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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(in millions, except per share data)

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the accompanying notes included in this Annual Report on Form 10-K. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs and involve risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed in Item 1A. Risk Factors and “Forward-Looking Statements” included within this Annual Report on Form 10-K.

Non-GAAP Financial Measures

While we report financial results in accordance with GAAP, this discussion also includes non-GAAP measures. These non-GAAP measures are referred to as “adjusted” or “organic” and exclude items such as restructuring charges, acquisition and integration costs, cost of early debt retirement, UK tax rate increase, impairment charges, COVID-19 pandemic expenses, advisory expenses in connection with the evaluation of the Feminine and Infant Care businesses, Sun Care reformulation costs, investor settlement expenses, the disposition of the Infant and Pet Care business, the related tax effects of these items and the impact of the Tax Act. Reconciliations of non-GAAP measures are included within this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We use this non-GAAP information internally to make operating decisions and believe it is helpful to investors because it allows more meaningful period-to-period comparisons of ongoing operating results. Given the various significant events, including the Project Fuel restructuring and recent acquisitions and divestitures, we view the use of non-GAAP measures that take into account the impact of these unique events as particularly valuable in understanding our underlying operational results and providing insights into future performance. The information can also be used to perform trend analysis and to better identify operating trends that may otherwise be masked or distorted by the types of items that are excluded. This non-GAAP information is also a component in determining management’s incentive compensation. Finally, we believe this information provides more transparency. The following provides additional detail on our non-GAAP measures:

•We analyze our net sales and segment profit on an organic basis to better measure the comparability of results between periods. Organic net sales and organic segment profit exclude the impact of changes in foreign currency, acquisitions, and divestitures. This information is provided because these types of fluctuations can distort the underlying change in net sales and segment profit either positively or negatively.

•We utilize “adjusted” non-GAAP measures including gross profit, SG&A, operating income, income taxes, net earnings, and diluted earnings per share internally to make operating decisions. The following items are excluded when analyzing non-GAAP measures: restructuring charges, acquisition and integration costs, cost of early debt retirement, UK tax rate increase, impairment charges, COVID-19 pandemic expenses, advisory expenses in connection with the evaluation of the Feminine and Infant Care businesses, Sun Care reformulation costs, investor settlement expenses, the disposition of the Infant and Pet Care business, and the impact of the Tax Act.

All comparisons are with the same period in the prior year, unless otherwise noted.

Impact of COVID-19

On March 11, 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) a worldwide pandemic, which has impacted individuals, families, companies and economies around the world. Throughout the pandemic, we have taken and continue to take significant measures to protect our employees and business, while remaining in compliance with local guidelines and requirements.

The Company’s top priority during this time continues to be ensuring the health and welfare of our employees and additional measures have been put in place at all of our manufacturing locations. To date, we have not experienced any material operational disruptions across our manufacturing or distribution facilities.

The prolonged COVID-19 environment has resulted in increased supply chain challenges across product procurement and distribution. The continued duration and severity of COVID-19 may cause further disruptions related to our key suppliers, increase procurement costs and impact our ability to hire and retain employees, which may result in higher labor costs going forward. However, the impact, timing and severity of potential disruptions cannot be reasonably estimated at this time.

We expect to maintain adequate liquidity during these uncertain times and we will continue to assess the impact that COVID-19 has on our liquidity needs and current economic market conditions. As noted within “Liquidity and Capital Resources” below,

COVID-19 has not had a significant impact on our liquidity, cash flows or capital resources, including our ability to enter into the unsecured indenture agreement for 4.125% Senior Notes in the amount of $500 due April 1, 2029 (“2029 Notes”).

Significant Events

Acquisitions

On September 2, 2020, we completed the acquisition of Cremo, a premier men's grooming company in the U.S, in an all-cash transaction at a purchase price of $233.9. As a result of the acquisition, Cremo became a wholly owned subsidiary of the Company. Refer to Note 3 of Notes to Condensed Consolidated Financial Statements for further discussion on the Cremo acquisition.

Divestiture

On December 17, 2019, we completed the sale of our Infant and Pet Care business included in the All Other segment for $122.5 which included consideration for providing services for up to one year under a transition services agreement. For further information on the divestiture of the Infant and Pet Care business, refer to Note 3 of Notes to Condensed Consolidated Financial Statements.

Goodwill and Intangible Asset Impairment

The Company performs an annual test for impairment of goodwill and indefinite-lived intangible assets. The annual test performed in the fourth quarter of fiscal 2021 and 2020, respectively, did not indicate that the Company’s goodwill and intangible assets had a fair value below the carrying value.

During the third quarter of fiscal 2019, we determined a triggering event had occurred following a decline in our market capitalization and share price. We performed an interim impairment analysis on all long-lived assets, including definite-lived intangibles, goodwill, and indefinite-lived intangible assets, using financial information through June 30, 2019 and forecasts for cash flows developed using our three-year strategic plan. The interim impairment review was performed. The results of the impairment review indicated the carrying value of the goodwill of the Wet Shave, Infant Care, and Skin Care reporting units were greater than their respective fair values, resulting in a non-cash goodwill impairment of $369.0, $37.0, and $2.0, respectively. Additionally, the carrying value of the Wet Ones and Diaper Genie trade names were greater than the fair values and resulted in non-cash impairments of the indefinite-lived intangible assets of $87.0 and $75.0, respectively. We performed an assessment in the fourth quarter of fiscal 2019 to determine if any significant events or changes in circumstances had occurred that would be considered a potential triggering event. We did not identify any indication of a triggering event that would indicate the existence of additional impairment of the reporting units, indefinite-lived intangible assets, and definite-lived intangible assets.

Refer to Notes 2 and 7 of Notes to Consolidated Financial Statements for further discussion on the annual impairment test.

Project Fuel

Project Fuel was an enterprise-wide transformational initiative that was launched in the second fiscal quarter of 2018, to address all aspects of our business and cost structure, simplifying and transforming the organization, structure and key processes. Project Fuel facilitated further re-investment in our growth strategy while enabling us to achieve our desired future state operations.

Fiscal 2021 Project Fuel related gross savings were approximately $68, bringing final cumulative gross savings for the program to approximately $280. The savings generated during the project are being used to fuel investments and brand building in strategic growth initiatives, mitigate operational cost headwinds from inflation and other rising input costs and improve the overall profitability and cash flow of the Company.

Restructuring and related charges were $30.1 for fiscal 2021, bringing final cumulative charges to $163.7 for the project.

Capital expenditures for Project Fuel were $13.6 for fiscal 2021 bringing cumulative capital expenditures to $71.7 for the project.

For further information on our restructuring projects, refer to Note 4 of Notes to Condensed Consolidated Financial Statements.

Executive Summary

Following is a summary of key results for fiscal 2021, 2020 and 2019. Net earnings and diluted earnings per share (“EPS”) for the time periods presented were impacted by restructuring charges, acquisition and integration costs, cost of early debt retirement, UK tax rate increase, impairment charges, COVID-19 pandemic expenses, advisory expenses in connection with the evaluation of the Feminine and Infant Care businesses, Sun Care reformulation costs, investor settlement expenses, the disposition of the Infant and Pet Care business, the related tax effects of these items and the impact of the Tax Act. The impact of these items on reported net earnings and EPS are provided below as a reconciliation of net earnings and EPS to adjusted net earnings and adjusted diluted EPS, which are non-GAAP measures.

Fiscal 2021

•Net sales were $2,087.3, an increase of 7.1% from fiscal 2020, inclusive of a 2.9% increase due to the acquisition of Cremo, a 1.4% decrease due to the sale of the Infant and Pet Care business and a 1.9% increase due to currency movements. Organic net sales increased 3.7% for fiscal 2021 as compared to the prior year period, as growth in Wet Shave and Sun and Skin Care were partially offset by slight declines in Feminine Care.

•Net earnings for fiscal 2021 was $117.0, as compared to net earnings of $67.6 in the prior fiscal year. On an adjusted basis, as illustrated in the table below, net earnings for fiscal 2021 increased 12.0% to $166.7. The increase was primarily driven by higher net sales attributable to a rebound from prior year COVID-19 declines. Increased net sales were offset by higher Advertising and sales promotion expense (“A&P”) in support of investments in critical commercial efforts compared to the prior year.

•Net earnings per diluted share during fiscal 2021 was $2.12 compared to earnings of $1.24 in the prior fiscal year. On an adjusted basis, as illustrated in the table below, net earnings per diluted share during fiscal 2021 were $3.02 compared to $2.73 in the prior year.

Gross Profit SG&A Operating Income EBIT Income taxes Net Earnings Diluted EPS

Cost of early retirement of long-term debt — — — 26.1 6.4 19.7 0.36

UK tax rate increase — — — — (0.3) 0.3 —

Gross Profit SG&A Operating Income EBIT Income Taxes Net Earnings Diluted EPS

Feminine and Infant Care evaluation costs — 0.3 0.3 0.3 0.1 0.2 —

Cost of early retirement of long-term debt — — — 26.2 6.4 19.8 0.36

Gain on sale of Infant and Pet Care business — — — (4.1) (2.6) (1.5) (0.03)

Gross Profit SG&A Operating Income EBIT Income Taxes Net Earnings Diluted EPS

Feminine and Infant Care evaluation costs — 2.1 2.1 2.1 0.5 1.6 0.03

Impact of dilutive shares — — — — — — (0.01)

Income tax reform — — — — (3.6) 3.6 0.07

Operating Results

The following table presents changes in net sales for fiscal 2021 and 2020, as compared to the corresponding prior year period, and provides a reconciliation of organic net sales to reported amounts.

Net Sales

Net Sales - Total Company

For the Years Ended September 30,

Impact of Infant and Pet Care sale (26.8) (1.4) % (93.4) (4.4) %

Impact of Cremo acquisition 56.0 2.9 % 4.5 0.2 %

For fiscal 2021, net sales increased 7.1% on a reported basis. Organic net sales increased 3.7% versus the prior year. The increase in organic net sales was largely driven by improving consumption across all categories and strong growth in Sun Care, Women’s Shave and Men’s Grooming. Organic net sales increased in North America by 5.2% while International organic net sales increased by 1.4%.

For further discussion regarding net sales, including a summary of reported versus organic changes, see “Segment Results.”

Gross Profit

Gross profit was $950.1 in fiscal 2021, as compared to $880.9 in fiscal 2020. Gross margin as a percent of net sales for fiscal 2021 was 45.5%, up 30 basis points as compared to fiscal 2020. Adjusted gross margin as a percent of sales increased by 30 basis points compared to fiscal 2020, driven by Project Fuel related savings and favorable pricing and promotion, partially offset by increased commodity and labor costs.

Selling, General and Administrative Expense

SG&A was $391.2 in fiscal 2021, or 18.7% of net sales, as compared to $408.8 in fiscal 2020, or 21.0% of net sales. Adjusted SG&A as a percent of net sales decreased 30 basis points compared to fiscal 2020 as stronger cost control and the benefit of sales leverage more than offset investments made in increased talent and capabilities and unfavorable foreign currency fluctuations.

Advertising and Sales Promotion Expense

For fiscal 2021, A&P was $241.5, up $25.3 as compared to fiscal 2020. A&P as a percent of net sales was 11.6% for fiscal 2021, compared with 11.1% in fiscal 2020. The increase in A&P was the result of investments in and focus on critical commercial efforts supporting the Schick Hydro relaunch, Schick Stubble Eraser® product launch, Skintimate campaign, Men’s systems development in Japan, increased support for the Sun Care business and the inclusion of Cremo brand investments. Fiscal 2020 had reduced A&P expense as a result of the COVID-19 pandemic.

Research and Development Expense

Research and development expense (“R&D”) increased to $57.8 in fiscal 2021, compared to $55.3 in fiscal 2020. As a percent of net sales, R&D was approximately 2.8% in both fiscal 2021 and fiscal 2020.

Interest Expense Associated with Debt

Interest expense associated with debt for fiscal 2021 was $67.9, an increase of $6.7 as compared to fiscal 2020. The increase in interest expense was the result of higher average outstanding debt and a higher weighted interest rate, primarily as a result of the issuance of the 5.5% $750 Senior Notes due 2028 issued in May 2020 (the “2028 Notes”).

In addition to the interest expense associated with debt, we incurred $26.1 of costs for the early retirement of the $500 Senior Notes due 2022 in fiscal 2021.

Other (Income) Expense, Net

Other (income) expense, net was income of $1.2 in fiscal 2021 compared to expense of $5.4 in fiscal 2020. The favorable movement was largely related to foreign currency movements and lower pension benefit expense, partially offset by unfavorable hedge settlements.

Income Tax Provision (Benefit)

Income taxes, which include federal, state and foreign taxes, were 19.8%, 22.6% and 4.6% of Earnings (loss) before income taxes in fiscal 2021, 2020 and 2019, respectively.

The effective income tax rate for fiscal 2021 for operations was 19.8% as compared to 22.6% in the prior year. On an adjusted basis, the effective tax rate for fiscal 2021 was 21.2% compared to 22.5% in the prior year. The fiscal 2021 effective tax rate reflects a more favorable mix of foreign earnings while fiscal 2020 includes the unfavorable impact of the sale of the Infant and Pet Care business.

Reported Adjustments Adjusted(Non-GAAP)

Effective tax rate 19.8 % 21.2 %

Reported Adjustments Adjusted(Non-GAAP)

Effective tax rate 22.6 % 22.5 %

Reported Adjustments Adjusted(Non-GAAP)

(Loss) earnings before income taxes $ (390.3) $ 638.1 $ 247.8

Income tax (benefit) provision (18.1) 77.1 59.0

Effective tax rate 4.6 % 23.8 %

Our effective tax rate is highly sensitive to the mix of countries from which earnings or losses are derived. Declines in earnings in lower tax rate jurisdictions, earnings increases in higher tax rate jurisdictions, or repatriation of foreign earnings or operating losses in the future could increase future tax rates. Additionally, adjustments to prior year tax provision estimates could increase or decrease future tax provisions.

Segment Results

Segment performance is evaluated based on segment profit, exclusive of general corporate expenses, share-based compensation costs, costs associated with restructuring charges, acquisition and integration costs, cost of early debt retirement, COVID-19 pandemic expenses, impairment charges, advisory expenses in connection with the evaluation of the Feminine and Infant Care businesses, Sun Care reformulation costs, investor settlement expenses, the disposition of the Infant and Pet Care business and the amortization and impairment of intangible assets. The exclusion of such changes from segment results reflects management’s view on how it evaluates segment performance. Financial items, such as interest income and expense, are managed on a global basis at the corporate level.

Our operating model includes some shared business functions across the segments, including product warehousing and distribution, transaction processing functions and, in most cases, a combined sales force and management teams. We apply a fully allocated cost basis, in which shared business functions are allocated between the segments on a percentage of net sales basis. Such allocations are estimates and do not represent the costs of such services if performed on a stand-alone basis.

The following tables present changes in segment net sales and segment profit for fiscal 2021 and 2020, as compared to the corresponding prior year periods, and also provide a reconciliation of organic segment net sales and organic segment profit to reported amounts. For a reconciliation of Segment profit to Earnings (loss) before income taxes, see Note 18 of Notes to Consolidated Financial Statements.

Wet Shave

Net Sales - Wet Shave

For the Years Ended September 30,

Wet Shave net sales for fiscal 2021 increased 4.6%, inclusive of a 2.3% increase due to currency movements. Organic net sales increased $26.6, or 2.3%, primarily driven by significantly higher volumes and slightly favorable price mix. The increase in organic net sales was driven by growth in Women’s systems, partially offset by declines in Men’s systems and Shave Preps. Women’s systems growth included increases in Intuition, Skintimate and Hydro Silk, while Men’s systems saw growth in Hydro and Bulldog, partially mitigating declines in other brands. By region, North America and International organic net sales both increased by 2.3%.

Segment Profit - Wet Shave

For the Years Ended September 30,

Segment profit - prior year $ 206.2 $ 246.5

Impact of currency 5.9 2.9 % (2.4) (0.9) %

Wet Shave segment profit for fiscal 2021 was $221.0, up $14.8 or 7.2%, inclusive of the impact of currency movements. Organic segment profit increased $8.9, or 4.3%. The increase in segment profit was driven by higher volumes, particularly in Women’s systems and disposables, partially offset by higher A&P in support of Men’s Hydro and Women’s Skintimate razors and unfavorable operating costs driven by higher freight and commodity prices.

Sun and Skin Care

Net Sales - Sun and Skin Care

For the Years Ended September 30,

Impact of currency 8.3 1.8 % (2.5) (0.5) %

Sun and Skin Care net sales for fiscal 2021 increased 26.7%, inclusive of a 12.1% increase from the Cremo acquisition and a 1.8% increase due to currency movements. Organic net sales increased $59.0, or 12.8%, primarily due to increased Sun Care sales as Banana Boat and Hawaiian Tropic both had double digit growth, rebounding from declines in the prior year due to the COVID-19 pandemic, which resulted in travel disruption during the summer vacation season. Organic growth in Men’s grooming of 14.8% was driven by favorable volumes in Jack Black and Bulldog. Wet Ones sales grew as a result of price, with volumes flat compared to the prior year.

Segment Profit - Sun and Skin Care

For the Years Ended September 30,

Segment profit - prior year $ 69.1 $ 80.4

Impact of Cremo acquisition 8.9 12.9 % 1.1 1.4 %

Impact of currency 1.5 2.1 % (0.7) (0.9) %

Sun and Skin Care segment profit for fiscal 2021 was $98.7, an increase of 42.8% compared to the prior year, inclusive of a 12.9% increase from the Cremo acquisition and a 2.1% increase from currency movements. Organic segment profit increased $19.2, or 27.8% driven by increased net sales and gross margin from favorable volumes of Sun Care products and pricing for Sun Care and Wet Ones, partially offset by higher freight and materials costs.

Feminine Care

Net Sales - Feminine Care

For the Years Ended September 30,

Impact of currency 1.0 0.3 % (0.4) (0.1) %

Feminine Care net sales for fiscal 2021 decreased $12.5, or 4.2%, inclusive of a 0.3% increase due to currency movements. Organic segment net sales decreased $13.5, or 4.5%, driven by overall category declines, lost distribution, and the impact of the prior year pantry loading.

Segment Profit - Feminine Care

For the Years Ended September 30,

Segment profit - prior year $ 52.3 $ 48.3

Impact of currency 0.6 1.1 % (0.1) (0.2) %

Segment profit - current year $ 37.2 (28.9) % $ 52.3 8.3 %

Feminine Care segment profit for fiscal 2021 was $37.2, a decrease of $15.1, or 28.9%, inclusive of currency impacts. The decrease is primarily due to unfavorable gross margin from lower sales volumes across all products, unfavorable cost mix due to higher material costs and higher warehouse and distribution costs.

All Other

The Infant and Pet Care business divestiture, completed in December 2019, disposed of the entirety of the operations of the All Other segment. The results below represent the impact of the divestiture to segment performance:

Net Sales - All Other

For the Years Ended September 30,

Net sales - prior year $ 26.8 $ 119.7

Organic — — % 0.5 0.4 %

Impact of Infant and Pet Care business sale (26.8) (100.0) % (93.4) (78.0) %

Impact of currency — — % — — %

Net sales - current year $ — (100.0) % $ 26.8 (77.6) %

Segment Profit - All Other

For the Years Ended September 30,

Segment profit - prior year $ 3.1 $ 11.7

Organic — — % 0.5 4.3 %

Impact of Infant and Pet Care business sale (3.1) (100.0) % (9.1) (77.8) %

Impact of currency — — % — — %

Segment profit - current year $ — (100.0) % $ 3.1 (73.5) %

General Corporate and Other Expenses

Fiscal Year

General corporate and other expenses $ 56.5 $ 54.9 $ 57.3

Restructuring and related costs 30.1 38.1 55.6

Cost of early retirement of long-term debt 26.1 26.2 —

Acquisition and integration planning costs 8.4 39.8 6.7

Sun Care reformulation costs 1.1 — 2.8

Feminine and Infant Care evaluation costs — 0.3 2.1

COVID-19 expenses — 4.3 —

Gain on sale of Infant and Pet Care business — (4.1) —

Impairment charges — — 570.0

Investor settlement expense — — 0.9

For fiscal 2021, general corporate expenses were $56.5, an increase of $1.6 as compared to fiscal 2020. Fiscal 2020 general corporate expenses decreased $2.4 when compared to fiscal 2019. The increase in general corporate expenses in fiscal 2021 relates to additional benefit and incentive payments, partially offset by savings from Project Fuel and reduced consulting and legal fees.

The Company incurred expenses associated with the early retirement of the $500 Senior Notes due 2022 and $600 Senior Notes due 2021, including the recognition of remaining debt issuance costs and interest expense in the second quarter of fiscal 2021 and third quarter of fiscal 2020, respectively. Acquisition and integration costs incurred in fiscal 2021 and the fourth quarter of fiscal 2020 were related to the acquisition of Cremo, which was completed in September 2020. Additionally, the Company incurred expenses, primarily legal, consulting and financing costs, associated with the termination of the Harry’s acquisition in the first half of fiscal 2020.

Liquidity and Capital Resources

To date, COVID-19 has not had a significant impact on our liquidity or capital resources. However, the ongoing COVID-19 pandemic 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.

At September 30, 2021, a portion of our cash balances were located outside the U.S. Given our extensive international operations, a significant portion of our cash is denominated in foreign currencies. We manage our worldwide cash requirements by reviewing available funds among the many subsidiaries through which we conduct business and the cost effectiveness with which those funds can be accessed. We generally repatriate a portion of current year earnings from select non-U.S. subsidiaries only if the economic cost of the repatriation is not considered material.

Our cash is deposited with multiple counterparties which consist of major financial institutions. We consistently monitor positions with, and credit ratings of, counterparties both internally and by using outside ratings agencies.

Our total borrowings were $1,276.5 at September 30, 2021, including $26.5 tied to variable interest rates. Our total borrowings at September 30, 2020 were $1,271.1. We had outstanding international borrowings, recorded within Notes payable, of $26.5 and $21.1 as of September 30, 2021 and September 30, 2020, respectively.

Historically, we have generated and expect to continue to generate positive cash flows from operations. Our cash flows are affected by the seasonality of our Sun Care products, typically resulting in higher net sales and increased cash generation in the second and third quarter of each fiscal year. While we cannot reasonably estimate the full impact COVID-19 will have on our cash flows, we believe our cash on hand, cash flows from operations and borrowing capacity under our U.S. Revolving Credit Facility due 2025 (the “Revolving Credit Facility”) will be sufficient to satisfy our future working capital requirements, interest payments, R&D activities, capital expenditures, and other financing requirements for at least the next 12 months. We will continue to monitor our cash flows, spending, and liquidity needs.

Short-term financing needs primarily consist of working capital requirements and principal and interest payments on our long-term debt. Long-term financing needs will depend largely on potential growth opportunities, including acquisition activity and repayment or refinancing of our long-term debt 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, contractual restrictions 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.

In fiscal 2022, we expect our total capital expenditures to be in the range of $60 to $70 primarily related to both maintenance of and productivity efforts across manufacturing facilities, new product development and information technology system enhancements. While we intend to fund these capital expenditures with cash generated from operations, we may also utilize our borrowing facilities.

During fiscal 2021, we contributed $4.9 to our pension and postretirement plans. Due to the election of certain terms of the American Rescue Plan Act, we are not required to make any cash contributions to our pension and postretirement plans in fiscal 2022.

Debt Covenants

The Revolving Credit Facility governing our outstanding debt at September 30, 2021 contains certain customary representations and warranties, financial covenants, covenants restricting our ability to take certain actions, affirmative covenants, and provisions relating to events of default. Under the terms of the Revolving Credit Facility, the ratio of our indebtedness to our earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined in the agreement and detailed below, cannot be greater than 4.0 to 1.0. In addition, under the Revolving Credit Facility, the ratio of our EBITDA to total interest expense must exceed 3.0 to 1.0. If we fail to comply with these covenants or with other requirements of the Revolving Credit Facility, the lenders may have the right to accelerate the maturity of the debt. Acceleration under one of our facilities would trigger cross-defaults on our other borrowings. Under the Revolving Credit Facility, EBITDA is defined as net earnings, as adjusted to add-back interest expense, income taxes, depreciation and amortization, all of which are determined in accordance with GAAP. In addition, the Revolving Credit Facility allows certain non-cash charges such as stock award amortization and asset write-offs including, but not limited to, impairment and accelerated depreciation, and operating expense reductions or synergies to be “added-back” in determining EBITDA for purposes of the indebtedness ratio. Total debt and interest expense are calculated in accordance with GAAP.

As of September 30, 2021, we were in compliance with the provisions and covenants associated with the Revolving Credit Facility.

Cash Flows

A summary of our cash flow from operating, investing and financing activities is provided in the following table:

Fiscal Year

Net cash from (used by):

Effect of exchange rate changes on cash (0.4) 5.6 (6.1)

Net increase (decrease) in cash and cash equivalents $ 114.5 $ 23.1 $ 75.2

Operating Activities

Cash flow from operating activities was $229.0 in fiscal 2021, as compared to $232.6 in fiscal 2020. The slight decrease in fiscal 2021 was primarily a result of net cash outflow from working capital in the current period compared to an inflow from working capital changes in the prior year period, partially offset by improved earnings compared to the prior year period.

Investing Activities

Cash flow used by investing activities was $48.7 in fiscal 2021 as compared to $196.4 in fiscal 2020. During fiscal 2021, we collected $7.5 of proceeds from the sale of the Infant and Pet Care business, compared to $95.8 in the prior year. Capital expenditures were $56.8 and $47.7 during fiscal 2021 and 2020, respectively. Additionally, other investing cash inflows related to the collection of receivables from our $150 uncommitted master accounts receivable purchase agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as the purchaser (the “Accounts Receivable Facility”) totaled $2.6 and $4.3 during fiscal 2021 and 2020, respectively, as a result of collections on the deferred purchase price of accounts receivables sold. During fiscal 2020, we completed the acquisition of Cremo for $233.6 and a minority investment of a direct-to-consumer company totaling $13.8.

Financing Activities

Net cash used by financing activities was $65.4 in fiscal 2021 as compared to $18.7 in fiscal 2020. During fiscal 2021, we repurchased $9.2 of our common stock under our 2018 Board authorization to repurchase our common stock. The Company repaid its 2022 Senior Notes with the proceeds received from the issuance of the 2029 Senior Notes, together with cash on hand. Additional financing cash outflows incurred were related to costs of early debt retirement of the 2022 Senior Notes totaling $26.1 and debt issuance costs of $6.5. Dividend payments totaled $25.6 in fiscal 2021. Additionally, cash flows associated with the Accounts Receivable Facility were inflows of $2.4 during fiscal 2021 compared to financing outflows of $11.2 in the prior year period. In the prior year period, the Company replaced its 2021 Senior Notes in the amount of $600 with the 2028 Senior Notes in the amount of $750. Early debt retirement costs incurred in connection with the repayment of the 2021 Senior Notes totaled $26.2 and debt issuance costs totaling $11.7. The Company had net repayments of its Revolving Credit Facility during fiscal 2020 totaling $117.0.

Share Repurchases

In January 2018, our Board approved an authorization to repurchase up to 10.0 shares of our common stock. This authorization replaced a prior share repurchase authorization from May 2015. During fiscal 2021, we repurchased 0.3 shares of our common stock for $9.2. We have 9.7 shares remaining available for purchase under the January 2018 Board authorization. As a part of our capital allocation strategy, we plan to implement a more consistent approach to share repurchases and intend to repurchase approximately $300 in shares of our common stock over the next three fiscal years. Additionally, we intend to enter into a Rule 10b5-1 trading plan to facilitate the repurchase of our common shares in accordance with this share repurchase program.

During fiscal 2021, 0.1 shares were purchased related to the surrender of shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock equivalent awards.

Since November 15, 2021, we repurchased 0.2 shares of common stock on the open market for $7.4. We have 9.6 shares remaining available for purchase under the January 2018 Board authorization.

Dividends

On August 5, 2021, the Company’s Board of Directors (the “Board”) declared a cash dividend of $0.15 per share of common stock outstanding. The dividend was paid on October 5, 2021 to holders of record as of the close of business on September 9, 2021. Dividends declared during fiscal 2021 totaled $33.7. Payments made for dividends during fiscal 2021 totaled $25.6.

On November 4, 2021, the Board declared a quarterly cash dividend of $0.15 per common stock outstanding for the fourth fiscal quarter. The dividend is payable January 6, 2022 to stockholders of record as of the close of business on December 3, 2021.

Inflation

Management recognizes that inflationary pressures may have an adverse effect on our company through higher material, labor and transportation costs, asset replacement costs and related depreciation, healthcare and other costs. In general, we have been able to offset or minimize inflation effects through a variety of methods including pricing actions, cost reductions and productivity improvements. We can provide no assurance that such mitigation will be available in the future.

Seasonality

Customer orders for sun care products within our Sun and Skin Care segment are highly seasonal. This has historically resulted in higher sun care sales to retailers during the late winter through mid-summer months. Within our Wet Shave segment, sales of women’s products are moderately seasonal, with increased consumer demand in the spring and summer months. See “Our business is subject to seasonal volatility” in Item 1A. Risk Factors.

Foreign Currency

Certain net sales and costs of our international operations are denominated in the local currency of the respective countries. As such, sales and profits from these subsidiaries may be impacted by fluctuations in the value of these local currencies relative to the U.S. dollar. We also have significant intercompany financing arrangements that may result in gains and losses in our results of operations. In an effort to mitigate the impact of currency exchange rate effects, we may hedge certain operational and intercompany transactions; however, our hedging strategies may not fully offset gains and losses recognized in our results of operations.

On June 23, 2016, the U.K held a referendum in which voters approved an exit from the E.U., commonly referred to as “Brexit.” The U.K. officially exited the E.U. on January 31, 2020, however, negotiations between the U.K. and E.U. regarding the separation remain ongoing. On December 24, 2020, the E.U. and the U.K. agreed on the final terms of a trade and cooperation agreement related to their relationship following Brexit. Future impacts on our U.K. operations and financial results will depend, in part, on the outcome of tariff, trade, regulatory and other negotiations.

Generally, a weaker British pound as compared to the U.S. dollar during a reporting period causes the local currency results of our U.K. operations to be translated into fewer U.S. dollars. Historically, our hedging strategy has included hedging a portion of our exposure to the British pound, thereby reducing our currency risk. We routinely monitor and evaluate this strategy based on risk and will adjust as necessary to minimize exposure to fluctuations in exchange rates related to our U.K. operations. For fiscal 2021, net sales of our U.K. operations were 4% of our consolidated net sales.

Commitments and Contingencies

Contractual Obligations

We have significant contractual obligations to fulfill our business operations including the repayment of short and long term debt, periodic interest payments, minimum levels of pension funding, and other obligations including payments for various leases of real estate, vehicles, and equipment, and minimum fixed costs to be paid to third party logistics vendors. We are also party to various service and supply contracts that generally extend one to three months. These arrangements are primarily individual, short-term purchase orders for routine goods and services at market prices, which are part of our normal operations and are reflected in historical operating cash flow trends. These contracts can generally be canceled at our option at any time. We do not believe such arrangements will adversely affect our liquidity position. In addition, we have various commitments related to service and supply contracts that contain penalty provisions for early termination. Because of the short period between order and shipment date (generally less than one month) for most of our orders, the dollar amount of current backlog is not material and is not considered to be a reliable indicator of future sales volume. Generally, sales to our top customers are made pursuant to purchase orders and we do not have supply agreements or guarantees of minimum purchases from them. As a result, these customers may cancel their purchase orders or reschedule or decrease their level of purchases from us at any time. As of September 30, 2021, we do not believe such purchase arrangements or termination penalties will have a significant effect on our results of operations, financial position or liquidity position in the future.

Environmental Matters

Our operations, like those of other companies, are subject to various federal, state, local and foreign laws and regulations intended to protect public health and the environment. These regulations relate primarily to worker safety, air and water quality, underground fuel storage tanks, and waste handling and disposal. Accrued environmental costs at September 30, 2021 were $11.8. It is difficult to quantify with reasonable certainty the cost of environmental matters, particularly remediation and future capital expenditures for environmental control equipment. Total environmental capital expenditures and operating expenses are not expected to have a material effect on our total capital and operating expenditures, consolidated earnings or competitive position. However, current environmental spending estimates could be modified as a result of changes in our plans or our understanding of underlying facts, changes in legal requirements, including any requirements related to global climate change, or other factors.

Critical Accounting Policies

The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our consolidated financial statements. Specific areas, among others, requiring the application of management’s estimates and judgment include assumptions pertaining to accruals for consumer and trade promotion programs, pension and postretirement benefit costs, share-based compensation, future cash flows associated with impairment testing of goodwill and other long-lived assets, uncertain tax positions, the reinvestment of undistributed foreign earnings and tax valuation allowances. On an ongoing basis, we evaluate our estimates, but actual results could differ materially from those estimates.

Our most critical accounting policies are revenue recognition, pension and other postretirement benefits, the valuation of long-lived assets (including property, plant and equipment), income taxes (including uncertain tax positions) and the carrying value of intangible assets (and the related impairment testing of goodwill and other indefinite-lived intangible assets). A summary of our significant accounting policies is contained in Note 2 of Notes to Consolidated Financial Statements. This listing is not intended to be a comprehensive list of all of our accounting policies.

Revenue Recognition

We derive revenue from the sale of our products. Revenue is recognized when the customer obtains control of the goods, which occurs when the ability to use and obtain benefits from the goods are passed to the customer, most commonly upon the delivery of the goods,. Discounts are offered to customers for early payment, and an estimate of the discounts is recorded as a reduction of Net sales in the same period as the sale. Our standard sales terms are final and returns or exchanges are not permitted with the exception of end of season returns for Sun Care products, as detailed below. Reserves are established and recorded in cases where the right of return does exist for a particular sale.

We assess the contractual obligations in customers’ purchase orders and identify performance obligations related to the transferred goods (or a bundle of goods) that are distinct. To identify the performance obligations, we consider all the goods promised, whether explicitly stated or implied based on customary business practices. Our purchase orders are short term in nature, lasting less than one year, and contain a single delivery element. For a purchase order that has more than one performance obligation, we allocate the total consideration to each distinct performance obligation on a relative stand-alone selling price basis. We do not exclude variable consideration in determining the remaining value of performance obligations.

We record sales at the time that control of goods passes to the customer. The terms of these sales vary, but, in all instances, the following conditions are met: (1) the sales arrangement is evidenced by purchase orders submitted by customers; (2) the selling price is fixed or determinable; (3) title to the product has transferred; (4) there is an obligation to pay at a specified date without any additional conditions or actions required by us; and (5) collectability is reasonably assured. Simultaneously with the sale, we reduce Net sales and Cost of products sold and reserve amounts on the Consolidated Balance Sheet for anticipated returns based upon an estimated return level in accordance with GAAP. Customers are required to pay for the Sun Care product purchased during the season under the required terms. Under certain circumstances, we allow customers to return Sun Care products that have not been sold by the end of the Sun Care season, which is normal practice in the Sun Care industry. The timing of returns of Sun Care products can vary in different regions, based on climate and other factors. However, the majority of returns occur in the U.S. from September through January, following the summer Sun Care season. We estimate the level of Sun Care returns as the Sun Care season progresses, using a variety of inputs including historical experience, consumption trends during the Sun Care season, obsolescence factors including expiration dates and inventory positions at key retailers. We monitor shipment activity and inventory levels at key retailers during the season in an effort to more accurately estimate potential returns. This allows us to manage shipment activity to our customers, especially in the latter stages of the Sun Care season, to reduce the potential for returned product. The level of returns may fluctuate from our estimates due to several factors, including weather conditions, customer inventory levels and competitive activity. Based on our fiscal 2021 Sun Care shipments, each percentage point change in our returns rate would have impacted our reported net sales by $3.4 and our reported operating income by $3.2. At September 30, 2021 and 2020, our reserve on the Consolidated Balance Sheet for returns was $52.7 and $44.8, respectively.

We offer a variety of programs, primarily to our retail customers, designed to promote sales of our products. Such programs require periodic payments and allowances based on estimated results of specific programs and are recorded as a reduction to net sales. We accrue, at the time of sale, the estimated total payments and allowances associated with each transaction. Additionally, we offer programs directly to consumers to promote the sale of our products. Promotions which reduce the ultimate consumer sale prices are recorded as a reduction of net sales at the time the promotional offer is made, generally using estimated redemption and participation levels. Taxes we collect on behalf of governmental authorities, which are generally included in the price to the customer, are also recorded as a reduction of net sales.

We continually assess the adequacy of accruals for customer and consumer promotional program costs not yet paid. To the extent total program payments differ from estimates, adjustments may be necessary. Historically, these adjustments have not been material to annual results.

Pension Plans and Other Postretirement Benefits

The determination of our obligation and expense for pension and other postretirement benefits is dependent on certain assumptions developed by us and used by actuaries in calculating such amounts. Assumptions include, among others, the discount rate, the expected long-term rate of return on plan assets, and future salary increases, where applicable. Actual results that differ from assumptions made are recognized on the balance sheet and subsequently amortized to earnings over future periods. Significant differences in actual experience or significant changes in macroeconomic conditions resulting in changes to assumptions may materially affect pension and other postretirement obligations. In determining the discount rate, we use the yield on high-quality bonds that coincide with the cash flows of our plans’ estimated payouts. For our U.S. plans, which represent our most significant obligations, we use the Mercer yield curve in determining the discount rates.

We utilize a spot discount rate approach to estimate service and interest components of net periodic benefit cost for our pension benefits. The spot discount rate approach applies the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows and is a more precise application of the yield curve spot rates used in the traditional single discount rate approach.

Of the assumptions listed above, changes in the expected long-term rate of return on plan assets and changes in the discount rate used in developing plan obligations will likely have the most significant impact on our annual earnings, prospectively. Based on plan assets at September 30, 2021, a one percentage point decrease or increase in expected asset returns would increase or decrease our pension expense by approximately $5.1. In addition, it may increase and accelerate the rate of required pension contributions in the future. Uncertainty related to economic markets and the availability of credit may produce changes in the yields on corporate bonds rated as high-quality. As a result, discount rates based on high-quality corporate bonds may increase or decrease, leading to lower or higher pension obligations, respectively. A one percentage point decrease in the discount rate would increase pension obligations by approximately $82.5 at September 30, 2021.

As allowed under GAAP, our U.S. qualified pension plan uses market related value, which recognizes market appreciation or depreciation in the portfolio over five years, thereby reducing the short-term impact of market fluctuations.

We have historically provided defined benefit pension plans to our eligible employees, former employees and retirees. We fund our pension plans in compliance with the Employee Retirement Income Security Act of 1974 or local funding requirements.

Further detail on our pension and other postretirement benefit plans is included in Note 12 of Notes to Consolidated Financial Statements.

Share-Based Compensation

We award restricted stock equivalents (“RSE”), which generally vest over two to four years. The fair value of each grant is estimated on the date of grant based on the current market price of our shares of common stock.

We also award performance restricted stock equivalents (“PRSE”) which may provide for the issuance of common stock to certain managerial staff and executive management if specified performance or market targets are achieved. The recipient of the PRSE award may earn a total award ranging from 0% to 200% of the target award.

For PRSE awards with performance conditions, the fair value of each grant is estimated on the date of grant based on the current market price of our shares of common stock. The total amount of compensation expense recognized reflects the initial assumption that target performance goals will be achieved. Compensation expense may be adjusted during the life of the performance grant based on management’s assessment of the probability that performance goals will be achieved. If such goals are not met or it is determined that achievement of performance goals is not probable, compensation expense is adjusted to reflect the reduced expected payout level. If it is determined that the performance goals will be exceeded, additional compensation expense is recognized.

For PRSE awards based on market conditions, the fair value is estimated on the grant date using a Monte Carlo simulation. The payout for PRSE awards with market conditions are assessed by comparing our total shareholder return (“TSR”) during a certain three year period to the respective TSRs of companies in a selected performance peer group.

Non-qualified stock options (“share options”) are granted at the market price of our common stock on the grant date and generally vest ratably over three years. We calculate the fair value of total share-based compensation for share options using the Black-Scholes option pricing model, which utilizes certain assumptions and estimates that have a material impact on the amount of total compensation cost recognized in our consolidated financial statements, including the expected term, expected stock price volatility, risk-free interest rate and expected dividends. The original estimate of the grant date fair value is not subsequently revised unless the awards are modified or there is a change in the number of awards expected to forfeit prior to vesting.

Further detail on Share-Based Payments is included in Note 13 of Notes to Consolidated Financial Statements.

Valuation of Long-Lived Assets

We periodically evaluate our long-lived assets, including property, plant and equipment, goodwill, and intangible assets, for potential impairment indicators. Judgments regarding the existence of impairment indicators, including lower than expected cash flows from acquired businesses, are based on legal factors, market conditions and operational performance. Future events could cause us to conclude that impairment indicators exist. We estimate fair value using valuation techniques such as discounted cash flows. This requires management to make assumptions regarding future income, working capital, and discount rates, which would affect the impairment calculation.

Income Taxes

Our annual effective income tax rate is determined based on our income, statutory tax rates and the tax impacts of items treated differently for tax purposes than for financial reporting purposes. Tax law requires certain items to be included in the tax return at different times than the items reflected in the financial statements. Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences are temporary, reversing over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities.

Deferred tax assets generally represent the tax effect of items that can be used as a tax deduction or credit in future years for which we have already recorded the tax benefit in our income statement. Deferred tax liabilities generally represent tax expense recognized in our financial statements for which payment has been deferred, the tax effect of expenditures for which a deduction has already been taken in our tax return but has not yet been recognized in our financial statements, or assets recorded at estimated fair value in business combinations for which there was no corresponding tax basis adjustment.

We estimate income taxes and the effective income tax rate in each jurisdiction that we operate. This involves estimating taxable earnings, specific taxable and deductible items, the likelihood of generating sufficient future taxable income to utilize deferred tax assets, the portion of the income of foreign subsidiaries that is expected to be remitted to the U.S. and be taxable and possible exposures related to future tax audits. Deferred tax assets are evaluated on a subsidiary by subsidiary basis to ensure that the asset will be realized. Valuation allowances are established when the realization is not deemed to be more likely than not. Future performance is monitored, and when objectively measurable operating trends change, adjustments are made to the valuation allowances accordingly. To the extent the estimates described above change, adjustments to income taxes are made in the period in which the estimate is changed.

We operate in multiple jurisdictions with complex tax and regulatory environments, which are subject to differing interpretations by the taxpayer and the taxing authorities. At times, we may take positions that management believes are supportable, but are potentially subject to successful challenges by the appropriate taxing authority. We evaluate our tax positions and establish liabilities in accordance with guidance governing accounting for uncertainty in income taxes. We review these tax uncertainties in light of the changing facts and circumstances, such as the progress of tax audits, and adjust them accordingly.

Further detail on Income Taxes is included in Note 5 of Notes to Consolidated Financial Statements.

Acquisitions, Goodwill and Intangible Assets

We allocate the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess value of the cost of an acquired business over the estimated fair value of the assets acquired and liabilities assumed is recognized as goodwill. The valuation of the acquired assets and liabilities will impact the determination of future operating results. We use a variety of information sources to determine the value of acquired assets and liabilities, including: third-party appraisers for the values and lives of property, identifiable intangibles and inventories; actuaries for defined benefit retirement plans; and legal counsel or other experts to assess the obligations associated with legal, environmental or other claims.

During fiscal 2020, the Company used variations of the income approach in determining the fair value of intangible assets acquired in the acquisition of Cremo Holding Company, LLC. Specifically, we utilized the multi-period excess earnings method to determine the fair value of the definite lived customer relationships acquired and the relief from royalty method to determine the fair value of the definite lived trade name and proprietary technology that we acquired.

Our determination of the fair value of customer relationships acquired involved significant estimates and assumptions related to revenue growth rates, discount rates, and customer attrition rates. The determination of the fair value of trade names and proprietary technology acquired involved the use of significant estimates and assumptions related to revenue growth rates, royalty rates and discount rates. We believe that the fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that marketplace participants would use.

The recorded value of goodwill and intangible assets from recently acquired businesses are derived from more recent business operating plans and macroeconomic environmental conditions and, therefore, are likely more susceptible to an adverse change that could require an impairment charge. As such, significant judgment is required in estimating the fair value of goodwill and intangible assets. Additionally, significant judgment is needed when assigning a useful life to intangible assets. Certain intangible assets are expected to have determinable useful lives. Our assessment of intangible assets that have a determinable life is based on a number of factors including the competitive environment, market share, brand history, underlying product life cycles, operating plans and the macroeconomic environment. The costs of determinable-lived intangible assets are amortized to expense over the estimated useful life. The value of residual goodwill is not amortized, but is tested at least annually for impairment. See Note 7 of Notes to Consolidated Financial Statements.

However, future changes in the judgments, assumptions and estimates that are used in our acquisition valuations and intangible asset and goodwill impairment testing, including discount rates or future operating results and related cash flow projections, could result in significantly different estimates of the fair values in the future. An increase in discount rates, a reduction in projected cash flows or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect our financial statements in any given year.

During the fourth quarter of fiscal 2021, we performed an annual test for impairment of goodwill on each of our reporting units. We elected to perform a qualitative test of goodwill impairment for the Feminine Care reporting unit. Taking into account the excess fair value over carrying value in the prior valuation, as well as macroeconomic factors, industry conditions and actual results relative to the amounts projected in the prior quantitative test, we determined it was not more likely than not that the fair value of the reporting unit is less than the carrying amount. For the Wet Shave, Sun Care, and Skin Care reporting units, we elected to perform a quantitative impairment test in fiscal 2021. As part of the quantitative goodwill impairment test, we estimated the fair value of each reporting unit using both market and income approaches of valuation. The income approach utilizes the discounted cash flow method and incorporates significant estimates and assumptions, including long-term projections of future cash flows, market conditions, and discount rates reflecting the risk inherent in future cash flows. The projections for future cash flows are generated using our company’s strategic plan to determine a five-year period of forecasted cash flows and operating data. The market approach uses the guideline public company method to calculate the value of each reporting unit based on the operating data of similar assets from competing publicly traded companies. Multiples derived from guideline companies provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. The multiples are adjusted given the specific characteristics of the reporting unit including its position in the market relative to the guideline companies and applied to the reporting unit’s operating data to arrive at an indication of value.

The income and market approaches are weighted based on circumstances specific to each reporting unit and combined are used to calculate fair value.

Determining the fair value of a reporting unit requires the use of significant judgment, estimates and assumptions. While we believe that the estimates and assumptions underlying the valuation methodology are reasonable, these estimates and assumptions could have a significant impact on whether an impairment charge is recognized, and also on the magnitude of any such charge. The results of an impairment analysis are as of a point in time. There is no assurance that actual future earnings or cash flows of the reporting units will not decline significantly from these projections. We will monitor any changes to these assumptions and will evaluate goodwill as deemed warranted during future periods.

The key assumptions for the market and income approaches used to determine fair value of the reporting units are updated at least annually. Those assumptions and estimates include market data and market multiples, discount rates and terminal growth rates, as well as future levels of revenue growth and operating margins based upon our strategic plan. The assumptions used for the annual goodwill impairment test for fiscal year 2021 include terminal growth rates ranging from 0.25% to 2.50% and a weighted-average cost of capital of 9.0%.

Our annual impairment testing date was July 1, 2021, and the valuation indicated there was no impairment of the goodwill of the tested reporting units. The results of the valuation indicated that all reporting units had a fair value that exceeded its carrying value by more than 30%.

We evaluate the fair value of indefinite-lived intangible assets annually in conjunction with the goodwill impairment test. Our assessment of intangible assets that have an indefinite life is based on a number of factors including the competitive environment, market share, brand history, underlying product life cycles, operating plans and the macroeconomic environment.

During the fourth quarter of fiscal 2021, we elected to complete a qualitative assessment for impairment of indefinite lived trade names, except for the Banana Boat trade name, for which we completed a quantitative assessment. There were no significant events nor adverse trends that indicated any of the indefinite lived intangible assets were impaired during the fourth quarter of fiscal 2021.

We tested the Banana Boat trade name for impairment by performing a quantitative assessment to estimate the fair value. The estimated fair value was determined using the multi-period excess earnings method, which requires significant assumptions, including estimates regarding future revenue and operating margin growth, and discount rates. Revenue and operating margin growth assumptions are based on historical trends and management’s expectations for future growth by brand. The discount rates were based on a weighted-average cost of capital utilizing industry market data of similar companies, in addition to estimated returns on the assets utilized in the operations of the applicable reporting unit, including net working capital, fixed assets and intangible assets.

The valuation of the Banana Boat trade name had no indication of impairment as of the annual testing date on July 1, 2021. The impairment analysis performed in fiscal 2021 indicated that the Banana Boat trade name had a fair value that exceeded its carrying value by greater than 40%.

Future changes in the judgment, assumptions and estimates that are used in our impairment testing could result in significantly different estimates of the fair values in the future. An increase in discount rates, a reduction in projected cash flows or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect our financial statements in any given year. The assumptions used for the annual valuation for indefinite-lived intangible assets for fiscal year 2021 include a terminal growth rate of 2.50% and a weighted-average cost of capital of 9.5%.

The annual impairment analysis performed in fiscal 2021 did not indicate that impairment existed in the reporting units or indefinite lived trade names.

Recently Issued Accounting Standards

Refer to Note 2 of Notes to Consolidated Financial Statements for a discussion regarding recently issued accounting standards and their estimated impact on our financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

($ in millions)

The market risk inherent in our financial instruments and positions represents the potential loss arising from adverse changes in currency rates, commodity prices, interest rates, and our stock price. The following risk management discussion and the estimated amounts generated from the sensitivity analysis are forward-looking statements of market risk, assuming certain adverse market conditions occur. Company policy allows derivatives to be used only for identifiable exposures and, therefore, we do not enter into hedges for trading purposes where the sole objective is to generate profits.

Currency Rate Exposure

A significant share of our sales is tied to currencies other than the U.S. dollar, our reporting currency. As such, a weakening of currencies relative to the U.S. dollar can have a negative impact to reported earnings. Conversely, strengthening of currencies relative to the U.S. dollar can improve reported results. The primary currencies to which we are exposed include the euro, the Japanese yen, the British pound, the Canadian dollar and the Australian dollar.

We do business in certain developing markets, which may be susceptible to greater volatility of inflation and currency exchange rates, as well as government pricing and import controls. While the activity is not considered material in relation to the consolidated company as a whole, there could be negative impacts to operating results in certain markets if inflationary pressures, exchange volatility and government controls negatively impact our ability to operate effectively and profitably.

Derivatives Designated as Cash Flow Hedging Relationships

At September 30, 2021, we maintained a cash flow hedging program related to foreign currency risk. These derivative instruments have a high correlation to the underlying exposure being hedged and have been deemed highly effective by the Company for accounting purposes in offsetting the associated risk.

We enter into forward currency contracts to hedge the cash flow uncertainty associated with currency fluctuations. These transactions are accounted for as cash flow hedges. We had an unrealized pre-tax gain of $3.3 and an unrealized pre-tax loss of $3.0 at September 30, 2021 and 2020, respectively, on these forward currency contracts accounted for as cash flow hedges included in Accumulated other comprehensive loss (“AOCI”). Assuming foreign exchange rates versus the U.S. dollar remain at September 30, 2021 levels over the next 12 months, the majority of the pre-tax gain included in AOCI at September 30, 2021 is expected to be included in Other (income) expense, net. Contract maturities for these hedges extend into fiscal year 2023. There were 64 open foreign currency contracts at September 30, 2021 with a notional value of approximately $129.2.

For further information on our derivatives designated as cash flow hedging relationships, see Note 16 of Notes to Consolidated Financial Statements.

Derivatives Not Designated as Cash Flow Hedging Relationships

Our foreign subsidiaries enter into internal and external transactions in the ordinary course of business that create non-functional currency balance sheet positions at the foreign subsidiary level. These exposures are generally the result of intercompany purchases, intercompany loans and, to a lesser extent, external purchases, and are revalued in the foreign subsidiary’s local currency at the end of each period. Changes in the value of the non-functional currency balance sheet positions in relation to the foreign subsidiary’s local currency result in an exchange gain or loss recorded in Other (income) expense, net. The primary currency to which our foreign subsidiaries are exposed is the U.S. dollar.

To mitigate these balance sheet exposures we enter into foreign currency derivative contracts, which are not designated as cash flow hedges for accounting purposes. Any gains or losses on these contracts are expected to be offset by exchange gains or losses on the underlying exposure; thus, they are not subject to significant market risk. The change in the estimated fair value of the foreign currency contracts resulted in a gain of $2.3 and a loss of $0.5 for fiscal 2021 and 2020, respectively, which were recorded in Other (income) expense, net. There were five open foreign currency derivative contracts which were not designated as cash flow hedges at September 30, 2021, with a notional value of approximately $42.0.

For further information on our derivatives not designated as cash flow hedging relationships, see Note 16 of Notes to Consolidated Financial Statements.

Commodity Price Exposure

We use raw materials that are subject to price volatility. At times, we have used, and may in the future, use hedging instruments to reduce exposure to variability in cash flows associated with future purchases of certain materials and commodities. At September 30, 2021, there were no open derivative or hedging instruments for future purchases of raw materials or commodities.

Interest Rate Exposure

Our exposure to interest rate risk relates primarily to our variable-rate debt instruments, which currently bear interest based on LIBOR plus margin. As of September 30, 2021, our outstanding debt included $26.5 related to our international, variable-rate note payable. Assuming a one percent increase in the applicable interest rates, annual interest expense would increase by approximately $0.3.

The remaining outstanding debt as of September 30, 2021 is fixed-rate debt. Changes in market interest rates generally affect the fair value of fixed-rate debt, but do not impact earnings or cash flows.

Item 8. Financial Statements and Supplementary Data.

INDEX TO FINANCIAL STATEMENTS

Consolidated Financial Statements

Responsibility for Financial Statements 44

Report of Independent Registered Public Accounting Firm 45

Consolidated Balance Sheets as of September 30, 2021 and 2020. 48

Notes to Consolidated Financial Statements. 52

Responsibility for Financial Statements

The preparation and integrity of the financial statements of Edgewell Personal Care Company (the “Company”) are the responsibility of its management. These statements have been prepared in conformance with generally accepted accounting principles(“GAAP”) in the United States of America, and in the opinion of management, fairly present the Company’s financial position, results of operations and cash flows.

The Company maintains accounting and internal control systems, which it believes are adequate to provide reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition and that financial records are reliable for preparing financial statements. The selection and training of qualified personnel, the establishment and communication of accounting and administrative policies and procedures, and a program of internal audits are important elements of these control systems.

The Board of Directors, through its Audit Committee consisting solely of non-management directors, meets periodically with management, internal audit and the independent auditors to discuss audit and financial reporting matters. To ensure independence, our auditor, PricewaterhouseCoopers LLP, has direct access to the Audit Committee.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Edgewell Personal Care Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Edgewell Personal Care Company and its subsidiaries (the “Company”) as of September 30, 2021 and 2020, and the related consolidated statements of earnings and comprehensive income (loss), of changes in shareholders’ equity and of cash flows for each of the three years in the period ended September 30, 2021, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended September 30, 2021 appearing under Item 15(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessment – Skin Care Reporting Unit

As described in Notes 2 and 7 to the consolidated financial statements, the Company’s consolidated goodwill, net balance as of September 30, 2021 was $1,162.8 million, which includes $232.1 million related to the Skin Care reporting unit. Management evaluates goodwill annually for impairment in the fourth fiscal quarter, or when indicators of a potential impairment are present. The impairment assessment compares the carrying value of the reporting unit to the estimated fair value. In determining the estimated fair value of the reporting unit when performing a quantitative analysis, both the market approach and the income approach are considered in the valuation, and where appropriate, both methods will be used and weighted, unless appropriate market comparables are not available for a reporting unit. The key assumptions and estimates for the market and income approaches used to determine fair value of the reporting unit included market data and market multiples, the discount rate and terminal growth rate, as well as future levels of revenue growth and operating margins, which are based upon the Company’s strategic plan.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment for the Skin Care reporting unit is a critical audit matter are the significant judgment by management when developing the fair value measurement of the reporting unit; this in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to management’s significant assumptions of future operating margin and the discount rate. In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the determination of the fair value of the Company’s Skin Care reporting unit. These procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the Skin Care reporting unit, (ii) evaluating the appropriateness of the income and market approaches, (iii) testing the completeness and accuracy of underlying data used in the income and market approaches, and (iv) evaluating the reasonableness of significant assumptions used by management related to operating margins and discount rates. Evaluating management’s assumptions related to the future operating margins and discount rate involved evaluating whether the assumptions used by management were reasonable considering (i) current and past performance of the reporting unit, (ii) relevant industry forecasts and macroeconomic conditions, (iii) management’s historical forecasting accuracy, (iv) consistency with evidence obtained in other areas of the audit, and (v) management’s objectives and strategies. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of management’s income and market approaches and the discount rate assumptions.

/s/ PricewaterhouseCoopers LLP

St. Louis, Missouri

November 19, 2021

We have served as the Company’s auditor since 1999.

EDGEWELL PERSONAL CARE COMPANY

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (LOSS)

(in millions, except per share data)

Fiscal Year

Selling, general and administrative expense 391.2 408.8 372.0

Research and development expense 57.8 55.3 53.5

Impairment charges — — 570.0

Gain on sale of Infant and Pet Care business — (4.1) —

Cost of early retirement of long-term debt 26.1 26.2 —

Interest expense associated with debt 67.9 61.2 62.6

Other (income) expense, net (1.2) 5.4 1.5

Income tax provision (benefit) 29.0 19.7 (18.1)

Earnings (loss) per share (Note 6):

Basic net earnings (loss) per share 2.15 1.25 (6.88)

Diluted net earnings (loss) per share 2.12 1.24 (6.88)

Statements of Comprehensive Income (Loss):

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments 5.6 29.9 (36.7)

Total other comprehensive income (loss), net of tax 54.7 44.3 (87.6)

See accompanying Notes to Consolidated Financial Statements.

EDGEWELL PERSONAL CARE COMPANY

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

Assets

Current assets

Cash and cash equivalents $ 479.2 $ 364.7

Property, plant and equipment, net 362.6 370.9

Liabilities and Shareholders’ Equity

Current liabilities

Current maturities of long-term debt $ — $ —

Deferred income tax liabilities 129.0 102.5

Commitments and contingencies (Note 17)

Shareholders’ equity

Accumulated other comprehensive loss (136.9) (191.6)

Total liabilities and shareholders’ equity $ 3,674.6 $ 3,540.9

See accompanying Notes to Consolidated Financial Statements.

EDGEWELL PERSONAL CARE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Fiscal Year

Cash Flow from Operating Activities

Adjustments to reconcile net earnings (loss) to net cash flow from operations:

Share-based compensation expense 27.3 19.2 17.8

Deferred income taxes 9.6 (2.9) (59.6)

Deferred compensation payments (9.3) (8.7) (7.5)

Loss on sale of assets 0.9 2.3 1.5

Gain on sale of Infant and Pet Care business — (4.1) —

Cost of early retirement of long-term debt 26.1 26.2 —

Impairment charge — — 570.0

Accounts receivable, net 3.7 66.3 (1.9)

Cash Flow from Investing Activities

Acquisitions, net of cash acquired (0.3) (233.6) —

Proceeds from sale of Infant Care business 7.5 95.8 —

Investment in equity securities — (13.8) —

Proceeds from sale of other assets — — 4.1

Collection of deferred purchase price from accounts receivable sold 2.6 4.3 9.7

Net cash used by investing activities (48.7) (196.4) (45.5)

EDGEWELL PERSONAL CARE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(in millions)

Fiscal Year

Cash Flow from Financing Activities

Cash proceeds from the issuance of Senior Notes due 2029 500.0 — —

Cash payments on Senior Notes due 2022 (500.0) — —

Cash proceeds from the issuance of Senior Notes due 2028 — 750.0 —

Cash payments on Senior Notes due 2021 — (600.0) —

Term Loan repayment — — (185.0)

Net increase in debt with original maturities of 90 days or less 4.2 3.0 5.8

Debt issuance costs for the Revolving Credit Facility — (3.6) —

Debt issuance costs for Senior Notes due 2029 (6.5) — —

Debt issuance costs for Senior Notes due 2028 — (11.7) —

Cost of early retirement of long-term debt (26.1) (26.2) —

Dividends paid (25.6) — —

Repurchase of shares (9.2) — —

Employee shares withheld for taxes (4.2) (2.0) (3.0)

Other, net (0.4) — —

Net cash used by financing activities (65.4) (18.7) (63.8)

Effect of exchange rate changes on cash (0.4) 5.6 (6.1)

Net increase in cash and cash equivalents 114.5 23.1 75.2

Cash and cash equivalents, beginning of period 364.7 341.6 266.4

Cash and cash equivalents, end of period $ 479.2 $ 364.7 $ 341.6

Supplemental Disclosures of Cash Flow Information:

Cash paid for interest, net $ 61.0 $ 56.1 $ 60.6

Cash paid for income taxes, net 25.4 24.6 58.0

See accompanying Notes to Consolidated Financial Statements.

EDGEWELL PERSONAL CARE COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in millions)

Common Shares Treasury Shares

Foreign currency translation adjustments — — — — — — (36.7) (36.7)

Pension and postretirement activity — — — — — — (49.5) (49.5)

Deferred loss on hedging activity — — — — — — (1.4) (1.4)

Activity under share plans — — 0.2 15.4 (0.6) — — 14.8

Net earnings — — — — — 67.6 — 67.6

Foreign currency translation adjustments — — — — — — 29.9 29.9

Pension and postretirement activity — — — — — — 17.7 17.7

Deferred loss on hedging activity — — — — — — (3.3) (3.3)

Activity under share plans — — 0.1 13.4 4.1 — — 17.5

Dividends declared to common shareholders — — — — — (33.7) — (33.7)

Foreign currency translation adjustments — — — — — — 5.6 5.6

Pension and postretirement activity — — — — — — 44.8 44.8

Deferred gain on hedging activity — — — — — — 4.3 4.3

Repurchase of shares — — (0.3) (9.2) — — — (9.2)

Activity under share plans — — 0.3 23.3 (0.7) — — 22.6

(1)Cumulative retained earnings adjustment for the adoption of ASU 2016-06, “Income Taxes - Intra-Entity Transfers of Assets Other than Inventory”.

See accompanying Notes to Consolidated Financial Statements.

EDGEWELL PERSONAL CARE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share data)

Note 1 - Background and Basis of Presentation

Background

Edgewell Personal Care Company and its subsidiaries (collectively, “Edgewell” or the “Company”), is one of the world’s largest manufacturers and marketers of personal care products in the wet shave, sun and skin care and feminine care categories. Edgewell operates in more than 20 countries and has a global footprint in more than 50 countries.

The Company conducts its business in the following three segments:

•Wet Shave consists of products sold under the Schick®, Wilkinson Sword®, Edge, Skintimate®, Shave Guard and Personna® brands, as well as non-branded products. The Company’s wet shave products include razor handles and refillable blades, disposable shave products and shaving gels and creams.

•Sun and Skin Care consists of Banana Boat® and Hawaiian Tropic® sun care products, Jack Black®, Bulldog® and Cremo® men’s grooming products, and Wet Ones® products.

•Feminine Care includes tampons, pads and liners sold under the Playtex Gentle Glide® and Sport®, Stayfree®, Carefree® and o.b.® brands.

Through December 2019, the Company also conducted business in its All Other segment which included infant care products, such as bottles, cups and pacifiers, sold under the Playtex®, OrthoPro® and Binky® brand names, as well as the Diaper Genie® and Litter Genie® disposal systems. The Company completed the sale of the Infant and Pet Care business in December 2019.

Basis of Presentation

The accompanying Consolidated Financial Statements include the accounts of the Company and its controlled subsidiaries and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”), under the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results may differ materially from those estimates.All intercompany balances and transactions have been eliminated in consolidation and, in the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included.

Acquisition of Cremo. On September 2, 2020, the Company completed the acquisition of Cremo Holding Company, LLC (“Cremo”), a men’s skincare products company based in the U.S. The results of Cremo for the post-acquisition period are included within the Company’s results since the acquisition date for the fiscal year ended September 30, 2021 and 2020. For more information on the acquisition, see Note 3 of Notes to Consolidated Financial Statements.

Sale of Infant and Pet Care assets. On December 17, 2019, the Company completed the sale of its Infant and Pet Care business which was included in the All Other segment through the date of the sale. The All Other segment will have no further operating results after the first quarter of fiscal 2020. Operations for the Company’s manicure kits were reclassified to the Sun and Skin Care segment for all periods presented as these products were not part of the divestiture. The impact of recasting the prior period segment information was not material. For more information on the sale of the Infant and Pet Care business, see Note 3 of Notes to Consolidated Financial Statements.

Note 2 - Summary of Significant Accounting Policies

Foreign Currency Translation

Financial statements of foreign operations where the local currency is the functional currency are translated using end-of-period exchange rates for assets and liabilities, and average exchange rates during the period for results of operations. Related translation adjustments are reported as a component within accumulated other comprehensive income in the shareholders’ equity section of the Consolidated Balance Sheets, except as noted below.

Gains and losses resulting from foreign currency transactions are included in Net earnings (loss). Foreign currency losses of $0.5, $10.5 and $3.9 during fiscal 2021, 2020 and 2019, respectively, were included within Other (income) expense, net. The Company uses foreign exchange (“FX”) instruments to reduce the risk of FX transactions as described below and in Note 16 of Notes to Consolidated Financial Statements.

Financial Instruments and Derivative Securities

The Company uses financial instruments, from time to time, in the management of foreign currency, interest rate, and other risks that are inherent to its business operations. Such instruments are not held or issued for trading purposes.

FX instruments, including forward currency contracts, are used primarily to reduce cash transaction exposures and, to a lesser extent, to manage other translation exposures. FX instruments are selected based on their risk reduction attributes, costs, and related market conditions. The Company has designated certain foreign currency contracts as cash flow hedges for accounting purposes as of September 30, 2021.

At September 30, 2021, the Company had $26.5 of variable rate debt outstanding. In the past the Company has used interest rate swaps to hedge the risk of variable rate debt. As of September 30, 2021, the Company did not have any outstanding interest rate swap agreements.

For further discussion, see Note 11 and Note 16 of Notes to Consolidated Financial Statements.

Cash Equivalents

Cash equivalents are considered to be highly liquid investments with a maturity of three months or less when purchased. At September 30, 2021, the Company had $479.2 in available cash and cash equivalents, a portion of which was outside of the U.S. The Company has extensive operations outside of the U.S., including a significant manufacturing footprint. The Company manages its worldwide cash requirements by reviewing available funds among the many subsidiaries through which it conducts its business and the cost effectiveness with which those funds can be accessed. The repatriation of cash balances from certain of the Company’s subsidiaries could have adverse tax consequences or be subject to regulatory capital requirements; however, those balances are generally available without legal restrictions to fund ordinary business operations.

Cash Flow Presentation

The Consolidated Statements of Cash Flows are prepared using the indirect method, which reconciles Net earnings (loss) to Net cash from operating activities. The reconciliation adjustments include the removal of timing differences between the occurrence of operating receipts and payments and their recognition in Net earnings (loss). The adjustments also remove cash flows arising from investing and financing activities, which are presented separately from operating activities. Cash flows from foreign currency transactions and operations are translated at an average exchange rate for the period. Cash flows from hedging activities are included in the same category as the items being hedged, which is primarily operating activities. Cash payments related to income taxes are classified as operating activities.

Trade Receivables

Trade receivables are stated at their net realizable value. The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the trade receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. Bad debt expense is included in Selling, general and administrative expense (“SG&A”). The Company began an accounts receivable factoring program in September 2017. For further discussion, see Note 10 of Notes to Consolidated Financial Statements.

Inventories

Inventories are valued at the lower of cost or net realizable value, with cost generally determined using average cost or the first-in, first-out (“FIFO”) method.

Capitalized Software Costs

Capitalized software costs are included in Property, plant and equipment, net. These costs are amortized using the straight-line method over periods of related benefit ranging from three to seven years. Expenditures related to capitalized software are included within Capital expenditures in the Consolidated Statements of Cash Flows. Amortization expense associated with capitalized software was $4.5, $5.2, and $4.3 in fiscal 2021, 2020 and 2019, respectively.

Property, Plant and Equipment, net

Property, plant and equipment, net (“PP&E”) is stated at historical cost. PP&E acquired as part of a business combination is recorded at estimated fair value. Expenditures for new facilities and expenditures that substantially increase the useful life of property, including interest during construction, are capitalized and reported as Capital expenditures in the accompanying Consolidated Statements of Cash Flows. Maintenance, repairs and minor renewals are expensed as incurred. When property is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and gains or losses on the disposition are reflected in Net earnings (loss). Depreciation is generally provided on the straight-line basis by charges to earnings at rates based on estimated useful lives. Estimated useful lives range from two to 10 years for machinery and equipment and three to 30 years for buildings and building improvements. Depreciation expense was $60.6, $66.3 and $69.9 in fiscal 2021, 2020 and 2019, respectively. Fiscal 2019 depreciation expense includes accelerated depreciation charges of $1.9 related to restructuring activities. See Note 4 of Notes to Consolidated Financial Statements for further information on restructuring charges.

Estimated useful lives are periodically reviewed and, when appropriate, changes are made and accounted for prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts.

Goodwill and Other Intangible Assets

Goodwill and indefinite-lived intangibles are not amortized but are instead evaluated annually for impairment as part of the Company’s annual business planning cycle in the fourth fiscal quarter, or when indicators of a potential impairment are present. The annual test for impairment performed for goodwill can be qualitative or quantitative, taking into consideration certain factors surrounding the fair value of the goodwill including, level by which fair value exceeded carrying value in the prior valuation, as well as macroeconomic factors, industry conditions and actual results at the test date. The quantitative analysis to test for impairment will estimate the fair value of each reporting unit (Wet Shave, Sun Care, Skin Care and Feminine Care) using valuation models that incorporate assumptions and projections of expected future cash flows and operating plans. In determining the estimated fair value of the reporting units when performing a quantitative analysis, both the market approach and the income approach are considered in the valuation, and where appropriate, both methods will be used and weighted, unless appropriate market comparables are not available for a reporting unit.

