• Gain realized from proceeds received on the representation and warranties insurance policies associated with the Tristar Business acquisition.

Refer to Note 15 - Commitment and Contingencies in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further details;

• Incremental reserves for non-recurring litigation or environmental remediation activity attributable to significant and unusual nonrecurring matters with no previous history or precedent.

• Unallocated shared costs associated with discontinued operations from certain shared and center-led administrative functions, through the close of the HHI divestiture on June 20, 2023;

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.

Subsequent to the close of the HHI divestiture, amounts attributable to unallocated shared costs would be mitigated through income from TSAs, subsequent strategic or restructuring initiatives, elimination of extraneous costs, or re-allocations or absorption of existing continuing operations.

See Note 2 – Divestitures for further details;

• Impact from the early settlement of foreign currency cash flow hedges, resulting in 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 excluded gains intended to mitigate costs during the year ending September 30, 2023;

• Other adjustments primarily attributable to:

(1) key executive severance and other one-time compensatory costs;

and (2) non-recurring unusual insurable losses.

During the three and six month periods ended March 31, 2024, such costs were directly attributable to legal costs incurred for the proceeds received from the representation and warranties insurance policies associated with the Tristar Business acquisition.

Refer to Note 15 - Commitment and Contingencies for further details;

• Non-cash gain realized from the repurchase of debt obligations at a discount, net deferred financing costs, during the three and six month periods ended March 31, 2024;

• Incremental costs associated with the recognition of product recall costs incurred by the HPC segment in collaboration with the CPSC, initiated at the end of the year ended September 30 2022 and during the year ended September 30, 2023, resulting in the accrual and recognition of incremental costs for the recall, product returns from customers, write-off of inventory on hand, and other costs such as notification, shipping and handling, rework and destruction of affected products, and consumer refunds, as needed.

Such costs are not recurring and directly attributable to the recall event, excluding all other costs associated with product warranty and returns.

During the three month period ended March 31, 2024, the Company was required by the CPSC to reissue a previously issued recall to provide a cash refund to customers, resulting in the recognition of incremental costs and reserves See Note 15 - Commitments and Contingencies for further details;

• Unallocated shared costs reflect the costs associated with certain shared and center-led administrative functions such as information technology, human resources, finance and accounting, supply chain and commercial operations, supporting the HHI business during the period the Company owned and operated the business through the close of the HHI divestiture on June 20, 2023.

Such costs are excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations in accordance of US GAAP, but reflected as part of income from continuing operations for all periods presented, and requiring retroactive adjustment for all periods presented.

HHI was previously a segment of the consolidated group and was excluded from the consolidated Adjusted EBITDA since being recognized as discontinued operations.

As a result, for all periods in which HHI was owned and operated by the Company, including comparable periods requiring retroactive adjustment, the adjustment is recognized to reconcile net income from continuing operations to Adjusted EBITDA of the remaining segments of the consolidated group.

With the close of the HHI divestiture on June 20, 2023, there is no adjustment recognized as such shared costs are mitigated through income from TSAs during the transition period post-separation, with subsequent restructuring initiatives to rightsize extraneous costs.

See Note 2 – Divestitures in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for further details;

• Non-cash gain from the remeasurement in the contingent consideration liability associated with the Tristar Business acquisition during the six month period ended March 31, 2023;

SPECTRUM BRANDS HOLDINGS, INC.

3 unchanged sentences

NOTE 16 - SEGMENT INFORMATION (continued)

Segment Adjusted EBITDA for the reportable segments for SBH for the three month periods ended December 31, 2023 and January 1, 2023, are as follows:

• For the three and six month periods ended April 2, 2023, the impact from the early settlement of foreign currency cash flow hedges during the year ended September 30, 2022, resulting in 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 excluded gains intended to mitigate costs during the year ending September 30, 2023;

• Other adjustments are attributable to:

(1) key executive severance and other one-time compensatory costs;

and (2) non-recurring unusual insurable losses, including any the receipt of insurance proceeds or recovery realized.

Segment Adjusted EBITDA for the reportable segments for SBH for the three and six month periods ended March 31, 2024 and April 2, 2023, are as follows:

Three Month Periods Ended Six Month Periods Ended

(in millions)

December 31, 2023 January 1, 2023

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

GPC $ 62.3 $ 46.3 $ 115.1 $ 83.5

7 unchanged sentences

Share based compensation 4.5 4.5 8.4 7.7

Tristar integration — 5.7

HHI separation costs 1.3 1.5

HHI divestiture and separation costs 0.8 1.4 2.1 2.9

HPC separation initiatives 2.8 1.1 3.1 3.5

Fiscal 2023 restructuring 0.5 —

Fiscal 2022 restructuring — 0.6

Russia closing initiatives — 2.9

Tristar integration — 4.0 — 9.7

Fiscal 2023 and 2022 restructuring 0.4 4.6 0.9 5.1

Global ERP transformation 3.9 3.3 6.9 4.9

Russia closing initiative — ( 0.1 ) — 2.8

Other project costs 0.1 6.5 0.1 11.9

Unallocated shared costs — 6.3

Non-cash purchase accounting adjustments 0.5 0.5 0.9 0.9

Gain from debt repurchase ( 4.7 ) —

Gain from remeasurement of contingent consideration liability — ( 1.5 )

