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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 2020April 4, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to______
spb-20200628_g1.jpgspb-20210404_g1.jpg
Commission File No.
Name of Registrant, State of Incorporation,
Address of Principal Offices, and Telephone No.
IRS Employer Identification No.
1-4219Spectrum Brands Holdings, Inc.74-1339132
(a Delaware corporation)
3001 Deming Way
Middleton, WI 53562
(608) 275-3340
www.spectrumbrands.com
333-192634-03SB/RH Holdings, LLC27-2812840
(a Delaware limited liability company)
3001 Deming Way
Middleton, WI 53562
(608) 275-3340
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Spectrum Brands Holdings, Inc.Yes☒No☐
SB/RH Holdings, LLCYes☒No☐
Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 
Spectrum Brands Holdings, Inc.Yes☒No☐
SB/RH Holdings, LLCYes☒No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
RegistrantLarge Accelerated FilerAccelerated FilerNon-accelerated Filer
Smaller Reporting Company
Spectrum Brands Holdings, Inc.X
SB/RH Holdings, LLCX
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Spectrum Brands Holdings, Inc.Yes☐No☒
SB/RH Holdings, LLCYes☐No☒
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§232.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter
Spectrum Brands Holdings, Inc.Yes☐No☒
SB/RH Holdings, LLCYes☐No☒
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Spectrum Brands Holdings, Inc.☐
SB/RH Holdings, LLC☐
Securities registered pursuant to Section 12(b) of the Exchange Act:
RegistrantTitle of Each ClassTrading SymbolName of Exchange On Which Registered
Spectrum Brands Holdings, Inc.Common Stock, $0.01 par valueSPBNew York Stock Exchange
As of July 28, 2020,May 4, 2021, there were 43,056,29642,628,769 shares outstanding of Spectrum Brands Holdings, Inc.’s common stock, par value $0.01 per share.
SB/RH Holdings, LLC meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this report with a reduced disclosure format as permitted by general instruction H(2).

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Forward-Looking Statements
We have made or implied certain forward-looking statements in this report. report including without limitation, statements regarding the Company's recently adopted share repurchase program, for which the manner of purchase, the number of shares to be purchased and the timing of purchases will be based on a number of factors including the price of the Company's common stock, general business and market conditions and applicable legal requirements, and is subject to the discretion of the Company's management and may be commenced, suspended or discontinued at any time.All statements, other than statements of historical facts included in this report, including the statements under Management’s Discussion and Analysis of Financial Condition and Results of Operations, or expectations regarding our Global Productivity Improvement Program, our business strategy, future operations, financial condition, estimated revenues, projected costs, projected synergies, prospects, plans and objectives of management, information concerning expected actions of third parties, retention and statements regardingfuture compensation of key personnel, our ability to meet environmental, social, and governance goals, the expected impact of the COVID-19 pandemic, economic, social, and political conditions or civil unrest in the U.S. and other countries, and other statements regarding the Company's ability to meet its expectations for its fiscal 2021 are forward-looking statements. When used in this report, the words future, anticipate, pro forma, seeks, intend, plan, envision, estimate, believe, belief, expect, project, forecast, outlook, goal, target, could, would, will, can, should, may and similar expressions are also intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.
Since these forward-looking statements are based upon our current expectations of future events and projections and are subject to a number of risks and uncertainties, many of which are beyond our control and some of which may change rapidly, actual results or outcomes may differ materially from those expressed or implied herein, and you should not place undue reliance on these statements. Important factors that could cause our actual results to differ materially from those expressed or implied herein include, without limitation: 
•the impact of the COVID-19 pandemic on our customers, employees, manufacturing facilities, suppliers, the capital markets, and our financial condition, and results of operations, all of which tend to aggravate the other risks and uncertainties we face;
•the impact of our indebtedness on our business, financial condition, and results of operations;
•the impact of restrictions in our debt instruments on our ability to operate our business, finance our capital needs or pursue or expand business strategies;
•any failure to comply with financial covenants and other provisions and restrictions of our debt instruments;
•the effects of general economic conditions, including the impact of, and changes to tariffs and trade policies, inflation, recession or fears of a recession, depression or fears of a depression, labor costs, and stock market volatility or monetary or fiscal policies in the countries where we do business;
•the impact of fluctuations in transportation and shipment costs, commodity prices, costs or availability of raw materials or terms and conditions available from suppliers, including suppliers’ willingness to advance credit;
•interest rate and exchange rate fluctuations;
•the loss of, significant reduction in, or dependence upon, sales to any significant retail customer(s);
•competitive promotional activity or spending by competitors, or price reductions by competitors;
•the introduction of new product features or technological developments by competitors and/or the development of new competitors or competitive brands;
•the impact of actions taken by significant stockholders;
•changes in consumer spending preferences and demand for our products, particularly in light of the COVID-19 pandemic and economic stress;
•our ability to develop and successfully introduce new products, protect our intellectual property and avoid infringing the intellectual property of third parties;
•our ability to successfully identify, implement, achieve and sustain productivity improvements (including our Global Productivity Improvement Plan)Program), cost efficiencies (including at our manufacturing and distribution operations), and cost savings;
•the seasonal nature of sales of certain of our products;
•the effects of climate change and unusual weather activity as well as further natural disasters and pandemics;
•the cost and effect of unanticipated legal, tax or regulatory proceedings or new laws or regulations (including environmental, public health and consumer protection regulations);
•our discretion to conduct, suspend or discontinue our share repurchase program (including our discretion to conduct purchases, if any, in a variety of manners including open-market purchases or privately negotiated transactions);
•public perception regarding the safety of products that we manufacture and sell, including the potential for environmental liabilities, product liability claims, litigation and other claims related to products manufactured by us and third parties;
•the impact of existing, pending or threatened litigation, government regulationregulations or other requirements or operating standards applicable to our business;
•the impact of cybersecurity breaches or our actual or perceived failure to protect company and personal data, including our failure to comply with new and increasingly complex global data privacy regulations;
•changes in accounting policies applicable to our business;
•our ability to utilize net operating loss carry-forwards to offset tax liabilities from future taxable income;
•the impact of expenses resulting from the implementation of new business strategies, divestitures or current and proposed restructuring activities;
•our ability to successfully implement further acquisitions or dispositions and the impact of any such transactions on our financial performance;
•the unanticipated loss of key members of senior management and the transition of new members of our management teams to their new roles;
•the impact of economic, social and political conditions or civil unrest in the U.S. and other countries;
•the effects of political or economic conditions, terrorist attacks, acts of war, natural disasters, public health concerns or other unrest in international markets;
•theour ability to achieve our goals regarding environmental, social, and governance practices; and
•our increased reliance on third partythird-party partners, suppliers, and distributors to achieve our business objectives.
Some of the above-mentioned factors are described in further detail in the sections entitled Risk Factors in our annual and quarterly reports (including this report), as applicable. You should assume the information appearing in this report is accurate only as of the end of the period covered by this report, or as otherwise specified, as our business, financial condition, results of operations and prospects may have changed since that date. Except as required by applicable law, including the securities laws of the United States (“U.S.”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”), we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
TABLE OF CONTENTS
This report is a combined report of Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC. The combined notes to the condensed consolidated financial statements include notes representing Spectrum Brands Holdings, Inc. and SB/RH Holdings, LLC and certain notes related specifically to SB/RH Holdings, LLC.
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PART I. FINANCIAL INFORMATION
Item 1.     Financial Statements

SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Financial Position
As of June 28, 2020,April 4, 2021, and September 30, 20192020
(unaudited)
(in millions)(in millions)June 28, 2020September 30, 2019(in millions)April 4, 2021September 30, 2020
AssetsAssetsAssets
Cash and cash equivalentsCash and cash equivalents$465.9  $627.1  Cash and cash equivalents$290.0 $531.6 
Trade receivables, netTrade receivables, net446.8  356.7  Trade receivables, net524.9 501.1 
Other receivablesOther receivables91.2  74.2  Other receivables88.5 74.2 
InventoriesInventories568.1  548.4  Inventories812.1 557.7 
Prepaid expenses and other current assetsPrepaid expenses and other current assets58.6  53.5  Prepaid expenses and other current assets83.2 63.5 
Total current assetsTotal current assets1,630.6  1,659.9  Total current assets1,798.7 1,728.1 
Property, plant and equipment, netProperty, plant and equipment, net394.6  452.9  Property, plant and equipment, net392.6 396.5 
Operating lease assetsOperating lease assets92.4  —  Operating lease assets103.0 103.8 
Investments142.9  230.8  
Deferred charges and otherDeferred charges and other74.0  67.2  Deferred charges and other49.2 115.2 
GoodwillGoodwill1,327.9  1,328.1  Goodwill1,434.6 1,332.0 
Intangible assets, netIntangible assets, net1,440.2  1,507.1  Intangible assets, net1,496.4 1,431.7 
Total assetsTotal assets$5,102.6  $5,246.0  Total assets$5,274.5 $5,107.3 
Liabilities and Shareholders' EquityLiabilities and Shareholders' EquityLiabilities and Shareholders' Equity
Current portion of long-term debtCurrent portion of long-term debt$13.9  $136.9  Current portion of long-term debt$18.6 $15.3 
Accounts payableAccounts payable446.2  456.8  Accounts payable548.6 557.5 
Accrued wages and salariesAccrued wages and salaries66.7  72.1  Accrued wages and salaries76.6 95.0 
Accrued interestAccrued interest36.7  29.3  Accrued interest11.7 38.5 
Indemnification payable to Energizer34.0  230.8  
Other current liabilitiesOther current liabilities184.8  214.2  Other current liabilities270.9 238.6 
Total current liabilitiesTotal current liabilities782.3  1,140.1  Total current liabilities926.4 944.9 
Long-term debt, net of current portionLong-term debt, net of current portion2,677.2  2,214.4  Long-term debt, net of current portion2,551.6 2,461.0 
Long-term operating lease liabilitiesLong-term operating lease liabilities78.7  —  Long-term operating lease liabilities86.2 88.8 
Deferred income taxesDeferred income taxes64.8  50.6  Deferred income taxes86.8 65.4 
Other long-term liabilitiesOther long-term liabilities114.1  112.0  Other long-term liabilities128.7 131.4 
Total liabilitiesTotal liabilities3,717.1  3,517.1  Total liabilities3,779.7 3,691.5 
Commitments and contingencies (Note 19)Commitments and contingencies (Note 19)


Commitments and contingencies (Note 19)


0
Shareholders' equity
0Shareholders' equity0Shareholders' equity
Common stockCommon stock0.5  0.5  Common stock0.5 0.5 
Additional paid-in capitalAdditional paid-in capital2,042.8  2,031.1  Additional paid-in capital2,051.6 2,054.3 
Accumulated earningsAccumulated earnings217.3  223.8  Accumulated earnings315.9 243.9 
Accumulated other comprehensive loss, net of taxAccumulated other comprehensive loss, net of tax(276.8) (273.6) Accumulated other comprehensive loss, net of tax(243.4)(284.7)
Treasury stockTreasury stock(606.9) (260.9) Treasury stock(637.0)(606.5)
Total shareholders' equityTotal shareholders' equity1,376.9  1,720.9  Total shareholders' equity1,487.6 1,407.5 
Non-controlling interestNon-controlling interest8.6  8.0  Non-controlling interest7.2 8.3 
Total equityTotal equity1,385.5  1,728.9  Total equity1,494.8 1,415.8 
Total liabilities and equityTotal liabilities and equity$5,102.6  $5,246.0  Total liabilities and equity$5,274.5 $5,107.3 
See accompanying notes to the condensed consolidated financial statements
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SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Income
For the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019
(unaudited)
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions, except per share)(in millions, except per share)June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions, except per share)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Net SalesNet Sales$984.3  $1,022.2  $2,793.6  $2,809.2  Net Sales$1,149.8 $937.8 $2,294.7 $1,809.3 
Cost of goods soldCost of goods sold635.7  660.7  1,834.2  1,835.3  Cost of goods sold744.5 606.0 1,467.0 1,198.5 
Restructuring and related chargesRestructuring and related charges(0.3) 0.5  12.5  1.5  Restructuring and related charges1.3 2.9 1.4 12.8 
Gross profitGross profit348.9  361.0  946.9  972.4  Gross profit404.0 328.9 826.3 598.0 
SellingSelling141.3  152.1  437.4  459.1  Selling173.2 150.0 340.0 296.1 
General and administrativeGeneral and administrative83.6  80.6  245.7  263.6  General and administrative89.0 81.9 180.9 162.2 
Research and developmentResearch and development9.7  10.5  29.7  32.7  Research and development12.5 10.1 22.9 19.9 
Restructuring and related chargesRestructuring and related charges12.5  20.2  49.1  40.7  Restructuring and related charges2.8 19.0 11.9 36.6 
Transaction related chargesTransaction related charges6.1  4.8  17.4  16.4  Transaction related charges9.7 7.2 30.3 11.3 
Loss on assets held for sale1.1  —  26.8  —  
(Gain) loss on assets held for sale(Gain) loss on assets held for sale0 (7.0)0 25.7 
Write-off from impairment of intangible assetsWrite-off from impairment of intangible assets—  —  24.2  —  Write-off from impairment of intangible assets0 0 0 24.2 
Total operating expensesTotal operating expenses254.3  268.2  830.3  812.5  Total operating expenses287.2 261.2 586.0 576.0 
Operating incomeOperating income94.6  92.8  116.6  159.9  Operating income116.8 67.7 240.3 22.0 
Interest expenseInterest expense36.1  33.9  106.5  185.1  Interest expense65.5 35.5 102.2 70.4 
Gain from extinguishment of Salus CLO debt(76.2) —  (76.2) —  
Other non-operating (income) expense, netOther non-operating (income) expense, net(56.5) 39.4  10.2  64.2  Other non-operating (income) expense, net(1.2)110.4 (7.4)66.8 
Income (loss) from continuing operations before income taxesIncome (loss) from continuing operations before income taxes191.2  19.5  76.1  (89.4) Income (loss) from continuing operations before income taxes52.5 (78.2)145.5 (115.2)
Income tax expense53.6  44.2  35.3  18.2  
Income tax expense (benefit)Income tax expense (benefit)15.7 (19.0)35.5 (18.3)
Net income (loss) from continuing operationsNet income (loss) from continuing operations137.6  (24.7) 40.8  (107.6) Net income (loss) from continuing operations36.8 (59.2)110.0 (96.9)
Income (loss) from discontinued operations, net of tax8.0  (1.2) 12.2  699.1  
(Loss) income from discontinued operations, net of tax(Loss) income from discontinued operations, net of tax(1.1)1.4 (1.4)4.3 
Net income (loss)Net income (loss)145.6  (25.9) 53.0  591.5  Net income (loss)35.7 (57.8)108.6 (92.6)
Net income attributable to non-controlling interest0.5  —  0.6  1.2  
Net (loss) income attributable to non-controlling interestNet (loss) income attributable to non-controlling interest(0.9)(0.8)(0.1)0.1 
Net income (loss) attributable to controlling interestNet income (loss) attributable to controlling interest$145.1  $(25.9) $52.4  $590.3  Net income (loss) attributable to controlling interest$36.6 $(57.0)$108.7 $(92.7)
Amounts attributable to controlling interestAmounts attributable to controlling interestAmounts attributable to controlling interest
Net income (loss) from continuing operations attributable to controlling interestNet income (loss) from continuing operations attributable to controlling interest$137.1  $(24.7) $40.2  $(108.8) Net income (loss) from continuing operations attributable to controlling interest$37.7 $(58.4)$110.1 $(97.0)
Net income (loss) from discontinued operations attributable to controlling interest8.0  (1.2) 12.2  699.1  
Net (loss) income from discontinued operations attributable to controlling interestNet (loss) income from discontinued operations attributable to controlling interest(1.1)1.4 (1.4)4.3 
Net income (loss) attributable to controlling interestNet income (loss) attributable to controlling interest$145.1  $(25.9) $52.4  $590.3  Net income (loss) attributable to controlling interest$36.6 $(57.0)$108.7 $(92.7)
Earnings Per ShareEarnings Per ShareEarnings Per Share
Basic earnings per share from continuing operationsBasic earnings per share from continuing operations$3.19  $(0.51) $0.89  $(2.12) Basic earnings per share from continuing operations$0.88 $(1.29)$2.57 $(2.09)
Basic earnings per share from discontinued operationsBasic earnings per share from discontinued operations0.18  (0.02) 0.27  13.62  Basic earnings per share from discontinued operations(0.02)0.03 (0.03)0.09 
Basic earnings per shareBasic earnings per share$3.37  $(0.53) $1.16  $11.50  Basic earnings per share$0.86 $(1.26)$2.54 $(2.00)
Diluted earnings per share from continuing operationsDiluted earnings per share from continuing operations$3.18  $(0.51) $0.89  $(2.12) Diluted earnings per share from continuing operations$0.88 $(1.29)$2.56 $(2.09)
Diluted earnings per share from discontinued operationsDiluted earnings per share from discontinued operations0.18  (0.02) 0.27  13.62  Diluted earnings per share from discontinued operations(0.03)0.03 (0.03)0.09 
Diluted earnings per shareDiluted earnings per share$3.36  (0.53) 1.16  $11.50  Diluted earnings per share$0.85 $(1.26)$2.53 $(2.00)
Dividend per shareDividend per share$0.42  $0.42  $1.26  $1.26  Dividend per share$0.42 $0.42 $0.84 $0.84 
Weighted Average Shares OutstandingWeighted Average Shares OutstandingWeighted Average Shares Outstanding
BasicBasic43.1  48.8  45.3  51.3  Basic42.6 45.1 42.8 46.4 
DilutedDiluted43.2  48.8  45.4  51.3  Diluted42.9 45.1 43.0 46.4 
See accompanying notes to the condensed consolidated financial statements
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SPECTRUM BRANDS HOLDINGS, INC
Condensed Consolidated Statements of Comprehensive Income
For the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019
(unaudited)
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Net income (loss)Net income (loss)$145.6  $(25.9) $53.0  $591.5  Net income (loss)$35.7 $(57.8)$108.6 $(92.6)
Other comprehensive income (loss)Other comprehensive income (loss)Other comprehensive income (loss)
Foreign currency translation gain (loss)Foreign currency translation gain (loss)7.5  (6.6) (13.3) (7.1) Foreign currency translation gain (loss)22.2 (47.4)41.6 (20.8)
Deferred tax effectDeferred tax effect(0.1) 0.1  —  (4.8) Deferred tax effect(5.0)0.3 0.3 0.2 
Net unrealized gain (loss) on foreign currency translationNet unrealized gain (loss) on foreign currency translation7.4  (6.5) (13.3) (11.9) Net unrealized gain (loss) on foreign currency translation17.2 (47.1)41.9 (20.6)
Unrealized loss on derivative instruments
Unrealized (loss) gain on hedging activity before reclassification(2.1) (0.4) (0.5) 5.4  
Net reclassification for gain to income from continuing operations(2.0) (2.5) (6.3) (8.2) 
Net reclassification for loss to income from discontinued operations—  —  —  0.5  
Unrealized loss on hedging instruments after reclassification(4.1) (2.9) (6.8) (2.3) 
Unrealized gain (loss) on derivative instrumentsUnrealized gain (loss) on derivative instruments
Unrealized gain (loss) on hedging activity before reclassificationUnrealized gain (loss) on hedging activity before reclassification5.8 7.8 (6.6)1.6 
Net reclassification for loss (gain) to income from continuing operationsNet reclassification for loss (gain) to income from continuing operations3.0 (1.7)5.7 (4.3)
Unrealized gain (loss) on hedging instruments after reclassificationUnrealized gain (loss) on hedging instruments after reclassification8.8 6.1 (0.9)(2.7)
Deferred tax effectDeferred tax effect1.7  2.4  2.8  (2.6) Deferred tax effect(2.4)(1.6)0.1 1.1 
Net unrealized loss on hedging derivative instruments(2.4) (0.5) (4.0) (4.9) 
Net unrealized gain (loss) on hedging derivative instrumentsNet unrealized gain (loss) on hedging derivative instruments6.4 4.5 (0.8)(1.6)
Defined benefit pension gainDefined benefit pension gainDefined benefit pension gain
Defined benefit pension (loss) gain before reclassification(0.8) 0.1  3.0  0.9  
Defined benefit pension gain (loss) before reclassificationDefined benefit pension gain (loss) before reclassification0.9 0.9 (1.3)3.7 
Net reclassification for loss to income from continuing operationsNet reclassification for loss to income from continuing operations1.0  0.5  3.1  1.5  Net reclassification for loss to income from continuing operations1.1 1.0 2.2 2.1 
Net reclassification for loss to income from discontinued operations—  —  —  0.2  
Defined benefit pension gain after reclassificationDefined benefit pension gain after reclassification0.2  0.6  6.1  2.6  Defined benefit pension gain after reclassification2.0 1.9 0.9 5.8 
Deferred tax effectDeferred tax effect—  (0.1) (0.4) (0.7) Deferred tax effect(0.6)(0.4)(0.4)(0.4)
Net defined benefit pension gainNet defined benefit pension gain0.2  0.5  5.7  1.9  Net defined benefit pension gain1.4 1.5 0.5 5.4 
Deconsolidation of discontinued operations and assets held for saleDeconsolidation of discontinued operations and assets held for sale—  —  8.1  21.9  Deconsolidation of discontinued operations and assets held for sale0 8.1 0 8.1 
Net change to derive comprehensive income (loss) for the periods5.2  (6.5) (3.5) 7.0  
Net change to derive comprehensive income for the periodsNet change to derive comprehensive income for the periods25.0 (33.0)41.6 (8.7)
Comprehensive income (loss)Comprehensive income (loss)150.8  (32.4) 49.5  598.5  Comprehensive income (loss)60.7 (90.8)150.2 (101.3)
Comprehensive loss attributable to non-controlling interest—  (0.1) —  (0.1) 
Comprehensive (loss) income attributable to non-controlling interestComprehensive (loss) income attributable to non-controlling interest(0.1)(0.1)0.3 0 
Comprehensive income (loss) attributable to controlling interestComprehensive income (loss) attributable to controlling interest$150.8  $(32.3) $49.5  $598.6  Comprehensive income (loss) attributable to controlling interest$60.8 $(90.7)$149.9 $(101.3)
See accompanying notes to the condensed consolidated financial statements
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SPECTRUM BRANDS HOLDINGS, INC
Condensed Consolidated Statements of Shareholder’s Equity
For the ninesix month period ended June 28, 2020April 4, 2021
(unaudited)
Nine Month Period Ended June 28, 2020 (in millions)Common StockAdditional
Paid-in
Capital		Accumulated
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders'
Equity		Non-
controlling
Interest		Total
Equity
SharesAmount
Balances at September 30, 201948.8  $0.5  $2,031.1  $223.8  $(273.6) $(260.9) $1,720.9  $8.0  $1,728.9  
Net (loss) income from continuing operations—  —  —  (38.6) —  —  (38.6) 0.9  (37.7) 
Income from discontinued operations, net of tax—  —  —  2.8  —  —  2.8  —  2.8  
Other comprehensive income, net of tax—  —  —  —  24.2  —  24.2  0.1  24.3  
Treasury stock repurchases(1.5) —  —  —  —  (90.6) (90.6) —  (90.6) 
Accelerated share repurchase pending final settlement(1.7) —  (18.7) —  —  (106.3) (125.0) —  (125.0) 
Restricted stock issued and related tax withholdings0.5  —  (13.3) —  —  18.2  4.9  —  4.9  
Share based compensation—  —  8.5  —  —  —  8.5  —  8.5  
Dividends declared—  —  —  (20.2) —  —  (20.2) —  (20.2) 
Cumulative adjustment for adoption of new accounting standards (Note 1)—  —  —  (0.3) 0.3  —  —  —  —  
Balances as of December 29, 201946.1  0.5  2,007.6  167.5  (249.1) (439.6) 1,486.9  9.0  1,495.9  
Net loss from continuing operations—  —  —  (58.4) —  —  (58.4) (0.8) (59.2) 
Income from discontinued operations, net of tax—  —  —  1.4  —  —  1.4  —  1.4  
Sale and deconsolidation of assets held for sale—  —  —  —  8.1  —  8.1  —  8.1  
Other comprehensive loss, net of tax—  —  —  —  (41.0) —  (41.0) (0.1) (41.1) 
Treasury stock repurchases(2.7) —  —  —  —  (149.2) (149.2) —  (149.2) 
Accelerated share repurchase final settlement(0.3) —  18.5  —  —  (18.5) —  —  —  
Restricted stock issued and related tax withholdings—  —  (0.7) —  —  0.4  (0.3) —  (0.3) 
Share based compensation—  —  8.9  —  —  —  8.9  —  8.9  
Dividends declared—  —  —  (19.7) —  —  (19.7) —  (19.7) 
Balances as of March 29, 202043.1  0.5  2,034.3  90.8  (282.0) (606.9) 1,236.7  8.1  1,244.8  
Net income from continuing operations—  —  —  137.1  —  —  137.1  0.5  137.6  
Income from discontinued operations, net of tax—  —  —  8.0  —  —  8.0  —  8.0  
Other comprehensive income, net of tax—  —  —  —  5.2  —  5.2  —  5.2  
Restricted stock issued and related tax withholdings—  —  (0.1) —  —  —  (0.1) —  (0.1) 
Share based compensation—  —  8.6  —  —  —  8.6  —  8.6  
Dividends declared—  —  —  (18.6) —  —  (18.6) —  (18.6) 
Balances at June 28, 202043.1  $0.5  $2,042.8  $217.3  $(276.8) $(606.9) $1,376.9  $8.6  $1,385.5  
Six Month Period Ended April 4, 2021Common StockAdditional
Paid-in
Capital		Accumulated
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders'
Equity		Non-
controlling
Interest		Total
Equity
(in millions)SharesAmount
Balances at September 30, 202043.1 $0.5 $2,054.3 $243.9 $(284.7)$(606.5)$1,407.5 $8.3 $1,415.8 
Net income from continuing operations— — — 72.6 — — 72.6 0.8 73.4 
Loss from discontinued operations, net of tax— — — (0.3)— — (0.3)— (0.3)
Other comprehensive income, net of tax— — — — 16.2 — 16.2 0.4 16.6 
Treasury stock repurchases(0.6)— — — — (42.3)(42.3)— (42.3)
Restricted stock issued and related tax withholdings0.2 — (18.6)— — 11.7 (6.9)— (6.9)
Share based compensation— — 7.5 — — — 7.5 — 7.5 
Dividends declared— — — (18.4)— — (18.4)— (18.4)
Dividend paid by subsidiary to NCI— — — — — — — (1.0)(1.0)
Balances as of January 3, 202142.7 0.5 2,043.2 297.8 (268.5)(637.1)1,435.9 8.5 1,444.4 
Net income (loss) from continuing operations— — — 37.7 — — 37.7 (0.9)36.8 
Loss from discontinued operations, net of tax— — — (1.1)— — (1.1)— (1.1)
Other comprehensive income (loss), net of tax— — — — 25.1 — 25.1 (0.1)25.0 
Restricted stock issued and related tax withholdings— — (0.1)— — 0.1 — — 0 
Share based compensation— — 8.5 — — — 8.5 — 8.5 
Dividends declared— — — (18.5)— — (18.5)— (18.5)
Dividend paid by subsidiary to NCI— — — — — — — (0.3)(0.3)
Balances at April 4, 202142.7 $0.5 $2,051.6 $315.9 $(243.4)$(637.0)$1,487.6 $7.2 $1,494.8 
See accompanying notes to the condensed consolidated financial statements
SPECTRUM BRANDS HOLDINGS, INC
Condensed Consolidated Statements of Shareholder’s Equity
For the ninesix month period ended June 30, 2019March 29, 2020
(unaudited)
Nine Month Period Ended June 30, 2019 (in millions)Common StockAdditional
Paid-in
Capital		Accumulated
Deficit/Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders'
Equity		Non-
controlling
Interest		Total
Equity
SharesAmount
Balances as of September 30, 201853.4  $0.5  $1,996.7  $(180.1) $(235.8) $—  $1,581.3  $8.3  $1,589.6  
Six Month Period Ended March 29, 2020Six Month Period Ended March 29, 2020Common StockAdditional
Paid-in
Capital		Accumulated
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Shareholders'
Equity		Non-
controlling
Interest		Total
Equity
(in millions)(in millions)SharesAmount
Balances at September 30, 2019Balances at September 30, 201948.8 $0.5 $2,031.1 $223.8 $(273.6)$(260.9)$1,720.9 $8.0 $1,728.9 
Net (loss) income from continuing operationsNet (loss) income from continuing operations—  —  —  (29.2) —  —  (29.2) 0.2  (29.0) Net (loss) income from continuing operations— — — (38.6)— — (38.6)0.9 (37.7)
Loss from discontinued operations, net of tax—  —  —  (83.2) —  —  (83.2) —  (83.2) 
Other comprehensive loss, net of tax—  —  —  —(11.0) —  (11.0) —  (11.0) 
Income from discontinued operations, net of taxIncome from discontinued operations, net of tax— — — 2.8 — — 2.8 — 2.8 
Other comprehensive income, net of taxOther comprehensive income, net of tax— — — — 24.2 — 24.2 0.1 24.3 
Treasury stock repurchasesTreasury stock repurchases(0.3) —  —  ——  (18.5) (18.5) —  (18.5) Treasury stock repurchases(1.5)— — — — (90.6)(90.6)— (90.6)
Accelerated share repurchase pending final settlementAccelerated share repurchase pending final settlement(1.7)— (18.7)— — (106.3)(125.0)— (125.0)
Restricted stock issued and related tax withholdingsRestricted stock issued and related tax withholdings0.3  —  7.5  (0.2) —  3.9  11.2  —  11.2  Restricted stock issued and related tax withholdings0.5 — (13.3)0 — 18.2 4.9 — 4.9 
Share based compensationShare based compensation—  —  3.2  ——  —  3.2  —  3.2  Share based compensation— — 8.5 — — — 8.5 — 8.5 
Dividends declaredDividends declared—  —  —  (22.5) —  —  (22.5) —  (22.5) Dividends declared— — — (20.2)— — (20.2)— (20.2)
Cumulative adjustment for adoption of new accounting standardsCumulative adjustment for adoption of new accounting standards—  —  —  (3.2) —  —  (3.2) —  (3.2) Cumulative adjustment for adoption of new accounting standards— — — (0.3)0.3 — — — 0 
Balances as of December 30, 201853.4  0.5  2,007.4  (318.4) (246.8) (14.6) 1,428.1  8.5  1,436.6  
Net (loss) income from continuing operations—  —  —  (55.0) —  —  (55.0) 1.0  (54.0) 
Balances as of December 29, 2019Balances as of December 29, 201946.1 0.5 2,007.6 167.5 (249.1)(439.6)1,486.9 9.0 1,495.9 
Net loss from continuing operationsNet loss from continuing operations— — — (58.4)— — (58.4)(0.8)(59.2)
Income from discontinued operations, net of taxIncome from discontinued operations, net of tax—  —  —  783.6  —  —  783.6  —  783.6  Income from discontinued operations, net of tax— — — 1.4 — — 1.4 — 1.4 
Sale and deconsolidation of discontinued operations—  —  —  —21.9  —  21.9  —  21.9  
Other comprehensive income, net of tax—  —  —  —2.6  —  2.6  —  2.6  
Sale and deconsolidation of assets held for saleSale and deconsolidation of assets held for sale— — — — 8.1 — 8.1 — 8.1 
Other comprehensive loss, net of taxOther comprehensive loss, net of tax— — — — (41.0)— (41.0)(0.1)(41.1)
Treasury stock repurchasesTreasury stock repurchases(4.6) —  —  ——  (250.0) (250.0) —  (250.0) Treasury stock repurchases(2.7)— — — — (149.2)(149.2)— (149.2)
Accelerated share repurchase final settlementAccelerated share repurchase final settlement(0.3)— 18.5 — — (18.5)— — 0 
Restricted stock issued and related tax withholdingsRestricted stock issued and related tax withholdings—  —  (0.2) ——  0.4  0.2  —  0.2  Restricted stock issued and related tax withholdings— — (0.7)— — 0.4 (0.3)— (0.3)
Share based compensationShare based compensation—  —  10.3  ——  —  10.3  —  10.3  Share based compensation— — 8.9 — — — 8.9 — 8.9 
Dividends declaredDividends declared—  —  —  (22.6) —  —  (22.6) —  (22.6) Dividends declared— — — (19.7)— — (19.7)— (19.7)
Balances as of March 31, 201948.8  0.5  2,017.5  387.6  (222.3) (264.2) 1,919.1  9.5  1,928.6  
Net loss from continuing operations—  —  —  (24.7) —  —  (24.7) —  (24.7) 
Loss from discontinued operations, net of tax—  —  —  (1.2) —  —  (1.2) —  (1.2) 
Other comprehensive loss, net of tax—  —  —  —  (6.4) —  (6.4) (0.1) (6.5) 
Restricted stock issued and related tax withholdings—  —  (1.9) —  —  1.2  (0.7) —  (0.7) 
Share based compensation—  —  9.7  —  —  —  9.7  —  9.7  
Dividends declared—  —  —  (21.2) —  —  (21.2) —  (21.2) 
Balances as of June 30, 201948.8  $0.5  $2,025.3  $340.5  $(228.7) $(263.0) $1,874.6  $9.4  $1,884.0  
Balances at March 29, 2020Balances at March 29, 202043.1 $0.5 $2,034.3 $90.8 $(282.0)$(606.9)$1,236.7 $8.1 $1,244.8 
See accompanying notes to the condensed consolidated financial statements
5
Table of ContentsContents
SPECTRUM BRANDS HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
For the ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019
(unaudited)
Nine Month Periods EndedSix Month Periods Ended
(in millions)(in millions)June 28, 2020June 30, 2019(in millions)April 4, 2021March 29, 2020
Cash flows from operating activitiesCash flows from operating activitiesCash flows from operating activities
Net income$53.0  $591.5  
Income from discontinued operations, net of tax12.2  699.1  
Net income (loss)Net income (loss)$108.6 $(92.6)
(Loss) income from discontinued operations, net of tax(Loss) income from discontinued operations, net of tax(1.4)4.3 
Net income (loss) from continuing operationsNet income (loss) from continuing operations40.8  (107.6) Net income (loss) from continuing operations110.0 (96.9)
Adjustments to reconcile net income (loss) to net cash from operating activities:Adjustments to reconcile net income (loss) to net cash from operating activities:Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortizationDepreciation and amortization113.1  138.4  Depreciation and amortization74.4 78.0 
Share based compensationShare based compensation38.8  35.8  Share based compensation16.0 26.0 
Unrealized (gain) loss on equity investments held(5.3) 38.2  
Realized loss on equity investments sold13.5  —  
(Gain) loss on equity investments(Gain) loss on equity investments(6.9)68.3 
Loss on assets held for saleLoss on assets held for sale26.8  —  Loss on assets held for sale0 25.7 
Write-off from impairment of intangible assetsWrite-off from impairment of intangible assets24.2  —  Write-off from impairment of intangible assets0 24.2 
Amortization of debt issuance costs and debt discountAmortization of debt issuance costs and debt discount3.7  8.3  Amortization of debt issuance costs and debt discount2.9 3.2 
Write-off of unamortized discount and debt issuance costsWrite-off of unamortized discount and debt issuance costs1.1  36.6  Write-off of unamortized discount and debt issuance costs7.9 1.1 
Gain from extinguishment of Salus CLO debt(76.2) —  
Deferred tax expense (benefit)5.3  (25.2) 
Inventory acquisition step-upInventory acquisition step-up3.4 0 
Deferred tax expenseDeferred tax expense3.8 22.0 
Net changes in operating assets and liabilitiesNet changes in operating assets and liabilities(150.4) (310.6) Net changes in operating assets and liabilities(275.4)(336.2)
Net cash provided (used) by operating activities from continuing operations35.4  (186.1) 
Net cash used by operating activities from continuing operationsNet cash used by operating activities from continuing operations(63.9)(184.6)
Net cash used by operating activities from discontinued operationsNet cash used by operating activities from discontinued operations—  (250.4) Net cash used by operating activities from discontinued operations(15.9)0 
Net cash provided (used) by operating activities35.4  (436.5) 
Net cash used by operating activitiesNet cash used by operating activities(79.8)(184.6)
Cash flows from investing activitiesCash flows from investing activitiesCash flows from investing activities
Purchases of property, plant and equipmentPurchases of property, plant and equipment(44.5) (40.3) Purchases of property, plant and equipment(28.1)(31.7)
Proceeds from disposal of property, plant and equipmentProceeds from disposal of property, plant and equipment0.7  0.1  Proceeds from disposal of property, plant and equipment0 0.6 
Proceeds from sale of assets held for sale30.1  —  
Proceeds from sale of discontinued operations, net of cash3.6  2,854.4  
Business acquisitions, net of cash acquiredBusiness acquisitions, net of cash acquired(17.0) —  Business acquisitions, net of cash acquired(129.8)(17.0)
Proceeds from sale of equity investmentProceeds from sale of equity investment68.0  —  Proceeds from sale of equity investment73.1 28.6 
Other investing activityOther investing activity2.5  (0.2) Other investing activity(0.3)2.5 
Net cash provided by investing activities from continuing operations43.4  2,814.0  
Net cash used by investing activities from discontinued operations—  (5.4) 
Net cash provided by investing activities43.4  2,808.6  
Net cash used by investing activitiesNet cash used by investing activities(85.1)(17.0)
Cash flows from financing activitiesCash flows from financing activitiesCash flows from financing activities
Payment of debt, including premium on extinguishmentPayment of debt, including premium on extinguishment(132.7) (2,475.1) Payment of debt, including premium on extinguishment(880.3)(130.0)
Proceeds from issuance of debtProceeds from issuance of debt528.0  54.0  Proceeds from issuance of debt899.0 780.0 
Payment of debt issuance costsPayment of debt issuance costs(0.8) (0.1) Payment of debt issuance costs(12.6)(0.8)
Payment of contingent considerationPayment of contingent consideration(197.0) —  Payment of contingent consideration0 (197.0)
Treasury stock purchasesTreasury stock purchases(239.8) (268.5) Treasury stock purchases(42.3)(239.8)
Accelerated share repurchaseAccelerated share repurchase(125.0) —  Accelerated share repurchase0 (125.0)
Dividends paid to shareholdersDividends paid to shareholders(57.2) (65.1) Dividends paid to shareholders(35.7)(39.1)
Dividends paid by subsidiary to non-controlling interestDividends paid by subsidiary to non-controlling interest(1.3)0 
Share based award tax withholding payments, net of proceeds upon vestingShare based award tax withholding payments, net of proceeds upon vesting(12.6) (3.3) Share based award tax withholding payments, net of proceeds upon vesting(7.2)(12.6)
Other financing activities, netOther financing activities, net—  (8.9) Other financing activities, net0.3 0 
Net cash used by financing activities from continuing operations(237.1) (2,767.0) 
Net cash used by financing activities from discontinued operations—  (2.2) 
Net cash used by financing activities(237.1) (2,769.2) 
Net cash (used) provided by financing activitiesNet cash (used) provided by financing activities(80.1)35.7 
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents—  (2.9) Effect of exchange rate changes on cash and cash equivalents3.4 (0.5)
Net change in cash, cash equivalents and restricted cash in continuing operationsNet change in cash, cash equivalents and restricted cash in continuing operations(158.3) (400.0) Net change in cash, cash equivalents and restricted cash in continuing operations(241.6)(166.4)
Cash, cash equivalents, and restricted cash, beginning of periodCash, cash equivalents, and restricted cash, beginning of period627.1  561.4  Cash, cash equivalents, and restricted cash, beginning of period533.8 627.1 
Cash, cash equivalents, and restricted cash, end of periodCash, cash equivalents, and restricted cash, end of period$468.8  $161.4  Cash, cash equivalents, and restricted cash, end of period$292.2 $460.7 
Supplemental disclosure of cash flow informationSupplemental disclosure of cash flow informationSupplemental disclosure of cash flow information
Cash paid for interestCash paid for interest$92.1  $172.1  Cash paid for interest$95.0 $57.5 
Cash paid for taxesCash paid for taxes$34.7  $43.9  Cash paid for taxes$20.1 $30.8 
Non cash investing activitiesNon cash investing activitiesNon cash investing activities
Acquisition of property, plant and equipment through finance leasesAcquisition of property, plant and equipment through finance leases$3.6  $2.1  Acquisition of property, plant and equipment through finance leases$0.6 $3.0 
Non cash financing activitiesNon cash financing activitiesNon cash financing activities
Issuance of shares through stock compensation planIssuance of shares through stock compensation plan$39.3  $26.1  Issuance of shares through stock compensation plan$16.6 $39.1 
See accompanying notes to the condensed consolidated financial statements
6
Table of ContentsContents

SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Financial Position
As of June 28, 2020April 4, 2021 and September 30, 20192020
(unaudited)
(in millions)(in millions)June 28, 2020September 30, 2019(in millions)April 4, 2021September 30, 2020
AssetsAssetsAssets
Cash and cash equivalentsCash and cash equivalents$461.9  $621.9  Cash and cash equivalents$288.3 $527.6 
Trade receivables, netTrade receivables, net446.8  356.7  Trade receivables, net524.9 501.1 
Other receivablesOther receivables171.5  140.1  Other receivables169.1 155.2 
InventoriesInventories568.1  548.4  Inventories812.1 557.7 
Prepaid expenses and other current assetsPrepaid expenses and other current assets58.6  53.5  Prepaid expenses and other current assets83.1 63.5 
Total current assetsTotal current assets1,706.9  1,720.6  Total current assets1,877.5 1,805.1 
Property, plant and equipment, netProperty, plant and equipment, net394.6  452.9  Property, plant and equipment, net392.6 396.5 
Operating lease assetsOperating lease assets92.4  —  Operating lease assets103.0 103.8 
Investments142.9  230.8  
Deferred charges and otherDeferred charges and other56.8  51.7  Deferred charges and other49.2 115.2 
GoodwillGoodwill1,327.9  1,328.1  Goodwill1,434.6 1,332.0 
Intangible assets, netIntangible assets, net1,440.2  1,507.1  Intangible assets, net1,496.4 1,431.7 
Total assetsTotal assets$5,161.7  $5,291.2  Total assets$5,353.3 $5,184.3 
Liabilities and Shareholder's EquityLiabilities and Shareholder's EquityLiabilities and Shareholder's Equity
Current portion of long-term debtCurrent portion of long-term debt$13.9  $136.9  Current portion of long-term debt$18.6 $15.3 
Accounts payableAccounts payable446.1  463.8  Accounts payable548.8 557.5 
Accrued wages and salariesAccrued wages and salaries66.7  72.0  Accrued wages and salaries76.6 95.0 
Accrued interestAccrued interest36.7  29.3  Accrued interest11.7 38.5 
Indemnification payable to Energizer34.0  230.8  
Income tax payable13.2  238.7  
Other current liabilitiesOther current liabilities170.3  182.7  Other current liabilities282.3 236.0 
Total current liabilitiesTotal current liabilities780.9  1,354.2  Total current liabilities938.0 942.3 
Long-term debt, net of current portionLong-term debt, net of current portion2,677.2  2,139.1  Long-term debt, net of current portion2,551.6 2,461.0 
Long-term operating lease liabilitiesLong-term operating lease liabilities78.7  —  Long-term operating lease liabilities86.2 88.8 
Deferred income taxesDeferred income taxes265.9  251.4  Deferred income taxes294.3 288.7 
Other long-term liabilitiesOther long-term liabilities121.1  111.8  Other long-term liabilities136.0 138.3 
Total liabilitiesTotal liabilities3,923.8  3,856.5  Total liabilities4,006.1 3,919.1 
Commitments and contingencies (Note 19)Commitments and contingencies (Note 19)Commitments and contingencies (Note 19)00
Shareholder's equityShareholder's equityShareholder's equity
Other capitalOther capital2,142.9  2,113.3  Other capital2,162.5 2,154.1 
Accumulated deficitAccumulated deficit(638.5) (414.7) Accumulated deficit(580.8)(614.2)
Accumulated other comprehensive loss, net of taxAccumulated other comprehensive loss, net of tax(276.7) (273.5) Accumulated other comprehensive loss, net of tax(243.3)(284.6)
Total shareholder's equityTotal shareholder's equity1,227.7  1,425.1  Total shareholder's equity1,338.4 1,255.3 
Non-controlling interestNon-controlling interest10.2  9.6  Non-controlling interest8.8 9.9 
Total equityTotal equity1,237.9  1,434.7  Total equity1,347.2 1,265.2 
Total liabilities and equityTotal liabilities and equity$5,161.7  $5,291.2  Total liabilities and equity$5,353.3 $5,184.3 
See accompanying notes to the condensed consolidated financial statements
7
Table of ContentsContents
SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Income
For the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019
(unaudited)
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Net SalesNet Sales$984.3  $1,022.2  $2,793.6  $2,809.2  Net Sales$1,149.8 $937.8 $2,294.7 $1,809.3 
Cost of goods soldCost of goods sold635.7  660.7  1,834.2  1,835.3  Cost of goods sold744.5 606.0 1,467.0 1,198.5 
Restructuring and related chargesRestructuring and related charges(0.3) 0.5  12.5  1.5  Restructuring and related charges1.3 2.9 1.4 12.8 
Gross profitGross profit348.9  361.0  946.9  972.4  Gross profit404.0 328.9 826.3 598.0 
SellingSelling141.3  152.1  437.4  459.1  Selling173.2 150.0 340.0 296.1 
General and administrativeGeneral and administrative82.0  79.3  239.5  259.8  General and administrative88.2 78.0 179.4 157.5 
Research and developmentResearch and development9.7  10.5  29.7  32.7  Research and development12.5 10.1 22.9 19.9 
Restructuring and related chargesRestructuring and related charges12.5  20.2  49.1  40.7  Restructuring and related charges2.8 19.0 11.9 36.6 
Transaction related chargesTransaction related charges6.1  4.8  17.4  16.4  Transaction related charges9.7 7.2 30.3 11.3 
Loss on assets held for sale1.1  —  26.8  —  
(Gain) loss on assets held for sale(Gain) loss on assets held for sale0 (7.0)0 25.7 
Write-off from impairment of intangible assetsWrite-off from impairment of intangible assets—  —  24.2  —  Write-off from impairment of intangible assets0 0 0 24.2 
Total operating expensesTotal operating expenses252.7  266.9  824.1  808.7  Total operating expenses286.4 257.3 584.5 571.3 
Operating incomeOperating income96.2  94.1  122.8  163.7  Operating income117.6 71.6 241.8 26.7 
Interest expenseInterest expense36.0  33.7  106.0  125.2  Interest expense65.6 35.3 102.4 70.0 
Other non-operating (income) expense, netOther non-operating (income) expense, net(56.5) 39.4  10.2  64.5  Other non-operating (income) expense, net(1.2)110.4 (7.4)66.8 
Income (loss) from continuing operations before income taxesIncome (loss) from continuing operations before income taxes116.7  21.0  6.6  (26.0) Income (loss) from continuing operations before income taxes53.2 (74.1)146.8 (110.1)
Income tax expense35.4  49.9  18.8  34.1  
Income tax expense (benefit)Income tax expense (benefit)15.9 (17.5)35.8 (16.6)
Net income (loss) from continuing operationsNet income (loss) from continuing operations81.3  (28.9) (12.2) (60.1) Net income (loss) from continuing operations37.3 (56.6)111.0 (93.5)
Income (loss) from discontinued operations, net of tax8.0  (1.2) 12.2  699.1  
(Loss) income from discontinued operations, net of tax(Loss) income from discontinued operations, net of tax(1.1)1.4 (1.4)4.3 
Net income (loss)Net income (loss)89.3  (30.1) —  639.0  Net income (loss)36.2 (55.2)109.6 (89.2)
Net income attributable to non-controlling interest0.5  —  0.6  1.2  
Net (loss) income attributable to non-controlling interestNet (loss) income attributable to non-controlling interest(0.9)(0.8)(0.1)0.1 
Net income (loss) attributable to controlling interestNet income (loss) attributable to controlling interest$88.8  $(30.1) $(0.6) $637.8  Net income (loss) attributable to controlling interest$37.1 $(54.4)$109.7 $(89.3)
Amounts attributable to controlling interestAmounts attributable to controlling interestAmounts attributable to controlling interest
Net income (loss) from continuing operations attributable to controlling interestNet income (loss) from continuing operations attributable to controlling interest$80.8  $(28.9) $(12.8) $(61.3) Net income (loss) from continuing operations attributable to controlling interest$38.2 $(55.8)$111.1 $(93.6)
Net income (loss) from discontinued operations attributable to controlling interest8.0  (1.2) 12.2  699.1  
Net (loss) income from discontinued operations attributable to controlling interestNet (loss) income from discontinued operations attributable to controlling interest(1.1)1.4 (1.4)4.3 
Net income (loss) attributable to controlling interestNet income (loss) attributable to controlling interest$88.8  $(30.1) $(0.6) $637.8  Net income (loss) attributable to controlling interest$37.1 $(54.4)$109.7 $(89.3)
See accompanying notes to the condensed consolidated financial statements
8
Table of ContentsContents
SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Comprehensive Income
For the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019
(unaudited)
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Net income (loss)Net income (loss)$89.3  $(30.1) $—  $639.0  Net income (loss)$36.2 $(55.2)$109.6 $(89.2)
Other comprehensive income (loss)Other comprehensive income (loss)Other comprehensive income (loss)
Foreign currency translation gain (loss)Foreign currency translation gain (loss)7.5  (6.6) (13.3) (7.1) Foreign currency translation gain (loss)22.2 (47.4)41.6 (20.8)
Deferred tax effectDeferred tax effect(0.1) 0.1  —  (4.8) Deferred tax effect(5.0)0.3 0.3 0.2 
Net unrealized gain (loss) on foreign currency translationNet unrealized gain (loss) on foreign currency translation7.4  (6.5) (13.3) (11.9) Net unrealized gain (loss) on foreign currency translation17.2 (47.1)41.9 (20.6)
Unrealized loss on derivative instruments
Unrealized (loss) gain on hedging activity before reclassification(2.1) (0.4) (0.5) 5.4  
Net reclassification for gain to income from continuing operations(2.0) (2.5) (6.3) (8.2) 
Net reclassification for loss to income from discontinued operations—  —  —  0.5  
Unrealized loss on hedging instruments after reclassification(4.1) (2.9) (6.8) (2.3) 
Unrealized gain (loss) on derivative instrumentsUnrealized gain (loss) on derivative instruments
Unrealized gain (loss) on hedging activity before reclassificationUnrealized gain (loss) on hedging activity before reclassification5.8 7.8 (6.6)1.6 
Net reclassification for loss (gain) to income from continuing operationsNet reclassification for loss (gain) to income from continuing operations3.0 (1.7)5.7 (4.3)
Unrealized gain (loss) on hedging instruments after reclassificationUnrealized gain (loss) on hedging instruments after reclassification8.8 6.1 (0.9)(2.7)
Deferred tax effectDeferred tax effect1.7  2.4  2.8  (2.6) Deferred tax effect(2.4)(1.6)0.1 1.1 
Net unrealized loss on hedging derivative instruments(2.4) (0.5) (4.0) (4.9) 
Net unrealized gain (loss) on hedging derivative instrumentsNet unrealized gain (loss) on hedging derivative instruments6.4 4.5 (0.8)(1.6)
Defined benefit pension gainDefined benefit pension gainDefined benefit pension gain
Defined benefit pension (loss) gain before reclassification(0.8) 0.1  3.0  0.9  
Defined benefit pension gain (loss) before reclassificationDefined benefit pension gain (loss) before reclassification0.9 0.9 (1.3)3.7 
Net reclassification for loss to income from continuing operationsNet reclassification for loss to income from continuing operations1.0  0.5  3.1  1.5  Net reclassification for loss to income from continuing operations1.1 1.0 2.2 2.1 
Net reclassification for loss to income from discontinued operations—  —  —  0.2  
Defined benefit pension gain after reclassificationDefined benefit pension gain after reclassification0.2  0.6  6.1  2.6  Defined benefit pension gain after reclassification2.0 1.9 0.9 5.8 
Deferred tax effectDeferred tax effect—  (0.1) (0.4) (0.7) Deferred tax effect(0.6)(0.4)(0.4)(0.4)
Net defined benefit pension gainNet defined benefit pension gain0.2  0.5  5.7  1.9  Net defined benefit pension gain1.4 1.5 0.5 5.4 
Deconsolidation of discontinued operations and assets held for saleDeconsolidation of discontinued operations and assets held for sale—  —  8.1  21.9  Deconsolidation of discontinued operations and assets held for sale0 8.1 0 8.1 
Net change to derive comprehensive income (loss) for the periodNet change to derive comprehensive income (loss) for the period5.2  (6.5) (3.5) 7.0  Net change to derive comprehensive income (loss) for the period25.0 (33.0)41.6 (8.7)
Comprehensive income (loss)Comprehensive income (loss)94.5  (36.6) (3.5) 646.0  Comprehensive income (loss)61.2 (88.2)151.2 (97.9)
Comprehensive loss attributable to non-controlling interest—  (0.1) —  (0.1) 
Comprehensive (loss) income attributable to non-controlling interestComprehensive (loss) income attributable to non-controlling interest(0.1)(0.1)0.3 0 
Comprehensive income (loss) attributable to controlling interestComprehensive income (loss) attributable to controlling interest$94.5  $(36.5) $(3.5) $646.1  Comprehensive income (loss) attributable to controlling interest$61.3 $(88.1)$150.9 $(97.9)
See accompanying notes to the condensed consolidated financial statements
9
Table of ContentsContents
SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Shareholder’s Equity
For the ninesix month periodsperiod ended June 28, 2020April 4, 2021
(unaudited)
Nine Month Period Ended June 28, 2020 (in millions)Other
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Total
Shareholder's
Equity		Non-
controlling
Interest		Total Equity
Balances as of September 30, 2019$2,113.3  $(414.7) $(273.5) $1,425.1  $9.6  $1,434.7  
Net (loss) income from continuing operations—  (37.7) —  (37.7) 0.9  (36.8) 
Income from discontinued operations, net of tax—  2.8  —  2.8  —  2.8  
Other comprehensive income, net of tax—  —  24.2  24.2  0.1  24.3  
Restricted stock issued and related tax withholdings4.9  —  —  4.9  —  4.9  
Share based compensation8.5  —  —  8.5  —  8.5  
Dividends paid to parent—  (36.7) —  (36.7) —  (36.7) 
Cumulative adjustment for adoption of new accounting standards (Note 1)—  (0.3) 0.3  —  —  —  
Balances as of December 29, 20192,126.7  (486.6) (249.0) 1,391.1  10.6  1,401.7  
Net loss from continuing operations—  (55.8) —  (55.8) (0.8) (56.6) 
Income from discontinued operations, net of tax—  1.4  —  1.4  —  1.4  
Sale and deconsolidation of assets held for sale—  —  8.1  8.1  —  8.1  
Other comprehensive loss, net of tax—  —  (41.0) (41.0) (0.1) (41.1) 
Restricted stock issued and related tax withholdings(0.3) —  —  (0.3) —  (0.3) 
Share based compensation8.3  —  —  8.3  —  8.3  
Dividends paid to parent—  (168.2) —  (168.2) —  (168.2) 
Balances as of March 29, 20202,134.7  (709.2) (281.9) 1,143.6  9.7  1,153.3  
Net income from continuing operations—  80.8  —  80.8  0.5  81.3  
Income from discontinued operations, net of tax—  8.0  —  8.0  —  8.0  
Other comprehensive income, net of tax—  —  5.2  5.2  —  5.2  
Share based compensation8.2  —  —  8.2  —  8.2  
Dividends paid to parent—  (18.1) —  (18.1) —  (18.1) 
Balances as of June 28, 2020$2,142.9  $(638.5) $(276.7) $1,227.7  $10.2  $1,237.9  
Six Month Period Ended April 4, 2021 (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— 72.8 — 72.8 0.8 73.6 
Loss from discontinued operations, net of tax— (0.3)— (0.3)— (0.3)
Other comprehensive income, net of tax— — 16.2 16.2 0.4 16.6 
Restricted stock issued and related tax withholdings(7.1)— — (7.1)— (7.1)
Share based compensation7.5 — — 7.5 — 7.5 
Dividends paid to parent— (60.1)— (60.1)— (60.1)
Dividend paid by subsidiary to NCI— — — — (1.0)(1.0)
Balances as of January 3, 20212,154.5 (601.8)(268.4)1,284.3 10.1 1,294.4 
Net income (loss) from continuing operations— 38.2 — 38.2 (0.9)37.3 
Loss from discontinued operations, net of tax— (1.1)— (1.1)— (1.1)
Other comprehensive income (loss), net of tax— — 25.1 25.1 (0.1)25.0 
Share based compensation8.0 — — 8.0 — 8.0 
Dividends paid to parent— (16.1)— (16.1)— (16.1)
Dividend paid by subsidiary to NCI— — — — (0.3)(0.3)
Balances at April 4, 2021$2,162.5 $(580.8)$(243.3)$1,338.4 $8.8 $1,347.2 
See accompanying notes to the condensed consolidated financial statements
SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Shareholder’s Equity
For the ninesix month periodsperiod ended June 30, 2019March 29, 2020
(unaudited)
Nine Month Period Ended June 30, 2019 (in millions)Other
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Total
Shareholder's
Equity		Non-
controlling
Interest		Total Equity
Balances as of September 30, 2018$2,073.0  $(235.5) $(235.7) $1,601.8  $9.9  $1,611.7  
Six Month Period Ended March 29, 2020 (in millions)Six Month Period Ended March 29, 2020 (in millions)Other
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Total
Shareholder's
Equity		Non-
controlling
Interest		Total Equity
Balances at September 30, 2019Balances at September 30, 2019$2,113.3 $(414.7)$(273.5)$1,425.1 $9.6 $1,434.7 
Net (loss) income from continuing operationsNet (loss) income from continuing operations—  (19.1) —  (19.1) 0.2  (18.9) Net (loss) income from continuing operations— (37.7)— (37.7)0.9 (36.8)
Loss from discontinued operations, net of tax—  (83.2) —  (83.2) —  (83.2) 
Income from discontinued operations, net of taxIncome from discontinued operations, net of tax— 2.8 — 2.8 — 2.8 
Other comprehensive income, net of taxOther comprehensive income, net of tax— — 24.2 24.2 0.1 24.3 
Restricted stock issued and related tax withholdingsRestricted stock issued and related tax withholdings4.9 — — 4.9 — 4.9 
Share based compensationShare based compensation8.5 — — 8.5 — 8.5 
Dividends paid to parentDividends paid to parent— (36.7)— (36.7)— (36.7)
Cumulative adjustment for adoption of new accounting standardsCumulative adjustment for adoption of new accounting standards— (0.3)0.3 — — 0 
Balances as of December 29, 2019Balances as of December 29, 20192,126.7 (486.6)(249.0)1,391.1 10.6 1,401.7 
Net loss from continuing operationsNet loss from continuing operations— (55.8)— (55.8)(0.8)(56.6)
Income from discontinued operations, net of taxIncome from discontinued operations, net of tax— 1.4 — 1.4 — 1.4 
Sale and deconsolidation of assets held for saleSale and deconsolidation of assets held for sale— — 8.1 8.1 — 8.1 
Other comprehensive loss, net of taxOther comprehensive loss, net of tax—  —  (11.0) (11.0) —  (11.0) Other comprehensive loss, net of tax— — (41.0)(41.0)(0.1)(41.1)
Restricted stock issued and related tax withholdingsRestricted stock issued and related tax withholdings11.3  —  —  11.3  —  11.3  Restricted stock issued and related tax withholdings(0.3)— — (0.3)— (0.3)
Share based compensationShare based compensation2.8  —  —  2.8  —  2.8  Share based compensation8.3 — — 8.3 — 8.3 
Dividends paid to parentDividends paid to parent—  (30.4) —  (30.4) —  (30.4) Dividends paid to parent— (168.2)— (168.2)— (168.2)
Cumulative adjustment for adoption of new accounting standards—  (3.2) —  (3.2) —  (3.2) 
Balances as of December 30, 20182,087.1  (371.4) (246.7) 1,469.0  10.1  1,479.1  
Net (loss) income from continuing operations—  (13.4) —  (13.4) 1.0  (12.4) 
Income from discontinued operations, net of tax—  783.6  —  783.6  —  783.6  
Sale and deconsolidation of discontinued operations—  —  21.9  21.9  —  21.9  
Other comprehensive income, net of tax—  —  2.6  2.6  —  2.6  
Restricted stock issued and related tax withholdings0.2  —  —  0.2  —  0.2  
Share based compensation9.9  —  —  9.9  —  9.9  
Dividends paid to parent—  (646.0) —  (646.0) —  (646.0) 
Balances as of March 31, 20192,097.2  (247.2) (222.2) 1,627.8  11.1  1,638.9  
Net loss from continuing operations—  (28.9) —  (28.9) —  (28.9) 
Loss from discontinued operations, net of tax—  (1.2) —  (1.2) —  (1.2) 
Other comprehensive loss, net of tax—  —  (6.4) (6.4) (0.1) (6.5) 
Restricted stock issued and related tax withholdings(0.7) —  —  (0.7) —  (0.7) 
Share based compensation9.3  —  —  9.3  —  9.3  
Dividends paid to parent—  (20.5) —  (20.5) —  (20.5) 
Balances as of June 30, 2019$2,105.8  $(297.8) $(228.6) $1,579.4  $11.0  $1,590.4  
Balances at March 29, 2020Balances at March 29, 2020$2,134.7 $(709.2)$(281.9)$1,143.6 $9.7 $1,153.3 
See accompanying notes to the condensed consolidated financial statements
10
Table of ContentsContents
SB/RH HOLDINGS, LLC
Condensed Consolidated Statements of Cash Flows
For the ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019
(unaudited)
Nine Month Periods EndedSix Month Periods Ended
(in millions)(in millions)June 28, 2020June 30, 2019(in millions)April 4, 2021March 29, 2020
Cash flows from operating activitiesCash flows from operating activitiesCash flows from operating activities
Net income$—  $639.0  
Income from discontinued operations, net of tax12.2  699.1  
Net loss from continuing operations(12.2) (60.1) 
Net income (loss)Net income (loss)$109.6 $(89.2)
(Loss) income from discontinued operations, net of tax(Loss) income from discontinued operations, net of tax(1.4)4.3 
Net income (loss) from continuing operationsNet income (loss) from continuing operations111.0 (93.5)
Adjustments to reconcile net income to net cash from operating activities:Adjustments to reconcile net income to net cash from operating activities:Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortizationDepreciation and amortization113.1  138.4  Depreciation and amortization74.4 78.0 
Share based compensationShare based compensation37.9  34.7  Share based compensation15.5 25.4 
Unrealized (gain) loss on equity investments held(5.3) 38.2  
Realized loss on equity investments sold13.5  —  
(Gain) loss on equity investments(Gain) loss on equity investments(6.9)68.3 
Loss on assets held for saleLoss on assets held for sale26.8  —  Loss on assets held for sale0 25.7 
Write-off from impairment of intangible assetsWrite-off from impairment of intangible assets24.2  —  Write-off from impairment of intangible assets0 24.2 
Amortization of debt issuance costs and debt discountAmortization of debt issuance costs and debt discount2.8  5.0  Amortization of debt issuance costs and debt discount2.9 2.7 
Write-off of unamortized discount and debt issuance costsWrite-off of unamortized discount and debt issuance costs1.1  12.7  Write-off of unamortized discount and debt issuance costs7.9 1.1 
Deferred tax expense (benefit)21.8  (9.2) 
Inventory acquisition step-upInventory acquisition step-up3.4 0 
Deferred tax expenseDeferred tax expense4.0 20.3 
Net changes in operating assets and liabilitiesNet changes in operating assets and liabilities(398.7) (331.1) Net changes in operating assets and liabilities(282.5)(547.5)
Net cash used by operating activities from continuing operationsNet cash used by operating activities from continuing operations(175.0) (171.4) Net cash used by operating activities from continuing operations(70.3)(395.3)
Net cash used by operating activities from discontinued operationsNet cash used by operating activities from discontinued operations—  (250.4) Net cash used by operating activities from discontinued operations(15.9)0 
Net cash used by operating activitiesNet cash used by operating activities(175.0) (421.8) Net cash used by operating activities(86.2)(395.3)
Cash flows from investing activitiesCash flows from investing activitiesCash flows from investing activities
Purchases of property, plant and equipmentPurchases of property, plant and equipment(44.5) (40.3) Purchases of property, plant and equipment(28.1)(31.7)
Proceeds from disposal of property, plant and equipmentProceeds from disposal of property, plant and equipment0.7  0.1  Proceeds from disposal of property, plant and equipment0 0.6 
Proceeds from sale of assets held for sale30.1  —  
Proceeds from sale of discontinued operations, net of cash3.6  2,854.4  
Business acquisitions, net of cash acquiredBusiness acquisitions, net of cash acquired(17.0) —  Business acquisitions, net of cash acquired(129.8)(17.0)
Proceeds from sale of equity investmentProceeds from sale of equity investment68.0  —  Proceeds from sale of equity investment73.1 28.6 
Other investing activitiesOther investing activities2.5  (0.2) Other investing activities(0.3)2.5 
Net cash provided by investing activities from continuing operations43.4  2,814.0  
Net cash used by investing activities from continuing operationsNet cash used by investing activities from continuing operations(85.1)(17.0)
Net cash used by investing activities from discontinued operationsNet cash used by investing activities from discontinued operations—  (5.4) Net cash used by investing activities from discontinued operations0 0 
Net cash provided by investing activities43.4  2,808.6  
Net cash used by investing activitiesNet cash used by investing activities(85.1)(17.0)
Cash flows from financing activitiesCash flows from financing activitiesCash flows from financing activities
Payment of debt, including premium on extinguishmentPayment of debt, including premium on extinguishment(132.7) (2,087.9) Payment of debt, including premium on extinguishment(880.3)(130.0)
Proceeds from issuance of debtProceeds from issuance of debt528.0  54.0  Proceeds from issuance of debt899.0 780.0 
Payment of debt issuance costsPayment of debt issuance costs(0.8) (0.1) Payment of debt issuance costs(12.6)(0.8)
Payment of contingent considerationPayment of contingent consideration(197.0) —  Payment of contingent consideration0 (197.0)
Payment of cash dividends to parentPayment of cash dividends to parent(223.0) (696.9) Payment of cash dividends to parent(76.2)(204.9)
Other financing activities, net—  (8.9) 
Net cash used by financing activities from continuing operations(25.5) (2,739.8) 
Dividends paid by subsidiary to non-controlling interestDividends paid by subsidiary to non-controlling interest(1.3)0 
Net cash (used) provided by financing activities from continuing operationsNet cash (used) provided by financing activities from continuing operations(71.4)247.3 
Net cash used by financing activities from discontinued operationsNet cash used by financing activities from discontinued operations—  (2.2) Net cash used by financing activities from discontinued operations0 0 
Net cash used by financing activities(25.5) (2,742.0) 
Net cash (used) provided by financing activitiesNet cash (used) provided by financing activities(71.4)247.3 
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents—  (2.9) Effect of exchange rate changes on cash and cash equivalents3.4 (0.5)
Net change in cash, cash equivalents and restricted cashNet change in cash, cash equivalents and restricted cash(157.1) (358.1) Net change in cash, cash equivalents and restricted cash(239.3)(165.5)
Cash, cash equivalents, and restricted cash, beginning of periodCash, cash equivalents, and restricted cash, beginning of period621.9  514.3  Cash, cash equivalents, and restricted cash, beginning of period529.8 621.9 
Cash, cash equivalents, and restricted cash, end of periodCash, cash equivalents, and restricted cash, end of period$464.8  $156.2  Cash, cash equivalents, and restricted cash, end of period$290.5 $456.4 
Supplemental disclosure of cash flow informationSupplemental disclosure of cash flow informationSupplemental disclosure of cash flow information
Cash paid for interestCash paid for interest$92.1  $141.0  Cash paid for interest$95.0 $57.5 
Cash paid for taxesCash paid for taxes$34.7  $43.9  Cash paid for taxes$20.1 $30.8 
Non cash investing activitiesNon cash investing activitiesNon cash investing activities
Acquisition of property, plant and equipment through finance leasesAcquisition of property, plant and equipment through finance leases$3.6  $2.1  Acquisition of property, plant and equipment through finance leases$0.6 $3.0 
See accompanying notes to the condensed consolidated financial statements
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SPECTRUM BRANDS HOLDINGS, INC.SB/INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)

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 below.
NOTE 1– BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Fiscal Period-End
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company and its majority owned subsidiaries in accordance with accounting principles for interim financial information generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes necessary for a comprehensive presentation of financial position and results of operations. It is management’s opinion, however, that all material adjustments have been made which are necessary for a fair financial statement presentation. 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, 2019.2020.
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. The exceptions are the first quarter, which begins on October 1, and the fourth quarter, which ends on September 30. As a result, the fiscal period end date for the three and ninesix month periods included within this Quarterly Report for the Company, are June 28, 2020April 4, 2021 and June 30, 2019.March 29, 2020.
Newly Adopted Accounting Standards
In FebruaryJune 2016, the FASB issued ASU No. 2016-02,2016-13, Leases (Topic 842)Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which supersededwas further updated and clarified by the lease requirements in ASC 840, Leases.FASB through the issuance of additional related ASUs. The ASU introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information, and reasonable and supportable forecasts. This ASU requires lesseesalso expands the disclosure requirements to recognize lease assetsenable users of financial statements to understand the entity’s assumptions, models, and liabilities on the balance sheet, as well as to disclose key information about leasing arrangements. Although the new ASU requires both operatingmethods for estimating expected credit losses. The guidance is effective for fiscal years and finance leases to be disclosed on the balance sheet, a distinction between the two types still exists as the economics of leases can vary. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements”, which provided entities with an alternative modified transition method, for which, comparativeinterim periods including the disclosures related towithin those periods, are not restated.fiscal years beginning after December 15, 2019. The Company adopted ASU No. 2016-02 and ASU 2018-11 as of October 1, 2019, using2016-13 on a modified retrospective approach, which allowed for the recognition of a cumulative effect of applying the new standard as an adjustment to the opening balance sheet of retained earnings, while continuing to present all prior periods under previous lease accounting guidance. The Company’s adoption of the new standard resulted in the recognition of additional right-of-use (“ROU”) lease assets of $107.5 million and additional lease liabilities of $113.0 million, with no material cumulative effect adjustment to equity as of the date of adoption. The difference between ROU assets and lease liabilities was driven primarily by prepaid lease payments, deferred and accrued lease incentives, and restructuring related accruals that were reclassified to the ROU asset balance as ofbasis effective October 1, 2019. The income tax accounting impact of ASC 842 adoption resulted in recording of deferred tax assets and tax liabilities of $29.7 million as of October 1, 2019.2020. The adoption of the new standard did not have a material impact on the Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Cash Flows.
As allowed under the new accounting standard, the Company elected to apply the package of practical expedients to carry forward the original lease determinations, lease classifications, and accounting of initial direct costs for all asset classes at the time of adoption. The Company elected to apply the practical expedient for all of its leases to account for the lease and non-lease components as a single, combined lease component. Therefore, all fixed payments associated with the lease, including non-lease components, are included in the ROU asset and the lease liability. Any variable payments related to the lease are recognized as lease expense when and as incurred. The Company also elected not to apply the recognition requirements to leases of twelve months or less. These leases are expensed on a straight-line basis and no operating lease liability is recorded.
In accordance with Topic 842, the Company determines if an arrangement is a lease at inception, considering whether the contract conveys a right to control the use of the identified asset for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. Lease liabilities are classified between current and long-term liabilities based on their payment terms. The operating lease ROU asset includes prepaid rent and reflects the unamortized balance of lease incentives. Our leases may include renewal options, and we include the renewal option in the lease term if we conclude that it is reasonably certain that we will exercise that option. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Lease expense for operating leases is recognized on a straight-line basis over the lease term. 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. As of October 1, 2019, the Company used an average discount rate of approximately 4.6%, based on an estimate of the Company’s incremental borrowing rate. See Note 11 – Leases for additional information.
We review the impairment of our ROU assets consistent with the approach applied for our other long-lived assets. Long-lived fixed assets held and used are reviewed for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Circumstances such as the discontinuation of a product or product line, a sudden or consistent decline in the sales forecast for a product, changes in technology or in the way an asset is being used, a history of operating or cash flow losses or an adverse change in legal factors or in the business climate, among others, may trigger an impairment review. If such indicators are present, the Company performs an undiscounted cash flow analysis to determine if impairment exists. The asset value would be deemed impaired if the undiscounted cash flows generated did not exceed the carrying value of the respective asset group. If impairment is determined to exist, any related impairment loss is calculated based on fair value.
In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”), which allows for an optional reclassification from AOCI to retained earnings for stranded tax effects
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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
as a result of the Tax Cuts and Jobs Act (the “Tax Reform Act”). Effective October 1, 2019, we adopted ASU No. 2018-02 and elected to reclassify the income tax effects of the Tax Reform Act from AOCI to Retained Earnings, which resulted in reclassification of $0.3 million from AOCI to Retained Earnings.
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This guidance amends certain rules for hedging relationships, expands the types of strategies that are eligible for hedge accounting treatment to more closely align the results of hedge accounting with risk management activities and amends disclosure requirements related to fair value and net investment hedges. The Company adopted this guidance effective October 1, 2019. The adoption of the guidance2016-13 did not have a material impact on the Company’s condensed consolidated financial statementsstatements. Refer to Note 6 - Receivables and related disclosures.Concentration of Credit Risk for further discussion on the Company's receivables and allowance for uncollectible receivables.
In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard provides guidance on accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2018-15 prospectively to all implementation costs incurred after October 1, 2020, the date of adoption. Before the adoption of the standard, the implementation costs in cloud computing arrangements were expensed as incurred. The adoption of ASU 2018-15 did not have a material impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, which adds implementation guidance to clarify certain optional expedients in Topic 848. The ASUs can be adopted no later than December 31, 2022 with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance.
Transaction related charges
Transaction related charges consist of transaction costs from (1) qualifying acquisition transactions, whether or not consummated, associated with the completion of the purchase of net assets or equity interest of a business such as a business combination, equity investment, joint venture or purchase of non-controlling interest; (2) subsequent integration related project costs directly associated with an acquired business including costs for integration of acquired operations into the Company’s shared service platforms, termination of redundant positions and locations, employee transition costs, integration related professional fees and other post business combination expenses; and (3) divestiture support and separation costs consisting of incremental costs incurred by the continuing operations after completion of the transaction to facilitate separation of shared operations, development of transferred shared service operations, platforms and personnel transferred under the transaction. Divestiture-related charges prior to completion of the transaction qualifying as discontinued operations are recognized as a component of Income from Discontinued Operations, net of tax. Transaction costsQualifying cost types include, but are not limited to, banking, advisory, legal, accounting, valuation, and other professional fees directly related to the respective transactions. See Note 2 - Divestitures and Note 3 – Acquisitions Acquisitions for further discussion. The following table summarizes transaction related charges incurred by the Company during the three and ninesix month periods ended June 28, 2020April 4, 2021 and June 30, 2019:March 29, 2020:
Three Month Periods EndedNine Month Periods Ended
(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Coevorden operations divestiture$1.7  $—  $3.4  $—  
GBL divestiture2.5  3.3  7.6  5.8  
Omega Sea acquisition0.1  —  1.5  —  
Other1.8  1.5  4.9  10.6  
Total transaction-related charges$6.1  $4.8  $17.4  $16.4  
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Three Month Periods EndedSix Month Periods Ended
(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Armitage acquisition and integration$2.0 $0 $6.8 $0 
Coevorden operations divestiture and separation2.0 1.5 4.8 1.7 
GBL divestiture and separation0.9 2.7 2.7 5.1 
Omega Sea acquisition and integration0.1 1.3 0.2 1.3 
Other4.7 1.7 15.8 3.2 
Total transaction-related charges$9.7 $7.2 $30.3 $11.3 
NOTE 2 – DIVESTITURES
The following table summarizes the components of Income from Discontinued Operations, Net of Tax in the accompanying Condensed Consolidated StatementStatements of Income for the three and ninesix month periods ended June 28, 2020April 4, 2021 and June 30, 2019:March 29, 2020:
Three Month Periods EndedNine Month Periods Ended
(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019
(Loss) income from discontinued operations before income taxes - GBL$(0.2) $(5.7) $3.6  $975.7  
Income (loss) from discontinued operations before income taxes - GAC—  0.8  —  (114.7) 
(Loss) income from discontinued operations before income taxes(0.2) (4.9) 3.6  861.0  
Income tax (benefit) expense from discontinued operations(8.2) (3.7) (8.6) 161.9  
Iincome (loss) from discontinued operations, net of tax8.0  (1.2) 12.2  699.1  
Income (loss) from discontinued operations attributable to controlling interest, net of tax$8.0  $(1.2) $12.2  $699.1  
Three Month Periods EndedSix Month Periods Ended
(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
(Loss) income from discontinued operations before income taxes$(1.0)$1.4 $(1.3)$3.8 
Income tax expense (benefit) from discontinued operations0.1 0 0.1 (0.5)
(Loss) income from discontinued operations, net of tax(1.1)1.4 (1.4)4.3 
(Loss) income from discontinued operations attributable to controlling interest, net of tax$(1.1)$1.4 $(1.4)$4.3 
During the three and six month periodperiods ended June 28, 2020,April 4, 2021 the Company recognized an $8.8 million tax benefit to discontinued operations from the return to provision adjustments related to the divestitures of GBL, primarily fromincremental pre-tax loss on sale for changes to US GILTI on the non-US portions of the sold business.

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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 2 – DIVESTITURES (continued)
During the fiscal third quarter for the period ended June 28, 2020, the Company identified an out of period error in Income from Discontinued Operations, net of tax, of $22.6 million as part of the return-to-provision adjustments. These adjustments correct an error in computing the tax on the gain on sales included in the year end tax provision for discontinued operations recognized in the fiscal year ended September 30, 2019. The Company has concluded that the misstatements are not material to the consolidated financial statements. The Company has updated the Condensed Consolidated Statement of Financial Position for the year ended September 30, 2019 within this filing and will continue to do so in subsequent filings to reflect the corrected numbers as follows:
SBH
(in millions)As reportedAdjustmentAs Adjusted
Deferred charges and other$51.7  $15.5  $67.2  
Total assets5,230.5  15.5  5,246.0  
Other current liabilities216.0  (1.8) 214.2  
Current liabilities1,141.9  (1.8) 1,140.1  
Deferred tax liabilities55.9  (5.3) 50.6  
Total liabilities3,524.2  (7.1) 3,517.1  
Accumulated earnings201.2  22.6  223.8  
Total shareholders' equity1,698.3  22.6  1,720.9  
Total equity1,706.3  22.6  1,728.9  
Total liabilities and equity5,230.5  15.5  5,246.0  
SB/RH
(in millions)As reportedAdjustmentAs Adjusted
Income tax payable$240.5  $(1.8) $238.7  
Current liabilities1,356.0  (1.8) 1,354.2  
Deferred tax liabilities272.2  (20.8) 251.4  
Total liabilities3,879.1  (22.6) 3,856.5  
Accumulated deficit(437.3) 22.6  (414.7) 
Total shareholder's equity1,402.5  22.6  1,425.1  
Total equity1,412.1  22.6  1,434.7  
Additionally, the beginning balance for Accumulated Earnings as of September 30, 2019 in the Company's Consolidated Statement of Shareholder's Equity within this filing and in subsequent filings was increased $22.6 million to reflect the corrected numbers. The adjustment does not impact the Statement of Income for the comparable interim periods during the year ended September 30, 2019 and will be adjusted to reflect the corrected numbers in the Company's Consolidated Statement of Income in our subsequent annual report for the year ended September 30, 2020.
GBL
On January 2, 2019, the Company completed the sale of its GBL business pursuant to the GBL acquisition agreement with Energizer Holdings, Inc. (“Energizer”) for cash proceeds of $1,956.2 million, resulting in a pre-tax gain on sale of $989.8 million during the year ended September 30, 2019, including the settlement of customary purchase price adjustments for working capital and assumed indebtedness, recognition of tax and legal indemnifications and other agreed-upon funding under the acquisition agreement and an estimated contingent purchase price adjustment for the settlement of the plannedsale and divestiture of the Varta® consumer batteries business by Energizer. The results of operationsits Global Batteries & Lighting ("GBL") and gain on sale for disposal of the GBL business were recognized as a component of discontinued operationsGlobal Auto Care ("GAC") divisions to Energizer Holdings, Inc. ("Energizer") during the year ended September 30, 2019.
The GBL acquisition agreement provided for a purchase price adjustment that was contingent upon the completion of the divestiture of the Varta® consumer battery, chargers, portable power and portable lighting business in the EMEA region by Energizer, including manufacturing and distribution facilities in Germany. The purchase price adjustment included a downward adjustment equal to 75% of the difference between the divestiture sale price and the target sale price of $600 million, not to exceed $200 million, or a potential upward adjustment equal to 25% of the excess purchase price. Effective January 2, 2020, Energizer closed its divestiture of the Varta® consumer batteries business to Varta Aktiengesellschaft (“Varta AG”) with an aggregate purchase price of €180 million and, in accordance with the terms and conditions of the GBL acquisition agreement, the Company was obligated to contribute up to $200.0 million to Energizer in connection with the sale. The Company settled the outstanding balance with Energizer for $197.0 million during the three month period ended March 29, 2020.
The Company and Energizer have agreed to indemnify each other for losses arising from certain breaches of the GBL acquisition agreement and for certain other matters. The Company has agreed to indemnify Energizer for certain liabilities relating to the assets retained by the Company, and Energizer has agreed to indemnify the Company for certain liabilities assumed by Energizer, in each case as described in the acquisition agreement.agreements. As of June 28,April 4, 2021 and September 30, 2020, the Company recognized $50.3$36.1 million and $51.6 million, respectively, related to indemnificationsindemnification payables in accordance with the acquisition agreement,agreements, including $34.0$17.0 million and $33.0 million, respectively, within Indemnification Payable to Energizer on the Company’s Consolidated Condensed Statement of Financial PositionOther Current Liabilities, primarily attributable to current income tax indemnifications, and $16.3$19.1 million and $18.6 million, respectively, within Other Long-Term Liabilities on the Company’s Condensed Consolidated Condensed StatementStatements of Financial Position, primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits.
The Company and Energizer entered into related agreements that became effective upon the consummation of the acquisition including a customary transition services agreement (“TSA”) and reverse TSA. The TSA and reverse TSA are recognized as a component of continuing operations for periods following the completion of the GBL sale. See Note 18 – Related Party Transactions for additional discussion.
The following table summarizes the components of Income from Discontinued Operations, Net of Tax associated with the GBL divestiture in the accompanying Condensed Consolidated Statements of Operations for the three and nine month period ended June 30, 2019:
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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 2 – DIVESTITURES (continued)
Three Month Period EndedNine Month Period Ended
(in millions)June 30, 2019June 30, 2019
Net sales$—  $249.0  
Cost of goods sold—  164.6  
Gross profit—  84.4  
Operating expenses—  57.0  
Operating income—  27.4  
Interest expense—  23.3  
Other non-operating expense, net—  0.5  
Loss (Gain) on sale5.7  (990.6) 
Reclassification of accumulated other comprehensive income—  18.5  
(Loss) income from discontinued operations before income taxes$(5.7) $975.7  
During the three month period ended June 28, 2020, the Company recognized incremental pre-tax loss on sale of $0.2 million and during the nine month period ended June 28, 2020, the Company recognized pre-tax gain on sale of $3.6 million, for changes to tax and legal indemnifications and other agreed-upon funding under the acquisition agreement.
Beginning in January 2018, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with GBL, therefore 0 depreciation and amortization was recognized during the three and nine month periods ended June 30, 2019. Interest expense consists of interest from debt directly held by subsidiaries of the business held for sale, including interest from capital leases, and interest on Term Loans required to be paid down using proceeds received on disposal on sale of a business. The Company paid down the Term Loans after the completion of the GBL divestiture. NaN impairment loss was recognized as the proceeds from the disposal of the business were more than the carrying value.
During the nine month period ended June 30, 2019, the Company incurred transaction costs of $12.9 million associated with the divestiture, which were recognized as a component of income from discontinued operations. Transaction costs were expensed as incurred and included fees for investment banking services, legal, accounting, due diligence, tax, valuation and various other services necessary to complete the transaction. After the completion of the divestiture, the Company incurred incremental costs to facilitate separation of shared operations, development of transferred shared service operations, platforms and personnel transferred under the transaction which have been recognized as Transaction Related Charges as part of continuing operations on the Company’s Condensed Consolidated Statement of Income. See Note 1 – Basis of Presentation and Significant Accounting Policies for further detail.
GAC
On January 28, 2019, the Company completed the sale of its GAC business pursuant to the GAC acquisition agreement with Energizer for $938.7 million in cash proceeds and $242.1 million in stock consideration of common stock of Energizer, resulting in the write-down of net assets held for sale of $111.0 million during the year ended September 30, 2019, including the settlement of customary purchase price adjustments for working capital and assumed indebtedness, and recognition of tax and legal indemnifications in accordance with the GAC acquisition agreement. The results of operations and write-down of net assets held for sale for the disposal of the GAC business were recognized as a component of discontinued operations during the year ended September 30, 2019.
The Company and Energizer have agreed to indemnify each other for losses arising from certain breaches of the GAC acquisition agreement and for certain other matters. The Company has agreed to indemnify Energizer for certain liabilities relating to the assets retained by the Company, and Energizer has agreed to indemnify the Company for certain liabilities assumed by Energizer, in each case as described in the acquisition agreement. As of June 28, 2020, the Company has recognized $1.4 million related to indemnifications in accordance with the acquisition agreement within Other Long-Term Liabilities on the Company’s Condensed Consolidated Statement of Financial Position primarily attributable to income tax indemnifications associated with previously recognized uncertain tax benefits.
The Company and Energizer entered into related agreements ancillary to the GAC acquisition that became effective upon the consummation of the acquisition, including a TSA and reverse TSA, a supply agreement with the Company’s H&G business, as well as a shareholder agreement. The TSA and reverse TSA are recognized as a component of continuing operations for periods following the completion of the GAC sale. The supply agreement with the Company’s H&G business is recognized as a component of net sales and continuing operations. Sales from the Company’s H&G segment to GAC discontinued operations prior to the divestiture have been recognized as a component of net sales and continuing operations for all comparable periods. See Note 18 – Related Party Transactions for additional discussion.
The following table summarizes the components of income from discontinued operations before income taxes associated with the GAC divestiture in the accompanying Consolidated Statements of Operations for the three and nine month periods ended June 30, 2019:
Three Month Period EndedNine Month Period Ended
(in millions)June 30, 2019June 30, 2019
Net sales$—  $87.7  
Cost of goods sold—  52.5  
Gross profit—  35.2  
Operating expenses—  35.7  
Operating loss—  (0.5) 
Interest expense—  0.7  
Other non-operating expense, net—  0.2  
Write-down of assets of business held for sale to fair value less cost to sell(0.8) 110.0  
Reclassification of accumulated other comprehensive income—  3.3  
Income (loss) from discontinued operations before income taxes$0.8  $(114.7) 
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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 2 – DIVESTITURES (continued)
Beginning in November 2018, the Company ceased the recognition of depreciation and amortization of long-lived assets associated with GAC, resulting in $1.4 million of depreciation and amortization recognized during the nine month period ended June 30, 2019. Interest expense consists of interest from debt directly held by subsidiaries of the business held for sale, including interest from capital leases. During the nine month period ended June 30, 2019, the Company recognized a $110.0 million write-down on net assets held for sale associated with the GAC divestiture attributable to the expected fair value to be realized from the sale, net of transaction costs. The impairment was primarily driven by the change in value of stock consideration to be received as a component of the purchase price from Energizer.
During the nine month period ended June 30, 2019, the Company incurred transaction costs of $8.8 million associated with the divestiture, which have been recognized as a component of income from discontinued operations on the Consolidated Statements of Income. Transaction costs are expensed as incurred and include fees for investment banking services, legal, accounting, due diligence, tax, valuation and various other services necessary to complete the transactions. After the completion of the divestiture, the Company incurred incremental costs to facilitate separation of shared operations, development of transferred shared service operations, platforms and personnel transferred under the transaction which have been recognized as Transaction Related Charges as part of continuing operations on the Company’s Condensed Consolidated Statement of Income. See Note 1 – Basis of Presentation and Significant Accounting Policies for further detail.
Coevorden Operations
On March 29, 2020, the Company completed its sale of the dog and cat food (“DCF”) production facility and distribution center in Coevorden, Netherlands (“Coevorden Operations”) pursuant to an agreement with United Petfood Producers NV (“UPP”) for total cash proceeds of $30.1 million.$29.0 million received during the year ended September 30, 2020. The divestiture doesdid not constitute a strategic shift for the Company and therefore iswas not considered discontinued operations. The divestiture of the Coevorden Operations was defined as a disposal of a business and a component of the GPC segment and reporting unit, resulting in the allocation of $10.6 million of GPC goodwill to the disposal group based upon a relative fair-value allocation. The Company realizedAssets held for sale are recognized at their estimated fair value less cost to sell, which resulted in the recognition of a loss on assets held for sale of $26.8$25.7 million during the ninesix month period ended June 28,March 29, 2020.
The Company and UPP entered into related agreements ancillary to the acquisition that became effective upon the consummation of the acquisition, including a TSA.transaction service arrangement (TSA). The Company will continuehas continued to operate its commercial DCF business following the divestiture of the Coevorden Operations and entered into a manufacturing agreement with UPP to supply the continuing DCF business, subject to an incremental tolling charge. Additionally, the Company will leaseleases and operateoperates the distribution center on behalf of UPP for up to 18 months following the divestiture under a lease agreement.
NOTE 3 - ACQUISITIONS
Armitage Acquisition
On March 10,October 26, 2020, the Company entered into an asset purchase agreement with Omega Sea, LLC (“Omega”), a manufacturer and marketer of premium fish foods and consumable goods for the home and commercial aquarium markets, primarily consistingacquired all of the Omegastock of Armitage Pet Care Ltd ("Armitage") for approximately $187.7 million. Armitage is a premium pet treats and toys business in Nottingham, United Kingdom, including a portfolio of brands that include Armitage's dog treats brand, for a purchase price of approximately $16.9 million.Good Boy®, cat treats brand, Meowee!® and Wildbird®, bird feed products, among others, that are predominantly sold within the United Kingdom. The net assets and operating results of Omega’s operationsArmitage, since March 10,the acquisition date of October 26, 2020, are included in the Company’s Condensed Consolidated Statements of Income and reported within the GPC reporting segment for the three and ninesix month periods ended June 28, 2020.April 4, 2021.
The Company has recorded an allocation of the purchase price to the Company’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of March 10,the October 26, 2020 the acquisition date. The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of $90.7 million was recorded as goodwill, resulting in the recognition of $4.4 million for the indefinite lived intangible asset Omega trade name and the allocation of goodwill of $8.6 million, allocated to the GPC segment andwhich is not deductible for tax purposes.
Pro forma results have not been presented as Goodwill includes value associated with profits earned from market and expansion capabilities, synergies from integration and streamlining operational activities, the Omega acquisition is not considered individually significant to the consolidated resultsgoing concern of the Company.business and the value of the assembled workforce. The purchase price and purchase price allocation of Armitage were finalized as of April 4, 2021, with no significant changes to preliminary amounts.

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SPECTRUM BRANDS HOLDINGS, INC.SB/INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 3 - ACQUISITIONS (continued)
The calculation of purchase price and purchase price allocation is as follows:
(in millions)Amount
Cash paid$187.7 
Debt assumed51.0 
Cash consideration$136.7 
(in millions)Purchase Price Allocation
Cash and cash equivalents$6.9 
Trade receivables, net16.7 
Other receivables1.9 
Inventories16.3 
Prepaid expenses and other current assets0.2 
Property, plant and equipment, net3.0 
Operating lease assets0.1 
Deferred charges and other0.9 
Goodwill90.7 
Intangible assets, net88.6 
Accounts payable(9.2)
Accrued wages and salaries(1.5)
Other current liabilities(7.0)
Long-term debt, net of current portion(51.0)
Long-term operating lease liabilities(0.1)
Deferred income taxes(18.0)
Other long-term liabilities(1.8)
Net assets acquired$136.7 
The values allocated to intangible assets and the weighted average useful lives are as follows:
(in millions)Carrying AmountWeighted Average Useful Life (Years)
Tradenames$74.3 Indefinite
Customer relationships14.3 12 years
Total intangibles acquired$88.6 
The Company performed a valuation of the acquired inventories, tradenames, and customer relationships. The fair value measurements are based on significant inputs not observable in the market, and therefore, represent Level 3 measurements. The following is a summary of significant inputs to the valuation:
Inventory - Acquired inventory consists of branded finished goods that were valued based on the comparative sales method, which estimates the expected sales price of the finished goods inventory, reduced for all costs expected to be incurred in its completion or disposition and a profit on those costs.
Tradenames - The Company valued tradenames, Good Boy® brand portfolio and Wildbird® and Other brand portfolio, using an income approach, the relief-from-royalty method. Under this method, the asset value was determined by estimating the hypothetical royalties that would have to be paid if the tradenames were not owned. Royalty rates of 8% for valuation of Good Boy® and 3% for Wildbird® and Other were selected based on consideration of several factors, including prior transactions, related trademarks and tradenames, other similar trademark licensing, and transaction agreements and the relative profitability and perceived contribution of the tradenames. The discount rate applied to the projected cash flow was 11% based on the a weighted-average cost of capital for the overall business. The resulting discounted cash flows were then tax-effected at the applicable statutory rate.
Customer relationships - The Company valued customer relationships using an income and cost approach, the avoided cost and lost profits method. The underlying premise of the method is that the economic value of the asset can be estimated based on consideration of the total costs that would be avoided by having this asset in place. These costs primarily consider the costs that would be incurred to re-create the customer relationships in terms of employee salaries and the revenues and associated profits forgone due to the absence of the relationships for a period of time.
Pro forma results have not been presented as the Armitage acquisition is not considered individually significant to the consolidated results of the Company.
Rejuvenate
On April 20, 2021, the Company entered into an agreement to acquire all ownership interests in For Life Products, LLC as part of the Company's H&G segment, for a purchase price of approximately $300 million. For Life Products, LLC is a leading manufacturer in the household cleaning, maintenance, and restoration products sold under the Rejuvenate® brand. The transaction is expected to close in the second half of the 2021 fiscal year, subject to customary closing conditions, including expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)

NOTE 4 - RESTRUCTURING AND RELATED CHARGES
Global Productivity Improvement PlanProgram – During the year ended September 30, 2019, the Company initiated a company-wide, multi-year program, which consists of various restructuring related initiatives to redirect resources and spending to drive growth, identify cost savings and pricing opportunities through standardization and optimization, develop organizational and operating optimization, and reduce overall operational complexity across the Company. Since the announcement of the project and completion of the Company’s divestitures of GBL and GAC during the year ended September 30, 2019, the project focus includes the transitioning of the Company’s continuing operations in a post-divestiture environment and separation withfrom Energizer TSAs and reverse TSAs. Refer to Note 2 – Divestitures and Note 18 – Related Party Transactions for further discussion of continuing involvement with Energizer.  The initiative includes review of global processes and organization design and structures; headcount reductions and transfers; and rightsizing the Company’s shared operations and commercial business strategy in certain regions and local jurisdictions; among others. Total cumulative costs incurred associated with the project were $113.9$136.3 million as of June 28, 2020,April 4, 2021, with approximately $74.8$31.6 million forecasted in the foreseeable future. The project costs are anticipated to be incurred through the fiscal year ending September 30, 2022.
Other Restructuring Activities – The Company may enter into small, less significant initiatives and restructuring related activities to reduce costs and improve margins throughout the organization. Individually these activities are not substantial and occur over a shorter time period (generally less than 12 months).
The following summarizes restructuring and related charges for the three and ninesix month periods ended June 28, 2020April 4, 2021 and June 30, 2019:March 29, 2020:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Global productivity improvement plan$12.2  $19.6  $60.1  $38.1  
Global productivity improvement programGlobal productivity improvement program$1.7 $21.2 $10.9 $47.9 
Other restructuring activitiesOther restructuring activities—  1.1  1.5  4.1  Other restructuring activities2.4 0.7 2.4 1.5 
Total restructuring and related chargesTotal restructuring and related charges$12.2  $20.7  $61.6  $42.2  Total restructuring and related charges$4.1 $21.9 $13.3 $49.4 
Reported as:Reported as:Reported as:
Cost of goods soldCost of goods sold$(0.3) $0.5  $12.5  $1.5  Cost of goods sold$1.3 $2.9 $1.4 $12.8 
Operating expenseOperating expense12.5  20.2  49.1  40.7  Operating expense2.8 19.0 11.9 36.6 
The following is a summary of restructuring and related charges for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020, and June 30, 2019 and cumulative costs for current restructuring initiatives, and estimated future costs to be incurred as of June 28, 2020,April 4, 2021, by cost type.
(in millions)Termination
Benefits		Other
Costs		Total
For the three month period ended June 28, 2020$0.5  $11.7  $12.2  
For the three month period ended June 30, 20194.0  16.7  20.7  
For the nine month period ended June 28, 202011.9  49.7  61.6  
For the nine month period ended June 30, 20197.6  34.6  42.2  
Cumulative costs through June 28, 202019.1  94.8  113.9  
Future costs to be incurred3.5  71.3  74.8  
(in millions)Termination
Benefits		Other
Costs		Total
For the three month period ended April 4, 2021$0.3 $3.8 $4.1 
For the three month period ended March 29, 20206.2 15.7 21.9 
For the six month period ended April 4, 20213.2 10.1 13.3 
For the six month period ended March 29, 202011.4 38.0 49.4 
Cumulative costs through April 4, 202123.6 112.7 136.3 
Estimated future costs to be incurred2.0 29.6 31.6 
The following is a rollforward of the accrual related to all restructuring and related activities, included within Other Current Liabilities, by cost type for the ninesix month period ended June 28, 2020.April 4, 2021.
(in millions)(in millions)Termination
Benefits		Other
Costs		Total(in millions)Termination
Benefits		Other
Costs		Total
Accrual balance at September 30, 2019$6.6  $27.0  $33.6  
Adoption of ASU 842 (Note 1)—  (4.2) (4.2) 
Accrual balance at September 30, 2020Accrual balance at September 30, 2020$4.1 $6.4 $10.5 
ProvisionsProvisions4.1  38.3  42.4  Provisions1.5 6.4 7.9 
Cash expendituresCash expenditures(4.6) (57.4) (62.0) Cash expenditures(1.9)(12.1)(14.0)
Non-cash itemsNon-cash items0.1  (0.3) (0.2) Non-cash items0 0.1 0.1 
Accrual balance at June 28, 2020$6.2  $3.4  $9.6  
Accrual balance at April 4, 2021Accrual balance at April 4, 2021$3.7 $0.8 $4.5 
The following summarizes restructuring and related charges by segment for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020, and June 30, 2019, cumulative costs incurred through June 28, 2020,April 4, 2021, and estimated future expected costs to be incurred by Spectrum’s segments of continuing operations:the Company’s segments:
(in millions)HHIHPCGPCH&GCorporateTotal
For the three month period ended June 28, 2020$0.3  $0.7  $2.1  $—  $9.1  $12.2  
For the three month period ended June 30, 20191.1  3.2  1.4  0.4  14.6  20.7  
For the nine month period ended June 28, 20200.9  3.6  18.8  0.3  38.0  61.6  
For the nine month period ended June 30, 20194.3  4.7  6.4  1.4  25.4  42.2  
Cumulative costs through June 28, 20201.4  11.6  18.5  2.1  80.3  113.9  
Future costs to be incurred1.5  6.0  1.1  4.4  61.8  74.8  
(in millions)HHIHPCGPCH&GCorporateTotal
For the three month period ended April 4, 2021$(0.2)$1.5 $0.6 $0 $2.2 $4.1 
For the three month period ended March 29, 20200.2 1.7 6.4 0.2 13.4 21.9 
For the six month period ended April 4, 20210 4.1 2.1 0 7.1 13.3 
For the six month period ended March 29, 20200.7 2.8 16.7 0.4 28.8 49.4 
Cumulative costs through April 4, 20211.5 15.7 22.8 2.2 94.1 136.3 
Estimated future costs to be incurred0.8 2.9 3.5 2.1 22.3 31.6 
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SPECTRUM BRANDS HOLDINGS, INC.SB/INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 5 – REVENUE RECOGNITION
The Company generates all of its revenue from contracts with customers. The following table disaggregates our revenue for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020, and June 30, 2019, by the Company’s key revenue streams, segments and geographic region (based upon destination):
Three Month Period Ended June 28, 2020Three Month Period Ended April 4, 2021
(in millions)(in millions)HHIHPCGPCH&GTotal(in millions)HHIHPCGPCH&GTotal
Product SalesProduct SalesProduct Sales
NANA$272.7  $108.7  $170.2  $207.8  $759.4  NA$378.6 $115.3 $182.4 $166.8 $843.1 
EMEAEMEA0.1  96.3  55.1  —  151.5  EMEA0 123.3 94.2 0 217.5 
LATAMLATAM5.1  28.4  3.5  2.0  39.0  LATAM10.0 40.6 4.4 1.5 56.5 
APACAPAC3.5  15.2  10.0  —  28.7  APAC0.7 15.9 8.8 0 25.4 
LicensingLicensing0.2  2.0  2.1  0.8  5.1  Licensing0.2 2.8 2.1 0.5 5.6 
OtherOther—  —  0.6  —  0.6  Other0 0 1.7 0 1.7 
Total RevenueTotal Revenue$281.6  $250.6  $241.5  $210.6  $984.3  Total Revenue$389.5 $297.9 $293.6 $168.8 $1,149.8 

Three Month Period Ended June 30, 2019Three Month Period Ended March 29, 2020
(in millions)(in millions)HHIHPCGPCH&GTotal(in millions)HHIHPCGPCH&GTotal
Product SalesProduct SalesProduct Sales
NANA$335.9  $98.1  $153.4  $200.9  $788.3  NA$313.6 $98.7 $166.3 $137.8 $716.4 
EMEAEMEA0.4  95.1  53.4  —  148.9  EMEA0.3 92.2 57.9 0 150.4 
LATAMLATAM11.8  34.4  3.1  0.8  50.1  LATAM9.9 28.3 3.3 0.9 42.4 
APACAPAC6.2  13.7  8.9  —  28.8  APAC5.0 12.6 6.2 0 23.8 
LicensingLicensing0.3  2.1  1.8  0.8  5.0  Licensing0.3 0.9 2.0 0.4 3.6 
OtherOther—  —  1.1  —  1.1  Other0 0 1.2 0 1.2 
Total RevenueTotal Revenue$354.6  $243.4  $221.7  $202.5  $1,022.2  Total Revenue$329.1 $232.7 $236.9 $139.1 $937.8 

Nine Month Period Ended June 28, 2020Six Month Period Ended April 4, 2021
(in millions)(in millions)HHIHPCGPCH&GTotal(in millions)HHIHPCGPCH&GTotal
Product SalesProduct SalesProduct Sales
NANA$867.9  $323.8  $474.9  $389.7  $2,056.3  NA$776.1 $257.9 $360.5 $247.0 $1,641.5 
EMEAEMEA0.4  337.7  167.0  —  505.1  EMEA0 290.9 175.5 0 466.4 
LATAMLATAM25.5  92.6  10.2  4.3  132.6  LATAM20.4 83.0 8.4 3.2 115.0 
APACAPAC13.8  45.3  23.3  —  82.4  APAC1.1 38.2 17.9 0 57.2 
LicensingLicensing0.8  6.0  5.9  1.6  14.3  Licensing0.6 6.4 3.9 0.8 11.7 
OtherOther—  —  2.9  —  2.9  Other0 0 2.9 0 2.9 
Total RevenueTotal Revenue$908.4  $805.4  $684.2  $395.6  $2,793.6  Total Revenue$798.2 $676.4 $569.1 $251.0 $2,294.7 

Nine Month Period Ended June 30, 2019Six Month Period Ended March 29, 2020
(in millions)(in millions)HHIHPCGPCH&GTotal(in millions)HHIHPCGPCH&GTotal
Product SalesProduct SalesProduct Sales
NANA$938.2  $306.4  $432.6  $390.5  $2,067.7  NA$595.1 $215.1 $304.8 $182.0 $1,297.0 
EMEAEMEA0.6  322.7  165.9  —  489.2  EMEA0.4 241.4 111.8 0 353.6 
LATAMLATAM33.8  101.1  9.4  3.0  147.3  LATAM20.4 64.2 6.6 2.2 93.4 
APACAPAC17.2  43.9  24.6  —  85.7  APAC10.3 30.1 13.3 0 53.7 
LicensingLicensing0.9  8.2  5.2  1.4  15.7  Licensing0.6 4.0 3.8 0.8 9.2 
OtherOther—  —  3.6  —  3.6  Other0 0 2.4 0 2.4 
Total RevenueTotal Revenue$990.7  $782.3  $641.3  $394.9  $2,809.2  Total Revenue$626.8 $554.8 $442.7 $185.0 $1,809.3 
The Company has a broad range of customers including many large mass retail customers. During the three month period ended April 4, 2021, there were three large retail customers each exceeding 10% of consolidated Net Sales and representing 33.7% of consolidated Net Sales. During the six month period ended April 4, 2021, there were two large retail customers each exceeding 10% of consolidated Net Sales and representing 23.3% of consolidated Net Sales. During the three and six month periods ended March 29, 2020, there were three large retail customers each exceeding 10% of consolidated Net Sales and representing 37.2% and 34.1% 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.be received. The allowance for product returns as of June 28, 2020,April 4, 2021, and September 30, 20192020 was $21.3$22.2 million and $19.2$23.1 million, respectively.
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SPECTRUM BRANDS HOLDINGS, INC.SB/INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 6 - RECEIVABLES AND CONCENTRATION OF CREDIT RISK
The allowance for uncollectible receivables as of June 28, 2020,April 4, 2021, and September 30, 20192020 was $6.4$6.6 million and $4.9$6.4 million, respectively. The Company has a broad range of customers including many large mass retail outlet channels,customers. As of April 4, of which exceed2021, there were two large retail customers each exceeding 10% of consolidated Net Sales and/orTrade Receivables and representing 27.3% of consolidated Net Trade Receivables. These fourAs of September 30, 2020, there were two large retail customers represented 46.4% and 43.3%each exceeding 10% of consolidated Net Sales for the three month periods ended June 28, 2020 and June 30, 2019, respectively, and 44.4% and 41.4% of Net Sales for the nine month periods ended June 28, 2020 and June 30, 2019, respectively. These 4 customers also represented 42.6% and 37.7% of Trade Receivables at June 28, 2020 and September 30, 2019, respectively.representing 28.4% of consolidated Net Trade Receivables .
NOTE 7 - INVENTORIES
Inventories consist of the following:
(in millions)(in millions)June 28, 2020September 30, 2019(in millions)April 4, 2021September 30, 2020
Raw materialsRaw materials$79.1  $66.2  Raw materials$102.0 $67.8 
Work-in-processWork-in-process69.6  46.4  Work-in-process78.1 60.8 
Finished goodsFinished goods419.4  435.8  Finished goods632.0 429.1 
$568.1  $548.4  $812.1 $557.7 
NOTE 8 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
(in millions)(in millions)June 28, 2020September 30, 2019(in millions)April 4, 2021September 30, 2020
Land, buildings and improvementsLand, buildings and improvements$131.3  $161.4  Land, buildings and improvements$132.0 $134.8 
Machinery, equipment and otherMachinery, equipment and other511.0  523.6  Machinery, equipment and other554.4 520.0 
Finance leasesFinance leases198.9  197.2  Finance leases202.0 200.8 
Construction in progressConstruction in progress31.2  31.7  Construction in progress31.0 29.8 
Property, plant and equipmentProperty, plant and equipment$872.4  $913.9  Property, plant and equipment919.4 885.4 
Accumulated depreciationAccumulated depreciation(477.8) (461.0) Accumulated depreciation(526.8)(488.9)
Property, plant and equipment, netProperty, plant and equipment, net$394.6  $452.9  Property, plant and equipment, net$392.6 $396.5 
Depreciation expense from property, plant and equipment for the three month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 was $18.1$18.9 million and $19.4 million, respectively; and for the ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 was $62.1$37.4 million and $71.8$44.0 million, respectively. DuringThe decrease in depreciation for the ninesix month period ended June 30, 2019, the Company recognized incremental depreciation of $13.5 millionApril 4, 2021 is attributable to accelerated depreciation on property plant and equipmentrealized as part of HPC assets that were previously held for sale.
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exiting GPC operating facilities in LATAM in the prior year.
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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 9 - GOODWILL AND INTANGIBLE ASSETS
Goodwill consists of the following:
(in millions)HHIGPCH&GTotal
As of September 30, 2019$702.1  $430.4  $195.6  $1,328.1  
Foreign currency impact0.1  1.7  —  1.8  
Omega Sea acquisition (Note 3)—  8.6  —  8.6  
Allocated to Assets Held for Sale - Coevorden Operations (Note 2)—  (10.6) —  (10.6) 
As of June 28, 2020$702.2  $430.1  $195.6  $1,327.9  
(in millions)HHIGPCH&GTotal
As of September 30, 2020$704.8 $431.6 $195.6 $1,332.0 
Foreign currency impact6.3 5.6 0 11.9 
Armitage acquisition (Note 3)0 90.7 0 90.7 
As of April 4, 2021$711.1 $527.9 $195.6 $1,434.6 
FollowingThe Company considered the recognitionimpact of the Coevorden Operations as held for saleCOVID-19 pandemic on its future operations and allocation of goodwill,cash flows and concluded that, although the Company remeasured the fair value of its GPC reporting unit goodwill. The fair value of the remaining GPC reporting unit exceeded its carrying value by 17% and the Company did not recognize an impairment. The GPC reporting unit goodwill of $430.1 million as of June 28, 2020 is still deemed ‘at risk’ of impairment in the near term if operating performance does not continue to improve in line with management expectations, or a negative long-term outlook for the business, or another change in factors and assumptions such as discount rate. The duration and severity of the COVID-19 pandemic could result in additional future impairment charges for the GPC reporting unit goodwill, and potentially other reporting unit goodwill not currently considered, ‘at risk’. While we have concluded that ano triggering event did not occuroccurred during the three and six month periodperiods ended June 28, 2020, a prolonged pandemic could negatively impact the resultsApril 4, 2021 to indicate an impairment of operations, net sales and earnings growth rates, changes in key assumptions and other global and regional macroeconomic factors.goodwill.
The carrying value of indefinite-lived intangibles and definite-lived intangibles assets subject to amortization and accumulated amortization are as follows:
June 28, 2020September 30, 2019April 4, 2021September 30, 2020
(in millions)(in millions)Gross Carrying AmountAccumulated AmortizationNetGross Carrying AmountAccumulated AmortizationNet(in millions)Gross Carrying AmountAccumulated AmortizationNetGross Carrying AmountAccumulated AmortizationNet
Amortizable Intangible Assets:Amortizable Intangible Assets:Amortizable Intangible Assets:
Customer relationshipsCustomer relationships$687.5  $(355.8) $331.7  $694.9  $(329.7) $365.2  Customer relationships$710.2 $(389.4)$320.8 $692.1 $(367.9)$324.2 
Technology assetsTechnology assets175.7  (100.2) 75.5  179.4  (90.9) 88.5  Technology assets153.6 (91.7)61.9 175.7 (104.1)71.6 
TradenamesTradenames160.9  (129.0) 31.9  160.4  (118.1) 42.3  Tradenames158.1 (136.8)21.3 161.0 (132.6)28.4 
Total Amortizable Intangible AssetsTotal Amortizable Intangible Assets1,024.1  (585.0) 439.1  1,034.7  (538.7) 496.0  Total Amortizable Intangible Assets1,021.9 (617.9)404.0 1,028.8 (604.6)424.2 
Indefinite-lived Intangible Assets - TradenamesIndefinite-lived Intangible Assets - Tradenames1,001.1  —  1,001.1  1,011.1  —  1,011.1  Indefinite-lived Intangible Assets - Tradenames1,092.4 — 1,092.4 1,007.5 — 1,007.5 
Total Intangible AssetsTotal Intangible Assets$2,025.2  $(585.0) $1,440.2  $2,045.8  $(538.7) $1,507.1  Total Intangible Assets$2,114.3 $(617.9)$1,496.4 $2,036.3 $(604.6)$1,431.7 
The Company assessed the indefinite-lived intangible assets and definite-lived intangible assets associated with the continuing commercial DCF business following recognition of the Coevorden Operations as held for sale. During the nine month period ended June 28, 2020, the Company recognized an impairment of $16.6 million on indefinite-lived intangible assets of tradenames associated with the commercial DCF business due to the reduced value of the associated tradenames, leaving no excess fair value as of the measurement date and risk of future impairment. For the remaining tradenames associated with the DCF business, there were $3.3 million of indefinite lived intangible assets that could be deemed at risk of future impairment due to the limited excess fair value. For definite lived intangible assets, the Company recognized an impairment of $7.6 million due to the incremental cash flow risk associated with the commercial DCF business following the planned divestiture of the Coevorden Operations, which consisted of the remaining carrying cost of the definite lived intangibles assets associated with the commercial DCF business. There were no additional impairments identified during the three and six month periodperiods ended June 28, 2020.April 4, 2021. While a triggering event did not occur during the three and six month periodperiods ended June 28, 2020,April 4, 2021, a prolonged COVID-19 pandemic could negatively impactimpacting net sales growth rate, changechanges in key assumptions, and other global and regional macroeconomic factors, that could result in additional future impairment charges for indefinite-lived intangible assets.
Amortization expense from the intangible assets for the three month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 was $16.9$19.8 million and $16.4$16.9 million, respectively; and for the ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 was $50.9$37.0 million and $66.6$34.0 million, respectively. During the nine month period ended June 30, 2019, there was an incremental amortization expense
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Table of $15.5 million attributable to amortization expense on intangible assets of HPC that were previously held for sale.Contents
SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 9 - GOODWILL AND INTANGIBLE ASSETS (continued)
Excluding the impact of any future acquisitions or changes in foreign currency, the Company estimates annual amortization expense of intangible assets for the next five fiscal years will be as follows:
(in millions)(in millions)Amortization(in millions)Amortization
2020$76.0  
2021202158.8  2021$76.3 
2022202244.2  202256.0 
2023202344.2  202345.9 
2024202443.0  202445.8 
2025202543.7 

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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 10 - DEBT
Debt consists of the following:
SBHSB/RH
June 28, 2020September 30, 2019June 28, 2020September 30, 2019
(in millions)AmountRateAmountRateAmountRateAmountRate
Spectrum Brands Inc.
Revolver Facility, variable rate, expiring March 6, 2022$528.0  2.5 %$—  — %$528.0  2.5 %$—  — %
6.625% Notes, due November 15, 2022—  — %117.4  6.6 %—  — %117.4  6.6 %
6.125% Notes, due December 15, 2024250.0  6.1 %250.0  6.1 %250.0  6.1 %250.0  6.1 %
5.00% Notes, due October 1, 2029300.0  5.0 %300.0  5.0 %300.0  5.0 %300.0  5.0 %
5.75% Notes, due July 15, 20251,000.0  5.8 %1,000.0  5.8 %1,000.0  5.8 %1,000.0  5.8 %
4.00% Notes, due October 1, 2026476.8  4.0 %465.0  4.0 %476.8  4.0 %465.0  4.0 %
Other notes and obligations3.6  8.8 %9.5  10.4 %3.6  8.8 %9.5  10.4 %
Obligations under capital leases161.1  5.6 %165.6  5.6 %161.1  5.6 %165.6  5.6 %
Total Spectrum Brands, Inc. debt2,719.5  2,307.5  2,719.5  2,307.5  
Spectrum Brands Holdings, Inc.
Salus - unaffiliated long-term debt of consolidated VIE—  — %77.0  — %—  — %—  — %
Total SBH debt2,719.5  2,384.5  2,719.5  2,307.5  
Unamortized discount on debt—  (0.2) —  —  
Debt issuance costs(28.4) (33.0) (28.4) (31.5) 
Less current portion(13.9) (136.9) (13.9) (136.9) 
Long-term debt, net of current portion$2,677.2  $2,214.4  $2,677.2  $2,139.1  
Revolver Facility
April 4, 2021September 30, 2020
(in millions)AmountRateAmountRate
Spectrum Brands Inc.
Revolver Facility, variable rate, expiring June 30, 2025$0 0 %$— — %
Term Loan Facility, variable rate, due March 3, 2028400.0 2.5 %— — %
6.125% Notes, due December 15, 2024— — %250.0 6.1 %
5.75% Notes, due July 15, 2025450.0 5.8 %1,000.0 5.8 %
4.00% Notes, due October 1, 2026500.6 4.0 %499.1 4.0 %
5.00% Notes, due October 1, 2029300.0 5.0 %300.0 5.0 %
5.50% Notes, due July 15, 2030300.0 5.5 %300.0 5.5 %
3.875% Notes, due March 15, 2031500.0 3.9 %0 0 %
Other notes and obligations2.6 7.7 %3.2 7.6 %
Obligations under capital leases156.4 5.7 %160.5 5.6 %
Total Spectrum Brands, Inc. debt2,609.6 2,512.8 
Unamortized discount on debt(1.0)0 
Debt issuance costs(38.4)(36.5)
Less current portion(18.6)(15.3)
Long-term debt, net of current portion$2,551.6 $2,461.0 
The Revolver Facility is subject to either adjusted LIBOR plus margin ranging from 1.75% to 2.25% per annum, or base rate plus margin ranging from 0.75% to 1.25% per annum. During the three month period ended June 28, 2020, the Company increased its overall capacity of the Revolver Facility by $90.0 million, resulting in a total capacity of $890.0 million. All amounts under the additional capacity are subject to either LIBOR plus margin ranging between 2.00% to 2.50% per annum, or base rate plus margin ranging from 1.00% to 1.50%. As a result of borrowings and payments under the Revolver Facility, the Company had borrowing availability of $341.3 million at June 28, 2020, net of outstanding letters of credit of $20.7 million.
Subsequent to the balance sheet date, on June 30, 2020, the Company entered into the Amended and Restated Credit Agreement (the “Credit Agreement”), which refinances the Company’s previously existing credit facility and includes certain modified terms from the previously existing revolving credit facility, including extending the maturity to June 30, 2025, reducing the revolving facility under the Credit Agreement from $890 million to $600 million (with a U.S. dollar tranche and a multicurrency tranche), and changing the interest rate margins applicable to the facility to either adjusted LIBOR plus margin ranging from 1.75% to 2.75% per annum, or base rate plus margin ranging from 0.75% to 1.75% per annum. The Credit Agreement is otherwise provided onLIBOR borrowings are subject to a 0.75% LIBOR floor. Our Revolver Facility allows for the same termsLIBOR rate to be phased out and conditions as the previously existing Revolver Facility. The Company incurred $5.1 million in connectionreplaced with the Credit Agreement, which will be capitalized as debt issuance costs inSecured Overnight Financing Rate and therefore we do not anticipate a material impact by the fourth quarterexpected upcoming LIBOR transition. As a result of borrowings and payments under the year ending September 30, 2020 and amortized overRevolver Facility, the remaining termCompany had borrowing availability of $576.6 million at April 4, 2021, net of outstanding letters of credit of $23.4 million.
On March 3, 2021, the Credit Agreement.
6.625% Notes

Effective November 15, 2019, SBICompany, through its wholly owned subsidiary, Spectrum Brands, Inc ("SBI"), completed the tender and callits offering of its 6.625% Senior Unsecured Notes with an outstanding principal of $117.4 million, recognizing a loss on extinguishment of the debt of $2.6 million including a non-cash charge of $1.1 million attributable to the write-off of deferred financing costs associated with the debt.

5.500% Notes

Subsequent to the balance sheet date, on June 30, 2020, SBI issued $300.0$500.0 million aggregate principal amount of 5.50%its 3.875% Senior Notes due 2030March 2031, and entered into a new Term Loan Facility (as defined below) in the aggregate principal amount of $400.0 million, expiring March 2028. Using the proceeds received, the Company redeemed $250.0 million aggregate principal amount of the 6.125% Notes in a cash tender offer and call and $550.0 million aggregate principal amount of the 5.75% Notes in a cash tender offer, with a make whole premium of $23.4 million and a write-off of unamortized debt issuance costs of $7.9 million recognized as interest expense for the three and six month periods ended April 4, 2021.
Spectrum Term Loan Facility
On March 3, 2021, the Company entered into the first amendment (the "5.50%"Amended Credit Agreement") to the Amended and Restated Credit Agreement (the "Credit Agreement") dated as of June 30, 2020. The Amended Credit Agreement includes certain modified terms from the existing Credit Agreement to provide for a new term loan facility (the “Term Loan Facility”). The Term Loan Facility is in an aggregate principal amount of $400.0 million and will mature on March 3, 2028. The Term Loan Facility is subject to a rate per annum equal to either (1) the LIBO Rate (as defined in the Amended Credit Agreement), subject to a 0.50% floor, adjusted for statutory reserves, plus a margin of 2.00% per annum or (2) the Alternate Base Rate (as defined in the Amended Credit Agreement), plus a margin of 1.00% per annum. The Term Loan Facility allows for the LIBO rate to be phased out and replaced with the Secured Overnight Financing Rate and therefore we do not anticipate a material impact to the expected upcoming LIBOR transition. The Term Loan Facility was issued net of a $1.0 million discount and the Company incurred $5.1 million of debt issuance costs, which is being amortized with a corresponding charge to interest expense over the remaining life of the loan.
Pursuant to a guarantee agreement, SB/RH and the direct and indirect wholly-owned material domestic subsidiaries of SBI have guaranteed SBI’s obligations under the Amended Credit Agreement and related loan documents. Pursuant to the Security Agreement, dated as of June 23, 2015, SBI and such subsidiary guarantors have pledged substantially all of their respective assets to secure such obligations and, in addition, SB/RH has pledged the capital stock of SBI to secure such obligations.
Subject to certain mandatory prepayment events, the Term Loan Facility is subject to repayment according to scheduled amortizations, with the final payment of amount outstanding, plus accrued and unpaid interest, due at maturity. The Amended Credit Agreement contains customary affirmative and negative covenants, including, but not limited to, restrictions on the Company 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.
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 10 - DEBT (continued)
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 5.50%3.875% Notes (the “2030“2031 Indenture”). The 5.50%3.875% Notes mature on JulyMarch 15, 20302031 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 . The proceeds from the 5.50% Notes were used for repayment of the Revolver Facility obligation.

Agreement.
SBI may redeem all or part of the 5.50%3.875% Notes at any time on or after JulyMarch 15, 20252026 at certain fixed redemption prices as set forth in the 20302031 Indenture. In addition, prior to JulyMarch 15, 2025,2026, 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 JulyMarch 15, 2023,2024, 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 20302031 Indenture. Further, the 20302031 Indenture requires SBI to make an offer to repurchase all outstanding 5.50%3.875% Notes upon the occurrence of a change of control of SBI, as defined in the 20302031 Indenture.

The 20302031 Indenture contains covenants limiting, among other things, the incurrenceability 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 dividends onrestricted subsidiaries, enter in transactions with affiliates, or redemption or repurchase of equity interests, the making of certain investments, expansion into unrelated businesses, creation of liens on assets,effect a merger or consolidation with another company, transfer or sale of all or substantially all assets, and transactions with affiliates.


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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
consolidation.
In addition, the 20302031 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 incurred $4.9recorded $7.6 million of fees in connection with the offering of the 5.50%3.875% Notes, which will behave been capitalized as debt issuance costs in the fourth quarter of the year ending September 30, 2020 and are being amortized over the remaining life of the 5.50%3.875% Notes.

Salus

The obligations of the Salus CLO securitization were secured by the assets of the variable interest entity (the "VIE"), which primarily consisted of asset-based loan receivables and carry residual interest subject to maintenance of certain covenants. The obligations of the CLO were non-recourse to the Company. As of September 30, 2019, the CLO’s assets consisted of $0.4 million of cash that was being held to cover wind-down and legal expenses. The CLO has effectively distributed the remaining assets and as of June 3, 2020, the CLO was discharged of its obligation under the indentures as there were no assets that remained with the CLO to service the outstanding debt and no recourse to the Company. Following the discharge of the debt, there are no substantial net assets remaining with the VIE. During the three and nine period ended June 28, 2020, the CLO realized a non-cash gain on extinguishment of debt of $76.2 million attributable to the discharge of the debt, consisting of $77.0 million for the carrying value of the outstanding debt upon discharge, and $0.1 million for the unamortized discount on the associated debt and $0.7 million for debt issuance costs.
NOTE 11 – LEASES
The Company has leases primarily pertaining to manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery, computer, and office equipment that expire at various times through February 28, 2047. We have identified embedded operating leases within certain logistic agreements for warehouses and I.T.information technology services arrangements and recognized assets identified in the arrangements as part of operating ROUright-of-use ("ROU") assets on the Company’s Condensed Consolidated StatementStatements of Financial Position as of June 28,April 4, 2021 and September 30, 2020. We elected to exclude certain supply chain contractsagreements that contain embedded leases for manufacturing facilities or dedicated manufacturing lines from our ROU asset and liability calculation based on the insignificant impact to our financial statements.
The following is a summary of the Company’s leases recognized on the Company’s Condensed Consolidated StatementStatements of Financial Position as of June 28,April 4, 2021 and September 30, 2020:
(in millions)Line ItemJune 28, 2020
Assets
OperatingOperating lease assets$92.4 
FinanceProperty, plant and equipment, net138.0 
Total leased assets$230.4 
Liabilities
Current
OperatingOther current liabilities$20.8 
FinanceCurrent portion of long-term debt10.3 
Long-term
OperatingLong-term operating lease liabilities78.7 
FinanceLong-term debt, net of current portion150.8 
Total lease liabilities$260.6 
(in millions)Line ItemApril 4, 2021September 30, 2020
Assets
OperatingOperating lease assets$103.0 $103.8 
FinanceProperty, plant and equipment, net129.8 136.3 
Total leased assets$232.8 $240.1 
Liabilities
Current
OperatingOther current liabilities$24.9 $22.4 
FinanceCurrent portion of long-term debt12.0 12.1 
Long-term
OperatingLong-term operating lease liabilities86.2 88.8 
FinanceLong-term debt, net of current portion144.4 148.4 
Total lease liabilities$267.5 $271.7 
As of June 28, 2020,April 4, 2021, the Company had no significant$19.7 million of commitments related to leases executed that have not yet commenced.
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 11 – LEASES (continued)
The Company records its operating lease expense and amortization of finance lease ROU assets within Cost of Goods Sold or Operating Expenses in the Condensed Consolidated StatementStatements of Income depending on the nature and use of the underlying asset. The Company records its finance interest cost within interest expense in the Condensed Consolidated StatementStatements of Income.
The components of lease costs recognized in the Condensed Consolidated StatementStatements of Income for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 are as follows:
Three Month Period EndedNine Month Period EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)June 28, 2020June 28, 2020(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Operating lease costOperating lease cost$6.2  $18.8  Operating lease cost$7.6 $6.1 $15.4 $12.6 
Finance lease costFinance lease costFinance lease cost
Amortization of leased assetsAmortization of leased assets3.7  10.7  Amortization of leased assets3.9 3.4 7.7 7.0 
Interest on lease liabilityInterest on lease liability2.3  6.7  Interest on lease liability2.3 2.2 4.7 4.5 
Variable lease costVariable lease cost3.3  9.1  Variable lease cost3.2 3.3 5.9 5.8 
Total lease costTotal lease cost$15.5  $45.3  Total lease cost$17.0 $15.0 $33.7 $29.9 
During the three month and nine month periods ended June 28,April 4, 2021 and March 29, 2020, the Company recognized income attributable to leases and sub-leases of $0.6 million and $1.6$0.5 million, respectively, including $0.3respectively. During the six month periods ended April 4, 2021 and March 29, 2020, the Company recognized income attributable to leases and sub-leases of $1.1 million and $1.0 million, respectively, from the sublease of the Company’s Corporate Headquarters in Middleton, Wisconsin with a related party, Energizer.respectively. Income from leases and sub-leases is recognized as Other Non-Operating Income onin the Condensed Consolidated StatementStatements of Income.
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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 11 – 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 Condensed Consolidated Statement of Cash Flow, including supplemental non-cash activity related to operating leases, for the three and ninesix month periods ending June 28,April 4, 2021 and March 29, 2020:
Three Month Period EndedNine Month Period EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)June 28, 2020June 28, 2020(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Operating cash flow from operating leasesOperating cash flow from operating leases$5.5  $17.3  Operating cash flow from operating leases$7.8 $5.4 $14.9 $11.8 
Operating cash flows from finance leasesOperating cash flows from finance leases2.2  6.8  Operating cash flows from finance leases2.3 2.3 4.7 4.6 
Financing cash flows from finance leasesFinancing cash flows from finance leases3.8  10.7  Financing cash flows from finance leases3.2 3.5 6.3 6.9 
Supplemental non-cash flow disclosureSupplemental non-cash flow disclosureSupplemental non-cash flow disclosure
Acquisition of operating lease asset through lease obligationsAcquisition of operating lease asset through lease obligations2.2  6.4  Acquisition of operating lease asset through lease obligations2.1 1.8 11.0 4.3 
The following is a summary of weighted-average lease term and discount rate at June 28,April 4, 2021 and September 30, 2020:
June 28, 2020
Weighted average remaining lease term
Operating leases6.3 years
Finance leases15.6 years
Weighted average discount rate
Operating leases4.62 %
Finance leases5.60 %
April 4, 2021September 30, 2020
Weighted average remaining lease term
Operating leases6.1 years6.6 years
Finance leases15.4 years15.6 years
Weighted average discount rate
Operating leases4.6 %4.7 %
Finance leases5.7 %5.6 %
At June 28, 2020,April 4, 2021, future lease payments under operating and finance leases were as follows:
(in millions)Finance LeasesOperating Leases
2020 remaining balance$4.1  $6.4  
202121.0  24.4  
202217.7  19.7  
202316.6  17.5  
202416.3  11.2  
Thereafter180.8  37.1  
Total lease payments256.5  116.3  
Amount representing interest(95.4) (16.8) 
Total minimum lease payments$161.1  $99.5  
As of September 30, 2019, minimum commitments under the Company’s leases, as required under prior lease guidance, were as follows:
(in millions)Finance LeasesOperating Leases
2020$17.5  $25.0  
202119.7  23.2  
202216.5  20.6  
202315.5  17.8  
202415.4  10.8  
Thereafter179.9  37.5  
Total lease payments264.5  134.9  
Amount representing interest(98.9) —  
Total minimum lease payments$165.6  $134.9  

(in millions)Finance LeasesOperating Leases
2021 remaining balance$10.4 $13.9 
202218.5 25.5 
202317.4 23.7 
202417.0 15.1 
202519.9 12.3 
Thereafter162.5 38.5 
Total lease payments245.7 129.0 
Amount representing interest(89.3)(17.9)
Total minimum lease payments$156.4 $111.1 
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SPECTRUM BRANDS HOLDINGS, INC.SB/INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 12 - DERIVATIVES
Cash Flow Hedges
Commodity Swaps. The Company is exposed to risk from fluctuating prices for raw materials, specifically zinc and brass used in its manufacturing processes. Brass consistsprocesses of zinc and copper.its HHI segment. The Company hedges a portion of the risk associated with the purchase of these materials using commodity swaps. The hedge contracts are designated as cash flow hedges with the fair value changes recorded in AOCI and as a hedge asset or liability, as applicable. The unrecognized changes in fair value of the hedge contracts are reclassified from AOCI into earnings when the hedged purchase of raw materials also affects earnings. The swaps effectively fix the floating price on a specified quantity of raw materials through a specified date. At June 28, 2020,April 4, 2021, the Company had a series of brass and zinc swap contracts outstanding through November 30, 2021.August 31, 2022. The derivative net gain estimated to be reclassified from AOCI into earnings over the next 12 months is $0.1$0.9 million, net of tax.
The Company had the following commodity swap contracts outstanding as of June 28, 2020April 4, 2021 and September 30, 2019:2020:
June 28, 2020September 30, 2019April 4, 2021September 30, 2020
(in millions, except Notional)(in millions, except Notional)NotionalContract ValueNotionalContract Value(in millions, except Notional)NotionalContract ValueNotionalContract Value
Brass swap contractsBrass swap contracts948.5  Metric Tons$4.3  904.9  Metric Tons$4.4  Brass swap contracts718.7  Metric Tons$4.0 949.0  Metric Tons$4.4 
Zinc swap contractsZinc swap contracts1,024.0  Metric Tons$2.1  —  Metric Tons$—  Zinc swap contracts2,883.0  Metric Tons$7.7 1,552.0  Metric Tons$3.4 
Foreign exchange contracts. 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 U.S. Dollars, Euros, Pound Sterling, Canadian Dollars, Australian Dollars, or Japanese Yen. These foreign exchange contracts are cash flow hedges of fluctuating foreign exchange related to sales of product or raw materialinventory 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 Condensed Consolidated Statements of Income. At June 28, 2020,April 4, 2021, the Company had a series of foreign exchange derivative contracts outstanding through December 29, 2021.September 27, 2022. The derivative net gainloss estimated to be reclassified from AOCI into earnings over the next 12 months is $1.1$4.6 million, net of tax. At June 28, 2020April 4, 2021 and September 30, 2019,2020, the Company had foreign exchange derivative contracts designated as cash flow hedges with a notional value of $196.5$318.4 million and $235.6$273.4 million, respectively.
Interest Rate Swaps. The Company had a series of U.S. dollar denominated interest rate swaps outstanding which effectively fixed the interest on floating rate debt related to the 2022 Term Loan, exclusive of lender spreads, at 1.76% for a notional principal amount of $300.0 million through May 8, 2020. On January 4, 2019, the underlying debt and related hedge were settled. As a result, the Company recognized a gain of $3.6 million during the nine months ended June 30, 2019, recognized as a component of discontinued operations as interest expense from the Term Loans per Note 2 – Divestitures. As of June 28, 2020, there are 0 outstanding interest rate swaps hedges.
The following table summarizes the impact of designated cash flow hedges and the pre-tax gain (loss) recognized in the Condensed Consolidated StatementStatements of Income for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020, and June 30, 2019, respectively:
For the three month period ended June 28, 2020 (in millions)Gain (Loss)
in OCI		Reclassified to Continuing OperationsReclassified to
Discontinued
Operations
Line ItemGain (Loss)
For the three month period ended April 4, 2021
(in millions)
For the three month period ended April 4, 2021
(in millions)
Gain (Loss)
in OCI		Reclassified to Continuing Operations
Line ItemGain (Loss)
Commodity swapsCommodity swaps$0.7  Cost of goods sold$(0.2) $—  Commodity swaps$0.5 Cost of goods sold$0.8 
Foreign exchange contractsForeign exchange contracts—  Net sales(0.1) —  Foreign exchange contracts0.1 Net sales0 
Foreign exchange contractsForeign exchange contracts(2.8) Cost of goods sold2.3  —  Foreign exchange contracts5.2 Cost of goods sold(3.8)
TotalTotal$(2.1) $2.0  $—  Total$5.8 $(3.0)

For the three month period ended June 30, 2019 (in millions)Gain (Loss)
in OCI		Reclassified to Continuing OperationsReclassified to
Discontinued
Operations
Line ItemGain (Loss)
For the three month period ended March 29, 2020
(in millions)
For the three month period ended March 29, 2020
(in millions)
Gain (Loss)
in OCI		Reclassified to Continuing Operations
Line ItemGain (Loss)
Commodity swapsCommodity swaps$(0.3) Cost of goods sold$(0.1) $—  Commodity swaps$(0.9)Cost of goods sold$(0.1)
Foreign exchange contractsForeign exchange contracts(0.1) Net sales—  —  Foreign exchange contracts(0.1)Net sales0 
Foreign exchange contractsForeign exchange contracts—  Cost of goods sold2.6  —  Foreign exchange contracts8.8 Cost of goods sold1.8 
TotalTotal$(0.4) $2.5  $—  Total$7.8 $1.7 

For the nine month period ended June 28, 2020 (in millions)Gain (Loss)
in OCI		Reclassified to Continuing OperationsReclassified to
Discontinued
Operations
Line ItemGain (Loss)
For the six month period ended April 4, 2021
(in millions)
For the six month period ended April 4, 2021
(in millions)
Gain (Loss)
in OCI		Reclassified to Continuing Operations
Line ItemGain (Loss)
Commodity swapsCommodity swaps$—  Cost of goods sold$(0.3) $—  Commodity swaps$1.4 Cost of goods sold$1.1 
Foreign exchange contractsForeign exchange contracts(0.1) Net sales(0.1) —  Foreign exchange contracts0.1 Net sales0 
Foreign exchange contractsForeign exchange contracts(0.4) Cost of goods sold6.7  —  Foreign exchange contracts(8.1)Cost of goods sold(6.8)
TotalTotal$(0.5) $6.3  $—  Total$(6.6)$(5.7)

For the six month period ended March 29, 2020
(in millions)
Gain (Loss)
in OCI		Reclassified to Continuing Operations
Line ItemGain (Loss)
Commodity swaps$(0.7)Cost of goods sold$(0.1)
Foreign exchange contracts0 Net sales(0.1)
Foreign exchange contracts2.3 Cost of goods sold4.5 
Total$1.6 $4.3 
2421
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SPECTRUM BRANDS HOLDINGS, INC.SB/INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 12 – DERIVATIVES (continued)
For the nine month period ended June 30, 2019 (in millions)Gain (Loss)
in OCI		Reclassified to Continuing OperationsReclassified to
Discontinued
Operations
Line ItemGain (Loss)
Interest rate swaps$(0.6) Interest expense$—  $2.2  
Commodity swaps(1.0) Cost of goods sold(0.3) (4.4) 
Foreign exchange contracts(0.2) Net sales(0.1) —  
Foreign exchange contracts7.2  Cost of goods sold8.6  0.5  
Total$5.4  $8.2  $(1.7) 
Derivative Contracts Not Designated as Hedges for Accounting Purposes
Foreign exchange contracts. The Company periodically enters into forward 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 U.S. Dollars, Canadian Dollars, Euros, Pounds Sterling, Taiwanese Dollars, Philippine Pesos, Australian Dollars, Polish Zlotys, Mexican Pesos, or Japanese Yen.Yen, among others. These foreign exchange contracts are fair value hedges of a related liability or asset recorded in the accompanying Condensed Consolidated Statements of Financial Position. The gain or 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 June 28, 2020,April 4, 2021, the Company had a series of forward exchange contracts outstanding through July 24, 2020.June 30, 2021. At June 28, 2020April 4, 2021 and September 30, 2019,2020, the Company had $585.0$773.5 million and $977.5$802.5 million, respectively, of notional value of such foreign exchange derivative contracts outstanding.
The following summarizes the impact of derivative instruments on the accompanying Condensed Consolidated Statements of Income for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020, and June 30, 2019, pre-tax:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)Line ItemJune 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions)Line ItemApril 4, 2021March 29, 2020April 4, 2021March 29, 2020
Foreign exchange contractsForeign exchange contractsOther non-operating expense (income)$1.2  $15.3  $(1.0) $28.5  Foreign exchange contractsOther non-operating (income) expense$(5.1)$22.9 $(8.4)$(2.2)
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)(in millions)Line ItemJune 28, 2020September 30, 2019(in millions)Line ItemApril 4, 2021September 30, 2020
Derivative AssetsDerivative AssetsDerivative Assets
Commodity swaps - designated as hedgeCommodity swaps - designated as hedgeOther receivables$1.3 $0.7 
Commodity swaps - designated as hedgeCommodity swaps - designated as hedgeOther receivables$0.1  $—  Commodity swaps - designated as hedgeDeferred charges and other0 0.1 
Foreign exchange contracts - designated as hedgeForeign exchange contracts - designated as hedgeOther receivables2.0  7.8  Foreign exchange contracts - designated as hedgeOther receivables1.3 0 
Foreign exchange contracts - designated as hedgeForeign exchange contracts - designated as hedgeDeferred charges and other—  0.5  Foreign exchange contracts - designated as hedgeDeferred charges and other0.4 — 
Foreign exchange contracts - not designated as hedgeForeign exchange contracts - not designated as hedgeOther receivables0.5  1.2  Foreign exchange contracts - not designated as hedgeOther receivables2.8 0.4 
Total Derivative AssetsTotal Derivative Assets$2.6  $9.5  Total Derivative Assets$5.8 $1.2 
Derivative LiabilitiesDerivative LiabilitiesDerivative Liabilities
Commodity swaps - designated as hedgeCommodity swaps - designated as hedgeAccounts payable$0.1  $0.2  Commodity swaps - designated as hedgeAccounts payable$0.1 $0 
Foreign exchange contracts - designated as hedgeForeign exchange contracts - designated as hedgeAccounts payable0.6  0.2  Foreign exchange contracts - designated as hedgeAccounts payable7.2 3.8 
Foreign exchange contracts - designated as hedgeForeign exchange contracts - designated as hedgeOther long term liabilities0.3  —  Foreign exchange contracts - designated as hedgeOther long term liabilities0.1 0.3 
Foreign exchange contracts - not designated as hedgeForeign exchange contracts - not designated as hedgeAccounts payable1.4  1.9  Foreign exchange contracts - not designated as hedgeAccounts payable2.4 10.1 
Total Derivative LiabilitiesTotal Derivative Liabilities$2.4  $2.3  Total Derivative Liabilities$9.8 $14.2 
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 as of June 28, 2020.April 4, 2021.
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 June 28, 2020,April 4, 2021, and September 30, 2019,2020, there was 0 cash collateral outstanding and 0 posted standby letters of credit related to such liability positions.

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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 12 – DERIVATIVES (continued)
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 Income (Expense)Expense (Income). As of June 28, 2020 and June 30, 2019April 4, 2021 the full principal amount was designated as a net investment hedge and considered fully effective. The following summarizes the gain (loss) from the net investment hedge recognized in Other Comprehensive Income for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020, and June 30, 2019, pre-tax:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
Gain (loss) in OCI (in millions)Gain (loss) in OCI (in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019Gain (loss) in OCI (in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Net investment hedgeNet investment hedge$(7.9) $(6.2) $(10.6) $11.5  Net investment hedge$20.1 $2.2 $(1.4)$(2.8)
During the three and six month periodperiods ended June 28, 2020,April 4, 2021, the Company did not0t recognize aany pre-tax gain (loss) in earnings related to the translation of the undesignated portion of debt obligation. During the nine month period ended June 28, 2020, the Company recognized aThe pre-tax loss related to the translation of the undesignated portion of the debt obligation recognized in earnings ofwas $0.5 million and $1.2 million.million and for the three and six month periods ended March 29, 2020. 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.
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 13 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has not changed the valuation techniques used in measuring the fair value of any financial assets and liabilities during the year. The carrying value and estimated fair value of financial and derivative instruments as of June 28, 2020April 4, 2021 and September 30, 20192020 according to the fair value hierarchy are as follows.
June 28, 2020September 30, 2019April 4, 2021September 30, 2020
(in millions)(in millions)Level 1Level 2Level 3Fair ValueCarrying
Amount		Level 1Level 2Level 3Fair ValueCarrying
Amount		(in millions)Level 1Level 2Level 3Fair ValueCarrying
Amount		Level 1Level 2Level 3Fair ValueCarrying
Amount
InvestmentsInvestments$142.9  $—  $—  $142.9  $142.9  $230.8  $—  $—  $230.8  $230.8  Investments$0 $0 $0 $0 $0 $66.9 $0 $0 $66.9 $0 
Derivative AssetsDerivative Assets—  2.6  —  2.6  —  —  9.5  —  9.5  9.5  Derivative Assets0 5.8 0 5.8 0 0 1.2 0 1.2 0 
Derivative LiabilitiesDerivative Liabilities—  2.4  —  2.4  —  —  2.3  —  2.3  2.3  Derivative Liabilities0 9.8 0 9.8 0 0 14.2 0 14.2 0 
Debt - SBHDebt - SBH—  2,749.3  —  2,749.3  2,691.1  —  2,468.8  —  2,468.8  2,351.3  Debt - SBH0 2,665.5 0 2,665.5 2,570.2 0 2,595.4 0 2,595.4 2,476.3 
Debt - SB/RHDebt - SB/RH—  2,749.3  —  2,749.3  2,691.1  —  2,391.8  —  2,391.8  2,276.0  Debt - SB/RH0 2,665.5 0 2,665.5 2,570.2 0 2,595.4 0 2,595.4 2,476.3 
Investments consist of our investment in Energizer common stock, which is valued at quoted market prices for identical instruments in an active market.  Unrealized income (loss) from changes in fair value, realized income (loss) from sale of equity investments, plus dividend income from equity investments, are recognized as components of Other Non-Operating Expense,Income, Net on the Condensed Consolidated Statements of Income.  During the three and ninesix month periods ended June 28,April 4, 2021, the Company sold 0.3 million and 1.7 million shares of Energizer common stock, respectively, for proceeds of $12.6 million and $73.1 million, respectively. During the three and six month periods ended March 29, 2020, the Company sold 1.1 million and 2.11.0 million shares of Energizer common stock for proceeds of $51.1 million and $79.7 million, respectively, of which $11.7 million consisting of 0.3 million shares were settled subsequent to June 28, 2020.$28.6 million. As of June 28, 2020,April 4, 2021, the company holds 3.1 millionheld 0 shares of Energizer common stock. 
The following is a summary of income recognized from equity investments:investments recognized as a component of Other Non-Operating Income in the Company's Condensed Consolidated Statements of Income:
Three Month Periods EndedNine Month Periods Ended
(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Unrealized gain (loss) on equity investments held$44.5  $(33.2) $5.3  $(38.2) 
Realized gain (loss) on equity investments sold15.6  —  (13.5) —  
Gain (loss) on equity investments60.1  (33.2) (8.2) (38.2) 
Dividend income from equity investments1.2  1.6  4.4  3.2  
Gain (loss) from equity investments$61.3  $(31.6) $(3.8) $(35.0) 
See Note 12 – Derivatives for additional detail on derivative assets and liabilities.
Three Month Periods EndedSix Month Periods Ended
(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Unrealized loss on equity investments held$0 $(84.5)$0 $(53.3)
Realized gain (loss) on equity investments sold0.9 (22.3)6.9 (15.0)
Gain (loss) on equity investments0.9 (106.8)6.9 (68.3)
Dividend income from equity investments0 1.6 0.2 3.2 
Gain (loss) from equity investments$0.9 $(105.2)$7.1 $(65.1)
The fair value measurements of the Company’s debt represent non-active market exchanged traded securities which are valued at quoted input prices that are directly observable or indirectly observable through corroboration with observable market data. See Note 10 – Debt for additional detail on outstanding debt of SBH and SB/RH. See Note 12 – Derivatives for additional detail on derivative assets and liabilities.
The carrying value of cash and cash equivalents, receivables, accounts payable and short term debt approximate fair value based on the short-term nature of these assets and liabilities. 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).
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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 14 - EMPLOYEE BENEFIT PLANS
The net periodic benefit cost for defined benefit plans for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 are as follows:
U.S. PlansNon U.S. PlansU.S. PlansNon U.S. Plans
(in millions)(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Three Month Periods EndedThree Month Periods EndedThree Month Periods Ended
Service costService cost$0.2  $0.1  $0.6  $0.5  Service cost$0.1 $0.2 $0.5 $0.6 
Interest costInterest cost0.5  0.7  0.6  0.9  Interest cost0.5 0.5 0.6 0.6 
Expected return on assetsExpected return on assets(1.0) (1.1) (0.9) (1.1) Expected return on assets(0.9)(1.0)(1.0)(0.9)
Recognized net actuarial lossRecognized net actuarial loss0.2  0.1  0.8  0.4  Recognized net actuarial loss0.3 0.2 0.8 0.8 
Net periodic benefit costNet periodic benefit cost$(0.1) $(0.2) $1.1  $0.7  Net periodic benefit cost$0 $(0.1)$0.9 $1.1 
Nine Month Periods Ended
Six Month Periods EndedSix Month Periods Ended
Service costService cost$0.5  $0.3  $1.7  $1.5  Service cost$0.2 $0.3 $1.1 $1.1 
Interest costInterest cost1.6  2.1  1.7  2.7  Interest cost0.9 1.1 1.2 1.2 
Expected return on assetsExpected return on assets(3.1) (3.3) (2.8) (3.2) Expected return on assets(1.8)(2.1)(2.0)(1.8)
Settlement and curtailmentSettlement and curtailment0.9  —  —  —  Settlement and curtailment0 0.9 0 0 
Recognized net actuarial lossRecognized net actuarial loss0.7  0.1  2.4  1.4  Recognized net actuarial loss0.7 0.5 1.5 1.6 
Net periodic benefit costNet periodic benefit cost$0.6  $(0.8) $3.0  $2.4  Net periodic benefit cost$0 $0.7 $1.8 $2.1 
Weighted average assumptionsWeighted average assumptionsWeighted average assumptions
Discount rateDiscount rate3.07%4.10%0.75 - 7.70%1.00 - 8.15%Discount rate2.46%3.07%0.50 - 6.90%0.75 - 7.70%
Expected return on plan assetsExpected return on plan assets6.50%6.50%0.75 - 3.40%1.00 - 4.01%Expected return on plan assets6.00%6.50%0.50 - 3.40%0.75 - 3.40%
Rate of compensation increaseRate of compensation increaseN/AN/A2.25 - 6.00%2.05 - 4.85%Rate of compensation increaseN/AN/A2.25 - 6.00%2.25 - 6.00%
Contributions to our pension and defined benefit plans, including discretionary amounts, for the three month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 were $0.8$0.9 million and $0.3$0.7 million, respectively. Contributions to our pensionrespectively; and defined benefit plans, including discretionary amounts, for the ninesix month periods ended June 28,April 4, 2021 and March 29, 2020, and June 30, 2019, were $2.3$3.7 million and $1.2$1.5 million, respectively.
23
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 15 – SHAREHOLDER’S EQUITY
Share Repurchases
The Company has a share repurchase program that is executed through purchases made from time to time either in the open market or otherwise. On July 24, 2018, the Board of Directors approved a $1 billion common stock repurchase program. The authorization is effective for 36 months. As part of the share repurchase program, the Company purchased treasury shares in open market purchases at market fair value, in private purchases from Company employees, significant shareholders or beneficial interest owners at fair value and through an accelerated share repurchase (“ASR”) agreement with a third-party financial institution. On May 4, 2021, subsequent to the balance sheet date, the Board of Directors approved a new $1 billion common stock repurchase program and terminated the previously approved repurchase program. The authorization is effective for 36 months.
On November 18, 2019, SBH entered into an ASR to repurchase $125$125.0 million of the Company’s common stock. At inception, pursuant to the agreement, the Company paid $125$125.0 million to the financial institution using cash on hand and took delivery of 1.7 million shares which represented approximately 85% 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 shares received initially of $106.3 million was recorded as a treasury stock transaction, with the remainder of $18.7 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. On February 24, 2020, the Company closed and settled the ASR resulting in an additional delivery of 0.3 million shares, with a fair value of $18.5 million. The total number of shares repurchased under the ASR program during the year ended September 30, 2020, was 2.0 million at an average cost per share of $61.59, based on the volume-weighted average share price of the Company’s common stock during the calculation period of the ASR program, less the applicable contractual discount.
The following summarizes the activity of common stock repurchases under the program for the ninethree and six month periods ended June 28, 2020April 4, 2021 and June 30, 2019March 29, 2020:
June 28, 2020June 30, 2019April 4, 2021March 29, 2020
Nine Month Periods Ended (in millions except per share data)
Number of
Shares
Repurchased
Average
Price
Per Share
Amount
Number of
Shares
Repurchased
Average
Price
Per Share
Amount
Three Month Periods Ended
(in millions except per share data)
Three Month Periods Ended
(in millions except per share data)
Number of
Shares
Repurchased
Average
Price
Per Share
Amount
Number of
Shares
Repurchased
Average
Price
Per Share
Amount
Open Market PurchasesOpen Market Purchases4.0  $56.97  $230.6  4.6  $54.22  $250.0  Open Market Purchases0 $0 $0 2.7 $54.54 $149.2 
Private PurchasesPrivate Purchases0.2  62.30  9.2  0.3  56.02  18.5  Private Purchases0 0 0 0 0 0 
ASRASR2.0  61.47  124.8  —  —  —  ASR0 0 0 0.3 59.69 18.5 
Total PurchasesTotal Purchases6.2  $58.57  $364.6  4.9  $54.34  $268.5  Total Purchases0 $0 $0 3.0 $55.06 $167.7 

There were 0 shares repurchased during the three month periods ended June 28, 2020 and June 30, 2019.
27
April 4, 2021March 29, 2020
Six Month Periods Ended
(in millions except per share data)
Number of
Shares
Repurchased		Average
Price
Per Share		AmountNumber of
Shares
Repurchased		Average
Price
Per Share		Amount
Open Market Purchases0 $0 $0 4.0 $56.97 $230.6 
Private Purchases0.6 65.27 42.3 0.2 62.30 9.2 
ASR0 0 0 2.0 61.47 124.8 
Total Purchases0.6 $65.27 $42.3 6.2 $58.57 $364.6 
Table of Contents
SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 16 - SHARE BASED COMPENSATION
Share based compensation expense is recognized as General and Administrative Expenses on the Condensed Consolidated Statements of Income. The following is a summary of share based compensation expense for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 for SBH and SB/RH, respectively.
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions)(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
SBHSBH$12.8  $14.0  $38.8  $35.8  SBH$8.5 $13.1 $16.0 $26.0 
SB/RHSB/RH$12.5  $13.6  $37.9  $34.7  SB/RH$8.0 $12.6 $15.5 $25.4 
The Company recognizes share based compensation expense primarily from the issuance of its Restricted Stock Units (“RSUs”), primarily under its Long-Term Incentive Plan ("LTIP"), based on the fair value of the awards, as determined by the market price of the Company’s shares of common stock on the designated grant date and recognized on a straight-line basis over the requisite service period of the awards. Certain RSUs are time-based grants that provide for either 3-year cliff vesting or graded vesting depending upon the vesting conditions and forfeitures provided by the grant. Certain RSUs are performance-based awards that are dependent upon achieving specified financial metrics (adjusted EBITDA, return on adjusted equity, and/or adjusted free cash flow) over a designated period of time.
Beginning in the fiscal year ended September 30, 2019, the Company provided to certain employees RSU grants issued under a Long-Term Incentive Plan (“LTIP”), with a 3-year, cliff vesting schedule and having both performance conditions dependent upon achieving specified financial targets (adjusted EBITDA, return on equity, and adjusted free cash flow) and time-based service. The Company also provided for bridge awards that are special awards to certain employees for transitioning to the LTIP from previous equity incentive compensation plans. Bridge awards vest annually, on November 21, 2019 and November 21, 2020, and have both performance conditions dependent upon achieving specified financial targets in fiscal year 2019 and 2020, respectively, (adjusted EBITDA and adjusted free cash flow) and time-based service conditions (60% performance/40% service). Bridge awards are payable in either RSUs or cash, or both, based upon an employee election. Bridge awards elected to be payable in RSU are recognized as equity awards and included as a component of share-based compensation expense. Additionally, the Company regularly issues individual RSU awards under its equity plan to its Board members and individual employees for recognition, incentive, or retention purposes, when needed, which are primarily conditional upon time-based service conditions and included as a component of share-based compensation.
The following summary ofIn the activity in Spectrum RSUs during the nine month period ended June 28, 2020:
SBHSB/RH
(in millions, except per share data)UnitsWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date		UnitsWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date
Time-based grants
Vesting in less than 24 months0.3  $62.37  $18.6  0.3  $62.29  $17.3  
Vesting in more than 24 months0.1  62.93  8.2  0.1  62.93  8.2  
Total time-based grants0.4  $62.54  $26.8  0.4  $62.49  $25.5  
Performance-based grants
Vesting in more than 24 months0.3  $62.93  $19.3  0.3  $62.93  $19.3  
Total performance-based grants0.3  $62.93  $19.3  0.3  $62.93  $19.3  
Total grants0.7  $62.70  $46.1  0.7  $62.68  $44.8  

SBHSB/RH
(in millions, except per share data)SharesWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date		SharesWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date
At September 30, 20191.2  $53.57  $67.0  1.2  $53.23  $65.1  
Granted0.7  62.70  46.1  0.7  62.68  44.8  
Forfeited(0.1) 61.71  (2.3) (0.1) 61.71  (2.3) 
Vested(0.6) 57.80  (39.3) (0.6) 57.29  (37.8) 
At June 28, 20201.2  $56.36  $71.5  1.2  $56.26  $69.8  
In addition to RSU awards,prior year, the Company also providesprovided for a portion of its annual management incentive compensation plan (“MIP”("MIP") to be paid in common stock of the Company, in lieu of cash payment, and is recognized aspayment. During the fourth quarter of the fiscal year ended September 30, 2020, the Company changed its MIP payout policy that previously provided for the issuance of stock for a liability plan.designated pool of recipients to be fully funded through cash distribution with no stock issuance. Share based compensation expense associated with the annual MIP for the three and six month periods ended March 29, 2020 was $4.3 million and $12.9 million$8.6 million. There was 0 portion of annual MIP recognized in the share based compensation expense for the three and ninesix month periods ended June 28, 2020, respectively, and $4.3 million and $12.6 million for the three and nine month periods ended June 30, 2019, respectively. The remaining unrecognized pre-tax compensation cost for SBH and SB/RH at June 28, 2020 was $42.3 million and $42.0 million, respectively.

April 4, 2021.
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SPECTRUM BRANDS HOLDINGS, INC.SB/INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 16 - SHARE BASED COMPENSATION (continued)
The following is a summary of the activity in the Company RSUs during the six month period ended April 4, 2021:
SBHSB/RH
(in millions, except per share data)UnitsWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date		UnitsWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date
Time-based grants
Vesting in less than 24 months0.1 $74.43 $7.7 0.1 $74.45 $6.3 
Vesting in more than 24 months0.1 74.37 7.7 0.1 74.37 7.6 
Total time-based grants0.2 $74.40 $15.4 0.2 $74.41 $13.9 
Performance-based grants
Vesting in more than 24 months0.3 $74.36 $22.3 0.3 $74.36 $22.3 
Total performance-based grants0.3 $74.36 $22.3 0.3 $74.36 $22.3 
Total grants0.5 $74.38 $37.7 0.5 $74.38 $36.2 

SBHSB/RH
(in millions, except per share data)SharesWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date		SharesWeighted
Average
Grant Date
Fair Value		Fair
Value
at Grant
Date
At September 30, 20201.4 $56.41 $79.3 1.4 $56.33 $77.7 
Granted0.5 74.38 37.7 0.5 74.38 36.2 
Forfeited(0.1)61.24 (1.0)(0.1)61.24 (1.0)
Vested(0.3)53.06 (17.1)(0.3)52.35 (15.8)
At April 4, 20211.5 $62.83 $98.9 1.5 $62.73 $97.1 
The remaining unrecognized pre-tax compensation cost for SBH and SB/RH at April 4, 2021 was $59.2 million and $58.3 million, respectively.
NOTE 17 - INCOME TAXES
The effective tax rate for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 was as follows:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
Effective tax rateEffective tax rateJune 28, 2020June 30, 2019June 28, 2020June 30, 2019Effective tax rateApril 4, 2021March 29, 2020April 4, 2021March 29, 2020
SBHSBH28.0 %225.8 %46.4 %(20.3)%SBH29.9 %24.3 %24.4 %15.9 %
SB/RHSB/RH30.3 %236.5 %285.4 %(131.4)%SB/RH29.9 %23.5 %24.4 %15.0 %
The estimated annual effective tax rate applied to the three and ninesix month periods ended June 28, 2020April 4, 2021 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”), net operating losses outside the U.S. that are not more likely than not to result in a tax benefit, certain nondeductible expenses, and foreign rates that differ from the US federal statutory rate.rate, and state income taxes. The Company has U.S. net operating loss carryforwards, which do not allow it to take advantage of the foreign-derived intangible income (“FDII”) deduction. The Company’s federal effective tax rate on GILTI is therefore 21%. During the three and nine month periods ended June 28,
On November 20, 2020, the U.S. Treasury and the Internal Revenue Service issued Final Regulations (“Regulations”) under Internal Revenue Code Sections 245A and 951A related to the treatment of previously disqualified basis under the GILTI regime. The Regulations are effective for Fiscal 2022, but the Company can elect to apply them to Fiscal 2018 through Fiscal 2021. The Company expects to satisfy the requirements necessary to apply the Regulations retroactively and has therefore estimated and recorded a $5.2benefit of $5.3 million tax benefit relatedfor the impact on years prior to U.S. return to provision differences, primarily from changesFiscal 2021 in estimates of GILTI, which is recorded as a period cost. During the ninesix month period ended June 28, 2020, theApril 4, 2021. The Company also recognized a $5.3 millionexpects to apply the Regulations to Fiscal 2021 and has included the impact in the estimated annual effective tax benefit from the favorable settlement for non-U.S.income tax examination for fiscal years preceding Fiscal 2019.rate.
As of June 28,April 4, 2021, and September 30, 2020, there is $2.8was $16.0 million and $1.8 million of income taxes payable on the SB/RH Condensed Consolidated StatementStatements of Financial Position, payable to its parent company, calculated as if SB/RH were a separate taxpayer.
On July 20, 2020, the US Treasury and the Internal Revenue Service issued Final Regulations under Internal Revenue Code Section 951A relating to the treatment
25
Table of income that is subject to a high rate of tax under the GILTI regime. The Regulations are effective for Fiscal 2021, but the Company can elect to apply them to Fiscal 2019 and Fiscal 2020. The Company is Contents
SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in the process of reviewing and estimating the impact of the Regulations, but there is a reasonable possibility that application of the Regulations could have a material effect on the Company’s Fiscal 2020 income tax expense. The Company expects to record the impacts to Fiscal 2020 during the fourth quarter.millions, unaudited)
NOTE 18 – RELATED PARTY TRANSACTIONS
Energizer Holdings, Inc.
Effective as of the close of the GBL divestiture on January 2, 2019, and GAC divestiture on January 28,divestitures during the year ended September 30, 2019, the Company and Energizer entered into a series of TSAs and reverse TSAs that support various shared back office administrative functions including finance, sales and marketing, information technology, human resources, real estate and supply chain, customer service and procurement; to support both the transferred GBL operations and the continuing operations of Spectrum,the Company, respectively, within the various regions in which they operate. Charges associated with TSAs and reverse TSAs are recognized as bundled service costs under a fixed fee structure by the respective service or function and geographic location and one-time pass-through charges, including warehousing, freight, among others, to and from Energizer that settle on a net basis between the two parties. The TSAs and reverse TSAs were further expanded to incorporate the activity and operations attributable to the close of the GAC divestiture. Charges to Energizer for TSA services are recognized as a reduction of the respective operating costs incurred by Spectrumthe Company and recognized as a component of operating expense or cost of goods sold depending upon the functions being supported by Spectrum.the Company. Charges from Energizer for reverse TSA services are recognized as operating expenses or cost of goods sold depending upon the functions being supported by Energizer. The TSAs and reverse TSAs have an overall expected time period of 12 months following the close of the transaction with some variability in expiration dependent upon the completed transition of the respective service or function and its geographic location and provide up to 12 additional months for a total duration of up to 24 months. Effective January 2, 2020, Energizer closed its divestiture of the European based Varta® consumer battery business in the EMEA region to Varta AG, which also transferred TSAs and reverse TSAs associated with the divested entities to be assumed by Varta AG. As a result, a portion of the TSA and reverse TSA charges with Energizer were transferred to Varta AG. The TSAs and reverse TSAs have an overall expected time period of 12 months following the close of the transactions with some variability in expiration dependent upon the completed transition of the respective service or function and its geographic location and provide up to 12 additional months for a total duration of up to 24 months. The Company has exited all outstanding TSAs and reverse TSAs with Energizer and Varta in January 2021.
During the three month period ended June 28,April 4, 2021, the Company recognized net gain of $0.1 million, consisting of TSA charges of $0.1 million. During the six month period ended April 4, 2021, the Company recognized net loss of $1.7 million, consisting of TSA charges of $0.9 million and reverse TSA costs of $2.6 million. During the three month period ended March 29, 2020, the Company recognized net loss of $1.6$1.5 million, consisting of TSA charges of $2.1$2.2 million and reverse TSA costs of $3.7 million. During the ninesix month period ended June 28,March 29, 2020, the Company recognized net lossgain of $1.6$0.1 million, consisting of TSA charges of $8.6$6.6 million and reverse TSA costs of $10.2 million. During the three month period ended June 30, 2019, the Company recognized net income of $1.4 million, consisting of TSA charges of $6.3 million and reverse TSA costs of $4.8 million. During the nine month period ended June 30, 2019, the Company recognized net income of $4.0 million, consisting of TSA charges of $12.9 million and reverse TSA costs of $8.9$6.5 million.
In addition to the TSAs and reverse TSAs, the Company, Energizer and Varta AG will receive cash and/or make payments on behalf of the respective counterparty’s operations as part of the shared administrative functions, resulting in cash flow being commingled with the operating cash flow of the Company. The Company recognizes a net payable or receivable with Energizer and Varta AG for any outstanding TSA and reverse TSA related services and net working capital attributable to commingled cash flow. As of June 28, 2020April 4, 2021 and September 30, 2019,2020, the Company had net receivable of $6.8$2.1 million and net receivable of $12.8$5.4 million, respectively, with Energizer included in Other Receivables on the Company’s Condensed StatementStatements of Financial Position. As of June 28,April 4, 2021 and September 30, 2020, the Company had net receivablepayable of $5.5$1.1 million and $1.0 million, respectively, with Varta AG included in Other ReceivablesCurrent Liabilities on the Company’s Condensed Consolidated StatementStatements of Financial Position.
The Company’s H&G segment continuescontinued to manufacture certain GAC related products at its facilities and sell the products to Energizer as a third-party supplier on an ongoing basis, at inventory cost plus contracted markup, as agreed upon in the supply agreement. The supply agreement hashad a contracted term of 24 months, and may be subject to early termination by either party at any timeexpired in January 2021 with written notice.no renewal. Material and inventory on hand to support the supply agreement is recognized as inventory of the Company. During the three and ninesix month periods ended June 28, 2020,April 4, 2021 the Company recognized $2.1$1.9 million and $13.0$6.0 million, respectively, of revenue attributable to the Energizer supply agreement as a component of H&G revenue after completion of the GAC divestiture. During the three and ninesix month periods ended June 30, 2019,March 29, 2020, the Company recognized $4.6$5.6 million and $8.3$10.9 million of revenue attributable to the Energizer supply agreement, respectively.agreement. As of June 28, 2020April 4, 2021 and September 30, 2019,2020, the Company had outstanding receivablereceivables of $1.7$0.1 million and $4.9$4.4 million, respectively, from Energizer in Trade Receivables, Net on the Company’s Condensed StatementStatements of Financial Position associated with the H&G supply agreement.
As a condition to the consummation of the GAC acquisition and receipt of 5.3 million shares of Energizer common stock as consideration, the Company entered into the Energizer Shareholder Agreement which contains a 24-month standstill provision that prohibits the Company from engaging in certain transactions
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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 18 – RELATED PARTY TRANSACTIONS (continued)
involving Energizer to control or influence management, board of directors or policies of Energizer. Additionally, for a period of 18 months following the closing of the GAC acquisition, the Company is required to vote in favor of Energizer’s board of director nominees and in accordance with the Energizer board’s recommendations on all other matters at any meeting of Energizer’s shareholders. Additionally, pursuant to the Energizer Shareholder Agreement, the Company has agreed not to transfer any of its Shares or other equity securities in Energizer, or engage in certain hedging transactions from the closing of the GAC acquisition until the day that is twelve months after the GAC closing date and, following such period, subject to certain limitations, not to transfer any such Energizer shares or other equity securities to any person or entity who would thereafter beneficially own more than 4.9% of Energizer’s outstanding shares of equity securities after giving effect to such transaction. Following the 18 month anniversary of the closing of the GAC acquisition, Energizer will have the right to repurchase any or all of the shares held by the Company for a purchase price per share equal to the greater of the volume-weighted average sales price per share for the ten consecutive trading days beginning on the 12th trading day immediately preceding notice of the repurchase from Energizer and 100% of the volume-weighted average sale price per share of the common stock for the 10 consecutive trading days immediately preceding the date of the GAC agreement. The Company’s investment in Energizer common stock is recognized at its fair value in Investments on the Company’s Condensed Consolidated Statement of Financial Position, with any unrealized gains or losses attributable to changes in the market price and dividend income received from Energizer being recognized as Other Non-Operating Income on the Company’s Condensed Consolidated Statements of Income. See Note 13 – Fair value of Financial Instruments for additional discussion on the Company’s investment in Energizer common stock.
NOTE 19 - 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 of theadditional matters or proceedings presently pending will have a material adverse effect on its results of operations, financial condition, liquidity or cash flows.
Shareholder Litigation.On August 16, 2019, a state court class action complaint was filed in the Circuit Court of Dane County, Wisconsin against the Company and certain of the Company's current and former directors and officers. The complaint alleged that certain financial statements contained misstatements in violation of the Securities Act of 1933. During the nine month period ended June 28, 2020, the Company recognized an estimated cost of $1.1 million for a proposed settlement, net third party insurance coverage and payment, which has been paid and is being held in escrow pending a final approval by the Circuit Court of Dane County.
Separately, on July 12, 2019, an amended consolidated class action complaint filed earlier in 2018 was filed in the United StateStates District Court for the Western District of Wisconsin (the “Court”) by the Public School Teachers’ Pension & Retirement Fund of Chicago and the Cambridge Retirement against Spectrum Brands’ Legacy, Inc. (“Spectrum Legacy”). The complaint alleges that the defendants violated the Securities Exchange Act of 1934 by making misrepresentations and omissions in Spectrum Legacy’s financial statements.1934. The amended complaint added HRG Group, Inc. (“HRG”), the predecessor to the Company, as a defendant and asserted additional claims against the Company on behalf of a purported class of HRG shareholders. The class period of the consolidated amended complaint is from January 26, 2017 to November 19, 2018, and the plaintiffs seek an unspecified amount of compensatory damages, interest, attorneys’ and expert fees and costs. Subsequent to June 28,During the year ended September 30, 2020, the Company has reached a tentativeproposed settlement with all parties. There is no incrementalresulting in an insignificant loss, recognized as a resultnet of the tentative settlement, net third partythird-party insurance coverage and payment. Basedpayment, pending final approval by the Court. In February 2021, the Court declined to approve the proposed settlement without prejudice because the Court determined that as a procedural matter the plaintiff’s counsel had not taken the appropriate actions to be appointed to represent the purported class of HRG shareholders. The parties are discussing appropriate actions that could address the procedural deficiency, but there can be no assurance that it will be addressed or that a settlement on information currently available,the same terms, or any other terms, will ultimately be reached and approved by the Court. In the event a settlement is not reached and approved, the Company does not believe that any other matters relatedintends to this complaint will have a material adverse effect on its business or financial condition.vigorously defend the litigation.
Environmental. The Company has provided for an estimated cost of $11.7 million and $12.2$11.6 million as of June 28, 2020April 4, 2021 and September 30, 2019, respectively,2020, associated with environmental remediation activities at some of its current and former manufacturing sites, included in Other Long-Term Liabilities on the Condensed Consolidated StatementStatements of Financial Position. The Company believes that any additional liability in excess of the amounts provided that may result from resolution of these matters, will not have a material adverse effect on the consolidated financial condition, results of operations, or cash flows of the Company.
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 19 -COMMITMENTS AND CONTINGENCIES (continued)
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 June 28, 2020April 4, 2021 and September 30, 2019,2020, the Company recognized $6.1$4.4 million and $5.9$5.1 million in product liability, respectively, included in Other Current Liabilities on the Condensed Consolidated StatementStatements 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 $6.8$11.4 million and $7.2$10.9 million of warranty accruals as of June 28, 2020April 4, 2021 and September 30, 2019,2020, respectively, included in Other Current Liabilities on the Condensed Consolidated Statements of Financial Position.
Other. During the six month period ended April 4, 2021, the Company recognized legal reserves at our H&G division of approximately $6.0 million attributable to significant and unusual non-recurring claims with no previous history or precedent, included in Other Current Liabilities on the Condensed Consolidated Statement of Financial Position.
NOTE 20 - SEGMENT INFORMATION
Net sales relating to the segments for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 are as follows:
Three Month Periods EndedNine Month Periods Ended
(in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019
HHI$281.6  $354.6  $908.4  $990.7  
HPC250.6  243.4  805.4  782.3  
GPC241.5  221.7  684.2  641.3  
H&G210.6  202.5  395.6  394.9  
Net sales$984.3  $1,022.2  $2,793.6  $2,809.2  
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SPECTRUM BRANDS HOLDINGS, INC.SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 20 - SEGMENT INFORMATION (continued)
Three Month Periods EndedSix Month Periods Ended
(in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
HHI$389.5 $329.1 $798.2 $626.8 
HPC297.9 232.7 676.4 554.8 
GPC293.6 236.9 569.1 442.7 
H&G168.8 139.1 251.0 185.0 
Net sales$1,149.8 $937.8 $2,294.7 $1,809.3 
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:
•Stock based and other incentive compensation costs that consist of costs associated with long-term compensation arrangements and other equity based compensation based upon achievement of long-term performance metrics; and generally consist of non-cash, stock-based compensation. During the year ending September 30, 2019, the Company issuedsix month period ended April 4, 2021 and three and six month periods ended March 29, 2020, other incentive compensation includes certain incentive bridge awards issued due to changes in the Company’s long-term compensation plansLTIP that allow for cash based payment upon employee election which have been included in the adjustment but do not qualify for shared-based compensation. All bridge awards fully vested in November 2020. See Note 16 - Share Based Compensation in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further discussion;details;
•Restructuring and related charges, which consist of project costs associated with the restructuring initiatives across the Company's segments. See Note 4 - Restructuring and Related Charges in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•Transaction related charges that consist of (1) transaction costs from qualifying acquisition transactions during the period, or subsequent integration related project costs directly associated with an acquired business; and (2) divestiture related transaction costs that are recognized in continuing operations and post-divestiture separation costs consisting of incremental costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred as part of the divestitures and exiting of transition service arrangements (TSAs) and reverse TSAs. See Note 1 – Basis of Presentation & Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for additionalfurther details;
•Gains and losses attributable to the Company’s investment in Energizer common stock, acquired as part of consideration received fromstock. During the Company’s sale and divestiture of GAC.three month period ended April 4, 2021, the Company sold its remaining shares in Energizer common stock. SeeNote 2 – Divestitures and Note 13 – Fair Value of Financial Instruments in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further discussion;details;
•Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations subsequent to an acquisition (when applicable);
•Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations (when applicable);
•ForeignOther adjustments primarily consisting of costs attributable to (1) proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual non-recurring claims with no previous history or precedent realized during the six month period ended April 4, 2021; (2) legal and litigation costs associated with Salus during the three and six month periods ended April 4, 2021 and March 29, 2020 as they are not considered a component of the continuing commercial products company; (3) foreign currency gains and losses attributable to multicurrency loans for the three and ninesix month periods ended June 28,March 29, 2020, and June 30, 2019, that were entered into with foreign subsidiaries in exchange for receipt of divestiture proceeds by the parent company and the distribution of the respective foreign subsidiaries’ net assets as part of the GBL and GAC divestures during the year ended September 30, 2019. The Company has entered into various hedging arrangements to mitigate the volatility of foreign exchange risk associated with such loans;
•Legal and litigation costs associated with Salus during the three and nine month periods ended June 28, 2020 and June 30, 2019 as they are not considered a component of the continuing commercial products company, but continue to be consolidated by the Company until the Salus operations can be wholly dissolved and/or deconsolidated;
•Gain on extinguishment of the Salus CLO debt due to the discharge of the obligation during the three month period ended June 28, 2020. See Note 10 - Debt for further details; and
•Other adjustments primarily consisting of costs attributable to (1)divestitures; (4) expenses and cost recovery for flood damage at Company facilities in Middleton, Wisconsin during the three and ninesix month periods ended June 28,March 29, 2020 and June 30, 2019; (2)(5) incremental costs for separation of a key executive during the three and ninesix month periods ended June 28, 2020 and June 30, 2019; (3) incremental costs associated with a safety recall in GPC during the three and nine month periods ended June 30, 2019; (4) operating margin on H&G sales to GAC discontinued operations during the three and nine month period ended June 30, 2019; and (5) certain fines and penalties for delayed shipments following the completion of a GPC distribution center consolidation in EMEA during the nine month period ended June 30, 2019.March 29, 2020;

Segment Adjusted EBITDA for the reportable segments for SBH for the three and nine month periods ended June 28, 2020 and June 30, 2019, are as follows:
Three Month Periods EndedNine Month Periods Ended
SBH (in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019
HHI$43.6  $67.7  $156.0  $175.9  
HPC25.0  18.2  69.4  57.7  
GPC50.6  39.0  122.1  100.9  
H&G55.5  53.3  80.6  85.9  
Total Segment Adjusted EBITDA174.7  178.2  428.1  420.4  
Corporate10.3  5.3  21.1  16.7  
Interest expense36.1  33.9  106.5  185.1  
Depreciation and amortization35.0  35.9  113.1  138.4  
Share and incentive based compensation14.2  15.6  43.3  38.7  
Restructuring and related charges12.2  20.7  61.6  42.2  
Transaction related charges6.1  4.8  17.4  16.4  
Loss on assets held for sale1.1  —  26.8  —  
Write-off from impairment of intangible assets—  —  24.2  —  
(Gain) loss on Energizer investment(60.1) 33.2  8.2  38.2  
Foreign currency translation on multicurrency divestiture loans4.5  7.7  5.0  29.5  
GPC safety recall—  —  —  0.7  
Salus0.2  —  0.6  —  
Salus CLO debt extinguishment(76.2) —  (76.2) —  
Other0.1  1.6  0.4  3.9  
Income from operations before income taxes$191.2  $19.5  $76.1  $(89.4) 
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SPECTRUM BRANDS HOLDINGS, INC.SB/INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 20 - SEGMENT INFORMATION (continued)
Segment Adjusted EBITDA for the reportable segments for SBH for the three and six month periods ended April 4, 2021 and March 29, 2020, are as follows:
Three Month Periods EndedSix Month Periods Ended
SBH (in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
HHI$73.4 $69.5 $171.6 $112.3 
HPC25.4 8.0 76.3 44.4 
GPC55.6 40.0 109.2 71.5 
H&G34.8 28.4 45.3 25.1 
Total Segment Adjusted EBITDA189.2 145.9 402.4 253.3 
Corporate8.3 5.5 17.5 10.8 
Interest expense65.5 35.5 102.2 70.4 
Depreciation and amortization38.7 36.4 74.4 78.0 
Share and incentive based compensation8.5 14.6 16.7 29.1 
Restructuring and related charges4.1 21.9 13.3 49.4 
Transaction related charges9.7 7.2 30.3 11.3 
(Gain) loss on Energizer investment(0.9)106.8 (6.9)68.3 
(Gain) loss on assets held for sale0 (7.0)0 25.7 
Write-off from impairment of intangible assets0 0 0 24.2 
Inventory acquisition step-up2.6 0 3.4 0 
Other0.2 3.2 6.0 1.3 
Income (loss) from operations before income taxes$52.5 $(78.2)$145.5 $(115.2)
Segment Adjusted EBITDA for reportable segments for SB/RH for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 are as follows:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
SB/RH (in millions)SB/RH (in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019SB/RH (in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
HHIHHI$43.6  $67.7  $156.0  $175.9  HHI$73.4 $69.5 $171.6 $112.3 
HPCHPC25.0  18.2  69.4  57.7  HPC25.4 8.0 76.3 44.4 
GPCGPC50.6  39.0  122.1  100.9  GPC55.6 40.0 109.2 71.5 
H&GH&G55.5  53.3  80.6  85.9  H&G34.8 28.4 45.3 25.1 
Total Segment Adjusted EBITDATotal Segment Adjusted EBITDA174.7  178.2  428.1  420.4  Total Segment Adjusted EBITDA189.2 145.9 402.4 253.3 
CorporateCorporate9.3  5.6  16.6  15.4  Corporate8.1 2.3 16.7 7.2 
Interest expenseInterest expense36.0  33.7  106.0  125.2  Interest expense65.6 35.3 102.4 70.0 
Depreciation and amortizationDepreciation and amortization35.0  35.9  113.1  138.4  Depreciation and amortization38.7 36.4 74.4 78.0 
Share and incentive based compensationShare and incentive based compensation13.8  15.2  42.3  37.6  Share and incentive based compensation8.0 14.1 16.1 28.5 
Restructuring and related chargesRestructuring and related charges12.2  20.7  61.6  42.2  Restructuring and related charges4.1 21.9 13.3 49.4 
Transaction related chargesTransaction related charges6.1  4.8  17.4  16.4  Transaction related charges9.7 7.2 30.3 11.3 
Loss on assets held for sale1.1  —  26.8  —  
(Gain) loss on Energizer investment(Gain) loss on Energizer investment(0.9)106.8 (6.9)68.3 
(Gain) loss on assets held for sale(Gain) loss on assets held for sale0 (7.0)0 25.7 
Write-off from impairment of intangible assetsWrite-off from impairment of intangible assets—  —  24.2  —  Write-off from impairment of intangible assets0 0 0 24.2 
(Gain) loss on Energizer investment(60.1) 33.2  8.2  38.2  
Foreign currency translation on multicurrency divestiture loans4.5  7.7  4.9  29.5  
GPC safety recall—  —  —  0.7  
Inventory acquisition step-upInventory acquisition step-up2.6 0 3.4 0 
OtherOther0.1  0.4  0.4  2.8  Other0.1 3.0 5.9 0.8 
Income (loss) from operations before income taxesIncome (loss) from operations before income taxes$116.7  $21.0  $6.6  $(26.0) Income (loss) from operations before income taxes$53.2 $(74.1)$146.8 $(110.1)
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SPECTRUM BRANDS HOLDINGS, INC.
SB/RH HOLDINGS, LLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, unaudited)
NOTE 21 - EARNINGS PER SHARE – SBH
The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation and the anti-dilutive shares for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 are as follows:
Three Month Periods EndedNine Month Periods EndedThree Month Periods EndedSix Month Periods Ended
(in millions, except per share amounts)(in millions, except per share amounts)June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions, except per share amounts)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
NumeratorNumeratorNumerator
Net income (loss) from continuing operations attributable to controlling interestNet income (loss) from continuing operations attributable to controlling interest$137.1  $(24.7) $40.2  $(108.8) Net income (loss) from continuing operations attributable to controlling interest$37.7 $(58.4)$110.1 $(97.0)
Income (loss) from discontinued operations attributable to controlling interest8.0  (1.2) 12.2  699.1  
(Loss) income from discontinued operations attributable to controlling interest(Loss) income from discontinued operations attributable to controlling interest(1.1)1.4 (1.4)4.3 
Net income (loss) attributable to controlling interestNet income (loss) attributable to controlling interest$145.1  $(25.9) $52.4  $590.3  Net income (loss) attributable to controlling interest$36.6 $(57.0)$108.7 $(92.7)
DenominatorDenominatorDenominator
Weighted average shares outstanding - basicWeighted average shares outstanding - basic43.1  48.8  45.3  51.3  Weighted average shares outstanding - basic42.6 45.1 42.8 46.4 
Dilutive sharesDilutive shares0.1  —  0.1  —  Dilutive shares0.3 0 0.2 0 
Weighted average shares outstanding - dilutedWeighted average shares outstanding - diluted43.2  48.8  45.4  51.3  Weighted average shares outstanding - diluted42.9 45.1 43.0 46.4 
Earnings per shareEarnings per shareEarnings per share
Basic earnings per share from continuing operationsBasic earnings per share from continuing operations$3.19  $(0.51) $0.89  $(2.12) Basic earnings per share from continuing operations$0.88 $(1.29)$2.57 $(2.09)
Basic earnings per share from discontinued operationsBasic earnings per share from discontinued operations0.18  (0.02) 0.27  13.62  Basic earnings per share from discontinued operations(0.02)0.03 (0.03)0.09 
Basic earnings per shareBasic earnings per share$3.37  $(0.53) $1.16  $11.50  Basic earnings per share$0.86 $(1.26)$2.54 $(2.00)
Diluted earnings per share from continuing operationsDiluted earnings per share from continuing operations$3.18  $(0.51) $0.89  $(2.12) Diluted earnings per share from continuing operations$0.88 $(1.29)$2.56 $(2.09)
Diluted earnings per share from discontinued operationsDiluted earnings per share from discontinued operations0.18  (0.02) 0.27  13.62  Diluted earnings per share from discontinued operations(0.03)0.03 (0.03)0.09 
Diluted earnings per shareDiluted earnings per share$3.36  $(0.53) $1.16  $11.50  Diluted earnings per share$0.85 $(1.26)$2.53 $(2.00)
Weighted average number of anti-dilutive shares excluded from denominatorWeighted average number of anti-dilutive shares excluded from denominator—  0.2  —  0.1  Weighted average number of anti-dilutive shares excluded from denominator0 0.1 0 0.1 
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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction
The following is management’s discussion of the financial results, liquidity and other key items related to our performance and should be read in conjunction with the Condensed Consolidated Financial Statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q. Unless the context indicates otherwise, the term the “Company,” “we,” “our,” or “us” are used to refer to Spectrum Brands Holdings, Inc. and its subsidiaries ("SBH") and SB/RH Holdings, LLC and its subsidiaries (“SB/RH”), collectively.
Business Overview
The Company is a diversified global branded consumer products and home essentials company. We manage the businesses in four vertically integrated, product-focused segments: (i) Hardware & Home Improvement (“HHI”), (ii) Home and Personal Care (“HPC”), (iii) Global Pet Care (“GPC”), and (iv) Home and Garden (“H&G”). The Company manufactures, markets and/or distributes its products globally in the North America (“NA”), Europe, Middle East & Africa (“EMEA”), Latin America (“LATAM”) and Asia-Pacific (“APAC”) regions through a variety of trade channels, including retailers, wholesalers and distributors, original equipment manufacturers (“OEMs”), and construction companies. We enjoy strong name recognition in our regions under our various brands and patented technologies across multiple product categories. Global and geographic strategic initiatives and financial objectives are determined at the corporate level. Each segment is responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a president or general manager responsible for sales and marketing initiatives and the financial results for all product lines within that segment. See Note 20 – 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:
SegmentProductsBrands
HHI
Security: Residential locksets and door hardware including knobs, levers, deadbolts, handle sets, including electronic and connected locks.
Plumbing & Accessories: Kitchen and bath faucets and accessories.
Builders' Hardware: Hinges, metal shapes, security hardware, track and sliding door hardware, gate hardware.
Security: Kwikset®, Weiser®, Baldwin®, Tell Manufacturing®, and EZSET®
Plumbing & Accessories: Pfister®
Builders' Hardware: National Hardware®, FANAL®
HPC
Home Appliances: Small kitchen appliances including toaster ovens, coffeemakers, slow cookers, blenders, hand mixers, grills, food processors, juicers, toasters, bread makers, and irons.
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®, Toastmaster®, Juiceman®, Farberware®, and Breadman®
Personal Care: Remington®, and LumaBella®
GPC
Companion Animal: Rawhide chews, dog and cat clean-up, training, health and grooming products, small animal food and care products, rawhide-free dog treats, and wet and dry pet food for dogs and cats.
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: 8IN1® (8-in-1), Dingo®, Nature's Miracle®, Wild Harvest™, Littermaid®, Jungle®, Excel®, FURminator®, IAMS® (Europe only), Eukanuba® (Europe only), Healthy-Hide®, DreamBone®, SmartBones®, ProSense®, Perfect Coat®, eCOTRITION®, Birdola®, Digest-eeze®, Good Boy®, Meowee!®, Wildbird®, and Digest-eeze®.Wafcol®
Aquatics: Tetra®, Marineland®, Whisper®, Instant Ocean®, GloFish®, OmegaOne® 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.
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®.
SB/RH is a wholly owned subsidiary of SBH. 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 10 - Debt for more information pertaining to debt. The reportable segments of SB/RH are consistent with the segments of SBH.

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COVID-19
The COVID-19 pandemic and the resulting regulations and other disruptions to both demand and supply may have a substantial impact on the commercial operations of the Company or impairment of the Company’s net assets. Such impacts may include, but are not limited to, volatility of demand for our products, disruptions and cost implications in manufacturing and supply arrangements, inability of third parties to meet obligations under existing arrangements, and significant changes to the political and economic environments in which we manufacture, sell, and distribute our products.
As of the date of this report, we continue to be classified as an essential business in the jurisdictions that have mandated closures of non-essential businesses, and therefore have been allowed to remain open. During the second quarter ended March 29, 2020, there were certain HHI operating facilities, primarily within Chinaopen and Philippines, that experienced a temporary limit on production in response to the COVID-19 outbreak, but such facilities were operating at or near full capacity by the end of the second quarter. Subsequently, during the third quarter ended June 28, 2020, additional governmental operating restrictions were announced in Mexico temporarily suspending or limiting production for our HHI operating facilities with facilities operating and ramping up productions by the end of the third quarter. Moreover, our H&G facility in St. Louis was temporarily closed in April 2020 to provide for additional cleaning and implementation of preventative measures in response to confirmed cases of COVID-19. These facilities continue to operate to the extent possible under existing regulations with any limitation in production output being short-term in nature.
Despite the supply implications experienced in the prior year, the Company continues to experience continued customer demand both during the three month period ended June 28, 2020 and during the subsequent period.demand. While demand in general for our products remains strong, our teams continue to monitor demand disruption and there can be no assurance as to the level of demand that will prevail throughthroughout the remainder of fiscal 2020.year. A large portion of our customers continue to operate and sell our products, with some customers reducing operations due to closures or reduced store hours. There have also been changes in consumer needs and spending during the COVID-19 pandemic, which have resulted in a limited number of change orders and reduced spending. Currently, we have not identified, and will continue to monitor for, any substantive risk attributable to customer credit and have not experienced a significant impact from permanent store closures or retail bankruptcies. We believe the severity and duration of the COVID-19 pandemic to be uncertain and may contribute to retail volatility and consumer purchase behavior changes. The magnitude of the financial impact on our quarterly and annual results is highly dependent on the duration of the COVID-19 pandemic and how quickly the U.S. and global economies resume normal operations.
The COVID-19 pandemic has not had a materially negative impact on the Company’s liquidity position. The sweeping nature of COVID-19 pandemic makes it extremely difficult to predict the long-term ramifications on our financial condition and results of operations. However, the likely overall economic impact of the COVID-19 pandemic is viewed as highly negative to the U.S. and global economies.economies remains uncertain. We have initiatedcontinue to actively monitor our global cash balances and liquidity, and if necessary, could reinitiate mitigating efforts to manage non-critical capital spending and assess operating spend to preserve cash and liquidity. We continue to generate operating cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets, although there can be no assurance of our ability to do so. We have also not observed any material impairments of our assets due to the COVID-19 pandemic.
We expect the ultimate significance of the impact on our financial condition, results of operations, and cash flows will be dictated by the length of time that such circumstances continue, which will ultimately depend on the unforeseeable duration and severity of the COVID-19 pandemic and any governmental and public actions taken in response.
DivestituresAcquisitions
•Global Batteries & Lights –On January 2, 2019, the Company completed the sale of its GBL business pursuant to the GBL acquisition agreement with Energizer for cash proceeds of $1,956.2 million, resulting in the recognition of a pre-tax gain on sale of $989.8 million during the year ended September 30, 2019, including the settlement of customary purchase price adjustments for working capital and assumed indebtedness, recognition of tax and legal indemnifications under the acquisition agreement, and contingent purchase price adjustment for the settlement with the divestiture of the Varta® consumer batteries business by Energizer. The results of operations and gain on sale for disposal of the GBL business are recognized as a component of discontinued operations during the nine month period ended June 30, 2019.
•Global Auto Care – On January 28, 2019, the Company completed the sale of its GAC business pursuant to the GAC acquisition agreement with Energizer for $1.2 billion, consisting of $938.7 million in cash proceeds and $242.1 million in stock consideration of common stock of Energizer, resulting in the write-down of net assets held for sale of $111.0 million during the year ended September 30, 2019, including the settlement of customary purchase price adjustments for working capital and assumed indebtedness, recognition of tax and legal indemnifications in accordance with the GAC acquisition agreement. The results of operations and write-down of net assets held for sale for the disposal of the GAC business are recognized as a component of discontinued operations during the nine month period ended June 30, 2019.
•Coevorden Operations - On March 29,October 26, 2020, the Company completed the saleacquisition of its DCF production facilityArmitage Pet Care Ltd ("Armitage") for $187.7 million. Armitage is a premium pet treats and distribution centertoys business in Coevorden, Netherlands for cash proceedsNottingham, United Kingdom including a portfolio of $30.1 million subject to working capitalbrands that include Armitage's dog treats brand, Good Boy®, cat treats brand, Meowee!®, and other typical closing adjustments, resultingWildbird® bird feed products, among others, that are predominantly sold within the United Kingdom. The net assets and results of operations of Armitage, since the acquisition date of October 26, 2020, are included in a loss on assets held for sale of $26.8 million during the nine month period ended June 28, 2020.
See Note 2 – Divestitures in Notes to theCompany’s Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report,of Income and reported within the GPC reporting segment for more information on the assetsthree and liabilities classified as held for sale and discontinued operations.six month periods ended April 4, 2021.
Acquisitions
On March 10, 2020, the Company entered into an asset purchase agreement with Omega Sea, LLC (“Omega”), a manufacturer and marketer of premium fish foods and consumable goods for the home and commercial aquarium markets, primarily consisting of the Omega brand, for a purchase price of approximately $16.9 million. The results of Omega’s operations since March 10, 2020 are included in the Company’s Condensed Consolidated Statements of Income and reported within the GPC reporting segment for the three and ninesix month periods ended June 28, 2020. April 4, 2021 and for the three and six month periods ended March 29, 2020 since the acquisition date.
On April 20, 2021, the Company entered into an agreement to acquire all ownership interests in For Life Products, LLC as part of the Company's H&G segment, for a purchase price of approximately $300 million. For Life Products, LLC is a leading manufacturer in the household cleaning, maintenance, and restoration products sold under the Rejuvenate® brand. The transaction is expected to close in the second half of the 2021 fiscal year, subject to customary closing conditions, including expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
See Note 3 – Acquisitions in the Notes to the Condensed Consolidated Financial statements,Statements, included elsewhere in this Quarterly Report, for more information.

Divestitures
34
TableOn March 29, 2020, the Company completed the sale of Contentsits DCF production facility and distribution center in Coevorden, Netherlands for cash proceeds of $29.0 million received during the year ended September 30, 2020, resulting in a loss on Coevorden Operations held for sale of $25.7 million and impairment of intangible assets of $24.2 million associated with the commercial DCF business following the divestiture during the six month period ended March 29, 2020. See
Note 2 – Divestitures in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for more information on the assets and liabilities classified as held for sale and discontinued operations.
Restructuring Activity
We continually seek to improve our operational efficiency, match our manufacturing capacity, and product costs to market demand and better utilize our manufacturing resources. We have undertaken various initiatives to reduce manufacturing and operating costs, which may have a significant impact on the comparability of financial results on the condensed consolidated financial statements. The most significant of these initiatives is the Global Productivity Improvement PlanProgram, which began during the year ended September 30, 2019.2019 and has continued through the three and six month periods ended April 4, 2021. See Note 4 - Restructuring and Related Charges in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report for more information.
Refinancing Activity
Refinancing activity has a significant impact on the comparability of financial results onof the condensed consolidated financial statements. Effective November 15, 2019,On March 3, 2021, the Company completed a tender and callits offering of $500.0 million aggregate principal amount of its 6.625% Senior Unsecured3.875% Notes and entered into a new Term Loan Facility in the aggregate principal amount of $400.0 million, and redeemed $250.0 million of the 6.125% Notes and $550.0 million of the 5.75% Notes, with an outstanding principala make whole premium of $117.4$23.4 million recognizing a loss on extinguishment of the debt of $2.6 million including a non-cash charge of $1.1 million attributable to theand write-off of deferred financingunamortized debt issuance costs associated withof $7.9 million recognized as interest expense during the debt.three and six month periods ended April 4, 2021. See Note 10 –- Debt in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for more information.
Salus CLO
31
During the three and nine month periods ended June 28, 2020, the non-recourse debt under Salus CLO were effectively discharged resulting in the recognition of a non-cash gain on extinguishment of debt of $76.2 million, consisting of $77.0 million for the carrying value of the outstanding debt upon discharge, and $0.8 million for the unamortized discount and debt issuance costs. See Note 10 - Debt in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for more information.
Adoption of New Lease Accounting Standard
On October 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842), and all the related amendments using the modified retrospective transition method, which resulted in the recognition of additional right-of-use (“ROU”) lease assets of $107.5 million and additional lease liabilities of $113.0 million, with no material cumulative effect adjustment to equity as of the date of adoption. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. See Note 1 – Basis of Presentation and Significant Accounting Policies and Note 11 – Leases in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for more information.

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Non-GAAP Measurements
Our consolidated and segment results contain non-GAAP metrics such as organic net sales, and adjusted EBITDA (“Earnings Before Interest, Taxes, Depreciation, Amortization”). While we believe organic net sales and adjusted EBITDA are useful supplemental information, such adjusted results are not intended to replace our financial results in accordance with Accounting Principles Generally Accepted in the United States (“GAAP”) and should be read in conjunction with those GAAP results.
Organic Net Sales. We define organic net sales as net sales excluding the effect of changes in foreign currency exchange rates and impact from acquisitions (when applicable). We believe this non-GAAP measure provides useful information to investors because it reflects regional and operating segment performance from our activities without the effect of changes in currency exchange rate and acquisitions. We use organic net sales as one measure to monitor and evaluate our regional and segment performance. Organic growth is calculated by comparing organic net sales to net sales in the prior year. The effect of changes in currency exchange rates is determined by translating the period’s net sales using the currency exchange rates that were in effect during the prior comparative period. Net sales are attributed to the geographic regions based on the country of destination. We exclude net sales from acquired businesses in the current year for which there are no comparable sales in the prior period.year. The following is a reconciliation of reported net sales to organic net sales for the three and ninesix month periods ended June 28, 2020April 4, 2021 compared to net sales for the three and ninesix month periods ended June 30, 2019:March 29, 2020:
Three Month Periods Ended
(in millions, except %)		June 28, 2020
Net SalesEffect of Changes in CurrencyNet Sales Excluding Effect of Changes in CurrencyEffect of Acquisitions
Organic
Net Sales
Net Sales
June 30, 2019
Variance
HHI$281.6  $0.8  $282.4  $—  $282.4  $354.6  $(72.2) (20.4)%
HPC250.6  8.6  259.2  —  259.2  243.4  15.8  6.5 %
GPC241.5  1.5  243.0  (2.9) 240.1  221.7  18.4  8.3 %
H&G210.6  0.1  210.7  —  210.7  202.5  8.2  4.0 %
Total$984.3  $11.0  $995.3  $(2.9) $992.4  $1,022.2  (29.8) (2.9)%
Nine Month Periods Ended
(in millions, except %)
June 28, 2020
Net SalesEffect of Changes in CurrencyNet Sales Excluding Effect of Changes in CurrencyEffect of Acquisitions
Organic
Net Sales
Net Sales
June 30, 2019
Variance
Three Month Periods Ended
(in millions, except %)		Three Month Periods Ended
(in millions, except %)		April 4, 2021
Net SalesEffect of Changes in CurrencyNet Sales Excluding Effect of Changes in CurrencyEffect of Acquisitions
Organic
Net Sales
Net Sales
March 29, 2020
Variance
HHIHHI$908.4  $0.8  $909.2  $—  $909.2  $990.7  $(81.5) (8.2)%HHI$389.5 $(3.2)$386.3 $— $386.3 $329.1 $57.2 17.4 %
HPCHPC805.4  19.4  824.8  —  824.8  782.3  42.5  5.4 %HPC297.9 (8.7)289.2 — 289.2 232.7 56.5 24.3 %
GPCGPC684.2  4.3  688.5  (3.7) 684.8  641.3  43.5  6.8 %GPC293.6 (6.1)287.5 (26.8)260.7 236.9 23.8 10.0 %
H&GH&G395.6  0.1  395.7  —  395.7  394.9  0.8  0.2 %H&G168.8 — 168.8 — 168.8 139.1 29.7 21.4 %
TotalTotal$2,793.6  $24.6  $2,818.2  $(3.7) $2,814.5  $2,809.2  5.3  0.2 %Total$1,149.8 $(18.0)$1,131.8 $(26.8)$1,105.0 $937.8 167.2 17.8 %

Six Month Periods Ended
(in millions, except %)
April 4, 2021
Net SalesEffect of Changes in CurrencyNet Sales Excluding Effect of Changes in CurrencyEffect of Acquisitions
Organic
Net Sales
Net Sales
March 29, 2020
Variance
HHI$798.2 $(4.7)$793.5 $— $793.5 $626.8 $166.7 26.6 %
HPC676.4 (14.2)662.2 — 662.2 554.8 107.4 19.4 %
GPC569.1 (10.3)558.8 (47.1)511.7 442.7 69.0 15.6 %
H&G251.0 — 251.0 — 251.0 185.0 66.0 35.7 %
Total$2,294.7 $(29.2)$2,265.5 $(47.1)$2,218.4 $1,809.3 409.1 22.6 %

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Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures used by management, which we believe provide useful information to investors because they reflect ongoing operating performance and trends of our segments, excluding certain non-cash based expenses and/or non-recurring items during each of the comparable periods. They also facilitate comparisons between peer companies since interest, taxes, depreciation, and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA is also used for determining compliance with the Company’s debt covenants. 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:
•Stock based and other incentive compensation costs that consist of costs associated with long-term compensation arrangements and other equity based compensation based upon achievement of long-term performance metrics; and generally consist of non-cash, stock-based compensation. During the year ending September 30, 2019, the Company issuedsix month period ended April 4, 2021 and three and six month periods ended March 29, 2020, other incentive compensation includes certain incentive bridge awards issued due to changes in the Company’s long-term compensation plansLTIP that allow for cash based payment upon employee election which have been included in the adjustment but do not qualify for shared-based compensation. All bridge awards fully vested in November 2020. See Note 16 - Share Based Compensation in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•Restructuring and related charges, which consist of project costs associated with the restructuring initiatives across the Company's segments. See Note 4 - Restructuring and Related Charges in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•Transaction related charges that consist of (1) transaction costs from qualifying acquisition transactions during the period, or subsequent integration related project costs directly associated with an acquired business; and (2) divestiture related transaction costs that are recognized in continuing operations and post-divestiture separation costs consisting of incremental costs to facilitate separation of shared operations, including development of transferred shared service operations, platforms and personnel transferred as part of the divestitures and exiting of transition service arrangements (TSAs) and reverse TSAs. See Note 1 – Basis of Presentation & Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•Gains and losses attributable to the Company’s investment in Energizer common stock, acquired as part of consideration received fromstock. During the Company’s sale and divestiture of GAC duringthree month period ended April 4, 2021, the year ended September 30, 2019.Company sold its remaining shares in Energizer common stock. SeeNote 2 – Divestitures and Note 13 – Fair Value of Financial Instruments in the Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details;
•Non-cash purchase accounting inventory adjustments recognized in earnings from continuing operations subsequent to an acquisition (when applicable);
•Non-cash asset impairments or write-offs realized and recognized in earnings from continuing operations (when applicable);
•ForeignOther adjustments primarily consisting of costs attributable to (1) proposed settlement on outstanding litigation matters at our H&G division attributable to significant and unusual non-recurring claims with no previous history or precedent realized during the six month period ended April 4, 2021; (2) legal and litigation costs associated with Salus during the three and six month periods ended April 4, 2021 and March 29, 2020 as they are not considered a component of the continuing commercial products company; (3) foreign currency gains and losses attributable to multicurrency loans for the three and ninesix month periods ended June 28,March 29, 2020, and June 30, 2019, that were entered into with foreign subsidiaries in exchange for receipt of divestiture proceeds by the parent company and the distribution of the respective foreign subsidiaries’ net assets as part of the GBL and GAC divestitures during the year ended September 30, 2019. The Company has entered into various hedging arrangements to mitigate the volatility of foreign exchange risk associated with such loans;
•Legal and litigation costs associated with Salus during the three and nine month periods ended June 28, 2020 and June 30, 2019 as they are not considered a component of the continuing commercial products company, but continue to be consolidated by the Company until the Salus operations can be wholly dissolved and/or deconsolidated;
•Gain on extinguishment of the Salus CLO debt due to the discharge of the obligation during the three month period ended June 28, 2020. See Note 10 - Debt in Notes to the Condensed Consolidated Financial Statements, included elsewhere in this Quarterly Report, for further details; and
•Other adjustments primarily consisting of costs attributable to (1)divestitures; (4) expenses and cost recovery for flood damage at Company facilities in Middleton, Wisconsin during the three and ninesix month periods ended June 28,March 29, 2020 and June 30, 2019; (2)(5) incremental costs for separation of a key executive during the three and ninesix month periods ended June 28, 2020 and June 30, 2019; (3) incremental costs associated with a safety recall in GPC during the three and nine month periods ended June 30, 2019; (4) operating margin on H&G sales to GAC discontinued operations during the three and nine month period ended June 30, 2019; and (5) certain fines and penalties for delayed shipments following the completion of a GPC distribution center consolidation in EMEA during the nine month period ended June 30, 2019.March 29, 2020;
Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of reported net sales for the respective period and segment.

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The following is a reconciliation of net income to Adjusted EBITDA for the three month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 for SBH.
SPECTRUM BRANDS HOLDINGS, INC.
(in millions)		SPECTRUM BRANDS HOLDINGS, INC.
(in millions)		HHIHPCGPCH&GCorporateConsolidatedSPECTRUM BRANDS HOLDINGS, INC.
(in millions)		HHIHPCGPCH&GCorporateConsolidated
Three Month Period Ended June 28, 2020
Three Month Period Ended April 4, 2021Three Month Period Ended April 4, 2021
Net income from continuing operationsNet income from continuing operations$34.8  $12.9  $35.8  $50.4  $3.7  $137.6  Net income from continuing operations$65.0 $11.0 $38.7 $29.9 $(107.8)$36.8 
Income tax expenseIncome tax expense—  —  —  —  53.6  53.6  Income tax expense— — — — 15.7 15.7 
Interest expenseInterest expense—  —  —  —  36.1  36.1  Interest expense— — — — 65.5 65.5 
Depreciation and amortizationDepreciation and amortization8.5  8.7  9.2  5.1  3.5  35.0  Depreciation and amortization8.6 11.8 9.6 4.9 3.8 38.7 
EBITDAEBITDA43.3  21.6  45.0  55.5  96.9  262.3  EBITDA73.6 22.8 48.3 34.8 (22.8)156.7 
Share and incentive based compensationShare and incentive based compensation—  —  —  —  14.2  14.2  Share and incentive based compensation— — — — 8.5 8.5 
Restructuring and related chargesRestructuring and related charges0.3  0.7  2.1  —  9.1  12.2  Restructuring and related charges(0.2)1.5 0.6 — 2.2 4.1 
Transaction related chargesTransaction related charges—  3.0  2.4  —  0.7  6.1  Transaction related charges— 1.1 4.1 — 4.5 9.7 
Gain on Energizer investmentGain on Energizer investment—  —  —  —  (60.1) (60.1) Gain on Energizer investment— — — — (0.9)(0.9)
Loss on assets held for sale—  —  1.1  —  —  1.1  
Foreign currency translation on multicurrency divestiture loans—  (0.3) —  —  4.8  4.5  
Salus—  —  —  —  0.2  0.2  
Salus CLO debt extinguishment—  —  —  —  (76.2) (76.2) 
Inventory acquisition step-upInventory acquisition step-up— — 2.6 — — 2.6 
OtherOther—  —  —  —  0.1  0.1  Other— — — — 0.2 0.2 
Adjusted EBITDAAdjusted EBITDA$43.6  $25.0  $50.6  $55.5  $(10.3) $164.4  Adjusted EBITDA$73.4 $25.4 $55.6 $34.8 $(8.3)$180.9 
Net SalesNet Sales$281.6  $250.6  $241.5  $210.6  $—  $984.3  Net Sales$389.5 $297.9 $293.6 $168.8 $— $1,149.8 
Adjusted EBITDA MarginAdjusted EBITDA Margin15.5 %10.0 %21.0 %26.4 %—  16.7 %Adjusted EBITDA Margin18.8 %8.5 %18.9 %20.6 %— 15.7 %
Three Month Period Ended June 30, 2019
Three Month Period Ended March 29, 2020Three Month Period Ended March 29, 2020
Net income (loss) from continuing operationsNet income (loss) from continuing operations$58.2  $5.7  $25.9  $48.0  $(162.5) $(24.7) Net income (loss) from continuing operations$60.8 $(6.2)$27.2 $23.0 $(164.0)$(59.2)
Income tax expense—  —  —  —  44.2  44.2  
Income tax benefitIncome tax benefit— — — — (19.0)(19.0)
Interest expenseInterest expense—  —  —  —  33.9  33.9  Interest expense— — — — 35.5 35.5 
Depreciation and amortizationDepreciation and amortization8.4  8.5  10.8  4.8  3.4  35.9  Depreciation and amortization8.5 9.0 9.8 5.2 3.9 36.4 
EBITDAEBITDA66.6  14.2  36.7  52.8  (81.0) 89.3  EBITDA69.3 2.8 37.0 28.2 (143.6)(6.3)
Share and incentive based compensationShare and incentive based compensation—  —  —  —  15.6  15.6  Share and incentive based compensation— — — — 14.6 14.6 
Restructuring and related chargesRestructuring and related charges1.1  3.2  1.4  0.4  14.6  20.7  Restructuring and related charges0.2 1.7 6.4 0.2 13.4 21.9 
Transaction related chargesTransaction related charges—  0.7  0.7  —  3.4  4.8  Transaction related charges— 2.7 3.6 — 0.9 7.2 
Loss on Energizer investmentLoss on Energizer investment—  —  —  —  33.2  33.2  Loss on Energizer investment— — — — 106.8 106.8 
Foreign currency translation on multicurrency divestiture loans—  —  —  —  7.7  7.7  
Gain on assets held for saleGain on assets held for sale— — (7.0)— — (7.0)
OtherOther—  0.1  0.2  0.1  1.2  1.6  Other— 0.8 — — 2.4 3.2 
Adjusted EBITDAAdjusted EBITDA$67.7  $18.2  $39.0  $53.3  $(5.3) $172.9  Adjusted EBITDA$69.5 $8.0 $40.0 $28.4 $(5.5)$140.4 
Net SalesNet Sales$354.6  $243.4  $221.7  $202.5  $—  $1,022.2  Net Sales$329.1 $232.7 $236.9 $139.1 $— $937.8 
Adjusted EBITDA MarginAdjusted EBITDA Margin19.1 %7.5 %17.6 %26.3 %—  16.9 %Adjusted EBITDA Margin21.1 %3.4 %16.9 %20.4 %— 15.0 %

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The following is a reconciliation of net income to Adjusted EBITDA for the ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 for SBH.
SPECTRUM BRANDS HOLDINGS, INC.
(in millions)		SPECTRUM BRANDS HOLDINGS, INC.
(in millions)		HHIHPCGPCH&GCorporateConsolidatedSPECTRUM BRANDS HOLDINGS, INC.
(in millions)		HHIHPCGPCH&GCorporateConsolidated
Nine Month Period Ended June 28, 2020
Six Month Period Ended April 4, 2021Six Month Period Ended April 4, 2021
Net income from continuing operationsNet income from continuing operations$130.0  $31.5  $9.7  $64.9  $(195.3) $40.8  Net income from continuing operations$154.5 $49.2 $72.7 $29.4 $(195.8)$110.0 
Income tax expenseIncome tax expense—  —  —  —  35.3  35.3  Income tax expense— — — — 35.5 35.5 
Interest expenseInterest expense— — — — 102.2 102.2 
Depreciation and amortizationDepreciation and amortization17.1 20.6 19.3 9.9 7.5 74.4 
EBITDAEBITDA171.6 69.8 92.0 39.3 (50.6)322.1 
Share and incentive based compensationShare and incentive based compensation— — — — 16.7 16.7 
Restructuring and related chargesRestructuring and related charges— 4.1 2.1 — 7.1 13.3 
Transaction related chargesTransaction related charges— 2.4 11.7 — 16.2 30.3 
Gain on Energizer investmentGain on Energizer investment— — — — (6.9)(6.9)
Inventory acquisition step-upInventory acquisition step-up— — 3.4 — — 3.4 
OtherOther— — — 6.0 — 6.0 
Adjusted EBITDAAdjusted EBITDA$171.6 $76.3 $109.2 $45.3 $(17.5)$384.9 
Net SalesNet Sales$798.2 $676.4 $569.1 $251.0 $— $2,294.7 
Adjusted EBITDA MarginAdjusted EBITDA Margin21.5 %11.3 %19.2 %18.0 %— 16.8 %
Six Month Period Ended March 29, 2020Six Month Period Ended March 29, 2020
Net income (loss) from continuing operationsNet income (loss) from continuing operations$95.0 $18.8 $(26.0)$14.4 $(199.1)$(96.9)
Income tax benefitIncome tax benefit— — — — (18.3)(18.3)
Interest expenseInterest expense—  —  —  —  106.5  106.5  Interest expense— — — — 70.4 70.4 
Depreciation and amortizationDepreciation and amortization25.1  26.5  35.1  15.4  11.0  113.1  Depreciation and amortization16.6 17.8 25.9 10.3 7.4 78.0 
EBITDAEBITDA155.1  58.0  44.8  80.3  (42.5) 295.7  EBITDA111.6 36.6 (0.1)24.7 (139.6)33.2 
Share and incentive based compensationShare and incentive based compensation—  —  —  —  43.3  43.3  Share and incentive based compensation— — — — 29.1 29.1 
Restructuring and related chargesRestructuring and related charges0.9  3.6  18.8  0.3  38.0  61.6  Restructuring and related charges0.7 2.8 16.7 0.4 28.8 49.4 
Transaction related chargesTransaction related charges—  7.3  7.4  —  2.7  17.4  Transaction related charges— 4.3 5.0 — 2.0 11.3 
Loss on Energizer investmentLoss on Energizer investment—  —  —  —  8.2  8.2  Loss on Energizer investment— — — — 68.3 68.3 
Loss on assets held for saleLoss on assets held for sale—  —  26.8  —  —  26.8  Loss on assets held for sale— — 25.7 — — 25.7 
Write-off from impairment of intangible assetsWrite-off from impairment of intangible assets—  —  24.2  —  —  24.2  Write-off from impairment of intangible assets— — 24.2 — — 24.2 
Foreign currency translation on multicurrency divestiture loans—  0.4  —  —  4.6  5.0  
Salus—  —  —  —  0.6  0.6  
Salus CLO debt extinguishment—  —  —  —  (76.2) (76.2) 
OtherOther—  0.1  0.1  —  0.2  0.4  Other— 0.7 — — 0.6 1.3 
Adjusted EBITDAAdjusted EBITDA$156.0  $69.4  $122.1  $80.6  $(21.1) $407.0  Adjusted EBITDA$112.3 $44.4 $71.5 $25.1 $(10.8)$242.5 
Net SalesNet Sales$908.4  $805.4  $684.2  $395.6  $—  $2,793.6  Net Sales$626.8 $554.8 $442.7 $185.0 $— $1,809.3 
Adjusted EBITDA MarginAdjusted EBITDA Margin17.2 %8.6 %17.8 %20.4 %—  14.6 %Adjusted EBITDA Margin17.9 %8.0 %16.2 %13.6 %— 13.4 %
Nine Month Period Ended June 30, 2019
Net income (loss) from continuing operations$145.4  $(9.0) $57.3  $70.8  $(372.1) $(107.6) 
Income tax expense—  —  —  —  18.2  18.2  
Interest expense—  —  —  —  185.1  185.1  
Depreciation and amortization25.3  55.7  32.0  14.4  11.0  138.4  
EBITDA170.7  46.7  89.3  85.2  (157.8) 234.1  
Share based compensation—  —  —  —  38.7  38.7  
Restructuring and related charges4.3  4.7  6.4  1.4  25.4  42.2  
Transaction related charges0.9  6.3  1.6  —  7.6  16.4  
Loss on Energizer investment—  —  —  —  38.2  38.2  
Foreign currency translation on multicurrency divestiture loans—  —  —  —  29.5  29.5  
GPC safety recall—  —  0.7  —  —  0.7  
Other—  —  2.9  (0.7) 1.7  3.9  
Adjusted EBITDA$175.9  $57.7  $100.9  $85.9  $(16.7) $403.7  
Net Sales$990.7  $782.3  $641.3  $394.9  $—  $2,809.2  
Adjusted EBITDA Margin17.8 %7.4 %15.7 %21.8 %—  14.4 %


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The following is a reconciliation of net income to Adjusted EBITDA for the three month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 for SB/RH.
SB/RH HOLDINGS, LLC
(in millions)		SB/RH HOLDINGS, LLC
(in millions)		HHIHPCGPCH&GCorporateConsolidatedSB/RH HOLDINGS, LLC
(in millions)		HHIHPCGPCH&GCorporateConsolidated
Three Month Period Ended June 28, 2020
Three Month Period Ended April 4, 2021Three Month Period Ended April 4, 2021
Net income from continuing operationsNet income from continuing operations$34.8  $12.9  $35.8  $50.4  $(52.6) $81.3  Net income from continuing operations$65.0 $11.0 $38.7 $29.9 $(107.3)$37.3 
Income tax expenseIncome tax expense—  —  —  —  35.4  35.4  Income tax expense— — — — 15.9 15.9 
Interest expenseInterest expense—  —  —  —  36.0  36.0  Interest expense— — — — 65.6 65.6 
Depreciation and amortizationDepreciation and amortization8.5  8.7  9.2  5.1  3.5  35.0  Depreciation and amortization8.6 11.8 9.6 4.9 3.8 38.7 
EBITDAEBITDA43.3  21.6  45.0  55.5  22.3  187.7  EBITDA73.6 22.8 48.3 34.8 (22.0)157.5 
Share and incentive based compensationShare and incentive based compensation—  —  —  —  13.8  13.8  Share and incentive based compensation— — — — 8.0 8.0 
Restructuring and related chargesRestructuring and related charges0.3  0.7  2.1  —  9.1  12.2  Restructuring and related charges(0.2)1.5 0.6 — 2.2 4.1 
Transaction related chargesTransaction related charges—  3.0  2.4  —  0.7  6.1  Transaction related charges— 1.1 4.1 — 4.5 9.7 
Gain on Energizer investmentGain on Energizer investment—  —  —  —  (60.1) (60.1) Gain on Energizer investment— — — — (0.9)(0.9)
Loss on assets held for sale—  —  1.1  —  —  1.1  
Foreign currency translation on multicurrency divestiture loans—  (0.3) —  —  4.8  4.5  
Inventory acquisition step-upInventory acquisition step-up— — 2.6 — — 2.6 
OtherOther—  —  —  —  0.1  0.1  Other— — — — 0.1 0.1 
Adjusted EBITDAAdjusted EBITDA$43.6  $25.0  $50.6  $55.5  $(9.3) $165.4  Adjusted EBITDA$73.4 $25.4 $55.6 $34.8 $(8.1)$181.1 
Net SalesNet Sales$281.6  $250.6  $241.5  $210.6  $—  $984.3  Net Sales$389.5 $297.9 $293.6 $168.8 $— $1,149.8 
Adjusted EBITDA MarginAdjusted EBITDA Margin15.5 %10.0 %21.0 %26.4 %—  16.8 %Adjusted EBITDA Margin18.8 %8.5 %18.9 %20.6 %— 15.8 %
Three Month Period Ended June 30, 2019
Three Month Period Ended March 29, 2020Three Month Period Ended March 29, 2020
Net income (loss) from continuing operationsNet income (loss) from continuing operations$58.2  $5.7  $25.9  $48.0  $(166.7) $(28.9) Net income (loss) from continuing operations$60.8 $(6.2)$27.2 $23.0 $(161.4)$(56.6)
Income tax expense—  —  —  —  49.9  49.9  
Income tax benefitIncome tax benefit— — — — (17.5)(17.5)
Interest expenseInterest expense—  —  —  —  33.7  33.7  Interest expense— — — — 35.3 35.3 
Depreciation and amortizationDepreciation and amortization8.4  8.5  10.8  4.8  3.4  35.9  Depreciation and amortization8.5 9.0 9.8 5.2 3.9 36.4 
EBITDAEBITDA66.6  14.2  36.7  52.8  (79.7) 90.6  EBITDA69.3 2.8 37.0 28.2 (139.7)(2.4)
Share and incentive based compensationShare and incentive based compensation—  —  —  —  15.2  15.2  Share and incentive based compensation— — — — 14.1 14.1 
Restructuring and related chargesRestructuring and related charges1.1  3.2  1.4  0.4  14.6  20.7  Restructuring and related charges0.2 1.7 6.4 0.2 13.4 21.9 
Transaction related chargesTransaction related charges—  0.7  0.7  —  3.4  4.8  Transaction related charges— 2.7 3.6 — 0.9 7.2 
Loss on Energizer investmentLoss on Energizer investment—  —  —  —  33.2  33.2  Loss on Energizer investment— — — — 106.8 106.8 
Foreign currency translation on multicurrency divestiture loans—  —  —  —  7.7  7.7  
Gain on assets held for saleGain on assets held for sale— — (7.0)— — (7.0)
OtherOther—  0.1  0.2  0.1  —  0.4  Other— 0.8 — — 2.2 3.0 
Adjusted EBITDAAdjusted EBITDA$67.7  $18.2  $39.0  $53.3  $(5.6) $172.6  Adjusted EBITDA$69.5 $8.0 $40.0 $28.4 $(2.3)$143.6 
Net SalesNet Sales$354.6  $243.4  $221.7  $202.5  $—  $1,022.2  Net Sales$329.1 $232.7 $236.9 $139.1 $— $937.8 
Adjusted EBITDA MarginAdjusted EBITDA Margin19.1 %7.5 %17.6 %26.3 %—  16.9 %Adjusted EBITDA Margin21.1 %3.4 %16.9 %20.4 %— 15.3 %


4036
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The following is a reconciliation of net income to Adjusted EBITDA for the ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019 for SB/RH.
SB/RH HOLDINGS, LLC
(in millions)		SB/RH HOLDINGS, LLC
(in millions)		HHIHPCGPCH&GCorporateConsolidatedSB/RH HOLDINGS, LLC
(in millions)		HHIHPCGPCH&GCorporateConsolidated
Nine Month Period Ended June 28, 2020
Net income (loss) from continuing operations$130.0  $31.5  $9.7  $64.9  $(248.3) $(12.2) 
Six Month Period Ended April 4, 2021Six Month Period Ended April 4, 2021
Net income from continuing operationsNet income from continuing operations$154.5 $49.2 $72.7 $29.4 $(194.8)$111.0 
Income tax expenseIncome tax expense—  —  —  —  18.8  18.8  Income tax expense— — — — 35.8 35.8 
Interest expenseInterest expense—  —  —  —  106.0  106.0  Interest expense— — — — 102.4 102.4 
Depreciation and amortizationDepreciation and amortization25.1  26.5  35.1  15.4  11.0  113.1  Depreciation and amortization17.1 20.6 19.3 9.9 7.5 74.4 
EBITDAEBITDA155.1  58.0  44.8  80.3  (112.5) 225.7  EBITDA171.6 69.8 92.0 39.3 (49.1)323.6 
Share based compensationShare based compensation—  —  —  —  42.3  42.3  Share based compensation— — — — 16.1 16.1 
Restructuring and related chargesRestructuring and related charges0.9  3.6  18.8  0.3  38.0  61.6  Restructuring and related charges— 4.1 2.1 — 7.1 13.3 
Transaction related chargesTransaction related charges—  7.3  7.4  —  2.7  17.4  Transaction related charges— 2.4 11.7 — 16.2 30.3 
Loss on Energizer investment—  —  —  —  8.2  8.2  
Loss on assets held for sale—  —  26.8  —  —  26.8  
Write-off from impairment of intangible assets—  —  24.2  —  —  24.2  
Foreign currency translation on multicurrency divestiture loans—  0.4  —  —  4.5  4.9  
Gain on Energizer investmentGain on Energizer investment— — — — (6.9)(6.9)
Inventory acquisition step-upInventory acquisition step-up— — 3.4 — — 3.4 
OtherOther—  0.1  0.1  —  0.2  0.4  Other— — — 6.0 (0.1)5.9 
Adjusted EBITDAAdjusted EBITDA$156.0  $69.4  $122.1  $80.6  $(16.6) $411.5  Adjusted EBITDA$171.6 $76.3 $109.2 $45.3 $(16.7)$385.7 
Net SalesNet Sales$908.4  $805.4  $684.2  $395.6  $—  $2,793.6  Net Sales$798.2 $676.4 $569.1 $251.0 $— $2,294.7 
Adjusted EBITDA MarginAdjusted EBITDA Margin17.2 %8.6 %17.8 %20.4 %—  14.7 %Adjusted EBITDA Margin21.5 %11.3 %19.2 %18.0 %— 16.8 %
Nine Month Period Ended June 30, 2019
Six Month Period Ended March 29, 2020Six Month Period Ended March 29, 2020
Net income (loss) from continuing operationsNet income (loss) from continuing operations$145.4  $(9.0) $57.3  $70.8  $(324.6) $(60.1) Net income (loss) from continuing operations$95.0 $18.8 $(26.0)$14.4 $(195.7)$(93.5)
Income tax expense—  —  —  —  34.1  34.1  
Income tax benefitIncome tax benefit— — — — (16.6)(16.6)
Interest expenseInterest expense—  —  —  —  125.2  125.2  Interest expense— — — — 70.0 70.0 
Depreciation and amortizationDepreciation and amortization25.3  55.7  32.0  14.4  11.0  138.4  Depreciation and amortization16.6 17.8 25.9 10.3 7.4 78.0 
EBITDAEBITDA170.7  46.7  89.3  85.2  (154.3) 237.6  EBITDA111.6 36.6 (0.1)24.7 (134.9)37.9 
Share and incentive based compensationShare and incentive based compensation—  —  —  —  37.6  37.6  Share and incentive based compensation— — — — 28.5 28.5 
Restructuring and related chargesRestructuring and related charges4.3  4.7  6.4  1.4  25.4  42.2  Restructuring and related charges0.7 2.8 16.7 0.4 28.8 49.4 
Transaction related chargesTransaction related charges0.9  6.3  1.6  —  7.6  16.4  Transaction related charges— 4.3 5.0 — 2.0 11.3 
Loss on Energizer investmentLoss on Energizer investment—  —  —  —  38.2  38.2  Loss on Energizer investment— — — — 68.3 68.3 
Foreign currency translation on multicurrency divestiture loans—  —  —  —  29.5  29.5  
GPC safety recall—  —  0.7  —  —  0.7  
Loss on assets held for saleLoss on assets held for sale— — 25.7 — — 25.7 
Write-off from impairment of intangible assetsWrite-off from impairment of intangible assets— — 24.2 — — 24.2 
OtherOther—  —  2.9  (0.7) 0.6  2.8  Other— 0.7 — — 0.1 0.8 
Adjusted EBITDAAdjusted EBITDA$175.9  $57.7  $100.9  $85.9  $(15.4) $405.0  Adjusted EBITDA$112.3 $44.4 $71.5 $25.1 $(7.2)$246.1 
Net SalesNet Sales$990.7  $782.3  $641.3  $394.9  $—  $2,809.2  Net Sales$626.8 $554.8 $442.7 $185.0 $— $1,809.3 
Adjusted EBITDA MarginAdjusted EBITDA Margin17.8 %7.4 %15.7 %21.8 %—  14.4 %Adjusted EBITDA Margin17.9 %8.0 %16.2 %13.6 %— 13.6 %

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Table of ContentsContents
Consolidated Results of Operations
The following is summarized consolidated results of operations for SBH for the three and ninesix month periods ended June 28, 2020April 4, 2021 and June 30, 2019, respectively.March 29, 2020.
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions, except %)April 4, 2021March 29, 2020VarianceApril 4, 2021March 29, 2020Variance
Net salesNet sales$984.3  $1,022.2  $(37.9) (3.7)%$2,793.6  $2,809.2  $(15.6) (0.6)%Net sales$1,149.8 $937.8 $212.0 22.6 %$2,294.7 $1,809.3 $485.4 26.8 %
Gross profitGross profit348.9  361.0  (12.1) (3.4)%946.9  972.4  (25.5) (2.6)%Gross profit404.0 328.9 75.1 22.8 %826.3 598.0 228.3 38.2 %
Gross profit marginGross profit margin35.1 %35.1 %— bps36.0 %33.1 %290 bps
Operating expensesOperating expenses254.3  268.2  (13.9) (5.2)%830.3  812.5  17.8  2.2 %Operating expenses287.2 261.2 26.0 10.0 %586.0 576.0 10.0 1.7 %
Interest expenseInterest expense36.1  33.9  2.2  6.5 %106.5  185.1  (78.6) (42.5)%Interest expense65.5 35.5 30.0 84.5 %102.2 70.4 31.8 45.2 %
Other non-operating (income) expense, netOther non-operating (income) expense, net(56.5) 39.4  (95.9) n/m10.2  64.2  (54.0) (84.1)%Other non-operating (income) expense, net(1.2)110.4 (111.6)n/m(7.4)66.8 (74.2)n/m
Income tax expense53.6  44.2  9.4  21.3 %35.3  18.2  17.1  94.0 %
Income tax expense (benefit)Income tax expense (benefit)15.7 (19.0)34.7 n/m35.5 (18.3)53.8 n/m
Net income (loss) from continuing operationsNet income (loss) from continuing operations137.6  (24.7) 162.3  n/m40.8  (107.6) 148.4  n/mNet income (loss) from continuing operations36.8 (59.2)96.0 n/m110.0 (96.9)206.9 n/m
Income (loss) from discontinued operations, net of tax8.0  (1.2) 9.2  n/m12.2  699.1  (686.9) (98.3)%
(Loss) income from discontinued operations, net of tax(Loss) income from discontinued operations, net of tax(1.1)1.4 (2.5)n/m(1.4)4.3 (5.7)n/m
Net income (loss)Net income (loss)145.6  (25.9) 171.5  n/m53.0  591.5  (538.5) (91.0)%Net income (loss)35.7 (57.8)93.5 n/m108.6 (92.6)201.2 n/m
n/m = not meaningfuln/m = not meaningfuln/m = not meaningful
Net Sales. The following is a summary of net sales by segment for the three and ninesix month periods ended June 28,April 4, 2021 and March 29, 2020 and June 30, 2019, respectively.
(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance
June 28, 2020June 30, 2019June 28, 2020June 30, 2019
HHI$281.6  $354.6  $(73.0) (20.6)%$908.4  $990.7  $(82.3) (8.3)%
HPC250.6  243.4  7.2  3.0 %805.4  782.3  23.1  3.0 %
GPC241.5  221.7  19.8  8.9 %684.2  641.3  42.9  6.7 %
H&G210.6  202.5  8.1  4.0 %395.6  394.9  0.7  0.2 %
Net Sales$984.3  $1,022.2  (37.9) (3.7)%$2,793.6  $2,809.2  (15.6) (0.6)%
The following sets forth the principal components of changechanges in net sales from the three and nine month periods ended June 30, 2019 to the three and nine month periods ended June 28, 2020.
(in millions)Three Month Periods EndedNine Month Periods Ended
Net Sales for the periods ended June 30, 2019$1,022.2  $2,809.2  
Increase in HPC15.8  42.5  
Increase in GPC18.4  43.5  
Increase in H&G8.2  0.8  
Decrease in HHI(72.2) (81.5) 
Acquisition sales2.9  3.7  
Foreign currency impact, net(11.0) (24.6) 
Net Sales for the periods ended June 28, 2020$984.3  $2,793.6  
The Company recognized a decrease in organic net sales of $29.8 million, or 2.9%, and an increase of $5.3 million, or 0.2% for the three and nine month periods ended June 28, 2020, respectively.respective periods.
(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
April 4, 2021March 29, 2020April 4, 2021March 29, 2020
HHI$389.5 $329.1 $60.4 18.4 %$798.2 $626.8 $171.4 27.3 %
HPC297.9 232.7 65.2 28.0 %676.4 554.8 121.6 21.9 %
GPC293.6 236.9 56.7 23.9 %569.1 442.7 126.4 28.6 %
H&G168.8 139.1 29.7 21.4 %251.0 185.0 66.0 35.7 %
Net Sales$1,149.8 $937.8 212.0 22.6 %$2,294.7 $1,809.3 485.4 26.8 %

(in millions)Three Month Periods EndedSix Month Periods Ended
Net Sales for the period ended March 29, 2020$937.8 $1,809.3 
Increase in HHI57.2 166.7 
Increase in HPC56.5 107.4 
Increase in GPC23.8 69.0 
Increase in H&G29.7 66.0 
Acquisition sales26.8 47.1 
Foreign currency impact, net18.0 29.2 
Net Sales for the period ended April 4, 2021$1,149.8 $2,294.7 
Gross Profit. ForGross profit for the three month period ended June 28, 2020, gross profit decreased $12.1 million,increased due to higher volumes across all segments, positive productivity and cost improvements, plus favorable product mix with a marginal increase inconsistent gross profit margin from 35.3% to 35.4% primarily due to reduced HHI sales volumes, incremental material inputincreased inflation and shipping costs including tariffs with government mandated COVID-19 related shutdownsplus benefits from retrospective tariff exclusions in the prior year. Gross profit and unfavorable transaction foreign currency loss, offset by favorable product mix and positive productivity. For the nine month period ended June 28, 2020, gross profit decreased $25.5 million, with a decrease in gross profit margin from 34.6% to 33.9% primarilyfor the six month period increased due to reduced HHI sales volumes incremental materialacross all segments, positive productivity and inputcost improvements, with lower restructuring and depreciation costs including tariffs with COVID-19 related shutdowns, unfavorable transaction foreign currency loss, incremental restructuringdue to the exiting GPC facilities in LATAM in the prior year, partially offset by increased inflation and shipping costs and accelerated depreciation expense as part ofbenefits in the Global Productivity Improvement Plan, offset by favorable product mix and positive productivity withprior year from retrospective tariff exclusions.
Operating Expenses. Operating expenses for the three month period ended June 28, 2020 decreased $13.9 million, or 5.2%,increased due to a decreasean increase in selling, general and administrative expenses of $7.8$30.3 million largely attributable to higher volumes, increased marketing, incentive and distributions costs plus an increase in transaction related costs of $2.5 million with a gain on disposition of the Coevorden operations of $7.0 million in the prior year, partially offset by a decrease in restructuring and related charges of $7.7$16.2 million. Operating expenses for the ninesix month period ended June 28, 2020 increased $17.8 million, or 2.2%, due to an increase in selling and general and administrative expenses of $62.6 million attributable to higher volumes and increased market and distribution costs and an increase in transaction related costs of $19.0 million; offset by a decrease in restructuring and related charges of $24.7 million and the recognition of a loss on assets held for sale of $26.8$25.7 million associated with the Coevorden Operations divestiture,and a $24.2 million write-off from impairment of intangible assets an increase in restructuring and related charges of $8.4 million; offset by a reduction in selling and general and administrative expenses of $39.6 million primarily from incremental depreciation and amortizationassociated with the Coevorden divestiture in the prior year associated with HPC business being de-recognized from held for sale.year. See Note 4 – Restructuring and Related Charges in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail on restructuring. See

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TableNote 1 - Basis of ContentsPresentation and Significant Accounting Policies
in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail on transaction-related charges.
Interest Expense. Interest expense for the three and six month period ended June 28, 2020periods increased $2.2 million, or 6.5%, due to higherthe refinancing activity with a make whole premium of $23.4 million and write-off of unamortized debt balancesissuance costs of $7.9 million recognized as interest expense during the periodthree and decreased $78.6 million, or 42.5%, during the ninesix month period ended June 28, 2020 due to overall lower debt and average interest rate during the period.periods. See Note 10 – Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.
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Other non-operating expense,income, net. Other non-operating expense decreased $95.9 million for the three and six month period ended June 28, 2020periods is due to realized and unrealized gains on our investment in Energizer common stock during the period, and decreased $54.0 million forwhich the nine month period ended June 28, 2020 due to higher losses on ourCompany sold its remaining investment in Energizer common stock during the prior period and foreign currency losses in the prior year related to multicurrency loans with foreign subsidiaries associated with the GBL and GAC divestitures.January 2021. See Note 13 – Fair Value of Financial Instruments in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional detail.
Income Taxes. Our estimated annual effective tax rate was significantly impacted for the three and ninesix month periods ended June 28, 2020 by income earned outside the U.S. that is subject to U.S. tax, including the U.S. tax on global intangible low taxed income, losses earned outside the U.S. that more likely than not will not result in a tax benefits, certain nondeductible expenses, and foreign rates that differ from the US federal statutory rate.
rate, and state income taxes. During the ninesix month period ended June 28, 2020,April 4, 2021, the Company recorded a $5.2 million tax benefit related to U.S. return to provision differences, primarily from changes to GILTI, which is recorded as a period cost. The Company also recognized a $5.3 million tax benefit fromdue to favorable Regulations issued during the favorable settlement of an income tax examination.year.
(Loss) Income From Discontinued Operations. Discontinued operations include our divestitures of GBL and GAC divisions that were sold on January 2, 2019 and January 28, 2019, respectively. Results of operations, financial position and cash flows for these businesses are separately reported asThe income or loss attributable to discontinued operations for all periods presented. During the three and nine month periods ended June 28, 2020, the Company recognizedprimarily reflect incremental income for changes to tax and legal indemnifications and other agreed-upon funding underassociated with the acquisition agreement. During the three month period ended June 28, 2020, the Company recognized an $8.8 million tax benefit to discontinued operations from the return to provision adjustments related to theCompany's divestitures of its GBL primarily from changesdivision and GAC divisions to US GILTI onEnergizer during the non-US portions of the sold business.year ended September 30, 2019.
Noncontrolling Interest. The net income attributable to noncontrolling interest reflects the share of the net income of our subsidiaries, which are not wholly-owned, attributable to the accounting interest. Such amount varies in relation to such subsidiary’s net income or loss for the period and the percentage interest not owned by SBH.
SB/RH
The following is summarized consolidated results of operations for SB/RH for the three and ninesix month periods ended June 28, 2020April 4, 2021 and June 30, 2019, respectively:March 29, 2020:
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions, except %)April 4, 2021March 29, 2020VarianceApril 4, 2021March 29, 2020Variance
Net salesNet sales$984.3  $1,022.2  $(37.9) (3.7)%$2,793.6  $2,809.2  $(15.6) (0.6)%Net sales$1,149.8 $937.8 $212.0 22.6 %$2,294.7 $1,809.3 $485.4 26.8 %
Gross profitGross profit348.9  361.0  (12.1) (3.4)%946.9  972.4  (25.5) (2.6)%Gross profit404.0 328.9 75.1 22.8 %826.3 598.0 228.3 38.2 %
Gross profit marginGross profit margin35.1 %35.1 %— bps36.0 %33.1 %290 bps
Operating expensesOperating expenses252.7  266.9  (14.2) (5.3)%824.1  808.7  15.4  1.9 %Operating expenses286.4 257.3 29.1 11.3 %584.5 571.3 13.2 2.3 %
Interest expenseInterest expense36.0  33.7  2.3  6.8 %106.0  125.2  (19.2) (15.3)%Interest expense65.6 35.3 30.3 85.8 %102.4 70.0 32.4 46.3 %
Other non-operating (income) expense, netOther non-operating (income) expense, net(56.5) 39.4  (95.9) n/m10.2  64.5  (54.3) (84.2)%Other non-operating (income) expense, net(1.2)110.4 (111.6)n/m(7.4)66.8 (74.2)n/m
Income tax expense35.4  49.9  (14.5) (29.1)%18.8  34.1  (15.3) (44.9)%
Income tax expense (benefit)Income tax expense (benefit)15.9 (17.5)33.4 n/m35.8 (16.6)52.4 n/m
Net income (loss) from continuing operationsNet income (loss) from continuing operations81.3  (28.9) 110.2  n/m(12.2) (60.1) 47.9  (79.7)%Net income (loss) from continuing operations37.3 (56.6)93.9 n/m111.0 (93.5)204.5 n/m
Income (loss) from discontinued operations, net of tax8.0  (1.2) 9.2  n/m12.2  699.1  (686.9) (98.3)%
(Loss) income from discontinued operations, net of tax(Loss) income from discontinued operations, net of tax(1.1)1.4 (2.5)n/m(1.4)4.3 (5.7)n/m
Net income (loss)Net income (loss)89.3  (30.1) 119.4  n/m—  639.0  (639.0) (100.0)%Net income (loss)36.2 (55.2)91.4 n/m109.6 (89.2)198.8 n/m
n/m = not meaningfuln/m = not meaningfuln/m = not meaningful
ForThe changes in SB/RH for the three and ninesix month periods ended June 28, 2020, the changes in net sales, gross profit, operating expenses, interest expense and other non-operating expenses are primarily attributable to the changes in SBH previously discussed.

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Segment Financial Data
Hardware & Home Improvement
(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance
June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Net sales$281.6  $354.6  $(73.0) (20.6)%$908.4  $990.7  $(82.3) (8.3)%
Operating income35.0  57.6  (22.6) (39.2)%130.5  145.3  (14.8) (10.2)%
Operating income margin12.4 %16.2 %(380)bps14.4 %14.7 %(30)bps
Adjusted EBITDA$43.6  $67.7  $(24.1) (35.6)%$156.0  $175.9  $(19.9) (11.3)%
Adjusted EBITDA margin15.5 %19.1 %(360)bps17.2 %17.8 %(60)bps
n/m = not meaningful
Net sales for the three month period decreased $73.0 million, or 20.6%, with a decrease in organic net sales of $72.2 million, or 20.4%.
•Security decreased $75.0 million due to supply constraints driven by temporary government mandated COVID-19 related shutdowns limiting supply levels, reduced volumes with residential security service providers, partially offset by favorable pricing.
•Plumbing decreased $1.5 million due to reduced volume from COVID-19 related store closures and restrictions primarily outside of NA offset by market share gains in the multifamily development channel and favorable pricing.
•Hardware increased $4.4 million due to new product introduction in the home center channel, increased volume through online retail channels and favorable pricing.
Operating income for the three month period decreased $22.6 million with a margin decrease of 380 bps due to reduced sales volumes and fixed overhead costs due to temporary government mandated COVID-19 related shutdowns. Adjusted EBITDA for the three month period decreased $24.1 million with a margin decrease of 360 bps due to reduced sales volumes and fixed overhead costs due to temporary government mandated COVID-19 related shutdowns.
Net sales for the nine month period decreased $82.3 million, or 8.3%, with a decrease in organic net sales of $81.5 million, or 8.2%.
•Security decreased $88.1 million due to supply constraints driven by temporary government mandated COVID-19 related shutdowns limiting supply levels, reduced volumes in the builder’s channel plus volume reduction from customer loss partially offset favorable pricing.
•Plumbing increased $2.4 million due to promotional related volume in retail channel and market share gains in the multifamily development channel and favorable pricing.
•Hardware increased $4.2 million due to new product introduction in the home center channel, increased volume through online retail channels and favorable pricing.
Operating income for the nine month period decreased $14.8 million with a margin decrease of 30 bps due to reduced sales volumes, increase in material and input costs including tariffs and fixed overhead costs due to temporary government mandated COVID-19 related shutdowns, offset by retrospective tariff exclusions. Adjusted EBITDA for the nine month period decreased $19.9 million with a margin decrease of 60 bps due to reduced sales volumes, increase in material and input costs including tariffs and fixed overhead costs due to temporary government mandated COVID-19 related shutdowns, offset by retrospective tariff exclusions.

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Home and Personal Care
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions, except %)April 4, 2021March 29, 2020VarianceApril 4, 2021March 29, 2020Variance
Net salesNet sales$250.6  $243.4  $7.2  3.0 %$805.4  $782.3  $23.1  3.0 %Net sales$389.5 $329.1 $60.4 18.4 %$798.2 $626.8 $171.4 27.3 %
Operating income (loss)11.3  5.7  5.6  98.2 %31.5  (9.0) 40.5  n/m
Operating income (loss) margin4.5 %2.3 %220 bps3.9 %(1.2 %)510 bps
Operating incomeOperating income66.0 61.0 5.0 8.2 %158.2 95.5 62.7 65.7 %
Operating income marginOperating income margin16.9 %18.5 %(160)bps19.8 %15.2 %460 bps
Adjusted EBITDAAdjusted EBITDA$25.0  $18.2  $6.8  37.4 %$69.4  $57.7  $11.7  20.3 %Adjusted EBITDA$73.4 $69.5 $3.9 5.6 %$171.6 $112.3 $59.3 52.8 %
Adjusted EBITDA marginAdjusted EBITDA margin10.0 %7.5 %250 bps8.6 %7.4 %120 bpsAdjusted EBITDA margin18.8 %21.1 %(230)bps21.5 %17.9 %360 bps
n/m = not meaningfuln/m = not meaningfuln/m = not meaningful
Net sales for the three month period increased $7.2 million, or 3.0%,by growth across all product categories with an increase in organic net sales of $15.8 million, or 6.5%.
•Personal care decreased $2.2 million, including a decrease in EMEA of $1.0 million due supplystrong consumer demand and inventory constraints attributable to COVID-19 restrictions offset by increased demand in hair carecommercial activity through promotions and personal grooming products; decrease in LATAM of $2.0 million from store closures; partially offset by a marginal increase in NA of $0.4 million due to increased volume and demand in mass retail and e-commerce channels primarily with hair care and personal grooming products despite supply and inventory constraints attributable to COVID-19 restrictions; and a marginal increase in APAC of $0.4 million.
•Home and kitchen increased $18.0 million, including an increase in NA of $10.9 million due to new product introductions, with growth across retail, e-commerce and new build channels. Organic net sales increased distribution$57.2 million, or 17.4%, excluding favorable foreign exchange impacts. Net sales for the six month period increased by growth across all product categories with fulfillment of previously disclosed open orders in massthe prior year, retail and grocery channels, increased volume through e-commerce channels offset by supply and inventory constraints and lower distribution to department stores from store closures attributable to COVID-19 restrictions; an increase in EMEA of $5.0 million from promotional volumes with increasedrebuild, strong consumer demand, partially offset by lower distribution due to store closures in response to COVID-19 pandemic;and commercial activity through promotions and new product introductions, with increase in APAC of $2.1growth across retail, e-commerce and new build channels. Organic net sales increased $166.7 million, and consistent sales in LATAM.or 26.6%, excluding favorable foreign exchange impact.
Operating income for the three month period increased $5.6 million with a margin increase of 220 bps due to higher sales volumes with favorable product mix and productivity with benefit from retrospective tariff exclusions, offset by negative foreign currency transaction loss. Adjustedadjusted EBITDA for the three month period increased $6.8 million with a margin increase of 250 bps due to higher salesincreased volumes with favorable product mix and productivity with benefit from retrospective tariff exclusion, offset by negative foreign currency transaction loss.
Net sales for the nine month period increased $23.1 million, or 3.0%, with an increase in organic net sales of $42.5 million, or 5.4%.
•Personal care appliances increased $12.8 million, including an increase in EMEA of $11.8 million driven by promotion volumes with traditional and online retailers during holiday season, increased growth in e-commerce channels coupled with increased demand in response to the COVID-19 pandemicimprovements, partially offset by supply constraints; an increase in NA of $2.2 million due to increased volume and demand in mass retail and e-commerce channels primarily with hair care and personal grooming products primarily in response to the COVID-19 pandemic despite supply constraints attributable to COVID-19 restrictions during the period; and an increase in APAC of $1.5 million offset by decrease in LATAM of $2.7 million.
•Home and kitchen appliances increased $29.7 million, including an increase in NA of $15.0 million due to new product introductions and distribution in mass retail and grocery channels, increased volume through online retail channels, coupled with increased demand in response to the COVID-19 pandemic partially offset by supply constraints; an increase in EMEA of $10.4 million from promotional volumes with traditional and online retailers during holiday season with increased consumer demand partially offset by lower distribution from store closures in response to COVID-19 pandemic; an increase in LATAM of $1.9 million from new product distribution; and an increase in APAC of $2.4 million.
Operating income for the nine month period increased $40.5 million with a margin increase of 510 bps due to higher sales volumes with favorable product mix and productivity withprior year's benefit from retrospective tariff exclusions, offset by incremental depreciationhigher freight and amortization in the prior year associated with HPC business being de-recognized from held for sale, incremental tariffinput cost inflation, distribution, COVID-19 related costs and negative foreign currency transaction loss. Adjustedhigher marketing investments reducing margins. Operating income, adjusted EBITDA and margins for the ninesix month period increased $11.7 million with a margin increase of 120 bps due to higher sales volume withincreased volumes, productivity and cost improvements, favorable pricing programs and product mix, and productivity with benefitpartially offset by prior year's benefits from retrospective tariff exclusions, offset by incremental tariffexclusion, COVID-19 related costs and negative foreign currency transaction loss.higher marketing investments.

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Table of ContentsContents
Global PetHome and Personal Care
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions, except %)April 4, 2021March 29, 2020VarianceApril 4, 2021March 29, 2020Variance
Net salesNet sales$241.5  $221.7  $19.8  8.9 %$684.2  $641.3  $42.9  6.7 %Net sales$297.9 $232.7 $65.2 28.0 %$676.4 $554.8 $121.6 21.9 %
Operating income36.4  26.5  9.9  37.4 %11.3  58.7  (47.4) (80.7)%
Operating income margin15.1 %12.0 %310 bps1.7 %9.2 %(750)bps
Operating income (loss)Operating income (loss)11.5 (3.5)15.0 n/m48.2 20.2 28.0 138.6 %
Operating income (loss) marginOperating income (loss) margin3.9 %(1.5 %)540 bps7.1 %3.6 %350 bps
Adjusted EBITDAAdjusted EBITDA$50.6  $39.0  $11.6  29.7 %$122.1  $100.9  $21.2  21.0 %Adjusted EBITDA$25.4 $8.0 $17.4 217.5 %$76.3 $44.4 $31.9 71.8 %
Adjusted EBITDA marginAdjusted EBITDA margin21.0 %17.6 %340 bps17.8 %15.7 %210 bpsAdjusted EBITDA margin8.5 %3.4 %510 bps11.3 %8.0 %330 bps
n/m = not meaningfuln/m = not meaningfuln/m = not meaningful
Net sales for the three month period increased $19.8driven by continued growth in small appliances and personal care across all regions with significant growth through e-commerce channels. Organic net sales increased $56.5 million, or 8.9%24.3%, excluding favorable foreign exchange impact. Net sales for the six month period increased driven by strong growth in small appliances and personal care during the holiday season and consumer demand from stay-at-home activity, with an increase in organicvolume growth through e-commerce channels and new product introductions. Organic net sales of $18.4increased $107.4 million, or 8.3%.
•Companion animal increased $11.6 million, including an increase in NA of $9.0 million from increased demand through online and traditional retail channels coupled with incremental demand driven by the COVID-19 pandemic; increase in EMEA of $1.2 million primarily from dog and cat food sales through online retail channels; with moderate increase in APAC and LATAM.
•Aquatics increased $9.7 million, including an increase in NA of $7.5 million from increased demand and customer conversion through online retail channels and pet specialty channels, and including acquisition sales of $2.9 million from Omega; and increase in EMEA sales of $2.0 million due to increased distribution through online retail channels.

19.4%, excluding favorable foreign currency impact.
Operating income, adjusted EBITDA and improved margins for the three month period increased $9.9 million with a margin improvement of 310 bps due to an increase in sales volumehigher volumes and positive pricing, product costproductivity improvements, partially offset by tariffsincreasing freight and additional investment ininput cost inflation and continued marketing investments. Operating income, adjusted EBITDA and advertising with incremental restructuring costs and transaction costs associated with the Omega acquisition and Coevorden Operations divestiture. Adjusted EBITDAimproved margins for the threesix month period increased $11.6 million with a margin increase of 340 bps due to an increase in sales volumehigher volumes, productivity and cost improvements, positive pricing programs and product cost improvements,mix favorability, partially offset by tariffshigher inflation and additional investment in marketing and advertising.
Net sales for the nine month period increased $42.9 million, or 6.7%, with an increase in organic net sales of $43.5 million, or 6.8%.
•Companion animal increased $37.4 million, including an increase in NA sales of $33.3 million from increased demand through online retail channels coupled with demand in response to the COVID-19 pandemic; an increase in EMEA sales of $4.6 million primarily from dog and cat food sales in response to the COVID-19 pandemicdistribution costs with increased distribution through online retail channels; partially offset by a decrease in APAC sales of $1.0 million and consistent sales in LATAM.
•Aquatics increased $9.8 million, including an increase in NA sales of $9.1 million from increased demand and customer conversion through online retail channels, pet specialty channels, and including acquisition sales of $3.7 million; an increase in EMEA sales of $0.8 million due to increased distribution through online retail channels offset by slower seasonal distribution; with a moderate increase in LATAM sales offset by a moderate decrease in APAC sales.
Operating income for the nine month period decreased $47.4 million due to the recognition of a loss on assets held for sale of $26.8 million associated with the Coevorden Operations divestiture, and a $24.2 million write-off from impairment of intangible assets; incremental transaction costs associated with the Omega acquisition and Coevorden Operations divestiture, plus restructuring costs and accelerated depreciation as part of the Global Productivity Improvement Plan, tariffs and additional investment in marketing and advertising, offset by increased sales volume, product cost improvements, and positive pricing. Adjusted EBITDA for the nine month period increased $21.2 million with a margin increase of 210 bps due to increased sales volume, product cost improvements, and positive pricing, offset by tariffs and additional investment in marketing and advertising.investments.

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Global Pet Care
Home and Garden
(in millions, except %)(in millions, except %)Three Month Periods EndedVarianceNine Month Periods EndedVariance(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
June 28, 2020June 30, 2019June 28, 2020June 30, 2019(in millions, except %)April 4, 2021March 29, 2020VarianceApril 4, 2021March 29, 2020Variance
Net salesNet sales$210.6  $202.5  $8.1  4.0 %$395.6  $394.9  $0.7  0.2 %Net sales$293.6 $236.9 $56.7 23.9 %$569.1 $442.7 $126.4 28.6 %
Operating income50.4  48.0  2.4  5.0 %64.8  70.3  (5.5) (7.8)%
Operating income margin23.9 %23.7 %20 bps16.4 %17.8 %(140)bps
Operating income (loss)Operating income (loss)39.8 28.2 11.6 41.1 %74.0 (24.7)98.7 n/m
Operating income (loss) marginOperating income (loss) margin13.6 %11.9 %170 bps13.0 %(5.6)%1,860 bps
Adjusted EBITDAAdjusted EBITDA$55.5  $53.3  $2.2  4.1 %$80.6  $85.9  $(5.3) (6.2)%Adjusted EBITDA$55.6 $40.0 $15.6 39.0 %$109.2 $71.5 $37.7 52.7 %
Adjusted EBITDA marginAdjusted EBITDA margin26.4 %26.3 %10 bps20.4 %21.8 %(140)bpsAdjusted EBITDA margin18.9 %16.9 %200 bps19.2 %16.2 %300 bps
n/m = not meaningfuln/m = not meaningfuln/m = not meaningful
Net sales for the three month period increased $8.1due to continued growth in both our aquatic and companion animal categories with broad-based demand across distribution channels led by e-commerce growth and acquisition sales of $26.8 million from the Omega and Armitage acquisitions. Organic net sales increased $23.8 million, or 4.0%10.0%, with an increase in organic net sales of $8.2 million, or 4.0%.
•Lawn & garden controls increased $4.1 million due to seasonal demandexcluding favorable foreign currency exchange impact and favorable weather, increased online retail and home center volumes, and new retail customer distribution.
•Repellents increased $2.5 million due to improved seasonal demand and favorable weather.
•Household insect control increased $4.0 million due to improved seasonal demand and favorable weather with increased online retail distribution.
•Other net sales under the GAC supply agreement were $2.1 million and $4.6 million for the respective three month periods
Operating income increased $2.4 million with margin increase of 20 bps due to increased sale volume, positive pricing and mix, with higher productivity offset by higher material and input costs and tariffs, higher marketing and advertising investment spending. Adjusted EBITDA increased $2.2 million due to increased sale volume, positive pricing and mix, offset by tariffs, higher marketing and advertising investment spending.
acquisition sales. Net sales for the ninesix month period increased $0.7due to continued growth in both our aquatic and companion animal categories with broad-based demand across distribution channels led by e-commerce growth and acquisition sales of $47.1 million from the Omega and Armitage acquisitions. Organic net sales increased $69.0 million, or 0.2%, with an increase in organic net sales of $0.8 million , or 0.2%.15.6% excluding favorable foreign exchange impact and acquisition sales.
•
Lawn & garden control
Operating income, adjusted EBITDA, and margins for the three month period increased $3.7 million due to seasonal demandhigher volumes with positive productivity, partially offset by higher inflation and favorable weather,distribution expenses and higher advertising and marketing investments. Operating income, adjusted EBITDA, and margins for the six month period increased online retail and home center volumes, and new retail customer distribution.
•Repellents decreased $2.4 million due to retail inventory levels from earlier seasonalhigher volumes with positive productivity, partially offset higher inflation and distribution expenses and advertising and marketing investments, with increases in operating income and margin also attributable to the prior year.
•Household insect controls increased $1.5loss on asset held for sale of $25.7 million due to retail inventory levels, earlier seasonal distributionand impairment of intangible assets of $24.2 million in the prior year associated with the Coevorden divestiture, along with lower restructuring and distribution costs from exiting LATAM operating facilities in the prior year and incremental transaction related charges in the prior year.

Home and Garden
(in millions, except %)Three Month Periods EndedVarianceSix Month Periods EndedVariance
April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Net sales$168.8 $139.1 $29.7 21.4 %$251.0 $185.0 $66.0 35.7 %
Operating income29.9 23.0 6.9 30.0 %29.4 14.4 15.0 104.2 %
Operating income margin17.7 %16.5 %120 bps11.7 %7.8 %390 bps
Adjusted EBITDA$34.8 $28.4 $6.4 22.5 %$45.3 $25.1 $20.2 80.5 %
Adjusted EBITDA margin20.6 %20.4 %20 bps18.0 %13.6 %440 bps
n/m = not meaningful
Net sales and organic net sales for the three month period increased by growth in all product categories driven by strong early season orders across channels. Net sales and organic net sales for the six month period increased by growth in all product categories driven by strong early season orders across channels and strong off-season POS with home centers.
Operating income, adjusted EBITDA and margins increased due to higher volumes, favorable mix, and productivity improvements, partially offset by advertising and marketing investments and higher distribution expenses. Operating income, adjusted EBITDA and margins increased for the six month period ended due to higher volumes, favorable product mix and productivity improvements, partially offset by increased online retail distribution.
•Other net sales under the GAC supply agreement were $13.0 millionadvertising and $15.0 million for the respective nine month periods
marketing investments and higher distribution expenses. Operating income for the ninesix month period decreased $5.5 million with reduction in margin of 140 bps due to higher material and input costs including tariffs, higher marketing and advertising investment spending,was partially offset by higher productivity. Adjusted EBITDA for the nine month period decreased $5.3 million with reduction in margin of 140 bps dueincremental legal reserve attributable to higher materialsignificant and input costs including tariffs, higher marketing and advertising investment spending, partially offset by higher productivity.

unusual non-recurring claims.
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Liquidity and Capital Resources
The following is a summary of the SBH and SB/RH cash flows from continuing operations for the ninesix month periods ended June 28,April 4, 2021 and March 29, 2020, and June 30, 2019, respectively.
SBHSB/RHSBHSB/RH
Nine Month Periods Ended (in millions)June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Six Month Periods Ended (in millions)Six Month Periods Ended (in millions)April 4, 2021March 29, 2020April 4, 2021March 29, 2020
Operating activitiesOperating activities$35.4  $(186.1) $(175.0) $(171.4) Operating activities$(63.9)$(184.6)$(70.3)$(395.3)
Investing activitiesInvesting activities$43.4  $2,814.0  $43.4  $2,814.0  Investing activities$(85.1)$(17.0)$(85.1)$(17.0)
Financing activitiesFinancing activities$(237.1) $(2,767.0) $(25.5) $(2,739.8) Financing activities$(80.1)$35.7 $(71.4)$247.3 
Cash Flows from Operating Activities
Cash flows from SBH continuing operations increased $221.5$120.7 million primarily due to:
•Increase in cash provided byto increased operating results from continuing operations, of $170.7 million, including increase inimproved cash generatedflow from working capital, coupled with a decrease in cash paid for restructuring of $163.0$32.8 million primarily from lower average inventory and receivable balances;
•Decreasecash paid for taxes of $10.7 million; partially offset by increase in cash paid for interest of $80.0 million;
•Decrease in cash paid for taxes of $9.2 million; offset by
•Increase in net corporate expenditures of $4.4 million;
•Increase in cash paid for restructuring$37.5 million and integrationtransaction related charges of $34.0$4.6 million.
Cash flows from operating activities from continuing operations of SB/RH decreased $3.6increased $325.0 million primarily due to the items previously discussed above except for an incremental operating cash outflow to its parent company for federal net operating losses under the Company’s tax sharing agreement.
Depreciation and Amortization
Depreciation and amortization for the Company was $113.1 million and $138.4 million for the nine month periods ended June 28, 2020 and June 30, 2019 respectively. The decrease in depreciation and amortization is primarily attributable to the cumulative adjustment to depreciation and amortization from the change in plan to sell the HPC divisionagreement in the prior year.
Cash Flows from Investing Activities
Cash flows from investing activities for SBH continuing operations decreased $2,770.6$68.1 million primarily due to increase in cash paid for acquisition business of $112.8 million due to the acquisition of Armitage, partially offset by net increase in proceeds of $2,854.4 million from the sale of the GBL and GAC businesses in the prior year, plus cash paid for Omega acquisition of $16.9 million; partially offset by $68.0 million in proceeds for the sale of shares of Energizer common stock of $44.5 million. The Company sold during the current period and $30.1its remaining investment in proceeds for the sale of the Coevorden Operations.
Capital Expenditures
Energizer common stock in January 2021. Capital expenditures for the Company were $44.5decreased $3.6 million and $40.3 million for the nine month periods ended June 28, 2020 and June 30, 2019, respectively. Wepredominantly due to timing of capital activities as we expect to make incremental investmentsinvestment in capital projects as partconsistent to prior years. Cash flows from investing activities of our Global Productivity Improvement Plan.SB/RH increased primarily due to the items previously discussed.
Cash Flows from Financing Activities
Cash flows from financing activities for continuing operations increased $2,529.9decreased $115.8 million for the nine month period ended June 28, 2020 primarily due to increased net proceeds from debt due to borrowings from the paydown of debtRevolver Facility in the prior year partiallyto support working capital needs, offset by proceeds withdrawn from the Revolverincreased stock repurchase activity in the current period.
Debt
prior year and payment of contingent consideration associated with the GBL divestiture in the prior year. During the ninesix month period ended June 28,April 4, 2021, the Company realized $899.0 million of proceeds from new Term Loan Facility and issuance of senior notes, net discount, with payment of $800.0 million of outstanding principal on senior notes and make whole premiums of $23.4 million using proceeds, plus paydown of assumed debt from the acquisition of Armitage. Refer to Note 10 - Debt in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information on debt borrowings. There has been no issuance of common stock, other than through the Company’s share-based compensation plans, with reduced spending on common stock repurchase activity of $322.5 million from the accelerated share repurchase arrangement and open market purchases in the prior year. See Note 15 – Shareholders’ Equity in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further detail. During the six month period ended April 4, 2021 and March 29, 2020, SBH recognized net proceedsmade cash dividend payments of $35.7 million and $39.1 million, or $0.42 per share, respectively. Cash flows from financing activity of SB/RH decreased $318.7 million and is highly dependent upon the Revolver Facilityfinancing cash flow activities of $528.0 millionSBH. primarily
Liquidity Outlook
Our ability to support working capital needs,generate significant cash flow from operating activities coupled with our expected ability to access the credit markets, enables us to execute our growth strategies and made $132.7 millionreturn value to our shareholders. Our ability to make principal and interest payment on debts forborrowings under our debt agreements and our ability to fund planned capital expenditures will depend on the outstanding balance of 6.625% Notes of $117.4 million with premium of early extinguishment of $1.3 million,ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other debt paymentsconditions. Based upon our current level of $14.0 million.operations, existing cash balances and availability under our credit facility, we expect cash flows from operations to be sufficient to meet our operating and capital expenditure requirements for at least the next 12 months. As of June 28, 2020,April 4, 2021, the Company had borrowing availability of $341.3$576.6 million, net of outstanding letters of credit.credit, under our credit facility. Additionally, we believe the availability under our credit facility and access to capital markets are sufficient to achieve our longer-term strategic plans. Liquidity and capital resources of SB/RH are highly dependent upon the cash flow activities of SBH.
SubsequentShort-term financing needs primarily consist of working capital requirements, restructuring initiatives, capital spending, and periodic principal and interest payments on our long-term debt. Long-term financing needs depend largely on potential growth opportunities, including acquisition activity and repayment or refinancing of our long-term obligations. We may, from time-to-time, seek to repurchase shares of our common stock. Such repurchases, if any will depend on prevailing market conditions, our liquidity requirements, and other factors. Our long-term liquidity may be influenced by our ability to borrow additional funds, renegotiate existing debt, and raise equity under terms that are favorable to us. We also have long-term obligations associated with defined benefit plans with expected minimum required contributions that are not considered significant to the balance sheet date, on June 30, 2020,consolidated group.
We maintain a capital structure that we believe provides us with sufficient access to credit markets. When combined with strong levels of cash flow from operations, our capital structure has provided the Company entered into the Credit Agreement, which refinanced the Company’s previously existing credit facility, reducing the revolving facility under the Credit Agreement from $890 millionflexibility necessary to $600 millionpursue strategic growth opportunities and extending the Credit Agreement's maturity datereturn value to June 30, 2025. Moreover, SBI issued $300.0 million aggregate principal amount 5.50% Notes. The proceeds from the issuance and sale of the 5.50% Notes were used for repayment of the Revolver Facility obligation.
At June 28, 2020, we were in compliance with all covenants under the Senior Credit Agreement and the indentures governing the 5.00% Notes, 5.75% Notes, 6.125% Notes, and 4.00% Notes.
our shareholders. The Company’s access to capital markets and financing costs may depend on the Company’s credit ratings. On March 26, 2020, S&P downgraded the Company’s corporate credit rating to ‘B’ from ‘B+’, senior secured debt ratings to ‘BB-‘ from ‘BB’ and senior unsecured debt to ‘B’ from ‘B+’ , with a negative outlook in response to the changing economic environment and risks attributable to COVID-19. None of the Company’s current borrowings are subject to default or acceleration as a result of a downgrading of credit ratings, although a downgrade of the Company’s credit ratings could increase fees and interest charges on future borrowings. At April 4, 2021, we were in compliance with all covenants under the Senior Credit Agreement and the indentures governing the 3.875% Notes, 5.00% Notes, 5.50% Notes, 5.75% Notes, and 4.00% Notes.
ReferA portion of our cash balance is located outside the U.S. given our international operations. We manage our worldwide cash requirements centrally by reviewing available cash balances across our worldwide group and the cost effectiveness with which this cash can be accessed. We generally repatriate cash from non-U.S. subsidiaries, provided the cost of the repatriation is not considered material. The counterparties that hold our deposits consist of major financial institutions.
The majority of our business is not considered seasonal with a year round selling cycle that is overall consistent during the fiscal year with the exception of our H&G segment. H&G sales typically peak during the first six months of the calendar year (the Company's second and third fiscal quarters) due to Note 10 - Debtcustomer seasonal purchasing patterns and the timing of promotional activity. This seasonality requires the Company to ship large quantities of product ahead of peak consumer buying season that can impact cash flow demands to meet manufacturing and inventory requirements earlier in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information.

fiscal year, as well as extended credit terms and/or promotional discounts throughout the peak season.
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Equity
There has been no issuanceThe Company enters into factoring agreements and customers' supply chain financing arrangements to provide for the sale of common stock, other than throughcertain trade receivables to unrelated third-party financial institutions. The factored receivables are accounted for as a sale without recourse, and the Company’s share-based compensation plans, duringbalance of the nine month periods ended June 28, 2020 and June 30, 2019.
Duringreceivables sold are removed from the nine month period ended June 28, 2020 and June 30, 2019, SBH madeCondensed Consolidated Balance Sheet at the time of the sales transaction, with the proceeds received recognized as an operating cash dividend payments of $57.2 million and $65.1 million, or $0.42 per share, respectively.
During the nine month period ended June 28, 2020,flow. Additionally, the Company paid $364.8 million forfacilitates a voluntary supply chain financing program to provide certain of its suppliers with the repurchase of common stock, consisting of 6.2 million treasury shares received, including $125.0 million through an accelerated share repurchase arrangement that was settled February 24, 2020. During the nine month period ended June 30, 2019,opportunity to sell receivables due from the Company paid $268.5 million for(the Company's trade payables) to an unrelated third-party financial institution under the repurchasesole discretion of common stock, consistingthe supplier and the participating financial institution. There are no guarantees provided by the Company or its subsidiaries and we do not enter into any agreements with the suppliers regarding their participation. The Company's responsibility is limited to payments on the original terms negotiated with its suppliers, regardless of 4.9 million treasury shares received. See Note 15 – Shareholders’ Equity included elsewhere in this Quarterly Report for additional discussion.
Liquiditywhether the suppliers sell their receivables to the financial institution, and capital resources of SB/RH are highly dependent uponcontinue to be recognized as accounts payable on the financingCompany's Condensed Consolidated Balance Sheet with cash flow activities of SBH.
Liquidity Outlookactivity recognized as an operating cash flow.
The Company’s ability to make principal and interest payment on borrowings under its debt agreements and its ability to fund planned capital expenditures will depend on its ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions. Based on its current level of operations, the Company believes that its existing cash balances and expected cash flows from operations will be sufficient to meet its operating requirements for at least the next 12 months. However, the Company may request borrowings under its credit facilities and seek alternative forms of financing or additional investments to achieve its longer-term strategic plans.
Because the COVID-19 pandemic has not, as of the date of this report, materially impacted our operations or demand for our products itand has not had a materially negative impact on the Company’s liquidity position.  Weposition, although there can be no assurance that it won't have initiateda material negative impact on us in the future. Nonetheless, we continue to actively monitor our global cash balances and liquidity, and if necessary, could reinitiate mitigating efforts to manage non-critical capital spending,spend and assess operating spend to preserve cash and improve liquidity.  Additionallyliquidity..  During the prior year, we had temporarily suspended treasury repurchase activity.activity, but given the improved economic situation and the Company's liquidity, we may consider opportunistic share repurchases from time-to-time. We continue to generate operating cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets, although there can be no assurance of our ability to do so. However, the continued spread of COVID-19 has led to disruption and volatility in the global capital markets, which, depending on future developments, could impact our capital resources and liquidity in the future. Subsequent to June 28, 2020, we successfully refinanced the previously existing credit facility extending the maturity to June 30, 2025 and issued $300.0 million of 5.50% Senior Notes, due July 15, 2030.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Contractual Obligations & Other Commercial Commitments
As noted in Note 2 – Divestitures included elsewhere within this Quarterly Report, the Company settled its outstanding balance for the Varta indemnification payable with Energizer for $197.0 million during the nine month ended June 28, 2020. Additionally, the Company repaid certain of its long-term indebtedness during the nine month ended June 28, 2020, as described under Note 10 - Debt. There has otherwise been no material changes to our contractual obligations & other commercial commitments as discussed in our Annual Report on Form 10-K for the year ended September 30, 2019.2020.

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Critical Accounting Policies and Estimates
Our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with generally accepted accounting principles in the United States of America and fairly present our financial position and results of operations. There have been no material changes to our critical accounting policies other than the adoption of ASU No. 2016-02, Leases (Topic 842), which provides for a single comprehensive model for entities to use to account for leases. Refer to Note 1 – Basis of Presentation and Significant Accounting Policies of Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for information about the adoption of Topic 842.
During the nine month period ended June 28, 2020, the Company measured the fair value of its GPC reporting unit goodwill following the recognition of the Coevorden Operations as held for sale. The Company allocated $10.6 million of GPC goodwill to the Coevorden Operations disposal group recognized as held for sale based upon a fair value allocation. The estimated fair value represents the amount at which a reporting unit could be bought or sold in a current transaction between willing parties on an arms-length basis. In estimating the fair value of the GPC reporting unit, we used 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 variable. The fair value of the remaining GPC reporting unit exceeded its carrying value by 17% and did not recognize an impairment. The GPC reporting unit goodwill of $430.1 million as of June 28, 2020 is still deemed ‘at risk’ of impairment. The duration and severity of the COVID-19 pandemic could result in additional future impairment charges for the GPC reporting unit goodwill, and potentially other reporting unit goodwill not considered ‘at risk’. While we have concluded that a triggering event did not occur during the three month period ended June 28, 2020, a prolonged pandemic could negatively impact the results of operations, net sales and earnings growth rates, changes in key assumptions and other global and regional macroeconomic factors.
Additionally, the Company assessed the indefinite-lived intangible assets and definite lived intangible assets associated with the continuing commercial DCF business following recognition of the Coevorden Operations as held for sale. For indefinite-lived assets, the Company compares the estimated fair value of the identified trade names to the carrying value to determine if potential impairment exists. If the fair value is less than its 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. During the nine month period ended June 28, 2020, the Company recognized $16.6 million impairment on indefinite lived intangible assets due to the reduced value of the associated tradenames, leaving no excess fair value as of the measurement date or risk of future impairment. For the remaining tradenames associated with the DCF business, there were $3.3 million of indefinite lived intangible assets that could be deemed at risk of future impairment due to the limited excess fair value. For definite lived intangible assets, the Company recognized $7.6 million impairment due to the incremental cash flow risk associated with the commercial DCF business following the planned divestiture of the Coevorden Operations, which consisted of the remaining carrying cost of the definite lived intangible assets associated with the commercial DCF business. While a triggering event did not occur during the three month period ended June 28, 2020, a prolonged COVID-19 pandemic could negatively impact net sales growth rate, change in key assumptions and other global and regional macroeconomic factors that could result in additional future impairment charges for indefinite-lived intangible assets.
Other than those discussed above, there have been no material changes to our critical accounting estimates as discussed in our Annual Report on Form 10-K for the year ended September 30, 2019.2020.
New Accounting Pronouncements
See Note 1 – Basis of Presentation and Significant Accounting Policies of Notes to the Condensed Consolidated Financial Statements elsewhere included in this Quarterly Report for information about accounting pronouncements that are newly adopted and recent accounting pronouncements not yet adopted.
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Guarantor Statements - SB/RH
SBI has issued the 5.00% Notes under the 2029 Indenture, 6.125%the 5.50% Notes under the 20242030 Indenture, the 5.75% Notes under the 2025 Indenture, and the 4.00% Notes under the 2026 Indenture, and the 3.875% Notes under 2031 Indenture (collectively, the “Notes”). The Notes are unconditionally guaranteed, jointly and severally, guaranteed, on a senior unsecured basis by SB/RH and SBI’s domestic subsidiaries. The Notes and the related guarantees rank equally in right of payment with all of SBI and the guarantors’ existing and future senior indebtedness and rank senior in right of payment to all of SBI and the guarantors’ future indebtedness that expressively provide for its subordination to the Notes and the related guarantees. Non-guarantor subsidiaries primarily consist of SBI’s foreign subsidiaries.
The following financial information consists of summarized financial information of the Obligor, presented on a combined basis. The “Obligor” consists of the financial statements of SBI as the debt issuer, SB/RH as a parent guarantor, and the domestic subsidiaries of SBI as subsidiary guarantors. Intercompany balances and transactions between SBI and the guarantors have been eliminated. Investments in non-guarantor subsidiaries and the earnings or losses from those non-guarantor subsidiaries have been excluded.
Nine Month Periods EndedYear EndedSix Month Period EndedYear Ended
(in millions)(in millions)June 28, 2020September 30, 2019(in millions)April 4, 2021September 30, 2020
Statement of Operations Data
Statements of Operations DataStatements of Operations Data
Third party net salesThird party net sales$1,996.7  $2,711.6  Third party net sales$1,565.2 $2,868.5 
Intercompany net sales to non-guarantor subsidiariesIntercompany net sales to non-guarantor subsidiaries43.7  67.3  Intercompany net sales to non-guarantor subsidiaries41.0 63.5 
Total net salesTotal net sales2,040.4  2,778.9  Total net sales1,606.2 2,932.0 
Gross profitGross profit638.3  858.1  Gross profit524.6 938.0 
Operating income (loss)101.7  (23.1) 
Net income loss from continuing operations(49.0) (719.0) 
Net loss(36.8) (52.8) 
Net loss attributable to controlling interest(36.8) (52.8) 
Statement of Financial Position Data
Operating incomeOperating income114.3 187.4 
Net income (loss) from continuing operationsNet income (loss) from continuing operations6.2 (46.8)
Net income (loss)Net income (loss)4.9 (32.8)
Net income (loss) attributable to controlling interestNet income (loss) attributable to controlling interest4.9 (32.8)
Statements of Financial Position DataStatements of Financial Position Data
Current AssetsCurrent Assets$1,371.5  $1,101.0  Current Assets$1,415.1 $1,342.0 
Noncurrent AssetsNoncurrent Assets2,897.5  3,013.1  Noncurrent Assets2,709.4 2,804.6 
Current LiabilitiesCurrent Liabilities844.3  1,405.9  Current Liabilities840.0 881.7 
Noncurrent LiabilitiesNoncurrent Liabilities3,226.2  2,383.0  Noncurrent Liabilities3,053.7 3,020.4 
The Obligor’s amounts due from, due to the non-guarantor subsidiaries as of June 28, 2020April 4, 2021 and September 30, 20192020 are as follows:
(in millions)(in millions)June 28, 2020September 30, 2019(in millions)April 4, 2021September 30, 2020
Statement of Financial Position Data
Statements of Financial Position DataStatements of Financial Position Data
Current receivables from non-guarantor subsidiariesCurrent receivables from non-guarantor subsidiaries$240.9  $—  Current receivables from non-guarantor subsidiaries$325.2 $161.1 
Long-term receivable from non-guarantor subsidiariesLong-term receivable from non-guarantor subsidiaries—  87.1  Long-term receivable from non-guarantor subsidiaries13.0 — 
Current payable to non-guarantor subsidiariesCurrent payable to non-guarantor subsidiaries426.4  649.3  Current payable to non-guarantor subsidiaries327.3 368.4 
Long-term debt with non-guarantor subsidiariesLong-term debt with non-guarantor subsidiaries242.8  10.2  Long-term debt with non-guarantor subsidiaries172.8 212.0 
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Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Market Risk Factors
No material change in the Company’s market risk has occurred during the ninesix month period ended June 28, 2020.April 4, 2021 other than the change in interest rate risk attributable to the issuance of the new Term Loan Facility. For additional information, refer to Note 10 – Debt and Note 12 – Derivatives to the Condensed Consolidated Financial Statement included elsewhere in the Quarterly Report and to Part II, Items 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019.2020.
Interest Rate Risk
Our Revolver Facility and and Term Loan Facility have a variable interest rates. If market interest rates increase, the interest rate on our variable rate debt will increase and will create higher debt service requirements, which would adversely affect our cash flow and could adversely impact our results of operations. The general levels of U.S., European Union interest rates and LIBOR affect interest expense. As of April 4, 2021, we had $402.6 million subject to variable interest rates, or 15.4% of total debt. Assuming an increase to market rates of 1% as of April 4, 2021, we would incur an increase to interest expense of $4.1 million. Our Term Loan Facility and Revolver Facility allows for the LIBO rate to be phased out and replaced with the Secured Overnight Financing Rate and therefore we do not anticipate a material impact by the expected upcoming LIBOR transition.
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Item 4.    Controls and Procedures

Spectrum Brands Holdings, Inc.
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) pursuant to Rule 13a-15(b) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, SBH’s management, including our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms, and is accumulated and communicated to SBH’s management, including SBH’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting. During the ninethree month period ended June 28, 2020,April 4, 2021, SBH begancontinued updating certain internal controls and supporting processes and systemsto address previously identified material weakness related to leasesineffective information technology general controls (ITGCs) related to user access and role change reviews over certain information technology systems in connection with our adoptionthe EMEA region attributable to ineffective risk assessment and communication of ASU No. 2016-02, Leases (Topic 842), further discussed in Note 1 – Basiscontrol activities related to the transfer of Presentation and Significant Accounting Policies, whichITGC operations provided TSAs. SBH will continue to develop and update such internal controls and processes during the year of adoption for the fiscal year ending September 30, 2020.to fully remediate the identified deficiencies. Other than those described above, there were no additional changes to our internal control over financial reporting that occurred during the ninethree month period ended June 28, 2020April 4, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls. SBH’s management, including our Chief Executive Officer and Chief Financial Officer, does not expect that SBH’s disclosure controls and procedures or SBH’s internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within SBH have been detected.
SB/RH Holdings, LLC
Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) pursuant to Rule 13a-15(b) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, SB/RH’s management, including our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms, and is accumulated and communicated to SB/RH’s management, including SB/RH’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting. During the ninethree month period ended June 28, 2020,April 4, 2021, SB/RH begancontinued updating certain internal controls and supporting processes and systemsto address previously identified material weakness related to leasesineffective information technology general controls (ITGCs) related to user access and role change reviews over certain information technology systems in connection with our adoptionthe EMEA region attributable to ineffective risk assessment and communication of ASU No. 2016-02, Leases (Topic 842), further discussed in Note 1 – Basiscontrol activities related to the transfer of Presentation and Significant Accounting Policies, whichITGC operations provided TSAs. SB/RH will continue to develop and update such internal controls and processes during the year of adoption for the fiscal year ending September 30, 2020.to fully remediate the identified deficiencies. Other than those described above, there were no additional changes to our internal control over financial reporting that occurred during the ninethree month period ended June 28, 2020April 4, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls. SB/RH’s management, including our Chief Executive Officer and Chief Financial Officer, does not expect that SB/RH’s disclosure controls and procedures or SB/RH’s internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within SB/RH’s have been detected.
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PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
Litigation
We are a defendant in various litigation matters generally arising in the ordinary course of business. See risk factors below and Note 19 – Commitments and Contingencies included elsewhere in this Quarterly Report. Based on information currently available, we do not believe that any matters or proceedings presently pending will have a material adverse effect on our results of operations, financial condition, liquidity or cash flows.
Item 1A.    Risk Factors
Information about our risk factors is contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 20192020 filed with the SEC on November 15, 2019.18, 2020. We believe that at June 28, 2020, with the exception of changes in the risk factors discussed below,April 4, 2021, there arehave been no material changes in our risk factors from those disclosed in Item 1A of our Annual Report on Form 10-K for the year ended September 30, 2019.
The COVID-19 pandemic is a serious emerging threat to the health and economic well being affecting our customers, employees, sources of supply and our financial condition and results of operations.

In March 2020, the World Health Organization announced that COVID-19 has become a pandemic and a National Emergency relating to COVID-19 was announced in the U.S.. There is a possibility of widespread infection in the U.S. and abroad, with the potential for substantial commercial impact. National, state, and local authorities have recommended social distancing and imposed, or are considering imposing, quarantine and isolation measures, on large portions of the population, including mandatory business closures. These measures are expected to have serious adverse impacts on domestic and foreign economies of uncertain severity and duration. The effectiveness of economic stabilization efforts, including potential government payments to affected citizens and industries, is uncertain.

The sweeping nature of COVID-19 makes it extremely difficult to predict the long-term ramifications on our financial condition and results of operations. However, the likely overall economic impact of COVID-19 is viewed as highly negative to the general economy. These impacts may include, but are not limited to:

•significant reductions in, or volatility of, demand for our products, which may be caused by the inability of consumers to purchase our products due to illness, quarantine, travel restrictions, store closures, general financial hardship or changes in consumer spending habits;
•inability to meet customers’ needs or achieve cost targets due to disruptions in our manufacturing and supply arrangements caused by the loss or disruption of essential manufacturing or availability of key product components, transportation, workforce, or other manufacturing and distribution capability;
•failure of third parties on which we rely, including our suppliers, contract manufacturers, distributors, contractors, commercial banks, and other business partners, to meet their obligations to us, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties and may adversely impact our operations;
•significant change in the political conditions in markets in which we manufacture, sell or distribute our products, including governmental or regulatory actions such as quarantines, closures or other restrictions, that limit or close our operating and manufacturing facilities, restrict our employees’ ability to travel or perform necessary business functions, or otherwise prevent our third-party partners, suppliers, or customers from sufficiently staffing operations, including operations necessary for the production, distribution, sale and support of our products, which could adversely impact our results or impairment of the Company’s net assets;
•disruptions and stress in capital markets that could impact the cost and availability of capital for us and for our customers, suppliers and other business partners; or
•quarantines, stay-at-home orders and other limitations can disrupt our product development, branding, research and administrative functions, regardless of whether we are actually forced to close our own facilities and similar disruptions that may also effect other organizations and persons that we collaborate with or whose services we are dependent on; or
•the need for our employees and business partners to work remotely in these circumstances also creates greater potential for risks related to cybersecurity, confidentiality and data privacy.

As of the date of this report, we have been classified as an essential business in the jurisdictions that have mandated closure of non-essential businesses, and therefore have generally been allowed to remain open. However, we can give no assurance that this will not change in the future. Despite our efforts to manage and remedy the impact of COVID-19 on our financial condition and results of operations, the ultimate impact also depends on factors beyond our knowledge or control, including the duration and severity of the COVID-19 pandemic and actions taken by governmental authorities to contain its spread and mitigate its public health effects. Additionally, as the COVID-19 pandemic conditions wane, we cannot predict how quickly the marketplaces in which we operate will return to normal. Any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially increase our costs, negatively impact our sales and damage our results of operations and liquidity position. The duration of any such impacts cannot be predicted. See further discussion in Item 2 - Management Discussion and Analysis of Financial Condition and Results of Operations.

Reliance on third-party relationships and outsourcing arrangements could adversely affect our business.

We rely on third parties, including suppliers, distributors, alliances with other companies, and third-party service providers, for selected aspects of product development, manufacture, commercialization, support for information technology systems, product distribution, and certain financial transactional processes. Additionally, we have outsourced certain functions to third-party service providers to leverage leading specialized capabilities and achieve cost efficiencies. Outsourcing these functions involves the risk that third-party service providers may not perform to our standards or legal requirements, may not produce reliable results, may not perform in a timely manner, may not maintain the confidentiality of our proprietary information, or may fail to perform at all. Additionally, any disruption, such as a government shutdown, war, natural disaster or global pandemic (including the current COVID-19 pandemic), could affect the ability of our third-party service providers to meet their contractual obligations to us. Failure of these third parties to meet their contractual, regulatory, confidentiality or other obligations to us could result in material financial loss, higher costs, regulatory actions, and reputational harm.


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Uncertain global economic conditions may adversely impact demand for our products or cause our customers and other business partners to suffer financial hardship, which could adversely impact our business.

Our business could be negatively impacted by reduced demand for our products related to one or more significant local, regional or global economic disruptions, the risk of which are aggravated by the COVID-19 pandemic, such as: a slow-down in the general economy; reduced market growth rates; tighter credit markets for our suppliers, vendors or customers; a significant shift in government policies; the deterioration of economic relations between countries or regions, including potential negative consumer sentiment toward non-local products or sources; or the inability to conduct day-to-day transactions through our financial intermediaries to pay funds to, or collect funds from, our customers, vendors and suppliers. Additionally, economic conditions may cause our suppliers, distributors, contractors or other third-party partners to suffer financial difficulties that they cannot overcome, resulting in their inability to provide us with the materials and services we need, in which case our business and results of operations could be adversely affected. Customers may also suffer financial hardships due to economic conditions such that their accounts become uncollectible or are subject to longer collection cycles. In addition, if we are unable to generate sufficient income and cash flow, it could affect the Company’s ability to achieve expected share repurchase and dividend payments.

Disruption in our global supply chain may negatively impact our business results.

Our ability to meet our customers’ needs and achieve cost targets depends on our ability to maintain key manufacturing and supply arrangements, including execution of supply chain optimizations and certain sole supplier or sole manufacturing plant arrangements. The loss or disruption of such manufacturing and supply arrangements, including for issues such as labor disputes, loss or impairment of key manufacturing sites, discontinuity in our internal information and data systems, inability to procure sufficient raw or input materials, significant changes in trade policy, natural disasters, increasing severity or frequency of extreme weather events due to climate change or otherwise, acts of war or terrorism, the COVID-19 pandemic or other disease outbreaks or other external factors over which we have no control, have interrupted product supply and, if not effectively managed and remedied, could have an adverse impact on our business, financial condition or results of operations.

Certain provisions of our charter, bylaws, and of the Delaware General Corporation Law (the “DGCL”) have anti-takeover effects and could delay, discourage, defer or prevent a tender offer or takeover attempt that a stockholder might consider to be in the stockholder’s best interests.

Certain provisions of our charter and bylaws and the DGCL may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of the Company and its stockholders. Such provisions include, among other things, those that:

•provide for a classified board of directors with staggered three-year terms;
•authorize the board of directors to issue preferred shares and to determine the terms, including the number of shares, voting powers, redemption provisions, dividend rates, liquidation preferences and conversion rights, of those shares, without stockholder approval;
•permit the removal of directors by the stockholders only for cause and then only by the affirmative vote of a majority of the outstanding shares of our common stock;
•opt in to Section 203 of the DGCL, which generally prohibits a Delaware corporation from engaging in a “business combination” with any interested stockholder (generally speaking a stockholder who holds 15% or more of our voting stock) for three years from the date such stockholder becomes an interested stockholder unless certain conditions are met; and
•subject to certain exceptions, prohibit any person from acquiring shares of our common stock if such person is, or would become as a result of the acquisition, a “Substantial Holder” (as defined in our charter).

These provisions may frustrate or prevent attempts by stockholders to cause a change in control of the Company or to replace members of its board of directors.

2020.
Item 1B. Other Information
On April 30, 2020, the Company announced that it is withdrawing the guidance it released with respect to its fiscal 2020 and the first quarter of 2020 as a result of the lack of business visibility into the impacts of the COVID-19 pandemic. The reason for the withdrawal of guidance included demand volatility and unpredictability in supply chain disruptions. The Company expects to provide an annual outlook when business conditions return to a more normal environment.
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Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
On July 24, 2018, the Board of Directors approved a $1 billion common stock repurchase program. The authorization is effective for 36 months. The following table summarizes the common stock repurchases under the program for the ninesix month period ended June 28, 2020:April 4, 2021:
Total Number
of Shares
Purchased
Average
Price Paid
Per Share
Total Number
of Shares Purchased
as Part of Plan
Approximate Dollar Value
of Shares that may
Yet Be Purchased
As of September 30, 20194,610,700  $54.22  4,610,700  $750,001,219  
October 1, 2019 to October 27, 2019—  —  —  750,001,219  
October 28, 2019 to November 24, 201935,568  62.27  35,568  747,786,559  
November 25, 2019 to December 29, 20191,275,844  62.05  1,275,844  668,618,252  
ASR November, 20191,719,534  61.79  1,719,534  562,368,245  
As of December 29, 20197,641,646  57.27  7,641,646  562,368,245  
December 30, 2019 to January 26, 2020168,646  63.54  168,646  551,652,107  
January 27, 2020 to February 23, 2020226,217  60.00  226,217  538,079,881  
February 24, 2020 to March 29, 20202,340,571  53.36  2,340,571  413,186,222  
ASR March, 2020309,857  60.51  309,857  394,436,228  
As of March 29, 202010,686,937  56.66  10,686,937  394,436,228  
March 30, 2020 to April 26, 2020—  —  —  394,436,228  
April 27, 2020 to May 24, 2020—  —  —  394,436,228  
May 25, 2020 to June 28, 2020—  —  —  394,436,228  
As of June 28, 202010,686,937  $56.66  10,686,937  $394,436,228  
Total Number
of Shares
Purchased
Average
Price Paid
Per Share
Total Number
of Shares Purchased
as Part of Plan
Approximate Dollar Value
of Shares that may
Yet Be Purchased
As of September 30, 202010,686,937 $56.66 10,686,937 $394,436,227 
October 1, 2020 to November 1, 2020— — — 394,436,227 
November 2, 2020 to November 29, 2020647,498 65.27 647,498 352,176,858 
November 30, 2020 to January 3, 2021— — — 352,176,858 
As of January 3, 202111,334,435 57.16 11,334,435 352,176,858 
January 4, 2021 to January 31, 2021— — — 352,176,858 
February 1, 2021 to February 28, 2021— — — 352,176,858 
March 1, 2021 to April 4, 2021— — — 352,176,858 
As of April 4, 202111,334,435 $57.16 11,334,435 $352,176,858 
DuringOn May 4, 2021, subsequent to the nine month periods ended June 28, 2020,balance sheet date, the Company also repurchased $9.2 millionBoard of Directors approved a new share repurchase program authorizing the purchase of up to $1 billion of common stockstock. The new share repurchase program commences immediately and replaces the previous program. The authorization is effective for 36 months. The repurchase permits shares to be repurchased in privateopen market or through privately negotiated transactions, including by direct purchases with employees at fair value, consistingor purchases pursuant to derivative instruments or other transactions (including pursuant to accelerated share repurchase agreements, the writing and settlement of 0.2 millionput options and the purchase and exercise of common stockcall options). The number of shares to be repurchased and the timing of any repurchases at an averagewill depend on factors such as the share price, of $62.30 pereconomic and market conditions, and corporate and regulatory requirements. The share which are not included in the common stock repurchase program summarized above.may be suspended, amended or discontinued at any time.
Item 5.    Other Information
None
Item 6.    Exhibits
Please refer to the Exhibit Index.

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SIGNATURES
Pursuant to the requirements 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.
Date: July 31, 2020May 7, 2021
SPECTRUM BRANDS HOLDINGS, INC.
By:/s/ Jeremy W. Smeltser
Jeremy W. Smeltser
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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SIGNATURES
Pursuant to the requirements 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.
Date: July 31, 2020May 7, 2021
SB/RH HOLDINGS, LLC
By:/s/ Jeremy W. Smeltser
Jeremy W. Smeltser
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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EXHIBIT INDEX
Exhibit 4.1
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 21.1
Exhibit 31.1
Exhibit 31.2
Exhibit 31.3
Exhibit 31.4
Exhibit 32.1
Exhibit 32.2
Exhibit 32.3
Exhibit 32.4
Exhibit 21.1
101.INSXBRL Instance Document**
101.SCHXBRL Taxonomy Extension Schema Document**
101.CALXBRL Taxonomy Extension Calculation Linkbase Document**
101.DEFXBRL Taxonomy Extension Definition Linkbase Document**
101.LABXBRL Taxonomy Extension Label Linkbase Document**
101.PREXBRL Taxonomy Extension Presentation Linkbase Document**
* Filed herewith
** In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be "furnished" and not "filed."
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