Determining the fair value of a reporting unit requires the use of significant judgment, estimates, and assumptions. While the Company believes that the estimates and assumptions underlying the valuation methodology are reasonable, these estimates and assumptions could have a significant impact on whether an impairment charge is recognized and the magnitude of any such charge. The results of an impairment analysis are as of a point in time. There is no assurance that actual future earnings or cash flows of the reporting units will not vary significantly from these projections. The Company will monitor any changes to these assumptions and will evaluate the carrying value of goodwill as warranted during future periods.

The key assumptions and estimates for the market and income approaches used to determine fair value of the reporting units included market data and market multiples, discount rates and terminal growth rates, as well as future levels of revenue growth, and operating margins, based upon the Company’s strategic plan.

The Company evaluates indefinite-lived intangible assets, which consist of trademarks and brand names used across the Company’s segments for impairment on an annual basis. Similar to goodwill, the impairment test can be qualitative or quantitative, taking into consideration certain factors surrounding the fair value of the brand names including, level by which fair value exceeded carrying value in the prior valuation, as well as macroeconomic factors, industry conditions and actual results at the test date. The quantitative test will determine the fair value using one of two income approaches: (i) the multi-period excess earnings method and (ii) the relief-from-royalty method, both of which require significant assumptions, including estimates regarding future revenue and operating margin growth, discount rates, and appropriate royalty rates. Revenue and operating margin growth assumptions are based on historical trends and management’s expectations for future growth by brand. The discount rates were based on a weighted-average cost of capital utilizing industry market data of similar companies and estimated returns on the assets utilized in the operations of the applicable reporting unit, including net working capital, fixed assets and intangible assets. The Company estimated royalty rates based on operating profits of the brand.

Intangible assets with finite lives, and a remaining weighted-average life of approximately seven years, are amortized on a straight-line basis over expected lives of five to 20 years. Such intangibles are also evaluated for impairment including ongoing monitoring of potential impairment indicators.

Refer to Note 7 of Notes to Consolidated Financial Statements for further discussion on goodwill and other intangible assets.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, other than goodwill and other intangible assets, for impairment when events or changes in business circumstances indicate that the remaining useful life may warrant revision or that the carrying amount of the long-lived asset may not be fully recoverable. The Company performs an undiscounted cash flow analysis to determine if impairment exists for an asset or asset group. If impairment is determined to exist, any related impairment loss is calculated based on estimated fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less cost of disposal.

Revenue Recognition

Principal Revenue Streams and Significant Judgments

Our principal revenue streams can be divided into: (i) sale of personal care products primarily through retailers in North America; (ii) sale of personal care products through a combination of retailers and distributors internationally; and (iii) production and sale of private brands products in North America and internationally that are made to customer specifications.

Performance Obligations

The Company’s revenue is generated from the sale of its products. Revenue is recognized when the customer obtains control of the goods, which occurs when the ability to use and obtain benefits from the goods are passed to the customer, most commonly upon the delivery of goods to the customer. Discounts are offered to customers for early payment and an estimate of discounts is recorded as a reduction of Net sales in the same period as the sale. The Company’s standard sales terms are final and returns or exchanges are not permitted with the exception of end of season returns for Sun Care products. Reserves are established and recorded in cases where the right of return exists for a particular sale.

The Company assesses the goods promised in its customers’ purchase orders and identifies a performance obligation to transfer goods (or a bundle of goods) that is distinct. To identify the performance obligations, the Company considers all the goods promised, whether explicitly stated or implied based on customary business practices. The Company’s purchase orders are short term in nature, lasting less than one year and contain a single delivery element. For a purchase order that has more than one performance obligation, the Company allocates the total consideration to each distinct performance obligation on a relative stand-alone selling price basis. The Company does not exclude variable consideration in determining the remaining value of performance obligations.

Significant Judgments

The Company records sales at the time that control of goods pass to the customer. The terms of these sales vary but the following conditions are applicable to all sales: (i) the sales arrangement is evidenced by purchase orders submitted by customers; (ii) the selling price is fixed or determinable; (iii) title to the product has transferred; (iv) there is an obligation to pay at a specified date without any additional conditions or actions required by the Company; and (v) collectability is reasonably assured. Simultaneously with the sale, the Company reduces Net sales and Cost of products sold and reserves amounts on its Consolidated Balance Sheet for anticipated returns based upon an estimated return level in accordance with GAAP. The Company also allows for returns of other products under limited circumstances. Customers are required to pay for

the Sun Care product purchased during the season under the required terms. Under certain circumstances, the Company allows customers to return Sun Care products that have not been sold by the end of the Sun Care season, which is normal practice in the Sun Care industry. The timing of returns of Sun Care products can vary in different regions based on climate and other factors. However, the majority of returns occur in the U.S. from September through January following the summer Sun Care season. The Company estimates the level of Sun Care returns as the Sun Care season progresses using a variety of inputs including historical experience, consumption trends during the Sun Care season, obsolescence factors including expiration dates and inventory positions at key retailers. The Company monitors shipment activity and inventory levels at key retailers during the season in an effort to more accurately estimate potential returns. This allows the Company to manage shipment activity to its customers, especially in the latter stages of the Sun Care season, to reduce the potential for returned product. The Company also allows for returns of other products under limited circumstances. Non-Sun Care returns are evaluated each period based on communications with customers and other issues known as of period end. The Company had a reserve for returns of $52.7 and $44.8 at September 30, 2021 and September 30, 2020, respectively. The adoption of ASU 2014-09, which updated the guidance related to accounting for revenue from contracts with customers, required changes in the presentation of returns on the Consolidated Balance Sheet, namely that a return asset should be recognized for returns expected to be resold, measured at the carrying amount of goods at the time of sale, less the expected costs to recover the goods and any expected reduction in value.

In addition, the Company offers a variety of programs, such as consumer coupons and rebate programs, primarily to its retail customers, designed to promote sales of its products. Such programs require periodic payments and allowances based on estimated results of specific programs and are recorded as a reduction to Net sales. The Company accrues, at the time of sale, the estimated total payments and allowances associated with each transaction. Additionally, the Company offers programs directly to consumers to promote the sale of its products. Promotions which reduce the ultimate consumer sale price are recorded as a reduction of Net sales at the time the promotional offer is made using estimated redemption and participation levels. Taxes the Company collects on behalf of governmental authorities, which are generally included in the price to the customer, are also recorded as a reduction of Net sales. The Company continually assesses the adequacy of accruals for customer and consumer promotional program costs not yet paid. To the extent total program payments differ from estimates, adjustments may be necessary. Historically, these adjustments have not been material.

Contract Balances

The timing of revenue recognition is based on completion of performance obligations through the transfer of goods. Standard payment terms with customers require payment after goods have been delivered and risk of ownership has transferred to the customer. The Company has contract liabilities as a result of advanced payments received from certain customers before goods have been delivered and all performance obligations have been completed. Contract liabilities were $0.6 and $1.4 at September 30, 2021 and September 30, 2020, respectively, and were classified within Other current liabilities on our Consolidated Balance Sheets. Substantially all of the amount deferred will be recognized within a year, with the significant majority to be captured within a quarter following deferral.

Trade receivables are stated at their net realizable value. The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in its receivables portfolio determined by historical experience, specific allowances for known troubled accounts, and other currently available information.

Advertising and Sales Promotion Costs

The Company advertises and promotes its products through national and regional media and expenses such activities as incurred. Advertising and sales promotion expense reported on the Consolidated Statements of Earnings and Comprehensive Income (Loss) includes advertising costs of $142.3, $121.2 and $137.9 for fiscal 2021, 2020 and 2019, respectively.

Share-Based Payments

The Company grants restricted share equivalents (“RSE”), which generally vest over two to four years. The estimated fair value of each grant is estimated on the date of grant based on the current market price of the Company’s common shares. The original estimate of the grant date fair value is not subsequently revised unless the awards are modified. The Company has elected to recognize forfeiture of awards as they occur. A portion of the RSE awards provide for the issuance of common stock to certain managerial staff and executive management if the Company achieves specified performance targets. The total amount of compensation expense recognized reflects the initial assumption that target performance goals will be achieved. Compensation expense may be adjusted during the life of the performance grant based on management’s assessment of the probability that performance targets will be achieved. If such targets are not met or it is determined that achievement of performance goals is not probable, compensation expense is adjusted to reflect the reduced expected payout level in the period the determination is made. If it is determined that the performance targets will be exceeded, additional compensation expense is recognized.

Non-qualified stock options (“Share Options”) are granted at the market price on the grant date and generally vest ratably over three years. The Company calculates the fair value of total share-based compensation for Share Options using the Black-Scholes option pricing model, which utilizes certain assumptions and estimates that have a material impact on the amount of total compensation cost recognized in the Consolidated Financial Statements, including the expected term, expected share price volatility, risk-free interest rate and expected dividends. The original estimate of the grant date fair value is not subsequently revised unless the awards are modified. The Company has elected to recognize forfeiture of awards as they occur.

Income Taxes

The Company’s annual effective income tax rate is determined based on its pre-tax income (loss), statutory tax rates and the tax impacts of items treated differently for tax purposes than for financial reporting purposes. Tax law requires that certain items be included in its federal tax return at different times than the items are reflected in the financial statements. Some of these differences are permanent, such as expenses that are not deductible in the Company’s tax return, and some differences are temporary, reversing over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities.

Deferred tax assets generally represent the tax effect of items that can be used as a tax deduction or credit in future years for which the Company has already recorded the tax benefit in the Consolidated Statement of Earnings. Deferred tax liabilities generally represent tax expense recognized in the Company’s financial statements for which payment has been deferred, the tax effect of expenditures for which a deduction has already been taken in its tax return but has not yet been recognized in its financial statements or assets recorded at estimated fair value in business combinations for which there was no corresponding tax basis adjustment.

The Company estimates income taxes and the effective income tax rate in each jurisdiction that it operates. This involves estimating taxable earnings, specific taxable and deductible items, the likelihood of generating sufficient future taxable income to utilize deferred tax assets, the portion of the income of foreign subsidiaries that is expected to be remitted to the U.S. and be taxable and possible exposures related to future tax audits. Deferred tax assets are evaluated on a subsidiary by subsidiary basis to ensure that the asset will be realized. Valuation allowances are established when the realization is not deemed to be more likely than not. Future performance is monitored, and when objectively measurable operating trends change, adjustments are made to the valuation allowances accordingly. To the extent the estimates described above change, adjustments to income taxes are made in the period in which the estimate is changed.

The Company operates in multiple jurisdictions with complex tax and regulatory environments, which are subject to differing interpretations by the taxpayer and the taxing authorities. At times, the Company may take positions that management believes are supportable but are potentially subject to successful challenges by the appropriate taxing authority. The Company evaluates its tax positions and establishes liabilities in accordance with guidance governing accounting for uncertainty in income taxes. The Company reviews these tax uncertainties in light of changing facts and circumstances, such as the progress of tax audits, and adjusts them accordingly.

Estimated Fair Values of Financial Instruments

Certain financial instruments are required to be recorded at estimated fair value. Changes in assumptions or estimation methods could affect the fair value estimates; however, the Company does not believe any such changes would have a material impact on its financial condition, results of operations or cash flows. Other financial instruments including cash and cash equivalents and short-term borrowings, including notes payable, are recorded at cost, which approximates estimated fair value. The estimated fair values of long-term debt and financial instruments are disclosed in Note 16 of Notes to Consolidated Financial Statements.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13 intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The new guidance applies to all financial instruments, including trade receivables, and requires the measurement of all expected credit losses for financial assets held at a reporting date to be based on historical experience, current conditions and reasonable and supportable forecasts. Previous guidance did not include forward-looking information. The Company adopted the standard effective as of October 1, 2020. The Company evaluates the creditworthiness of customers when negotiating contracts and, as trade receivables are short term in nature, the timing between recognition of a credit loss under existing guidance and the new guidance was not materially different for the Company.

In August 2018, the FASB issued ASU 2018-13, which adjusts disclosure requirements for fair value measurements. The guidance updates the disclosure requirements regarding leveling of fair value assets and the valuation of Level 3 fair value measurements. The update was effective for the Company beginning October 1, 2020 and early adoption was permitted. The Company believes that the standard did not result in material changes to its required disclosures.

In August 2018, the FASB issued ASU 2018-14, which modifies disclosure requirements for defined benefit pension plans and other post retirement plans. The guidance removes disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. The new standard was effective for the Company beginning October 1, 2020 and early adoption was permitted. The Company believes that the standard did not result in material changes to its required disclosures.

In August 2018, the FASB issued ASU 2018-15, which 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. The amendments in this standard require an entity that is the customer in a hosting arrangement to follow the guidance on internal-use software to determine which implementation costs to capitalize and which costs to expense. The standard also requires a customer to expense the capitalized implementation costs of a hosting arrangement over the term of the hosting arrangement. The new guidance requires an entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The entity is also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented. The Company adopted the standard effective as of October 1, 2020 on a prospective basis. The Company notes the guidance has not had a material impact on its financial statements through fiscal 2021.

Recently Issued Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, which eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period when interim loss exceeds anticipated loss for the year, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted this standard as of October 1, 2021. There was no cumulative effect adjustment recorded to retained earnings as the amount was not material. The effects of this standard on our financial position, results of operations and cash flows were not material.

Note 3 - Business Combinations and Divestitures

Cremo Holding Company, LLC

On September 2, 2020, the Company completed the acquisition (“Acquisition”) of Cremo Holding Company, LLC (“Cremo”). The Company accounted for the Acquisition utilizing the acquisition method of accounting, which requires assets and liabilities to be recognized based on estimates of their acquisition date fair values. The determination of the values of the acquired assets and assumed liabilities, including goodwill and other intangible assets, requires significant judgment. We have calculated fair values of the assets and liabilities acquired from Cremo including goodwill and intangible assets and working capital. The Company completed the final fair value determination of the Acquisition in the first quarter of fiscal year 2021.

The Company used variations of the income approach in determining the fair value of intangible assets acquired in the Acquisition. Specifically, we utilized the multi-period excess earnings method to determine the fair value of the definite lived customer relationships acquired and the relief from royalty method to determine the fair value of the definite lived trade name and proprietary technology acquired. Our determination of the fair value of the intangible assets acquired involved the use of significant estimates and assumptions related to revenue growth rates, discount rates, customer attrition rates, and royalty rates. The Company believes that the fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that marketplace participants would use.

The Company’s purchase price allocation included net assets of $234.6 and consisted of working capital and other net assets of $11.5 (including cash of $0.7), other intangible assets of $95.1, and goodwill of $128.0, representing the value of expansion into new markets and channels of trade. The acquired goodwill is deductible for tax purposes. The intangible assets acquired consisted primarily of the Cremo trade name, customer relationships, and product formulations with a weighted-average useful life of 17 years. All assets are included in the Company’s Sun and Skin Care segment.

The Company noted that the net sales and net earnings of Cremo from the beginning of fiscal 2020 through the date of the closing of the Acquisition were not material relative to the total net sales and net earnings of the Company during fiscal 2020, and thus pro-forma results for Cremo were not disclosed in accordance with Accounting Standards Codification 805. Acquisition and integration costs related to Cremo totaling $7.1 and $7.0 for the year ended September 30, 2021 and 2020, respectively, were included in SG&A on the Consolidated Statement of Earnings and Comprehensive Income. Additionally, acquisition costs of $1.3 and $0.6 were included in Cost of products sold for the year ended September 30, 2021 and 2020, respectively.

Sale of Infant and Pet Care Business

On December 17, 2019, the Company completed the sale of its Infant and Pet Care business included in the All Other segment for $122.5, which included consideration for providing services to the purchaser for up to one year under a transition services agreement. The Company received proceeds of $115.0, which includes consideration for providing support under the transition services agreement, with the remaining sales price receivable of $5.0 reported in current assets as of September 30, 2021. Total assets included in the sale were comprised of $18.8 of inventory, $3.6 of property, plant and equipment, and $77.8 of goodwill and intangible assets. The sale of the Infant and Pet Care business resulted in a gain of $4.1 in the Company’s 2020 Consolidated Statement of Earnings. The gain on the sale was net of expenses incurred to facilitate the closing of the transaction and in support of the transition services agreement.

Note 4 - Restructuring Charges

Project Fuel

The Company does not include Project Fuel restructuring costs in the results of its reportable segments. However, the estimated impact of allocating such charges to segment results for fiscal 2021, 2020, and 2019 would have been as follows:

WetShave Sun and Skin Care Feminine Care All Other Corporate Total

Project Fuel

Severance and related benefit costs $ 1.5 $ 0.1 $ — $ — $ 7.8 $ 9.4

Asset impairment and accelerated depreciation 1.1 — — — — $ 1.1

Wet Shave Sun and Skin Care Feminine Care All Other Corporate Total

Project Fuel

Severance and related benefit costs $ 0.2 $ 0.3 $ — $ — $ 7.6 $ 8.1

Asset impairment and accelerated depreciation 1.7 — — — — $ 1.7

Wet Shave Sun and Skin Care Feminine Care All Other Corporate Total

Project Fuel

Severance and related benefit costs $ 12.3 $ 2.2 $ 1.2 $ 0.5 $ 7.3 $ 23.5

Asset impairment and accelerated depreciation 3.1 — — — 1.1 $ 4.2

Consulting, project implementation and management and other exit costs include pre-tax SG&A associated with certain information technology enablement expenses and compensation expenses related to Project Fuel of $8.7, $13.3, and $8.6 for fiscal 2021, 2020, and 2019, respectively. Asset impairment and accelerated depreciation includes pre-tax Cost of products sold associated with inventory obsolescence related to Project Fuel of $0.6 and $0.2 for fiscal 2021 and 2020, respectively. Project-to-date restructuring costs inclusive of information technology enablement charges and inventory obsolescence totaled $163.7.

Restructuring Reserves

The following table summarizes Project Fuel activities and related accruals:

Utilized

October 1, 2020 Charge toIncome Other (1) Cash Non-Cash September 30, 2021

Restructuring

Severance and termination related costs $ 4.3 $ 9.4 $ — $ (11.8) $ — $ 1.9

Asset impairment and accelerated depreciation — 1.1 — — (1.1) —

Utilized

October 1, 2019 Charge toIncome Other (1) Cash Non-Cash September 30,2020

Restructuring

Severance and termination related costs $ 8.2 $ 8.1 $ 0.1 $ (12.1) $ — $ 4.3

Asset impairment and accelerated depreciation — 1.7 — — (1.7) —

(1)Includes the impact of currency translation.

On September 29, 2021 the Company announced changes within the commercial organization to position itself to better enable growth, increase agility and innovation, execute a more consumer-centric strategy, and improve manufacturing and supply chain efficiency. For fiscal 2022, the Company expects to incur one-time charges of approximately $17 associated with these initiatives.

Note 5 - Income Taxes

The provisions for income taxes from continuing operations consisted of the following:

Fiscal Year

Currently payable:

United States - Federal $ (3.1) $ 1.2 $ 16.1

Deferred:

United States - Federal 7.9 (2.8) (52.4)

Income tax provision (benefit) $ 29.0 $ 19.7 $ (18.1)

The source of pre-tax earnings (loss) was:

Fiscal Year

A reconciliation of income taxes with the amounts computed at the statutory federal income tax rate follows:

Fiscal Year

State income taxes, net of federal tax benefit 0.8 0.6 1.0 1.1 (13.5) 3.5

Foreign tax less than the federal rate (9.0) (6.2) (5.6) (6.4) 15.8 (4.1)

Adjustments to prior years’ tax accruals (4.3) (2.9) (0.5) (0.5) (1.5) 0.4

Other taxes including repatriation of foreign earnings 8.9 6.1 8.2 9.4 7.9 (2.0)

Sale of Infant and Pet Care business — — 1.6 1.8 — —

Tax reform — — — — 3.6 (1.0)

The deferred tax assets and deferred tax liabilities recorded on the balance sheet were as follows, and include current and noncurrent amounts:

September 30,

Deferred tax liabilities:

Depreciation and property differences $ (26.6) $ (28.4)

Lease liabilities (14.9) (11.4)

Other tax liabilities (9.4) (8.6)

Gross deferred tax liabilities (243.4) (228.5)

Deferred tax assets:

Deferred and share-based compensation 15.4 16.1

Tax loss carryforwards and tax credits 8.2 11.6

Postretirement benefits other than pensions 1.5 1.6

Inventory differences 3.2 5.0

Lease right of use assets 15.0 11.4

Valuation allowance (9.4) (8.5)

Net deferred tax liabilities $ (108.0) $ (79.3)

There were no material tax loss carryforwards that expired in fiscal 2021. Future expirations of tax loss carryforwards and tax credits, if not utilized, are not expected to be material from 2022 through 2024. The valuation allowance is primarily attributable to tax loss carryforwards and certain deferred tax assets impacted by the deconsolidation of the Company’s Venezuelan subsidiaries.

The Company generally repatriates a portion of current year earnings from select non-US subsidiaries only if the economic cost of the repatriation is not considered material. No provision is made for additional taxes on undistributed earnings of foreign affiliates that are intended and planned to be indefinitely invested in the affiliate. The Company intends to, and has plans to, reinvest these earnings indefinitely in its foreign subsidiaries to, amongst other things, fund local operations, fund pension and other post-retirement obligations, fund capital projects and to support foreign growth initiatives including potential acquisitions. As of September 30, 2021, approximately $840.3 of foreign subsidiary earnings were considered indefinitely invested in those businesses. If the Company repatriated any of the earnings it could be subject to withholding tax and the impact of foreign currency movements. Accordingly, it is not practical to calculate a specific potential tax exposure. Applicable income and withholding taxes will be provided on these earnings in the periods in which they are no longer considered reinvested.

Unrecognized tax benefits activity is summarized below:

Unrecognized tax benefits, beginning of year $ 21.8 $ 25.5 $ 20.7

Additions based on current year tax positions and acquisitions 1.7 1.8 9.4

Reductions for prior year tax positions and dispositions — (1.7) (0.4)

Settlements with taxing authorities and statute expirations (2.5) (3.8) (4.2)

Unrecognized tax benefits, end of year $ 21.0 $ 21.8 $ 25.5

Included in the unrecognized tax benefits noted above was $19.7 of uncertain tax positions that would affect the Company’s effective tax rate, if recognized. The Company does not expect any significant increases or decreases to its unrecognized tax benefits within 12 months of this reporting date. In the Consolidated Balance Sheets, unrecognized tax benefits are classified as Other liabilities (non-current) to the extent that payments are not anticipated within one year.

The Company classifies accrued interest and penalties related to unrecognized tax benefits in the income tax provision. The accrued interest and penalties are not included in the table above. The Company accrued approximately $4.3 of interest, (net of

the deferred tax asset of $0.7) at September 30, 2021, and $4.1 of interest, (net of the deferred tax asset of $0.6) at September 30, 2020. Interest was computed on the difference between the tax position recognized in accordance with GAAP and the amount previously taken or expected to be taken in the Company’s tax returns.

The Company files income tax returns in the U.S. federal jurisdiction, various cities and states, and more than 30 foreign jurisdictions where the Company has operations. U.S. federal income tax returns for tax years ended September 30, 2018 and after remain subject to examination by the Internal Revenue Service (the “IRS”). With few exceptions, the Company is no longer subject to state and local income tax examinations for years before September 30, 2012. The status of international income tax examinations varies by jurisdiction. At this time, the Company does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress.

U.S. Tax Reform

EPC US Equity

EPC · 10-K · period ended 2021-09-30

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

EPC US Equity☆

EPC · 10-K · period ended 2021-09-30

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

EPC US Equity