Impairment of equipment and operating lease assets 0.5 4.2 0.5 4.5

Impairment of intangible assets 39.0 67.0 43.0 67.0

Early settlement of foreign currency cash flow hedges — 2.6

Representation and warranty insurance proceeds ( 65.0 ) — ( 65.0 ) —

Legal and environmental 0.3 — 1.5 —

Gain from debt repurchase — — ( 4.7 ) —

HPC product recall 6.7 1.6 6.0 1.9

Unallocated shared costs — 6.3 — 12.5

Early settlement of foreign currency cash flow hedges — 1.3 — 3.9

Gain from remeasurement of contingent consideration liability — — — ( 1.5 )

Other 0.1 0.6 0.5 5.0

5 unchanged sentences

NOTE 16 - SEGMENT INFORMATION (continued)

Segment Adjusted EBITDA for reportable segments for SB/RH for the three month periods ended December 31, 2023 and January 1, 2023, are as follows:

Segment Adjusted EBITDA for reportable segments for SB/RH for the three and six month periods ended March 31, 2024 and April 2, 2023, are as follows:

Three Month Periods Ended Six Month Periods Ended

(in millions)

December 31, 2023 January 1, 2023

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

GPC $ 62.3 $ 46.3 $ 115.1 $ 83.5

7 unchanged sentences

Share based compensation 4.1 4.0 7.8 7.1

Tristar integration — 5.7

HHI divestiture and separation costs 0.8 1.4 2.1 2.9

HPC separation initiatives 2.8 1.1 3.1 3.5

Fiscal 2023 restructuring 0.5 —

Fiscal 2022 restructuring — 0.6

Russia closing initiatives — 2.9

Tristar integration — 4.0 — 9.7

Fiscal 2023 and 2022 restructuring 0.4 4.6 0.9 5.1

Global ERP transformation 3.9 3.3 6.9 4.9

Russia closing initiative — ( 0.1 ) — 2.8

Other project costs 0.1 6.5 0.1 11.9

Unallocated shared costs — 6.3

Non-cash purchase accounting adjustments 0.5 0.5 0.9 0.9

Gain from debt repurchase ( 4.7 ) —

Gain from remeasurement of contingent consideration liability — ( 1.5 )

Impairment of equipment and operating lease assets 0.5 4.2 0.5 4.5

Impairment of intangible assets 39.0 67.0 43.0 67.0

Early settlement of foreign currency cash flow hedges — 2.6

Representation and warranty insurance proceeds ( 65.0 ) — ( 65.0 ) —

Legal and environmental 0.3 — 1.5 —

Gain from debt repurchase — — ( 4.7 ) —

HPC product recall 6.7 1.6 6.0 1.9

Unallocated shared costs — 6.3 — 12.5

Early settlement of foreign currency cash flow hedges — 1.3 — 3.9

Gain from remeasurement of contingent consideration liability — — — ( 1.5 )

Other 0.1 0.6 0.6 5.0

1 unchanged sentence

NOTE 17 – EARNINGS PER SHARE – SBH

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive shares for the three month periods ended December 31, 2023 and January 1, 2023, are as follows:

The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive shares for the three and six month periods ended March 31, 2024 and April 2, 2023, are as follows:

Three Month Periods Ended Six Month Periods Ended

(in millions, except per share amounts)

December 31, 2023 January 1, 2023

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Net income (loss) from continuing operations attributable to controlling interest $ 50.1 $ ( 75.1 ) $ 67.5 $ ( 115.3 )

12 unchanged sentences

Weighted average number of anti-dilutive shares excluded from denominator — 0.1 — 0.1

SPECTRUM BRANDS HOLDINGS, INC.

SB/RH HOLDINGS, LLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, unaudited)

NOTE 18 – SUBSEQUENT EVENT

In May 2024, the Company and its HPC segment entered into a new trademark license agreement (the "License Agreement") with SBD which terminates the previous arrangement, with an effective date of January 1, 2024.

Pursuant to the License Agreement, the Company will license the B+D brand in North America, Latin America (excluding Brazil) and the Caribbean for four categories of household appliance:

beverage products, food preparation products, garment care products and cooking products.

The License Agreement has an initial four-year term ending December 31, 2027, with two subsequent four-year renewal rights each based upon meeting certain sales targets at the end of each renewal period, extending the total contract term to December 31, 2035.

The License Agreement does not renew if these targets are not satisfied.

Under the terms of the License Agreement, the Company agrees to pay SBD royalties based on a percentage of sales, with a minimum annual royalty payment of $ 11.7 million for the first year in the initial term, with decreases in subsequent years in the initial term down to $ 10.2 million and is subject to adjustment with each renewal period.

The License Agreement also requires us to comply with maximum annual returns rates for products and promotional spending commitments, See Note 3 - Revenue Recognition for further detail on revenue concentration from B+D products.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements